The Smart Grid is Upon Us

The-Smart-Grid-is-Upon-Us_Image1-iPadThe Smart Grid is the term we use to describe the advanced technology upgrade that modernizes our electrical energy infrastructure and gradually replaces the legacy system that has been in place for decades. It is argued that the old hardware and systems are fast approaching their end-of-life. In order to efficiently and safely provide power to the nation’s homes, businesses and other robust utility and transportation providers, we must implement The Smart Grid. By 2015, an estimated 65 million Smart Meters will have been installed across America, roughly 52 percent of households, according to the Edison Electric Institute.

These Smart Meters will enable customers to have direct access to more granular usage data that until now has always been vague and largely un-useful monthly summaries. The Smart Grid Consumer Collaborative (SGCC) states in their “Data Privacy and Smart Meters” Fact Sheet, “The White House, in partnership with utilities, has initiated a program called “Green Button” designed to give consumers access to their own energy usage data. Utilities that participate in the Green Button program will allow consumers to easily access and securely download their own household smart meter data. Additionally, using the Green Button, consumers will be able to choose to share their smart meter data with companies delivering new services such as smart thermostats, remote home control systems and smart appliances.”

Green Button - Download My Data

The Smart Grid is a fascinating concept in theory and a useful system in practice. The core intended benefits to having The Smart Grid in place are:

  • Increased power demands will be met with new streamlined power management capabilities thus reducing brownouts, blackouts and damaging electrical surges.
  • End-user empowerment to directly access utility usage data and associated costs via consumer monitoring products. With these tools, the consumer can customize when and how certain appliances are used by intelligent scheduling of power-intensive tasks in coordination with lower-demand periods when the costs could be set at lower rates.
  • Less need for dispatching workers for on-premise repairs and meter readings since many tasks can be done remotely. The cost-savings of this would ideally be passed through to the consumer.
  • Reduce need for costly standby power plants which are used for rare emergencies and times of extreme power demands. This was a byproduct of the legacy analog equipment but with The Smart Grid, accurate remote monitoring and management handles the usage adjustments and household limits which results in an overall more stable infrastructure.
  • Better equipped for the future of abundant rechargeable electric cars. As electric cars become more pervasive, The Smart Grid will be more capable at handling the owners’ needs to plug their cars into the grid for recharges at optimal rates.
  • Compatible with renewable power sources (Solar, Water, Wind) and generally better for the environment since the power infrastructure can be fine tuned.

The Smart Gridlock

Google-Suggestions-Smart-MetersWith all of these benefits, any inquisitive person will keep an open eye on this new shiny infrastructure known as The Smart Grid. Over time, some concerns and potential negative aspects of The Smart Grid technology have entered the discussion and debate. Here are the most common concerns that I have found through some basic research on the topic:

Privacy and Security

Smart Meters, a core component of smart grid technology, securely communicate wirelessly with your local power company and possibly other partner companies that monitor home energy usage data. The data is much more granular than what was gained from the old analog meters. This data, according to those who are concerned about their privacy, could reveal things that make some people uncomfortable and who deem this an invasion of privacy.

On the surface, it is hard to imagine that power and other utility usage data would fall into the same bucket as personal and identifiable information that we all naturally want to keep protected. However, some people are sensitive to having even general behaviors and patterns revealed to corporations which could then be sold and repurposed by a marketplace. For example, The Smart Grid could expose when occupants wake up and go to sleep, when they leave and come home, when TV and computers are used the most and even when meals are cooked. Additionally, since the Smart Meter equipment relies on wireless network communication, some people are concerned about intrusions and security of their own data and Internet usage.

Security is achieved using the same advanced methods as internet banking and ATM machines. Smart Meters encrypt customers’ energy usage data before it is sent over the wireless network to ensure privacy. These and other security measures are tested and reviewed regularly so to avoid security vulnerabilities. But the inherent risk has some people worried not only about their data but also about potential disruptions and subsequent damage to their electrical appliances.

Health Risks

Some people have made claims that the radio frequency (RF) waves that smart meters use to communicate are harmful to people and cause illnesses as basic as headaches and sleeplessness or as severe as certain cancers. Many reports show this to be untrue and point out that microwaves and cell phones emit more radiation than the Smart Meter. But beyond the isolated Smart Meter hardware device itself, some are researching what is called “Dirty Electricity” which generally speaking is the high frequency voltage spikes on the currents that run through the building and radiate outward. This is a complicated topic so I cannot go into full detail in this article but if interested in more information, a simple Google search will get you going.


Some claims are related to fires and explosions of Smart Meters. This may have more to do with the buildings old wiring than the Smart Meter device itself but these types of cases are important to consider nonetheless. In other words, full safety inspections prior to the installation of Smart Meters and other smart grid technology are critical to safety.

Inaccurate Readings

In some cases, The Smart Meter data was inaccurate resulting in unexpected costs and time-consuming bill disputes. I can only assume that these are uncommon glitches and as the technology improves and home appliances are gradually upgraded to more compatible versions, accuracy will only improve. Resolution of discrepancies should also become more streamlined over time especially considering all of the reference data now available per household.

Time-of-use rates or other monetary incentives

If the consumer does not adapt to pricing schemes by changing their energy use behaviors, it could be more costly to them as opposed to the legacy analog system we are all accustomed to. The potential savings for customers, then, are not so much about the smart grid technology itself but rather how the technology will be leveraged by the power companies to incentivize customers to be proactive and involved in their household’s electrical usage patterns.

Remote Kill Switch

The existence of the “Remote Kill Switch” which lets the power company cut-off electricity remotely without dispatching a worker to the location worries some people. The concern here is that the new ease of disrupting households in this way when a bill is not paid on time may be abused and used unfairly and without ample warning. I personally don’t think too much would change compared to how these matters are already handled. Besides, Internet and TV services have been remotely disconnecting people for years and we don’t hear many complaining about it…. they just pay the bill. At some point, people have to trust that the companies we rely on for services are not nefarious entities.

Investment Cost

The Connecticut Attorney General George Jepsen did an analysis and found that “The Smart Grid” technology would cost each residential ratepayer roughly $444 in order to save about $11 over 20 years, or 55 cents per year per customer. Jepsen had said, “The costs associated with the full deployment of AMI [“smart”] meters are huge and cannot be justified by energy savings achieved.

So it is the opinion of some that the overall investment is too large and ROI too low and there are no adequate consumer subsidies which results in the overall costs being incurred by consumers over time.

No opt-out or opt-out with a monthly fee

The option to keep your analog meter and not have a Smart Meter installed is either not available or will cost the consumer more money on a monthly basis.

The Inevitable

The concerns have caused adoption to slow down somewhat but it is inevitable that The Smart Grid will continue to move forward with its implementation across America. The pros and cons are a normal part of new implementations of innovative technologies. Some of the concerns are certainly worthy of attention and should be addressed with the goal of satisfying the consumer who, after all, is paying for all of this either directly or through taxpayer based government subsidies.

The potential benefits should also not be dismissed, especially the more obvious long-term effects to the overall stability of the country’s power grid. But let us not forget that the Smart Grid program is new with billions of dollars invested. This means that there are many advocates and marketing efforts. It is therefore appropriate that certain potentially misleading information be fact-checked and investigated before consumer consensus can be depended upon.


At the end of the day, this new era of The Smart Grid needs to happen and nothing will ultimately stop it from being a pervasive integrated system spanning across the country in the coming years. The initial implementation won’t be perfect but over time, the technological kinks will be worked out and the cultural shift towards wide-spread acceptance will become the norm.

SFA Marketing has experience working in the Energy Industry. Learn more about our work and our Energy Industry clients.

Navigation Guide