PG&E, SoCal Edison Investing the Most in Demand-Side Management

by | Mar 22, 2011

Pacific Gas & Electric (PG&E) and Southern California Edison (SCE) top a list of the utilities making the highest investments in demand-side management.

The two California utilities invested $586 million and $494 million, respectively in demand-side management (DSM) in 2010, according to rankings compiled by research firm Zpryme. Both invested more than twice as much as the third-ranked utility, Florida Power & Light (FPL).

FPL, the country’s biggest utility by MWh sold, spent $200 million. Another California utility, San Diego Gas & Electric, came in fourth place with $144 million.

Zpryme said PG&E and SCE’s outpacing of the other utilities is unsurprising, given the difficulties California’s electricity sector has encountered in the past, and given the state’s renewable energy mandate. “Without a doubt, California will use smart grids to improve demand response before the rest of the country,” Zpryme said.

These two utilities are also the biggest in the country by revenue, both pulling in over $10 billion. Florida Power & Light is third, at $9.04 bilion.

PG&E is one of the first utilities in the U.S. to deploy smart grid technology, Zpryme said. Starting in 2006, it has installed over 5.5 million smart meters in residences and commercial properties, although this has encountered some resistance from customers who have concerns about accuracy and perceived health effects from wireless signals.

Another PG&E program, SmartAC, offers customers $25 to install a remote sensor that can manage air conditioning.

SCE is also investing in smart grid technology. It has installed over two million smart meters across southern California and intends to install nearly three million more. Last month SCE partnered with Teradata Corporation to collect customer usage data, using Itron’s Enterprise Edition Meter Data Management System.

The utility plans to integrate this with billing and weather data, Zpryme said, and plans to publish the information to customers later this year.

SCE also partnered with Honeywell to automate its Critical Peak Pricing program, which offers commercial and industrial customers incentives to reduce power consumption during the hottest days of the year.

Smart grids offer more tools towards improving DSM than any other power sector program or technological advancement in the past 30 years, Zpryme said. It added that smart grids will change the face of DSM by providing utilities with a “flood of data”.

“Two key near-term benefits of smart grids for utilities are operational and asset efficiency, along with improved reliability and quality of electrical service,” Allan Schurr of IBM Global Energy and Utilities told Zpryme.

“Smart meters will enable their consumers to use energy more efficiently.  Finally, smart grids will improve the reliability and lower the cost of incorporating significant amounts of renewable energy supplies,” Schurr added.

Last week a decision by the Federal Energy Regulatory Commission (FERC) opened the door to growth in demand response deployment, according to energy management company Viridity Energy.

Andrew Tang, leader of Pacific Gas & Electric’s ”Smart Energy Web” program, presents his vision of the future of smart grids in this video.

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