Outages drive smart grid, and muni legislation
We've written extensively in this space about the prospects for municipalization by Boulder, Colo., now a more tangible proposition after its citizens narrowly voted earlier this month to explore the possibilities. (See "Boulder Rejects Xcel.")
As you probably know, the drivers in Boulder's case are many. The short version is that the city aspires to control its energy destiny. Among the many factors in the mix: cutting carbon emissions, ramping up renewables, using local resources and cutting ties to Xcel Energy. All but the last item on this list would depend on adding smarts to the grid.
Of the many factors driving that last item, it's worth noting that Boulder's simmering resentment toward its power provider may provide the closest parallel to municipalization efforts elsewhere in the country.
What a difference 2,000 miles make. On the East Coast, millions of people, battered first by hurricanes and tropical storms, then an early winter walloping, endured extended outages of electricity service from many large investor-owned utilities. Storm-related outages, of course, have been cited by many IOUs to justify their proposals to add intelligence to their grids. (See "ComEd Wins Smart Grid Okay.")
But will that argument for grid modernization work going forward? Certainly, this fall in the East, outrage ensued over the outages. The immediate environment was not, shall we say, conducive to explanations of how a smarter grid might have improved things and how much it will cost ratepayers.
(Note that we lack crucial information here: How did small- and mid-sized municipal and cooperative utilities perform at service outage and restoration under the same conditions? And, what role might scale play in similar efforts by the large IOUs? Anyone: is there a lineman-per-mile of poles-and-wires benchmark in the industry?)
As the first storms approached in late August, I was impressed with what the utilities said about their preparations for the impacts, particularly in terms of public outreach and outage/restoration notification, and I wrote about it. (See "BGE Handles Howling, and Hurricane.") Having an appreciation for the power of Mother Nature and the magnitude of the challenge of delivering, maintaining and restoring service, I had empathy for the utilities. Even after outages continued after the late October snowstorm. Chalk it up to those 2,000 miles and the fact that I could watch television news coverage of the debacle from the comfort of my powered-up home.
Then I heard details that lent credence to the complaints that preparedness and organization were lacking. A colleague tipped me off that he had been without power for six days, leading him to take refuge at a relative's home hundreds of miles away. In some cases, restoration information was overly optimistic. He was not alone.
In the case of Connecticut Light & Power, the outrage led to yesterday's resignation of Connecticut Light & Power's CEO Jeff Butler, to the creation of two new positions—one to lead emergency preparedness, the other to lead infrastructure hardening—and to an internal evaluation of its preparedness by a consultant. Perhaps more stunning, an investigation by the Connecticut Attorney General will examine whether laws were broken by the utility. This tends to counter the initial appearance that legitimate-sounding claims by utilities that all that was humanly possible was done to prepare for the storms and restore service afterwards.
Out of the back and forth, there was nuance. One editorial writer in Connecticut suggested that the storm was overwhelming and that, despite examples of disorganization, the utilities' preparedness levels and maintenance efforts were approved by state regulators. Oversight was the problem.
Now to the upshot. In neighboring Massachusetts, the storms also wreaked havoc, outages were widespread and emotions ran high, leading to vilification of the state's four investor-owned utilities, including NStar, National Grid, Unitil and Western Mass Electric.
Enter House Bill 869, which represents a decade-long effort - thwarted til now, proponents say, by utility lobbying - that would make it easier for cities and towns to take over their distribution systems from the IOUs. State law already provides a process for municipalization, but gives IOUs veto power. The bill purportedly would tilt the balance away from the utility and toward the municipality. While Massachusetts has 41 "munis" today, no city or town has formed one since 1926. That will change if the Massachusetts Alliance for Municipal Electric Choice (MAMEC) has its way.
Back to parallels with Boulder. In the foothills of the Rocky Mountains or in the hills of Massachusetts, cities or towns seeking to municipalize would undoubtedly have to modernize their grids. In the former case, smarts would help integrate massive amounts of renewable resources; in the latter case, intelligent switching could limit outages and self-healing circuits could speed restoration. In both cases, intelligence on the grid would create efficiencies in operations and maintenance that presumably would (debatably) keep costs under control. In both cases, cities and towns likely will find themselves battling their incumbent service provider and facing administrative, technical and financial challenges.
Will "outage outrage" be enough to power HB 869 into law? Will any cities or towns take the plunge on municipalization as a result? What role will the promise of grid modernization play in these decisions? And did anyone imagine that a smarter grid could be used to argue for and against so many disparate objectives? Finally, what would be the effect of municipal defections on IOUs and their revenue, earnings and stock value?
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