Smart Grid Rubber Hits the Road in Stockton

March 26th, 2007

NPR this morning reported that PG&E is starting a trial program in Stockton, Calif. they are calling “SmartAC”. In exchange for a $25 discount, homeowners agree to install a “smart switch” on their air conditioning units that will let PG&E cycle the units off during peak demand periods- reportedly for 15 minutes every hour. According to the Central Valley Business Times, the first switches were installed recently, and the hope is to ramp up to 400,000 customers by 2010, which would give the ability to reduce demand by 300 megawatts.

The challenge of the smart grid, I believe, has to do with the “tragedy of the commons”, the idea that if I don’t use shared resources, my neighbors will take them all and I will end up with nothing. The tragedy comes in when resources that could be managed to support use sustainably over the long term get depleted by short-term thinking.

In the energy context, PG&E and all the smart grid operators need to overcome this hurdle. Particularly in the hot Central Valley, it may take some work to convince many consumers that turning off an A/C is actually a good thing for everyone in the long term. If successful, the program’s most immediate benefits will be that the power stays on, rates might not go up, and less CO2 may hit the atmosphere- none of which will be apparent unless PG&E makes an effort to point them out to people.

It sounds like the program has started with people with energy efficiency and carbon footprint ideas already in mind. I question whether they will be able to hit their 400,000 household target without moving out of that demographic. This will be a pilot program to follow closely. I am especially interested to see which marketing ideas sell best to the general public.