1. Rethinking the Electric Grid

2. Topics Firstly it is about the Mindset Ancient & Modern History
What the Heck is Smart Grid?
The Status Quo is not So Great
Wicked Smart Vermont
The Payoff Pitch
8/19/2010

3. Mindset Before Technology
My goal is to cause you to revisit your assumptions
Are consumers of electricity the same as they were 10 or even 5 years ago?
What have we sought to accomplish and what have we wrought from our policies?
Are the “enemies” the same as they were 30 years ago?
8/19/2010

4. Historical Context Ancient History
Grid Built to be Central Station Driven
Bundled Investment Made on Behalf of Consumers & Society
Investment in Long Lived, Predictable Assets
Retail Rates Expected to be Stable
Rate stability valued above rate accuracy

5. Historical Context Modern History Renewable goals
Use energy more efficiently, use less electricity, rate decoupling
Reduce carbon emissions
Bar raised on grid reliability

6. What is Smart Grid?
Perhaps an unfortunate descriptor for it implies that the current grid is dumb
In reality it is the sum total of many components
Enhanced operational control
Consumer empowerment
Think of it as the digital automation of the electric grid
In this slide I want to challenge the audience to “clean the attic” of traditional thought about electricity delivery

7. The Realms within Smart Grid
Hard Assets- Meters, Switchgear, Communications and Data Consolidation Systems
Human Element- Adaptation to New Technology and Business Process Change

8. What is Smart Grid?
“The lack of contemporary information and communication functionality has been a key factor in preventing utilities from moving to 21st century business functionality among thriving American industries.”
Source: West Penn Power, Smart Meter Technology Procurement and Installation Plan, August 14, 2009

9. What is Smart Grid?
“We are an industry that provides customers with no information about our product and offers virtually no choices.  We have trained our economy to believe that multiple day outages are unavoidable and that there is no cost associated with a "least cost" grid and heavily carbon-based supply sources.  This technology calls all that into question and it is time.”
Source: A CEO of a major Midwest utility

10. It’s Peak Demand Stupid
The Grid is Economically inefficient Due to Lack of Price Discipline at the retail level
2/21/11

11. Smart Vermont Snapshot
315,941 AMI connections via digital meters & web presentment
Distribution automation via a mixture of solutions including 828 automated regulators, 187 feeder monitors, and 198 remote fault indicators
GMP, CVPS & Burlington Electric Dept. installing MDMS

12. Smart Vermont Snapshot
Total project cost $166 million, 50% ARRA funded
Collaboration of all distribution utilities with VELCO as grant facilitator and project manager
Meter data collection first via mesh network
Intermediate backhaul either fiber or 4G wireless
Variable pricing trials follow infrastructure build-out

13. The Payoff Pitch Peak Demand Costly to Consumers & Society
Established Regulatory Regime not Economically Efficient
Consumers Currently Paying for Policy Mandates
More Electricity Use Can be a Good Thing

14. Resources
“Principles of Public Utility Rates”, James C. Bonbright, Albert L. Danielsen , David R. Kamerschen
“Advanced Metering Initiatives and Residential Feedback Programs: A Meta-Review for Household Electric- Saving Opportunities”, Karen Ehrhardt-Martinez, Kat A. Donnelly, John A. “Skip Laitner, June 2010
“Smart Grid Strategy: How Can State Commission Procedures Produce the Necessary Utility Performance?” Tom Stanton of NRRI, February 2011

15. Resources
“THE ETHICS OF DYNAMIC PRICING”, Ahmad Faruqui, Ph. D. The Brattle Group, March 30, 2010
“Rethinking ‘Dumb’ Rates, Achieving the Smart Grid’s Potential Requires a Revolution in Electricity Pricing.” Rick Morgan, Public Utilities Fortnightly, March 2009.

16. Questions ? David J. O'Brien
Director of Regulatory Strategy & Compliance BRIDGE Energy Group Inc.
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