Regulating Electricity Consumption and Attitude With HEMS Tech

A massive blackout crippled the Northeastern U.S. on Aug. 14, 2003, leaving over 50 million people without power across a giant swath that reached from Toronto all the way to New York City. We were all to blame.

In New York, we're not used to thinking about electricity as a finite resource, how it's produced or what it costs and nothing short of a colossal power failure will get people talking about this crucial matter. To be fair, however, New York City as part of the broader region was only part of the problem that led to the 2003  blackout, just as energy consumption on a person-to-person basis contributed to a power grid overloaded only after human error and computer malfunctions caused a wide scale network failure.

However, the question remains to be asked, how much electricity do we really need and how much should we be using?

“The West as a whole thinks we have a right to energy,” says HEMS Tech founder and CTO, Bill Melendez. “We’re at the very beginning of a change of attitude globally concerning the use of energy and electricity.”

Melendez’ company, HEMS Technology (Homeowners Energy Management Systems) has invented a wireless technology that will help homeowners and utility companies track and regulate home energy consumption while simultaneously reducing electricity bills and curbing the emission of greenhouse gases caused by power generation.

The product looks like a regular electrical socket, but when an appliance of electrical device is plugged in, the socket sends a wireless signal to a "gateway" receiver detailing how much electricity has been used and for how long.

The HEMS Tech system relies on Open RF wireless technology to track, record and regulate the electrical consumption of household appliances allowing the homeowner to rank the importance of each device. The technology also gives homeowners the ability to shut off individual devices, raise or lower the temperature of the thermostat or turn off lights by using a cell phone.

The "kit" version of the HEMS system includes includes two HEMS 220 Plug-ins, a USB dongle for PC, and Windows XP software, with a suggested retail price of about $200. A system for the whole house comes with 40-45 AC smart sockets and will cost around $2,000 according to Melendez, who said the company is bypassing retail sales requests in favor of a buyer who could provide distribution on a national or global level.

A house fully wired with a HEMS system could reduce electrical consumption by as much as 20 percent, an average savings of the average about $234 dollars per year, according to the Department of Energy, however, as Melendez said, the savings could be even greater depending on how religious you are about turning of the lights.

“We’re trying to impact human behavior, especially for the next generation,” Melendez said.

Melendez said the HEMS system will also introduce the idea of “energy credits” to American families. The energy credit is essentially an allotment of electricity consumption that is determined--normally by a parent--for any user (read teenager) to consume.

Practically speaking, this will enable parents to monitor and regulate how much time their kids spend playing video games, watching television or using the computer, based on the amount of energy needed to run the devices. Melendez said if a teen goes over her energy credit limit, she could barter with her brother for enough credits to keep playing video games or doing homework on the computer.

Because each electrical device has a unique energy signature, a house with every outlet wired would be able to stop a Nintendo Wii from operating even if it was plugged into an outlet in a different room. Melendez joked that as a parent, the blame would rest with the technology and not with him.

The potential of the HEMS 220 system to read energy signatures also has security implications if used within a constrained area. For instance, if a 50 inch plasma TV goes missing from one house in a  subdivision and its energy signature shows up in another house nearby, the system could recognize it. Privacy advocates are bound to have a field day with that feature, but the potential is intriguing nonetheless.

Melendez said he has been in discussions with home security companies about integrating his technology into an overall home security system that would include alarm monitoring and tracking of electricity consumption.

While the HEMS products have clear benefits for consumers there are also benefits for electrical producers and the environment. Electrical utilities will be able to more closely monitor their  energy usage on a house-by-house basis and inform their customers of the cheapest times to use energy. Melendez said his company plans to offer this as a subscription-based premium service to electrical utilities and customers.

While the devices have major implications from an energy conservation standpoint, they will also help to reduce the amount of greenhouse gases caused by electrical generation.

According to a 2008 report by the Environmental Protection Agency, 32 percent of all CO2 emissions in the United States come from coal plants generating electricity for homes and businesses. A 20 percent reduction in energy consumption by 2,500 households would keep nearly 7.5 million pounds of CO2 from entering the atmosphere.

Melendez, who was enlisted in the U.S. Marines and served with the U.S. Army Special Forces Command before working in the private sector for NORTEL said the idea came to him after his wife complained about the wasteful behavior of their teenage son and daughter, who were constantly running appliances even when they weren’t using them. As parents they were always following behind their children turning the appliances off to save money.

Prototypes of the device have already been manufactured and Melendez said he has fielded countless offers for small orders, but he is waiting for an offer from a major distributor because he sees his invention going on sale in major national chains such as Home Depot. In the meantime, HEMS Tech is actively seeking venture funding in order to market the product to a mass audience.

If you are an investor interested in learning more about HEMS technology you can send an email to investment@hemstech.com.