By Jeff St. John
So GridPoint bought another company on Monday. What else is happening in the world of smart grid?
Monday morning saw a slew of other smart grid-related news, including a quarterly earnings report for demand response provider Comverge (NASDAQ:COMV), the opening of Echelon's (NASDAQ:ELON) smart meter ambitions in Latin America, and Xcel Energy (NYSE:XEL) seeking to start offering "peak pricing" programs to customers in Boulder, Colo.
• First, Comverge. The East Hanover, N.J.-based company reported it lost $9.4 million on revenues of $33.2 million in the third quarter of 2009, an improvement from a $81.8 million loss on revenues of $24.3 million in the same quarter last year.
That's not as impressive a third-quarter showing as that of competitor EnerNoc (NASDAQ:ENOC), which reported last week its first profit for the third quarter of 2009. Comverge has reported quarterly profits in the past, but neither of the two publicly traded demand response providers has yet reported an annual profit (see EnerNoc Finally Turns a Profit).
But both companies have been growing revenues and adding to contracts to turn down utility customers' power use to meet peak demand. Comverge said it had 2,857 megawatts under management as of Sept. 30, 2009, putting it behind EnerNoc's 3,250 megawatts under management as of that date.
Comverge may be hoping that managing residential demand response through smart meters will help it overtake its rival. EnerNoc concentrates on commercial and industrial customers, as do most other demand response companies including Comverge. But Comverge has also branched out into homes.
Two of Comverge's contracts – one with Maryland-based utility Pepco (NYSE:POM) and another recently announced with Dominion Virginia Power (NYSE:D) – are set to use smart meters for those demand response services, although it will begin by serving those homes with its existing pager-based networks (see Comverge's Home Demand Response: Pagers First, Then Smart Meters).
Most demand response programs are now run in a command-and-control fashion – utilities pre-pay customers to agree to turn down power when needed, then use technologies from two-way digital communications to phone calls to warn the customers to turn down power when peak loads are looming.
But many utilities are hoping that new variable pricing schemes will help create a market-based solution to the demand response business. By making power more expensive when demand is high and lowering its price when it's plentiful, utilities hope to give customers incentive to do the load-shifting on their own.
Many commercial and industrial customers already pay variable prices of this nature. Bringing them to homes, on the other hand, is more complicated, since technology to communicate price changes and adjust power use accordingly is seen as a prerequisite to applying pricing schemes fairly across a wide range of residential customers (see Utilities Mull Price Points, Policies for Home Energy Management).
• Xcel Energy became the latest utility to seek to try out such a program, announcing that it has asked the Colorado Public Utilities Commission for permission to run a peak pricing pilot program with about 2,000 customers in Boulder, Colo. – home of the utility's $100 million SmartGridCity, a showcase of smart grid technologies (see the Daily Camera).
Xcel is seeking to give about 2,000 customers a range of pricing options, including time of use pricing that charges more for power between 2:00 p.m. and 8:00 p.m., critical peak pricing programs that also boost prices on the 15 days of the year when demand is highest, and a "peak time rebate" program to give extra credits for turning down power use during peak days.
Similar types of variable pricing programs are being tried out by Arizona utilities Salt River Project and Arizona Public Service, as well as utilities in Canada's Ontario province such as Milton Hydro. California utilities are also under state regulator mandate to start rolling out variable pricing programs for commercial customers.
The $3.4 billion in smart grid stimulus grants given out by the Department of Energy last month could jumpstart a lot more requests like this. Projects in states including Arizona, Connecticut, Louisiana, Maryland, Michigan, Missouri, North Carolina, Nevada, Oklahoma, and Wyoming, as well as Washington D.C, have proposed giving customers different prices to drive energy conservation (see DOE's $3.4B Smart Grid Grant Program: The Winners).
Many utilities see such in-home energy management systems as an end goal of their deployment of two-way communicating smart meters to customers homes and businesses, though so far, those projects have been limited to pilot projects.
In other parts of the world, however, utilities may be more concerned with using smart meters to detect energy theft than to link up high-tech home area networks. That's one observation that analysts have made of smart meter deployments in markets such as India, China and Latin America, where energy theft – hacking into meters to steal power – can eat up a large percentage of a utility's electricity (see Freescale's Smart Meter on a Chip).
• San Jose, Calif.-based Echelon announced Monday it was taking its first step into the Latin American market with a deal with Brazilian meter supplier ELO Sistemas Electronicos. The country has announced tentative plans to replace the nation's roughly 63 milllion electricity meters with smart meters by 2021, and ELO serves utilities with about 55 million customer "endpoints," or meters, Echelon reported.
Echelon has had a good deal of success in Europe with its smart meters, which communicate over the same wires that carry power, and it recently landed a contract with Duke Energy in the United States that could expand its presence in North America (see Echelon Expands Euro Smart Meter Biz).
In Brazil, it will compete with other smart meter makers, such as Landis+Gyr, which in July announced a deal to build smart meters in the country and plans to install about 200,000 of them by year's end.