Decision on $5.5 Billion Smart Grid Plans Due

By Published On: March 30, 2012

It’s time for the California Public Utilities Commission to weigh in on investor-owned utilities’ $5.5 billion worth of blockbuster smart grid plans. The expensive plans promise greater efficiency in energy use and environmental benefits, yet lack specificity and could grease the skids for spending ratepayer money with little review. In general, utilities see the smart grid as an evolving landscape and argue that the commission should extend flexibility when it comes to plan implementation. Utilities don’t want to be hemmed in on timing of investments or precluded from modifying course in an arena that’s subject to swift technological change. Last summer, utilities characterized their plans as largely conceptual when they introduced them (Current, July 8, 2011). The plans, according to Southern California Edison attorney Kris Vyas, “are intended for high-level policy guidance rather than project selection and approval.” To maintain their footing on the rapidly changing smart grid field, utilities want the commission to handle spending approval on individual program elements through a simple application process and not have to regularly update their plans, which cover the remainder of the decade. The Division of Ratepayer Advocates, on the other hand, prefers to see the plans sent back to the drawing board to be redrafted with greater specificity and then have the commission handle expenditures through general rate cases every three years. The division also wants specific cost-effectiveness tests for individual projects. “Cost effectiveness has taken a back seat in this proceeding,” wrote division attorney Lisa-Marie Salvacion in a March 22 filing with the commission. Third-party players, like EnerNoc, want the commission to carve out a guaranteed market on the customer side of the meter for their smart grid-enabled services, like automated management of home energy use and demand response and energy efficiency programs. Utilities aren’t ready to cede any market territory yet, preferring that the commission further study any such “line of demarcation” and handle questions about who can provide what services on a case-by-case basis as they arise. EnerNoc attorney Sara Steck Myers called this approach “sub-optimal from a policy perspective.” In a March 15 filing, she urged the commission to give “direction encouraging third-party participation to the greatest extent possible” in the state’s smart grid. Without keen third-party participation, she wrote, lack of competition is likely to stymie “the market for smart grid services.” In a March 1 report, commission staff recommended approval of the gargantuan utility smart grid plans “without changes.” Staff urged that remaining issues be worked out in the context of utility smart grid annual reports.

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