In a previous post, I gave a brief overview of the history of electricity in Texas. I meant to come back sooner to this topic, but events have swept me away. I have a new client in UtiliPoint International - see them here. Also, my book, The Advanced Smart Grid was published last week (buy it here), so I've been fielding notes of congratulations and busy marketing that. This is all good.

But I've been eager to come back to this post, because the transitions in electric industry are so compelling, and with Texas as my backyard, this economy offers a great way to study and contemplate those changes and what they mean.

In this post, let's take up the questions that all this change brings on. We should look at the change from different perspectives.

Today let's look at change from the customer perspective: change holds opportunities, but also risks - and given their lack of sophistication on the finer points of change, residential customers especially are more suspicious of the risks of change - the downside. Customers, by and large, have had it pretty good in the US when it comes to electricity, where the utilities provide incredible reliability and absent the occasional outage, we can count on the electricity being there when we throw a switch or plug in an appliance. In the industry, they call this Reliability, and it is the driving force for utility employees. Not just "keep the lights on" but all aspects of reliability.

And electricity has by and large been an incredibly inexpensive product/service, when one considers how it has impacted our lives - we generally spend less than 10% of our household budget on electricity - only the poorest households see significant economic distress from paying their utility bill. So change, when it comes, has a challenge for residential customers at least. They already have it pretty good, so change may likely bring ... higher bills, less convenience?

With commercial customers, however, change represents the ability to improve how they manage a signficant cost item on their books. Every net dollar saved from the electricity bill of a business, after all, flows directly to the bottom line as increased profit. Change that makes electricity less risky in terms of price, that provides greater control to users, that gives them more information or more options? That is change they can believe in.

In Texas, we're working our way through a major change, one that will impact customers directly. Texas leads the nation in the deployment of Smart Meters - we're about halfway through the deployment in the deregulated portions of the state, with about 3 million more meters to go, with completion expected sometime in 2012. The data from those meters is already flowing into data banks and showing up on the website designed for customer acccess - SmartMeterTexas.com. It remains to be seen how customers will use this day-behind consumer data, and also, how utilities and retail electric providers will make use of a more informed marketplace.

But Texas is a big state - we must also look to those areas of Texas not included in ERCOT - looking at the previous post, one can see that that would include folks out in El Paso, up in the Panhandle, and over in deep east and southeast Texas. The changes sweeping over the rest of the state are surely occurring in those areas as well, because no utility is left out of these changes - all utilities are closely examining their operational models, looking for effiiencies in operations and in the ways they run their businesses. Truly, Texas has every type of utility environment, and pretty much, every type of climate as well.

The big questions to hit us here in Texas, and those that will hit those utilities, retailers, and consumers in other areas of the country, mostly concern adaptation to changing technolgies and changing environmental conditions, at both the climate and political levels. These changes, loosely understood by what we have already seen in telecom and internet markets, are even now impacting how we produce, distribute and consume electricity.

This post is getting a little long in the tooth, so I'll close for now, to revisit this subject I hope in the next few days. Change, and the questions it brings and hopefully the answers we develop in response, have arrived at the doorstep of the electric industry. We - both utilities and consumers - must understand change and its impacts, if we are to plan and react in ways that serve us in the long-term. Ignorance is rarely an optimal strategy - and these days - it may be fatal.