Making the Case for a Modern Grid

Last month's column explored the Principal Characteristicsof a modern grid to significantly improve reliability, efficiency, and customer benefits. This month, I will focus on the system and societal benefits.

Justifying grid improvements

It is often difficult to justify grid improvements to regulators. It starts with a good long-term vision, as we have discussed in the last few columns. Our experience says this skill set can be lacking in the utility industry.

Next is the ability to quantify benefits or 'making the business case.' We need to get better at this task through the hard work of developing intelligent business cases and vetting them through rigorous review. Then we should shamelessly re-use those models again and again to make the case to management and regulators.

As we do that, we should consider not just the direct and obvious benefits to the utility, but the benefits to society as well.

Two types of benefits

After working in-depth with several utilities, the Modern Grid Initiative team has found that benefits come primarily in two forms: benefits to the system (the utility, its immediate customers and its investors) and benefits to society at large. The table below provides some examples. Notice that some benefits accrue only to one side or the other. But some benefits apply to both areas, as noted:

Fortunately, we are seeing societal benefits being considered as critical parts of the business case for advanced metering infrastructure (AMI) under the California Public Utility Commission (CPUC) initiative. This is good news. Remember, a modernized grid across the country benefits society as well as the industry. It is time to account for these benefits.

Next month, we will discuss the key technology areas that enable a modern grid.  These technologies are the driver for creating benefits (like the ones above) in support of a robust, 21st-century electric infrastructure.

Please take part in the national network creating this vision. The next regional Modern Grid event will be the California Regional Summit, “California Smart Grid Energy Conference”, October 25-26, 2006 in San Diego at the conference center on the University of San Diego campus. There is no charge. We invite your attendance and ideas.  Heads up; the Midwest Regional Summits is being planned for November in Columbus, Ohio!

   Email Steve Pullins

   Steve’s previous column

   Details on the Regional Summits