Not many of us can afford to load a grocery cart with a month’s worth of food without knowing the price on each item, simply getting a bill in the mail a few weeks after doing the shopping. Why then do most of us consume electricity for dozens of appliances and chargers—without knowing the individual cost for any one of them—and just pay the bill when it comes to the mailbox once a month?
An interesting alliance of businesses and non-profits recently wrote to the President to ask that he facilitate an information revolution by promoting policies that would ensure every consumer gets detailed information about what’s going into that electricity “shopping cart." Companies as diverse as AT&T , Dow Chemical , Hewlett Packard, Google , GE and Whirlpool wrote that “when people have access to direct feedback on their electricity use, they can achieve significant savings through simple behavioral changes,” concluding that “if all U.S. households saved 15 percent on their energy use by 2020, for example, the greenhouse gas savings would be equivalent to taking 35 million cars off the road and would save consumers $46 billion on their energy bills, or $360 per customer each year.”
Indeed numerous case studies demonstrate that not only are residential and commercial customers inspired to convert to more energy efficient lighting and appliances when they know how their energy dollars are being spent, but they save even more by using the energy hogs more sparingly or by using appliances at times of the day when electricity rates are lowest. But why would a phone company, a search engine, and a couple dozen other Fortune 500s care how much anyone spends on electricity? Because they hope to deliver products and services that shift some of those savings from our pockets to theirs.
Google is testing a Web-based program that would take the information in real time about our energy uses and help us manage consumption. They might charge for that service or show us ads for new energy-efficient products from, say HP , GE , or Whirlpool . (GE is the parent company of CNBC and CNBC.com.) AT&T might send that data to us on our cellphones, so we could turn off the lights in a teenager’s room when we know he already left for school or keep the air conditioner off during the day, but turn it on again an hour before we arrive back at home. Many tenants in commercial buildings pay for electricity, but have no idea how much is associated with heating/cooling versus copiers or lighting. Knowing the details might inspire a tenant to install better controls, even though they don’t own the building, because the savings would quickly repay the cost. Oh, did I mention that Johnson Controls and Honeywell also signed the letter?
The President has yet to reply, but perhaps he should suggest that these companies consider paying for the upgrades to the grid and energy meters themselves—knowing they will be handsomely repaid over time from the sale of products and services related to that investment. If they did, we might get a smart grid and the ability to manage our energy uses, while those companies would start profiting from our actions, much sooner.
In the meantime, Mr. President, I hear that you ask your kids to switch off lights when they leave the room. On behalf of the taxpayers who get the bill for the White House electricity shopping cart every month, many thanks.
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Terry Tamminen, former Secretary of the California Environmental Protection Agency, is a partner at Pegasus Sustainable Century Merchant Bank and the Cullman Senior Fellow at the New America Foundation. (Cracking The Carbon Code is a registered trademark of Terry Tamminen).