California remains the leader among states and the District of Columbia when it comes to grid modernization efforts, according to a recently released grid modernization index. Along with ranking highest overall among states, California also ranked highest in the areas of state support, customer engagement and grid operations, according to the rankings by GridWise Alliance in its fourth Grid Modernization Index.
The index, which was created by the alliance in collaboration with Clean Edge Inc., assesses and ranks all 50 states and the District of Columbia based upon the degree to which they are moving toward a modernized electric grid.
The updates are published every 12 to 18 months, noted GridWise Alliance executive director Bryan Nicholson.
As with prior Grid Modernization Indexes, data in the report is grouped into three general categories: (1) State support, which includes plans and policies that support grid modernization; (2) customer engagement, which ranks states on their rate structures, customer outreach, and data collection practices; and (3) grid operations, which benchmarks the deployment of grid modernization technologies such as smart meters, sensors, controls and analytics.
The report, Nicholson said, examined all types of investments that can modernize a grid. They include the deployment of a range of new technology such as smart meters, energy storage, renewables, electric vehicles and increasing grid resilience.
More state utility commissions, he said, "are beginning to think about this on a certain line."
One of the key takeaways from the report is that leading states continue to make progress toward comprehensive grid modernization.
“Each state follows its own approach to policy, business and regulatory models. Unique local and regional circumstances compel each state to develop its own approach to grid modernization,” the report said. “However, it is critical that states pioneering new ideas effectively communicate lessons learned to states that can build on their experience.”
California retains leading position
For the second consecutive edition of the index, California ranked highest overall.
The report, which was released in early November, noted that California has procurement targets for electric vehicles, energy storage, renewable energy, and energy efficiency. It also requires its three investor-owned utilities to submit detailed plans for siting, valuing, integrating, and managing demand-side resources. California’s total point score of 82 was nine points higher than number two Illinois, and 17 points higher than number three Texas.
Rounding out the overall top ten, in order, were Maryland, Oregon, Arizona, the District of Columbia, New York, Nevada and Delaware.
This category ranks states on their implementation of policies to advance and encourage grid modernization. Criteria in the category include specific plans, such as those that advance grid modernization, resiliency, and security; broad energy policies, such as renewable portfolio standards, energy efficiency resource standards, and carbon dioxide emissions goals; incentives and mandates for EVs, energy storage, and other technologies; and measures to ensure customer data privacy.
California moved up one spot to first in this category in the latest Grid Modernization Index. It replaces the previous state support leader, Illinois, which fell to fourth after having taken the top spot in each of the first three versions of the index. Between them sit Massachusetts (#2) and New York (#3). Each of those states rose to its highest ranking ever in the category, as did number five Hawaii. Rounding out the top 10 in this category are Texas, the District of Columbia, North Carolina, New Jersey, and Arizona.
In terms of major themes and trends in the state support category, the report said that the highest-ranked states in this category are taking a more comprehensive approach to policies and regulatory proceedings that encourage grid modernization. Areas of primary focus include EVs, integration of DERs, energy storage, resiliency and reliability, cyber and physical security, and changes in regulatory models, including rate design structures.
Meanwhile, incentives and mandates to encourage the deployment of energy storage technologies are becoming a popular policy option for supporting utility operations, the report said.
The customer engagement category ranks each state according to how well its utilities involve their customers in smart grid programs. The category encompasses a range of topics including the availability of different electricity pricing approaches, pricing for DER adoption, methods utilities use to communicate with their customers and how customer data is used, both by customers and utilities.
The report noted that among the category’s top 10 states, customer engagement efforts have vaulted several states to dramatic gains in the rankings from the prior Grid Modernization Index.
Although California repeated as the four-time category leader by earning 26 of a possible 31 points, four other leading states climbed at least nine places in the rankings.
Minnesota came in second, having jumped 15 spots since the third grid modernization index. The other three are Colorado (up 28 places to #5), Oregon (#6, a nine-spot leap), and Missouri (up 19 spots to tie for eighth). The remainder of the top 10 is composed of Illinois (#3), Nevada (#4), Texas (#7), and Arizona and Maryland (both tied with Missouri at #8).
In terms of major themes and trends on the customer engagement front, the report said that leading utilities are offering customized energy programs and enhanced service levels that leverage foundational investments in AMI and apply data analytic frameworks to deliver new value streams to customers. “Examples of such benefits include automatic system connection and disconnection, new approaches to outage status updates, and fault detection,” the report noted.
In addition, utilities “are tailoring innovative communication strategies and programs to meet the requirements of increasingly diverse, engaged, and informed customer classes.”
The grid operations category measures utilities on their deployment of grid modernization technologies and capabilities. This includes AMI, as well as automated system management platforms and other communications, visibility, and control equipment.
California was the top grid operations state for the first time in the index’s history, with a category score of 27. Texas led the category in the last index, but dropped to second in the fourth edition of the index, returning to the same spot where it finished in the first two editions of the Grid Modernization Index.
With respect to key themes and trends in the grid operations category, the report said that advanced metering infrastructure “remains a critical, foundational component of a modernized grid, with leading utilities implementing AMI programs that support diverse operational improvements and capture a wide range of customer benefits.”
The report said that the increased penetration of DERs has made grid operations more complex. “New software platforms and control systems are being deployed by a diverse group of utilities to automate grid operations and increase system efficiency and situational awareness,” it said.
Changes to the data collection process
Data collection for the fourth GMI took place from late 2016 through August 2017.
For the first time, the GridWise Alliance utilized an online data collection portal as the primary means of data collection. The data collection portal was created by consulting firm Navigant.
State regulators, utility representatives, and other industry stakeholders accessed the portal to answer questions and send data. After they submitted their answers, GridWise project team members followed up with respondents by phone and/or e-mail to clarify details, fill in gaps, and supplement data as needed, the report said.
Based on feedback provided by GridWise members and industry stakeholders, and to streamline the data collection process, GridWise began the fourth edition of the index by evaluating each prior index question for efficacy, deleting those that were less essential and combining questions where appropriate.
The final set of questions was available to all state representatives and other stakeholders through the online data collection portal. The portal allowed respondents to answer questions on their own schedule, reducing the time and effort needed for follow-up and manual data gathering.
Questions in the data collection portal were divided into five sections: (1) state support; (2) customer engagement and pricing; (3) advanced metering infrastructure; (4) distribution; and (5) transmission.
According to the report, the data collection portal was designed so that states could designate multiple subject matter expert respondents to answer the questions that were relevant to them.
The report also noted that the scoring system in the latest Grid Modernization Index has been changed as part of the revamped data collection process.
For previous indexes, most questions were scored on a 1 to 5 scale, with GridWise team member knowledge of state activities often determining final question scores. For the latest index, states were scored on an objective set of criteria for each question, according to the report.
Some questions were scored on simple yes/no responses, while others were scored on a multi-point scale, based on the range of deployment/coverage. “We found that with all other things being equal, these changes resulted in a general decrease in scoring for all states of about 10%,” the report noted.
GridWise Alliance members include the following public power entities: New York Power Authority, Platte River Power Authority, and the Bonneville Power Administration.
For additional information about the report and the GridWise Alliance, click here.