Although 2010 has been a mixed bag across the nation when it comes to implementing elements of the smart grid, the major Electric Distribution Companies (“EDCs”) in Pennsylvania have all received PaPUC approval of their smart meter implementation plans. And while the Commission appears eager to embrace the new technology, the common denominator among most of these electric distribution companies is a slow prudent rollout:

  • Allegheny Power – By December 31,2010, Allegheny will have trained personnel, installed support equipment and software, established network designs and tested and certified Electronic Data Interchange transaction capability, paving the way for the first batch of 93,100 smart meters to be deployed in March of 2011.  Allegheny’s Smart Meter Plan may be found on the Public Utility Commission’s website by entering docket number M-2009-2123951 in the search box.
  • Duquesne Light – Duquesne will extend and complement its existing advanced meter capabilities based on analysis and evaluation of several key issues.  The Company is conducting studies on smart meter network design, smart meter installation and training, and information technology systems and software upgrades. Like other utilities’ plans, much of Duquesne’s final deployment plan will be shaped by the outcomes of these assessments. Duquesne has a contractual obligation with Itron for Automatic Meter Reading infrastructure maintenance, which does note expire until the end of 2013.  Once the Itron contract expires, it will begin its 5-year major deployment of smart meters beginning in 2014 to be completed by January 2019, according to its 2009 smart meter plan. 
  • FirstEnergy – Before one meter is installed, the company will take the time necessary to address issues regarding personnel training, equipment procurement, software and testing. By the end of 2013, a pilot batch of 5,000 to 10,000 smart meters will be deployed;this technical trial will feature an Advanced Metering Infrastructure (AMI) test laboratory. Following a successful trial, it will deploy up to 60,000 smart meters to “de-bug” the system before full deployment. FirstEnergy’s Smart Meter Plan on behalf of Met-Ed, Penelec and Penn Power may be found on the Public Utility Commission’s website by entering docket number M-2009-2123950 in the search box. 
  • PECO – In October 2009, the company was awarded $200 million dollars in a Smart Grid Investment Grant from the federal government, which will be used to defray the costs of smart meter procurement and installation. PECO has already selected vendors and smart meter technology, and is currently field testing its Advanced Metering Infrastructure (AMI) as well as developing the technology necessary to support smart meters and related systems. You can expect to see the first batch of smart meters for PECO be deployed in October 2011.  PECO’s Smart Meter Plan will ramp up deployment starting in August of 2012.  
  • PPL – The company is a leader among Pennsylvania EDCs when it comes to smart meters.  PPL was an early adopter of Advanced Metering Infrastructure (AMI), having installed the meters several years before there was a legal requirement to even submit a plan. Accordingly, PPL states that its current meters either meets or exceeds the minimum requirements of Act 129 under the Public Utility Commission’s order.  Notwithstanding, beginning in January 2011, PPL will launch pilot programs for bidirectional data communications capability, direct customer access to price and usage data and remote disconnection and reconnection. PPL will evaluate semiannually next-generation AMI technologies and smart-grid integration.  PPL’s Smart Meter Plan may be found on the Public Utility Commission’s website  by entering docket number M-2009-2123945 in the search box.

Based on PPL’s experience when it implemented AMI, it does not appear that Pennsylvania EDCs will have to deal with the customer backlash currently taking place in California.  Time and full deployment will tell.

Edward P. Yim contributed to this post.

BGE took the political high road and decided to move forward with a modified version of its smart grid plan despite not receiving cost recovery via a surcharge tracker. In a news release the day it filed its modified proposal, BGE president and chief executive officer, Kenneth W. DeFontes expressed disappointment over the Commission’s June 21,2010 order but remained hopeful the revised plan would get approved; allowing the company to get on with the business of enhancing reliability, move toward meeting its EmPOWER Maryland goal to reduce energy consumption by 15 percent by 2015 and put to use the $200 million stimulus grant the company was in jeopardy of losing. 

Although the revised plan was approved and the Maryland PSC stressed its decision should not be viewed as a no confidence vote in smart grid technology, the Commission also remained unpersuaded from its original position on cost recovery.  The 51 page decision states:

…we will not authorize cost recovery for any approved ‘smart grid’ or AMI project through a surcharge.” We reached that conclusion because the proposed AMI deployment “would represent a large, but classic investment in BGEs distribution infrastructure,” precisely the kind of investment that BGE has recovered through traditional ratemaking for a century. We are not persuaded to deviate from these principles by BGEs arguments regarding the magnitude of the AMI investment or the possibility of negative reactions from credit rating agencies. Pg.32

When announcing its intent to proceed with smart grid implementation, BGE highlighted the Commission’s support of prudently incurred cost recovery rather than “unfair, post hoc nickling-and diming.”  This was no doubt a shout out to the victorious AARP and the OCP!

On June 21, 2010, to the surprise of many, the Maryland Public Service Commission (“MPSC” or “Commission”) denied Baltimore Gas and Electric Company’s (“BGE”) Application to Deploy a Smart Grid Initiative (“Proposal”).  Stating, “Although we share BGE’s (and others’) hopes, and even enthusiasm, for the long-run potential and importance of the infrastructure upgrades known colloquially as the “smart grid,” we find the business case for this Proposal untenable.”   This decision jeopardizes approximately $136 million BGE was awarded from the U.S. Department of Energy (“DOE”) pursuant to the American Recovery and Reinvestment Act (“ARRA”) for smart grid funding.  The total price tag for BGE’s filed plan was $835 million.  The Commission stated that BGE should fairly allocate between itself and its customers the risk of the smart grid journey.  
In denying the Proposal, the Commission goes on to discuss concerns it has about exposing customers to unproven technology that could quickly become obsolete due to evolving Advanced Metering Infrastructure (“AMI”) technology standards.  The decision states BGE planned to install the ZigBee chip in its smart meters.  Currently, ZigBee is the dominant technology in the AMI market.  However, at this time, no appliance manufacturer has adopted ZigBee technology.  In order to provide customers with the option of deriving the full benefits of the smart meters that BGE hoped to install, the meters should be able to communicate with smart appliances when they are created.  The following quote from the decision highlights the Maryland Commission’s stance that it will not expose its ratepayers to the risks of being an early adopter:
“The field of modern technology is replete with examples of innovations once considered the leaders into a new era that were never widely adopted. All the federal funding in the world would not have made Sony’s Betamax a wise investment, for example. Those who invest in new technology as it becomes available often find themselves re-investing much sooner than they anticipated.”
This view by the Maryland Commission begs a few questions: “What if all the states took that stance?  Would the smart grid and all its technological moving parts have an opportunity to mature and provide BGE’s ratepayers and the rest of us all the benefits of a modern electrical grid? Since smart meters will ultimately teach customers how to use less of BGE’s core product, electricity, doesn’t the very filing of the Proposal qualify as an investment by BGE?

On June 21, 2010, to the surprise of many, the Maryland Public Service Commission (“MPSC” or “Commission”) denied Baltimore Gas and Electric Company’s (“BGE”) Application to Deploy a Smart Grid Initiative (“Proposal”).  Stating, “Although we share BGE’s (and others’) hopes, and even enthusiasm, for the long-run potential and importance of the infrastructure upgrades known colloquially as the “smart grid,” we find the business case for this Proposal untenable.”  This decision jeopardizes approximately $136 million BGE was awarded from the Department of Energy (pdf) pursuant to the American Recovery and Reinvestment Act (“ARRA”) for smart grid funding.  The total price tag for BGE’s filed plan was $835 million.  The Commission stated that BGE should fairly allocate between itself and its customers the risk of the smart grid journey.  

In denying the Proposal, the Commission goes on to discuss concerns it has about exposing customers to unproven technology that could quickly become obsolete due to evolving Advanced Metering Infrastructure (“AMI”) technology standards.  The decision states BGE planned to install the ZigBee chip in its smart meters.  Currently, ZigBee is the dominant technology in the AMI market.  However, at this time, no appliance manufacturer has adopted ZigBee technology.  In order to provide customers with the option of deriving the full benefits of the smart meters that BGE hoped to install, the meters should be able to communicate with smart appliances when they are created.  The following quote from the decision highlights the Maryland Commission’s stance that it will not expose its ratepayers to the risks of being an early adopter:

The field of modern technology is replete with examples of innovations once considered the leaders into a new era that were never widely adopted. All the federal funding in the world would not have made Sony’s Betamax a wise investment, for example. Those who invest in new technology as it becomes available often find themselves re-investing much sooner than they anticipated.

This view by the Maryland Commission begs a few questions: “What if all the states took that stance?  Would the smart grid and all its technological moving parts have an opportunity to mature and provide BGE’s ratepayers and the rest of us all the benefits of a modern electrical grid? Since smart meters will ultimately teach customers how to use less of BGE’s core product, electricity, doesn’t the very filing of the Proposal qualify as an investment by BGE?