RED LIGHT! Got it. Stop! Wait, are we supposed to go forward or not?

In Maryland and elsewhere in the regulatory community there is a pursuit of certainty that simply cannot be realized.  This is creating a hot potato issue that is the central barrier to grid modernization post stimulus. Utility executives cannot expose their investors to that sort of financial risk. Not if they want to remain employed. As a result, utilities will stay on the smart grid sidelines until further notice.

Make no mistake – this is not a simplistic problem of overly cautious regulators.  In many cases regulators are responding to smart grid proposals that lack clear and convincing consumer benefits.  Let’s be honest – the utility community has not tackled digital technology with the same sort of transformative zeal as competitive industry.  Further, regulators do not have a clear state policy framework to rely upon as they weigh the evidence.  In reality as we all know “it takes two” and here there is a pox on both houses. Affixing the "blame" is further complicated by the fact that regulators are utilizing a rule book that is ill-suited to reconcile investment in grid modernization. 

These issues may seem daunting, yet I see opportunity instead – assuming that both sides can exit their comfort zones.

Editor's note: In the next installment the author tackles the topics of leaving comfort zones and risk and its upside – and offers some common sense advice on how regulators and utilities can work together to resolve their differences and provide the best outcomes for the most stakeholders. The second installment will be published later this week.

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Smart Meters business case problem

The main thing in the utility business is the fixed costs of it. Renewables also contributing. When customers are looking for ways to improve energy consumption efficiency, and the load on the network goes down, those fixed costs make the kwh more expensive, which means that the customer consumes less but pays the same or more. And customers doesn't understand that. Smart metering to makes sence, and go forward, has to be in times when the load demand is growing, so that the fixed costs can be deluted for a bigger amount of energy transit/output. In present days, and with the economic enviroment, that will only happen with decarbonisation of the economy (which means EV penetration). Pilot projects are good to prove the technology, but are unable to provide good business cases unless made on a full independent system, because that way the fixed costs are spead equaly for all customers. And now it's possible to calculate properlly the real value of the smart meters for all stakeholders.

Nuno - 06/06/2012 - 16:13

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