What if you could improve the infrastructure on the electric grid to make it smarter? In 2008, Xcel Energy embarked on an ambitious pilot program designed to do just that in Boulder. Called SmartGridCity, the program was intended to add digital tracking capabilities to the existing electric grid, making it possible for the utility company to remotely monitor power usage across the grid, and for residents to monitor their energy use in real time.
Xcel estimated the grid would cost around $100 million. The company expected to pay about $15 million of that, hoping that interested companies would cover the rest.
Since Xcel considered SmartGridCity to be a pilot program for the entire state, not just Boulder, the utility’s share of the costs was covered by a slight rate increase for all of Xcel’s Colorado ratepayers.
But a few years into the project, Xcel’s portion of the project grew from $15 million to $44.5 million. Xcel recently declared the project finished and is looking to recover its cost overruns. Xcel asked the Public Utilities Commission (PUC) for permission to raise rates again to cover the rest of the utility’s expenses. The PUC gave Xcel permission to recover all but $16.5 million, and noted that after Xcel addressed some PUC commissioners’ concerns, Xcel would be allowed to recover the rest of the costs. Xcel says it has answered those questions and is awaiting a decision from the PUC, according to Xcel spokeswoman Michelle Aguayo.
But now that Boulder residents approved ballot measures to move the city towards exploring municipalizing the electric utility, the future of Xcel’s Smart Grid infrastructure investments lays in limbo.
In the next few months, the city will examine all the components of Xcel’s grid that would need to be condemned and acquired as part of the municipalization process, including the components of SmartGridCity.
One of the components the city will have to evaluate is the 200 miles of fiber-optic cable Xcel spent roughly $20 million installing. The cable was intended to help the SmartGridCity instruments send data back to Xcel. There is a chance, says Jonathan Koehn, the city’s regional sustainability coordinator, that the city might not choose to condemn the fiber-optic cable, or that the city might condemn the fiber-optic cable but use it for something other than transmitting utility data.
“There are certainly other applications for a fiber backbone. Other communications, other options besides just transmitting utility data,” Koehn says. “We want to explore not just is the technology available and useful for, like I said, transmitting customer data on energy use, but are there other applications that we would consider? In which case, we may consider acquiring those portions of the system.”
As part of the SmartGridCity initiative, Xcel installed monitoring devices on 4,500 transformers and four substations that serve Boulder and installed 23,000 “smart meters” in Boulder, Aguayo says. The old meters recorded electricity use only once a month, providing Xcel with just 12 points of data per meter per year, but the meters Xcel installed as part of SmartGridCity take readings once every 15 minutes, which comes out to thousands of readings per meter per year. In addition to the $20 million the utility spent on fiber optics, Xcel also spent millions of dollars on data management and software that could interpret the raw data and turn it into a useful form, says Leslie Glustrom of Clean Energy Action, a nonprofit dedicated to clean-energy issues.
Glustrom criticizes the entire system, saying the meters Xcel installed on Boulder homes were out-of-date, and that the fiber-optic system was overkill and unnecessary. She says Xcel blundered when they chose the meters, made by Landis & Gyr, to install on Boulder homes.
“These meters were absolutely not the most current models,” Glustrom says. “They couldn’t be upgraded remotely. … So whenever Xcel wanted to upgrade them, they would have to send someone out.”
Steve Pomerance, a former Boulder city council member, says the meters only allow Xcel to get specific energy readings throughout the day. They cannot actually alter energy use, Pomerance says.
“It was known at the time that these meters were obsolescent,” Pomerance says. “These meters had no value in terms of actually managing energy. All they could do was time-of-day metering.”
It wasn’t just the meters that were out-of-date, Pomerance says, it was the whole system — the meters, the fiber-optic network installed to transfer metering data back to Xcel, and the software Xcel purchased to analyze said data and convert it into data digestible for consumers.
“The whole system is out of date. As far as I know, nobody is using this kind of system anymore,” Pomerance says. “Dedicated fiber optics — nobody’s doing it. Everybody is doing it over the Internet, wirelessly.”
Indeed, Xcel is now running a small pilot program using different monitoring equipment (manufactured by EnergyHub) that doesn’t connect to the fiber-optic network at all. Instead, all information exchanged between the meter and Xcel is transmitted through the home’s wireless network. In an FAQ distributed to the participants in the pilot program, one of the questions asks if customers will be able to monitor and control the EnergyHub device from the Xcel Energy My Account portal, the online portal that allowed customers to access the data collected using the fiber-optic network. Xcel gives a terse answer: “No.”
As Boulder moves forward and explores the municipalization process, the city will have to decide whether the SmartGridCity components are worth acquiring from Xcel. Koehn says that might not include the Smart Grid components, and the city might not agree with Xcel over how much the components are actually worth.
“That’s one of the possibilities, that we could really parse out the components of the Smart Grid system that really have value to the consumer, versus those that have the biggest benefit to the utility,” Koehn says.
“It’s easy [for Xcel] to say that they have cost overruns of $44.5 million; that does not correlate to the value of the equipment,” he says.
The city has yet to really dig deeply into the condemnation process — Boulder only recently retained lawyers to help with the process — and, pending further investigation, the city has assessed a value of zero to the Smart Grid.
“We are rolling up our shirt sleeves and valuing each aspect of what Xcel has in place right now. … We are in the process of starting to figure out the steps we will take to value all of their assets, including the existing components of the Smart Grid,” says city spokeswoman Sarah Huntley.
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