Utilities worry about a lot of things, such as keeping the lights on, earning a return for investors, and making regulators and customers happy with their service.

Now there is a new worry: How can they protect customers from what one utility refers to as “mental fatigue?”

In this particular case, the utility raises the issue as it prepares to invite homeowners and small businesses to select from among new and possibly complicated rate options made available because of smart meters. The new rates should lead to greater energy efficiency. But that won’t happen if customers become overwhelmed by their complexity, throw the bill insert into the trash, and turn to the next thing demanding their attention.

Mental fatigue is a big problem not only when it comes to homeowners, but also businesses and organizations faced with technical decisions required to green their facilities. Start with the basics. Do you pursue energy efficiency or renewable energy or both? And then, do you choose to make actual physical changes, such as installing combined heat and power systems or solar panels, or do you buy from among the more virtual products such as energy efficiency certificates or renewable energy credits (RECs). And to make it even more difficult there are now a growing number of RECs to choose from: solar RECs, zero emissions RECs, low emissions RECs and more. (See my article on US RECs in the December issue of Platts Energy Economist.)

Analysts Patrick Costello and Roshni Rathi recently prepared a report for RealEnergyWriters.com that sorts through the many options presented to companies trying to go green. The detailed analysis attempts to give direction to organizations by using examples drawn, interestingly, from information technology and telecommunication companies. These industries are known for their progressive, game-changing strategies and many have led the way in reducing energy usage and emissions in their data centers, according to Costello.

The report, “Data Center Energy Efficiency, Renewable Energy, and Carbon Offset Investment Best Practices,” points out that seven of the top ten organizations in Newsweek’s Green Rankings were IT or telecom companies with IBM, HP and Sprint Nextel in the lead. IBM won further kudos this week from the European Union, which bestowed its code of conduct recognition on 27 IBM data centers for their energy efficiency. IBM met a 2007 goal to double the IT capacity of its data centers within three years without increasing its electricity usage.

But not all data centers are run by firms the size of IBM. Many are small and don’t have the kind of resources of a large IT firm, so don’t even know where to begin when installing or purchasing energy efficiency or renewable energy. REC purchases, in particular, can confound the uninitiated. Two markets exist for RECs, one voluntary and the other regulated by states, and each state has its own way of defining what constitutes a legitimate REC. “It is really important to be careful about what you purchase and where you purchase it. People often don’t have an understanding of what they are buying,” Costello said.

They don’t understand and sometimes they wish they didn’t have to. Mental fatigue may be a new occupational hazard for the energy-consuming public.

Elisa Wood is a long-time energy writer whose work appears in many of the industry’s top magazines and newsletters. She is publisher of the Energy Efficiency Markets podcast and newsletter.

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Americans tend to beat themselves up over their imperfections. We eat too much, watch too much TV and owe China too much money. Despite all of our sloth, we can feel good about one area: our progress saving energy.

A report issued this week by the Institute for Electric Efficiency found that we saved enough electricity to power almost 10 million homes in 2010 (about 112 MWh). That’s 21 percent better than we did the previous year. And it looks like when 2011 data comes out, we’ll have done even better.

You’re saying, “Who me? Not possible. I forget to shut off the lights, my computer stays on all the time and my kids won’t get off the Xbox.”

Therein lies the beauty of energy efficiency today; it requires no huge effort on our part. New appliances, light bulbs, thermostats, heating and cooling systems and electric gadgets are increasingly designed with energy efficiency in mind. Those with an energy conscience don’t have to fumble in the dark and cold.

The report studied programs offered by utilities, which spent $4.8 billion in 2010 on energy efficiency, about 28 percent more than the previous year, and $6.8 billion in 2011, a 25 percent increase. Utilities are expanding their energy efficiency efforts so quickly that IEE expects them to surpass optimistic forecasts that they will dedicate $12 billion annually to efficiency by 2020.

“This steady increase in electricity savings is really impressive. And the growth in electric utility expenditures for energy efficiency is the major reason behind it,” said Lisa Wood, IEE Executive director. (No relationship to me.)

Efficiency is considered a good investment because it’s cheaper to save energy then make energy. The report pegs the cost of saving energy at 3.5 to 4.3 cents/kWh. Check your utility bill – chances are buying electricity costs you a great deal more.

Our success stems from energy efficiency resource standards, which are savings requirements set by state governments. Typically, the requirements mandate that utilities save a set percentage of energy annually. About half of the states, representing two-thirds of the US’ population, now have these standards, according to IEE.

Some states and regions are doing better than others when it comes to energy efficiency. California continues to be the top state when it comes to spending on energy efficiency, with a budget of $1.5 billion, well above second place state, New York, with $1 billion. The Pacific Northwest follows with about $559 million, and then comes Massachusetts, Florida, New Jersey, Pennsylvania, Maryland, Ohio and Arizona.

California’s effort is particularly impressive in light of its demographics. While its electric efficiency budget represents 22.6% of total U.S. utility electric efficiency budgets, it uses only 6.9 percent of US electricity and its share of the population is only 12.1 percent, according to IEE.

Several states that did not make the top 10 are quickly improving their programs. The IEE report found that five states have doubled their energy efficiency budgets for 2011. These states are Indiana, North Dakota, South Dakota, Virginia, and West Virginia. Washington, DC also doubled its budget.

See the full IEE report here.

Elisa Wood is a long-time energy writer whose work appears in many of the industry’s top magazines and newsletters. She is publisher of the Energy Efficiency Markets podcast and newsletter.

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Minneapolis electronics retailer Best Buy announced last month it is launching a new Home Energy Management Concept. In addition to an “online learning center,” stores in select cities (Chicago, Houston, San Carlos, Calif.) will have an “in-store experience,” complete with demonstration vignettes for a touch and feel experience with home energy management, home control, and home assurance technologies.

As part of the in-store program, Best Buy is partnering with local utilities in each of the cities to promote and grow the program.

The company also will launch an online resource, with information about home energy management solutions and services, including product demonstration videos, an energy self-assessment tool, self-guided product and solution selection tools and an ENERGY STAR® rebate finder.

While the “in-store” concept may not provide an immediate impact for Xcel Energy customers (unless you find yourself visiting one of the cities above), this pilot most certainly will increase exposure to new and exciting energy-saving technologies and resources.

And with the support of a major retailer and willing utility partners, there likely will be an even greater appetite for new and more powerful energy efficiency technologies. Moreover, as the in-store pilot (hopefully) grows beyond these three stores, buzz surrounding energy management will surely increase.

Not so fast you say? Yes, we’ve heard it before – energy efficiency isn’t ready for the social media limelight (perhaps OPower knows something we don’t)? But buzz within the home energy retail category continues to grow, particularly with the launch of products like Nest earlier this year.

Clearly there is an appetite for saving money and energy – more than 356,000 of our Minnesota customers participated in at least one of our residential energy efficiency rebate programs in 2010. And while that sounds like a significant number, it represents less than 30 percent of our customers in Minnesota. There still is work to be done.

Hopefully, the added exposure of this pilot will only increase acceptance of – and hopefully participation in – energy efficiency practices. And for me, that’s a win for all.

So what do you think? Will the Home Energy Management Concept pilot survive?

Article by Tim Laughlin, appearing courtesy Xcel Energy Blog.

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U.S. utilities are getting smarter, and smart grids are making the difference. This theme permeated the recent Autovation 2011 conference in suburban Washington, D.C., which provided an overview of trends and recent developments.

How smart? No one from the utilities admitted to failing grades, of course, but various company representatives using smart technology report measurable progress:

- Pepco’s Bill Gausman, senior vice president of strategic initiatives, told the opening session that his utility’s smart grid outage-detection system came up big during Hurricane Irene. The system had 150,000 meters reporting in, and managers equipped with this data were able to eliminate 600 truck-rolls in Maryland alone (which, using a back-of-the-envelope calculation, works out to some $90,000 in savings).

- John Stafford, vice president of sales at Sensus, said he initially underestimated the benefits of smart grid technology for consumers. He told the audience his own projected bias was that only a “lunatic fringe” would be interested in modifying their usage once empowered with consumption data. However, consumers are interested in using Web-based reporting portals, he said; adoption is in the 20 percent range. He cautioned the audience to guard against personal bias, and allow the actual data to speak for itself.

- Portland General Electric’s project manager technology support, Eric Spack, said his utility’s installation of smart meters will bring an estimated return on investment (ROI) of $35 million (net present value) in operational cost savings.

Two other companies offered interesting updates on their efforts:

Craig Kuennen, business transformation and marketing administrator for Glendale (California) Water & Power, described how GWP has deployed smart meters across its system, and is in trials for the rollout of CEIVA photo frames early next year that will allow consumers to not only share pictures over a ZigBee-enabled home area network, but also engage them with a water and electric management dashboard. Pretty cool.

Echologics’ Marc Bracken, vice president and general manager, presented a fascinating case study of how his company’s non-invasive acoustics technology enabled the Sewerage and Water Board of New Orleans (SWBNO) to detect and conserve thousands of gallons of lost water per day. The technology can accurately pinpoint leaks without the use of digging, and in one instance uncovered a significant leak underneath a sidewalk that was costing SWBNO an estimated $200,000 per year.

One of the more lively sessions at Autovation took place during a panel discussion among meter vendors. Aclara’s Paul Lekan, vice president of marketing (and one of the most entertaining personalities in the utility business, I might add) made a strong point about how great the new meters are, but that “it’s all about the data” – and how utilities manage the information they collect and leverage analytics to their advantage. He cited one utility his company has worked with that saw a dramatic change in customer service calls: before the new technology was installed, 90 percent of calls were inbound, and now that has been reversed by utilizing data to proactively reach out to customers.

The takeaway from Autovation: Deployments of smart technology may be longer-term bets, but for utilities that have deployed them already some of the payoffs are evident now.

Article by Neil Strother, appearing courtesy the Matter Network.

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In a previous post, I wrote about Texas smart meter company TransData‘s patent infringement suit against CoServ, a Texas utility.

TransData recently extended its patent enforcement activity from Texas in an easterly direction through the southeastern United States, filing complaints against utilities in Alabama, Georgia and Mississippi.

The targets are the Alabama Power Company (TransData-AlabamaPower_Complaint), the Georgia Power Company (TransData-GeorgiaPower_Complaint), and the Mississippi Power Company (TransData-MissPower_Complaint).

Each complaint asserts U.S. Patents Nos. 6,181,294 (’294 Patent), 6,462,713 (’713 Patent) and 6,903,699 (’699 Patent), which relate to antenna and wireless communication devices for use with electric meters.

The ’294, ’713 and ’699 Patents are related patents which trace back to an original 1998 filing date. They describe early solutions for wireless transmission of electrical consumption data.

In particular, the patents are directed to electric meters (100) and an antenna (170, 270) for use with the electric meters. The antenna includes antenna elements (172, 174, 272, 274) located within a dielectric housing (120, 220) and a balance circuit (176, 276).

The balance circuit (176, 276) mechanically supports the antenna elements (172, 174, 272, 274) so the antenna elements can cooperate and act as a dipole.

According to the patents’ specification:

The present invention . . . introduces the broad concept of outfitting an electric meter with an internal, wireless communications antenna, allowing the electric meter circuitry within the meter to communicate via a data network wirelessly couplable thereto.

According to the complaints, the devices that infringe or may infringe the asserted patents are Sensus iCon electric meters, Elster Alpha A3 and REX electric meters, and meters with SmartSynch wireless modules.

With these three new complaints, there are now at least six pending TransData infringement suits involving the same patents. In addition to the CoServ case, the new complaints list two other cases in the Eastern District of Texas against CenterPoint Energy Houston Electric and Tri-County Electric Cooperative.

Eric Lane is a patent attorney at Luce, Forward, Hamilton & Scripps in San Diego and the author of Green Patent Blog. Mr. Lane can be reached at elane@luce.com.

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Utilities are often dismissed or ignored in most discussions of energy efficiency and green building  I find this quite remarkable.  First, many state laws mandate that utilities engage in energy efficiency efforts.  Second, as utilities are directly connected to the energy consumer, utilities are often the best place to advocate for energy efficiency and deliver energy efficiency programs.

The problem is that utilities are not usually incentivized, and are often disincentivized, from promoting energy effiiciency.  Historically, utilities have made money by selling electricity or natural gas, and recovering a return on their sales and investment in infrastructure from ratepayers.  The trouble with this scenario is that it does little to incentivize utilities to promote energy efficiency.  If the utility promotes conservation, thus selling less energy and reducing investment in infrastructure, they will make less money.   

Some energy efficiency advocates are beginning to promote different utility rate structures which pay the utilities for the lost revenue attributable to energy efficiency, so that the utilities are made whole for their investment. An article on energy efficient rate making is available here.

These new rate structures are not without their challenges.  For example, the Public Regulation Commission of New Mexico put in place a rate scheme which allowed utilities to collect one cent for each kilowatt hour of electricity that was saved through energy efficiency programs.  The average increase on a residential customer was 17 cents a month. 

On August 3, the New Mexico Supreme Court struck down the surcharge, holding:

The PRC did not inquire into any of the utilities’ revenue requirements, nor any of the traditional elements of the ratemaking process. At the evidentiary hearing, the utilities merely presented evidence on what the impact of [the surcharge] would be. Without inquiring into a utility’s revenue requirements, we fail to see how the PRC could adequately balance the investors’ interests against the ratepayers’ interests when adopting [the surcharge]. The PRC’s adoption of the adder rates was arbitrary and unlawful in that they were not evidence based, cost-based, nor utility specific.

Energy efficiency advocates seeking to use utility ratemaking as a mechanism for promoting energy efficiency must pay careful attention to ratemaking regulations, and realize that attempts to change the historical rate structures will face opposition from many sides, including consumer advocates.   

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While the U.S. is known around the world for innovative companies like Google and Facebook, there is a new vanguard of American companies creating and exporting clean energy technologies,” said Jim Kapsis.  His company, OPower, an information-enabled energy efficiency company, is one of them. Opower is transforming the relationship between consumers and how they use energy in their homes.  According to Kapsis, Opower is on track to save households more than $100 million next year and enough energy to take the equivalent of more than 100,000 households off the grid.

Founded in 2007 by two college buddies, the company started out with a simple idea: utility bills are too difficult to understand.   The friends, co-founders, Dan Yates and Alex Laskey, bet that if people had better information about their energy usage, they would use less of it, save money, and improve the environment.  “It was an innovative business idea, but given the complexity of the energy market, they weren’t sure at first that it was going to work,” said Kapsis.  By working with utility companies to deliver better information to their customers, OPower not only helps people understand how they are consuming energy, but how they are doing relative to other similar homes in their neighborhood. By coupling this context with personalized energy saving advice, Opower is giving households the tools to make more informed choices about their energy use.

The company now has utility clients in 25 states and is providing 10 million U.S. households with home energy information through its multi-channel platform, which includes paper-based reports, emails, text messages, and an interactive web portal. The company also recently acquired its first global client in the UK and has an ambitious plan to expand globally. OPower has been working closely with the Commerce Department’s foreign commercial services, the International Trade Administration and the Trade Development Agency to establish contacts with potential foreign clients and governments by participating in trade missions and meeting with foreign delegations in the U.S.

Aside from its innovative business model, OPower’s corporate culture is another reason for its success. Kapsis described this culture as “double bottom line”, where it is not enough to just make a profit: the company must also make good on the larger goals of saving energy and money for households, which is good for people’s pocketbooks and for the planet. “The great thing about working at OPower is that you don’t have to pick between making money and doing good for society; they are one and the same here,” said Kapsis. Because of this commitment, OPower has been able to attract many bright, capable people, including Kapsis who was motivated to move his career into clean energy after working on Middle East policy at the State and Defense Departments.

Kapsis attributes a lot of Opower’s success to smart government policies in more than 20 U.S. states that set standards for energy efficiency and give utilities an incentive to want their customers to use less power. “When the right policy is in place, it creates a market for companies like us provide households with the cleanest and cheapest form of energy there is — the energy they don’t use.” Indeed, OPower has grown to over 200 employees from just 60 a year ago and expects to open its first international office later this year. “Without smart policy,” says Kapsis, “we would still just be an idea. Instead, we’re creating jobs, giving families relief on their energy bills, and exporting our product overseas.”

Article by Ari Matusiak, Executive Director of the White House Business Council

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Are your solar panels looking a little grimy? No worries, there is now a team of seasoned professionals to do that cleaning for you.

Solar Maid, a one-of-a-kind New Jersey company, first began in 2003 but didn’t receive the boost it needed until 2008, when the solar industry really took off.

While they have a significant amount of business in their home state alone (New Jersey is the second-largest solar state in the country), they have since managed to launch Solar Maid services all over the United States, Canada and Europe, totaling 41 locations in all.

The company serves a wide base of customers, including developers, utilities, and individual system owners—all of which previously depended on the rare contractor that could perform this specialized duty.

With the solar industry booming in many countries all over the globe, other solar cleaners will undoubtedly pop up soon. But for now, Solar Maid is one unique company with a very bright idea.

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When will the maturation process take hold for the global Home Energy Management market? The answer to this question and more will be answered in an upcoming report published by Pike Research, “Home Energy Management.” Some initial thoughts are as follows:

First, the major categories of EIDs [energy information displays] are:

Of course, many vendors will provide a melding of the three major categories. For example, a vendor providing an in-home display will also enable the end-user to check energy consumption remotely (either through an internet-enabled user interface), or a mobile phone app, or both. What is very interesting, and what the upcoming report will research extensively, is what path to market will be exercised by vendors.

One prevailing theory is that the HEM [home energy management] market will be driven primarily by the actions of utilities. Here, the utility will subsidize, or even provide at no-cost, an EID to the end-user. This idea pivots on residential DR [demand response] and other enabling DSM [demand side management] applications that will assist the utility in reducing peak demand, adhering to potential energy efficiency mandates, and to provide energy information to an increasingly sophisticated energy consumer in a competitive energy market.

Another path to market for EID vendors is through commercial retail outlets (e.g. Best Buy and Amazon). Here, the end-user is responsible for purchasing an EID on their own. This consumer-led adoption will present numerous hurdles to the industry, yet if the devices are priced right, many believe an increased sense of energy efficiency and management in the residential sector will be a strong driver. Additionally, with entrants like Google and Microsoft spurring the market along, customer motivations will be increased by massive marketing campaigns from the vendors who can afford it. These campaigns will highlight the use cases for EIDs in the home, including increased energy usage awareness, DR opportunities, and budgeting applications.

The upcoming HEM report will quantify the different business models of HEM vendors and dive into the HEM application within the home area network (HAN) structure and technology framework.

Jevan Fox is a research analyst contributing to Pike Research’s smart energy practice.

Article appearing courtesy Matter Network.

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And now for a dose of reality.

No doubt smart meters are a good thing, but even their most ardent fans must admit that a degree of hoopla surrounds these little digital boxes. We hear that if consumers can just see how much power they use in real time, and what it costs, our energy woes will be no more.

Smart meters will even cure the blind. The energy blind that is.

“It can be difficult to separate the hype from legitimate claims,” said the American Council for an Energy-Efficient Economy in a new report that evaluates what works – and what doesn’t – when it comes to smart meters.

ACEEE points out that we no longer load the stove with coal and wood for our primary energy. Instead, gas and electricity flow unseen to take care of our needs. Since we see only a monthly bill, we have no idea what energy costs in real time, how much we use, or even the acceptable social norm for energy consumption.

Thus, most people in the US are “among the energy blind,” says the report. Asking us to save energy based on our monthly bills alone is like asking a dieter to lose weight without a scale. “Perhaps it can be done, but the task is a lot more difficult,” the report says.

But seeing how much energy we use is one thing; acting on it another. Smart meters will not do their job if we rely on the technology alone. The consumer needs good reason to act, according to ACEEE.

These findings are important because the US and other nations are making a huge investment in smart grid technology. Smart meters represented only about 4.7% of US household meters in 2008. But their market share is expected to grow to 40% over the next five to seven years, according to the report.

The report looked at 57 studies, three decades of research in Europe, North America, Australia and Japan, and found that smart meters can be effective. In fact, households using them have reduced electricity use 4% to 12%.

But much depends on how the meters present information and feedback and how we respond. Ultimately, the smartness of smart meters relies on utilities understanding human psychology.

The report offers several interesting insights about our energy behaviour. For example:

There has been a lot of talk about how smart grid will marry two giant industries: energy and information technology. True. But the ACEEE study makes apparent that a third field needs to play a big role: behavioural science.

“The bottom line here is very simple: Smart meters in and of themselves are just not ‘smart’ enough to get the job done for consumers and our economy. While advanced metering provides a useful tool to save energy, cut consumer electric bills and reduce greenhouse gas emissions from power plants, utilities need to use these advanced meters to provide consumers with information on their consumption in ways that grab consumers attention and encourage them to take action,” said John “Skip” Laitner, ACEEE’s director of economic and social analysis.

The report can be found here.

Elisa Wood is a long-time energy writer whose work appears in many of the industry’s top magazines and newsletters. She is publisher of the Energy Efficiency Markets podcast and newsletter.

photo: Tom Raftery

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