Who Should Pay
Technologically, the self-healing smart grid is no longer a distant dream. Finding the money to build it, however, is another matter.

The grid would be costly, though not prohibitively so given historic investments. EPRI estimates that testing and installation across the entire U.S. transmission and distribution system could run $13 billion a year for 10 years—65 percent more than the industry is currently investing annually. Other studies predict $10 billion a year for a decade or more. Money will also have to be spent to train human operators. The costs sound high, but estimates peg the economic loss from all U.S. outages at $70 to $120 billion a year. Although a big blackout occurs about once a decade, on any given day 500,000 U.S. customers are without power for two hours or more.

Unfortunately, research and development funding in the electric utility industry is at an all-time low, the lowest of any major industrial sector except for pulp and paper. Funding is a huge challenge because utilities must meet competing demands from customers and regulators while being responsive to their stakeholders, who tend to limit investments to short-term returns.

Other factors must be considered: What terrorism threat level is the industry responsible for and what should government cover? If rate increases are not palatable, then how will a utility be allowed to raise money? Improving the energy infrastructure requires long-term commitments from patient investors, and all pertinent public and private sectors must work together.

Government may be recognizing the need for action. The White House Office of Science and Technology Policy and the U.S. Department of Homeland Security recently declared a “self-healing infrastructure” as one of three strategic thrusts in their National Plan for R&D in Support of Critical Infrastructure Protection. National oversight may well be needed, because the current absence of coordinated decision making is a major obstacle. States’ rights and state-level public utility commission regulations essentially kill the motivation of any utility or utility group to lead a nationwide effort. Unless collaboration can be created across all states, the forced nationalization of the industry is the only way to achieve a smart grid.

At stake is whether the country’s critical infrastructures can continue to function reliably and securely. At the very least, a self-healing transmission system would minimize the impact of any kind of terrorist attempt to “take out” the power grid. Blackouts can be avoided or minimized, sabotage can be contained, outages can be reduced, and electricity can be delivered to everyone more efficiently.

Had a self-healing smart grid been in place when Ohio’s local line failed in August 2003, events might have unfolded very differently. Fault anticipators located at one end of the sagging transmission line would have detected abnormal signals and redirected the power flowing through and around the line to isolate the disturbance several hours before the line would have failed. Look-ahead simulators would have identified the line as having a higher-than-normal probability of failure, and self-conscious software along the grid and in control centers would have run failure scenarios to determine the ideal corrective response. Operators would have approved and implemented the recommended changes. If the line somehow failed later anyway, the sensor network would have detected the voltage fluctuation and communicated it to processors at nearby substations. The processors would have rerouted power through other parts of the grid. The most a customer in the wider area would have seen would have been a brief flicker of the lights. Many would not have been aware of any problem at all.

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