Today’s sensors are small, intelligent and inexpensive. Armed with communication capabilities, some of these miniature monitors are joining the billions of devices that comprise the Internet of Things (IoT).
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Utilities take advantage of this by monitoring virtually every aspect of power generation, distribution and consumption using sensors that predict component failures, controllers that automatically reroute power from point to point, and smart meters that closely track customer usage and trends. Processing that much information is far beyond human computational capabilities, so utilities are relying on the IoT and artificial intelligence (AI) to make the grid more user-friendly, reliable, flexible, secure and profitable.
The Customer Experience
Two years ago, our local power company installed smart meters in the area. Shortly after, they offered customers a choice of keeping their current flat electric rate or switching to a time-of-use model, where the cost of electricity varies, hour-by-hour, depending on supply and demand. During high-demand hours—usually midafternoon through the early evening—rates are higher. Under this plan, the average hourly rate is usually much less than the flat rate, but customers also pay for demand—the maximum power that a customer is drawing from the grid during a given period of time. (In our case, it’s in 15-minute increments.) Customers paying the flat rate aren’t charged separately for demand; it’s rolled into the flat rate.
From the customer standpoint, time-of-use pricing allows us to reduce our electric bills by using less power when rates are high and reducing the number of high-power devices running simultaneously. The utility incentivizes these behaviors because it reduces the load on their generation and transmission equipment and decreases the need to build peaker plants, which typically run for just a few hours each day and rarely pay for themselves. To help the consumer decide when it’s best to use energy, the power company provides a website with real-time rates.
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