Left Coasting : Fail Marks for the Smart Grid

What’s so smart about corporate energy’s transition to smart meters?

by Rosalea Barker

Pacific Gas & Electric has a virtual monopoly on the supply of gas and electricity in northern California. You don’t get a choice whether to have a SmartMeter™.

So, eat your broccoli :

“Since the Energy Policy Act of 2005 prompted the electric utility industry to explore smart metering and time of use rates for all customers, utilities and state regulatory agencies have been interested in the potential for residential and small commercial markets to drive more demand response. Recently, the industry has awakened to the idea that ‘consumer engagement’ is important to the success of demand side management programs. However, while there is excitement about the role of the consumer, utilities still have doubts. How reliable can demand response strategies be if they depend on consumers to opt-in to participate?”

Translation: Who on earth is going to opt to sit down at their computer to look at the data being transmitted by their smart meter, and adjust their usage according to the time-of-use rate? Apart from Bob of Woodland, California, that is: (Watch Bob Woodland on Youtube).

In his household, Bob is his family’s self-proclaimed “energy cop. ” And repeat : Pacific Gas & Electric has a virtual monopoly on the supply of gas and electricity in northern California. You don’t get a choice whether to have a SmartMeter.™.

The italicized paragraph cited above is taken from the blurb for one of the panel discussions at GridWeek 2010, which was held in Washington DC the week of October 18-21. The “Grid” in “GridWeek” is the so-called Smart Grid, an operational framework that aims to make the transmission and distribution of electricity more energy efficient and reliable. The CLEAN Energy Act signed by President Bush in 2007—and one of the signature pieces of legislation of the Democrats’ First 100 Days in power after the 2008 election—included federal funding for it, and the Obama Administration has continued that support.

Gee whiz! According to the President’s speech, the Smart Grid will save Florida residents the princely sum of $56 each by 2030! A pretty paltry return on investment for the millions of dollars of their combined taxes that will go into getting them those savings.

It’s hard not to think that the Smart Grid is just fuzzy-wuzzy geekspeak for a multibillion-dollar opportunity for (already) multibillion-dollar companies to grab taxpayers’ money in the form of grants like the one given to the Navajo Nation. Their Smart Grid Investment Grant will be siphoned off by Elster, which unabashedly promotes its experience in handling stimulus funds on its EnergyAxis website. Perhaps SMART is just an acronym for Suck Money Away fRom Taxpayers.

But it’s not just in the US that governments are throwing money at the spectrum of electrotechnologies—electricity, computers, and wireless transmission of data—that make up the Smart Grid. The European Union is deeply committed to it. A blog in India calls it “the internet of electricity” and Indian companies certainly hope to cash in, as do those in China and many other developing nations, who have the added leverage of being blamed for causing climate change.

As the newly appointed energy czar at the World Bank, Dan Kammen, said in a recent interview: “Part of the reason why they created this position and why I was interested to take it is that the fastest growing sector within the energy space of the whole World Bank lending group is energy efficiency and renewables. It’s now several billion dollars a year in that area alone.” (Kammen’s actual title is Chief Technical Specialist for Renewable Energy and Energy Efficiency.)

So just what is this symbol of energy efficiency at the heart of the Smart Grid—the smart meter? It’s the demand-side gizmo that lets the supply-side gizmos monitor and control energy usage in, for example, your home. Ever since the early days of electricity, its use by consumers has been metered. Typically, you either pay for what the meter says you’ve used, or use what you’ve already paid for. The latter category is called pre-paid these days; not too long ago, it was called “Damn! The meter’s run out. Where’s the flashlight so I can find some coins to put in it?”

Either way, utility companies—be they owned by investors, cooperatives, or local authorities—manipulate pricing so that electricity is most expensive at times of peak demand. This is supposedly to discourage energy use. Smart meters will enable energy companies to manipulate the price paid by their customers in real time, rather than just over blocks of time that are traditionally high or low usage.

For example, two o’clock in the morning is not usually a high demand, high-price time-slot for residential homes, but let’s say there’s a big sports event happening on the other side of the world involving one of your national teams. Electricity usage goes up and so does the price. Too bad if you have a high-wattage storage heater that is programmed to only come on in the early hours of the morning because of the usually cheaper rates. (Not to worry; you can hop on your computer and watch the money being sucked out of your pocket, just like Bob of Woodland!)

The claim that smart metering will encourage consumers to reduce electricity usage at traditional peak times is of doubtful validity. In 2005, the San Francisco based group TURN (The Utility Reform Network), found that, when California gave 35 million dollars worth of free advanced meters to corporations with the ostensible goal of enabling them to reduce peak use during hot summer days in 2001, the amount of peak load reduction was almost zero. And, TURN pointed out, corporations actually have staff whose full-time job it is to monitor energy usage in the buildings they occupy.

Admittedly, TURN is biased in the sense that it is at the forefront of declaring that smart meters are a dumb idea. But it would seem that the California Public Utilities Commission is equally biased. In its FAQ about an independent study into whether smart meters resulted in higher electricity bills, CPUC’s response to the question “Why wasn’t a moratorium called on the installation of Smart Meters?” states that “a moratorium would involve costs to consumers for ramping down installation and re-starting at a later date…” In other words, whatever the independent study shows, CPUC is committed to the rollout of smart meters throughout California.

Since January 2009, CPUC has received more than 600 customer complaints about smart meters. Anecdotally, I’ve heard of monthly bills going up $40-$50 for a household of two adults and a toddler. But much worse, is the customer service aspect of smart meters. Utility companies make much of how smart meters mean meter readers won’t have to come onto or into your property. But, again anecdotally, I’ve heard of an elderly resident with difficulty walking whose power went off, and because she has a smart meter, PG&E customer service wanted to find out the problem’s cause over the phone. She was expected to come and go to the phone, switching off appliances one at a time until the customer rep on the other end of the line figured out which appliance was overloading the circuit.

Danger! What would it take for an actual service truck to be dispatched? Well, a hack attack might do the trick. In an April Gartner Research report entitled The Myth of Smart Grid Security, authors Earl Perkins and Paul E. Proctor warn that the future holds some painful lessons because Smart Grid deployment is being handled piecemeal. The authors’ primary concern is that companies see operational technology as separate from information technology, whereas the Smart Grid is based on the IT controlling the OT, and it won’t matter how secure the Smart Grid’s physical plant and infrastructure is if the software controlling it is insecure. Not to mention security concerns about the wireless communication networks through which the control signals are routed.

Perkins and Proctor provide a “short (not comprehensive) list of potential attacks”, which includes smart meters being attacked in order to roll all the maintenance trucks; in the ensuing “chaos”, other more serious attacks could be launched. And because smart meters are two-way wireless devices, there is the possibility that the functioning of critical infrastructure could be interfered with. The pressure within gas pipelines, for example, is regulated electronically, and you only have to look at the devastation caused by the recent San Bruno pipeline explosion—which was preceded by a power outage at an unmanned terminal—to see how a major disaster could be engineered by someone knowledgeable enough to hack into their smart meter and send malicious code along with the meter’s self-reporting of electricity usage.

Consumers have raised other concerns about smart meters—which transmit wireless signals at set intervals and can receive them at any time—including interference with devices in their homes, such as cordless telephones, security systems, and baby monitors. PG&E has responded to the effect that their smart meters meet the Federal Communications Commission guidelines, and consumers will just have to buy home electronics that are better shielded against interference. And in the future, consumers may even be forced to buy Smart Grid-compliant appliances, such as washing machines and driers that can have their power cut off individually by the utility company at times of peak load. The 30-month Smart-A project in Europe investigated that prospect and its 2009 final report is here.

Health issues are also high on the list of worries consumers have about smart meters. A lengthy article in the East Bay Express in July, looked at the possibility that the electromagnetic fields they create are contributing to a variety of symptoms. On November 18 in San Francisco, the Commonwealth Club of California will host a panel discussion about the health effects of electromagnetic fields. One of the panels is entitled ‘Smart Meters’–The Shortsightedness of New, Radiation-Emitting Utility Technologies. The day’s program is co-organized by ElectromagneticHealth.org, which was founded by Camilla Rees, co-author of Public Health SOS: The Shadow Side of the Wireless Revolution.

There is a great deal of money to be made in supplying the hardware, software, and wireless technologies associated with the Smart Grid. For example, Cisco recently bought out Arch Rock, a San Francisco-based company that makes wireless technology to transmit data from smart meters to utilities. In a BusinessWeek article Charles Carmel, Cisco’s vice-president for corporate development is quoted as saying: “The smart grid will be a multibillion-dollar opportunity for players like Cisco and others for a number of years to come.”

Arch Rock was started by two researchers, one of them a professor of computer science at UC Berkeley. Below is a link to him giving a lecture in October, 2008—it’s just the first five minutes that you need to watch. I’m not posting it to make him look foolish, but rather to show how vulnerable systems already are when there isn’t even any malicious intent involved. The background is that in 2008, Governor Schwarzenegger slashed the UC system’s operating budget, with the result that staff cutbacks led to poor maintenance of systems, such as the AirBears wireless network, relied on by instructors.

It seems to me that no matter how rosy the investment picture might be for Smart Grid-related businesses at the moment, the future will inevitably hold times of financial strain – resulting in staff cutbacks, poor maintenance, and lax oversight. The results of which could be disastrous on a nationwide scale.

[Editor’s footnote : New Zealand is proceeding with the installation programme by 2012, of an allegedly dumb generation of smart meters. The last year rollout was criticized by Jan Wright, the Parliamentary Commissioner for the Environment.

Wright’s report was released before the rollout of smart meters in California had triggered a consumer revolt against smart meters and with the threat of class action against them by the city of Bakersfield.

Some of the security concerns :

On November 1st, a new generation of smart meters will be rolled out in northern California.]