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Technology Corridor

A digital grid to the home, secured via a local fiber-optic network, could position utilities to fix power and telecom together.
Fortnightly Magazine - March 2004
  • cause havoc on a colossal scale.
  • Privacy protection. Individual customers need assurance their data won't be compromised, with dedicated circuits sheltered from invasion.
  • Reasonable cost. The huge economic value of electricity justifies substantial investments in data communications to and from the residence, but leasing out bandwidth could greatly reduce costs that electric ratepayers will have to pay to ensure demand response and distributed generation.

Specifically, these attributes all epitomize the singularly robust optical fiber networks that incumbent cable and telephone networks, claiming insufficient demand, have failed to bring all the way to the American home. But one axiomatic trait for fiber-abundant bandwidth-isn't on my list because just to read meters and coordinate distributed generation does not require such bandwidth bounty.

Nevertheless, there will be great benefits in the fortuitous circumstance that utility-built bandwidth vastly exceeds power management needs. Regulated utilities could properly charge electric ratepayers for the telecom networks whose robustness would be "used and useful" for electric service, provided surplus economic value goes toward reducing ratepayer costs.

So the hereto unaffordable bill to upgrade last-mile telecommunications could now be paid by electric customers to ensure their access to demand response and distributed generation-costs that would be recouped by fees charged for bandwidth to telecom providers, incumbents included. As a rough net measure, utilities could spend as much on digital networking as they would have to spend on new transmission to ensure comparable results. In the process, utilities gain telecommunications enabled electric service that is no less reliable but potentially environmentally more benign.

Utilities therefore should question whether they need to incur heavy debts now for new transmission, notwithstanding prospective government help such as guarantees and incentive rates of return. What's more, contentious eminent domain proceedings may not be needed to deploy new transmission lines, since reliable electric service also can be ensured by running fiber-optic cables to residences through utilities' existing local rights of way.

If distribution utilities choose to meet future power demands by activating digital links to residences, they could profit from solving two critical infrastructure problems simultaneously, greatly enhancing the quality of American life.


  1. See Bonneville Power Administration, , "Non-Wires Solutions Round Table Information,"
  2. Solicitation, Nov. 22, 2002, U.S. Department of Energy Office of Distributed Energy, Advanced Communications & Controls Program,
  3. Testimony of T.J. Glauthier, president & CEO, Electricity Innovation Institute, to the Committee on Energy & Commerce, U.S. Congress, on "Blackout 2003: How Did It Happen and Why?" Sept. 4, 2003, www/ See also Energy Future Coalition, , Appendix A.4, "Smart Grid" (Washington, D.C., June 18, 2003);


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