The Maryland decision was quite clear about what its problems were:

1. Higher distribution rates per kilowatt rather than fixed charges on bills should pay for these upgrades – effectively meaning heavy users subsidize light ones which seems entirely fair and reasonable to me. BG&E would have been entirely insulated from the risk of deploying for instance bad proprietary non-IPv6 based meters, etc., and having to replace them sooner than scheduled. Why not force them to do it right and use something robust that actually meets the IPv6-based “smart grid” standards?

2. Residential home-area-network (HAN) networks based on Zigbee and other powerline networking standards must be deployed and perhaps financed by the distributor before implementing any mandatory time-of-use or dynamic pricing scheme. This lets the customer adjust to a world of expensive peak and cheaper off-peak power. Also seems very fair. BG&E’s proposal notably did not include in-home meters and guarantees of interoperability with third party conservation service providers (goal 6 of the US National Broadband Plan, read it!).

3. Distributors are simply not allowed to hand-wave away the question of backhaul (communications between the meters, other secure devices on that network, whatever carrier/ISP gets the data for billing to the distributor and for demand-response to a third party). They can’t, for instance, blame satellite connections in a rural area or frequent outages on a cable network, for bad electric demand decisions. This strongly suggests distributors are being gently urged to set up their own secure networks, which in practice will either use 802.15.4 (suites like Arch Rock sells), 802.11abgn (the “Wi-Fi” standard) or powerline networking (a perfect match for HANs in the home and ITU G.hn networking when it arrives) or all of the above (perhaps the powerline networking primarily and the wireless for failover).

This in combination with Prop 16′s failure in California means that communities are keeping the power to deploy their own power-and-data unified utility/distributor and telling incumbent monopolies to go hang. Good idea. Given the robust standards the IEEE, ITU and NIST and FERC are working out, probably any Mom-and-Pop ISP would make a better power company than these mindless horrors mostly focused on generation.

Since when does economics favor entrenched monopolies trying to hive off all risk of deployments (including future mistaken relationships with data providers) of tech the customer does not understand, onto those customers rather than bear it, itself?

Please learn something of the field you are commenting on before commenting. More:
http://www.smartgridnews.com/artman/publish/Business_Policy_Regulation_News/Uh-Oh-Maryland-PSC-Dumps-BG-E-s-Smart-Grid-Metering-Project-Utility-Exec-Dumbfounded-2549.html#blogcomments

Jim: times are a changing!

Lynne, for great input check the article “Could We Lock in the Past?” at http://bit.ly/b7PLMm

Whether they are aware or not, my guess is that the Md.’ PSC made a great move. As can be seen in the post “The Potential Setback of the Smart Grid that is Being Pushed” http://bit.ly/EWPC09 :

The Order No. 83410 is sending the very clear message to the general public that the Maryland PSC needs to fulfill its legal duties on a problem they seem unable to handle. That Order may involve a very smart move as (using your words) “the utility has been invited to re-submit its proposal in a way that shares risk between the utility and its consumers.” Thank you also for writing “…that other utilities looking to begin or expand smart grid implementations must take this into account.” The Order is in fact shifting that problem to BGE and utilities with a potential setback for the smart grid that is being pushed.

I’m not totally convinced about your thesis on regulators being afraid of risk-taking and innovation. These same commissions had no problem approving very risky nuclear projects in the 70s and even some economically risky clean coal projects more recently.

A multi-billion dollar power plant has many forces pushing the project forward, including a plethora of ancillary interests, like local unions and construction firms. There can be a lot of economic activity generated by some of these projects.

OTOH, smart-grid projects can have a tough time identifying and aligning the economic interests. It’s partly due to the uncertainty around which consumers will benefit and IMO mostly to do with the local political power of the firms doing the work.

Jim

I admire your optimism and you advocacy for this cause. But, as long as the electric business is highly politicized, and regulated by politicians, I am not willing to see their power over my day to day life increased. I am only only willing to accept a system under which is is physically and economically impossible for the socialist state to use it as a vector of social control. If the regulators persist in seeing the smart grid as a problem for them and not an opportunity for social control, I am thankful when my enemies screw up.

“the organized, coordinated political actions of so-called consumer advocates (who really represent low-income consumers, not all consumers) and groups like the AARP,”

Consumer groups seldom “represent” anyone other than their upper class selves. Recently, the veil has been striped from ACORN, which is in fact a tiny group of professional “community organizers” conspiring with public employee unions. AARP, is an insurance marketing scam with a hard left political arm.

Your point about China is well taken. We can see the actions of our own mandarins having the same effect on our lives. We just call them “environmentalists”.

I find the article well though out and almost impeccable. The only thing that I am concerned is with an apparent endorsement on Faruqui’s quote that says “There is no doubt in my mind that without state commissions approving the business cases for advanced meters and the smart grid, this is not going anywhere. They control the dollars; they set the rates for the customers.” I think that was to be expected based that “In brief, traditional economic regulation is incompatible with economic dynamism, with technological change, with innovation, and ultimately incompatible with widespread consumer well-being because of the enormous extent to which traditional economic regulation stifles experimentation.”

Maybe the regulatory approach is not going anywhere, which means regulators need a new mandate, as it is suggested in the the EWPC article “Forget the Customer Engagement Debate; Think Risk Taking Suppliers ( http://bit.ly/EWPC08 ),” which offer a proposal for a new approach to the simple and holistic smart power service.

Its summary says “The outstanding Maryland PSC’s leadership decision is a potential precedent, which will help utilities and state governments accept the fact that the utility partnership with a regulator run out of steam. Instead of a predictive customer engagement debate to extend the obsolete indirect regulated risk free business model, for example on utilities AMIs, we need a new bargain in the power industry to facilitate a customer partnership with one of several suppliers having an emerging direct competitive risk taking business model.”

Best regards,

José Antonio