The computer in my toaster might be more powerful than the one that guided Apollo 11. But half a century after Robert Noyce launched the cyber age by inventing the silicon-based integrated circuit, computers are curiously scarce in one huge and critical part of daily life.
When power goes out in your neighborhood, Baltimore Gas & Electric has no idea until somebody picks up a phone and tells it. BGE still has to send out meter readers to figure out bills.
Households are clueless about daily electricity price fluctuations. It's like not knowing when strawberries are on sale at Safeway.
What does it cost to run a load of dishes? Bake a turkey? Watch I'm a Celebrity, Get Me Out of Here? Unless you're a power geek, you don't know.
BGE's ambitious "smart meter" program promises to bring the electrical grid up to the technology standards we expect from bank accounts, cell phones and coffee makers.
Done right, it would deliver amazing efficiencies, cutting the use of expensive, peak-use power, reducing pollution, increasing reliability and lowering long-term costs after a modest initial investment.
After a decade of deregulation that turned out to be a payday for electricity sellers and a disaster for consumers, smart meters might give the little guy a chance to fight back.
I'll give possible reasons why BGE and parent Constellation Energy proposed a program that seems against their interests. But first let's look at the big picture.
No market works without good information passing between buyers and sellers about the value of what's exchanged. To take an extreme case, the old Soviet Union collapsed partly because prices set by central planners bore zero relationship to reality, causing shortages, resource misallocation and inefficiency.
But market information about U.S. electricity - at least for residential and small commercial users - hasn't been a whole lot better. On hot summer days, the wholesale price of electricity can spike 10- or 20-fold, but most retail users never know. They pay the same rate as for kilowatts burned at midnight.
BGE's smart meters, by contrast, would track pricing and pay bonuses to people who avoid the most expensive kilowatts.
Eventually smart meters may help consumers distinguish between dirty coal electricity and clean solar power. They'll also enable dryers and other smart appliances with wireless devices that transmit power-usage data to a central source.
