Pushmepullyou: Disputes and Discussions on Grid Politics

By Kennedy Maize

Pages: 1 2 3

“Strong” vs “Smart”

In the meantime, at GridWeek in Washington, myriad private interests were exploring ways to leverage their technologies into the local distribution grid to control appliances, send price signals, and the like. These folks are convinced that their future lies in a smart distribution grid, regardless of what happens with the 800-pound gorilla in the room: the high-voltage transmission grid.

These are two different worlds, not easily reconcilable. Money to build out a robust interstate, interconnected grid—against stiff local opposition—will compete with money to equip the local distribution system with the brains to allocate and ration electricity to bolster efficiency (rationing, are we talking rationing?). In both cases, customers will pay, a circumstance few customers appear to understand at this point.

In both cases, proponents of their grid plans are arguing for significant subsidies. In the case of the big iron folks, the subsidy is federal eminent domain authority, to be exercised by FERC and, presumably, the guarantee of cost recovery through rates as a result. A determination that FERC will call the shots—as it does with natural gas and oil pipelines —will mean access to lower-cost capital on Wall Street. But that’s a long way from fruition.

For smart grid advocates, the golden ring on the policy merry-go-round is direct DOE funding, through the stimulus piggy-bank, which also makes private money cheaper to raise. Ultimately, of course, customers will pay for these costs in rates, although proponents of the smart grid argue that the savings will exceed the costs. That’s yet to be seen.

It is a lot easier to be in favor of a smart grid than a strong grid. Although both will ultimately cost customer dollars, the smart grid is also a stealth grid. It’s on the distribution side, where the lines are already in place, and it involves cyber bells and Internet whistles added onto existing infrastructure, most of which will initially slide under the customers’ rate radar.

Most folks won’t notice if their local utility swaps out the existing electric meter for one that can identify their power usage patterns, control the home air conditioner, and slice a firm, unripened tomato (Ron Popeel’s claim for the original Vegematic). They won’t notice until they get the bill, if then.

The big iron, on the other hand, is very visible as it marches across the landscape. Like wind, big transmission is unsightly and, for the most part, doesn’t deliver any immediate benefits to the folks who have to give up their land to site it and then look at the ugly aspects of electric infrastructure.

Ultimately, it looks like gridlock in both directions. It may be time for a new paradigm in electric transmission and distribution, although I readily confess that I don’t have a clue what that paradigm might be.

—Kennedy Maize is MANAGING POWER’s executive editor.