Blue hen state

Delaware's smart grid progress

Published In: Intelligent Utility Magazine November/December 2009

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BASED ON ITS MODEST GEOGRAPHY, DELAWARE MIGHT BE DISMISSED BY some in the greater U.S. business equation, but omitting the state in any serious business discussion constitutes a considerable oversight. Delaware actually maintains a rather lofty business profile-and not just because it's home to leading global businesses such as DuPont. The state's inviting business/incorporation legal structure, for example, has long been a magnet for major companies to incorporate there, regardless of how close to the state the companies' actual offices and headquarters may be.

And today, with the developing smart grid becoming more established among electricity providers everywhere, Delaware may well represent no less than a potentially prime influence and trendsetter for the nation.

Among the state's many interesting facets that are interlaced with its electric service is that Delaware consists of only three counties: New Castle, Kent and Sussex, north to south. Much of the electricity in the two southern counties is provided by the 80,000-meter Delaware Electric Cooperative.

New Castle County, the northern- most and by far the most densely populated-and incorporating the communities of Wilmington, New Castle and Newark-is served primarily by the one and only investor-related utility in the state, Delmarva Power, which is itself an electric delivery subsidiary of Pepco Holdings Inc. Delmarva also serves numerous incorporated areas in Kent and Sussex counties. The coop, in turn, serves unincorporated areas in Delaware's two southern counties.

Additionally, scattered across the state are municipal power authorities in the communities of New Castle, Newark, Middletown, Clayton, Dover, Smyrna, Milford, Seaford and Lewes.

COMMISSION ACTION

Delaware's Public Service Commission, with five gubernatorial-appointed commissioners, oversees multifaceted utility and other public infrastructure functions, but regulates the rates of only Delmarva among the state's electric delivery companies. The cooperative and the municipal power providers are essentially self regulated.

Public Service Commission staff members say that, although they are responsible for regulating the rates of just one utility, they avoid overstepping.

But it can be a fine line. One example involves the potential that the commission could decide to mandate parameters for the regulated utility, Delmarva, that do not apply to out-of-state competitors that are allowed to sell energy and services in
Delaware under state law enabling retail energy competition.

"Potentially, we're looking at dynamic pricing," said Bruce Burcat, executive director for the Public Service Commission. "We've opened a docket looking into determining how we should potentially price electricity at various points during the day.

"So at peak time, rather than just advising people they should be reducing usage, they would have some pricing incentives to reduce the peak by deferring a lot of their usage to other times."

And the commission may eventually decide to leave it up to the consumer-that is, in this case, only Delmarva's consumer-whether or not to select dynamic pricing from among a range of choices.

If, however, the commission were to mandate dynamic pricing at Delmarva, that could affect the utility's competitiveness against out-of-state entities that are not subject to commission regulations.

SUSTAINABLE GENERATION

This also highlights other important regional factors. Constraint within crowded transmission routes in the eastern United States is an ongoing issue, and the PJM Interconnection is moving forward with multiple transmission-related efforts at the greater regional transmission organization level-including the Mid-Atlantic Power Pathway, development of which is regarded as essential for Delaware and the region.

Delmarva is also involved in an agreement to eventually distribute power from a proposed offshore wind farm that has yet to begin construction, and yet another portion of its sourcing is to be derived from recently negotiated onshore wind contracts. Delaware Electric Cooperative has wind generation in its portfolio through its approximately 16 percent ownership interest in Old Dominion Electric Cooperative, a generation and transmission coop.

Finally, other current sources for Delaware electric utilities run the gamut from coal to natural gas to nuclear, plus future innovative clean energy plans and aspirations that rank among the most forward-looking in the nation.

"The consumer has to be the first responder for sustainable energy," said state Sen. Harris McDowell, who chairs the energy and transit committee in the Delaware Senate. McDowell views smart meters as potential tools of consumer empowerment.

''Smart meters should serve as 'ledgers-of-account' for sustainability,'' McDowell said. ''Sustainability-in the form of energy efficiency, energy conservation and customer-sited renewables-is our largest resource. It's our cheapest resource. It's our cleanest resource. And it's the one that's almost impossible to export, in terms of jobs.''

Putting teeth in his sustainable philosophy, McDowell helped engineer recently enacted state legislation that encourages Delaware utilities not only to substantially augment renewable resources within their portfolios, but also to take whatever measures may be required to achieve a reduction of at least 15 percent in Delaware's overall electricity consumption by 2015.

The legislative action, as intended, has prompted immediate formulation of blueprints relating directly to the question of how theory comes to grips with reality-and realistically, how the greater system advances from here to there.

''When we look at how we're going to work with the utility and 
the Delaware Division of the Public Advocate and other interests to design the rates, we have to look at it with a view of meeting the objectives of the legislation,'' said Burcat. ''I think we're going to look at a lot of the research as to what programs potentially reach different goals, because we're looking at pretty significant goals, and it's important we work with the utility to make sure it's in compliance with state law.''

That utility, of course, is Delmarva. But what about Delaware's self-regulated utilities?

COOPERATIVE PERSPECTIVE

The President and CEO of Delaware Electric Cooperative is Bill Andrew-formerly an engineer with Delmarva-who today delivers television public service messages relating to energy conservation and hosts an electricity-themed radio talk show in Delaware.

Andrew is a crusader for the coop's ''Beat the Peak'' initiative, which is pretty straightforward: when peaking energy circumstances warrant, Beat the Peak initiates an e-mail-based system calling on volunteers to cut back on their basic electric usage during specified peak hours.

Crediting Beat the Peak for saving coop members $2.6 million in 2008, Andrew projects savings approaching $4 million or more when the figures are added up in 2009.

''It's almost so simple, it's stupid,'' said Andrew. ''All I know is it works.''

Planned next for Beat the Peak are customer-alert devices designed to work based on mostly installed smart-largely smart meter-technologies.

Believing he has a finger on Delaware's electricity pulse through input from coop members as well as from anybody and everybody who calls in to his radio talk show, Andrew said, ''The most important part of the smart grid is the member, it's the end user. And we don't need to overcomplicate that.

''You can put on all the systems you want and overcomplicate things. Electricity consumers don't really care how many kilowatt-hours they're using on a daily basis or a monthly basis. More so on a monthly basis, they're concerned about how much they're paying for it.''

Andrew says consumers will take action if it means they'll not only be applying sound environmental procedures and saving energy, but also saving on their energy dollars.

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