The outages from the Halloween snowstorm have now yielded that strange occurrence of a promise of rate hikes for the restoration of service. From a buy side view, this is a problem that would normally be managed by insurance.

Smart meters don’t solve this problem, so let’s talk about how to build it into applications.

Image your smartphone has a relationship to the smart meter in your home. We have all seen these apps. The thermostat is displayed on your phone, and you adjust the temperature based on when you plan on coming back to the house, etc.

Right now the app is very simplistic and just shows the adjustment; however, nowhere in the demonstrations I have seen is the cause and effect really displayed.

What is optimum is if I am going to be gone for X amount of hours, how low can I go where I am not having to surge the system to bring the heat back up?

Obviously we can do better, but often the implications of what can be done have to be in context of the weather. And whether the weather is predicted accurately is always a matter of risk.

So now that we have the element of risk involved, let’s use it at two levels.

Level 1: What if you wanted to keep your pipes warm above freezing because you were going to be away for a week or so? You could play it safe and keep the house in the 50’s, or you could put the house in the 40’s. 

If your heat were electric or gas, the utility might try to offer an incentive for choosing the lower number.

Now let’s say you just intend to be gone for the weekend. The natural tendency is to keep the house closer to your normal temperatures and therefore the 50 to 60 degree range is more likely. 

Here the app would have to give you some feedback as to how long it takes to get the house warm again before you risk coming into the house and wanting to leave your coat on.

So far, so good. We have an app that knows the time it takes to heat the house, the risk involved with the weather and the utilities incentives to have you be efficient.

Now let’s go to Level 2.

A storm is predicted and the possibility of an outage is apparent. You and your utility know each other really well in the fact that you either normally weather a storm or are subject to lost power.

The utility could do a lot here to incentivize you.

1.    The utility could just offer you a rate insurance guarantee with a risk mitigation instrument.

2.    The utility could put you in a pool of neighbors where you could purchase a backup system, which while not directly applicable for the storm, gives you a sense of control beyond your normal experience.

3.    You could voluntarily offer your plug-in electronic vehicle to supplement the grid.

There’s one more level here that should be just part of the discussion. We all see the way that gas station prices go up and down based on the market for crude. We need that kind of feedback with the smart grid. The price of power needs to be shown dynamically and hopefully with some strategies. 

The bottom line is the risk gets shared via communication, and that should be embedded in most smart grid discussions. 

There is a need for it, even if there’s not an app for it.