Smart Grid Report Card Finds CA Utilities Barely Average

Smart Grid Report Card Finds CA Utilities Barely Average

California's three largest utilities have developed solid visions and strategic plans for building the state's smart grid, but are falling short in setting up metrics and roadmaps to chart their progress, according to the Environmental Defense Fund.

The EDF drew up a scorecard on smart grid plans thus far by San Diego Gas & Electric, Southern California Edison and Pacific Gas & Electric companies, and at best their grades were slightly above average. SDG&E and SCE each received a B-; PG&E, a C.

"They really do have high expectations and high aspirations for deploying smart grid in their areas -- that wasn't surprising," said Tim O'Connor, director of the EDF's California Climate and Energy Initiative. "What we did find surprising and a little disappointing is that the utilities didn't necessarily do the amount of work that's needed to ensure that those results are going to be achieved. What EDF really wanted to see was numbers and something we could quantify."

Instead of hard numbers, the utilities are making big plans and commitments -- together, the three utilities plan to invest between $2.4 billion and $3.6 billion on smart grid initiatives through 2020.

Studies project that smart grids in the U.S. can slash emissions by 30 percent in the electric sector by 25 percent in the transportation sector by 2030. And building a smart grid, which make for a two-way connection between energy utilities and their customers, offers a host of other advancements, part of a convergence of technology calls VERGE.

In addition to preventing rolling blackouts from too much demand on the power grid, smart grid technologies open the door to much more efficient feed-ins for renewable energy into the larger power grid, and can help make electric vehicles more active and effective participants in managing demand loads.

In smart grid plans filed with California's Public Utilities Commission, the three energy companies forecast big savings. EDF found in a review of the documents that:

  • PG&E projects as much as $2 billion in cost savings and a reduction of  2.1 million metric tons of carbon dioxide emissions.
  • SCE says it will be able to power 1 million electric vehicles by 2020 and avoid up to 1,900 megawatts of peak demand by 2014.
  • SDG&E foresees a cut of 6.8 MMT in pollution related to global warming and fuel savings of as much as $615 million.

To come up with its grades, which EDF is calling "mid-term" marks, the organization viewed the utilities' plans against a framework it designed for evaluating smart grid development. That review formed the basis for comments EDF recently filed with California's utilities commission as well as the grades that the group issued yesterday.

EDF looked at key components in the utilities' plans: how they intend to empower and engage customers, create platforms for new smart grid-related technology and services, shrink the grid's environmental footprint, and allow sales in wholesale markets of resources such as renewable energy generated by companies and others on the "demand-side" of the plug.

Overall, the utilities' strong marks for strategy and vision for smart grid deployment were pulled down by their intentions to meet regulator's reporting requirements -- but little more than that -- and by a lack of quantitative benchmarks for progress, EDF's filing said. "The roadmap sections of the three utility smart grid deployment plans fell quite short of EDF's expectations," the document said. "Words such as 'more' and 'better' and 'most' were used rather than quantity words like 'all' or 'X %' or 'Y number of customers' -- therefore it will be nearly impossible to use the roadmap sections to inform actual deployments or track whether deployments are delivering the promised benefits."

Spokesmen for SDG&E and PG&E said the utilities just received the EDF filing and their grades. "We are currently reviewing the EDF scorecard and will be looking for ways that we can improve our score as we move forward with our smart grid deployment plans," the San Diego utility said in a statement.

PG&E also said it is reviewing the material. "We appreciate and value the Environmental Defense Fund's feedback," the company said in a statement. "We understand the EDF score is preliminary. PG&E will continue cooperating and sharing information with EDF." The utility added that its smart grid efforts include installation of more than 8.3 million smart meters for electricity and gas in Northern and Central California. The utility has a goal of upgrading 10 million meters by the end of 2012.

The utilities can improve their grades if they build in better metrics and benchmarks to focus on deliverables and develop "real tools to track progress," O'Connor said.

"The reason we undertook this effort is because we firmly believe the smart grid can deliver a tremendous amount of benefits. [And] It's critical we get it right in California," he said, pointing to the state's landmark climate legislation and policy for integrated energy planning. "We think California is going to be the bellwether state on this issue."

Image CC licensed by Flickr user Ian Muttoo.