Monopolistic Utility Companies Suppress the Use of Customer Data — Episode 155 of Local Energy Rules

Date: 27 Apr 2022 | posted in: Energy, Energy Self Reliant States | 0 Facebooktwitterredditmail

Using an iPhone solely as an iPod would be a waste, but this failure to harness smart technology’s full potential is happening with electric meters across the United States. Customers have paid their utility for hardware and installation, but the utility won’t enable the meter’s “smart” functions.

For this episode of the Local Energy Rules Podcast, a rebroadcast from the Building Local Power Podcast, host John Farrell speaks with Michael Murray. Murray is president of the Mission Data Coalition. Farrell and Murray discuss how utilities are resisting data portability, even though customers have a right to their own data.

Listen to the full episode and explore more resources below — including a transcript and summary of the conversation.

Michael Murray: How are we gonna grow? How are we gonna tell wall street a story about, you know, up into the right goes our profits and dividends over time and so forth. And so they said, well, we need to invest in the distribution system. And smart meters became a critical part of providing value. And it, it provided a capital expenditure opportunity that was arguably lost with power getting deregulated. What’s interesting is that utilities often don’t have the real digital capabilities in house to be able to use smart meters to their full potential.
John Farrell: Amazon reinforces its online shopping dominance by leveraging data it collects about sellers and their products. Facebook profits from the personal data it collects from users. We know that data can be incredibly valuable. That’s why Michael Murray, president of the Mission Data Coalition, joined me in April 2022 to suggest that clean energy advocates need to pay more attention to the value of customer electricity use data and how to extract it from the protective claws of monopoly electric utilities. I’m John Farrell, director of the Energy Democracy Initiative at the Institute for Local Self-Reliance and this is Local Energy Rules, a biweekly podcast sharing powerful stories about local, renewable energy. Michael, welcome to Local Energy Rules.
Michael Murray: Thank you, John. I am a big fan of the podcast and very happy to join you today.
John Farrell: It was such a pleasure to meet and talk to you earlier this year for the first time, and then to get a chance to read your recent report on digital platform regulation, because it really intersects well with the way that ILSR and, and that other folks across the country are looking at this issue of like who controls the platforms that we do business on and who has access to the information about themselves. You know, some people might think of this in the context of Facebook. As a Facebook user, that this company controls a lot of data about you, that you’ve given them voluntarily. And then sometimes you’re trying to figure out like, wow, maybe I wanna cancel my account or close my account. How do I have access to that data? How can I get back my data? Or you have Amazon, which uses data about the different sellers on its platform in ways that can enhance its ability to compete or unfairly compete with the independent sellers on its platform.

And then we have the utility business, and this is where I was so pleased to come across your work, because I wasn’t aware that someone had thought through so carefully, not just this idea of like access to customer data as something that might be useful, but you’ve really thought through it in terms of like, what are the structural, market structure problems that prevent us from getting access to customer data? And I feel like there’s some good stories to tell as well. Maybe you could just talk about like in a heat wave or maybe in like the Texas freeze context, when these big events happen on the electricity system that constrain the system, why does customer data at this point in time matter? Why does it matter if we have access to how people are using their electricity? Why does it matter that customers might have access to their own data about that?

Michael Murray: I’ll give you two great examples. There was a heat wave… there’s been so many heat waves now in the West Coast. I can’t even remember how many years ago this was, but the usage data from a large number of customers is extremely useful, both for demand side management in these emergency situations, but it’s also valuable for load forecasting and it’s that load forecasting function which often contributes to blackouts if you get it wrong. So if your day ahead forecast is, you know, too low and the demand ends up exceeding that, you’re in a bind as a grid operator. And so there was some, some evidence on an article and by an advocate for community choice aggregators in California, that the time delay that the community choice aggregators had experienced in, in getting access to large scale customer usage data led to them underestimating their peak usage in the coming days of this heat wave. And so that actually led to reliability problems and more spot market purchases, which increased costs to everybody, to the system as a whole.

So that’s a great example of where there was, there was a disparity or an asymmetry between the utility, the incumbent utility that had much faster access to this data, but then they would sort of say, well, there’s these processing delays and, and we have to run it through these big systems in order to provide it to you. And that delay of, you know, 12 or 24 or 48 hours could meaningfully impact your responsiveness on the supply side of things to the power grid. So that was one example.

Another also in a heat wave context is there are efficiency, aggregators that will, you know, save a few hundred Watts with one household and a few hundred Watts with another household. And you wrap that up into tens or hundreds of thousands of households. And you end up with several hundred megawatts of flexible load on, on the power grid. And the only way to value those services is with the meter data. So you need to know, you know, what was the usage before the heat wave event? What was the usage after? There’s a little bit of complicated mathematics to calculate a sort of fair subtraction of your, you know, usage based on a compared to the baseline. But the usage data is, is really the fulcrum of the whole system, because that’s how the aggregator goes to the wholesale market operator and gets paid for their service. And in turn, those payments can flow through in part to the consumers who are donating their flexibility, if you will, in their power usage. So those are two great examples of where the data on every household, you know, measured often at a 15 minute interval plays this really important role behind the scenes in lowering cost for everybody.

John Farrell: That’s so great. I, this reminds me actually, I had a great interview with Cisco degrees from OhmConnect, think it was last year where we talked about their virtual power plant. So he’s, and folks should listen to that podcast if they wanna better understand this idea of demand response aggregation, which I know is probably three words that most people don’t string together very easily. But this idea of that, you take a little bit from everybody, a little bit of energy savings from everybody, and you can put it together and you can make it as much as a big power plant. And so one of the things we didn’t get into very much. So we talked a little bit about the fact that there aren’t that many markets where you can even do this, where you’re even allowed to pull together these different customers. But it sounds like there’s this other piece of it too, that matters, which is even if you had a market for that, you need access to that data. You need to be able to say here’s how much my different customers are using. Here’s how much energy they’re saving, therefore here’s how much we ought to be paying them to be providing this service.
Michael Murray: Exactly. And that’s why it’s so critical that we solve this data portability problem, because we want a hundred OhmConnects out in the world providing these services because it reduces the wholesale power costs. It makes so much economic sense. And yet what we’ve seen in many places, even in California, which has a number of clean energy credentials, they ostensibly care about distributed energy resources and are trying to help customers on the local level, through, you know, generous energy efficiency programs and that type of thing. They still make it very, very difficult to effectively operate as an aggregator. And the access to that usage data has been a litigated issue for almost 10 years. Just to give you a sense of some of the complexities and the arrows that OhmConnect has taken in their back as they tried to pioneer this space.

It was, I met one of the founders of OhmConnect maybe in 2013. So some, some time ago, and they were trying to get, this seems like a simple task, but they were trying to get the California Independent System Operator to agree to treat the usage data that was available on, let’s say the PG&E website. So when you log in to pay your bill, you can view your energy usage history. And OhmConnect with telling the California ISO, you need to treat the data that is available on the webpage as called settlement quality data. That’s sufficient for meeting all of the rules and regulations around settlement data at the wholesale market level. And that seems like a really simple thing. You know, you have energy usage data on the website and shouldn’t you just be able to send that to the ISO and get paid? It was extremely difficult to get that. And the utilities introduced to all sorts of problems like, well, the data that we provide to customers, isn’t really settlement quality data. It’s this other kind of rough, raw data that is not sufficiently polished. And so therefore you can’t take that to the wholesale market. And every time you start peeling back one obstacle after another, it always seems there’s something else that’s in the way. And eventually we were able to overcome that problem, but let’s just say the system is not designed to help distributed resources get the information they need at a quality and timeliness that they deserve.

John Farrell: So I wanna come back at some point to this issue of kind of what data is out there and this whole process of like, why utilities have this data and, you know, getting access to other parties to provide services that can lower costs for everybody. But can we, before we get into that too much, in terms of like how data is used or is available or not available, could you just talk about how much more data is being collected these days than it used to be like, what’s out there? What are we getting? What information are we getting that we didn’t used to be? And I’m starting this conversation by thinking about the story of like the first net metered solar project, which they’d had no idea how they would measure the energy usage or bill somebody. It just so happened that they plugged in the solar panel and this dumb mechanical meter started spinning backwards instead of forwards. And hence this whole policy concept of net metering was born. But at that point, all we could collect really was how much energy is used in total, on this meter over some period of time. So if I look at the meter today and then I look at it tomorrow, and then I just do some subtraction, that was as sophisticated as it got, and the utility would literally go out and read the meter, a person would be sent to read it.

Well, we’re a lot more sophisticated these days. What are we collecting out there? What are utilities collecting in terms of customer usage data, and how could we be using that?

Michael Murray: I, I think you’re being generous, John and saying that utilities are much more sophisticated now than they were a few years ago. So what the, a couple of things have changed since those electrical mechanic meters were widespread. The first is that we have so-called smart meters and I put big air quotes around those. They’re not particularly smart. They have two core functions. One is to read consumption or the, the back feed, if you will, if it’s a net meter with, you know, solar feeding back the grid, every 15 minutes, some states it’s once an hour, some states it’s 30 minutes like in Illinois. So there’s different measurement intervals, but just generally less than an hour.

And the second function is those meters communicate it over a radio network that’s sometimes proprietary back to the utility for billing purposes, and this allows the utility to fire their meter readers. So instead of having a person drive around in a van and, you know, go into your backyard and read the meter, they could lay off all those people and just solve the problem with a radio network instead. And that was sort of advanced metering infrastructure AMI 1.0, you might call it. To date, there’s upwards of about a hundred, maybe 110 million of those meters that are deployed across the country. So it’s fair to say that the majority of American homes and businesses now have a so-called smart meter version one on their house or their business.

John Farrell: We have a less dumb meter, is what you’re saying. It’s not really a smart meter yet.
Michael Murray: Exactly. It’s, it’s less dumb. And to give you a sense of, of the dumbness, a lot of these meters came baked in with a second radio that was designed for local communication so that someone inside their home could get a sense of their real time power usage. And this was part of the vision, a somewhat, you know, techno utopian vision of smart meters that was put forth, you know, 10, 15 years ago. And in some states, those are turned on. Those radios are turned on and customer as can actually use the information. Sometimes it’s broadcast every five or seven seconds. And so you could, you know, walk around your house and turn things on and off and get a very instinctive sense of what is using power. And, you know, it can be very, very useful for people who often don’t have a sense of, you know, does their electric cooktop use more than their hot tub or their heat pump or whatever. So there’s certainly some educational value to that.

What’s been frustrating for me is, and other DER aggregators, is that it’s extremely, has been extremely difficult for utilities to universally enable that capability. So there are states where customers have paid for this, this meter it’s called referred to as the home area network, but the utilities refused to turn it on. And so this is the case in Washington, DC, where the smart meters have been deployed for probably 12 years or so. And even to this day, despite a lot of clamoring from individual customers, from businesses, from the Washington DC municipal government, Pepco still will not turn on the home area network radio for being able to use it for energy management purposes. So it’s a big frustration and that’s sort of the state of the U.S. today. It’s a patchwork. Some states like California, you can access the home area network, but then there’s other places in Maryland and in Washington, DC, parts of Ohio where you can’t use it.

John Farrell: I’m just really curious about this specific example with DC. So the meter hardware has this radio that allows this capability of like home energy insight. And I feel like I’ve probably seen some of these like glorified commercials or whatever of like somebody having some device on their kitchen countertop that’s telling them like, here’s what’s using the most energy in your house, right. So I’m sure we’ve all seen something like that – those of us who work in the field. You know, obviously we don’t think people are gonna sit around just like gazing at that all day, but there are some pretty interesting potential uses.

You know, I’ve heard, for example, like some electric co-ops that have smarter meters will actually call customers themselves. I think this was in Tennessee, for example, Chattanooga, one of the pieces of their smart grid rollout was that if somebody’s energy use spikes, they’ll call the customer proactively and say, Hey, by the way, did you know your energy use has been spiking over the past few days. If you haven’t been doing something different, you may have a faulty thing or other, and if you need help, we can help.

So it’s really funny to think, uh, funny, it’s not funny, it’s disturbing to think that we’ve all paid for this technology, right? We’ve paid for this hardware as a customer of the utility to be installed outside of our home. And yet we can’t use it. So what’s going on in DC? I don’t know if you have more detail about DC in particular, but why wouldn’t they want to turn this on? What’s the problem?

Michael Murray: You’ve begun to ask the question of why don’t the utilities want to play ball? Why don’t they want to empower their customers with their energy data? And there’s rhetoric, and then there’s reality. And it’s kind of like peeling layers of an onion. There always seems to be, you know, some excuse or another, oh, there’s cybersecurity problems. You know, God forbid someone is able to access the energy usage of their neighbor and therefore violate their neighbor’s privacy. For example, that’s one of the arguments that they put forth. That sounds like it would be concerning if you care about privacy. The fact is that that’s almost impossible to occur as a technical matter. The meters have a cryptographic key that’s installed on them that ensures that only devices that are approved by the utility can in fact, communicate with that individual meter.

So you hear cybersecurity concerns. You hear concerns about cost. This is I think sort of ironic because the utility has no problem billing customers for the hardware that enables this capability, but then when it comes to actually turning it on, they say, oh, you know, this would cost too much money. We might have to have call center representatives who need to walk our customers through the device connection process to their meter, and there’s there. And it just would be unfair to, you know, put the costs of this enablement on all customers, even though only a small number of customers might use it. So that that’s another argument that we sometimes hear.

And it’s frustrating because it’s sort of the classic incentive where the utility wants to deploy. They want capital expenditure and they want it in the rate base. But then when it comes to actually using the meters for what they were designed for, they, they say, oh, well, we couldn’t possibly do that. Our IT systems can’t handle it. And, and that sort of thing. So we’ve been sort of circling around that in Washington DC for a number of years. I will say that the meters that Pepco has in Washington DC are exactly the same meters that Pacific Gas and Electric has. And PG&E has been enabling the home area network since probably 2013 or 2014. So we know it can be done. It can be done securely. It can be done on a large scale. This is a solved problem, but some utilities just don’t want to embrace that.

John Farrell: We’re going to short break. When we come back, we discuss why utilities invested in smart meters, but don’t really tap their potential, as well as some examples of where data access is unleashing competitive and innovative solutions to electricity grid problems. You’re listening to a Local Energy Rules podcast with Michael Murray, president of the Mission Data Coalition, about the crucial need to make it easier to access customer electricity usage data.

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John Farrell: I really think it’s great that you’ve highlighted this issue about the financial incentive though, because what I hear you saying essentially is because of the way we generally allow utilities to profit – regulated monopolies to profit it’s by building something and earning a return on it, expending capital. So they can make a profit on selling you an expensive meter that they can stick on the outside of your house. But if it costs money to run that meter, whether it’s through tech support or advice that they have to develop on the website, they don’t necessarily earn the same profit on that. Cause it’s not in the rate base in the same way. So there’s not as much of an incentive to actually make good use of this.

I feel like this is the same, this is the corollary to like the whole fight we have about power generation right now, right? So advocates are saying, don’t build new gas power plants. In the long run, you’re not gonna use them because either your state has climate goals, it’s gonna reduce your ability to use that power plant or simply it’s gonna be uneconomical cuz as the prices of natural gas, methane gas have gone up so much, it’s no longer as competitive with renewable energy resources. And so these as another example of stranded asset, except this this time, it feels like it’s on purpose. It’s to say, yeah, we really just wanted to build, put the meter on your house to make the money, but we don’t really intend to use it.

So obviously that’s, I mean, in terms of implications here, though, what’s happening is that we’re spending a lot of our money collectively, the utility is spending this money for us. Regulators are approving it and saying like, yeah, this is a great idea. And then customers are essentially not getting to tap into the advantages, whether it’s for the individual customer who could maybe participate in some market where their potential to help save energy could benefit everybody. Or we’re not taking advantage of it because the utility has to go out and build more resources to meet energy end that we could be addressing if we collectively shared this information.

So one of the things that I’m interested in talking about a little bit here is I really love essays that are written by Scott Hempling. He’s now an administrative law judge with the Federal Energy Regulatory Commission, but formerly did a lot as a litigator and attorney, a lot of work on utility mergers and kind of utility structure. And he talks about this idea of what he calls unearned advantages and specifically the things that a utility has simply because it’s the monopoly because the government has said, here’s a public franchise. You will have no competition. We will regulate your rates, et cetera.

So as the incumbent utility, just because they are the utility, because they read your meter because provide that customer services, the monopoly, they have access to data about your energy usage. And what they’re essentially saying is even though we didn’t earn that right to have your data, we didn’t do anything special. We, we collect it because it’s part of our business. We are using that as our competitive advantage against these other people that might wanna do stuff. So we wanna do a power plant and OhmConnect says that they could do the same thing for less money. Well OhmConnect, because we can restrict their access to the data, we can keep them from competing with us in the field of power generation. Is that, I mean, is that what you’re seeing happening here? Is this, does my description of unearned advantage capture what’s going on here with the data?

Michael Murray: Exactly. I would add a little bit more color to it, I think. So stepping back in, you know, smart meters really fulfilled this role, this important role in utility capital expenditure that economically was threatened with the deregulation and the forced divestitures of, of generation, you know, going back to the early two thousands. So there’s a lot of utilities that were forced like in, you know, New York and to some extent, California were required to divest of their power generation. And utilities, I think, reacted very thoughtfully and strategically to that in part by saying, well, we’re not gonna be able to make money as reliably on power plants. This is only true in certain states, not all states. And so how are we gonna grow? How are we gonna tell Wall Street a story about, you know, up until the right goes our profits and dividends over time and so forth. And so they said, well, we need to invest in the distribution system.

And smart meters became a critical part of providing value. And it, it provided a capital expenditure opportunity that was arguably lost with power generation getting deregulated. What’s interesting is that utilities often don’t have the real digital capabilities in house to be able to use smart meters to their full potential. So there’s a new generation of smart meters, which maybe we’ll talk about in a second, that provides a lot of opportunities for understanding where our power’s being used in the home. And that requires a lot of data science and skill with managing data that’s provincially,  traditionally been within the scope of the tech sector, not really the monopoly utility world. And so on one hand you have utility saying, well, we have to be the generator of this energy data because we bill you for it. And it’s essential part of our system. But on the other hand, they don’t really have the capabilities, even though they might have the ambitions of exploiting it and using it in a way that’s maximally valuable. And so I would say that there’s, I agree with what you said, John, but I think there’s, there’s a capability aspect in addition to the mismatch of incentives. And this is, it results in some frustrating results.

So for example, there’s some utilities that are, you know, sitting lots of smart meter data and have not been putting it to use, but then when anyone else tries to go to them and say, here’s how we’d like to help you target your energy efficiency programs better using our, you know, mathematical prediction models. Here’s how we can deliver better load aggregation services, whatever it might be, then the utility say, well, no, you, you can’t do that. And because of cyber security or privacy or this or that. And so on, on one hand, they know that the smart meter data is valuable, but they really think it’s their exclusive right  to exploit it. And so even though they really may not have the capability of following through with it, they end up boxing out some of these other entities that have even with customer permission.

So this is, you know, where Mission Data get to evolve, cuz we’re always advocating for permission based exchanges of data. And so this is not the case where we’re asking for, you know, wholesale copies of the utility database, you know, just to go on a fishing expedition or to market products and services to customers. That’s not what we’re talking about. We’re talking about an individual customer gives their permission to a solar installer or to a demand response aggregator or an energy efficiency company. And it is the utility’s job as a steward to that in a standardized, rapid, simple way.

And that’s where the utilities say, mm let’s hesitate. Let’s draw this out several years so that we don’t have to face the music. And they’re afraid of what ultimately underlies a lot of the resistance and, and lays on the part of utilities to enabling data portability is I think a, an anti-competitive impulse that they really see this as theirs to exploit. And they don’t like the idea of any other company doing a better job at using customer data and delivering useful services for people. To your example, John, that could be high bill alerts. So the utility may have a rightful natural monopoly on a meter. It only makes sense to have one meter on the premises. That seems reasonable enough. But what about the digital services that are possible from the data collected? What gives the utility the natural monopoly over that things like energy desegregation of where your power’s being used in the home based on analysis of trends. Is that a monopoly function? I don’t think so. And so to your point about unearned economic advantages, this is definitely a case where utilities want to be able to be the only provider of these insights about your energy usage. And that creates a market asymmetry for the companies that we work with that are, you know, really, really trying to do some interesting things with energy data analysis.

John Farrell: I feel like we’ve actually covered a lot of different ways in which this sort of system that we have is problematic. So you have the mismatch to incentives for the utility, right? They’re, generally speaking, we reward utilities for spending money on capital investment, but not for figuring out how to use it well. So we’ve got this problem where utility, rationally as a utility manager, I’m rationally saying, let’s do smart meters, but I’m also rationally not really concerned with whether or not it can be used. Well, which is funny because it’s not only do I not make money while doing that, but I’m also not really talented inherently at doing it. So it’s like this, the, the worst of both worlds, right? I have no idea how to use smart media data. And I also don’t care
Michael Murray: Exactly.
John Farrell: And then you have this combined with the fact that the utility has access to this data as the result of this publicly granted franchise, not because of any merit. They haven’t said, they haven’t proven to us, like, we are the best holders of the data about energy use, because we will use it the most effectively. They just have it because they’ve always had it because like you said, it does make sense for them to be the only company that installs a meter on your house. We only need one of those, but they don’t have any particular advantage that they’ve shown, any competitive advantage they’ve shown in how that might be used. In fact, it’s a complete opposite, as you say, when people come and say, Hey, we think we have ways we could use this data to serve customers better. The utility is like no, let’s actually stop them from doing that
Michael Murray: Exactly. And there’s a variety of techniques to stopping those entities from doing it. It’s, you know, one is just a brick wall, you know, we’re not gonna talk to you. This is our data. We’re not gonna share it with you. There’s some other tactics like cybersecurity. So they’ll say, well, we couldn’t possibly share this data with you, even though the customer wants us to, because you might have a cybersecurity breach and we spend hundreds of millions of dollars a year on cybersecurity, and you probably don’t spend that much. And so therefore you’re a risk. And they plant that seed of that out in the regulator’s mind, who then becomes, you know, hesitant to create what they might see as a cybersecurity vulnerability in their jurisdiction. So there’s all sorts of tactics to delay the inevitable.

But I will point out the United Kingdom has thought about this a bit differently in the UK. There’s one meter on each premises, but the data doesn’t go to the distribution utility. It goes to a centralized authority called the DCC. The Data Communications Corporation, I believe is what it stands for. And from there, it’s available to the retail suppliers for billing, and it can be available to other third party aggregators at that point as well. And so the British are very, you know, in many ways they invented deregulation with Thatcher in the eighties and, you know, national grid was split up into different different segments. And so that’s an interesting way of thinking about how to structure the industry. So we take it for granted that, you know, the utility has to own the meter and the data that’s generated from that. But that’s an assumption. You know, I think the empirical evidence, as you suggest, for utilities being the best, most capable users of that information is certainly up for debate.

John Farrell: I would love if you could talk a little bit more about, I was just, this is perfect segue. I was just gonna ask you about if there was a place that was doing this well, are there specific examples of things that are happening in the UK market because the utilities don’t have a monopoly on this data granted to them by the government? And also are there examples stateside where we’re getting it right? Where maybe we’re not doing that same thing, but where we are making sure that data is getting out there and allowing competitive activity in the marketplace to lower cost for customers, to make the grid run more efficiently, to encourage renewables, what have you.
Michael Murray: There’s a great example in California with a community choice aggregator called Silicon Valley Clean Energy, or SVCE. The acronym is a bit of a, could be hard to muddle through that. Silicon Valley Clean Energy is owned by the community. They’re a governmental organization. And if you compare how they provide customers with access to their own energy data with that of PG&E, you start to see some important differences. Now, I will say at the outset, PG&E has generally done a good job of providing data portability. They were one of the first utilities to adopt the green button standard. But nevertheless, the pace of improvement has been much slower with the investor owned utilities as compared to the CCAs.

So Silicon Valley Clean Energy decided not to build their own data portability infrastructure from scratch like PG&E did, SVCE hired a specialist called Utility API as to be the software company that provides that exchange between the utility and numerous distributed resource companies. And utility API has a lot of experience in this realm. They know how to serve the needs of the distributed energy community. So they know what the needs of the solar salesperson is, who is trying to generate a price quote for solar and potentially a battery system with a net meter 2.0 customer in Southern California. And they know what an energy efficiency provider to sell heat pumps and help transition a customer off of natural gas heating to a heat pump in Massachusetts. And these are skills that utilities often don’t have. And so to give you a sense of the variation in a place like Chicago, Illinois, where ComEd has offered their green button system for several years to date, there’s only something like three companies that are actually using that system, for a variety of technical challenges and sort of failures on CommEd part.

And yet at Silicon Valley Clean Energy, within weeks of them announcing that they were providing this state portability system, there were dozens– I, I think it was more than 50 companies who actively started using it, serving, you know, the large commercial customers and the residential customers. And now there’s even an electric vehicle load management tool. That’s extremely customer friendly where all the customer has to do to charge their electric vehicle at the optimum rate is just to share their energy usage from Silicon Valley Clean Energy to a smartphone app that coordinates with their electric vehicle charger and automatically has their vehicle charged at off peak times. And it selects the right rate that’s appropriate for them to save them money. And so this is an innovation that happened very, very quickly, and you compare that to some of the investor owned utilities and the pace of change and iterative development is just much, much slower.

John Farrell: Probably worth noting that ComEd, which serves Chicago in Illinois, probably has something like two or 3 million customers and Silicon Valley Clean Energy probably has in the tens of thousands. So the fact that there are 50 companies already using their platform versus three with ComEd in Chicago speaks volumes about a, on a per capita basis, how useful that system actually is.
Michael Murray: That’s right. And, and some companies have, have been trying to get the ComEd system to work. It’s ostensibly a green button standardized system. And what I hear is it’s just a slog, there’s technical problems. There’s unexplained errors. There’s bugs in the system that don’t get fixed. And so it really tests the resolve of these companies to continue working with ComEd, in some cases over the course of many years, to get the system working. And I think a lot of people don’t appreciate the level of effort that goes in on a third parties perspective to make this work. They’re really taking, you know, they’re really the Guinea pigs. They’re testing the software that the utilities often fail to test. They’re identifying problems that sadly, a lot of regulators don’t pay that much attention to.

And so this is what my paper that we issued about a year ago on digital platform regulation was trying to address. It’s, you know, thinking about utility regulator, not as just a rate-setting authority over, you know, poles and wires, but as we enter a digital age, they have to become savvy in a digital context. And that means holding utilities accountable for when their IT systems don’t perform very well. And just to give you an example, even California, which, you know, has aspirations to have a plug and play, high DER future, California has been sitting on allegations of data failures on the part of Southern California Edison for more than two and a half years. There’s a company that filed a formal complaint with the commission. They identified numerous alleged failures on the part of Southern California Edison. I’ve read the complaint. It seems very credible to me. And the only action that the a public utilities commission has taken to date is to grant themselves extensions on the statutory deadline to have the matter resolved. So we’re now 2.5 years into getting resolution on some major technical failures. And it just doesn’t seem like the regulators have the capacity or the will to, to take on this challenge.

John Farrell: It’s interesting to think about a comparison of another market. If you had a pothole in your street for two and a half years, the kind of like rage and attention you could get to that as compared to this, when you have a digital pothole in access to data and the utilities just like, oh, we’re just gonna take a little longer. I just, I can’t imagine. You know, and I think the people would have a different sense of the expectation, but it’s really the same thing, right? Like the road is the way by which we can transact and move around and interact with so many people, right? Whether we ride a bike or drive a car or whatever, it’s how we connect to other people. And the data that about the energy system about the electricity system is the same thing. It’s how we’re gonna be able to connect and interact with and exchange value with other people in a 21st century electricity system. And yet regulators are like letting it be littered with potholes by the utility. And it’s like deliberate potholes, maybe.

I mean, we’ve kind of described here, I think really well, the fact that we have an incentive problem, we have an expertise problem. We’ve got an anti-competitive instinct problem. Like there’s so many reasons there are potholes, but the problem seems to be in general that we continue to allow there to be potholes. How do we fill the potholes? I wanted to ask you before we have to wrap up what are some of the things that we can do? What, you know, maybe some things from your digital platform regulation paper, recommendations you might have for utility regulators, for legislators, how do we make sure that we can get the best and most efficient and most cost effective energy system by making sure that this data about this isn’t just locked up in this concept of utility?

Michael Murray: It’s a great question. So there’s several things. The first is I think it’s incumbent on utilities to hire experts who actually know how to build these systems and they know how to operate digital platforms for the use of distributed energy resources. That sounds obvious. And yet we see a lot of examples of utilities that have decided to build their own system. And they have, you know, clearly indicated just a lot of challenges and high costs and a lot of frustration on the part of distributed energy resource companies.

And so in this area, I’ll give a shout out to National Grid in New York, they hired the company called Utility API that I just mentioned. And it’s a similar story where they had a strong number of third parties express interest and using their system much more than their neighbor to the south, ConEd or Consolidated Edison in New York City. So there was an understanding, I think among the IT and leadership teams at National Grid that they needed to know the limits of their expertise and hire a firm that could do a good job. So that, that’s the first thing.

The second thing also sounds really simple, but it’s really important. And that’s a bug tracking system. So if you’ve ever filled out a technical support request, you know, for your internet service being down or something like that, they created the ticket. And that ticket sort of works its way through the technical support system. It might get escalated if you know, there’s higher levels of expertise that are involved. Many utilities don’t even have a trouble ticket system. They rely on email that many of them do not have phone calls. They’re, you know, giant corporations and they don’t want you to have anybody’s individual phone number. And so we, we hear stories from companies that we work with that have submitted support requests, and they’re waiting months to get an answer, basic things like when I hit this web server, I should get a response and I’m getting an undescribed error. I can’t move forward until you fix this. And then nothing happens. And this, many of the energy companies that are trying to serve customers, they’re entrepreneurs, they’re innovators. Sometimes they’re really small firms and they’re not going to challenge the utility in a formal context. They don’t want to bring a formal complaint against the utility. They don’t want to make a lot of noise with the regulator or with politicians because there’s a fear of retaliation.

And so having a trouble ticket system that’s transparent in which the utility regulator gets to see what is the response time on average to a ticket, how quickly do they acknowledge the existence of a problem and actually resolve it? This is for any customer support organization, we had this figured out 20 years ago, but it’s, I think it’s time for public utility regulators to take up the mantle and really think of themselves as overseers of a tech support platform. That’s an important part of accountability.

John Farrell: Michael, thank you so much for diving into this issue of data access. I think it’s an area in which a lot of folks who care about a clean energy future don’t really think about, you know, there’s sort of like, there’s so much focus on this sort of broader issue of like, how do we force the utility to do something different? You know, how do we pass a mandate for clean energy or for community solar or for distributed solar. And I feel like we’re increasingly getting more attention to these sort of back office things. But they really need a lot more attention. And especially because it really gets into this issue that we’re starting to explore more broadly across our economy, which is when big companies have so much power over the systems that operate our economy, whether it’s retail online shopping with Amazon, whether it’s Facebook and the way that we interact with other people, that utilities have that are in that same role and in a space that is going to become so important as we electrify things in our economy. I mean, electricity is already the backbone of our economy. It powers our phones and computers and all these other things, but it’s become gonna become even more important. So thank you so much for the work that you do trying to expose the problems with access to data. We’ll be delighted to share more of the work that you’ve been doing on our show page. Just really appreciate you taking the time to talk with me today.
Michael Murray: Thank you, John. It’s been my pleasure and thank you for bringing some attention to these issues. I like to say that this is the plumbing that’s really behind the scenes that a lot of people don’t wanna think about, but as you say, it’s critically important to realizing a clean energy future. And thank you for spending the time.
John Farrell: Thank you so much for listening to this episode of Local Energy Rules, where Michael Murray, president of the Mission Data Coalition joined me to explain why we need to extract customer electricity usage data from the utility monopoly to enable a cleaner and more efficient electricity system. On the show page, look for links to Mission Data’s report on digital platform regulation, Scott Hempling’s essay about unearned advantage, a map of which states have restructured electricity markets, and my March, 2021 podcast with OhmConnect CEO Cisco DeVries. Local Energy Rules is produced by myself and Maria McCoy with editing provided by audio engineer Drew Birschbach. Tune back into Local Energy Rules every two weeks to hear more powerful stories of communities taking on concentrated power to transform the energy system. Until next time, keep your energy local and thanks for listening.

 


Why Is Customer Data Important?

Managing the electric grid is a high stakes balancing act. To know how much electricity supply is needed, electric utilities look to their customers’ prior usage data. Thanks to smarter electric meters and radio technology, utilities can get hourly updates on customer electricity use. Utilities also use customer data to encourage energy conservation in an emergency situation.

Demand side management is not just for emergencies. Time of use rates and virtual power plants are cost-effective ways to ease stress on the grid during peak hours. However, to participate effectively in these programs, customers must be able to access and share their own data. For example, efficiency aggregator OhmConnect pays individual customers to reduce their energy consumption at certain times.


Learn more about how OhmConnect is connecting customers to create a virtual power plant in episode 126 of Local Energy Rules.


OhmConnect needs to know how much electricity a customer is actually conserving in order to pay them for that service. To get access to this information, OhmConnect took utilities to court — even though the customers had given permission to access their data.

Monopoly Utilities Resist Data Portability

Utilities have fought to control customer data and limit the customer’s ability to share information with third parties (data portability). Utilities have many excuses to restrict access to customer data, including cybersecurity, customer privacy, and cost. However, when it comes down to it, third party aggregators and other efficiency services are a threat to the monopoly’s control over the market.

Michael Murray is president of the Mission Data Coalition, whose mission is to “empower consumers with access to their own energy usage and cost data.” Mission Data released a report on digital platform regulation in January 2021. The report describes how digital platform regulation can make utilities offer data portability, among other things.

As an example of where data portability works, Murray brings up the United Kingdom. Utilities there do not have exclusive control over information; all customer data is sent to a third party and then to the utility. Others can then gain access to the data from the neutral third party, rather than wrestling it out of the utility’s hands.

We know it can be done. It can be done securely. It can be done on a large scale. This is a solved problem, but some utilities just don’t want to embrace that.

Installing Smart Meters With No Intention to Use Them

Many states have restructured their electricity markets. In some cases, utilities had to divest from their electricity generation plants and solely manage distribution. Particularly in these states, says Murray, smart meters were an opportunity for the utility to invest in infrastructure (which earns a guaranteed return for utility shareholders). However, utilities need to spend even more to facilitate the additional functions that smart meters allow. Utilities do not earn a return on their operational spending.

They want capital expenditure and they want it in the rate base, but then when it comes to actually using the meters for what they were designed for, they say, oh, well, we couldn’t possibly do that.

How Can We Make the Most of Customer Data?

Murray’s first suggestion is that utilities hire experts equipped to utilize smart meter data. Secondly, for utilities like ComEd that have already launched data portability programs, utilities need an accountability system. As the programs develop, third party companies that access customer data bear the burden of working out programmatic issues. By tracking and regulating technological issues, utility commissions could ease the burden on these third parties.

It’s time for public utility regulators to take up the mantle and really think of themselves as overseers of a tech support platform.

Episode Notes

See these resources for more behind the story:

For concrete examples of how towns and cities can take action toward gaining more control over their clean energy future, explore ILSR’s Community Power Toolkit.

Explore local and state policies and programs that help advance clean energy goals across the country, using ILSR’s interactive Community Power Map.


This is the 155th episode of Local Energy Rules, an ILSR podcast with Energy Democracy Director John Farrell, which shares powerful stories of successful local renewable energy and exposes the policy and practical barriers to its expansion.

Local Energy Rules is Produced by ILSR’s John Farrell and Maria McCoy. Audio engineering by Drew Birschbach.

This article originally posted at ilsr.org. For timely updates, follow John Farrell on Twitter, our energy work on Facebook, or sign up to get the Energy Democracy weekly update.

Featured Photo Credit: Portland General Electric via Flickr (CC BY-ND 2.0)

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Maria McCoy

Maria McCoy is a research associate with the Energy Democracy Initiative. In this role, she contributes to blog posts, podcasts, video content, and interactive features.