General Electric Deal Paves Way For More Tiered Energy Pricing

(MoneyWatch)  As one of the world's largest appliance makers, anything General Electric does will certainly catch the market's attention. Now, with a startup called Tendril, it's bringing energy demand software to refrigerators, dishwashers and other power-hungry equipment, a move that could eventually have big effects for electrical utilities.

Tendril's business involves a lot of communications IP, but all consumers should see is a little screen on their device listing energy prices and giving a few options. If electricity prices are high and whatever you're doing can wait (washing a load of clothes, for instance), you can push a button for automatic operation, and the washer will turn on when prices have gone down.

It's a tough job getting consumers to care much about electricity prices, so the point is only partially about getting people to act. The other part is allowing appliances to modify their own operation based on information from the utility, or letting utilities directly affect them. Thus, if power usage is spiking, either the equipment can temporarily go into low-power mode, or the utility, if facing a blackout, can turn it off.

Not every utility changes pricing based on time of day and usage at the moment, but the spread of appliances like GE's are an open invitation for more of them to do so.

How much of an affect this will have may depend on whether consumers get in the habit of paying attention to energy management like the ones Tendril makes. If they do, energy demand from both homes and businesses could be cut significantly, especially in areas that are especially hot or cold, as heating and cooling will certainly become part of the trend as well.

But even if consumers overlook the new options, there will be room for plenty of energy efficiency improvements. This could be the first step to cutting energy use around the country, which is now a significant component of the climate bill now facing Senate.

Depending on how widespread and sophisticated energy management hardware becomes, it could even be used by utilities to deal with some new problems, like wind power's intermittency. But how much energy management is capable of will only become apparent gradually; especially in the current economy, there's no great rush to buy new appliances.