In Australia and a few other locations, some communications carriers have begun to experiment with bundling utility services into their cellular and cable TV packages.In the future, a wide swath of companies will sell power. But who will fix the lines after a storm?
The idea is both simple and radical at the same time. Power and water are commodities delivered through monthly service contracts, just like internet service. The same back-end billing and accounting software can be exploited to handle all of these accounts. In Texas and the U.K., consumers already buy power from retailers.
But when was the last time your basement got flooded by an on-demand movie? Or that neighborhoods had to be cordoned off because of spotty cell phone coverage? In a pinch, you can live without modern communications. Life without the utility infrastructure would be like a page out of Little House on the Prairie.
The general public perception of utilities is that they are staid, almost immobile, organizations that act more like government agencies than businesses. The power and water business, however, is currently undergoing perhaps the largest transformation it has seen since the dawn of utility commissions.
Consumers and corporations have begun to install solar panels and fuel cells that effectively let them ease off the grid. Native American tribes, real estate investment trusts and others sell power generated from real estate — desert acreage, industrial rooftops, landfills — that once had little market value. Soon, microgrids could lead to autonomous communities. Power to charge your electric car will come from a parking lot.
Meanwhile, smart grid technologies have paved the way for companies like EnerNoc and Silver Spring Networks to act as trusted power intermediaries. For utilities, these companies monitor peak power and stave off the need for expensive capital upgrades. At the other end of the wire, they can unobtrusively turn down air conditioners and lights to lower their utility bills while turning a profit for themselves. It truly is one of those rare less-is-more scenarios.
Telecommunications carriers and large web companies don’t offer gas or water in the States yet, but don’t be surprised if some of them soon don’t start offering to slash your power bills by $25 a month with an internet-enabled thermostat you can lease for only $5. Is the utility the company that generates power, or the one that helps you control it?
The regional monopoly model worked well when power was cheap and plentiful and computers were things in a glass room only scientists got to touch. But now power is the valuable commodity, while communication is cheap.
But what about safety? And comprehensive coverage in a region? Cable companies aren’t required to provide hook-ups to everyone, or even to provide decent programming. People like to complain about their local utility — until there’s a blackout.
Change is coming, make no mistake. The question now is what combination of technologies and responsibilities, business models and regulatory requirements will keep the lights on.
Read more on this topic in a joint effort by General Electric Ecomagination and Greentech Media, and join in on the conversation here.
Tuesday, December 20, 2011
Phone, Internet, TV … And Gas?