With the electric power industry merging formerly separate power, digital and telecommunications systems into one platform—otherwise known as the smart grid—the United States is moving to cleaner energy and a more efficient and reliable power grid. In addition, with smart grid technologies provided wirelessly, it is now very easy for utilities to offer and manage prepaid plans, according to Greentech Media. But advancement of the technology will require support from legislators and even more grid modernization.
Here are three perspectives on the future of the electric grid, and what state policymakers can do to push for modernization.
1. Modernize Electric Grid for Public Benefit
by West Virginia Public Service Commissioner Jon McKinney and Kansas Rep. Tom Sloan
Modernization of electric power distribution grids can permit legislators and public service commissioners to support important public policy priorities, such as containing energy costs, improving the reliability and resiliency of electric service, and enhancing safety and security. Upgrading electric transmission and distribution system infrastructures will provide direct, measurable benefits to customers.
We sponsored resolutions at The Council of State Governments and the National Association of Regulatory Utility Commissioners in support of grid modernization for the public benefit.
Numerous grid modernization technologies are cost-effective and deployable now. The most immediate priorities should be those technologies that provide measurable benefits and do not require customers busy with their daily lives to actively manage their energy consumption.
VoltVar Optimization—or VVO—is a prime example of a technology that can cost-effectively provide benefits to customers without their needing to take any actions. When added to the grid, this technology reduces voltage variance. By doing so, it provides energy and demand reduction benefits of 2 to 5 percent. These benefits are predictable and measurable at the consumer’s electric meter.
The recovery of lost revenues to the electric utility can be mitigated by the development of rate designs that provide appropriate recovery of the costs of investment. We would not expect a utility to quickly invest in this technology if it has to wait the typical three years to get recovery through standard ratemaking processes.
VoltVar and other “smart, efficient” technologies are an investment category where all customers benefit, not just those who can afford to make capital investments to reduce consumption or generate their own electricity. Investments in such technologies by the electric utility benefit all customers and customer classes.
By encouraging and facilitating utility investments in such technologies, state policymakers also can take credit for subsequent reductions in the frequency and duration of electric outages. Modern grids are more resilient against storm damage and other threats by helping utilities locate and identify the type of problem and, therefore, expedite response and repairs.
Being able to automatically reroute circuits around outage areas is only possible if the utility has precise and timely information about operational problems and has sufficient bidirectional communications/monitoring capability so that a transformer, for example, can communicate with the central office. Facilitating such investments by electric utilities will improve the grid’s reliability for customers and permit state legislators and public service commissioners to quantitatively demonstrate to consumers the value of such utility investments.
Conversations between legislators and public utilities commissioners are vital to modernizing the electric grid. CSG and the National Association of Regulatory Utility Commissioners must ensure that commissions have the necessary statutory tools and that they are educating the public about why such utility investments are necessary and appropriate.
2. Building a Power Grid for the 21st Century
by Brian McCormack, Vice President, Political and External Affairs |
Edison Electric Institute (www.eei.org)
Every day, electric companies are powering our lives and economy.
As the world changes, we, and the nearly 500,000 people in our workforce, are changing with it, reinventing ourselves and the way we serve our customers. We’re moving toward a cleaner energy future. We’re building advanced generating stations. We’re expanding the use of renewable energy sources. Importantly, we’re also creating a smarter electric grid.
Today, the electric power industry is merging separate power, digital and telecommunications systems into one platform—the smart grid. First and foremost, the intelligent technologies powering the smart grid will provide electric companies with real-time information about their networks, from what’s happening on local distribution lines to the transmission lines that bring power to cities and towns.
The smart grid also will have advance “self healing” characteristics that will enable the system to automatically detect and repair problems on the grid, sometimes even before they affect anyone’s electricity service. This will make for more reliable service overall, and fewer and shorter outages when they do occur. In particular, though, the operational flexibility inherent in the smart grid will help us to transform how we serve our customers.
For example, many Edison Electric Institute member utility companies are now installing advanced metering, infrastructure and information technologies to improve their call-center functions. These technologies will enable us to move from one-way communication to a two-way pipeline. Electric companies and their customers will be able to send, as well as receive, more information about their electricity service—including information about outage response/restoration times, energy usage and price alerts. The smart grid also will enable electric companies to use multiple modes of communication to connect with their customers, including phone, email and text messaging.
Many electric customers are happy with the basic service, but we know others want:
More Information about their electricity use and options to control it.
Bill information delivered to them anytime, anywhere.
More energy choice and control. And long-term, they will want more energy-related services.