COM/NER/jt2 Date of Issuance 6/28/2010
Decision 10-06-047 June 24, 2010
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Order Instituting Rulemaking to Consider Smart Grid Technologies Pursuant to Federal Legislation and on the Commission's own Motion to Actively Guide Policy in California's Development of a Smart Grid System. |
Rulemaking 08-12-009 (Filed December 18, 2008) |
DECISION ADOPTING REQUIREMENTS FOR SMART GRID DEPLOYMENT PLANS PURSUANT TO SENATE BILL 17 (PADILLA), CHAPTER 327, STATUTES OF 2009
TABLE OF CONTENTS
Title Page
DECISION ADOPTING REQUIREMENTS FOR SMART GRID DEPLOYMENT PLANS PURSUANT TO SENATE BILL 17 (PADILLA), CHAPTER 327, STATUTES OF 2009 2
1. Summary 2
2. Background 5
2.1. Recent Procedural History 6
2.2. Pursuant to SB 17, This Decision Adopts Policies Pertaining to Smart Grid Deployment Plans with the Input of the CEC and the ISO 8
2.3. Access to Information and Privacy Protections 10
2.4. Policies Pertaining to Functionality and Interoperability Standards Await Action by Standard Setting Bodies 11
3. Issues before the Commission Pertaining to Use and Content of Deployment Plans 16
3.1. How Should the Commission use Smart Grid Deployment
Plans? 17
3.1.1. Position of Parties 18
3.1.2. Discussion: Deployment Plans Can Set Smart Grid Baseline and Guide Investments 21
3.2. What Elements Must a Smart Grid Deployment Plan Have? 22
3.3. What Should the Smart Grid Vision Statement Include? How Should the Vision Statement be Structured? 30
3.3.1. Position of Parties 32
3.3.2. Discussion: Vision Statement Should Present a Vision of Smart Energy Markets, Smart Consumers and a Smart Utility 33
3.4. What Should the Deployment Baseline Include? 37
3.5. What Should the Smart Grid Strategy Include? 43
3.5.1. Position of Parties 43
3.5.2. Discussion: Smart Grid Strategy Should Provide
Direction and Demonstrate Consistency with SB 17
and GO 156 Goals 47
3.6. What Should be in the Grid Security and Cyber Security Section of the Deployment Plan? 49
3.6.1. Position of Parties 50
3.6.2. Discussion: Deployment Plans Should Address the Security of Smart Grid 58
3.7. What Should be in the Smart Grid Roadmap? 63
3.7.1. Position of Parties 63
3.7.2. Discussion: A Roadmap Can Help Identify How Technology Deployment Aligns with Policy and Statutory Deadlines 64
3.8. What Should the Section on Cost Estimates Include? 65
3.8.1. Position of Parties 65
3.8.2. Discussion: Smart Grid Deployment Plans Should Include Cost Estimates 68
3.9. What Should the Section on Benefits Include? 69
3.9.1. Positions of Parties 70
3.9.2. Discussion: Smart Grid Deployment Plans Should Assess All Benefits 74
3.10. What Metrics Should Be Included in the Deployment Plans? 75
4. Other Issues Pertaining to Deployment Plan and SB 17 that Require Resolution at this Time 85
4.1. How Should the Commission Consider/Approve Deployment Plans? 85
4.2. How Should the Commission Review Proposed Revisions to Deployment Plans? 89
4.2.1. Positions of Parties 89
4.2.2. Discussion: Commission Will Update Procedure Following Review of Initial Deployment Plans 93
4.3. How Should the Commission Review/Consider Specific Smart Grid Investments? 94
4.3.1. Positions of Parties 94
4.3.2. Discussion: Application or GRC Offer Appropriate Procedures for Reviewing Smart Grid Investments 95
4.4. What Reports Should the Commission Require Pertaining to Smart Grid Investments? When Should They be Filed? 95
4.4.1. Positions of Parties 95
4.4.2. Discussion: Annual Reports Are Needed to Prepare An Annual Report to Legislature 99
4.5. Should the Commission Set a Demarcation Point for Utility Investments 102
5. Comments on Proposed Decision 109
5.1. Comments on Deployment Plan Requirements and
Procedures 110
5.2. Demarcation Point 115
5.3. Comments Concerning Security, Privacy and Interoperability Issues 116
6. Assignment of Proceeding 122
Findings of Fact 122
Conclusions of Law 131
ORDER 138
Attachment A - Senate Bill No. 17, Chapter 327
DECISION ADOPTING REQUIREMENTS FOR SMART GRID DEPLOYMENT PLANS PURSUANT TO SENATE BILL 17 (PADILLA), CHAPTER 327, STATUTES OF 2009
1. Summary
This decision provides Pacific Gas and Electric Company, San Diego Gas & Electric Company, and Southern California Edison Company with the guidance needed to file Smart Grid Deployment Plans with this Commission by July 1, 2011.
As the Commission stated in Decision 09-09-029, modernizing the electric grid with additional two-way communications, sensors and control technologies, key components of a Smart Grid, can lead to substantial benefits for consumers. A Smart Grid can enable the integration of higher levels of renewable energy, energy storage, and, eventually, electric vehicles, at a lower cost to consumers. A Smart Grid can also empower consumers by helping them understand and control their energy use, thereby facilitating their participation in demand response programs and helping them to use energy more efficiently. Greater monitoring and automated controls can also reduce the frequency and duration of outages. Many of the advantages of a Smart Grid will contribute to reducing greenhouse gas emissions. It is imperative that Smart Grid investments deliver these benefits to the utilities' customers.
The California legislature and Governor have enshrined the importance of modernizing the state's electric grid through the enactment of Senate Bill (SB) 17 (Padilla), signed into law on October 11, 2009. SB 17 states that "[i]t is the policy of the state to modernize the state's electrical transmission and distribution system to maintain safe, reliable, efficient, and secure electrical service, with infrastructure that can meet future growth in demand" and achieve purposes specified in the law. SB 17 further requires the Commission "by July 1, 2010, and in consultation with the State Energy Resources Conservation and Development Commission (Energy Commission), the Independent System Operator (ISO), and other key stakeholders, to determine the requirements for a smart grid deployment plan consistent with the policies set forth in the bill and federal law."1
Pursuant to SB 17, this proceeding, in consultation with the Energy Commission and the ISO and other key stakeholders, sets the requirements for Smart Grid Deployment Plans. This decision requires that utilities follow a common outline in preparing their Smart Grid Deployment Plans. The outline consists of eight topics as follows:
1. Smart Grid Vision Statement;
2. Deployment Baseline;
3. Smart Grid Strategy;
4. Grid Security and Cyber Security Strategy;
5. Smart Grid Roadmap;
6. Cost Estimates;
7. Benefits Estimates; and
8. Metrics.
In addition, this decision sets requirements for each of these sections concerning the topics that the Smart Grid Deployment Plans must address, the information that the deployment plans must provide, and how the deployment plans must link each section and topic back to the policies set forth in SB 17 and in relevant federal law. Furthermore, we anticipate that workshops hosted by the Energy Commission concerning research on "Defining the Pathway to the Smart Grid of 2020" and workshops hosted by this Commission prior to the filing of the initial Smart Grid Deployment Plans will provide further opportunities for cooperation with the Energy Commission and the ISO.
The decision requires that the Smart Grid Deployment Plans present a vision of the Smart Grid consistent with legislative initiatives. The vision must address how the plans will enable consumers to capture the benefits of a wide range of energy technologies and energy management products and services that may, or may not, be provided by the utility, while protecting consumers' privacy. The vision must also discuss how the Smart Grid will help the utility meet environmental policies already adopted by statute or Commission action, and promote innovation and competition among companies developing new products and services.
The decision requires that the Smart Grid Deployment Plans provide a deployment baseline so that we understand the character of the California grid today and articulate a strategy for achieving the adopted goals.
The decision requires each utility to address grid security and cyber security issues in their Smart Grid Deployment Plans to ensure that these issues are considered explicitly at the planning stage. The decision, consistent with the intent of SB 17, links California concerns for grid security with the security guidelines identified as under development by the National Institute of Standards and Technology. The decision also adopts security strategy requirements and principles to guide the development of Smart Grid Deployment Plans to ensure alignment with national efforts. Further, we note that we anticipate a separate decision before the end of the year adopting privacy rules prior to the Commission ordering third-party access to customer data. A ruling will follow this decision setting a schedule for resolving privacy issues.
The decision provides a discussion of the cost and benefit procedures that the Smart Grid Deployment Plans should use to enumerate, quantify, and -- to the extent feasible -- monetize the costs and benefits of Smart Grid investments. The decision requires the plans to follow cost-effectiveness analysis to meet legislatively mandated goals in a cost effective way and requires the presentation of the "business case" analysis for other components of the Smart Grid.
The decision also finds that the Smart Grid Deployment Plans should include metrics that permit the assessment of progress, but the adoption of specific metrics requires additional work by parties. A subsequent decision later this year will endorse specific metrics for inclusion in Smart Grid Deployment Plans and other reports.
This decision also proposes to review the initial deployment plans in a single proceeding. Subsequent utility requests to make specific Smart Grid-related investments, however, would occur in utility-specific proceedings where the reasonableness of particular Smart Grid investments can be determined.
Finally, this decision requires that the utilities file annual reports on their Smart Grid activities, with the first annual reports due on October 1, 2012.
1 Chapter 327, Statutes of 2009.
