$250M for Not So ‘Smart’ Grid Improvements

$269 million goes to rural utilities, but very little of it is actually for smart grid.

Photo Credit: Tri-State Generation and Transmission Association

by Katherine Tweed
September 12, 2012

The problem with the term "smart grid" is that everyone defines it differently. Like other infrastructure terms co-opted by politicians, they love to insert it in places it doesn’t apply.

Take the recent announcement from the U.S. Department of Agriculture, which was headlined “Secretary Vilsack Announces USDA Has Reached Its Goal to Fund $250 Million in Smart Grid Improvements.”

That’s not nearly as much as the more than $4 billion that was handed out as part of the stimulus funding, but it sure sounds like some real money. And it is -- it’s just mostly not for smart grid, at least in the sense that most people would define it.

About $27 million of the $269 million is for smart grid projects in rural utilities, some of which are just extensions of previous smart grid investments, such as advanced metering. The $27 million also appears to mostly be going to pilots, rather than implementation of increased intelligence on the grid and additional analytics back in the control center.

The announcement illustrates the problem with the term "smart grid." Just three-and-a-half years ago, when the USDA announced $356 in loans to rural utilities, the word "smart" was nowhere in the press release. Of course, depending on the technology installed in many of the updated substations that were funded as part of those loans, some projects could potentially be considered "smart."

Friday’s announcement makes a clearer distinction, noting that most of the money is going to transmission projects and updating distribution lines.

Many people in utility circles eschew the phrase "smart grid," as it implies that it is a contained project that has a specific endpoint or that there was no intelligence on the grid before the phrase was invented. Instead, constant improvements to the electrical grid have always been in progress, and the fact that some of those are labeled “smart” is just a matter of semantics.

Even though the bulk of the money is going to transmission lines, the upgraded infrastructure will, in part, support increase renewable generation, such as within the territory of Tri-State Generation and Transmission Association. The power company has various large-scale renewable projects, including a 30-megawatt solar facility in northeastern New Mexico and a 51-megawatt facility in east-central Colorado. For Tri-State, new transmission lines are critical to deliver the renewables where the power is needed. The utility will also pilot real-time reliability software and predictive analytics for assets.

The small scale of smart grid projects in this sector is unsurprising, as rural utilities don’t have the funds to pony up without proof of payback. Many of the ongoing DOE projects that were funded by stimulus grants could provide data that could inform the investments that rural municipal and cooperative utilities make.

A recent survey of municipal utilities conducted by GTM Research found that more than half of those surveyed were still in the planning and investigative stages of smart grid technologies, with a heavy lean toward smart meters. Many rural cooperatives and munis are waiting for prices to continue to drop on everything from communications to meters.

Here is the USDA's list of loan recipients:

Colorado/ Nebraska/ New Mexico/ Wyoming

Kansas

Minnesota

Missouri/Iowa

North Carolina

Wisconsin