DistribuTECH news: Capgemini survey reveals North American regulatory commissioners’ perspective on smart grid and renewable energy

San Diego, CA, Feb. 3, 2009 — Capgemini released the results from what they’re saying is the first smart grid and renewable energy opinion survey of energy regulators across North America at the DistribuTECH Conference and Exhibition. The Capgemini survey was conducted in conjunction with the National Association of Regulatory Utility Commissioners (NARUC) and Canadian Association of Members of Public Utility Tribunals (CAMPUT) in an effort to develop a comprehensive perspective on smart grid and renewable energy policy in North America.

After years when delivering reliable, cheap and uninterrupted energy was its primary directive, the North American utility industry is now facing growing political, societal and regulatory pressure to produce energy with less environmental impact and to help consumers use energy more efficiently. To meet this challenge, industry regulators are beginning to consider the role of a smarter grid. Such a perspective was reflected in the survey.

Thirty eight percent of respondents already have regulations that require an automated metering infrastructure (AMI) deployment, an additional 7 percent reported that they are allowing deployments without regulations, while 22 percent report additional analysis is either underway or required.

Forty eight percent of respondents favor the recent formation of the NARUC-Federal Energy Regulatory Commission (FERC) Smart Grid Collaborative, while an additional 31 percent felt more time is needed before they can judge. Eighteen states have already joined the Collaborative.

“Smart grid is not a fad; smart is the future of the electric grid. This survey shows there is clearly an increasing regulatory acceptance of AMI and a need to ascertain how a smarter grid will improve utility services for consumers,” said Frederick Butler, president of NARUC.

Additional results of the survey revealed that regulators are clearly interested in smart grid and increased energy efficiency, but they are not certain that the benefits outweigh the cost for customers at this point:

* Commissioners have not yet formed a consensus about the values of AMI: The cost of AMI may exceed direct operational savings causing regulators to rely on case-specific filings not general industry valuations.

* Most regulators are not ready to share the real-time costs of energy with all classes of customers: More than half (51 percent) of the respondents do not support real-time pricing for all customer classes and only 9 percent do.

* Renewable energy sources abound but at a price: Nearly three out of four states (73 percent) have access to adequate supplies of renewable resources, but their representative commissioners were quick to add that those resources are substantially more costly than current fuels.

“Utility regulators are in the very early stages of an education and valuation process,” said Roy Ellis, energy, utilities and chemicals regulatory relations leader at Capgemini. “In most cases, this process is a complicated effort to view a cleaner more efficient grid through a prism of existing laws, regulations and market dynamics that were designed to promote the rapid expansion of a least-cost, highly-dependable grid using carbon-based fuels. Interestingly, the speed with which both renewables and the smarter grid take hold may be the result of a growing political belief that a rapid move to clean energy is necessary, and the only way to make the move quickly is with an equally rapid enablement of a smart grid.”

The survey was conducted between September and November 2008, and expands on findings from the June 2008 NARUC Membership Energy Survey. A total of 45 NARUC members and 2 CAMPUT members responded to the survey.

The full study results can be found at Capgemini’s website: www.us.capgemini.com/smartgrid_regulatory.

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