The control panel on GE’s “smart” water heater. (image: appliancist.com)

General Electric this month began distributing a hot water heater that can link into the so-called “smart” electric meters being distributed nationwide, according to a post Wednesday on The New York Times’ Green Inc. blog. Industry experts believe that GE’s water heater is the first “smart appliance” to be made commercially available in the US.

The water heater has a port resembling an Ethernet port that can theoretically plug into a converter box that, in turn, connects to the utility’s meter. The consumer or utility will be able to switch to an electricity-saving mode at times of high electricity use, such as the late afternoon.

Unfortunately, smart meters are not currently installed in many households, although millions are on their way. In addition, the way that electricity is priced will have to change in order for the smart meters and smart appliances to be truly useful.

Most American homeowners basically pay the same hour-after-hour price for electricity, whether it is a time of peak electricity use or low use. So, no monetary incentive exists to program the water heater to go into energy-saving mode during peak use hours, and the appliance’s “smartness” serves no immediate purpose.

On October 27, President Obama named 100 utility projects that will share $3.4 billion in federal stimulus funding to hasten implementation of a smart electric grid, Carol Sonenklar wrote on heatingoil.com.

One target of the grant money is smart meters, said Sonenklar. The funds will pay for about 18 million meters, about 13 percent of all meters in the US. The Obama administration hopes to distribute approximately 40 million smart meters over the next several years.

The Electric Power Research Institute estimates that smart grid technologies could reduce electricity use by more than 4 percent by 2030, and translate to a saving of $20.4 billion for U.S. businesses and consumers.

Members of the Senate Finance Committee. (image: clubrelaford.com)

Over a Republican boycott, the Senate Environment and Public Works (EPW) Committee passed a draft climate bill.

Now the hard work begins.

Despite Democratic control of the Senate, the bill faces considerable opposition—not just from Republican Senators, but also from Senate Democrats. In both cases, concerns center around economics, not environmental science—how much will curbing carbon emissions cost, and how are those costs (and any gains from trading emissions allowances) distributed?

The Republican boycott, for example, was held because EPW Committee Republicans wanted the Environmental Protection Agency to analyze the costs of carbon reduction more thoroughly.

As the New York Times reports Monday, the bill is heading for simultaneous hearings before the Finance Committee and the Energy and Natural Resources Committee.

Finance is likely to be a particularly difficult test for the draft legislation. It’s chaired by a Democrat, Senator Max Baucus of Montana—the only Democrat to vote against the bill in EPW. In voting against it, Baucus signaled that he will not let party loyalty force him to go against what he thinks is best for his constituents. His concern, like that of his Republican colleagues, is that the bill will be too expensive and that its costs will not be fairly distributed. Very telling is the line-up of witnesses set to testify before his Finance Committee: union leaders, economists, and energy industry representatives. Missing—at least so far—are the environmental scientists and Cabinet Secretaries, all boosters of the climate bill, who were the marquee names testifying before the Environment and Public Works Committee.

Baucus has proposed reducing the 2020 targets for emissions reduction, from a 20 percent reduction to a 17 percent reduction (albeit with a kicker to raise it to 20 percent if developing countries, such as China and India, set their own aggressive limits.) He seems unwilling to have US industry pay a disproportionate share of the price of curbing global warming: “We have to be sensitive to our own industries, as other countries are sensitive to theirs.”

Baucus is far from the only Democrat expressing concerns about the bill. For example, Sen. Tom Harkin (D-Iowa), who chairs the Health Committee, has stated flatly that the draft scheme for distributing carbon allowances needs to be changed. The scheme, as reflected in the House version of the bill passed earlier, would give too many credits, Harkin and other Midwestern senators believe, to coastal utilities, forcing Midwestern power companies (and therefore Midwestern states) to bear too much of the cost.

Similarly, staunch Democrat Jay Rockefeller (W.Va), while not putting a stake in the ground on a particular issue or aspect of the bill, was blunt in saying that bill supporters should not expect easy, quick, or nonjudgmental passage. “[A]mong people like myself who come from coal state and manufacturing states who can’t just sort of meet the Copenhagen deadline. We’ve got to be satisfied that it’s a good bill and I’m not at that point.”

The “Copenhagen” in question is the upcoming Copenhagen climate summit. The deadline that Rockefeller refers to relates to the sense among many that US leadership is necessary for meaningful and enforceable international carbon reduction targets to emerge from Copenhagen. A number of officials, both US and UN, have expressed their belief that without US climate change legislation in place before (or at least during the early stages of) Copenhagen, it will be impossible to make progress on slowing or reversing global warming.

It was at least in part a concern over the timing of Copenhagen that prompted the EPW Chairperson, Sen. Barbara Boxer (D-CA), to ignore Republican calls for further analysis and send the bill out of committee in order to move it along. However, it is possible that Boxer’s strategy may backfire—compared to Representatives, Senators are famously fractious, independent, jealous of their authority and jurisdictional bailiwicks, and unwilling to play party ball. Adding to that, Boxer is not a particularly popular Senator; as Heatingoil.com’s Carol Sonenklar wrote, her strongly liberal views and combative attitude do not endear her to many of her colleagues. By riding roughshod over Republican and conservative Democrat concerns and rushing the bill out to the broader Senate, Boxer may have contributed to the drawing of battle lines—battle lines that may prevent the bill from gathering the 60 votes it needs to overcome Senate parliamentary tactics by foes whose opposition is based in economics.

A good takeaway or lesson from the bill’s progress might be: don’t ignore the concerns of legislators who are worried about the impact on their constituents’ bottom line, especially during a recession.