Energy Policy Initiatives Center

Drop Shadow

Union Tribune Article and Editorial on EPIC Smart Grid Study

USD study: High-tech power grid beneficial

Users, SDG&E would save billions

UNION-TRIBUNE STAFF WRITER

October 19, 2006

Utility customers and San Diego Gas & Electric could reap billions of dollars in benefits over the next two decades by modernizing the regional electricity grid, a University of San Diego study has concluded.

The study, released yesterday from the USD Energy Policy Initiatives Center, found that an investment of about $500 million in technology for the grid would yield up to $3 billion in benefits divided almost equally between the community and the utility.

The benefits would include reduced costs, greater security, environmental gains and a reduction in the likelihood of blackouts.

Scott Anders, director of the energy center, said he suspected that the public was largely unaware of how primitive the existing grid technology is.

“Right now, the way SDG&E knows that the power is out is that you call them,” Anders said.

A high-tech grid would help pinpoint outages and might anticipate problems, allowing the utility to take action before a loss of power, along with other benefits, Anders said.

He said the study also found that regulatory and business trends in the region will create a favorable climate for upgrading the grid. Those trends include more stringent environmental regulations favoring greater use of renewable energy and increased emphasis on conservation.

The study was conducted by San Diego-based SAIC and jointly funded by SDG&E and the Utility Consumers' Action Network, or UCAN, a local consumer group that is often critical of the utility.

A spokesman for SDG&E said it strongly supported the idea of a smart grid and welcomed the study's findings. But Eddie Van Herik, the SDG&E spokesman, said the utility found the benefit estimates from modernizing the grid “a bit optimistic.”

“But this is an early stage study,” Van Herik said.

As an example of a “smarter” grid's benefits, the utility spokesman said it could allow more efficient use of power generated from rooftop photovoltaic systems, which convert sunlight to electricity.

“We know we're getting power from photovoltaics, but precisely how much and where it's coming from is hard to quantify,” Van Herik said. “But you want to know exactly where you're getting it and how much, so you know what you need to buy. Having that information lets you shave peak power demand and is a cost saver.”

He added that the dozen or so technologies considered in the report all depend on advanced electricity meters, which SDG&E is proposing to install at a cost of about $1 billion by 2011. That proposal is under consideration by the California Public Utilities Commission.

Advanced meters will include computer capabilities and provide information such as when electricity is being used. Electric meters now in use merely track the aggregate quantity of power used over time.

The USD study assumed that advanced meters were already deployed in the region.

Michael Shames, executive director of UCAN, agreed that estimates of benefits from upgrading the grid were a bit “squishy.”

But Shames said a particularly useful aspect of the study was its finding that most of the investment in new grid technologies would yield paybacks within seven years.

Among the visible benefits to consumers, Shames noted, might be Internet-based portals that would allow consumers to track their home energy usage and control appliances to conserve power and save money.

A modern grid might also allow clusters of customers to generate and use their own electricity, as a type of “microgrid,” Shames said.

But the consumer advocate said he was disappointed by SDG&E's proposal for advanced metering, criticizing it for not being aggressive enough technically and for requiring too long a period to provide savings.

 


Craig Rose: (619) 293-1814; craig.rose@uniontrib.com

 

 


UNION-TRIBUNE EDITORIAL
Get smart

Study shows path to reliable power supply

October 20, 2006

Few people think about electricity until the lights go out and the food begins to spoil. Because of epic legislative and regulatory bungling over the past decade, Californians have too often pondered the reliability of this wellspring of modern life.

Economists have said for decades that power grids get into trouble because utilities don't give consumers basic tools to reduce their usage when shortages loom. It's a compelling argument.

Electricity is the world's most volatile commodity. Imagine gasoline that cost $2.50 a gallon at midnight, but soared to $400 a gallon by late afternoon. This is precisely how power markets behave on hot summer days, when air conditioners push up demand.

But under California's antiquated regulatory regime, consumers can't take advantage of cheap, off-peak electricity prices. A key reason: We use meters that are nearly identical to those invented in Thomas Edison's workshop.

A recently released University of San Diego study says consumers could save billions using readily available technology. The study was funded in a rare collaboration between San Diego Gas & Electric and the Utility Consumers Action Network, a frequent critic.

Analysts call for upgrading the local distribution system into a “Smart Grid.” Today, SDG&E discovers outages when people call to complain. By 2010, sensors could monitor neighborhoods, anticipate problems and reroute juice to prevent blackouts.

Smart meters on every home and business would form the system's foundation. Using wireless signals or high-speed Internet across power lines, the meters could tell the utility each second how much energy was required.

Just as important, consumers could see the real cost of power every few minutes. If prices rose too much, you could program the meter to shut off the pool pump and adjust the thermostat.

Multiplied by 1.3 million meters in SDG&E's territory, such savings would be immense. About 16 percent of our annual power consumption occurs during just 100 hours a year. Generators run 55 percent of the time. Shifting demand to off-peak hours would be painless for most consumers and avoid construction of power plants worth $500 million apiece.

Then it's up to regulators to modify rates. Consumers should have a choice between fixed costs or dynamic pricing.

SDG&E has asked regulators for permission to spend $450 million on smart meters. UCAN says key details need to be modified. The USD study shows that both sides have an abiding interest in empowering consumers.

 

Contact:

Scott Anders
scottanders@sandiego.edu
(619) 260-4589