A handful of cities are moving strategically to make their electric grids more secure, reliable and sustainable. That may not sound sexy even by energy industry standards, but the return on their investments gets more appealing with each dollar spent.
It might surprise you to know that cities such as Austin, Texas, Chattanooga, Tennessee, and Naperville, Illinois, are at the front of the pack. Why and how they got there and what their energy leaders are doing to build on their achievements to date is a story building behind headlines dominated by global climate talks, the U.S. Clean Power Plan and dirt-cheap energy prices.
Austin, Chattanooga and Naperville are leading because they want to better serve their customers and distinguish themselves among key stakeholders, including future customers. They’re doing it in part with a program known as PEER.
PEER, or performance excellence in electricity renewal, has been relatively slow to gain traction. But its first corporate partner -- S&C Electric Co. – has plans to target the value proposition with eyes on fresh revenues by taking the PEER business case directly to customers. As the new year begins, they will stand up cities such as Chattanooga as live examples of how local power grids can benefit.
“Until now, there has been no independent way to design, measure and verify the benefits of a smarter, more sustainable grid,” said David Chiesa, senior director of development at S&C Electric. “Now we can answer the question: What did our upgrade to a smarter system deliver for our customers? That’s what PEER delivers. It gives you the measurement tool to prove your success through third-party validation.”
PEER is the brainchild of John Kelly and Greg Rouse of the Green Business Certification Institute (GBCI), an offshoot of the U.S. Green Building Council. GBCI is an independent, third-party nonprofit launched in 2008 to ensure precision in the measuring of sustainable building performance and credentialing. It fosters worthy initiatives in much the same way the U.S. Green Building Council has led the charge with its LEED (leadership in energy and environmental design) campaigns for sustainable buildings over the past 22 years.
PEER grew out of an electricity initiative launched in 2005 by Robert Galvin, after he finished his career as CEO of Motorola, to accelerate innovations in the electric industry. Galvin envisioned something like PEER as a program for open-sourcing innovations in much the way coders develop apps for today’s smartphones.
Galvin was looking for a model his initiative could lean on to help attract and drive electricity innovations from the bottom-up – individuals up to organizations and cities – rather than top-down by regulated utilities. They opted for the model demonstrated by the U.S. Green Building Council and its LEED program. Galvin admired LEED’s model for incentivizing sustainable design and other features into commercial and government buildings.
The ground-up approach enables PEER to incentivize power grid operators to change without relying on the century-plus constraints and regulations that often inhibit genuine forward-thinking by even the most sophisticated utilities.
“We established four performance categories to focus how best to drive waste out of electricity systems,” Kelly said in an interview. “And they’re starting to catch on.” The categories are:
“Utilities are trapped in their business model. This is a forward-looking way to help utilities get out from under it,” Kelly said. Painted another way: “Rules can block or enable operational savings approaching 50 percent,” he said.
Chiesa huddled with Kelly and industry leaders to develop standards for those four categories and the types of data to measure performance which then could become the foundation for GBCI’s certifications. This push consumed four years of research and development work at the Illinois Institute of Technology, not far from S&C’s corporate headquarters in Chicago.
“What the Galvin Electricity Initiative had been doing to transform how communities generate, deliver and use electricity in the U.S. is exemplary,” Chiesa said. “But it was not enough. We’re building on those ambitions and recognizing communities, utilities and grid operators for achieving specific thresholds of sustainability. And now, we have the data to validate them.”
Those thresholds, Chiesa said, can include small-scale solar, microgrids, smart investments in joining connected buildings, and others steps that generate cleaner power, use it more efficiently and protect it with a more robust, self-healing, electrical infrastructure.
Kelly and Chiesa only had to venture 25 miles west of Chicago to find Naperville. There, Olga Geynisman, deputy director of Naperville’s electric utility, and colleagues had the presence of mind – as did Chattanooga – to secure a matching $11 million Economic Recovery Act grant in 2009-2010 to jump start their work.
Naperville was well on its way to “undergrounding” virtually all of its distribution lines and was among the first municipal utilities to invest in smart-grid technologies back in the 1990s. Now with its PEER certification, Naperville can serve every one of its roughly 53,000 residential customers and about 5,000 business meters from two transformers. If one goes down, power automatically flows from the other. Fiber optics connects all of its substations for robust communications.
“We’re only scratching the surface,” Geynisman said in an interview. So far, it’s been enough to attract and/or retain large employers such as BP, Lucent Technologies, Bell Labs, and a host of data centers and financial institutions.
What’s next for Naperville, which buys its power from the Illinois Municipal Electrical Agency and thus can do little to source its power from renewables? Geynisman envisions a power system “dashboard” customized for every one of its residential and business customers – at no extra charge.
Kelly noted that if other municipalities aspired to Naperville’s average power outage of only about 20 minutes per year – versus an overall utility average of more than 200 minutes per year – their customers would likely be a lot happier.
Go here to read how Austin Energy, the city’s municipal utility, engaged with PEER through the USGBC.
The sky may not be the limit yet. But both Chiesa and Kelly see innumerable opportunities for utilities. “It all depends on the leadership at the utility,” Kelly added. “When the leadership buys into the idea and can see real, verifiable, results from their actions; great things can happen.”
Image credit: Jim Pierobon
Clean energy advocate, strategic marketer and story teller with 15+ years supervisory experience and a proven track record achieving strategic and program objectives for energy, utility, technology and other clients in their marketplaces and policy arenas while engaging their priority stakeholders and target audiences. I'm always on the lookout for innovative policies, people, technologies and businesses that are demonstrating how sustainability can be both healthy and profitable. Catch my blog posts at TheEnergyFix.com. I've also written for The New York Times, Houston Chronicle, The Huffington Post and TheEnergyCollective.com.