Utilities that generate, transmit and distribute electricity see the smart grid as a money saver as they digitize, better secure and make more efficient transmissions. They see smart meters as a way to better enable distribution to their customers, whom they often call “rate payers.” One significant bottom line: Smart meter technology allows utilities to “adjust” homeowner use from afar and eliminates costly meter readers who physically check meters at homes.

Utilities are also accelerating — some say faster than the reliability of the gear — to new smart grid technology, thanks in large part to barrels of federal government stimulus money.

At the other end, homeowners are players as tools for home energy management fall into their hands but also sideline observers as a utility rolls to the curb to install their smart meter. The giant California utility PG&E and others are slowly letting rate payers access their accounts online, though the emphasis is more on digital bill payment than on their limited user-enabled home energy management services. There are significant bumps along the road. Some cities, state commissions and advocacy groups have raised concerns ranging from the accuracy of the smart meters, excessive customer surcharges, loss of homeowner control, arbitrary time-of-use pricing and a lack of education of the customer base.

While the utilities, commissions, cities and government agencies give-and-take as smart grid evolves, a niche has opened for home automation and home security dealers as well as remote monitoring firms to take advantage of their technologies and existing partnership connection to their customers to both educate homeowners on the advantages of home energy management and then sell, install and help monitor primarily through smart thermostats as standalones or integrated into home networks or home security systems.

In some regions, this business opportunity window may close when the local utility sees its own business advantages to expanding home services to more energy management tools or even beyond that to other home systems and services through its two-way communications connection into the home. In its smart meter rollout, for example, Chicago’s ComEd offers homeowners an in-home energy display unit.

Basically, smart grid delivers electricity to consumers using two-way digital technology to control, for now in a limited way, home systems to save energy, reduce cost and increase reliability and transparency. It overlays the electricity distribution grid with an information and networked smart metering system or automated meter infrastructure using utility backroom software, in-home utility or third party technologies and automated meter reading gear.

A home area network extends some of the smart meter capabilities into the home using powerline networking or radio frequency such as ZigBee, INSTEON, Z-Wave, Wi-Fi and others. There are contentions, competition and confusion in this wireless sweet spot with smart thermostat, home security, smart appliance and home automation players going with a variety of the offerings. Each has its advantages, disadvantages, industry alliances and cheerleaders. There is no doubt, however, that ZigBee is the bee’s knees for many U.S. utilities.

Z-Wave also has it supporters. Wireless and Web-enabled Alarm.com has emPower, a collection of automation and remote energy management solutions for its growing group of dealers. And APX Alarm now has home energy management within its Go!Control security panel. Z-Wave thermostats, coupled with Web-based monitoring and controls, can go beyond functions of many current utility offerings. Another advantage of coupling security with home management is the ability of home alarms, more than other established systems, to “know” when a home is empty or alarm-armed, and help adjust heating or air conditioning.

Bluetooth may also play a role. Axial Vector Energy of Virginia Beach, Va., has what is dubbed the Genius Box, an appliance networking system that monitors home appliances during peak hours to optimize their use. Another talked about but not as yet implemented approach is platforming the smart grid via white space. That’s the spectrum available since television broadcasters went from analog to digital. It’s unlicensed, free spectrum available in most cities with high profile backers such as Google, Microsoft, Dell and Motorola.

The National Institute of Standards and Technology is promoting interoperability among the different standards. OSHAN or the Open Source Home Area Network is one “under development” initiative that enables interoperability.

As with other advances, except for tech-loving first adopters, the success of home energy management, whether part of the smart grid or not, depends on making a business case to homeowners. That may take both time and a solid sales pitch.

A recent Harris poll discovered that, while utility companies across the United States are committing billions of dollars in projects to upgrade the electric grid and install new meters in homes, 68 percent of Americans have never heard the term “smart grid” and 63 percent have not heard of smart meters.

Sadly or surprisingly, just a little over a majority of U.S. adults (57 percent) in the Harris poll are aware of how much electricity they are consuming, but an even greater number (67 percent) say they would reduce use if they had visibility to it. In today’s age of mistrust, a core of U.S. adults (22 percent) do not want the electric company to know how much power they are using each minute. That may be a crack in that door for private companies to provide energy management tools as compared to public utilities.

But there is also a more approachable and patriotic angle to home energy management.

In another national survey commissioned by GE, 79 percent of Americans said they would adjust their energy consumption habits and behaviors in the short term to effect change long term, quite possibly because most of them (72 percent) believe that how they generate and use energy today could actually harm the economic growth of the country.

The survey indicates that Americans will respond positively to smart appliances that are empowered by smart meters offering new pricing models, which will result in a fundamental shift in how energy is consumed. Where do Americans wish to see investments made to overcome energy challenges? Eighty-eight percent of Americans in the GE survey said they would be willing to use a smart device such as a meter, thermostat or appliance if it would help to better manage their energy use. Better yet, 82 percent of those willing to use these devices believe smart meters and smart appliances are the future.

One essential component inside the home is the new-age thermostat. Some of these devices manufacturers brand and sell their own gear through their HVAC channels while they OEM the equipment to others.

Last February, Honeywell added time-of-use utility price schedule programming capability to its wireless-enabled Prestige programmable thermostat. A hand-held device senses temperature in any room of the house and gives homeowners the control to adjust temperature from anywhere in the house. And GE, with its sizeable appliance stable, has a smart thermostat that it is OEMing to others.

Google has PowerMeter, in conjunction with a handful of utilities, which is a free home energy monitoring tool. Using energy information provided by utility smart meters and home energy monitoring devices, PowerMeter lets the homeowner view consumption from anywhere online.

“Home automation and home energy management are different things,” observes Scott Ballantyne of Boulder, Colo.-based Tendril, a smart grid firm that provides support end-to-end with technology for utilities, electronic systems contractors and homeowners.

Using Tendril gear within the home, utility customers can track energy costs and consumption by appliances, electronics, and household devices. The platform provides a set of applications and devices that together form a ZigBee-enabled home area network (HAN). These devices provide access and information about the other devices in the HAN as well as insight into the applications deployed on the platform, including energy awareness, load control, and demand response. The devices include in-home display, smart thermostat, smart outlet, relay range extender and others.

No matter how far along a local utility is in bringing smart meters to homes, there is no doubt there are plenty of opportunities for a savvy home electronic system dealer. Every homeowner is a user of electricity as compared to fewer with monitored home alarms or a sophisticated home theater. Most are sensitive to their monthly utility bills and, unlike cellular phone service, most homeowners are served by a monopoly electric utility. And most homeowners want to reduce their utility bill.

So there are business advantages for dealers to become an energy advisor. There are smart thermostats as standalones or integrated into home networks or home security systems. Various appliances can be networked for energy use, reporting and adjusting. And some home system dealers see promise in selling, installing and networking alternative energy solutions ranging from solar panels to home wind turbines. There are plenty of opportunities to “plug in” to the smart grid.

The Dark Side of the Smart Grid

There are plenty of benefits of the smart grid. But there also are a lot of potential dangers ranging from security of the information going to and from homes, privacy concerns, and theft of service by a dishonest neighbor to the ultimate threat from a domestic or foreign terrorist or terror group.

Susan Lyon, counsel at Perkins Coie of Seattle, and who advises clients on privacy and data security issues, knows the reality of the threats. “There are real security and privacy concerns” embedded in the smart grid concept. “Basically, it is two-way communications from and to homes and even can include smart grid appliances,” she says. “Utilities are quickly increasing the amount of data they collect, tracking and recording more activities.” She points out that most utilities, with 80 percent of them private, fairly small organizations, are new to such information security needs. Most traditionally have simple files of names, addresses and meter numbers. “Generally speaking, utilities are now playing catch up.”

Some states and commissions are doing better than others in establishing privacy and security requirements. In California, Senate Bill 837 — now under consideration — would stipulate that any meter data collected by an electrical or gas corporation is the property of the customer, regardless of whether or not the data is kept by the customer or retained solely by the utility company. It would require that individual customer information, including energy use, billing, and credit information, remain confidential unless the customer expressly authorizes, in writing, that the information may be released to a third party. The bill would also require utilities to obtain the state agency’s approval of a statement of privacy and security principles for smart meter systems and a work plan to implement those principles. Such legislative actions could flop over to third-party monitoring services, too.

There is also growing speculation from homeland security and information security observers that smart meters and wireless communications may encourage theft or diversion of electrical service from one homeowner by another or an organized gang. And, when it comes to homeland security concerns, infrastructure experts believe that moving to a more tightly networked digital grid may prove a more inviting target for computer hackers, often overseas, to bring down large parts of the grid.