A Power Company at CES? A Digital Grid Tipping Point

For the first time, power company NRG Energy (s nrg) and its consumer-facing Texas utility Reliant Energy, are making a showing at the massive gadget love-fest the Consumer Electronics Show (CES). Why? As Reliant Energy President Jason Few told me in a phone interview from the show floor, this is the first time the company and the energy industry have really been able to take advantage of the “digitization of the power grid.”

For NRG and Reliant, that means showing off a demo of a smart energy home complete with smart appliances, dashboards, meters, an electric vehicle (Nissan’s LEAF) and variable energy pricing. While this year’s CES wasn’t the first for Few — he formerly hailed from Motorola (s mmi) — it was a milestone for the energy company. Here’s my edited excerpt of an interview with Few:

Earth2Tech: Is this the first show for Reliant and NRG?

Few: It is. This is the first time that we’ve been here. We really consider the opportunity to be here … as a pivotal point for us and our industry, because we now have, for the first time, the ability to take advantage of the digitization of the grid.

We now have the capability to deliver real solutions to our customer base. Quite frankly even if we had a desire in the past to do this, there was just no way to do it, and now we can. So being here at CES is an important step in demonstrating what we’re trying to do for our customers.

E2T: Tell me more about the tipping point for this technology? What’s different this year?

Few: For us, we’ve become the new entrant into the opportunity. If you look back historically, I think the people who have participated in the smart home market have, by and large, been manufacturers of entertainment products, whether that’s TVs or even gaming. People like Microsoft (s MSFT) and others trying to bring together home automation and entertainment. Then you have security companies that have tried to bring this together.

Now you have someone like us as an energy provider that has the opportunity to deliver a set of consumer services that leverages smart meters, and smart appliances from manufacturers such as Wolf, GE (s ge) and others. So it’s a new integration opportunity for consumers in their homes, and as an energy provider, it creates an opportunity for us to participate.

The other thing that you’ve got that’s driving this and serving as a tipping point, is the proliferation of smart phones. People are becoming a lot more comfortable with using applications on their smart phones, and people are getting comfortable with technology. That’s people along the whole spectrum, and with the iPad (s aapl) and Kindle (s amzn) for example. You have people today that might be older people, 60 plus years old, that are now using iPad and Kindles. There’s a comfort level now that’s across the population.

E2T: Have you seen any other power companies or utilities there?

Few: We haven’t seen any, though I can’t say for sure. But for us, we consider ourselves different. We are in the energy sector, but we see ourselves as a consumer services company. We have a different view of our market .

E2T: Tell me about the demo?

Few: We’ve literally created a home. Imagine taking a house and cutting it in half. Then we’re showing how consumers can take advantage of solutions. We’re demonstrating turning on a washer/dryer, and you can see the consumption go up, and then we show real-time pricing. So it shows how you could make a decision to not run [the] washer/dryer when it’s more expensive, but also giving the consumer control too if they want to override that.

We’re demoing taking consumer consumption and forecasting a customer bill for a month out, based on the real-time use of energy. We’re also demonstrating remote control features, and we’re illustrating that by showing the consumer leaving the home and their plans change, and then they can remotely control the home fully using automation and connectivity. So it’s a full 360-degree view in and out of home, integrated with electric vehicles and a home charger solution.

E2T: Is Reliant working with a lot of third parties? Can can you talk about which companies and the process of working with these companies?

To work with third parties, we’ve become active in standards bodies groups. Were on the Zigbee board; we’re part of the NIST process, etc. It’s important for us, [with] our large customer base, and not being a traditional tech company, that we work on standards that we can devote to a consistent set of solutions.

We’re working with companies like Control4, [which] has a home automation product today. We don’t intend to be a manufacturer of solutions. We’re working with GE (s GE) on smart appliances. From an energy perspective, we have an opportunity to provide our knowledge. We’ve made a smart home in Houston, where we test technologies in our environment, so before we sell to our customer base, and choose partners to work with, we make sure we can fully integrate things.

E2T: The Verizon (s vz) folks are showing off their smart home demo at CES. Do you see a service provider as a partner for you guys?

Few: I do. We can work with a broad spectrum of partners. In the smart home, wireless and cellular plays a huge part. Verizon has a cable/FIOS offering, and people feel comfortable receiving information over a TV screen. We’ve worked with them in terms of broadband infrastructure in the house for Zigbee-enabled devices, but also other devices that may not go down Zigbee path but are connected through Internet Protocol. Companies like Verizon are also excellent at putting applications and broadband devices in homes (set-top boxes, etc.), and those can become meaningful partners.

E2T: Do you see the Verizon launch as a meaningful tipping point for smart energy homes?

Few: I do, because it’s the more the merrier. They are doing two important things: education, and engagement. These are going to be the things that get people to adopt our solutions. This is very much an experience-driven market.

We sell a product on the energy side where everyone needs it, and everyone has it. You don’t want to touch it; that’s not a good thing. But this is [the] first time people get to touch “energy.” We think that’s very exciting.

E2T: Do you think this could happen in a regulated market?

Few: I do. But here’s the thing: If you break it into pieces … I think if you look at the EV space, there’s a potential opportunity for that ecosystem to emerge in regulated markets — that is, if regulators decide not to rate-base the infrastructure, which I think would be a mistake.

Reliant isn’t waiting for PUCs; we’re doing these things to create solutions for customers. I think parts of this can happen in a regulated market, but I think what’s happening in Texas is yet another great example as to why markets should deregulate, because consumers should have a choice for whatever they buy and companies need to innovate.

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Image courtesy of Vladeb.