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By Jesse Berst

 

Depending on your viewpoint, Pacific Gas & Electric (PG&E) has been either a courageous smart grid pioneer or a bumbling smart grid screw-up. I lean towards the former, but there is no denying that the San Francisco-based utility has learned some hard lessons on the way to installing more than 8 million smart meters (the nation's largest smart meter implementation to date).

 

Now PG&E has released a 290-page plan that recounts those lessons and lays out a nine-year vision for a modernized grid.

 

I consider it required reading. Start with GigaOm's excellent summary. Then download the full version of  PG&E's Smart Grid Deployment Plan. As you read, you will glean dozens of insights. Here are five you should be sure to consider:

 

1.     Be cautious about embracing the first version of standards. The Smart Energy Profile, for instance, continues to struggle as it attempts to move from version 1.0 to version 2.0. PG&E calls version 1.0 "not sufficiently mature to support large-scale deployments." And then there's OpenADR, the emerging standard for demand response. PG&E is (wisely) still evaluating its maturity before deciding whether to roll it out.

2.     Consider energy storage. PG&E has pilots in the works for compressed air and for sodium-sulfur batteries.

3.     Prepare for the data tsunami. If I had to pick a single "growth pain" that most utilities are underestimating, I would choose this one. For its part, PG&E is embarking on a $12.3 million program to develop a data warehouse and business analytics engine.

4.     It's the system, stupid. Don't overemphasize smart meters. The biggest opportunities lie in making the system itself smart and more efficient. PG&E, for instance, plans to spend as much as $1.25 billion over the next nine years. Up to $850 million of that will be for distribution automation, substation automation, wide-area management systems and similar system upgrades.

5.     Talk to your customers first. PG&E initially took a paternalistic approach, launching its smart metering program and only then engaging with customers. As a result, PG&E encountered severe consumer backlash. Instead, make customers part of the planning and dialogue right from the beginning.

 

And if you've got time for more reading, Southern California Edison recently released its Smart Grid Strategy and Roadmap. After all, it's smart to learn from your mistakes. But it's even smarter to learn from the mistakes – and from the successes – of others.

 

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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Current Comments (5)

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Bumbling Screwup!

Why would any company continue to rollout a product which is making people ill? Is this data storage really worth the people who can't live in their homes who have become electrosensitive to this man-made radiation? Insanity!

Bill Tabby - 07/13/2011 - 02:21

Lessons Learned

The PG&E deployment plan does make good reading and some of the lessons learned are invaluable. However, the comments and hesitation regarding OpenADR are perplexing and not at all comparable to the experience with Smart Energy Profile. OpenADR has been in real operation for nine years, has been on the commercialization track since 2006, and has been tested successfully with every demand response option thrown its way - for all classes of customers. OpenADR is not magic, just basic signalling. It works. It produces benefits far greater than other approaches. The results are documented. So I question PG&E's hesitation and your characterization that this is a wise move. Staged expansion that standardizes and stabilizes the customer interface and simultaneously builds a flexible, operational DR asset would be a wise move.

Roger Levy - 07/13/2011 - 07:17

Market without a market

PGE was one of the first to petition CA's PUC for rate hikes. They moved forward with a plan which did not include the customer, the building or any edge devices like a refrigerator freezer or HVAC or pool pump, or any experience in building networks. They didn't and don't understand what they have done to their customers today. How many customers will actually understand how to use the applied science of monitoring electric pricing. In other words, they installed a "smart" meter on a residence that talked to NOTHING in the residence. I equate this to your home sprinkler system.. how many people program their sprinkler system controller let alone care what it does once it's turned on by their lawncare person? This is a push by the law makers to redistribute wealth. Who will participate and who will not?

mike trust - 07/13/2011 - 07:52

PG&E Smart Meter lessons

Note that PG&E now focuses on energy storage and data storage. From their CPUC filings in October 2004 and June 2005 the benefits were driven by the proposed implementation of time varying rates and the cost savings of not requiring physical visits to shut off customers for non-payment. Note SF Chronicle article 1/26/10 and North County Times 11/21/10.

Jeff Williams - 07/13/2011 - 07:58

Smart Meters a clandistine reason for raising rates ?

I had a conversation recently with some former SDG&E employees who had a jobs calibrating electric meters. There reaction to the smart meter was it was SDG&E's attempt to raise the utility rates under the PUC's nose and noted that the old meters were calibrated to round off the numbers in the customers favor, whereas the new meter round off in SDG&E's favor , resulting in an immediate 10 % rate increase ! Also the sales pitch that the smart meter would allow a differentiation in rates based on peak time and off peak hours thereby allowing the consumer to save money as they could wash their clothes between 12am & 5 am to take advantage of the reduced rates! Her reaction , that was SDG&E's strategy to get residential consumers to use less during peak hours so they would have more power to sell commercial customers at much higher rates! My question is in your view did SDG&E use Google's good faith effort to implement smart grid technology as smoke screen to raise their rates ?

haven putnam - 07/13/2011 - 11:33

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