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Smart Grid, Smart Utility

The intelligent-grid vision is becoming clearer as utilities take incremental steps toward a brighter future.

Fortnightly Magazine - February 2007

build smart grids,” Von Dollen says. “Intelligence comes from the way you make investments.”

Southern California Edison: Fixing What Broke

While most states are approaching smart-grid projects with baby steps, California is shoving its investor-owned utilities into the future.

After studying the causes of the energy crisis that paralyzed the state in 2000 and 2001, the California Public Utilities Commission (CPUC) in 2004 instructed California’s investor-owned utilities to develop business cases for equipping their networks with advanced metering infrastructure (AMI)—largely to create a more robust platform to manage power loads and encourage conservation. That initiative now is bearing tangible results, with specific plans moving forward at Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric.

Most recently, in December 2006, Southern California Edison (SCE) issued formal requests for proposals (RFP) soliciting bids from smart-metering vendors to supply 5 million meters, a wireless two-way communication network, and a meter data management (MDM) system. When installed, the AMI network will allow hourly meter reads and a host of other advanced features, including remote connect and disconnect; long-term, remote upgrade capabilities; and open standards to accommodate smart devices, such as appliances and thermostats that will be required by the California Building Commission beginning in 2009.

The RFPs set forth an accelerated process for implementation, with bids due in January and February 2007, field testing in summer 2007, and full-scale deployment between 2009 and 2012. But while SCE’s plans are moving quickly, the company reached this point only after exhaustive deliberation. In fact, its initial AMI business case produced a discouraging prognosis: The available technology was too limited and too expensive to deliver cost-effective benefits, resulting in a $500 million net deficit.

“We had started from a traditional AMR [automated meter reading] perspective, but then we realized we had to look at it quite differently,” says Paul De Martini, SCE’s AMI program manager. “It became clear it wasn’t just about metering, but the opportunity to extend the central nervous system of the network out to the fingertips; to connect more of the dots that will create the intelligent grid.”

SCE worked with vendors and consultants to develop technologies that would allow the utility to extract more smart-grid functionality from its AMI investment. “The meter is important, but the way we leverage the system as a whole will bring service efficiencies and benefits to customers,” De Martini says.

For example, if meters could measure voltage at the end-user level, they would provide a wealth of data about network operations. With this information, SCE engineers could improve the performance of the distribution system by conducting more accurate predictive maintenance, leading to higher grid reliability, shorter service-response times, and more cost-effective deployment of hardware investments.

The prospect of such benefits pushed SCE’s AMI business case into the black, and energized the company to approach its AMI project from a more holistic perspective, involving not just the metering and customer-service operations, but every area that touches the distribution network.

“The more we looked at it, the more we got excited about the possibilities,” says James Kelly,