Niagara Mohawk dba National Grid Seeks Continued Secrecy on Cost of Its "Smart Grid" Proposals

The New York PSC invited New York investor owned electric utilities to submit "smart meter/smart grid" proposals in 2006. They submitted proposals that would have cost billions of dollars to implement. at customer expense. None of the utilities has proposed to put any of its shareholders' funds at risk to invest in the initiatives, suggesting a possible lack of utility confidence in the claimed increases in efficiency and reduced costs due to the trendy but unproven smart meters.

The PSC then told the utilities not to implement the large expensive projects they had proposed but to resubmit scaled down pilot projects. See PSC Requires More Study Before Allowing Major Investment in "Smart Meters", PULP Network, July 21, 2008.

When federal stimulus money appeared on the horizon, the PSC again asked the utilities to submit large smart meter/smart grid proposals, and promised to match any federal grants with ratepayer money, which would be collected from customers through higher electric rates. See

• National Grid Responds to New York State Public Service Commission Request for Projects Suitable for Federal Stimulus Funding - Potential Projects Bring Smart Grid Technology and Enhanced Reliability to Upstate New York;
• National Grid seeks $240 million in stimulus funds to build advanced grid in, near Syracuse.

Niagara Mohawk dba National Grid submitted a proposal which blacked out the cost of its plan.

• NYSEG/RG&E submitted a proposal totalling $615 million.
• Con Edison/Orange & Rockland's proposals totalled $318 - 328 million, of which $149 - 154 million would be paid by its customers through higher rates.
  

When the Times Union sought the information, the utility obtained New York PSC approval to keep the cost of its proposed "smart grid/smart meter" proposals secret until the federal Department of Energy (DOE) acted on its request to use economic stimulus funds for the project, which the PSC said could be matched with 50% support from customers, through higher rates. See Niagara Mohawk Allowed to Keep Cost of "Smart Grid" Proposal Secret, PULP Network, September 11, 2009.

DOE denied the funding request. Under the PSC secrecy order, the cost data would soon become public.

In a November 23 letter to the PSC, National Grid asked for continuation of the secrecy about the cost of its proposed "smart meter" project, saying it still hopes to begin a possibly scaled down version of the original proposal next year. According to the Times Union, which has been seeking the cost information from the PSC through FOIL requests:

The New York portion of the project -- expected to cost $250 million -- would have taken place in Saratoga County and a small portion of Schenectady County, as well as parts of the Syracuse area. Half the funding would have come from the Department of Energy through the stimulus package, and the other half would have come from utility customers.
However, National Grid was not among the chosen when President Barack Obama announced $3.4 billion in smart grid funding for 100 projects across the country on Oct. 27.

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National Grid revealed its plans Monday in a letter to the state Public Service Commission. The letter argues that the PSC, which regulates utilities in New York, should keep details of its smart grid plan secret. The Times Union has been seeking to have specifics of the plan made public after large portions were blacked out by the utility.

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"National Grid is aggressively evaluating a strategy by which it could pursue its proposed New York Smart Grid Program in some shape or fashion... with the desire to establish a proposed revised course of action early in 2010," National Grid attorney Catherine Nesser wrote in a letter to Brilling.

National Grid spokesman Patrick Stella said Tuesday that the utility hasn't decided how a smaller project would be funded or what it would entail in terms of technology.

Larry Rulison, Smart grid is still an option - National Grid tells regulators it may aim for scaled-down plan, Albany Times Union, Nov. 25, 2009.

As consumers and regulators in other states learn more about "smart meters" they are beginning to question the cost and benefits of the massive investment being proposed by utilities and market rate enthusiasts. In Maryland, the "smart meter" cost benefit issues are being litigated publicly. See AARP Opposes PEPCO Plan for Spending on "Smart Meters", PULP Network, June 19, 2009.

Secrecy in New York -- by utilities and regulators that in the past saddled consumers with higher rates due to the sale of power plants to functionally deregulated merchant power and trading interests -- does not lend confidence to the smart meter initiative. See Rebecca Smith, Smart Meter, Dumb Idea?, Wall Street Journal, April 27, 2009; Consumer Uprising Against California Smart Meter Program, PULP Network, October 28, 2009; Will "Smart" Meters Pass The Test of Time?, PULP Network, Nov. 24, 2009.