March 20, 2012 General Meeting- James Fine on Evaluating Smart Grids

The Local Clean Energy Alliance’s March general meeting featured James Fine, of the Environmental Defense Fund (EDF), presenting a summary of EDF’s work evaluating Smart Grid deployment plans of California’s three Investor-Owned Utility (IOU) companies.

The EDF has determined that smart grid technology has the ability to cut air pollution, and climate change gas emissions by 30% in the electric sector and by 25% in the transportation sector and will generate new jobs, promote new electricity markets, encourage least-cost energy innovations and develop smarter energy consumers.

Smart grids utilize computer technology to decentralize energy systems; gather real-time data on energy use, supply and demand, and can be used to automate energy delivery. This has the potential to maximize conservation and efficiency and encourage the use of new energy resources.

Fine described the EDF’s position that smart grid technology is critical to increase the use of low carbon energy resources to meet energy needs by working with open markets to inspire least-cost innovations in energy generation and delivery. According to Fine, the deployment of smart grids will also be important in re-shaping state and federal regulations to fairly value new, cleaner energy resources.

Fine got involved in this work when the California Public Utilities Commission (CPUC) ordered California’s IOUs to develop smarter grid systems in California after the California electricity “crisis” in 2001 and established goals for their deployment. EDF was invited to work with the three California IOUs, Pacific Gas & Electric (PG&E), Southern California Edison (SCE), and San Diego Gas & Electric (SDG&E) to develop a framework for evaluating progress toward meetings the smart grid deployment goals set by the CPUC.

The framework, complete in pdf format, resulted in the development of a scorecard that allows deployment plans made by a utility to be evaluated. Fine reported the results of EDF’s application of this scorecard to the deployment plans of each of the three California investor-owned utilities; PG&E received a C score, while both SCE. and SDG&E received B- scores.  Fine noted that for all three plans the major failing was in providing road maps that included standardized, measurable goals.

Several interesting issues were raised during the discussion following Fine’s presentation including how multifamily units are figured into the benefits of smart grid systems, and whether the equipment will actually deliver what is promised to consumers. Another question was how smart grid technology will affect the formation of consumer choice aggregates. The problem of motivation for the I.O.U.s was also raised. Since the majority of their profits come from guaranteed rates of return from infrastructure investments based on growth, what motivation do they have to promote conservation?