Environmental Valuation & Cost-Benefit News

Link: http://www.coloradodaily.com/cu-boulder/ci_14346139

Xcel Energy has begun charging customers across the state to recoup some of the skyrocketing costs the company has incurred building its smart grid project in Boulder.

In response, the Colorado Public Utilities Commission has decided to take a larger role in regulating Xcel's "SmartGridCity," which commissioners say will increase the transparency of the project.

The smart grid already allows Xcel to read meters in Boulder remotely, route power around bottle-necked lines and detect power outages without relying on people calling in. Ultimately, the finished system will also allow customers to see real-time data reflecting their energy use and then make energy-conserving decisions about how household appliances draw power and when.

When Boulder was chosen for the smart grid project in March 2008, Xcel Energy projected that capital expenditures for the SmartGridCity would be about $15.3 million. By May 2009, Xcel had changed its projected cost to $27.9 million, and now the company believes the total bill will reach $42.1 million, not including the costs of operating and maintaining the new grid.

A large part of the increased price tag is associated with the unanticipated difficulty of constructing the system's fiber network.

"The company had to install far more underground fiber than initially projected, substantially increasing the cost ..." Xcel officials wrote in a document filed with the utilities commission last May. "We also ran into unexpected construction conditions such as having to drill through granite with diamond-tipped drill bits and remove large boulders with cranes and dump trucks ... ."

On Dec. 4, the Public Utilities Commission approved Xcel Energy's request to raise customers' rates 6.5 percent. The majority of the increase will be used to pay for Comanche 3, Xcel's new coal-fired unit at its power plant outside of Pueblo.

But $11 million from the rate increase -- which went into effect Jan. 1 -- is earmarked to cover costs associated with Boulder's smart grid, including capital investment, taxes and operation and maintenance fees for 2009 and 2010, according to Karen Hyde, Xcel's vice president for rates and regulatory affairs.
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From the beginning, Xcel planned to bring on industry partners that would share the cost of the project, which will likely exceed $100 million, including operation and maintenance. Now, Xcel has seven "consortium" members, but it's not clear what their financial contribution will be.
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"SmartGridCity has always been a research and development process," [a spokesperson for the utility] said. "It's a living and breathing laboratory, and we've always said all along that there's parts that will work and parts that won't work."
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According to Jeff St. John at www.earth2tech.com:
Some municipal utilities have installed fiber optic lines to homes and businesses and are now looking at providing smart meter connectivity through them — but those investments have typically been justified by including the potential to sell video, data and voice communications over the same lines. Examples include Tacoma, Wash. municipal utility Tacoma Power, which has turned to vendor MuNet to hook up some 17,000 smart meters via already-laid fiber optic lines, and Chattanooga, Tenn.. where municipal utility EPB won a $111.6 million Department of Energy smart grid grant to build a $200 million fiber optic, teaming up with Tantalus for the smart meters and Alcatel-Lucent for the fiber optic network.

In late 2009 Xcel Energy filed for an electricity pilot pricing program with the Colorado Public Utilities Commission (CPUC) to coincide with implementation of SmartGridCity™. The pilot will include no more than 2,000 customers and is designed to provide customers with better price signals so they can make informed decisions about their energy use. The program is expected to produce reductions in consumption during on-peak periods or to shift some consumption to off-peak periods. Residential customers in Boulder who have a smart meter can choose to participate in the pilot, which will run until Dec. 31, 2011.

The program will allow participants to opt into a Time-of-Use (TOU) rate, a Critical Peak Pricing (CPP) rate or a Peak Time Rebate (PTR) rate. The TOU rate divides the day into on-peak periods, when energy costs more and off-peak periods, when energy costs less. The CPP rate builds on the Time-of-Use rate. If needed, the Critical Peak Pricing can be invoked for capacity or economic reasons and increase the price significantly above the on-peak price. The Peak Time Rebate encourages customers to reduce their usage below what they would normally use at a Critical-Peak time. Customers receive a credit for the energy saved on their bill, based on the CPP pricing. Customers will be notified of a Critical-Peak day the day before it is to take effect.

The proposed rates, in cents per kilowatt-hour are as follows:
Time of Use (TOU) Price
Summer Off-Peak Charge - $0.04081
Winter Off-Peak Charge - $0.04081
Summer On-Peak Charge - $0.17921
Winter On-Peak Charge - $0.06202
Critical Peak Pricing (CPP)
Summer Off-Peak Charge - $0.04081
Winter Off-Peak Charge - $0.04081
Summer On-Peak Charge - $0.12122
Winter On-Peak Charge - $0.05179
Summer Critical Peak Charge - $0.53713
Winter Critical Peak Charge - $0.34924
Peak Time Rebate (PTR)
Summer Peak Time Credit - $0.48612
Winter Peak Time Credit - $0.29823

By Laura Snider
FOR FULL SOTRY GO TO:
http://www.coloradodaily.com/cu-boulder/ci_14346139
Colorado Daily Camera www.coloradodaily.com
February 6, 2010

Xcel’s SmartGridCity Can Thank Fiber For Ballooning Costs
By Jeff St. John
http://earth2tech.com/2010/02/09/xcel%E2%80%99s-smartgridcity-can-thank-fiber-for-ballooning-costs/
Earth2tech.com http://earth2tech.com
February 9, 2010

Xcel Energy files pricing pilot for SmartGridCity
http://www.xcelenergy.com/Minnesota/Company/Newsroom/Pages/2009-11-03-SmartGridCity.aspx
Xcelenergy www.xcelenergy.com
November 3, 2009