by Jeff St. John
March 05, 2020

ComEd, Illinois’ dominant utility, has already invested billions of dollars per year over the past decade into a state-of-the-art smart grid infrastructure. Now, the chief subsidiary of Chicago-based Exelon is laying out plans to invest billions more to harden and bury power lines, install more switches and voltage control systems, and continue work on microgrids, volt/VAR optimization and other grid edge technologies. 

ComEd’s $9.53 billion capital plan for 2020 through 2023 is slightly higher than the $9.51 billion it spent from 2015 to 2018, the height of its smart grid spending, Crain’s Chicago Business reported. And its addition of more than $5 billion to ComEd’s rate base of capital assets will increase customer rates in future years, even as they decreased slightly this year, a fact that’s drawn opposition from ratepayer watchdog groups. 

Under the landmark 2011 state law that set its $2.6 billion smart grid plan in motion, there’s little state regulators or stakeholders can do to alter that plan. That’s because the law allows ComEd to file its plans under formula rate updates which give the Illinois Commerce Commission little power to change them beyond reviewing spending after the fact for impropriety or waste. 

But with ComEd and Exelon under federal investigation for alleged corruption related to hefty lobbying work in the state capital, it’s a tricky time to be demanding more money. Exelon warned investors last month that it may face civil or criminal penalties related to the investigation, which has seen FBI agents raid the homes and offices of several lobbyists and associates.

Since it broke in October, the scandal has cast a pall over ComEd’s relationship with state lawmakers and clean energy advocates, sinking its attempt to extend the existing formula rate structure for another decade. It also derailed progress with state lawmakers and clean energy advocates on a new energy bill, the Clean Energy Jobs Act (CEJA), that could put Illinois on a path to 100 percent clean energy by 2050. 

It’s likely that CEJA will be a front-burner issue as the legislature returns to session this week. In the past months, the legislative coalition behind the bill and Governor JB Pritzker have called for moving quickly to craft a bill from competing proposals in the state capital. There’s some urgency to the effort, not only to set Illinois’ carbon and clean energy efforts in motion but also to protect Exelon from a December decision from the Federal Energy Regulatory Commission that could undercut revenue for clean and nuclear energy in mid-Atlantic grid operator PJM’s capacity market

Making the case for staying the course on grid investments

ComEd CEO Joseph Dominguez has remained silent on the lobbying investigation in public comments, beyond saying the company is cooperating with investigators. But he’s continued to make a public case for ComEd’s capital spending as a prudent investment in reliability measures as both effective and a way to prepare the grid for CEJA's aggressive goals. 

Terry Donnelly, president and chief operating officer of ComEd, reiterated those points in an interview last week, starting with the utility’s smart grid performance over the past decade. “Where are we now? I’d say we’re in pretty good fighting weight, and with some benefits that are really unparalleled in the industry."

Specifically, ComEd’s investment in distribution automation technology from Chicago-based S&C Electric Company and other vendors has allowed it to isolate and limit outages on critical circuits with increasing precision, he said. Investments in a “self-healing grid," along with more prosaic (and expensive) grid reinforcement and upgrades, have helped improve ComEd’s reliability by 70 percent since 2012 and by 80 percent in the city of Chicago, improvements that “pretty much don’t exist in the industry,” he said. 

ComEd has fully equipped its 4.2 million customers with smart meters, completing the deployment it launched in 2012 with Silver Spring Networks, now Itron. That’s allowed it to roll out smart thermostats and peak-time savings programs to hundreds of thousands of customers and support other time-of-use rate structures as well as inform the hundreds of millions of dollars per year it invests in energy efficiency.

ComEd and fellow Illinois investor-owned utility Ameren have been forced to show that their smart grid investments have paid off. Under a then-unusual requirement in the 2011 energy law, both utilities were forced to meet annual targets for reducing outages, reducing “nontechnical losses” from stolen or unbilled electricity, sharpening the accuracy and timeliness of customer billing, and instituting other improvements that smart meters and distribution automation systems are meant to provide or face financial penalties. 

Still, pieces of ComEd’s system remains in need of upgrades, including from 30,000 to 85,000 utility poles out of more than 1.3 million across its system, and about 3,000 miles of “problematic underground cable” installed in the 1970s and early 1980s that will be replaced to improve reliability, on top of about 4,500 miles already completed, Donnelly said. 

These projects, which make up roughly half of the capital plan’s $2.2 billion per year budget, are largely aimed at modernizing ComEd’s existing infrastructure. But its capital plan also includes more than $370 million this year for infrastructure improvements such as LED streetlights and new substations to support data centers seeking the region’s relatively low-cost and carbon-free electricity, as well as access to state incentives passed last year. 

Hundreds of millions of dollars more are targeted for “continued modernization, in terms of additional smart switches, advanced relays, and technology to get the grid ready for renewable integration,” Donnelly said. For example, ComEd plans to spend about $100 million this year on expanding its existing volt/VAR optimization (VVO) system, which uses smart meter and grid sensor data to fine-tune voltages across key circuits. ComEd has invested about $500 million over the past decade to enable VVO on about 3,000 feeder circuits, achieving 1.5 to 2 percent savings in reduced over-voltages as a result, Donnelly noted.  

The utility is also planning to add about 5,000 more automation devices to the 4,000 already deployed in its smart grid program to “fully automate [the] system to where we want it to be.” That includes not just limiting the scope of outages caused by weather or accidents but also managing the increased amount of distributed generation coming onto its grid, which can cause their own predictable grid disruptions, he said.

Next steps for a renewable and distributed grid 

Illinois’ Future Energy Jobs Act, passed in late 2016, qualified Exelon’s Clinton and Quad Cities nuclear power plants to receive hundreds of millions of dollars per year as zero-carbon resources. Some business groups and ratepayer advocates opposed this move as a corporate handout but others supported it as a way to maintain carbon-free resources.

ComEd gets 92 percent of its annual electricity from such carbon-free resources, Donnelly noted. But of that, only 7 percent comes from non-nuclear renewable energy resources, well below the 25 percent by 2025 targets set by the 2016 legislation. 

That share of renewables is set to grow under FEJA, which set a target of 3,000 megawatts of solar by 2025, up from a mere 55 megawatts when it was passed in 2017. The incentives to drive that growth included utility-scale projects via competitive bidding and a complex “adjustable block program” offering renewable energy credits for community solar, large distributed projects and small-scale solar systems. 

The incentives have helped drive growth in the Illinois solar space, although uneven uptake across these categories has slowed the community solar pipeline, as we reported at GTM Squared last month. ComEd has between 300 and 400 megawatts of solar projects coming online this and next year, compared to about 40 megawatts in 2017, Donnelly said. 

On the distributed side, ComEd now has more than 13,000 applications for residential solar systems on its grid. That's not a lot compared to solar-heavy states like California, Arizona or Hawaii, but a big jump from a mere 900 net-metered customers interconnected of 2017. 

The Clean Energy Jobs Act is likely to create a whole new set of state mandates, programs and incentive structures to encourage an even more aggressive rollout of renewable energy in ComEd territory, both utility-scale and behind-the-meter. 

“We definitely support CEJA’s goal to reduce air pollution and build out a ComEd system that meets the needs of our customers,” Donnelly said. But like some other investor-owned utilities, ComEd has opposed the expansion of net metering to its customers, arguing that the program shifts costs onto customers who don't have solar.

Building on the Bronzeville microgrid

ComEd has been taking a multifaceted approach to the challenge of integrating rooftop solar on its distribution circuits, ranging from upgrades to its advanced distribution management system, to offering rebates to non-residential solar customers to install smart inverters that provide more control over how they interact with the grid. 

ComEd and the state of Illinois have also focused heavily on the promise of distribution grid-integrated microgrids to manage distributed energy resources (DERs) at scale. The utility’s Bronzeville microgrid project combines solar PV, batteries, grid controls and a microgrid controller platform, developed with the U.S. Department of Energy and various technology partners. 

The $25 million project has already shown it’s capable of delivering power to the critical facilities it’s connected to, as well as a nearby school and low-income housing development. Now ComEd is finalizing requests for proposals to add 7 megawatts of third-party, on-site generation to the site by early next year and to integrate with a nearby, independently built microgrid at the Illinois Institute of Technology. 

This microgrid work has been a central part of ComEd’s plans for integrating DERs at the distribution-grid scale, Donnelly noted.

As part of that work, the utility has installed high-fidelity sensors called phasor measurement units, commonly used on transmission grids, to gain more real-time awareness and control over the local disturbances that can occur when DERs are supplying a majority of power to an islanded section of the power grid. 

“When disturbances happen on the system, you have to increase the speed of how everything operates so renewables can stay online, not trip offline — or [so that] those that trip offline can be localized to where the disturbance is.”