On the Smart Grid, a Watt Saved is a watt earned

What would the electrical grid look like if everyone could get paid to save energy? Jon Wellinghoff, chair of the Federal Energy Regulatory Commission, the U.S. agency that regulates electricity transmission, thinks that’s the future.

Last year, Wellinghoff’s agency issued a controversial ruling that in wholesale electricity markets, energy that customers don’t use (dubbed “negawatts”) should be worth as much as energy generated. That means utilities will soon have to pay big customers—and eventually consumers—who save power during peak periods.

The idea is to cut electricity demand instead of spinning more turbines. Pulling this off will require a smart grid in which customers and utilities communicate real-time information about prices and electricity use. Wellinghoff told TR business editor Jessica Leber why this could reduce our need for new coal or nuclear plants.

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