Calif., Texas Tie for States with Most Smart Grid Progress

California and Texas equally show the most progress in modernizing their electric systems with smart grid technologies compared to other U.S. states, a new evaluation of the nation’s grid modernization efforts shows.

The first Grid Modernization Index (GMI) released by the GridWise Alliance and the Smart Grid Policy Center on Monday applies a ranking system, or "scorecard," that uses a set of criteria to evaluate the progress of state grid modernization efforts in three key areas. These gauge how well state policies and regulatory mechanisms facilitate grid investment, how much has been invested in customer–enabling technologies and capabilities, and how much has been invested in grid-enhancement technologies and capabilities.

Of data gathered for 41 states, California and Texas tied for the highest overall score, followed by Maryland, Delaware, and Pennsylvania. Arizona, the District of Columbia, Ohio, Nevada, Illinois, Florida, Virginia, Oklahoma, Vermont, and Maine also ranked among the top 15 states.

Among the GMI’s key observations is that states showing more grid modernization progress have retail choice, belong to Regional Transmission Organizations (RTOs) or Independent System Operators (ISOs), and/or have Renewable Portfolio Standards. These factors indicate "a relationship exists between these federal and state policies and greater investment in grid modernization," the GMI says.

Meanwhile, the analysis shows a high positive and statistically significant correlation between states that received American Recovery and Reinvestment Act (ARRA) Smart Grid Investment Grants and the scoring across all three components. But no correlation was found between electricity end-use prices in any customer segment and the GMI scores, indicating that the price of electricity is not a primary driver for grid modernization. States that scored higher overall also showed higher scores in addressing cybersecurity and data privacy than other states, and had higher scores in engaging and educating customers.

States that scored higher overall have also deployed more sensors and advanced modeling tools for both transmission and distribution grids, the GMI finds. And, the 15 highest-scoring states have all deployed smart meters to their residential and small commercial customers to some extent. Ten of these 15 states have installed smart meters for at least 60% of their consumers. The survey also found, significantly, that "most states are lagging in the areas of establishing metrics, measuring the value of grid investments, and in determining appropriate cost recovery mechanisms."

The 24-page report notes that state and federal energy policies are necessary for the U.S. to achieve "grid modernization," a term often used interchangeably with "smart grid." A change in “structure and mindset that will see utilities shift from commodity-oriented toward service-oriented entities” will also be vital, as will be customer engagement, it says.

Sources: POWERnews, GridWise Alliance, Smart Grid Policy Center

—Sonal Patel, Senior Writer (@POWERmagazine, @sonalcpatel)

NOTE: This story was originally published on July 24