Manufacturers are designing smart thermostats and appliances that will adjust power use automatically in response to price signals from smart meters, an approach known as "prices to devices." General Electric is already marketing hot water heaters that can link to smart meters. Whirlpool plans to manufacture one million smart clothes dryers by 2011, and has pledged that by 2015 all of its electronically controlled appliances will be smart grid-compatible worldwide.
Although utilities are running smart grid pilot projects across the U.S., including cities in New York, Texas, Florida, Colorado, and California, recent polls show that only about 20 to 30 percent of Americans know what the smart grid is. But large majorities of those who have heard about it think that seeing data on their power usage will help them save energy. Bearing out those views, studies show that consumers who have real-time information about their energy use reduce their total consumption by about five percent on average.
"When customers get enough data about how their electricity use affects their bill, they get interested," said Ellen Vancko, a senior advisor with the Union of Concerned Scientists who has also worked in the electric power industry. "You can see it with other purchases - people will drive past three service stations to buy gas from one that charges a cent less per gallon, because they can see the prices. The more information customers get and the more ability they have to act on it, the more successful smart metering programs will be."
As electric vehicles start to penetrate the market, smart metering will also help utilities manage growing power requirements to charge cars at homes and workplaces. "A single vehicle charging at 220 volts can double a household's peak power usage, so it will be critical to make sure they don't all plug into the grid at 6 p.m.," said Case. "That will become part of home energy management packages, and we also will probably be able to interrupt charging if it's needed to make sure that the grid is operating reliably."
In January the Energy Department's Pacific Northwest National Laboratory released a study estimating that developing a full-scale smart grid in the U.S. by 2030 could reduce annual carbon emissions from the electric power sector by some 442 million metric tons, about 12 percent, equivalent to the output from 66 average coal-fired power plants. The smart grid would reduce emissions in many ways, including linking in more renewable power sources and educating consumers about their own energy use. Partial deployment of a smart grid in some areas would yield proportionally smaller payoffs.
Some interest groups are less enthusiastic, especially advocates for low-income and elderly consumers, who worry that advanced metering will make it easier to cut off customers' electricity and that managing home energy use will be too difficult for their members. For example, the American Association of Retired Persons argues that ratepayers should be able to choose whether to shift to dynamic pricing, and that retirees, the ill and the disabled may not be able to move their energy use to off-peak periods.
"Unaffordable home energy poses a serious and increasing threat to the health and well-being of a growing number of older people in low- and moderate-income households. For many of these households, high and volatile home energy prices jeopardize the use of home heating and cooling and increase the prospect of exposure to temperatures that are too hot in summer and too cold in winter," said Dean Sagar, AARP's director of livable communities.
Smart grid advocates say that carefully designed pilot programs and extensive testing - backed by strong oversight from public utility commissions - can minimize negative impacts like these. Moreover, they argue, utilities have no choice: without a more sophisticated grid that can integrate low-carbon sources, the power industry will not be able to meet state renewable energy targets (which mandate a fivefold increase in renewable electricity use by 2030) or accommodate large numbers of electric vehicles. "The smart grid is coming, inevitably," said Fox-Penner. "The only question is how bumpy the transition will be."
Jennifer Weeks is a freelance reporter based near Boston, Mass. DailyClimate.org is a nonprofit news service that covers climate change.