Online exclusive: Show me the elephant

by Kathleen Davis, senior editor

There’s a pachyderm in the room: big, round, a tad smelly. But, no one talks about him. We all pretend not to see him. We all go along our merry way with only a sideways glance to see if he’s disappeared in a puff of smoke. Yet, he never does, no matter how hard we wish for it.

I see this elephant a lot. I think others do, too, but they deny it.

I’m not sure if we’re keeping a conspiratorial silence or if we’re still trying to feel things out, find the edges and ends of the elephant before we declare it out loud as officially existing.

Mr. Elephant was at CIGRE when I was there this August, and he appeared again at GRIDWEEK. Let’s call him by his “given” name: money.

The smart grid may be the next great messiah for our industry. It may, as advertised, solve all of our problems from generation to distribution. It may be the magic pill, but can we afford to buy it? Can we afford to confront the elephant?

Now, before I get too many angry letters, I know there has been investment — in fact, heavy investment — in vendors, in the makers and manufacturers, in the software and gizmos of smart grid. Just this week, Kleiner Perkins Caufield & Byers (KPCB) led a $75 million investment round for smart grid technology developer Silver Spring Networks. I know that this industry has spent a lot of time and effort convincing the investment world of the joys of this magic smart grid pill. We’ve even gotten regulators on board. But, there’s a duck missing from this row.

See, it’s the other end of the elephant that concerns me — not the trunk, but the tail. The way for those investments in tech to be recouped is by selling the product to utilities. The way for utilities to buy this product is by convincing their customers (and, therefore, those pesky rate regulators) that it’s a worthy investment and will be an expenditure of true value and not just frivolous rate hikes.

I’m just not sure any customer, at the tail-end of that chain of ducks or elephants, believes in that smart grid value enough to give the utility the dollar to pass on up to vendors and manufacturers, especially in this economy. I’m not sure you can convince the guy who is angry and concerned about his current power bill to foot the next bill for advancements. I’m not sure he cares to pay out of pocket in order to have a meter that will be super smart down the road. His power works, and he really isn’t concerned about making an “elite” intelligent grid. He wants it cheap, and, therefore, is happy with it stupid.

In this industry, we spend a lot of time talking to each other. And, perhaps, we convince ourselves that the average guy — Joe Sixpack or Joe the Plumber, if you’d like to use presidential debate terms — will be über-excited about all the options available to them once all this smart grid “stuff” is in place. Honestly, I’m not sure they will be.

Take for example, Internet access. Sure, over half the U.S. population has a broadband connection (of the nearly 78 million households with Internet access). But, that still means that almost half use dial-up. Do they not realize that broadband is better? Of course they do. What holds them back, then? Cost.

And cost could hold back the smart grid — not from investments in companies or vendors, but from the consumer end. Would they like to be able to fiddle with the data, understand time-of-use? Sure, maybe some will be interested. But, interested enough to see the real benefit to them, specifically, when they have to shell out the peanuts? I doubt it. When we’ve just had a presidential election all about who will raise taxes on whom (down to the minutia), it’s not a big jump to think the electric consumer might see the smart grid as something they’d rather “pass” on paying for.

And that will be the time we can’t ignore our industry-sized elephant anymore. Then, we’ll have to face the pachyderm in the room and figure out whether we can get him out the door.

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