PG&E smart grid project first to be approved by FERC using new policy


Jon Wellinghoff,
Chairman, FERC
Washington, DC, U.S.A. — (METERING.COM) — December 18, 2009 – A smart grid project from Pacific Gas and Electric Company (PG&E) has become the first to be approved by the Federal Energy Regulatory Commission (FERC) under its new policy on priorities for the development of smart grid standards.

Using the policy the FERC agreed that PG&E can recover a portion of its costs in transmission rates for a regional project that will ensure electric power reliability for consumers and integrate variable renewable resources into its system.

PG&E, with neighboring utilities and the Western Electricity Coordinating Council, is developing a $50 million synchrophasor project that would provide real time data on key transmission system operating measurements in the region. The WECC has sought $25 million in grants for one half of PG&E’s portion of the project from the Department of Energy under the American Recovery and Reinvestment Act of 2009. PG&E will seek recovery of the remaining costs in a future transmission rate filing. The decision also allows PG&E to recover 100 percent of abandoned plant costs if the project is abandoned for reasons beyond the utility’s control.

“One goal of our smart grid policy is to protect consumers while providing early moving utilities that invest in smart grid technologies with the cost recovery assurances they need to take that important first step,” said FERC chairman Jon Wellinghoff.

The FERC’s smart grid policy, adopted in July, provides guidance regarding smart grid development focusing on key standards to achieve interoperability (see FERC adopts policy on development of smart grid standards). The policy also includes an interim rate policy that allows the recovery of FERC jurisdictional smart grid related costs.

PG&E’s project will help collect information on how to reliably and securely make use of synchrophasor data and communications to improve the reliability, security and efficiency of the electric grid, and thus meets the criteria set out in the Smart Grid Policy Statement. However, the FERC cautioned that future applications of synchrophasor data and communications in real time operations will require a more detailed demonstration of no adverse impacts on reliability or cyber security.