Jan | Feb 2014


Smart Power

 

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:
At the same time, we’re also partnering with private industry to deploy advanced networking products, software and services. If you can keep the technology moving, it will get the consumer moving as well. Just look at how Apple has stimulated consumer interest in advanced technology with its iPods, iPhones and now iPads.
We’re working closely with state policymakers and regulators to create a supportive platform for the deployment of smart technology for the grid. In addition, we’re addressing such issues as cost recovery of new technology investments, prudency determination, accelerated technological obsolescence, data access and privacy. We’re also in frequent communication with them about what enhancing the grid means, and, most importantly, the many benefits it creates for both the customer and the utility.
We’re working with a wide variety of governmental agencies to keep the smart grid secure as well. And we are collaborating with the National Institute of Standards and Technology to develop a framework of equipment standards that will become the foundation of an interoperable smart grid.
The electric power industry’s transition to a smart grid is well underway. It won’t be happening overnight, but over the next several years, the digital power now at work in everything from mobile phones to automobiles will be added to the electric grid.
Just as the advances in digital technology have brought us products and conveniences we never would have imagined 20 years ago, the smart grid will open up another frontier for technological advancement. At a time when finding solutions to critical energy and environmental challenges are at the forefront of the current national political agenda, the smart grid’s capabilities will be essential.
For more information about the electric power industry’s efforts to transform America’s electric grid, visit http://smartgrid.eei.org.
 

3. Prepaid Electricity—Is it in Your Future?

By Rita Mix, AT&T Mobility Enterprise Architect (rita.mix@att.com) and
Ed Davalos, AT&T Smart Grid Product Director (ed.davalos@att.com)
Does the idea of prepaying for your electricity usage seem like a novel idea?
Well, U.S. prepaid phone subscriptions exceeded the 100 million mark in the second quarter of 2012, according to Chetan Sharma, technology and strategy consulting firm. We purchase Breeze cards here in Atlanta to prepay train rides around the city, an option offered by almost all major cities.
Many of us prepay gift cards to restaurants and retail stores. Prepaid electricity, however, has been slow to catch on in the U.S. It is not widely offered, and due to lack of knowledge about prepaid as an option, it is not widely demanded by consumers. In many other countries, such as Great Britain, prepaid has long been a choice embraced by some consumers, a 2012 article on the Fierce Energy website says.
With the advent of smart grid technologies provided wirelessly by companies such as AT&T, it is now very easy for utilities to offer and manage prepaid plans, according to Greentech Media.
Who hasn’t had sticker shock at times when opening our monthly utility bill? The fact that consumers don’t know how much a bill is going to be can be frustrating and worrisome. It would be like shopping for groceries in a store where there are no prices, and then getting a bill that you know is coming but have no idea what it will be until it arrives days or weeks later. The uncertainty of utility bills presents budgetary concerns for many consumers.
Prepaid electricity is a very real benefit to many consumers. It allows consumers to avoid potentially having to make a significant monetary deposit to get electric service started. Prepaying for electric service can prevent consumers from having service disconnected when they are unable to pay their bills. It also provides consumers with increased control, just as prepaid cell phones or prepaid subway cards do.
Some people might worry that prepaid electricity might make it too easy for a utility to simply disconnect a customer’s service. With text messages and persistent reminders when the account is low, however, the opposite could be the reality. Consumers like the feeling of control over their usage and account, and will likely manage to put money into their accounts to continue service. Logically, it is easier for many consumers to come up with $20 to add to a prepaid electric account than to pay a $150 bill at the end of the month.
With smart meters and cool smartphone apps, once prepaid electricity is widely offered in the U.S., it is likely to grab hold very quickly, as it has done in several utilities that do offer this option, the Greentech Media article said.
Of course, prepayment is also a benefit to the utilities. It reduces the cost of collection and the costs of reconnects and disconnects. It allows utilities to maximize the benefits from their smart grid investments. It also reduces the frustration felt toward the utility when that unpredictable bill arrives every 30 days, and thus can improve the customer’s relationship with the utility.
Mobile devices and banking services have increased consumer expectations for real-time information. Consumers also now expect to conduct business from their homes. At least one prepaid application company allows its customers to contact the utility to “top up” their account directly with a mobile device, making online payments, recharging at various retail outlets, or utilizing a number of additional payment methods. The solution calculates the consumer’s actual consumption at the meter and alerts customers real-time as they reach predetermined spending levels.
So, has the time arrived for more broadly offering prepaid electricity arrived? We’re ready to sign up!