The good and the bad about the Illinois smart grid performance metrics

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By: SGN Staff

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I've been agitating for new business models for years, business models that would give utilities incentives to be more efficient and more innovative. Recently I've been pinning my hopes on performance-based ratemaking as a step in the right direction. But the devil is in the details. So I jumped at the chance to get Paul Alvarez to explain the details of the seminal ComEd proposal. As you'll see, he thinks they are a good thing – but they could become too much (or too many) of a good thing. - Jesse Berst

 

By Paul Alvarez

 

Utilities, smart grid pundits, industry suppliers and regulators across the U.S. are interested in the performance metrics proposed by Commonwealth Edison in its 2013 smart grid progress report filed with the Illinois Commerce Commission April 1 (Case 13-0285). The metrics were developed collaboratively by stakeholders, including the Citizens Utility Board, the Environmental Defense Fund, and Illinois’ investor-owned utilities (including Ameren) in a process similar to one that has been ongoing in California.

 

At the Wired Group, we perceive value in these efforts. But we have a unique perspective informed by the comprehensive, independent smart grid deployment evaluations we have performed (SmartGridCityâ„¢ for Xcel Energy in 2011 and Duke Energy Cincinnati for the Ohio PUC in 2012).

 

In brief, we feel the Illinois performance metrics are a significant advancement from those envisioned by the legislature when it encouraged Illinois IOUs to invest in their grids through Senate Bill 1652 (originally vetoed by Governor Quinn but eventually overridden into law by the General Assembly in 2011, Public Act 097-0616). Our research confirms that the proposed performance metrics will focus utility resources on capabilities that deliver the greatest economic, reliability and environmental benefit potential available per dollar of smart grid investment.

 

It's time to apply the 80/20 rule

Even so, over time we hope that distribution performance metrics will evolve towards compliance with the 80/20 rule. Stakeholders should agree on a limited number of standardized metrics that focus on the 80% of benefits available. Too many metrics become difficult for utilities to manage. As the saying goes, “if everything is a priority, nothing is a priority."

Sixty metrics were developed through the collaborative process in Illinois.  Our research indicates that the most appropriate and valuable distribution performance metrics are those that relate to:

·         Time-of-Use/Demand Response impact (relative to peak) and facilitation cost

·         Reductions in line losses and improvements in Volt/VAR control

·         Availability of data and new customer services

·         Reliability improvements  (SAIDI and SAIFI)

·         Customer complaints

·         The levels of customer-owned/distributed generation and storage the utility can reliably accommodate

 

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