States that Implement a Heterogeneous Grid are Poised to be the Winners

States legislatures need to empower state regulators to do the innovative job to satisfy the need for their constituencies that a homogeneous grid is no longer able to provide. To consider a heterogeneous grid, legislatures can take a look at the now closed debate between Mr. James Carson and I, under the EWPC article The Electricity Without Price Controls Architecture Framework (EWPC-AF). Please hit the red hyperlinks here and below to get to the corresponding page.

By José Antonio Vanderhorst-Silverio, Ph.D.
Systemic Consultant: Electricity
EWPC-AF Originator

First Posted on the Grupo Millennium Hispaniola Blog on December 13, 2009.

The EWPC article summary is:

A new approach to power energy policy design, based on system’s architecting heuristics, has led to an emerging simplified synthesis of the power industry regulatory policy. Instead of undergoing business as usual regulatory proceedings, the approach to the Electricity Without Price Controls Architecture Framework is poised to replace the Investor Owned Utilities Architecture Framework and its incremental extensions that have evolved by analytic patchwork as a extremely complex system.

In addition to confirming the above summary, adapted to tell the differences of the two architecture frameworks that result in a homogeneous or a heterogeneous grid, other important conclusions of the debate are (text inside quotation marks are taken from Mr. Carson posts):

· To show how powerful a competent system architecting approach is, for example to better respond to the ideal that regulators “would never risk bringing the grid down.”

· The homogeneous grid is not longer able to meet the performance requirements of an increasingly share of demand. The apparently “ridiculous” homogeneous grid disturbance costs, “of oughly the same as the entire wholesale sector? Half the retail value???,” are for real.

· As state regulators are bound to act under the homogeneous grid, only state legislatures can introduce a restructuring plan to help them do their job under a heterogeneous grid.

In the commentary posted, at the beggining of November 2009, on SmartGridNews.com, How to Spot the Real Stimulus Winners, Jesse Berst, gives “six examples, including two that have gone largely unnoticed,” about “… how the money and the attention will impact various stakeholder groups over the long term.” The examples are utilities, regulators, suppliers, system integrators, the ZigBee Alliance and the taxpayers. I will concentrate on the second and last examples to highlight the key stakeholder group, that went missing, the states legislatures.

Mr. Berst wrote that “Regulators of ‘losing’ utilities may have a tough time approving Smart Grid upgrades. They’ve got to counter the perception that the utility’s project wasn’t good enough for the feds, but they are going to go forward anyway, requiring a rate increase.“ The problem is that regulators are not longer able to respond and need help from state legislatures to let them become innovative state regulators. That help may be enabled with an EWPC-AF based state energy policy.

Mr. Berst added that “… the hardest question to answer is whether or not taxpayers will win in the long term. Some experts say no. For instance, Kurt Yeager, executive director of The Galvin Electricity Initiative, decries the overemphasis on metering. His organization wanted the funds directed at local microgrid projects to offset ‘the unreliability of the current centralized architecture.’ Many others share the view that the money should have been spent to advance the state of the art.” To advance the state of the art, the proposed non centralized architecture is that of the EWPC-AF.

This is a comment I posted one month ago under Mr. Berst’s article:

The Homogenous VS. the Heterogeneous Grid

The Smart Grid architecting is a highly risky and costly one shot experiment which taxpayers will fund to extend the homogenous grid.

"The Galvin Electricity Initiative, decries the overemphasis on metering" is about the fundamentals of the power industry, which are best met by an intermediate architecture, where customers are able to elect metering or not, under a heterogeneous solution.

The winners, even without the stimulus funding, will be those who understand the differences between the two approaches. Innovative State regulators that promote the development of retail markets to enable complete and fully functional power environments will be in the winning team for their constituencies.