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The promise of Utility 2.0

For those of us in Maryland who have suffered from unacceptable electric utility service — and that is most of us — there is light at the end of the tunnel. Utility executives, think tanks and energy experts all agree: There is a utility revolution coming.

It is a revolution that has been created by the innovative might of technology that is more powerful, superior and totally antithetical to the existing antiquated utility system. We call it Utility 2.0. It literally turns the existing utility paradigm on its head. Instead of a top down, one-way, command and control construct, we get a bottom-up, consumer directed, dynamic and innovative system. Instead of a centralized system that is especially vulnerable to storms, terrorism and cyber-security threats, we get a distributed system that is much more resilient, cost effective, efficient and green. On every aspect of service that we desire — and deserve — it is better.

Imagine a utility where you control your appliances remotely using a smart phone app; a system that allows you to be part of your own clean energy micro-grid; a system where you can easily sell solar energy from your roof top, battery stored power from your electric vehicle, and energy that you saved back into the system; a distribution system that is self-healing after a storm.

Such imagining is not mere fantasy — the technology that underlies Utility 2.0 already exists. For example, the Food & Drug Administration in Silver Spring wisely concluded a number of years ago that it could not obtain the level of reliability it requires from Pepco. As a result, they constructed a "micro-grid" system that has the capacity to function independent of the larger electric grid. Today FDA enjoys 99.9 percent reliability, cleaner power (natural gas and solar), and has generated net profits for the government by selling power back into the grid.

FDA is not an isolated case — in New Jersey, when Hurricane Sandy was ravaging the state, Princeton, with a state of the art micro-grid system, was snug as a bug. A once struggling community, Chattanooga, Tenn., made the bold decision a number of years ago to invest in infrastructure that allowed the city to restore power to 42,000 homes hit by a storm in 2 seconds.

This is a future the citizens of Maryland can have. To Governor O'Malley's credit, his Grid Resiliency Task Force requested the Energy Future Coalition, a respected think tank, to lay out a path to pilot Utility 2.0 in Maryland. They have done so, and it is the most comprehensive plan put forth anywhere in the nation. It is pending before the Maryland Public Service Commission. Utility 2.0 is also the single most important step our state could take to advance the governor's climate change and green economy agenda that he has forcefully put forth. Utility 2.0 is high on the Obama administration's energy agenda as well.

But like most revolutions, Utility 2.0 is facing serious resistance. As inevitable as it may be, neither utilities nor their regulators know with any confidence how to manage this radical transformation. Utilities worry that the disruptive nature of solar roof tops, micro-grids and battery storage technologies will totally unravel the only business model they have known; similarly, the regulatory tools used by public service commissions for the better part of the last century are ill suited for a 21st century Utility 2.0.

If we want a dynamic utility service that Steve Jobs would have been proud of, we need an infusion of innovation that only entrepreneurs can inject. Utilities are neither innovative nor entrepreneurs. What is required is a new utility business model that allows customer access to innovation while utilities focus on managing the grid day-to-day.

Regulators will also have to change. Typically, regulators react to proposals by those they regulate. That passive role does not serve us now. We need our public institutions to lead this conversation.

Today, for obvious and good reasons, state regulators and elected officials are focused on increasing reliability. Billions of ratepayer dollars will be spent in pursuit of that worthy objective. At the same time, now is also the right moment to ensure that this substantial public investment encourages resiliency in its broadest sense, and is not entirely spent on engineering solutions that simply "harden" the current antiquated system. Utility 2.0 — a more reliable, customer driven, cost-effective, efficient, resilient, innovative, and greener model of utility — is within our collective grasp. Let's seize it.

Roger Berliner, an energy lawyer, chairs the Montgomery County Council's Transportation, Infrastructure, Energy & Environment Committee. His email is roger.berliner@montgomerycountymd.gov.

Copyright © 2014, The Baltimore Sun
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