A no-holds-barred interview with the electric industry’s chief architect of wholesale electric market design.
The Smart-Enough Grid
How much efficiency do ratepayers need—and utilities want?
in the case of the California-Oregon Intertie, which has an operational limit of 4,800 MW, but a thermal rating “substantially above that.” CAISO agrees that wider deployment of PMUs could provide system operators with the data they would need to dampen oscillation and boost line capacity with a well-timed momentary pulse of electricity, but that would require improved energy storage capacity—yet another smart-grid technology awaiting development (see comments, pp. 8-9).
Wally Tillman, long time general counsel at the National Rural Electric Cooperative Association, provides some context:
“The commission … could theoretically encourage a transmission owner to install synchrophasors on every transmission line, every transformer or every delivery point on the bulk power system… Of course, that expense would be imprudent. There must be an appropriate balance… Utilities seeking to invest in synchrophasors should be required to demonstrate that they found the right technological balance.”
Ain’t Broke, Don’t Fix
The strongest indictment of the smart-grid initiative and FERC’s proposed policy points comes from Scott Rozzell, executive vice present and general counsel of CenterPoint Energy, headquartered in Houston.
For CenterPoint, the so-called smart-grid revolution pertains primarily to local distribution networks, rather than the bulk-power transmission system, which, according to Rozzell, “has long operated as a smart grid.”
As Rozell explains, the benefit of smart-grid technology will come from “allowing the distribution utility to identify an outage remotely, to close breakers remotely, and to switch circuits remotely.” Yet at the same time, Rozzel adds, this automation of the distribution system “will not cause the bulk system to be any less automated or any more vulnerable to cyber attacks.”
Importantly, CenterPoint takes issue with FERC’s assumption (which is illustrated in the policy statement by a schematic diagram omitted here) that the fact of Internet connectivity between utility marketing departments and retail consumers, obtained through advanced metering, will put the bulk-power system at risk. Moreover, it argues that FERC’s apparent insistence that NIST must develop standards for all distribution-level smart-grid technologies, on the assumption that they could threaten the cyber security of interstate transmission networks and control centers, will end up delaying more deployments of smart meters and automated metering systems (AMS) by retail utilities.
Such delay is particularly destructive, CenterPoint suggests, because the billions of dollars in DOE funding, made available under the American Recovery and Reinvestment Act (ARRA), could be put at risk. In fact, DOE
has indicated in its FOAs (Funding Opportunity Announcements) that it might withhold funding if the applicant cannot show compliance with interoperability standards.
Here is Rozzel’s argument:
“The CenterPoint System does not look like the hypothetical system shown on Appendix A in the Draft Policy Statement. The CenterPoint Control Center is and will remain isolated from the CenterPoint inter-company system that manages the connections with retail customers through the smart meters. There is no communications link between CenterPoint’s customers and the CenterPoint Control Center or the ERCOT dispatcher…
“CenterPoint has a connection to the Internet through its website … but the various components of the intra-company system are separated by multiple layers of protection… The separate components of the CenterPoint