Public Power - May 2008 - (Page 27)

Smart Grid BY BREN T BARKER JOURNEY TO THE fering 20 percent reimbursement for investments in a smart grid, and amending the Public Utility Regulatory Policies Act to require state regulators to explain why they might allow non-smart T&D investment. The private sector has been jockeying even more aggressively for the smart grid. Vendors push smart grid technology as they compete for billion dollar markets, even though their proprietary offerings might be only a small piece of a larger puzzle, and their communication technologies use different protocols and speak different languages. Nevertheless, they are bringing a feverish pace of innovation to a culture bred on caution. Given concerns about greenhouse gas emissions and related demand growth, some states are also driving aspects of the smart grid. For instance, California, which has constrained future generation, intends to meet its projected growth in peak demand by getting a better handle on consumption. To this end, the California PUC has mandated rapid installation of smart meters by its three major investor-owned utilities. Pacific, Gas and Electric will be investing $1.7 billion to install 10.3 million smart meters by 2011. Southern California Edison plans to install 5 million meters in its service territory by 2012, at a cost of $1.5 billion, and San Diego Gas and Electric plans to invest $600 million. Once the new meters are in place, SCE expects to reduce its peak demand by 1,000 MW. “A high-tech world can no longer afford a low-tech electricity grid. This will require substantial capital investment in the modernization of our transmission and distribution system, and in the re- the 3,200 utilities in the United States, the smart grid has been coming together in bits and pieces for years. Whether it is at the consumer end, at the control centers or at the substation level, it is the future integration of these ends into a comprehensive communication backbone that holds the largest promise for the smart grid. With more than 20 utilities now pursuing the smart grid aggressively, hundreds are laying out long range plans. The remaining utilities have started on their journey, though they may not realize it yet. As fiber optic communication cable is laid, as wireless and power line carrier communications advance, as smart meter applications take off, and computer chips become routinely embedded in homeowner appliances—the smart grid is coming together piece by piece. Although the smart grid has been talked about for two decades, now is the time to accelerate. “A critical mass is now forming,” said Micheal Hervey, the Long Island Power Authority’s vice president of operations. “Public policy is driving it, the technology is essentially here, and utilities are seeing the financial benefits.” Federal interest in the implementation of the smart grid began with the Energy Policy Act of 2005, which required states to start considering the smart grid. The Energy Independence and Security Act of 2007, passed in December 2007, then followed with a series of measures to help move along the smart grid, including: supporting modernization of the electricity grid, increasing the Department of Energy’s role in implementation and research, ofwww.APPAnet.org For placement of the dinosaurs of our industry—analog household electricity meters—with state-of-the-art, smart digital meters,” said John Bryson, president and CEO of Edison International, SCE’s parent company. The benefits of the new meters go beyond demand response “to include more accurate billing, automatic meter reading, shorter power outages, online access to energy usage, and new rate design,” said Tim Vahlstrom, head of PG&E’s smart meter program. “The possibility of new rate options will give the California PUC a powerful tool for shaping energy policy.” Further north, things are moving in the same direction. “We think we are going into a demand-constrained world in the Northwest,” said Terry Oliver, chief technology innovation officer, at the Bonneville Power Administration, in Oregon. “We have built technology roadmaps for energy efficiency, as well as for transmission and renewables, and are now looking for synergies where the smart grid can contribute. Demand response fits very well with the smart grid.” “In the East, we are going forward with the smart grid and the advanced metering infrastructure as part of our broader public policy mission to reduce greenhouse gas emissions and to gain efficiencies in end-use consumption and power delivery. In doing so, we should be able to defer the next generation plant, and be in a much better place to respond to new public policy initiatives as they arise,” said Kevin Law, president and CEO of LIPA. With the cost of fuel and power plant construction materials skyrocketing, and the cost of CO 2 emissions looming on MAY 2008 27 http://www.APPAnet.org

Table of Contents Feed for the Digital Edition of Public Power - May 2008

Public Power - May 2008 Contents Perspective LEEDing the Way Ontario Moves to Mandatory Time-of-Use Pricing Journey to the Smart Grid Right-Sizing Transformers Energy Audits for Large Industries Economic Development Community Broadband Reliability Hometown Connections Parting Shot

Public Power - May 2008

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