ComEd smart grid deal: profits tied to performance

By Jesse Berst

The trend to set performance benchmarks for utilities got another boost with an announcement Thursday by ComEd. The Illinois utility laid out the steps it will take to meet the performance metrics built into the state's recent smart grid bill. (Which was passed only by overriding the governor's veto.)

The 10-year $2.6 billion modernization plan requires the state's utilities to prove they are making progress toward 10-year goals that include improving outages by 20 percent and the duration of those outages by 15 percent. As part of its plan, ComEd will install 10 “smart” electric substations over the next five to 10 years to better predict, find and resolve power outages.

The Joliet Herald-News reported that ComEd also will allow businesses to install rooftop solar panels and take advantage of net metering to get credit on their electric bills for providing power to the electric grid, which only residential customers can do now, and that it will increased spending on minority and women-owned businesses as part of its upgrades and changes. ComEd and Ameren, which provides service outside ComEd's service area, also must reduce outage frequency by 20%, increase the number of customers that surpass service reliability targets by 75%, and reduce the number of estimated power bills by 90% and cut back energy use from inactive meters as well as electricity theft.

ComEd officials said it is the first utility in the U.S. to have its profits linked to performance, and that it will pay penalties if it does not follow through on its agreements to operate efficiently and reliably, the Herald-News article said.

Jesse Berst is the founder and chief analyst of Smart Grid News.com. He consults to smart grid companies seeking market entry advice and M&A advisory. A frequent keynoter at industry events in the US and abroad, he also serves on the Advisory Council of Pacific Northwest National Laboratory's Energy & Environment directorate.

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