eMeter CEO Gary Bloom: Why we should all want smart meters

eMeter has raised over $70 million so far to build software that connects utility companies' computer systems to our smart meters (when we get them). Its chief backers are two Silicon Valley venture capital firms, Foundation Capital and Sequoia.

eMeter CEO Gary Bloom, who's worked at two other software companies -- Oracle and Veritas -- joined eMeter in March. He sees the U.S.'s aging electrical grid as a giant software problem that eMeter could help solve.

SmartPlanet: What data does eMeter help utilities collect?

GB: We take in all this information that's created from the smart grid -- at the heart of it is the smart meter, providing data about power, water and gas, except instead of once a month you're now talking about interval reads every 10 to 15 minutes.

Suddenly there's an order of magnitude more data collected by the utility that enables customers to do things they couldn't do before.

Toronto Hydro, for instance -- they do a very innovative time-of-use price model. If you use power on non-peak hours, they give you a lower rate. Customers now have the ability to use it, and the utility knows whether you use it.

Time-of-use has been around for years, but it's been an honor system -- the only way the utility companies can see if it's working is to see what’s the overall draw from the grid.

Suddenly now...if I’m clever, I can motivate behavior out of my customers that I want to motivate. Different communities will take advantage of that, and essentially, there will be more available income to put into other things, like food and staples.

In Finland, they can do loss-detection -- they can know how much power the grid’s generating, how much it's transmitting, how much they've billed for, and the delta from metering. If they're only billing three-quarters of the power, they've lost some.

SmartPlanet: Where is this lost power going?

GB: Some is just lost in transmission, but a lot of it is theft detection. Is somebody drawing off the grid inappropriately? Now they have data on where that's happening.

SmartPlanet: It’s quite common for people to live off the grid, isn’t it?

GB: I didn't realize how common it was until I started talking with CEOs, especially in small businesses. Large businesses don't have this problem, but with small businesses, you can see it in the industrial warehouse area around here. I own a building over there and there's a meter inside the building -- how hard is it to tap into that and feed power back to the meter so not too much is missing?

You can’t tell when there's a monthly meter reader -- how much intelligence are you going to do? But if you start narrowing it down to particular buildings or addresses, and you know how much you're losing and how much you're billing, you can do all kinds of analysis.

And that's another area of savings -- there's an application for remote connect/disconnect. Now when you move out they send a meter reader, and they get the bill back, and if a new person has not signed up for power quickly enough, they send a truck out to disconnect the power. Then a new person signs up, and now they have to send a truck out again and do another meter read.

That's two to three truck rolls, and we can eliminate those.

SmartPlanet: That's fine for the utilities, but how about their customers? What do we get out of it?

GB: Just like with traditional software, there's a Web portal that the utility can deploy for customers that lets them see what they're consuming.

If I arm a typical consumer with information, do I think they’ll manage it better? Yes. When the price of gas goes up, It affects their driving patterns, do they or don’t they take a trip. I think a house is the same way.

Think about your and my power bill. I pay them, and until I worked here, I never looked at them. But if I have a Web portal that shows we're leaving lights on, if I can show my kids what the house looks like if it’s dark versus when every light is left on, they can see for the first time how we're consuming power.

If I can see that for cost purposes, and given the big push toward a green planet and reducing our carbon emissions, I’m contributing to global warming if I'm not reducing consumption. There's an emotional attachment.

I said, here’s an enormous software problem -- there's more data than the utility industry has ever had in history, and what’s the business value of all that information? It's derived from the quality of the software and the data that's collected, and here's eMeter in the captain’s seat.

SmartPlanet:The utility industry is regulated, and smart meters are a new market -- it can't be easy to sell software to utilities.

GB: The first thing that's a challenge for this industry is to collect the data. This portion of their business has never a part of their strategy -- software has never been a differentiator.

They are mini-monopolies. The public utilities commissions decide how much of their expenses they can pass back to consumers, but if they can get consumers to reduce consumption, maybe they won't have to build that next power plant.

There's a dramatic business benefit for the first time, but it's all new to them....They have to change the way they think about and manage information technology -- that's why they're hiring chief information officers -- and they also have to think about customers in a dramatically different way.

Think about Sears. They put their catalog on the Internet, so you could get on and order by part number, type in your credit card info, go to the store and pick it up.

Compare that to Amazon. They have all kinds of information, and they've established a relationship with their customers. My wife’s a baker -- she buys high-end baking supplies, and if I go on Amazon, I get ads. They looked at the Internet as a new opportunity to change fundamentally the way people buy.

Roll the clock forward and look at where Sears is -- it's part of Kmart.

If all I do as a utility company is replace the meter reader, that's the Sears approach. You’re not leveraging your capabilities. And they do have customer satisfaction as a pressure, because if the public utilities commissions are happy, they'll have a happy business meeting with the utilities they regulate.

Consumer sentiment has gone the wrong way on smart meters. There have been stories that the smart grid makes baby monitors malfunction, that the dog got sick, that radio waves are dangerous, and they all got coverage in the TV news. There are a million reasons the dog could get sick, and there are radio waves all around us.

This post was originally published on Smartplanet.com