Smart Grid Growing Pains

by John Rubino on August 23, 2010

Smart grid is generally seen as a “here and now” alternative energy source, something that we know how to do and just have to implement. But Colorado utility Xcel’s experience with its Boulder “Smart Grid City” program points to a longer, more complicated road. Consider:

SmartGridCity Meltdown: How Bad Is It?

When reports of cost overruns at Xcel Energy’s SmartGridCity emerged earlier this year, we asked the question: How bad are the problems with SmartGridCity?

Now, after slogging through a series of documents filed recently with the Colorado Public Utility Commission, I can tell you this: Whatever the reality, it doesn’t look good. Here are some of the key points pulled from filings regarding Xcel’s request for a Certificate of Public Convenience and Necessity (CPCN). Please keep in mind that these points and allegations come from a variety of sources, including consumers and state staffers as well as Xcel officials:

  • Xcel didn’t file a CPCN before the project started in 2008 because they didn’t think they needed to for what they deemed a research project
  • Without a CPCN there was no opportunity for the PUC or other interested parties to consider capping costs to protect ratepayers
  • A traditional cost-benefit analysis wasn’t performed prior commencing the project
  • The original $15.3 million project estimate soared to $27.9 million and at last report to $44.8 million due to higher costs of permits, tree trimming, software and negotiations; and to the amount of rock they had to drill through for fiber optic lines.
  • Several key Xcel project executives left early last year
  • Xcel asked the PUC last year to OK a rate increase to recoup some of its project costs. That’s when the commission decided Xcel needed a CPCN to prove the project is prudent and in the public interest
  • As the project nears completion, only 43% of Boulder residents have smart meters, which the company says allows a side-by-side comparison
  • The metering system is not providing as many in-home benefits anticipated as part of a Smart Grid program

We don’t know enough to say who’s at fault – if anyone… Or who should have seen this coming – if anyone… Or how many of the complaints are just naysayers doing what they do … Or which missteps can be attributed to a pioneering initiative that was intended all along as an experiment. An administrative law judge in Colorado gets to make those decisions.

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