For nearly 30 years, Steve Pullins has worked in and around the utility industry, in capacities ranging from systems engineering to project development to high-level consulting. He currently works at SAIC, where he heads the Modern Grid Initiative for the National Energy Technology Laboratory.

I spoke with him at the Discover Brilliant conference in Sep. 2007. He stressed that he was speaking to me as a concerned private citizen, not as a representative of the MGI.

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DR: What is the Modern Grid Initiative?

SP: It’s a team, first sponsored by Senator Byrd of West Virginia, now institutionalized within the Department of Energy, trying to help the DOE regain a more of a leadership position in relation to the grid. We’ve been, if you will, kind of a hired think tank.

We did a systems analysis, developed a picture of what a modern grid would look like, and developed a set of functional specifications on how to develop it. We did four smart-grid studies over the last several years. We’re working on a transition plan now.

Going to a smart-grid approach is not going to cost us a dime.

DR: That’s a welcome message to the DOE, I’m sure.

SP: And it should be a welcome message to the [utility] industry. What it really means is, over the next twenty years we’re going to spend about $930 billion in business-as-usual electric infrastructure, replacing retiring assets and adding new assets. Standard old approach — if one transmission line is good, two is better.

But our studies have told us that the smart-grid approach costs somewhere between +6 percent and -20 percent the business-as-usual case. If you are taking a smart-grid strategy primarily to improve or sustain reliability, it’s about +6 percent. If you are trying to enact a renewables penetration strategy, to support an RPS [Renewable Portfolio Standard], that’s -20 percent.

We don’t have enough data points. But the early returns suggest that implementing a smart grid might be a wash over the business-as-usual case.

DR: What do we mean when we talk about the grid? Is it just electrical lines, or does it also include generators and consumers?

SP: People typically refer to the grid as just transmission and distribution. That’s not how we look at it. You have to understand that it is an integrated system that goes all the way from generation and fuel source, through the transmission and distribution, into the consumers’ home and businesses.

If you don’t think about it holistically, you fall into a lot of traps. This is one of the weaknesses we have in our industry — most people focus on transmission. If I make a transmission-only decisions, I’m only allowing myself to consider a few of the tools in my toolbox. If I start looking at a holistic solution, I allow myself to consider a lot more tools.

DR: Where’s the intelligence in the grid?

SP: Let’s say a measurement of intelligence is automation and sensing. Clearly, the most intelligent end is generation. There’s just a lot more sensing and data, and use of that data, and awareness of that data. It flows downhill from there. There’s less in transmission, less in distribution, and less on the consumer end of the picture.

DR: Isn’t a lot of hope for the smart grid in smart meters and smart appliances and other consumer-end stuff?

SP: That’s true. But how many smart dryers are there in the country right now? Well, there’s 50. How many dryers are there in the country? Probably 100 million.

That’s a problem you’ll find in the electric industry — we grasp hold of these few, small examples and say, “We’re making progress.” That’s not the case in a global sense. Yes, we have some smart buildings. Yes, we have some demand response. But if you look at it across the country, in the aggregate, we’re talking about maybe 2 percent.

As for the level of intelligence in the transmission system, how many substations have SCADA [Supervisory Control and Data Acquisition] so they can sense what’s going on and send a command to do something about it? Sixty percent. That’s our shining example of intelligence, the 60 percent penetration of SCADA. The amount of automation in the distribution level is only about 2 percent.

Over the last decade, the industry has demonstrated about 600 successful pilot projects in automating substations and distribution feeders and circuits. When you go look at how many of those actually led to deployment, you’ll find one. We’ve got this gap between demonstrating technology and demonstrating real value to customers. We call that gap “pilotitis.”

DR: What’s the low-hanging fruit? Where could you get the biggest bang for the buck from the grid?

SP: It’s all about getting data to flow, getting information in the hands of more people. So advanced metering infrastructure (AMI) is a beginning, but not an endpoint. If you add up all the meters around the country communicating two ways — providing information to the home and to the utility — we’re still 10,000 here, 50,000 there, 100 there.

DR: Until you have smart appliances with some kind of automated response, all the meter can do is give individuals information, right? That seems like a blunt weapon.

SP: It is one way to make improvement. People can use what they know about their own usage to make a difference.

The other thing is, there are plenty of example — again, examples — of load-control programs in place. Two really good ones are Progress Energy Florida and Florida Power and Light. They have devices on hot-water heaters, pool pumps, dryers, air conditioners, things like that.

You’re probably not going to get more than 25 or 30 percent of the people to enroll in a voluntary program. But these direct load-control things can be automated very nicely, to where people don’t even know they’re being impacted. I have a buddy whose mother is in Florida, she’s complaining to him, “Florida Power and Light is paying me $150 a year to be in this program, and they never use it.” He asked Florida Power and Light about it, and there were 538 times they had taken some sort of load-curtailing action in his mother’s home. She never knew it.