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

Technology Corridor

A digital grid to the home, secured via a local fiber-optic network, could position utilities to fix power and telecom together.

Before billions are spent building new transmission lines to ensure reliable electric service, North American electric utilities should evaluate whether the alternatives-controlling demand and fostering distributed generation-might be more cost-effective and broadly beneficial.

That's what Bonneville Power Administration (BPA) suggested recently when it declared, "Before BPA decides to build a line, we want to make sure we have fully considered whether non-construction alternatives can be used. We want to look at all options, not just traditional construction."1

Two substitutes in particular merit exploration:

  • Demand response moves data between utilities and consumers so retail prices can reflect utilities' actual fluctuating costs, allowing consumers to react based on rational determinations of self-interest.
  • Distributed generation produces electricity near where it's consumed, often under consumer control and from renewable and non-polluting sources.

Both conserve-one by avoiding surplus production, the other by displacing excess transmission. Both enlist private individuals and entities as transactional partners and invite energy from solar and fuel cells and windmills to become cost-competitive. During the next decade, the U.S. Department of Energy suggests that as much as 50 percent of all power locally consumed could be locally produced, stored, and coordinated with central generation via microgrids.2

Both expedients need robust local telecommunications to the home-links that don't exist today. But if the grid were now digitized from the local distribution utility to the residence (as experts from EPRI and elsewhere have begun to urge),3 power could be delivered reliably and with due regard for environmental consequences. Moreover, the nation would profit by having mastered its stubborn predicament over "last-mile" telecommunications, even as utilities gain from having astutely deployed their capital to build both long-term value and new business opportunities.

Government, industry, and academics have begun to recognize a need for strategies to interconnect demand response and distributed generation. The following is an unconstrained list of attributes for telecommunications essential to digitize the grid to the residence:

  • Universal coverage. Efficiency and equity require data links without gaps. Likewise, grid safety and reliability demand pervasive coverage, embracing every electric meter and a disparate mix of distributed energy devices-fuel cells, solar cells, windmills, batteries, flywheels, etc.-buttressing the existing grid.
  • High reliability. Intermittent failures in communications would defeat the whole enterprise, from weather or electronic radiation, including from powerlines themselves. Data support will have to work perfectly virtually every time. If the nation turns to hydrogen for fuel, as the president and other enthusiasts now hope, the system will have to track and control a volatile gas with complete authority.
  • 24/7 availability. Likewise, data for critical, always-on applications cannot be frustrated by busy signals or pre-empted by the vagaries of shared telecommunications.
  • Bidirectional, real-time connectivity. Not only must price-signals go out to customers, but data on usage and status from monitoring and control devices and remote sensors must come back to the utility, without appreciable time lag.
  • High security. Networked distributed generation must be hardened against hacking and cyber-sabotage, which could 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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