The McDonnell Group

By Don McDonnell

ATLANTA -- October 6, 2010 -- Do you hear that?  Like the heated and cooled air escaping most homes right under consumers’ noses every day, the smart grid hype bubble has started springing some wholesale leaks and the hissing sound is getting louder.

Over the long haul, this recent venting is probably not a bad thing.  Many utility industry insiders have shared their views with us that hyper-inflated regulatory, consumer, and investor expectations -- and the over-exuberance of consumer media coverage around smart grid – could become a mere hype bubble.  It has become an unlikely and unexpected threat to a practical evolution towards smart grid based on each utility’s individual needs and circumstances.

This probably sounds funny coming from a boutique firm whose services include public relations, eh?  Suffice to say, whether we are seen as “living in a glass house and throwing stones” on this or seen as “a canary in a coal mine” (pick your favorite cliché), media sentiment on smart grid at present is decidedly fickle.

The Consumer is Always Right?

Smart grid is a global movement driven by the need for innovation in electric power. The laws of physics, the realities of regulatory policy, and the fiscal and physical reality of capital investment requirements around grid-scale electric power systems dictate that smart grid evolution will be a marathon and not a venture capitalist-driven land grab sprint.   The idea that the path to smart grid success is paved first through the driveway and homes of consumers doesn’t always hold true, and utilities are skinning the smart grid cat in all sorts of other ways that don’t get much press.

There are tremendous system efficiency benefits available from smart grid programs and technology that don’t impinge on end-customers or their use of electric power.  Voltage conservation management is a prime example. It’s not new but it’s gaining traction for regulation and ownership structures to provide utilities incentives to implement it for economic (not just reliability) objectives.

Smart meters are a key element of the smart grid -- and they have understandably taken center stage in media coverage since consumers see their installation and realize their meter looks different.  Beyond this basic fact, the average consumer doesn’t know a smart meter from an electromechanical meter, nor do many yet know to ask if they can have one or why.

When engaging consumers, the smart grid battle for “hearts and minds” will flow through pocketbooks -- but also, in a society with free press, from perceptions created by media.

In our next blog post, my colleague Nancy Broe does an exclusive interview with Clark Howard, the leading national consumer advocate, to gain his take on these important topics.