The smart grid may be only in the underachiever phase for longer than some might be thinking, even though the Obama administration is putting billions toward it, and promising jobs and savings in connection with it.
Patrick Gallagher, deputy director of the National Institute of Standards and Technology, told the Senate Energy and Natural Resources Committee Tuesday that "there is a bit of a jam right now" in figuring out which standards are most urgent to move on, and he said the organization hoped to have initial drafts of roadmaps ready this summer. Initial drafts of roadmaps.
Senator Lisa Murkowski told Gallagher at a committee hearing that Energy Secretary Steven Chu had suggested to her that people be locked in a room to develop standards in "a few weeks," our colleague Jason Fordney reported. Obsolescence is a worry, Murkowski said, and Suedeen Kelly of the Federal Energy Regulatory Commission said FERC believes some safeguards should be put in place by the Department of Energy on smart grid funding to avoid the risk of obsolescence.
Suites of standards, rather than single ones, will be needed, Gallagher said, and they will have to evolve rather than be static. State utility regulators, who occupy a critical space in implementation of smart grid technology at the distribution and customer levels, issued their own cautionary message. For one thing, deployment should probably start at the transmission, or wholesale, level, they advised.
Frederick Butler of the New Jersey utility commission, speaking for the National Association of Regulatory Utility Commissioners, compared smart grid deployment to electricity market restructuring, which in many states' views has not given customers the promised benefits of lower power costs.
"Right now, we are selling the smart grid as a means of empowering consumers to lower their usage and, correspondingly, their energy bills," Butler said in his prepared testimony. "While this may ultimately be the case, we must learn our lesson from the restructuring experience before heading down this path. The promise of restructuring was that consumers would save money by shopping for power. ... At the outset, restructuring seemed to be a success." But when the California crisis happened, and when rate caps came off in other places in the early 2000s, prices went up and "many consumers still feel burned."
"The problem here was not restructuring per se," Butler said, "but it was the way it was sold to consumers. ... [W]e jumped right in, with the promise of lower rates to follow. Because of this approach, and because of the results, the concept of restructuring has taken a significant hit." The smart grid should not take a similar path, he advised. Operational work, customer education and strategic deployment of meters will prove worthwhile in the long run, he said.
And he urged starting with the transmission system, "the backbone," where utility systems will benefit. "[S]tarting with the backbone means the initial investments would be paid for by the utilities themselves, as they will be the initial beneficiaries, and not immediately by ratepayers," Butler said. It seems that transmission investments would be paid for ultimately in transmission rates, which do affect consumers; but those rates are in FERC's domain, not state commissions'.
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