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Lessons From a Failing Smart Grid

Smart grids are supposed to be the future of our aging electric system. And XCel Energy's SmartGridCity project was supposed to turn Boulder, Colorado into the ultimate smart grid hub. According to a 2008 press release from XCel, Boulder would become a city that could "support easily dispatched distributed generation technologies (such as plug-in hybrid electric vehicles with vehicle-to-grid technology; battery systems; wind turbines; and solar panels)" through a "robust, dynamic electric system communications network, providing real-time, high-speed, two-way communication throughout the distribution grid".

But that's not what happened. Now, while the project is almost finished, only 43% of Boulder residents have smart meters. That's not bad for an average American city, but pretty dismal for a supposed smart grid leader. Meanwhile, project costs ballooned from $15 million to $42 million (not counting operation and maintenance costs) thanks to unforseen obstacles with permits, software, tree trimming, and rock drilled through to install fiber optic line, according to Earth2Tech.

It's hard to say what caused the failure. Smart Grid News points the finger at bad project management. For example, it says, XCel failed to perform a simple cost-benefit analysis before beginning the initiative. And since the company never filed something called a Certificate of Public Convenience and Necessity (CPCN), the Colorado Public Utilities Commission couldn't cap costs on the project.

Nevertheless, SmartGridCity's website remains upbeat, with assurances that we "can expect to hear more news on several trial programs in 2010, including in-home technology tests, pilot pricing rates, plug-in hybrid electric vehicle road tests, added Web tools and special MyAccount features designed for Boulder residents."

We're not holding our breath. A word of advice for future smart grid cities: take it slow and don't promise too much. Otherwise, residents might grow wary of the smart grid concept—which, considering our aging electric network, would be a dangerous development.


Ariel Schwartz can be reached on Twitter or by email.