Weekly Update courtesy of Utility Regulatory News #3979: Continuing its practice of promoting energy policies that contribute to environmental improvements, the California Public Utilities Commission has authorized an electric utility, San Diego Gas & Electric Co. (SDG&E), to establish temporary experimental rates for plug-in electric vehicles. The rates are part of the utility’s ongoing Pricing and Technology Study, which is being conducted in cooperation with Nissan and ECOtality, Inc., a renewable energy company that specializes in commercial applications of advanced clean energy technologies. Under the associated new rate program, the first 1,000 consumers in San Diego who purchase a new Nissan LEAF electric vehicle will receive free home charging equipment and will be eligible for special time-variable plug-in rates. The utility said that the main hypothesis behind its study was that time-of-use rates for electric vehicle owners would induce them to shift their recharging activities to off-peak periods. The commission agreed that finding out how consumers respond to price signals could be key to successful reintroduction of electric vehicles in the state. The commission added that the study also should help identify any potential safety problems related to recharging as well as any incompatibilities between charging equipment and SDG&E’s infrastructure. The commission noted that the electric vehicle project will be funded in part by a stimulus grant from the U.S. Department of Energy to ECOtality. That grant, totaling $99.8 million, will be matched by private investments. The stimulus funds are expected to be sufficient to cover the costs of the charging equipment for those first 1,000 LEAF purchasers. For the full story Subscribe to URN.
Excerpted from “Summer of Discontent,” Fortnightly’s August 2010 Frontlines column.
As America approaches summer’s Dog Days, the debate over smart meters is heating up. Utilities in at least four states are facing public backlash against smart-meter rollouts — and that’s not counting the class-action lawsuits previously filed against Oncor and Pacific Gas & Electric in Texas and Bakersfield, Calif., respectively.
NORTHERN CALIFORNIA: About 60 residents picketed offices of the California Public Utilities Commission (CPUC) in San Francisco on July 20, carrying protest signs and chanting such slogans as, “One, two, three, four, smart meters no more.” The demonstrators voiced concerns about privacy and personal choice issues, as well as the meters’ radio-frequency transmissions and their possible effect on human health. Several local governments in Northern California, including Berkeley, Marin County, Santa Cruz and San Francisco, petitioned PG&E to stop its smart-meter rollout pending further public hearings and studies.
The Marin Independent Journal published an editorial on July 20 that stated, “Forcing your customers to do something without first making sure they are comfortable with it is not the best way to run a business.”
MARYLAND: Executives at Baltimore Gas & Electric were stunned when the Maryland Public Service Commission (PSC) decided in June to deny the company’s DOE-funded smart-grid investment plan. The decision came in the midst of a heated gubernatorial campaign, in which Gov. Martin O’Malley (D) is campaigning on a theme of green jobs, while former Gov. Robert Ehrlich (R) accuses the O’Malley administration of killing jobs with anti-business regulations. Against this backdrop, BGE petitioned for expedited re-hearing and amended its plan to address the PSC’s concerns—most notably by deferring and limiting BGE’s proposed capital-expense “tracker”; eliminating shareholder incentives for achieving demand-reduction targets; accelerating the depreciation of the new meters; making time-of-use rates voluntary instead of mandatory; and proposing a customer communication and education plan. The commission agreed to schedule hearings for early August.
OHIO: The Westerville city council voted in a meeting on July 20 to postpone a final vote on the municipal utility’s federal stimulus-funded smart-grid project. Chairman Mike Heyeck announced afterward that the postponement would allow the council to field questions and comments from Westerville residents, and to “provide additional opportunity to learn more about advanced metering” via a series of public events and outreach efforts.
The council’s decision came in the wake of growing public discontent, expressed at a July 6 city council meeting, where the residents who showed up spoke overwhelmingly against smart meters. ThisWeek newspaper quoted resident Charles Voight Jr. expressing outrage over the remote disconnection capabilities of smart meters, and the city’s decision to accept federal stimulus dollars. “This process seems to have been predetermined, with the grants being applied for without the public giving their full consent,” Voight reportedly said. “I personally will not let you into my home, remember that.”
Andy Boatright, electric utility manager for the city of Westerville, told Fortnightly in a phone interview that many of the 30-plus people who have expressed opposition to the project have focused on the federal government’s role. “I think it’s primarily a function of the federal grant,” Boatright said.
COLORADO: Xcel Energy awaits a decision by the Boulder city council on whether to recommend that voters renew Xcel’s utility franchise. That’s right; the celebrated Smart Grid City might actually walk away from its utility partner.
Xcel’s 20-year agreement expires at the end of 2010, and the utility wants Boulder to sign up for another 20 years. But surveys indicate voters would reject such an agreement, as well as an alternative plan that would impose an excise tax on Xcel—which the company would pass through to customers in monthly bills. Council members reportedly are considering municipalizing Boulder’s utility services if voters reject both initiatives.
Negative public sentiment over Xcel’s franchise agreement might be tied to the company’s Smart Grid City project, which has encountered its share of problems—from ballooning capital costs to disappointing participation in its demand-response program. Xcel CEO Dick Kelley told Fortnightly in June, “There’s huge value on the utility side of the meter, but it hasn’t been that successful on the customer side. I guess some people thought Boulder residents were super-environmentalists, but in fact they just want their TV to work and their beer to be cold when they get home.”-Michael T. Burr
Cyber security and customer privacy of paramount concern
July 22, 2010 - Weekly Update From Utility Regulatory News #3977: Reiterating its support for the most modernized electric network possible, the California Public Utilities Commission has released an updated plan for transforming the state’s grid into a safer, more reliable, and more efficient interoperable system.
The commission asserted that the measuring sensors, advanced meters, and automated control technology that form the backbone of smart grid networks facilitate communication between electric utilities and the grid as well as between the utilities and their customers. The special equipment allows for more timely collection and dissemination of operational data and also can help utilities integrate greater amounts of renewable energy into their resource portfolios. In the commission’s view, such smart grid technology not only can improve service reliability, by easing transmission congestion for instance, but also can encourage ratepayers to reduce or shift their usage, such that the need for additional new power plants is mitigated. The commission contended that, in turn, air quality can be improved and other environmental benefits achieved when new generating units can be avoided.
However, the commission said, it recognized that the electronic transmission of data has its risks, and it declared security to be a critical policy matter for it as it strives to implement smart grid fixtures. It expressed a commitment to enacting measures that will protect both the physical grid and private consumer information from being manipulated externally. To that end, it instructed the state’s electric utilities to include cyber security in their strategic planning deliberations and to abide by all cyber security rules and recommendations listed by the National Institute of Standards and Technology as well as by the U.S. Department of Homeland Security.
With such protections in place, the commission said, the state would be poised to bring its electric grid out of the “industrial age” and into the “information age” of technology. It added that its goal is to see not just a smart grid, but also a smart market, a smart utility, and a smart consumer.Subscribe to URN for the full story.
July 22, 2010 - Weekly Update From Utility Regulatory News #3978:Deeming smart grid technology to be a prudent investment, the Oklahoma Corporation Commission has preapproved up to $366.4 million in program costs for Oklahoma Gas & Electric Co. (OG&E) to construct a smart grid system.
The estimated costs of the program include a $130 million stimulus grant from the federal government. Although ratepayers will be expected to cover $220 million of the costs, OG&E said the smart grid network will save them money at the same time, including more than $20 million in operation and maintenance (O&M) expenses and $8 million in meter reading costs. The utility was authorized to recoup its project costs from customers via a smart grid recovery rider (SGRR) over a 42-month period, the end of which should coincide with the company’s next scheduled rate case in 2013.
To facilitate reconciliation of the SGRR in that 2013 proceeding, the commission ordered that three regulatory assets be established, one as a smart grid O&M account, one as a stranded meter cost account, and one as a Web portal account. Although ratepayers will be funding the program through the SGRR, they also will be credited with any cost savings achieved as a result of consumption reductions, shifts in usage, or other energy efficiencies made in response to information obtained from the new smart meter equipment.
Despite widespread support for smart grid technology, and in spite of assertions that the smart meters to be used have tested 99.98 percent accurate, one commissioner dissented, saying that a more measured approach should have been taken and that any preapproval of costs should have been limited to incremental stages. Subscribe to URN for the full story.
Maryland PSC urges utility to invest more of its own money in program.
Weekly update courtesy of URN #3976: Finding that any ratepayer benefits from an electric and natural gas utility’s proposed “smart meter” rollout would be “largely indirect, highly contingent and a long way off,” the Maryland Public Service Commission (PSC) has disapproved the company’s advanced metering infrastructure (AMI) program.
The utility, Baltimore Gas & Electric Co. (BGE), had submitted a plan under which every meter in its service territory would be replaced with a new AMI module. Although BGE professed that a stimulus grant of $136 million from the U.S. Dept. of Energy would be dedicated to the project, the PSC noted that total plan costs were estimated to be $835 million, with the company seeking to hold its customers liable for the difference via a special surcharge mechanism that would go into effect before the meter installation work even began.
The commission expressed displeasure at the utility’s attempt to saddle its ratepayers with the entire cost of the new metering equipment. Explaining that a utility’s metering network is a backbone component of its service system — i.e., part of its infrastructure — and that utilities traditionally have invested their own funds in such plant, the PSC said that it could not authorize the AMI initiative as proposed.
The commission added that it also strongly objected to another part of the plan that would have made time-of-use (TOU) rates mandatory for residential customers during the summer season. In the commission’s view, whatever benefits a customer might receive as a result of a smart meter being installed at his or her premises likely would be greatly mitigated, if not completely negated, by the combination of the surcharge and the mandatory TOU schedules.
The commission emphasized that its rejection of BGE’s smart meter program as presented should not be taken as an indication of the PSC’s nonsupport of AMI programs in general. To the contrary, the commission stated, it fully endorses the concept of AMI deployment, and it invited BGE to return with a revised AMI business plan that was more equitable in cost sharing and not as “untenable” as the present proposal. Subscribe to URN for the full story.