3.17.09 Stateline.org: Smart Grid Growth Now Depends on States
Stateline.org agrees with an earlier article from smartgridnews.com that now that Congress has allocated $4.6 billion in stimulus spending toward developing a “smart” grid, it will be up to the states to get consumers on board and figure out how to adjust rates to pay for the technology.
“The state role is crucial. We’re the ones who know how ratepayers react. We’re the ones that know the bumps in the road. We’re the ones who know how what their tolerance level is for innovative things,” said Frederick Butler, president of the National Association of Regulatory Utility Commissioners.
The improvements, backers say, will change nearly every part of the nation’s aging power transmission system – from how power plants distribute power to how consumers use it at home.
The idea behind a smart grid – parts of which are already being introduced in Los Angeles, Boulder, Colo. and Austin, Texas – is to install devices that, working together, can save energy by increasing efficiency, reduce blackouts and cut customers’ bills.
The article explains that smart meters will be able to relay instant information to customers about their rates and how much particular devices and appliances are costing at any given moment. This will allow energy and money conscience consumers to turn of their air conditioner for hours while away, while other appliances will be able to automatically shut themselves off when power becomes too expensive for a certain period of time.
On the technical and unseen side of the grid, new tools will be able to divert power away from congested grid areas while sensors will be able to direct repair teams to the exact spots in a line that need work during a power outage.
But for the plans to succeed, state regulators must overhaul the rules they have used for decades to determine electric rates.
“You can’t have a smart grid and dumb rates. We have been used to – for over 100 years – rates that are the same all day, every day. That’s not the way electricity is produced,” Butler said.
Regulators likely also will be asked to approve rate hikes to pay for improvements to the grid. Much of the $4.6 billion in the stimulus plan likely will be matching grants. State regulators could be asked to step in and approve rate hikes to cover the remaining costs.
Already, states are pushing for major tests of smart grids.
After the 2001 energy crisis that led to rolling blackouts in California, regulators there pressed for changes that would help them respond better to future emergencies. The need for a smart grid increased as California enacted new policies to cut greenhouse gas pollution, increase use of wind and solar power and promote the use of plug-in hybrid cars.
As a result, Southern California Edison, which covers a 50,000 square-mile area outside of Los Angeles, began distributing new electric meters to its customers last year. By 2012, it expects all 5 million of its smaller users to have the smart meters. The utility’s largest customers – which use 60 percent of its power – have been using similar technology since 2003.
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