Study Shows Path
Few people think about electricity until the lights go out and the food begins to spoil. Because of epic legislative and regulatory bungling over the past decade, Californians have too often pondered the reliability of this wellspring of modern life.
Economists have said for decades that power grids get into trouble because utilities don't give consumers basic tools to reduce their usage when shortages loom. It's a compelling argument.
Electricity is the world's most volatile commodity. Imagine gasoline that cost $2.50 a gallon at midnight, but soared to $400 a gallon by late afternoon. This is precisely how power markets behave on hot summer days, when air conditioners push up demand.
But under California's antiquated regulatory regime, consumers can't take advantage of cheap, off-peak electricity prices. A key reason: We use meters that are nearly identical to those invented in Thomas Edison's workshop.
A recently released University of San Diego study says consumers could save billions using readily available technology. The study was funded in a rare collaboration between San Diego Gas & Electric and the Utility Consumers Action Network, a frequent critic.
Analysts call for upgrading the local distribution system into a "Smart Grid." Today, SDG&E discovers outages when people call to complain. By 2010, sensors could monitor neighborhoods, anticipate problems and reroute juice to prevent blackouts.
Smart meters on every home and business would form the system's foundation. Using wireless signals or high-speed Internet across power lines, the meters could tell the utility each second how much energy was required.
Just as important, consumers could see the real cost of power every few minutes. If prices rose too much, you could program the meter to shut off the pool pump and adjust the thermostat.
Multiplied by 1.3 million meters in SDG&E's territory, such savings would be immense. About 16 percent of our annual power consumption occurs during just 100 hours a year. Generators run 55 percent of the time. Shifting demand to off-peak hours would be painless for most consumers and avoid construction of power plants worth $500 million apiece.
Then it's up to regulators to modify rates. Consumers should have a choice between fixed costs or dynamic pricing. SDG&E has asked regulators for permission to spend $450 million on smart meters. UCAN says key details need to be modified. The USD study shows that both sides have an abiding interest in empowering consumers.
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