 October 27, 2009—A Smart Date to Remember - By Patti Harper-Slaboszewicz and J. Christopher Perdue Daily IssueAlert 10/28/2009 Free For the teams that worked on grant proposals and found their Smart Grid project on the list of projects awarded by the Department of Energy (DOE), yesterday was a happy day. Of the 129 large investor owned utilities (IOUs), 31 were selected for projects—three were selected for more than one project: Duke Energy, Entergy and Pepco Holdings. Others were not so lucky and were not selected for any. The top six project awards of $200 million were given to the following large IOUs and all involved, at least in part, smart metering:
In fact, projects with smart metering captured over 85 percent of the funding awarded to utilities. Clearly the DOE believes that smart metering is one of the key areas of investment for the Smart Grid, but not the only one. Of the $3.4 billion awarded, over $600 million was awarded for projects without a mention of metering, smart or otherwise.
Cooperatives, public utility districts, and G&T cooperatives together won 23 percent of the awards in terms of the number of awards with the various types of municipal utilities winning a similar percentage (25 percent). Denton County Electric Cooperative received the largest funding of the distribution cooperative utilities. Based in the Texas city of Corinth and part of the Dallas-Fort Worth metropolitan area, the cooperative received over $17 million to install a 140,000 smart meter network that includes meters, two-way communications, computer systems, and a distribution network that will provide timely information about customer electricity consumption. The total value of the cooperative’s project approaches $41 million. In the municipal utility sector Sacramento Municipal Utility District received the largest funding. The municipal utility received over $127 million to fund a $308 million project that will entail the installation of a comprehensive regional smart grid system that includes 600,000 smart meters, dynamic pricing, 100 electric vehicle charging stations, and 50,000 demand response controls including programmable smart thermostats, home energy management systems. DOE awarded nine percent to other types of entities, such as independent system operators (ISOs). Five ISOs received federal funding yesterday, and their funding all pertained to the implementation of phasor measurement units. These units measure the electrical waves on an electricity grid to determine the health of the system. They are also commonly referred to as synchrophasors and are considered one of the most important measuring devices in the future of power systems. The five ISOs that received funding were:
Over 50 percent of utility projects with smart metering note in the project description their plan to test or implement dynamic rates, or at least new rate plans. Municipals have the most consistent plans for new rate plans for their customers (60 percent), but IOUs are quite high as well at 57 percent. The co-op projects awarded by DOE have a considerably lower percentage of plans for alternative pricing.
Most Smart Grid investment plan have a goal to enhance customer service in some way, whether it’s to assist customers to manage their energy bill or to reduce outages. Successfully deploying Smart Grid technologies that support these efforts is not without its challenges. Vendors are improving their products to keep up with new requirements and technological advances—utilities may start their planning with one product version but go-live with a newer version. Many back office software systems need to be upgraded or replaced, either before, during or after. Customers are confused between smart meters and smart thermostats even though they may know the difference between thermostats and meters if they aren’t labeled as "smart." Smart meters may be installed but don’t seem "smart" to customers right away because it’s really difficult to get all the pieces in place simultaneously. Despite the difficulties, most utilities know where they are headed with their Smart Grid investment and have a plan to get there. We need a plan to get customers there as well so that using energy wisely and reducing their carbon footprint is as routine as recycling aluminum cans. As we measure these Smart Grid deployments, it will be important to develop more sophisticated measures of progress than simply measuring how many smart meters are installed. How many customers can better manage their energy bill using the new consumer web portal, their smart meter, in-home network and smart devices within the home? How many customers have access to alternative rate plans, and are utilities seeing a reduction in peak demand, all other things being equal? Interestingly, only 50 percent of the awarded project descriptions referred to customers or consumers—the rest only described technology. Utilities need to work to make October 27, 2009 a happy day for customers as well. One method is to articulate at each step along the way what impact or benefit this will have on customers.
While the new projects will involve a total of $3.4 billion dollars of stimulus spending from the federal government, with matching spending by utilities the total commitment will be over $8 billion, and fund the installation of over five million smart meters. With such a large investment it would appear that the smart grid will finally move from the realm of pilot and test projects and into the mainstream. |
