FERC vs NERC: A grid control showdown over cyber security

OUT THE DOOR
WWW.INTELLIGENTUTILITY.COM /// JULY/AUGUST 2011
46
The advanced
smart grid
+ + Viewing the trends
By Andres Carvallo and John Cooper
JUNE MARKED THE RELEASE OF THE ADVANCED SMART GRID:
Edge Power Driving Sustainability, a new book by Andres Carvallo
and John Cooper. The following excerpt comes from Chapter 6, “Today’s
Smart Grid.”
State smart grid dockets
The year 2010 saw progress on many state fronts in implementing smart grid
plans of electric utilities. In many cases, the utilities and regulators worked well
together to launch projects without major issues. In others, regulators saw themselves
repeatedly put in the position of reacting to unintended, negative impacts
of smart grid implementations. Viewed together as a trend line, these separate
cases help us draw some conclusions.
Oklahoma and OGE
Oklahoma Gas & Electric (OGE), the recipient of $130 million in DOE FOA 58
smart grid investment grants, successfully maneuvered the
regulatory process from June to August 2010 and received
approval for its Positive Energy Smart Grid program. The
OCC preapproved up to $366.4 million in program costs
for the system, with the principal focus on smart meters.
From June to August 2010, the OCC approval for a large
smart grid project shone as a bright light in comparison to the other cases
documented in this section.
California and PG&E
In September 2009, California utility giant Pacific Gas and Electric Company
(PG&E) faced a challenge to its multibillion-dollar AMI deployment, at the
time one of the largest and most ambitious rollouts of the
new technology in the world, kicking off a trend of consumer
backlash to smart grid that has only grown as the year
progressed. As if to prove the adage that pioneers are the ones
who get arrows in their backs, PG&E was sued by consumers
in the San Joaquin Valley over abnormally high electric bills
that they attributed to their new smart meters.
As many insiders suspected all along, the results of an official inquiry revealed
in September 2010 that the meters worked perfectly all along, but PG&E had
dropped the ball in helping its customers understand the changes underway.
CPUC Commissioner Nancy Ryan put it succinctly, “Better communication and
customer service will help ensure that consumers see smart meters as something
that is done for them, not to them.”
Texas and Oncor
Similarly, Texas utility Oncor came
under fire for its AMI rollout a few
months after PG&E did.
With the benefit of going
second, Texas regulators
reacted much quicker than
their California colleagues,
hiring Navigant to investigate
to identify root causes.
Investigation results in July 2010
likewise found the technical performance
of the meters impeccable, but
those consumers had high bills
because of an unusually cold winter
and that communication and education
could have helped consumers
better understand the changes, underscoring
the lessons of the California
case—consumer awareness will be
critical to the success of the smart grid.
Public opinion on both of these cases
appears likely to influence the longterm
future of smart grid initiatives
and, as the following cases show, the
funding for such initiatives as well.
Hawaii and HECO
In Hawaii, there was yet another challenge
to smart grid in June 2010, but
this time it did not concern a consumer
issue per se. The Hawaii
Solar Energy Association
(HSEA) challenged plans
for the pilot, claiming that
Hawaii Electric Company
(HECO) was “putting the
cart before the horse,” since the pilot’s
principal goal was to ratify technology
decisions around a smart metering
system, but it used a network approach
that HSEA claimed would be
incapable of supporting future longterm
utility needs to integrate applications
beyond smart metering, notably,
solar PV systems and other forms of
renewable energy.
When it comes to renewable energy
integration, Hawaii is a bellweather
state—nearly 90 percent of its electricity
is powered by imported oil, their
electricity rates are the highest in the