California Smart Grid: The Good, the Bad, and the Ugly

The State of California mandated that the California Public Utilities Commission (CPUC) work with the California Independent System Operator (CAISO) and California Energy Commission (CEC) to create requirements for a Smart Grid deployment plan by July of this year. These three entities held workshops this past week to gather information and offer researchers, consumers, product vendors and service providers, and utilities opportunities to share their feedback to shape these requirements. These workshops were also excellent opportunities to hear about the Smart Grid plans from regulated investor-owned utilities (IOUs, and defined in the Smart Grid Dictionary) and utilities representing municipalities and rural districts.

This is the GOOD about California’s Smart Grid plans – it’s a public process that invites an open exchange of views about the roadmap for a successful and cost-effective Smart Grid in this state, which often serves as a template for other states. It included a great deal of discussion about what is in the average residential ratepayer’s best interests – and the aspects of the Smart Grid that benefit consumers.

The BAD is that decisions have to be made quickly, and in advance of cyber security and interoperability standards recommendations coming from the National Institute of Standards and Technology (NIST). It’s becoming a common theme – everyone is waiting for these standards recommendations, everyone wants state and Federal regulators to establish policies, but regulators are reluctant to pick winners and losers.

The UGLY is a sad, cynical and manipulative ploy by one of the three California IOUs to squash competition from municipal utilities. That utility is PG&E. It is sponsoring and investing more than $25 million dollars in a misleadingly-named “Taxpayers Right to Vote Act” also known as Proposition 16. This proposition requires that 2/3s of voters must approve any local government’s provisioning of electricity through a municipal utility. Why is this ugly? First, it contravenes the proposed California Smart Grid roadmap’s goals of accommodating all generation and storage options. Second, it directly counters another roadmap objective to enable electricity markets to flourish. PG&E definitely does not want alternative markets organized around Community Choice in California that could compete with them. Third, it is blatantly unenlightened behavior from a utility that had the courage to divorce the Chamber of Commerce for its “extreme position on climate change”. Does PG&E have an evil twin that is currently running the show?

Shout out to the EPA and DOE
The US Environmental Protection Agency and the Department of Energy are strengthening the ENERGY STAR program as noted in previous blogs. New testing is underway on six of the major electricity consumers in average American homes, and new ongoing verification testing will ensure continued compliance in addition to the third party testing already put into place. The appliances are freezers, refrigerator-freezers, clothes washers, dishwashers, water heaters and room air conditioners.

In addition, the DOE has been aggressively stepping up enforcement of Energy Star standards, requiring manufacturers to actually comply with these standards, and revoking the ENERGY STAR label from non-compliant products. This is all good news for American consumers, because the ENERGY STAR program is well-known and trusted to guide purchasing decisions. Beefed up enforcement will save consumers money – estimated to be $250 – $300 billion in savings over the next 30 years. Now that’s what I call a good use of taxpayer money. For more information, click here.

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