We’re not in 1930 anymore.

The US electric grid of 2030 will confront emergent technology including remote renewables, microgrids and rooftop solar, fleets of electric vehicles and cyber attack threats.

But the grid’s fragmented industrial and regulatory structure now dates to the 1930s, and if it isn’t adapted to face those challenges, the 2030 grid may be significantly less reliable and more costly than what the US has today, warns a new Massachusetts Institute of Technology study.
“The Future of the Electric Grid,” released Monday, says the current grid is delivering power reliably, but the business and government structures behind it have accreted over the last century.

Utility performance data is not available in an organized way.

Those systems are highly diverse, only loosely coordinated and sometimes conflicting, from huge interstate investor-owned utilities to rural co-ops with a few hundred customers. Power is provided by more than 3,000 retail distributors over millions of miles of wire, selling power from hundreds of generators, all regulated by the states, cities, or local or regional authorities, a couple of federal regional agencies, and/or the Federal Energy Regulatory Commission.

Patchy And Fundamental

Unlike other regulatory regimes developed in the Depression for railroads, aviation and telecommunications, the MIT report notes, electricity regulation has been patched but not fundamentally changed. There is no national electricity policy, and no agency responsible for the overall national interest in either interstate transmission or cyber security.

The report doesn’t recommend scrapping local or state regulation, or the diverse mixture of public and private ownership among utilities. But it says a stronger federal role is required particularly in the transmission and security areas.

The report recommends “enhanced siting authority” over high-voltage transmission lines for FERC, akin to the role it has played since the late 1930s in siting interstate natural gas pipelines. The Energy Policy Act of 2005 did widen FERC’s authority but has produced few results, as siting and cost allocation battles continue to ensnare any proposed new line.

Study Co-Chair Richard Schmalensee said more interstate transmission is “absolutely critical” to the national goal of getting large amounts of solar and wind energy on-line, since renewable resources are often distant from where consumers live. FERC is going in the right direction, he said, but now states and even other federal agencies can, and do, halt projects.

“This is a mismatch,” he said. Blackouts are no respecter of state borders and grid reliability can’t be planned in pieces. Some agency needs to speak for the national interest, he said.

Study member Jerrold Grochow said current cybersecurity efforts are “disjointed,” even as the technology grows more complex.

“Having somebody in charge is important,” Grochow said, since effects can cascade through an interconnected grid. Threats mutate, making cybersecurity “a problem to be managed, not something to be solved,” he said.

A federal agency needs to work closely with industry to evolve ongoing coordinated responses to everything from accidents to foreign attacks, Grochow said, adding that security is also vital to preserving the privacy of vastly increased customer data from advanced meters.

Refining Regulation

The MIT researchers called for “targeted” research into areas including computational tools to better aggregate, process and use of the wealth of data from new grid controls, as well as cybersecurity and consumer response to changes. “Industry needs to take the lead,” said study co-chair John Kassakian, who said the projects should be industry, not government, funded.

The researchers want to see results made available from pilots and demonstration projects, many of them involving advanced grid controls and metering, funded by the 2009 stimulus.
Consumers have often resisted technology that lets them see and manage their usage real time, but also lets utilities vary power prices based on the wholesale prices the utility is actually paying for power.

The MIT study sees introduction of “dynamic pricing” as vital to lowering costly demand peaks and electricity rate rises. The researchers also urged standardization of performance data of all kinds across the country so everyone can see what works.

“Utility performance data is not available in an organized way,” said Kassakian.