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November 05, 2012

Illinois Utility's Smart Grid Struggle Shows Need for Clear Policies



Illinois Commonwealth Edison has proposed to upgrade its electrical grid, but the plan is in limbo and shows the need for cost recovery policies at utilities, according to a study by Vermont Law School.

Known for its focus on environmental law, Vermont Law School says the new policies are needed nationwide if the smart's grid's reliability and environmental benefits are to be realized.

ComEd has a $2.6 billion plan to modernize its electrical grid, according to TMCnet. The controversy may land in court and could lead to a delay of the smart grid implementation for several years. The company wants to add four million smart meters and as well as more high-tech equipment. With this, there would no longer be a need for meter readers, consumers would get control over electricity use and experience fewer outages.

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"While ComEd has successfully implemented a smart grid pilot and subsequently developed a full scale, smart grid implementation plan consistent with Illinois law, the ongoing controversy between the Illinois Commerce Commission, ComEd and the Illinois Legislature on cost recovery threatens further progress," Kevin Jones,  director of the law school’s Institute for Energy and the Environment, said in a statement. "As states such as California and Vermont have demonstrated, clear state policies will speed smart grid implementation. In Illinois, uncertainty over state cost recovery policy is delaying the benefits for ComEd customers and the environment."

In addition, the open struggle on cost recovery policy by ComEd for its smart grid pilot programs influenced the perception of the company by the public.

"The utility has faced significant challenges in reaching a balanced cost recovery approach that ComEd, state regulators, the Illinois Legislature and the courts could all accept," Jones added. "ComEd's experience suggests that something as far-ranging in impact as smart grid deployment requires a solid policy foundation based on clear policy leadership from state legislators and regulators. When cost recovery is uncertain and subject to expensive regulatory lag, utilities may observe ComEd's experience and decide against making the types of investments required to achieve the full benefits of the smart grid."

As part of the ongoing study, Vermont Law is reviewing legal, policy and regulatory issues over upgrading the U.S. electric system with smart grid technology. It is focusing on Commonwealth Edison, Central Vermont Public Service Company, Pecan Street Project, Sacramento Municipal Utility District, Salt River Project and San Diego Gas and Electric.

Jones is a part chairman of the Vermont Public Service Board, and represented the U.S. EPA in appellate litigation, according to a law school biographical sketch. He is also a director of the Vermont Energy Investment Corporation.




Edited by Amanda Ciccatelli
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