Archive for April, 2010

The Common Carrier Opportunity

April 16, 2010

While traveling over the continent of Africa at the end of the 90s, it became clear that right of way was the most expensive, hard-to-create, and hard-to-operate-and-maintain asset in every country.  Power authorities struggled to get the legal right and the funds to create transmission paths from their plants and dams to their customers.  At the same time, telecom companies were forced by economics to use a European country’s satellite connections and to pay them what amounted to a transfer fee on every call outside their country – even if the call was connected to a neighboring African country.

But neither the power nor the telecom service providers thought to build along a common right of way.  They seemed to always operate separately.  On realizing this, I went out of my way on a number of occasions to put together power people I met with telecom commissions (the telecom commissions of Economic Community of West African States and the Southern Africa Development Community with Eskom and the Southern Africa Power Pool).

The important idea we began to discuss together was to focus the revenue streams of power transmission and telecommunications along the same right of way to nourish this common carrier path’s sustained operations and maintenance.

A power grid network can evolve this common carrier pathway into transformative opportunities, such as:

  • The power grid right-of-way can deliver powerful new communications technology solutions through its universal customer access
  • Building an extreme-capacity broadband network on the power grid can provide dedicated and secure support for all the smart grid applications it will take to maximize energy efficiency
  • This broadband network can be designed to be self-aware and self-healing – allow more reliable management of electric distribution and communications through network faults and power outages.
  • An intelligent broadband power grid network can service multiple public utility or rural electric cooperative grids – without sacrificing each local smart grid’s managerial autonomy.
  • An intelligent network built on power grids can defeat power theft and manage customer accounts
  • A power grid network built through multiple public utility or rural electric coop distribution grids can buy both network and smart grid hardware & software with much higher economies of scale.
  • A network of multiple local power grids can generate sufficient communications service revenues to both subsidize smart grid apps and enable the power grid network to operate profitably.

Advanced communications services and local power grids can flourish in the reciprocal relationship of a power grid network.

Power utilities leasing out their right of way for telephone links can provide ancillary revenue, but insufficient to fund and manage the smart grid.

Telecom companies offering standard “plain-old-telephone-services” and internet access over power grid utility pole lines confront dual limitations in both traffic and profit margins that universal service funds can never adequately address.

The community’s scarce resources can be better deployed for everyone’s benefit than they are now.  This power grid network offers one real solution.

See:  USrural project

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“How Are You Going To Pay For The Smart Grid?”

April 10, 2010

This $165 billion question for utilities is coming from retail customers, and their consumer advocates, and now more and more public service commissions.

1-SmartGridCity’s Real Cost

1-Smart-grid Costs shock consumer advocates

We’re starting up some discussions with U.S. local power distributors this week about an answer.

Two Constituencies — Or Else.

April 10, 2010

In designing the Power Grid Network, we have to examine those ‘Smart Gridders’ out there on the “Bleeding Edge” carefully – their mistakes can reveal our solutions.

Who gets the benefit of smart meters is important. Regulators in the U.S. are weighing in to stop ‘one-sided business cases’ for smart meters in their tracks:

Dominion Virginia Power extends a smart meter field test before going all out with a $600 million rollout. Duke Energy scales back a $450 million rollout after getting slapped by Indiana regulators. And PG&E’s smart meter program, taking punches from fighting-mad customers for months, will get audited courtesy of state regulators.

Dominion’s overall plan calls for replacing all 2.4 million meters in its service area with smart meters. About 55,000 thousand meters are now being tested in two locations.

Dominion says it’s still committed to a Smart Grid and that the extended test phase is intended to address any concerns about the metering project. But the State Corporation Commission (SCC), which is beginning hearings on Dominion requests to put in place up to 12 demand response programs and rate hikes to pay for them, isn’t pumped about the utility’s smart meter program.

The actual benefit value realized by ratepayers will be less than the costs borne by ratepayers,” Howard M. Spinner, economics and finance division director for SCC, was quoted as saying in the Richmond Times-Dispatch. “The project is likely to save only 60 percent of the energy claimed by the company.”

A Dominion spokeswoman said customers will help pay the cost of the smart meters, but will pay less over time.

While a Duke meter rollout in Ohio will hum along as planned, the company is cutting back a proposed Indiana Smart Grid project involving 800,000 meters and other digital equipment because regulators said it cost too much and that Duke hadn’t shown that it would do customers much good.

Beleaguered PG&E — sued over its meter program by customers who blame the new technology for electric bill overcharges — is going to get audited. The California Public Utilities Commission (CPUC) is going to hire a consultant soon to conduct an independent audit of the utility’s program.

While PG&E said it field tested over 1,700 meters and found no problems, that hasn’t cooled off customers infuriated by the alleged overcharges and the company’s tiered rate system. Under the system, rates per kilowatt-hour increase as more power is used and the customer climbs into the highest tiers. Its highest tier, 47.39 cents per kilowatt-hour, is well above Southern California Edison’s highest rate of 34.25 cents per kilowatt-hour, not to mention the 11.47 cents in Austin, Texas.

We should develop a careful, gradual demand response introduction and marketing plan – starting with “positive gain” introductions, moving on the institutional business cases, and discussing the benefits and the costs of ‘smart pricing’.  The most important investment it requires is time, then engagement.   ‘Smart pricing’ will only succeed to the extent that customers actually know they benefit from it.

Questions U.S. Local Utilities Should Ask

April 8, 2010

What Is USrural To Us?

  • Financial partner that pays for building and expanding our community’s smart grid
  • Operating partner that manages and maintains the community smart grid under our direction
  • Research and development partner that will exploit ‘lessons learned’ on  each ‘best-of-breed’ smart grid application it deploys in multiple power grid networks
  • Provider of subsidized Internet access for our community’s schools, libraries, & medical facilities

What Does USrural Bring To The Table?

  • Financial Resources for the community smart grid
  • Telecommunications Expertise / Manpower that’s independent from vendors
    • New Technology Solutions Powering Extreme Capacity Broadband
  • Vendor Independent Smart Grid Research / Development / Deployment Expertise

What Would Be Our Responsibilities In A Relationship With USrural?

  • Provide right-of-way for smart grid and broadband/mobile apps
  • Set smart grid strategy based on customer benefits / requirements
  • Direct when and how smart grid apps operate
  • Approve data integrity and security of all customer data that adjudicates service disputes
  • Pay service fees only for actual smart grid usage

What Would Our Benefits Be From A Relationship With USrural?

  • Eliminate up-front community smart grid and communications Capital Expenditures we face
    • Remove urgency to raise energy tariffs in order to repay these new investments “on time”
  • Roll out ‘best-off-breed’ smart grid apps one at a time, based on their benefits to our customers
    • Reducing service disruption, accommodating new energy demand without increasing supply
    • Changing how and when smart grid costs impact energy tariffs
  • Subsidized broadband for our community’s public institutions
  • Subsidized ops & maintenance for the community power grid network
  • New Resources with which to develop our community’s economy
    • New local jobs
    • New and more cost-effective local communications service to support new commerce
    • More reliable / efficient / cost-effective energy to prompt new enterprise moves into the community

What Does USrural Seek From A Relationship With Us?

  • Universal access right-of-way to all customer sites within our communities’ service footprint
  • New smart grid and communications service usage revenues
  • Partner whose continued viability is assured by developing our community’s economy

A View of the Customer Sub-Network

April 8, 2010

PGN’s Customer Access Network