Smart Grids, Coming to a California Utility near You

California’s Public Utilities Commission (CPUC) took a major step forward today to give consumers greater control over their electricity bills, create jobs and protect the environment.  (6/25 update: CPUC decision summary available.)

It voted to approve the environmental and consumer benefits that PG&E, Southern California Edison, and San Diego Gas and Electric must include in their smart grid plans.

In a proceeding sparked by SB 17 (Padilla), which called for utilities to give special attention to consumer protection and environmental benefits when developing their plans, the agency has given utilities a roadmap to do just that.

The guidelines it is providing will maximize the smart grid's potential to reduce the use of dirty energy, air pollution and oil consumption – and help California make gains in energy independence and economic growth.

One of the key requirements approved today is for utilities to explain how their plans will meet customer expectations and detail how they will educate consumers on ways to use electricity more efficiently.

Studies, such as those by Silver Spring Networks and IBM, have shown that a smart grid can reduce household utility bills by 10 percent or more when customers are provided with real-time information and monitoring tools they can use to manage electricity consumption.

For example, using a "demand response” application, households and businesses can see when energy is cheapest, during "off-peak" times, and most expensive, during "peak" times. In the same way that big businesses are using demand response now, households could respond by choosing when to use more or less electricity.

Rising peak demand is straining our aging electricity system and threatening its reliability. It also adds costs that customers must pay one way or another and resulting in increased pollution, water consumption and land use impacts.

By rewarding consumers for using less energy at peak times, California can keep some dirty power plants from being fired up and being built. In fact, with more demand response, California could reduce peak production by almost 8,000 megawatts, which is equivalent to the output of 100-plus peak power plants.

California is one of the first states to begin creating a regulatory framework to manage the operation of smart grids, helping to ensure that ratepayers get all of the potential benefits.

In doing so, it is also growing its economy.  One fourth of all domestic smart grid companies are located in California, creating jobs and helping to drive additional investments throughout the state.

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