In early 2005, SDG&E asked the California Public Utilities Commission (CPUC) for approval to deploy "real-time" meters to all of SDG&E's customers, including small business and residential customers. These meters would allow SDG&E to charge customers based upon what time of day the customer uses electricity. For many small businesses that operate during the day and residential customers who are homebound, this form of metering creates the potential for significant bill increases. While UCAN supports the move to real time metering, SDG&E's proposal is far too expensive and poorly conceived. A summary of UCAN's position is outlined below. You can read UCAN's filings and testimony with the Public Utilities Commission by following the links on the right. Subsequently, SDG&E agreed to revise the program and add additional oversight to ensure that the program was cost-effective and useful to customers. UCAN joined with the CPUC staff in settling the case. The Commission adopted the settlement on April 12, 2007. See attachment below for details of the Commission decision.

Summary Position on SDG&E's Advanced Metering Initiative Proposal

Even though SDG&E's AMI program is crushingly uneconomic and poorly designed, UCAN supports Commission efforts to reduce peak load and invest in SDG&E's distribution grid. As set forth in the UCAN testimony, UCAN supports an integrated and systems-wide approach to address the peak load problem and an increase technical capabilities of distribution operations (through a "Smart Grid"). Moreover, UCAN believes that SDG&E overlooked the value of Smart Grid communications and functionalities to improve outage restoration and provide more information on transmission and distribution operations. To that end, UCAN recommends that the Commission direct SDG&E to conduct a Smart Grid pilot in 9 defined areas could serve to test and experiment with the emerging technologies identified in the USD Smart Grid report before tackling the entire region.2. This approach would also provide value to the grid as new technologies and applications surfaced. Such a "testbed" would demonstrate the integrated environment and results for each new improvement initiative under the above priority scheme prior to transitioning to a "production" mode.

Most importantly, had SDG&E attempted to integrate some of the new, emerging grid technologies into a system-based grid upgrade, it might have been able to overcome the serious cost-effectiveness problems that have doomed its current initiative to being the grossly uneconomic, numbers-manipulation exercise that has been submitted to the Commission.

There are remarkably few areas of disagreement amongst the parties. The primary disagreement surrounds the cost-effectiveness of SDG&E's proposed deployment. When SDG&E filed its initial AMI application in early 2005, UCAN was concerned about the narrow scope of SDG&E's plan. UCAN's general familiarity with emerging "Smart Grid" technologies suggested that SDG&E's plan was unduly limited in scope and vision. In order to provide the Commission and policymakers with an alternative vision of grid investment possibilities, UCAN initiated a study in early 2006, conducted by the Energy Policy Initiatives Center (EPIC) located at the University of San Diego that examined the deployment of an integrated "smart grid"in the San Diego Gas & Electric service area. SDG&E later agreed to jointly fund the project with UCAN and to participate in the development of this report.

The genesis of the report was UCAN's conviction that San Diego needs to be thoughtful and farsighted about investing in its distribution system. As explained in Chapter VIII below, UCAN believes that a prudently designed "smart grid" modernization can be cost-effective and practical for San Diego. UCAN explains below that had SDG&E presented the Commission with an AMI with greater functionalities and through a more phased-in schedule, the Commission might have been able to approve the application. However, there is not enough information in the record for UCAN (or the Commission) to make that finding - in large part because of SDG&E's rush to process this application.
As a result of SDG&E's agreement to pursue the enhanced functionalities of the smart grid technologies to make its business plan cost-effective allowed UCAN to sign on and join with the utility in pursuing AMI deployment. There are still a number of contentious issues, such as the proposed rate design and whether new rate structures will be voluntary (as they should be). Those issues will be litigated in other rate case proceedings scheduled for the coming years.