EDF: California smart-grid plans pass 'mid-terms,' need more work

Smart-grid plans for California pass a mid-term review but will need to provide more details to earn a final passing grade, according to the Environmental Defense Fund (EDF).

The organization used its recently released smart-grid evaluation framework, or “score card,” to analyze around 1,000 pages of material submitted by Pacific Gas & Electric (PG&E), San Diego Gas & Electric (SDG&E) and Southern California Edison (SCE) to the California Public Utilities Commission (CPUC). While the plans show that a smart grid in California can deliver significant consumer and environmental benefits, the EDF says utilities must commit to regularly providing detailed updates on their progress meeting energy law requirements to get passing final grades.

“California’s legislature and Public Utilities Commission specified that utilities must deliver the full range of smart-grid benefits, and this evaluation will help ensure that happens,” said Tim O’Connor, EDF’s director of California’s climate and energy initiative. “We developed our framework based on the agency’s decision and kept the utilities informed about how plans would be scored. That’s why we were disappointed that their roadmaps didn’t include metrics or milestones to track progress.”

PG&E, SDG&E and SCE serve more than 11 million customers and estimate they will make new smart-grid investments of $2.4 billion to $3.6 billion from now through 2020.

“These public utilities will be investing billions of taxpayer dollars in the smart grid, so we can’t afford for them not to get it right,” said Miriam Horn, director of EDF’s smart-grid initiative. “The smart grid is critical to achieving the state’s goals: to eliminate massive inefficiencies in the system, dramatically increase California’s reliance on renewable energy, including ‘distributed’ energy made in communities’ own backyards; shift to zero-emission electric vehicles; and empower consumers to manage their energy use, footprint and bills. But the smart grid will only achieve these things if it is designed from the outset to do so, and if utilities are held accountable for delivering on their promises.”

PG&E estimates its smart-grid upgrades will cut costs by up to $2 billion and reduce up to 2.1 million metric tons of carbon dioxide emissions. SCE estimates it will be able to charge one million electric vehicles by 2020 and avoid up to 1,900 megawatts (MW) of peak demand by 2014. SDG&E estimates it will cut 6.8 million metric tons of various types of greenhouse gases and save up to $615 million in fuel costs.

The plans from SDG&E and SCE earned the highest cumulative grades with a “B-.” while PG&E’s plan earned a “C.” Evaluated by EDF energy experts and consultants, the scores reflect whether plans chart a course to achieve four state objectives: radically increase California’s reliance on clean energy and flexible demand; empower consumers; create a platform for new energy technologies and services; and reduce the electric system’s impact on air, water and land. A separate team of EDF staff worked with SDG&E in an advisory role during the design of its plan.

“SDG&E earned its overall score by working with lots of stakeholders and really digging into how to provide the full range of possible benefits,” O’Connor said. “But we still need to see measurable commitments to deliver environmental and customer value. These plans are roadmaps that will guide this multi-year journey toward a modernized grid. They must provide the state and ratepayers with mileage markers showing if we’re on the right track.”

O’Connor added, “Utilities should view these scores as ‘mid-term grades.’ They will have a chance to improve their plans and scores during the ongoing Public Utilities Commission process. Utilities need to report progress on an ongoing basis for all to see. They can’t hide that they’re missing many key ingredients and EDF will be working to hold them accountable.”