If conservation is the ‘Happy Face’ of the smart grid (Lesson 2), consumer manipulation by utilities is its ‘Unhappy Face.’ I was struck last February, while talking with folks at Distributech, at the variety of means the industry is developing to manipulate our behavior. They need to provide incentives for us to consume less. These incentives generally mean to “pay more,” one way or another. The most common incentives are time-of-use rates (higher rates for peak usage) and rebates for increasing off-peak usage. When those don’t conserve enough, then utility demand response programs kick in (selectively turning off or throttling back energy hogs at peak times).

Of the three techniques, only off-peak rebates are non-controversial. Time-of-use rates may unfairly penalize those least able to shift their demand, such as the retired, disabled, and unemployed, and turning off an older person’s air conditioning on a hot day could be fatal. Utilities need to develop tariffs that support differentiated lifestyles in order to ease our transition from average-cost to usage-based billing.

Home energy monitoring systems can help consumers understand “where they stand” with respect to the grid, their usage, and electric rates; and make informed choices on how and when to use electricity. These systems can sound alarms, send text alerts, or change their display to red when peak rates are in effect.

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