Over opposition from a consumer groups, the California Public Utilities Commission (CPUC) authorized a five-year, $150 million joint research effort between a federal research laboratory and three of the state’s major investor-owned utilities. Natural gas operating advancements are one of four focus areas.
Although at least one of the five CPUC commissioners admitted to being skeptical about the proposal, on a unanimous vote the regulatory commission approved a plan in which Pacific Gas and Electric Co., Southern California Edison Co. and San Diego Gas and Electric Co. each will come up with individual research projects to pursue with the Lawrence Livermore National Laboratories (LLNL) in Northern California.
While each of the utilities will share proportionally in the $30 million annual costs, by 2020, the CPUC has calculated that the collective benefits stemming from the research could produce more than $552 million in savings from improvements in gas operations, safety and reliability, advancements in electric grid and smart meters, and generally in energy cyber security.
Nevertheless, earlier this week, CPUC President Michael Peevey, long-time head of the regulatory panel, was under fire from a consumer watchdog group, The Utility Reform Network (TURN), for allegedly railroading through the commission the research project that TURN said was not worth the cost. TURN urged state lawmakers to “rein in” Peevey (see Daily GPI, Dec. 20).
After the approval, Peevey said the project will “benefit utility customers in many ways. Research findings are likely to improve the safety of gas operations by reducing the amount of pressure needed in transmission pipes, and also by improving leak detection and predicting pipe breaks.”
Peevey predicted that benefits to ratepayers were likely to exceed program costs across both gas and electric operations in the state. Other CPUC members predicted that the Lawrence Livermore supercomputers have the potential to greatly advance grid planning and establishment of a “smart grid” for electricity and natural gas pipelines.
During the five years, the regulators promised there would be “strong state oversight” of the program.
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