Sticker Shock: EPRI Says Smart Grid Will Cost $165 Billion Over 20 Years


By: SGN Staff

The Electric Power Research Institute (EPRI) says the Smart Grid will cost $165 billion over the next 20 years. But, you might ask, what all does that estimate include? And is the price tag something to get that excited about when the same organization said last year that business losses and damages from power interruptions and fluctuations cost the economy about $100 billion?


The coming Smart Grid will be able to do a lot of things: provide reliable, green, secure electricity and a stable energy future for the country. It's also expected to cost a lot of dollars: about 165 billion of them over the next 20 years, according to the Electric Power Research Institute (EPRI).


That $165 billion price tag has caused quite a stir among stakeholders as well as consumer groups.


They wonder who's paying for it.


Depending on when Smart Grid cost estimates were given and who made them, the numbers have varied dramatically. At least one estimate has said it will cost about $2 trillion when all is said and done. Energy Secretary Steven Chu said last year that it would be over $100 billion, more or less in line with the EPRI number.


Xcel Energy's SmartGridCity pilot project in Boulder, Colorado, has been in the news a lot lately and was cited in The Denver Post as a prime example of associated costs. That project, plagued by unanticipated difficulties and ensuing cost overruns, is expected to cost about $100 million by the time it's done.


"This is all uncharted territory," Bill Levis, director of the Colorado Office of Consumer Counsel, was quoted as saying in the Post. "The costs have to be accounted for." While the Xcel pilot has been praised and supported despite the cost overruns, the Colorado PUC will require the company to get a certificate of need which will allow the agency to regulate the project.


Hard pushback has been occurring from California to Pennsylvania where advocates question whether Smart Grid technologies â€" like smart meters â€" are worth the money.


"The cornerstone of Smart Grid is this house where your meter talks to your appliances. My toaster is never going to talk to anyone," commented Mindy Spatt, spokeswoman for a California utility advocacy organization, also quoted in the same news story.


The California PUC plans to study the accuracy of smart meters after Bakersfield residents complained about overcharges and filed suit against Pacific Gas & Electric. The utility has deployed about 4.6 million new meters at a cost of about $2.2 billion.


While billions in stimulus grants and private investment are supporting the growing Smart Grid, questions of how to pay for the whole enchilada are far from answered. If nothing else, the EPRI pronouncement points to the need for continuing, realistic dialogue.


From the source ...

Denver Post


Related SGN resources ...

SmartGridCity cost overruns

Smart Grid Stimulus Awards & Projects


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