California Dream 2.0

Why PG&E Customers Should Keep Their Meters Smart

Yesterday, responding to customer concerns and a California Public Utilities Commission (CPUC) request, PG&E proposed a way to let customers opt-out of having  wireless SmartMeters.

EDF has been closely following this issue and is actively working on the development of the smart grid and the installation of smart meters. Modernizing our electricity system with information and networking technologies – such as PG&E’s SmartMeter – will let us diversify energy sources, eliminate enormous waste, save money and improve air quality, among other things.

We support PG&E giving customers a choice to turn off the wireless chips in their SmartMeters, but encourage consumers to keep them turned on. Keeping the wireless chip on will maximize the environmental, public health and economic benefits of the smart grid – cleaner air, lower energy prices, and accelerating our much-needed transition to a clean-energy economy.

While regulatory agencies and utilities must address public health concerns, research (such as that done by the non-profit, non-partisan California Council on Science and Technology) has not found a scientific link between exposure to radio frequencies from smart meters and human health.

What does pose a risk to all human health is burning fossil fuels to generate electricity. It is one of the biggest sources of pollution. It costs California hundreds of millions of dollars a year in hospital admissions and emergency room visits and the United States billions of dollars annually in health care costs and lost productivity. Even fortunate Americans who are not breathing polluted air pay a price for it.

A smarter grid can reduce this pollution by increasing the use of clean, renewable energy and reducing reliance on the most polluting fossil fuel power plants.

Turning the radio off will also prevent customers from seeing and taking full advantage of real-time usage and pricing information, which can bring cost savings and cleaner air.

We don’t know what percentage of ratepayers would choose the ‘radio off’ option and what effect it would have on PG&E’s ability to maximize the promised benefits of a smart grid. What we do know: some key  benefits will be lost.   

PG&E has proposed a flexible, long-term solution. It keeps the smart meters in place and lets individuals change their minds and take advantage of the technology that makes  these benefits possible. While EDF supports PG&E’s choice of alternatives, we strongly encourage customers to keep their smart meters smart.

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Smart Meters. An Integral Piece To The Smart Grid Pie

As you may have heard, the roll out of smart grid technology in California has raised some health concerns over the safety of smart meter use.  As a result, the California Public Utility Commission (CPUC) has ordered Pacific Gas & Electric (PG&E) to develop an alternative to wireless meters.

The Environmental Defense Fund (EDF) is following this issue closely.  Our organization offers a unique perspective given our proven track record of enabling markets and innovation to gain environmental benefits.  Our national organization is working across the country to advance smart grid deployment in a way that ensures maximum consumer, economic, and environmental benefits.  To do so, we are working with public utilities and regulatory commissions on smart grid policy and advancing smart grid pilots such as Austin’s world-renowned Pecan Street Project.

Deploying an effective smart grid throughout the country is a national priority supported by multiple stakeholders: from companies like GE, Cisco and Google, who see it as key to the future of their businesses, America’s global competitiveness, and job growth, to Chambers of Commerce, who see the huge economic development and security benefits in making more energy at home and keeping energy dollars at home, to consumer groups like the Citizens Utility Board, our partner in Illinois, who see it as the only way to keep electric bills from climbing steeply in the years to come.  Right now, our outdated energy grid wastes approximately 10% of generated electricity just in transmission and distribution, costing the consumer roughly $25 billion a year.  We lose another estimated $100b in black-outs, which a smart grid will help us avoid.

Digital “smart” meters, capable of two-way communication between customers and electric utilities, are key to realizing the multiple benefits of a smart grid.

A properly designed smart grid will help households and businesses reap many economic and environmental benefits. It will allow us to greatly reduce our use of dirty energy, improving air quality and the health of millions of Americans now hurt by dangerous air pollution.  With easy-to-use tools, such as online updates on how much energy they’re using and what it’s costing, consumers will be able to make choices that lower their bills.  Businesses will be able to pinpoint the most valuable opportunities to make their buildings and operations more energy efficient, saving money. Utilities will be able to provide customers with more reliable service.

Smart meters allow information to flow between meters and utilities by utilizing radio frequencies (RF) such as those currently used by AM/FM radios, baby monitors and cell phones.  Studies (such as research by the California Council on Science and Technology (CCST) and the Electric Power Research Institute) have found no evidence that these radio frequencies pose risks to human health.  In fact, the CCST report released earlier this year found that even if smart meters were on 100% of the time, an individual’s exposure would be a very low (4 uW/cm3).  To put this number into perspective, the average exposure to RFs from using a cell phone is between 1,000 and 5,000 uW/cm3 or 250 – 1, 250 times that from a smart meter.

A well-designed smart grid will be a boon to public health.  It will improve our quality of life, grow our economy, and drive the clean energy revolution we need.

For more information regarding the benefits of a smart grid, please view EDF’s fact sheet here.

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California Picks Up the PACE

A bit of good news for California households and small businesses: Governor Arnold Schwarzenegger has just signed AB 1873 into law.

This bill, which Environmental Defense Fund co-sponsored and which was authored by Assemblymember Jared Huffman, can provide more funding for Property Assessed Clean Energy (PACE) programs by allowing state agencies such as CalPERS to invest in PACE bonds.

These bonds make investments in energy efficiency more affordable for home and business owners while building California’s clean energy economy.

Through PACE programs, local governments sell bonds and use proceeds to allow home and business owners to make energy efficiency and clean energy improvements. The improvements are assessed as part of property taxes, which are generally paid in full and also have a higher priority than mortgages and other loans in the event of a foreclosure. Overall, they could give state entities that invest in them the opportunity to enjoy stable and predictable returns.

Recent actions by Fannie Mae and Freddie Mac and their conservator, the Federal Housing Finance Agency (FHFA), have put the future of PACE in question. By stating that PACE assessments should not be permitted to be made senior to mortgages without mortgage lenders’ consent, these organizations have left the fate of PACE programs largely in the hands of federal decision makers. This has chilled the climate for PACE and resulted in a significant slowing of activity nationwide.

AB 1873 could give California PACE programs a boost in the wake of Fannie Mae and Freddie Mac’s decisions. Committed jurisdictions that are continuing to offer PACE financing with senior status, combined with state agency investments in PACE bonds, can enable California’s home and business owners to continue enjoying their related benefits: energy efficiency investments that drive demand and help California’s clean energy companies continue building their businesses, knowledge base and market share.

This victory can help move federal decision makers toward a better understanding of the benefits of PACE and pave the way for broader implementation in coming years.

For more details, see this article that highlights the benefits of this bill.

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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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Ensuring California’s Smart Grid Maximizes Economic and Environmental Benefits

On May 24th, California’s Public Utility Commission (CPUC) released its proposed decision for the smart grid plans of California’s three investor-owned electric utilities, PG&E, San Diego Gas & Electric and Southern California Edison. 

The proposed decision is a requirement of Senate Bill 17, sponsored by Senator Alex Padilla, which requires smart grids to help California meet its climate change, demand-side management and renewable energy goals. Senator Padilla’s bill gives the CPUC an opportunity to set aggressive guidelines for how utilities can leverage smart grid technology to achieve a win-win balance of meeting California’s future energy growth needs while having minimal impact on the environment.  

Once adopted—a vote to approve the decision is expected next month—the decision will provide a framework for how utilities can design and deploy their smart grid plans. 

The smart grid’s ability to reduce air pollution and create green jobs can only be realized if utilities’ smart grid plans are designed to increase the use of clean energy and reduce reliance on fossil fuels. Without strong environmental metrics, we will sacrifice a critical opportunity to set trailblazing standards that guide deployment of one of the most promising solutions for a low-carbon economy. 

The Environmental Defense Fund (EDF) asked the PUC to design the smart grid to ensure that California achieves its landmark energy and environmental policy goals to reduce emissions to 1990 levels by 2020 and increase its use of renewable energy from 20 percent by 2010 to 33 percent by 2020

The PUC proposed decision contains the critical commitment to giving consumers real-time energy use data that can be used to lower energy use and costs. As we noted in our last post on the subject, this information can help all utility customers save money – even those that do not change their energy use. 

The PUC is also taking the time necessary to ensure that providing transparency on real-time energy use is done in a way that benefits consumers and protects their privacy. 

As the agency hammers out the final decision on smart grids in the next month, EDF will be working with their staff and our clean energy allies to ensure consumers, our economy and the environment reap maximum benefits.  

A well-designed smart grid system will help facilitate: expanded deployment of renewable and distributed power sources; reward those who use less energy at peak times; and drive greater adoption of electric vehicles and new energy storage technologies.

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CPUC Deciding Soon on Smart Grid; Will Shape Plans of California Utilities

Right now, the California Public Utilities Commission (CPUC) is deciding what California’s electricity grid will look like far into the future: whether it will be truly “smart” and how environmental and consumer benefits will factor into the smart grid plans of state public utilities PG&E, San Diego Gas & Electric (SDG&E) and Southern California Edison (SCE).

Environmental Defense Fund and numerous clean tech companies recently asked the CPUC to ensure that California’s smart grid delivers solid returns on consumers’ investments, since it is ultimately customers that pay for utilities’ infrastructure. Solid returns can be delivered by giving households and businesses information that allows them to tailor how much they use, thus lowering bills and emissions, and by enabling greater use of clean energy.

Here’s a quick tutorial on how our electrical grid is evolving and why a smart grid is critical to cutting costs and emissions.

Smart Grid 101

The nation’s electricity grid—parts of which are almost 100 years old—was built to do one thing: keep the lights on. It wasn’t designed to handle the requirements of the 21st century:

  •  greater reliability and quality to sustain a digital economy;
  •  increased energy independence and security; and
  • dramatically reduced environmental impacts in the face of climate change and water scarcity.

Nor was it designed to capture all the emerging opportunities:

  • far greater energy efficiency;
  • increased reliance on domestically produced renewable energy; and
  • consumers empowered to see their daily energy use, shift it to times when electricity is cleaner and cheaper, and even to generate their own. 

While the grid is usually reliable, keeping the lights on can be challenging. Blackouts cost the U.S. economy $150 billion each year. The grid, centralized around big power plants, also faces security risks through cyber attacks that could bring our nation’s banking, communications, transportation and security systems to a standstill.

But as the grid becomes an “energy internet” — incorporating information and communications technology into every aspect of electricity generation, delivery and consumption so that it can “talk to” appliances, solar panels and plug-in vehicles – we will be able to:

  1. Watch and manage power flows moment-by-moment to avoid outages
  2. Rely less on centralized fossil-fuel resources and more on renewable and distributed energy generation
  3. Rely more on efficiency and “demand-side resources” such as “cycling down” air-conditioners when a cloud passes over a solar farm
  4. Empower users with information and choice 

This two-way sharing of information between end users and utilities is a key component of a smart grid. Those changes, in turn, will: 

  • create business opportunities for entrepreneurs offering energy services;
  • spur economic development and jobs;
  • improve reliability and service; and
  • reduce customer costs.

Meeting environmental goals

Most importantly, the smart grid will shrink the environmental impact of our electricity use, which accounts for 25 percent of California’s carbon footprint.

For example, a strategy called “demand response” can keep California from paying for new power plants. Demand response is used by utilities to alert customers that the price of electricity will be high during a certain time and asks them to reduce usage during that period. 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.

As customers shift usage from “peak” times—when demand and prices are highest—to “off-peak” times when demand and prices are lower, utilities can avoid firing up expensive — and dirty — fossil-fuel “peaker” plants.

Most importantly, demand response can increase the amount of “intermittent” solar and wind power that can be supported on the grid.  Demand kicks in when the renewable electricity is “on”, and gets cycled off when the wind stops or sun goes down, keeping the system in balance.

Broad deployment of smart grid technologies – including smart meters – will make that moment-by-moment match between supply and demand possible on a much bigger scale. 

Smart meters will also provide customers with detailed information about their electricity consumption and rates, empowering them to cut costs and emissions by reducing use or shifting it to off-peak times. If just 5 percent of customers shift their use, the most expensive and polluting peak power plants will come online less often and prices for all customers will be substantially reduced, according to Peter Fox-Penner, author of Smart Power: Climate Change, the Smart Grid and the Future of Electric Utilities.

EDF will keep you up-to-date on smart grid and smart meter developments in California and welcomes your feedback.

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