In this week’s Industry Perspectives, Gary Rackliffe, Vice President of Smart Grids for ABB provides insights on state of grid transformation in the United States.
Since 2003, the GridWise Alliance’s vital voice has represented the diverse stakeholders that design, build and operate the electric grid, and has been at the forefront of educating legislators and regulators on the critical need to modernize America’s electricity system. As long-time members, we at ABB know well the important work the Alliance does — mapping the Grid of the Future and advocating for smart grid and grid modernization investments, as a couple of examples. One of the most important and informative activities, though, is a producing a report that was released last month, the GridWise Alliance’s 3rd Annual Grid Modernization Index (GMI) report.
The GMI report is very important, because it not only defines the attributes of grid modernization; it rates the individual U.S. states on their success in achieving these attributes. In this way, U.S. Federal, state and local governments – as well as all grid stakeholders – receive direct, comparative feedback on their grid modernization efforts.
The Alliance rates the states by assessing multiple indicators, including:
1. Regulatory policy, state support and plans for grid modernization
2. Customer engagement based on rate and tariff structures, demand response and distributed energy resource (DER) programs, customer education programs and consumer data analytics
3. Investments in grid operations technologies such as advanced metering infrastructure, advanced automation for the transmission and distribution systems, enhanced systems integration, and grid edge technologies (including microgrids and DER integration)
This year, the GridWise Alliance collaborated with Clean Edge and Accenture to produce the report, with many hours provided by Alliance members to capture all of the state data. Becky Harrison, the CEO Emeritus of the GridWise Alliance, provided the hands-on leadership that pushed the 3rd GMI report to a new level.
The key takeaways from this year’s report are:
1. The American Recovery and Reinvestment Act (ARRA) grants allowed utilities to “buy down” the costs of grid modernization, especially Advanced Metering Infrastructure (AMI) projects.
2. Sustaining grid modernization investments is a challenge to regulators and utilities.
3. There is a wide gap between the leading states in the GMI report and those states that do not have the regulatory policies, customer engagement, and more significant grid investments that drive grid modernization.
4. Electric market deregulation, demand response programs, and AMI are key factors currently associated with high GMI scores.
5. Deployments of grid modernization technologies are progressing, but the full potential of the benefits has not yet been achieved.
6. Dynamic rate structure reforms could help to fully unlock the benefits offered by smart grids.
7. The leadership needed to implement grid modernization varies widely across the states. Stakeholder collaboration is an essential requirement for success.
The top three states in the GMI report are California, New York and Texas. California was tied with Texas for the top ranking last year and retained the number one position this year by leading the nation in Customer Engagement and ranking second in the State Support and Grid Operations categories. Illinois moved up to second from third place and leads the nation in State Support based on its Energy Infrastructure Modernization Act. Texas ranked number three, dropping slightly from its tie for the top spot with California last year, but the state still leads the nation in the Grid Operations category.
ABB is a long-time Alliance member, which makes me doubly proud that, in the top three states from the GMI report, ABB utility customers contributed significantly to their states’ rankings. PG&E in California, ComEd and Ameren in Illinois, and CenterPoint Energy and CPS San Antonio in Texas are upgrading their customer engagement and/or grid operations in a big way. Examples include:
- PG&E Opens New $40 Million State-Of-The-Art Electric Control Center in Concord
- Advanced Distribution Management and Software Solutions Enable CenterPoint Energy to Improve Reliability of Power Supply
- Ameren Illinois Modernizing Energy Delivery System in Adams, Brown, Hancock, Pike and Schuyler Counties
- ComEd’s Future Energy Plan Supports a Cleaner Energy System and Promotes Critical Consumer Needs
- CPS Energy Integrates Energy Distribution Operation
Looking at the key takeaways, I think that continued collaboration is essential to drive policy and to implement rate structures and demand response programs that both engage customers and enhance grid efficiency. In parallel, continued collaboration to align centralized generation and transmission with distributed energy resources will further unlock benefits of grid modernization. Two states to watch are New York with its Reforming the Energy Vision (REV) initiative and Massachusetts with its Department of Public Utilities’ order for utility grid modernization plans. To achieve the next level, we must capture the value and achieve the full benefits of grid modernization and a smarter grid.
Submitted by Gary Rackliffe, vice president of Smart Grids for ABB. Garyhas more than 25 years of industry experience in both transmission and distribution (T&D) and has worked with ABB for 19 years across a variety of positions. He holds a bachelor’s and master’s degree in electric power engineering from Rensselaer Polytechnic Institute and an MBA degree from Carnegie Mellon University.