California Public Utilities Commission Votes to Maximize Smart Grid Benefits

Utilities Required to Demonstrate How Plans will Benefit Consumers and the Environment

June 24, 2010
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(Sacramento, CA – June 24, 2010) Environmental Defense Fund today praised the California Public Utilities Commission (CPUC) for adopting a comprehensive plan to maximize the environmental and consumer benefits in the smart grid plans of state investor-owned utilities, PG&E, San Diego Gas & Electric (SDG&E) and Southern California Edison (SCE). 

"Today's PUC decision shows yet again that California is creating a model that other states can follow to save ratepayers money, grow the economy and protect the environment," said Lauren Navarro, Environmental Defense Fund, which was a party in the smart grid proceeding. "Utilities now have clear guidelines for developing smart grid plans that are able help California meets its energy and environmental goals."

Achieving those goals requires smart grid plans that take customer needs into account and feature marketing campaigns to educate consumers about ways they can use electricity more efficiently and save money.

"Utilities are now required to take a proactive approach to consumer education and use market research and past experiences to improve their outreach efforts," Navarro said.

Studies have shown that a smart grid can reduce household utility bills10 percent when customers have access to tools, technologies and real-time information that can help them better manage energy use.

By providing ratepayers with information about how much electricity they use at different times of the day, utilities can help customers save electricity during critical times. This "demand response" process leads to cost savings, reduced energy use and cleaner air. If just five 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 drop substantially.

Smart grid deployment, done right, can play a significant role in helping California achieve its landmark energy and environmental policy goals. As the National Institute of Standards and Technology (NIST) and others have found, the potential benefits of a smart grid include reductions in climate change and criteria pollutants, water and land impacts and oil consumption – as well as gains in energy independence and economic growth.

Maximizing these benefits will require a smart grid that can facilitate: expanded deployment of renewable and distributed power sources; greater use and charging of electric vehicles and new energy storage technologies; and greater reliance on demand-side resources, especially those that serve as an alternative to new peaking power plants.

Nancy Ryan, the public utility commissioner in charge of the smart grid proceeding, ensured that the smart grid plan approved today was designed to maximize consumer and environmental benefits.

The agency's smart grid planning process began after Senate Bill 17 (Padilla) was signed into law last year. That bill called for utilities to give special attention to consumer protection and environmental benefits when developing these plans. It also integrated California's environmental policies related to mitigating climate change. These include the Renewable Portfolio Standard (RPS), building and appliance efficiency standards, the loading order that prioritizes renewables and energy efficiency over fossil fuel energy, and air quality improvement policies.

"The PUC decision is a solid step forward in guiding the utilities to deliver all of the environmental and consumer benefits that the smart grid provides," concluded Navarro.

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Environmental Defense Fund, a leading national nonprofit organization, represents more than 700,000 members. Since 1967, Environmental Defense Fund has linked science, economics, law and innovative private-sector partnerships to create breakthrough solutions to the most serious environmental problems. For more information, visit www.edf.org.