Could utilities throttle your electricity like Comcast throttled BitTorrent?

Politicians have argued that ISPs should serve customers more like utilities--where electrons flow to the switch and nobody questions which ones belong to what appliance. But what would utilities prefer?

It's a net neutrality issue of sorts, except that instead of being about the rights of bits, it's about the rights of electrons. The promise of the smart grid is typically described with bold, sometimes grandiose, Walt Disney-like language, and usually includes a sentence or two about how the smart meter in your home or business can work in tandem with your power provider to help better manage the electric grid as a whole, maintain appropriate power levels and conserve energy usage.

That's the same promise that Internet service providers would apply to a smarter net, if the notion of two-way bandwidth control weren't already colored by the "Open Internet" debate. Network management has to happen somehow; and for the electricity delivery network, the changing demands of households and offices necessitate a two-way relationship between the provider and consumer of service.

But while the installation of smart meters in some metropolitan areas has eclipsed 80 percent, by some estimates, there is no single communications standard between power companies and smart meters nationwide. In fact, since communications schemes may have been determined on the fly, there could be hundreds. Meanwhile, smart meters themselves lack the smarts to connect to smart devices, such as hybrid and electric vehicles (EVs), giving them the data they need to throttle back their power draw when the grid approaches overload.

Last week, Ford Motor Company announced an initiative to build a central server with which the nation's power providers could communicate not just with Ford electric cars, but 12 major worldwide brands, including GM. In an interview with FierceEnterpriseCommunications, one of Ford's principal consultants on this project, Dr. Nancy Ryan, who directs policy and strategy for the firm Energy & Environmental Economics (E3), explains the logic behind Ford's move to connect the power company with electric cars without necessarily involving smart meters.

As a former member of the California Public Utilities Commission, Dr. Ryan was a champion of smart meter technology, defending it against complaints that it enabled utilities companies to charge customers more during times of peak demand. Smart meters, she says, already pass utility companies' cost/benefit tests simply for requiring meter readers to come on-premises. It's still theoretically possible, she adds, for smart meters to communicate price signals to charging devices, informing them of the most cost-effective times of the day or the month to draw power.

"Given the amount of smarts that's in cars today, I think it's logical to have some of that control happening inside of the car," remarks Ryan. "I don't think it's any kind of existential threat to smart meters. Honestly, sensing, metering, and control technology keeps on getting cheaper. It's really more the institutional arrangements and partnerships in the market that make it possible to capture the potential of all of those devices."

Partnerships like the one Ford is forging with utility companies will expedite the time when those companies can have much more granular control over the impact that EV charging will have on the power grid. Ford emphasizes that enabling this level of control will only take place on an opt-in basis by the customer. But Ford's value proposition to the customer is based around the notion of helping to prevent overloads. Is there truly a danger from electric vehicles overloading the grid?

"We're a ways away from that really being a problem," admits Dr. Ryan. "Which means we have headroom to solve the problem.

"If you look at things from the wholesale level, EVs have to get up above a couple of million in California, for example, to begin to have the kind of load growth that can make an impact on the bulk power system." Ryan actually believes that declining power load as a result of more efficiently distributed generation will balance out the growth in power loads from increasing numbers of EVs over the next 15 to 20 years.

So if overload won't be a problem--what's Ford's objective? Could it be, as I suggested, a way to enable power companies to offer--perhaps on a prepaid basis--premium tier pricing for EV owners, analogous to the "Netflix premium" pricing models that ISPs are considering?

While Dr. Ryan wouldn't rule out the possibility, she believes that would be a bad idea. There are some pre-paid electricity subscription programs available, including in Texas, she said. "I think it would be progressive politics that informs a lot of customer-facing policy for the residential sector, that would preclude going to pre-paid. There's a kind of visceral... Any kind of customer-facing business model that includes having the possibility of having their service disconnected, would be an incredibly tough sell in California."

For more:
- read the L.A. Times' 2010 account of Dr. Ryan's defense of smart meters
- see Betanews' 2010 coverage of the Comcast/BitTorrent throttling issue

Related Articles:

Ford's next car-charging network could bypass smart meters
Big data's impact on utilities: from smart grid to soft grid [FierceBigData]
Big data analytics sparks reinvention of smart grid [FierceBigData]