Opinion: No more SmartGrid cities


We are closing in on the end game. Xcel`s grand experiment of SmartGridCity is dying of its own financial and technical weight without ever having fulfilled many of the myriad of claims that Xcel made when they proposed it. The story is both depressing and illuminating.
Around six years ago, the City of Boulder started to look at the idea of taking over from Xcel the business of supplying electric power within the city limits. The process is called “municipalization,” and is well defined in state law. (For example, Fort Collins, Colorado Springs, and Longmont are all munis.) Then, a few years into this study, in March of 2008, Xcel announced that Boulder was going to be its grand experiment in implementing a “smart grid.” The project was called SmartGridCity, and was supposed to provide customers with real time data on their electric use, allow Xcel to manage demand in order to make more efficient use of its generating facilities, support better integration of intermittent renewable energy, improve reliability, and so on.
At almost the same time, the City announced that it was putting the municipalization study on hold. The Daily Camera article from March 17, 2008 put it this way, “Officials from Boulder and Xcel said the timing of the two power-related announcements wasn`t related. Xcel spokesman Mark Stutz said his company`s pleased to hear the news. But, he said, Xcel would have made the investment regardless. ‘We view it as two separate issues,` Stutz said. ‘We made the commitment to Boulder on the basis that it`s able to meet the criteria we had for implementing the smart grid. ..'” But almost everyone I know saw SmartGridCity as a play by Xcel to keep Boulder in its territory, and Boulder`s shelving the municipalization study as a mistake.
So Xcel started its full-scale experiment, building a citywide system, apparently intended to reach all 50,000-plus meters in Boulder. And, according to City Council members, there were claims made by Xcel that it wasn`t going to cost us anything, and that the expenses (estimated at around $15 million) were going to be absorbed by Xcel. To many, the whole idea was bizarre – an untried experiment being undertaken on such a huge scale by an organization that had very little relevant expertise.
Since then, progress has been spotty. Reports are that less than half the so-called “smart” meters are in place. (These are really just remote-read meters.) Very few of the “smart” devices that would allow some of the claimed benefits to be realized have been installed in homes or businesses. The dedicated fiber optics system was wildly overbuilt for the little data that it carries. And, based on my experience with my “smart” meter, access to real time data is non-existent, and getting data at all is complicated at best.
Late last year, as part of the rate case in front of the Public Utilities Commission, Xcel asked that its SmartGridCity investment be paid back by its ratepayers, with Xcel`s request now having tripled to around $45 million. The total project cost reportedly exceeds $100 million, with the balance having been put in by firms that partnered with Xcel; apparently they wanted in the “smart grid” game too. This comes out to about $2,000 per meter, a huge investment on a per customer basis. Partially at Boulder`s insistence, the PUC decided that Xcel needed to get a Certificate of Public Convenience and Necessity for the project before they could collect any money. (A CPCN being issued means, in short, that the investments in the project are deemed “prudent” and “in the public interest.”)
The CPCN docket is still in process, but fortunately, support for Xcel getting all its money is pretty weak. David Eves, the CEO of Xcel`s Colorado division, gave SmartGridCity its semi-eulogy, “We would not do that again over the whole service area.” Apparently, $100 million too late, Mr. Eves has seen the light. Let`s hope the PUC does also, and denies full cost recovery.
But smart grid efforts are proceeding elsewhere and with considerable success. Companies like Spirae in Fort Collins are working with far superior design concepts, and better test protocols are being used from the Pacific Northwest to Denmark. I expect “smart grid” system integration will be a normal practice within this decade.


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