Performance measurement and action steps for smart grid investments.
Paul Alvarez is a principal and utility practice leader at MetaVu Inc. He led two independent evaluations of smart grid deployments for Xcel Energy and the Public Utilities Commission of Ohio. is a program manager at the Johnson Controls Institute for Building Efficiency.
Scores of investor-owned utilities (IOUs) have invested hundreds of millions of dollars to improve distribution capabilities. Now those utilities are beginning to consider how best to utilize the new capabilities. Other IOUs are in testing and strategy development phases. And regulators are considering what role they should play in encouraging IOUs to make prudent grid investments while minimizing risks and maximizing benefits for distribution customers.
As more utilities make smart grid business cases public, and as more independent smart grid performance evaluations are completed,1 a picture of the principal smart grid customer benefits, costs, risks, and drivers is emerging. Many observers, from the Maryland PSC to the governor of Illinois, have concluded—correctly in the author’s opinion—that the business case for the smart grid is far from being a “no brainer,” and that significant post-deployment efforts are required if benefits are to be maximized. It’s becoming increasingly clear that most investments in smart grid capabilities are different from traditional generation, transmission, and distribution investments in one fundamental respect: commissioning doesn’t automatically translate to customer value.