Saturday, June 11, 2011

Post # 72 - EDF's Smart Grid Framework

Last June, the California Public Utilities Commission (CPUC) issued an order outlining the requirements for "Smart Grid Deployment Plans" to be filed by July 1, 2011 by California’s three investor‐owned utilities: Pacific Gas & Electric, San Diego Gas & Electric and Southern California Edison.

The CPUC directed that, in preparing their Smart Grid Deployment Plans, the utilities follow a common outline, addressing eight specific topics:
1. Smart Grid Vision Statement;
2. Deployment Baseline;
3. Smart Grid Strategy;
4. Grid Security and Cyber Security Strategy;
5. Smart Grid Roadmap;
6. Cost Estimates;
7. Benefits Estimates; and
8. Metrics

In anticipation of the submissions, the Environmental Defense Fund (EDF), which has played an active role in CPUC smart grid proceedings, last week issued its Evaluation Framework for Smart Grid Deployment Plans, intended (in the words of the EDF's release) "to critically evaluate how effective California public utilities' plans to upgrade the state's outdated electricity network into a digital smart grid will be at delivering environmental and consumer benefits."

EDF recognizes that as PG&E, SDG&E and SoCalEdison develop plans to deploy the smart grid in their service territories, "site‐specific circumstances and considerations must be taken into account." For that reason, EDF states that its evaluation framework does not require that every utility plan engage in every listed strategy or pursue every identified metric. "To a large extent," the documents states, "deployment strategies must flow from individualized smart grid visions that are calibrated to respond to both existing and future conditions." But, with that caveat, the EDF proposes the following evaluation framework, based on five principles:

1. Smart grid deployments should seek to share costs between utilities and consumers, and deliver benefits to consumers commensurate with investments. Smart grid deployment plans should share the investment and technology risk between utilities and their customers, while making sure customers get the full value from the investment, including reduced whole‐system costs and improved reliability, environment quality and public health.

2. The smart grid should empower customers to make choices about their energy use, both to save money and to support clean energy. In general, consumer empowerment is achieved through providing customers with the information, tools and incentives needed to effectively manage on‐site energy production, storage and use. At the same time, consumer empowerment is also supported through maintaining or improving customer equity, protecting consumers from unnecessary financial risks and loss of electrical service, and protecting against loss of privacy.

3. The smart grid should create a platform for a wide range of innovative energy technologies and management services. This platform should enable new technologies and markets without compromising information security.

4. The smart grid should enable and support the sale of demand‐side resources into wholesale energy markets, on equal footing with traditional generation resources. Such demand‐side resources should include energy efficiency, demand response, distributed generation, and storage.

5. The smart grid should deliver environmental and public health benefits. Smart grid cost‐benefit analyses should take into consideration the full range of benefits of deployment, including reduced use of high‐polluting peak power plants and reduced air, water, land and wildlife impacts, for example by avoiding the construction of power plants and transmission lines.

EDF states that it will use the framework to score how well the public utilities' plans will enable the integration of clean energy technologies, empower customers, create a platform for innovative technologies and services, enable demand-side resources to be made available for wholesale energy markets and meet environmental targets set forth in federal and state laws.

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