Smart Meters And Energy Deregulation

AGR Group is a leader in retail energy telemarketing services. We’re born of energy deregulation, and we’re big fans of innovation.

Energy competition brings increased choices and lower prices to the consumer. Technology can do the same, of course, and when paired together they can be a powerful combination.

Which brings us to today’s question: What exactly is a “Smart Meter,” and why should you care?

Hang on – this won’t be too painful.

Energy deregulation was designed to introduce competition to the electricity industry and drop costs to consumers through market-driven pricing. But forecasting pricing through mathematical models is a best-guess scenario.

It’s an ongoing challenge for energy companies to match consumption with generation. Electricity can’t really be stored on a mass level (think battery-power cites), yet we all need the electricity to be there when we hit the switch. The challenge is that there are times when we collectively use more power than others (think hot workday afternoon vs. Sunday morning).

So power companies rely on a series of generation plants to try to meet the varying demand. Some are churning away all the time (they’re called base load plants), and some kick on only when demand is high (called peak load plants). Peak load plants are far less efficient, as they have to be at full capacity in a moment’s notice, and generally run on fossil fuels. So peak energy is more expensive.

Power suppliers predict what demand might be (based on weather and other factors), and what the mix of base load vs. peak load might be, and come up with an average price to charge the customer.

But wouldn’t it be cool (ok, “Smart,”) to have a meter that determined the cost of the electricity you were using at any particular moment? What if that data could be delivered immediately via email or text message to the homeowner? That would certainly lead to electricity product innovation and increased conservation (or so goes the argument). And it has, but not without controversy. We’ll explore more in future posts.