Smart Planning Leads to Successful Smart Grid Rollout

As Ben Franklin famously said, “If you fail to plan, you’re planning to fail.”  This saying certainly holds true for smart grid deployment plans, which can cost utilities several hundred million dollars. Given these high stakes, good planning is essential.

Many utilities have installed smart grids.  Currently, 25% of US electricity customers have smart meters, a key component of the smart grid.  Some early deployments were rocky, but utilities have learned their lessons.  Utilities have incorporated these lessons learned in the planning process for more recent smart grid deployments.  A well-thought-out smart grid deployment plan should address the following topics:

• Strategic purpose: What are the objectives for deploying a smart grid?  What are the guiding principles which will govern the project?
• Road map: The plan should provide a step-by-step overview for each phase of the deployment plan, in chronological order.
• Technologies: Describe the technologies selected by the utility and explain how these technologies will function together as a unified system.
• Implementation: Explain how the utility will manage the project and coordinate the activities of the different departments involved in the deployment.
• Customer impacts: How will customers be affected by the smart grid deployment? What changes will they see in the electricity service they receive, including the meters, meter data, billing, collection, connection/disconnection of service, and customer service?
• New services: What new products and services, including new rate plans, will the utility provide after the smart meters are installed?
• Customer education: How will the utility educate customers about the smart grid plan? What channels with the utility use to communicate with customers and how often will these communications occur?
• Cybersecurity and data privacy: How will the utility keep the customers’ usage information secure? How can customers provide information to other providers of energy products and services? What types of information will be available to these third parties?

A utility preparing for a smart grid deployment should follow the standards developed by the Smart Grid Interoperability Panel (SGIP).  The SGIP is a public-private partnership formed in 2009 by the National Institute of Standards and Technology.  The SGIP’s mission is to develop industry standards to ensure that all the equipment and systems used in a smart grid deployment will work effectively together.

Performance metrics are essential to ensuring a successful smart grid deployment

A smart grid deployment plan might look good on paper, but how do we ensure that the plan is implemented properly?  One word: measurement.  Tom DeMarco, a management guru, said, “You can’t control what you can’t measure.”  The plan must contain metrics to define how success will be measured.

When a utility develops a smart grid plan, the utility must demonstrate that the benefits exceed the costs.  When the deployment plan is approved, the utility receives permission to begin incurring costs and recovering these costs from its customers.  The customers may be required to start paying for the smart grid equipment before the benefits from the smart grid deployment are fully realized.  Having clear, objective performance metrics will protect the utility’s customers by holding the utility accountable for delivering all the benefits promised.

Good examples of thoughtful, well-developed smart grid deployment plans are those filed by Commonwealth Edison (ComEd) and Ameren for their Illinois customers in October 2012.  These plans are noteworthy for their detailed performance metrics, which EDF had a hand in developing.  These smart grid deployments are now in progress and so far, so good.

The test will be found in the plans’ performance metrics, which will provide clear evidence of how well ComEd and Ameren deliver on their promises.  State utility commissioners reviewing upcoming smart grid projects in their jurisdictions should think about requiring these same types of detailed performance metrics for the smart grid deployment plans under consideration.

John Finnigan is a senior regulatory attorney with the EDF. This article was republished with permission from the EDF.