How Not to Get Utilities to Pay for Home Energy Data

All those home energy management startups promising to tell you exactly how much electricity your toaster, TV and fridge are using better come up with a business plan that doesn't rely heavily on utilities paying for it.

Oh sure, utilities will pay to know a household's overall energy usage – that's part of the reason they're deploying millions of smart meters around the world. They'll want that information to do demand response programs, better integrate rooftop solar panel and other distributed power generation systems into the grid and other pieces of what's known as the "smart grid" (see The Smart Home, Part I)

But as far as the utility executives at Wednesday's Smart Grid Innovation Symposium in Palo Alto were concerned, asking utilities to pay for more data than what they need for those moneymaking or cost-saving purposes is a nonstarter.

"Do we really need to measure the throughput of a toaster? Probably not," said Ed Kjaes, Southern California Edison's director of electric transportation. "This issue of how much data is useful, and how much gets in the way, is part of the debate right now."

And he's got a simple calculation for it – of all the data likely to be generated by in-home energy monitoring systems, "80 percent of it we're not going to need," he said.

Andrew Tang, senior director of Smart Energy Web for Pacific Gas & Electric, agreed with that assessment. The problem, he said, is that utilities need to make money from data if they're going to spend money on handling it.

"More granular data... if I don't need it for system reliability and I can't monetize it, why would I want to buy it?" he said.

This kind of response is no doubt what worries entrepreneurs interested in bringing new home energy monitoring technologies to market.

Many makers of such systems - Tendril Networks, Energate, Aztech Associates, Onzo, Greenbox and others - are conducting trials with utilities.

But others are considering ways to sidestep utilities to bring their products to consumers (see Will Utilities or Customers Lead in Smart Grid?)

Going that route, however, will require the startups in question to justify the cost of their systems in terms of homeowners' power bill savings, Tang said.

PG&E does care about measuring some of the biggest household energy loads, he noted, such as thermostats to control the air conditioner loads that are up to half of the utility's peak summer afternoon demand.

Electric or plug-in hybrid cars will also need to be monitored and controlled when they start arriving in neighborhood garages in large numbers, he added. And distributed power generation systems like rooftop solar, as well as distributed electricity storage systems like batteries, will need to be linked with the utility, he said.

But there's a cost to handling that data. Beyond the simple challenge of analyzing and storing the vast amounts of it that will come from such things as 15-minute smart meter reads, there's also the question of privacy and security, Kjaes noted.

Providing that security adds costs to data management, particularly as utilities come under new federal guidelines for securing it.

That's not just the view of U.S. utilities. Klaus Baggesen Hilger, senior innovation manager for Dong Energy, noted that he'd be interested in paying for data that can help the Danish utility model "narrow parts of the distribution network" to see where it needs to focus future investments.

Beyond that, however, "I don't see a big market for it," he said.