Strategic CIO // Executive Insights & Innovation
Commentary
3/24/2009
03:02 PM
Bob Evans
Bob Evans
Commentary
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IT's Dark-Side Potential Seen In SmartGridCity Project

In an exciting and thought-provoking experiment in the city of Boulder, Colorado, Xcel Energy has kicked off a $100M project called SmartGridCity designed to give consumers greater control over energy usage and options via Web-based accounts. But the control goes both ways: the test also allows Xcel to reach into consumers' homes and adjust thermostats during periods of high demand.

In an exciting and thought-provoking experiment in the city of Boulder, Colorado, Xcel Energy has kicked off a $100M project called SmartGridCity designed to give consumers greater control over energy usage and options via Web-based accounts. But the control goes both ways: the test also allows Xcel to reach into consumers' homes and adjust thermostats during periods of high demand.As noted in a recent Global CIO column, the SmartGridCity project is exploring a wide range of customer-driven options: consumers can select which types of energy they prefer to consumer, evaluate variable-pricing programs, and receive more-granular information on home energy usage by appliance, by time of day, and other measures. The goal - and it's clearly an excellent one - is to help consumers be better-informed about energy usage and costs to allow them to make the decisions they believe are right for their home.

But what's drawing a lot of attention with the Boulder project is the option for consumers to give Xcel permission to monitor energy usage with great precision in individual homes and, when the company feels it is necessary, to regulate the amount of energy homes can consume. So let's say there's a long stretch of unusually hot weather in July and a Boulder resident with a houseful of guests has cranked up the air conditioner to 68 degrees- if that consumer has given Xcel permission to monitor and adjust energy consumption, Xcel could remotely adjust the thermostat setting from 68 degrees to 72 degrees or whatever temperature Xcel feels is appropriate.

Speaking of the overall project and not just the remote-adjustment feature, Xcel CIO Mike Carlson said his company is "testing how far we can go with this," according to a recent Wall Street Journal article. I think it's great to see an accomplished business-technology leader like Mike Carlson taking a prominent role in this exciting and important project that shows precisely how IT can extend business models and create new levels of engagement with customers. But it also seems that for all of the enticing aspects of the project, the discomfort raised by the prospect of someone outside your home regulating energy usage inside your home is something Xcel should address more directly.

Think about it: let's say a Boulder resident has three refrigerators, four computers, a big whomping air conditioner, lots of lights, three 50" plasma TVs, and commercial-grade washer and dryer. And let's say this particular Boulder resident has elected not to give Xcel permission to regulate energy consumption in that particular home - this will present a very interesting situation during peak usage periods if Xcel calls up that consumer and says, "Hey, we know you opted out of the remote-control plan, but our system shows that you're using more energy than your neighbors - how about cutting back so that we don't have to further squeeze the opt-in participants?"

Sounds like a good business opportunity for a web-based company offering consumer-based SLAs spelling out very clearly what rights the consumer has in such an arrangement, and what service commitments are incumbent on the energy provider.

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