Tuesday, 10 February 2009

"Smart Grid is not a fad; smart is the future of the electric grid"

A survey featuring utilities in North America has indicated that there is clearly an increasing regulatory acceptance of AMI and a need to ascertain how a smarter grid will improve utility services for consumers.

The North American utility industry is now facing growing political, societal and regulatory pressure to produce energy with less environmental impact and to help consumers use energy more efficiently. To meet this challenge, industry regulators are beginning to consider the role of a Smarter Grid, stated Capgemini, as it released the results from the first Smart Grid and Renewable Energy opinion survey of energy regulators across North America.

The findings were as follows: 38 percent of respondents already have regulations that require an AMI deployment, an additional seven percent reported that they are allowing deployments without regulations, while 22 percent report additional analysis is either underway or required; 48 percent of respondents favor the recent formation of the NARUC-Federal Energy Regulatory Commission (FERC) Smart Grid Collaborative, while an additional 31 percent felt more time is needed before they can judge. Eighteen states have already joined the Collaborative.

The Capgemini survey was conducted in conjunction with the National Association of Regulatory Utility Commissioners (NARUC) and Canadian Association of Members of Public Utility Tribunals (CAMPUT) in an effort to develop a comprehensive perspective on Smart Grid and renewable energy policy in North America.

"Smart Grid is not a fad; smart is the future of the electric grid," said Frederick Butler, president of NARUC.

Even as regulators are clearly intererested in Smart Grid and increased energy efficiency, they are not certain that the benefits outweigh the cost for customers at this point: Commissioners have not yet formed a consensus about the values of AMI (the cost of AMI may exceed direct operational savings causing regulators to rely on case-specific filings not general industry valuations); Most regulators are not ready to share the real-time costs of energy with all classes of customers: More than half (51 percent) of the respondents do not support real-time pricing for all customer classes and only nine percent do.

"Utility regulators are in the very early stages of an education and valuation process," said Roy Ellis, energy, utilities and chemicals regulatory relations leader at Capgemini.

Ellis added,"In most cases, this process is a complicated effort to view a cleaner more efficient grid through a prism of existing laws, regulations and market dynamics that were designed to promote the rapid expansion of a least-cost, highly-dependable grid using carbon-based fuels. Interestingly, the speed with which both renewables and the smarter grid take hold may be the result of a growing political belief that a rapid move to clean energy is necessary, and the only way to make the move quickly is with an equally rapid enablement of a Smart Grid."

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