Massachusetts to utilities: Thou SHALT modernize! (We'll reward you for it)
Quick Take: I remember years back giving a speech at a National Governors Association meeting. My goal was to explain smart grid to them and convince them it was a worthwhile endeavor. Now the tables are turning. Now many governors understand very well what smart grid implies. In fact, more and more of them are demanding that utilities modernize.
Case in point: Massachusetts Governor Deval Patrick. His public utilities commission just issued an order requiring that utilities in his state develop a grid modernization plan. And not just any plan, but one that includes smart meters.
That's a positive development all on its own, but there's even better news. The commission is proposing a new business model that would allow utilities to recover smart grid investments more quickly. Or maybe "proposing" is too gentle a term. To quote the press release (see below): "We require the electric utilities to adopt a new business model that is more forward thinking." As more regions begin to see smart grid as a necessity, I predict an uptick in smart grid spending, beginning in 2015 and for several years thereafter. - By Jesse Berst
New business models to improve reliability, achieve cost savings, promote clean energy, and encourage the use of electric vehicles
Boston - Monday, December 23, 2013 - The Patrick Administration's Department of Public Utilities (DPU) today issued an order that will result in the modernization of the Commonwealth’s electricity grid. Massachusetts’ electric utilities will be required to develop a Grid Modernization Plan that includes investing in infrastructure for advanced metering functionality.
Advanced metering enables two-way communication between the utility and the customer, helping to achieve cost and energy savings and allow for efficient grid operations. The necessary infrastructure includes smart meters, communications networks and new data management systems to give customers greater choice about their energy use and real-time information to enable the utilities to respond better to storms.
In addition to savings and reliability, grid modernization will allow for easier adoption of clean energy technologies like renewable distributed generation and electricity storage. Advanced metering also enables targeted electricity rates for electric vehicles and electric vehicle charging stations.
The order follows an study into the potential for grid modernization technologies such as advanced meters, cell phone applications and smart appliances. The investigation was launched in 2012 and resulted in a comprehensive report to the DPU from its grid modernization stakeholder group after eight months.