Despite companies like Cisco (s CSCO) declaring that the smart grid sector will one day be bigger than the Internet, there’s been a series of speed bumps on the road for utilities’ plans to add digital intelligence to their power grids. Here’s one that just came across my radar: last month Hawaii’s energy regulator the Public Utilities Commission rejected a plan to expand a smart grid project, according to a report in the AP, because it planned to pass the costs of smart meter installations onto customers.
Hawaii utility Hawaiian Electric Co has been planning to build a $115 million smart grid project that would install smart meters at hundreds of thousands of residents and businesses on the islands of Oahu, Maui and the Big Island. But the PUC denied a request for Hawaiian Electric to expand testing of the technology on Oahu, reports the AP, until the utility shows the PUC an expanded smart grid plan that wouldn’t use ratepayer money for the installation of smart meters. Local consumer advocates have been concerned that the benefits of smart meters hasn’t been articulated yet.
The issue is similar to the one that emerged in Baltimore. Back in June, Maryland’s public regulator, the Maryland Public Service Commission, denied Baltimore Gas and Electric Co’s smart grid project request, which would have deployed 2 million smart meters for all of its customers, and cost an estimated $500 million over five years. The Maryland PUC said that customers were shouldering too much of the costs of the project and that the utility would need to contribute more of the funds for the project.
The big problem for the Baltimore case is that the DOE had allocated $200 million from the stimulus package for BGE’s plans, and could now revoke the funding. BGE resubmitted a proposal and asked the PUC to review it by July 30, and Smart Grid Today reports today that the DOE has agreed to wait to decide if it will revoke the funding from BGE until August 16.
Both of these cases are about utilities failing to show the benefits of the smart grid and smart meters to consumers, but at the same time raising rates to pay for the deployments. This will continue to be a fundamental problem for the smart grid.
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Image courtesy of rainy city.