Remember the massive power outage in 2003? Quite unexpectedly, 10 million Canadians and 45 million Americans in the Midwest and Northeast lost electrical power. The event drew attention to our aging electric-power grid and how vulnerable we all are to huge power outages. Few now would disagree with the wisdom of investing to improve this infrastructure.

Six years later, little has been done to improve the electric-power grid, but that is about to change. The Obama administration announced today that they will use $3.4 billion in federal stimulus funding for 11 projects designed to modernize the grid and to cut energy use. Innocuous, right? Let’s take a closer look.

A significant amount of this investment will be used to ensure that one-quarter to one-third of U.S. homes are connected to advanced digital meters. These meters are squarely focused on cutting energy use.

A pilot program utilizing advanced digital meters is currently underway in Boulder, CO, with utilities and government officials around the country watching closely . Consider what these amazing new meters will be able to do when the program is fully implemented.

• The local utility company will have unprecedented authority to adjust settings in customers’ homes to “ease strain on the grid”. (This sounds too much like forced personal sacrifice for the good of the collective.) The utility company will be able reach into homes and:
  • adjust the home thermostat.
  • turn down the temperature on the hot water heater.
  • what times of day specific appliances can be used.
• The utility will be able to charge variable rates, based on:
  • time of day (more during peak consumption hours).
  • availability of power (less when the wind blows, more when it is overcast).
  • type of appliance (more for evil appliances like air conditioners, clothes dryers, hot tubs, and those that don’t meet efficiency targets).

Additionally, the Boulder city government will be granted access to private electricity usage of its citizens.

While most of the funds approved by the Obama Administration are designated for upgrading the electric-power grid, it appears that the government is using the broader initiative as cover to quietly implement new technology that empowers government control over how much power we consume, when we consume it, and which appliances we can use. This approach is consistent with many of actions of this administration: proclaim a crisis and then enact policy and laws that nominally seek to resolve the crisis while encroaching on the rights and freedoms of Americans.

In this case, the proclaimed crisis is twofold. We have an antiquated electric-power grid that does need upgrading and we are running short of electrical power. In response to the latter, the government approach is to impose reductions in consumption. While economizing is a good and noble idea, ideology and the free market will ensure we economize appropriately. The truth, however, is that there is only one reason we are running short of electrical power: government has prevented the construction of new power plants. With due deference to environmental concerns, we are fully capable of building clean coal and nuclear plants that will meet our growing need for electricity and protect the environment. The crisis of insufficient supply is totally a government created crisis.

Those in the government are watching Boulder and discussing this topic. They should know we are talking about it and won’t accept the level of intrusion being considered for the rest of America. One WSJ commenter wisely noted that: “If the utility company has access, motive and the power to “adjust” your home environment, it will do so.” The same is true of government.

Ask yourself, and then ask someone else today, “How comfortable are you with the government restricting supply and then dictating your use electricity?”

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