Why it's past time to move to the smart... no, make that the value-added grid

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By David O'Brien

 

“Safe, reliable service” – that is the North Star by which utilities navigate. It is found in state utility statutes around the country. It is an important measuring stick for regulators to assess utility performance. In some jurisdictions the term is “safe and adequate.”

 

Adequate... ponder that for a moment. Utilities are expected to make prudent investments in physical assets and deploy human resources that yield this fundamental outcome. I wonder how many of my kindred “smart gridders” see the mismatch between the term “safe and reliable” and a modern grid of interconnected digital endpoints, 15-minute interval data and such things as conservation voltage regulation (
CVR). The modernized grid is analogous to the modern car – Yes, it is safe, yes it is reliable... but it is a whole lot more.

 

Is safe and reliable just a holdover?

It would seem that the “safe and reliable” standard is another holdover from the bygone era of this industry. Under this traditional mindset, expectations have been met when the system is not a threat to anyone’s safety and operates on a consistent basis. This standard had real meaning during rural electrification in the 1930’s. And coming out of major blackouts in the 1960’s and 70’s.  But in the digital world of today with increasing expectations regarding renewables, storage and electric vehicles, it’s a mismatch. I cannot imagine the public being too interested in a product that is pitched to them as merely “safe and reliable."

 

Rotary telephones were certainly reliable and performed “adequately.” But they were a far cry from the products that followed the explosion of innovation in the telecom industry over the past twenty years.  Once we got a taste of enhanced features and functionality we wanted more. We were once thrilled with simple cell phones but now expect app-laden smart phones.

 

Likewise, in commercial relationships it’s all about delivering the value-add. We all expect value and are willing to pay for it. But not for goods and services seen as cheap or average. We either avoid those or pay as little as possible. 

 

To a large extent that is the lot that the electric utility faces today. I would posit that a sophisticated, customer-friendly electric grid could be the difference maker for an industry at a crossroads.

 

As a practical matter, any utility that seeks to implement a digital grid (AMI, DA, etc.) will be best received if there is a shared understanding of the value equation, the compelling reasons to invest beyond the current safe and reliable standard. And that is precisely what we hear from consumer advocates. “Why spend more, what will be different?" they ask.

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