Second of two parts.
Leesburg is poised to go into debt to build a "smart grid" system that would hand residents a virtual knife to slash their electric bills.
What those pushing the $20 million project have failed to say is that smart grid is a double-edged blade that just as easily could bloody the consumer.
For that to happen, all the customer has to do is … nothing. Yes, nothing.
That's because the success of smart grid — both from the customer's point of view and the city's — depends almost entirely on whether the consumer is willing to change family habits or is instead determined to keep mindlessly running the clothes dryer just when everyone else in the city is using the most power.
Let's take a look at the goals of smart grid and how its system of special meters and wireless communication systems work.
From the city's point of view, the goal of smart grid is to reduce electric use during peak times.
Electric utilities such as Leesburg's, which have to buy power from producers, are charged rates based on the one-hour time period each month when citywide usage is the highest. The greater the consumption, the higher the rate. Theoretically, if the spikes could be flattened, electric rates to the consumer would drop. However, it's difficult to predict the exact hour that will be the highest usage, so the city's goal is to target peak times.
From the consumer's point of the view, the goal of smart grid is to reduce the monthly bill — first by pushing electric consumption into nonpeak hours and second, by conserving.
The way smart grid works is that the system takes several snapshots a minute of the amount of power being used in a home at any given time. That information is transmitted wirelessly to a device resembling a thermostat inside the house, which immediately would tell the consumer how much power is being used, at what rate and whether the city is in a peak period.
Currently, consumers pay a single rate for power. That would change after smart grid. The system would allow the city to charge varying prices, depending on when the consumer uses the power. The most costly power, of course, would be charged when citywide use of electric is at its highest.
Tiered system could carry sting
Here's an example:
Mom comes home from her teaching job about 4 p.m. She comes in and turns up the air conditioning, switches on the television and throws in a load of laundry. Then she fires up the oven for dinner.
The kids arrive from school. Lights go on and computers start humming. Mom tosses the laundry into the dryer. Then Dad comes home from his sweaty roofing job and takes a hot shower.
You're getting the idea, right? Peak hours in the summer often land between 4 and 6 p.m. on the hottest days of the month.
With smart grid, the device inside the home would tell Mom that the family's electric use was skyrocketing. The idea is that she would switch off the television and delay the laundry until later in the evening, when electric use citywide was down, along with the price of the kilowatt hour.
It's easy to see that smart grid's wealth of information offers an opportunity to reduce a monthly bill. But its tiered system of charges also could carry a sting for those who don't want to be bothered. Customers who don't use the smart-meter information, or don't understand it, could instead be stuck with higher bills.
So, would smart grid benefit Leesburg residents in the long run? How about customers who may not be as computer savvy as others? Would they get stuck with a stupid little box on the wall while they pay the highest rates?
And then there's this:
A report by a consultant the city hired to evaluate the proposal stated that the city could expect to save money — until the energy producers start to charge in a different way.
The consultant, EnerNex, stated that 75 percent of the financial benefit of smart grid comes from reducing the peak demand.
Already, the report stated, the consortium from which the city buys electricity is out to foil smart-grid systems by changing the way that it sets rates. For example, some producers charge by peak hours — plural — rather than a single hour. That would make it far harder to reduce the demand charges.
Commissioners 'left in the dark'
Between salaries, consultant fees, meter tests, grant-writing and the laborious creation of a 284-page request for bids, Leesburg already has hundreds of thousands of dollars invested in this proposition.
Yet, city commissioners have not had the first discussion that goes any deeper than its fluffy press releases proclaiming the wonderment of smart grid.
Mayor Bill Polk has been itching for such a discussion. Commissioners have been told that the city has the money to do the smart-grid project, he said.
However, records obtained from the city show that is not the case. And city finance director Jerry Boop said last week in an interview that he is carefully considering whether a bond issue or a bank note would be the cheapest way to borrow the money needed. It's expected that Leesburg's portion of the project could run $10 million.
"We know very little about the whole thing," Polk said of the commission's knowledge of the project.
All the elected body has done, he said, was to approve the applications that won the city $11.2 million in state and federal grants.
"I don't like to be left in the dark, and me and the other commissioners have been left in the dark," he said.
As of last week, commissioners hadn't been told that the city's original plan to own and operate the system had been shelved as too expensive. Staffers were exploring the possibility that the city would contract with General Electric, which would own a chunk of the infrastructure of smart grid and operate it for the city. They hope that GE's economies of scale would reduce the total price.
Commissioners need to get a grip on this project, the biggest ever undertaken in Leesburg's history. Too many key questions remain unanswered — and many simply unasked. There should be an exhaustive discussion about the pros and cons of GE's owning part of the hardware that runs the city's electric system. The discussion should not be limited to whatever happy-talk documents the staff hands them.
And commissioners need to invite the public into the process — and not just so that the all-wise city staff can preach to the peasants about what the amazing smart grid can do.
This should be a partnership. Residents, after all, would be paying for this system for years to come. They should be helping to evaluate whether smart grid is in their best interest.
Lritchie@tribune.com Her blog is online at http://www.orlandosentinel.com/laurenonlake