Interview with Michael R. Niggli, COO, SDG&E and SoCalGas

Please start by giving an update on San Diego Gas & Electric’s (SDG&E) smart meter rollout?  

SDG&E, with its vendor VSI, already has installed more than 450,000 digital smart meters – with the goal of completing the installation of 1.4 million electric meters and 900,000 gas modules by end of next year. At that pace, SDG&E will be first utility in the U.S. to convert its entire service territory to smart meter technology.  

We are pleased with how smoothly the process has gone so far, thanks in large part to our extensive customer outreach before, during and after installation. We have customer service teams in the field to answer   customers’ questions and also conduct random follow-up surveys with customers about the installation experience. While there have been a handful of issues, the vast majority of responses have been positive.

At this point, customers won’t see much of a difference because, even though the new meter uses digital technology and offers two-way communication capability, it’s still just a meter. The really exciting part for customers is still ahead – what this foundational technology can offer them in terms of control of their energy usage, convenience and new products and services.

In a nutshell, customers want choices regarding cleaner energy, better services, and greater reliability – all at a reasonable cost. All this will be possible in the future as these smart meters open the door to many more opportunities for customer interaction.

What impact is the ARRA funding expected to have on the smart meter initiative, and for what aspects will the funding be allocated and what are the anticipated outcomes?  

SDG&E was awarded a $28.1 million grant that will help us develop our “Advanced Smart Grid Communications System.” Our strategy for smart grid communications is a consolidated, custom designed wireless infrastructure – a wireless network designed with a future smart grid in mind. The ARRA funding will allow us to accelerate the construction of that network and complete it by early 2012.

The system will use the latest in wireless technologies (a combination of WiMAX, WiFi, licensed and unlicensed spectrum) to deliver data to and from the 1.4 million electric smart meters, tens of thousands of other data points on our system and hundreds of SDG&E mobile field personnel.

This next generation wireless network will cover our entire 4,100-square-mile service territory, including regions that today are not reached by commercial wireless service providers. By consolidating network control, we ensure greater security and interoperability, and can begin to realize the customer service and operational benefits of smart meter/smart grid – such as “self-healing” capability, remote turn-on and turn-off, and predictive system maintenance to spot problems before they cause outages.

SDG&E also is part of a different consortium that includes Nissan and Electric Transportation Engineering Corporation (eTec), which was awarded a $100 million stimulus grant in August 2009 to implement the largest transportation electrification project in U.S. history. About $20 million of that stimulus money will stay in San Diego to help develop the EV charging infrastructure to make the region “plug-in ready.” SDG&E will install 1,000 residential chargers and about 1,600 public access chargers in association with the Nissan zero emission electric cars that will be introduced in San Diego at the end of 2010.

We’re pleased to help the San Diego region and the nation realize the benefits of the smart grid much more quickly. As more people drive electric vehicles, and more energy comes from renewable resources, the need for a smart grid to manage these changes becomes even more critical.

What is SDG&E doing to engage customers in their own energy management and what are the experiences to date?

Information is power – in this case, the power to save energy and money. Research has shown that when people know how much energy they’re using, they tend to use 5 to 10 percent less.

Home energy management technologies will give people the information and tools to monitor their energy use and allow them to take action – if they choose – to cut back their usage when rates are high. The goal, of course, is to help customers manage their energy costs, and, through their efforts, help to reduce the need to build more power plants.

Once all our smart meters are installed, energy prices will be based on time-of-use. Customers will have optional time-of-use rates with incentives to encourage them to shift their use to off-peak hours.

This is a nascent and dynamic market with new manufacturers introducing new products at a rapid pace. SDG&E is looking at various technologies to identify and jump-start those that are the most cost effective, versatile and offer the greatest convenience, choice, control and value to our customers in achieving their energy management objectives.

One example of what’s being developed are real time energy monitors that show customers how much it costs to run a particular device at any given time. They could see the level of energy used drop or spike as they turn off lights or turn on their pool pump. Some products use a light that changes from green, to yellow or red as the hourly cost of energy rises. All these signals give consumers options to change when they do certain things.  

SDG&E currently is testing these kinds of in-home display devices.  

As we learn more about these technologies, we field test and run pilot programs on selected products. We also plan to offer options on how customers can track their energy use, including through our website. We have been involved in a pilot project with Google in which customers can get their energy usage information on their iGoogle page through Google’s PowerMeter gadget. Further, we are part of a global coalition with IBM and other leading energy companies from around the world that are sharing ideas on how to maximize the benefits of the mart grid for our customers.

Have SDG&E customers experienced increased bills with smart metering (like PG&E customers) and has the PG&E experience impacted SDG&E’s activities?  

SDG&E has not experienced these issues, primarily because of the level of proactive outreach we’ve done. First, we started talking five years ago to our customers about the coming switch to the new technology – even before the California Public Utilities Commission had approved our project. Since then, we have been very proactive and visible in the communities where the smart meters are being installed – offering presentations to planning groups and service organizations, staffing smart meter information booths at local community events, and employing an in-field customer service “SWAT team” of sorts to respond immediately to customer concerns.

The high bill issue at PG&E really has nothing to do with the smart meter technology itself. It turns out that PG&E’s installation appears to have coincided with the hottest time of the year and right after a rate increase had taken effect.  

Please outline the aims and status of the San Diego County Regional Smart Grid Demonstration.  

SDG&E and a coalition of 25 local, national and global organizations, including UC San Diego, SAIC, GE, and IBM, had applied for a matching $100 million grant to create and study a secure, community scale “end-to-end” smart grid project that could be replicated anywhere in the world on a large scale. Unfortunately, we did not receive funding for this proposal. While we are understandably disappointed, we are moving ahead, although at a slower pace than if we had succeeded in winning a stimulus grant.

We already are in the design and engineering phase of our microgrid pilot project in Borrego Springs, Calif. – a small, desert community east of San Diego. We are using $10 million in grants from the Department of Energy and the California Energy Commission to deploy and test a variety of smart technologies at a single substation – renewable energy generation, energy storage, smart meters and energy management systems.  

The generation resources and large, utility-scale storage are proven technologies, but some of the others are just emerging. While all have been tested to varying degrees, integrating all of them has never been done.  Some of what we will demonstrate – such as seamlessly shifting a portion of customer load off the grid to operate as an island – had been done, but not at the scale the pilot project proposes.

What is the SDG&E customer’s home of the future going to look like (in terms of energy-related technologies)?  

We are on the brink of a major transformation of our industry. The next 10 years will usher in more changes in the energy business than we’ve seen in the last 100. Smart meters are the first step. They give customers real time access to their energy usage information and allow consumers to interact with the utility beyond getting a bill once a month.  

An explosion of technology is coming as the market responds with products to help people access usage information more easily. Manufacturers already are putting smart chips in appliances and electronics to allow them to “talk” to each other, and working on other innovations we can’t even imagine at this point.  

SDG&E’s “home of the future” will be energy efficient and will be outfitted with green technology, including a charging station for an electric vehicle and a home area network that can pre-program the car to charge only when prices are lowest and automatically signal electrical equipment, including lighting to turn off or cycle down. Customers will have multiple options for 24/7 access to their online energy usage data and can review it at work or at home.  

Many of our customers will ultimately have rooftop solar or other kinds of distributed generation with an in-home energy monitor system. Our “smart grid” will interact with the customer’s power producing devices to allow storage of excess power, followed by the return of that power to the customer are times when it is needed – like a kind of “energy bank.”