Glendale, Burbank, Lancaster and Palmdale have spent millions installing smart meters up and down the Valley region, which could help consumers save as much as 15 percent off their household electric bills. But the investments may be for naught if consumers waste the opportunity to manage their energy use. Enter Ceiva Logic Inc., and their band of self-described supercomputing “nerds.” The Burbank company — started by six former Disney employees who used supercomputers to make animated films — is eager to capture a slice of the emerging market for in-home displays, and in the process, revolutionize how people think about their energy and water use. Some observers say it may be a tough task for a company so small, as much bigger players including Microsoft Corp., Google Inc. and Cisco Systems Inc. have recently abandoned the market for in-home displays. But Ceiva CEO Dean Schiller is convinced the company has a good shot. “Right now, the way we use electricity is like a car without a gas gage,” Schiller said. “You have no idea how much you are using and you treat it like an endless tank until the bill comes in.” Schiller said his company’s core product — an Internet-enabled digital photo frame that Ceiva pioneered and patented a decade ago — is the perfect vehicle to deliver the kind of minute-by-minute usage data that will get consumers to change their energy-wasting habits. Right now, for a fee of about $100 a year, those frames deliver pictures of grandma and the kids. Tomorrow, they could be delivering information about just how much it costs to take that 30-minute shower or to run that old refrigerator in the garage to cool your six-pack. Want to know how much you spent to run the pool pump at 2 p.m. when electric rates are at a peak? Press two buttons on the display, and bingo, the answer is there. Tomorrow, you may want to use your display to program the pump to run at night — when rates will soon be significantly less under a new variable rate energy program. Glendale Trial Leaders at Glendale Water & Power are hoping consumers will make those kinds of adjustments. Glenn Steiger, general manager of GW&P, bumped into Schiller at a smart meter conference in Washington, D.C. a year ago where Steiger was receiving a leadership award for his city’s enthusiastic and effective rollout of smart meters. Schiller was there to do some research on the new market opportunity for in-home displays in the energy sector. Before they left the conference, the two men had formed the basis for a deal. GW&P, which was first in the country to be fully operational with smart meters for both water and electricity, plans to buy up to 15,000 in-home displays from Ceiva in the next 18 months and make them available free of charge to Glendale residents, Steiger said. If consumers like it and wind up reducing their energy consumption, or shifting their usage to times when rates are lower, Glendale may expand the program to more of the city’s 120,000 smart electric and water meters. Officials say the hope is that the utility can shift usage patterns enough to generate a savings that will pay for the in-home displays. The in-home display, which is equipped with radio transmitters, could ultimately also communicate with most appliances in the home, allowing consumers to use the device to program their dishwasher or washing machine to come on when rates are cheap at night. The biggest pay-off would come when more electric vehicles are in use, Steiger said. The displays, in conjunction with the smart grid, can be used to charge vehicles when rates are cheap. Alternatively, the utility hopes to be able to automatically sequence electric vehicle charging patterns to match the lowest rates. If the program works — and delivers the kind of savings that Glendale hopes — it could open up a significant national market to Ceiva and an entirely new business model with utilities, rather than consumers, paying to install the in-home displays. With tens of millions of smart meters coming on line, the potential for this Burbank company may be significant. Ceiva itself is closed-lipped about the opportunity. The privately-owned company that was started by Schiller and five other former Disney supercomputing experts discloses no financial information about itself. It won’t even say how many customers have bought or subscribed to its connected digital photo frames, which the company pioneered in 2000 and holds a patent on. Ceiva frames cost between $100 to $150 while the subscription price for accessing and sharing online photos costs between $99 and $127.95 a year. Ceiva employs 50 people. But Schiller appears confident that the new market opportunity is substantial — and may even make his photo business pale in comparison. Schiller estimates that as many as 300 million smart meters will be operational within a few years. Even if Ceiva is paid as little as $1 a month for every smart meter connection to an in-home display, “that’s a sizeable little business,” he said. Challenges ahead The chances of Ceiva capturing that much of the in-home display market, however, are small. The U.S. market for smart meters is $160 million, according to Matt Wakefield, senior program manager for smart grid at the nonprofit, independent Electric Power Research Institute. By 2015, only an estimated 65 million will be up and running, he said. Beyond this, there is no guarantee that consumers are that interested in closely managing their energy consumption, Wakefield said. “So far, only about 5 to 10 percent of consumers appear to be interested in proactively managing their energy,” he said. A recent study in Ireland found that 91 percent of consumers introduced to the in-home displays really liked it, he added. But when utilities looked at how much energy was actually shifted from peak to off-peak consumption as a result of the in-home displays, results were not that encouraging. Wakefield said consumers with in-home displays shifted 11 percent of their usage to off-peak hours when energy rates are cheaper, compared to 8.8 percent of energy that was shifted by those without the displays. The difference, Wakefield said, was not enough for utilities to justify the investment in the in-home display. Perhaps because of those results, companies ranging from Microsoft to Google and Cisco recently announced they were exiting the in-home display market, Wakefield said. “It’s a tough business.” That could change, Wakefield pointed out, as more consumers become educated about the possibility and the potential savings. For example, consumers who really get into managing their energy consumption with new technology can shave between 10 and 20 percent off their energy bill, he said. Schiller certainly hopes he can help drive consumers toward that goal, and create that “sizeable little business.” But he also has other competitors, including iPhone apps in development, and websites that utilities are populating with information that their customers can access using a log-in name and password. Abundant competition Glendale, Burbank and cities in the Antelope Valley are all providing customers their usage information over the Internet, which cost less than installing a dedicated display in every home. Ken Devore, director of Southern California Edison’s SmartConnect program, which is installing five million smart meters through its region and is in the middle of its Antelope Valley deployment now, has chosen to invest first in a website that will allow consumers to log in and access their usage information online. “We’ve decided to invest first in our Web presence,” Devore said. “It will give businesses information on their usage every 15 minutes and will update information for residential customers every hour.” The in-home display is the next step, Devore said. The company has a smart grid lab that will begin testing a number of home-display products starting early this year. The company hopes to choose an interim vendor soon and roll out a pilot with 500 in-home displays in the coming months, and eventually scale up to 5,000 displays. “We will scale up based on the customer demand.” Devore said Southern California Edison will pay for the initial 500 displays. “We’ll do it on our dime,” he said. “We want to seed the market and see the reaction.” Eventually, Devore said, the displays will be more of a consumer product, similar to digital thermostats that consumers will be able to purchase at electronics retailers. “The market will drive the innovation and control the price,” he said. “The hope is that there will be a nice, healthy market for these devices with many companies competing” for wallet share. Schiller thinks he is well positioned to compete in the in-home display market. His displays already have security features that customers and utilities both value, while the frames carry the standard communications protocol that allows the frame to communicate not only with the smart meter and the utility, but appliances that will eventually be digitally connected to the meter and the display, allowing consumers to program their appliances. Most important, the frames are engaging, he said. People love nothing more than looking at pictures of their loved ones, Schiller said. “It’s primal…it spans across all countries and all cultures…When we start putting energy consumption information up there, it will be the same thing. People will say ‘Oh my God, I had no idea.’” Other devices, he said are gadgets. “Within a few months, they wind up in the kitchen drawer.” “Some people say the Web, or e-mail or smartphone apps are our competition,” Schiller added. “But none of them, in my mind, are effective enough to get consumers to make the needed change…When you get home late at night do you really want to log into your utility’s website?” Getting consumers to engage with the information provided by smart meters will be critical to getting people to change their consumption patterns, agreed Rajit Gadh, professor of engineering and founding director of the Smart Grid Energy Research Center at the University of California, Los Angeles. Though UCLA has conducted some studies, even Gadh does not know what kind of medium will work best. He suspects that for younger consumer, a smartphone app will be ideal, while older consumers may prefer something like the Ceiva photo frame. “A 14-year-old probably wants to see that information on a cell phone because that is his life,” Gadh said. “At UCLA, we’re experimenting with all the mediums: iPads, photo frames, cell phones and many other devices. We just don’t know yet which will work best. We suspect there may be room for many of them and eventually, the market will decide.” MUNICIPALITIES USING SMART METERS GLENDALE/Glendale Water & Power Total electric smart meters installed: 85,000 Total water smart meters installed: 35,000; Project timeline: 3 years Total Cost: $70 million, including a $20 million federal grant Most Interesting Feature: Automatic sequences of electric vehicle charges in which charging time is automatically matched to the lowest-cost time period. Next Up: Variable rate energy pricing; peak cost to be about 35 percent higher than off-peak rates. BURBANK/Burbank Water and Power Total Electric Meters Installed: 40,000 Total Cost: $60 million, including a $20 million federal grant Most Interesting Feature: Fiber-optic system that connects the smart meter grid has extra space that Burbank can rent to the entertainment industry to transmit huge digital film files online; potential revenue to town: $125 million a year. Next Up: Variable pricing plan with off-peak, winter rates as much as 50 percent below summer peak rates. LANCASTER/PALMDALE/ANTELOPE VALLEY/Southern California Edison Total Electric Meters Installed: 3.7 million in area that extends from San Gabriel Valley south to San Diego and north to Santa Barbara. Lancaster and Palmdale, San Fernando and Santa Clarita are being installed now. Project timeline: Completion year-end 2012; 5 million total smart meters to be installed. Total Cost: $1.6 billion Most Interesting Feature: Budget Assist — it allows customers to set in dollar terms what they want to pay in electricity per month and receive alerts if they come close to meeting or exceeding the amount. Next Up: In-home displays that allow consumers to connect and control their appliances to use energy during off-peak times, offering estimated savings of 5 to 15 percent.
Smart Display
