On July 24, 2009, the Public Service Commission (PSC) voted to approve a wide-range of advanced smart grid initiatives as proposed by six major electric utilities in New York. The PSC’s approval of the cutting-edge projects is contingent upon the U.S. Department of Energy (DOE) awarding a 50% matching federal grant. Since the federal stimulus funds available from DOE will only cover up to 50% of the total costs of the proposed smart grid projects, the utilities filed requests with the PSC to recover the portion of the costs not covered by the DOE grant from ratepayers. The PSC approved a series of projects with a total cost of about $825 million and ratepayer matching funding of approximately $390 million.
The utilities seeking ratepayer recovery for matching funding of smart grid investments, and the amounts of such funding approved by the Commission today include: Consolidated Edison of New York, Inc. (Con Edison) for $175 million; National Grid $145 million; Rochester Gas and Electric Corporation (RG&E) $36 million; New York State Electric and Gas Corporation (NYSEG) $20 million; Central Hudson Gas and Electric Corporation (Central Hudson) $10 million; and Orange and Rockland Utilities, Inc. (O&R) $5 million.
The ratepayer-matching funding will be provided through a temporary surcharge to be implemented upon completion of each project. Surcharge proposals by the affected utilities will be made after DOE grants are announced and will be subject to comment by interested parties as to the manner and classes of ratepayers impacted by the surcharge.
In approving proposed utility projects for ratepayer-matching funding, the PSC determined that projects provide a reasonable investment in technology that improves the efficient and intelligent operation of the electric grid in New York State. The PSC concluded that there are substantial benefits to be gained by beginning to invest in the use of advanced technology and communication to improve grid operations. Smart grid projects that will improve grid operations and potentially enable expansion of demand response resources and opportunities for residential customers to manage energy costs were approved in all of the electric service territories.
A smart grid uses advanced technology and two-way communications to improve operations and efficiency of the entire electric grid from the generation source to end-use consumption. Among other benefits, a smart grid will allow operators to more effectively operate the power grid, and will potentially enable consumers to actively monitor energy consumption and better control their bills. A smart grid can also enable the accommodation of all generation sources, including renewables, and storage options.
Several non-smart grid projects for Con Edison were also approved totaling approximately $2.5 million in ratepayer funds. Ratepayer contribution to these projects represents less than 50 percent of the projects costs because the utilities recruited partners for the projects. The projects include deployment of 2,250 solar panels at its Astoria complex to test the company’s system for the integration of solar resources and battery storage; a study conducted with other partners to assess off-shore wind resources; and a partnership with Chrysler and the U.S. Postal Service to test new technologies for vehicle transportation that ultimately may promote the reduction of greenhouse gases.