Startups Meet the Smart Meter

SMUD wants to turbocharge technologies that can raise the IQ of its smart grid

Back Article Dec 29, 2015 By Steven Yoder

Next time you walk into a hotel room, pay attention to what you do first. If you’re like most people, you’ll change the thermostat. Chances are that the previous guest’s setting is making you either shiver or break into a sweat. Worse, they’ve been gone for hours but the air conditioner or heater has been running since they left.

If you own the hotel, that’s like sending bags of cash out with the trash. Most rooms are empty from at least 2 p.m. to 6 p.m. Meanwhile, their heating and cooling systems run on, wearing out the equipment and spewing dollars and carbon into the ether.

All of that matters to local utility companies too. Energy is in highest demand during the day, and that’s when it’s most expensive for them to buy when they need extra power. Or they have to build more power plants to cover those surges.

Giving customers price incentives to use less energy during peak periods is a key feature of SMUD’s smart grid. That new metering system is designed to let both the utility and customers better monitor energy use in homes. Now SMUD is hoping to take its grid to the next level. It’s partnering with entrepreneurs who can give customers technology that lets them use SMUD’s price incentives to save money.

The Smart Hotel

The empty hotel room problem had for years vexed Charlie Bane, director of engineering at the Hyatt Regency Sacramento. He’s after more than just saving money: The Sacramento Hyatt has an ambitious plan to cut its energy use by 20 percent by 2020.

Bane looked at thermostat systems that tried to figure out when rooms were empty so they could power down the air conditioning. None were sensitive enough. Those with a motion sensor didn’t detect movement when a guest was sleeping or in the bathroom —or they’d cut off the compressor prematurely, and the guest would have to wave a hand to restart it. Better to let the system run than get a mound of complaints, Bane decided.

Then he met Henrik Westergaard, CEO of Folsom-based Smart Grid Billing. Westergaard had designed a system that solved the motion sensor problem by putting sensors on doors, too. When a guest enters, the door sensor tells the system that someone is in the room, and it doesn’t signal that they’ve left until the door opens again. When they do, the system lets the thermostat drift up to 75. Bane liked what he saw.

At a Boston hotel, Westergaard had done a pilot study showing just how uncomfortable guests are when they walk into the typical room. For 80 percent of hotel guests, changing the thermostat was the first thing they did after dropping their bags. After installing Westergaard’s system, called the GridRabbit, that number dropped to 3 percent. More importantly, that hotel’s electricity use dropped dramatically.

But for a hotel with 500-plus rooms like the Hyatt, investing in energy efficiency can be a tough pitch to an owner. The GridRabbit costs between $300 and $400 per room to install. While Westergaard won’t give exact numbers, the Hyatt was likely facing at least a $150,000 to $200,000 investment.

Enter SMUD

Like the Hyatt, SMUD wants to cut energy use system-wide. In 2007, the utility set a goal of cutting power-use by 15 percent by 2017. So in 2012, as part of a pilot program, it began offering customers a variable pricing plan: They pay more for electricity during the day when demand is highest and less at night.

But to take time-of-use pricing mainstream, the utility needs companies to come up with products that put energy information in consumers’ hands. They need to know how much energy their devices take to run at different times of day so that they can program when those devices run.

That’s why, since 2010, SMUD has used its Innovation Generator program to partner with companies that have developed such products. The utility gives firms access to its smart grid in exchange for a licensing fee that the company pays SMUD every time the company sells a product. It’s akin to what Apple does when it gives developers access to their smartphone hardware and code — the apps are designed to make smartphones indispensable.

SMUD’s Tim Berg, who manages corporate business development, had met one of Westergaard’s colleagues from Smart Grid Billing in 2012 and was intrigued. The utility soon partnered with Westergaard — if Westergaard could get a few hotels to show that the GridRabbit saves big money, others might buy in. That would go a long way toward helping SMUD meet its energy reduction goals: When a single large hotel like the Hyatt runs two-thirds of its air conditioners in empty rooms, it’s the equivalent of more than 3,000 hundred-watt light bulbs being left on for no reason.

So SMUD decided to pay for the Hyatt’s investment in Westergaard’s system. Bane says that when he and his manager found out about the partnership, “We were jumping for joy.” Berg says he can’t give details of how much they put into the deal since it’s part of a private contract, but it made financial sense for the utility: “We said what is [having the Hyatt cut its energy use] worth to SMUD?” Every electron saved is one that the grid doesn’t have to generate by buying power elsewhere or building a new plant, he says.

After months of testing, the Hyatt started using the GridRabbit full-time in August, and Bane and Westergaard say the early results match what they expected. The hotel has cut its energy consumption between 2 p.m. and 6 p.m. by at least 75 percent, and Westergaard expects a 30-percent cut in the hotel’s overall energy use.

There have been a cascade of other benefits. Bane says that since the compressors in each room aren’t running as hard, there’s been an 80- to 90-percent drop in the number that come into the shop for repair. That’s brought customer complaints about room temperature down dramatically and cut staff time spent fixing machines.

When a single large hotel like the Hyatt runs two-thirds of its air conditioners in empty rooms, it’s the equivalent of more than 3,000 hundred-watt light bulbs being left on for no reason.

Berg says that SMUD has used the Innovation Generator to partner with four other companies, one of them local. If they succeed, SMUD benefits in two ways: Customers use less energy, and the utility earns licensing fees every time they sell a product. But SMUD doesn’t favor one startup over another — if a GridRabbit competitor emerges that does something better or cheaper, SMUD can partner with them too.

The Hyatt’s experiment offers a glimpse at how the rest of us may soon live — setting dishwashers to run loads at night when energy is cheapest, programming refrigerators and water heaters to cycle off for short periods during peak energy hours, and using our smartphones to monitor, in real time, how much each appliance is costing us to run.

And then comes the re-chargeable self-driving car. 


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