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Illinois Becomes Latest State to Approve Smart Grid Expansion

By Jack Keough

In a major victory for Smart Grid technology proponents, the Illinois General Assembly has approved legislation that will lead to a modernization of the state’s electrical grid at a cost of $2.6 billion to rate payers over the next ten years.

In taking that step the General Assembly overrode Illinois Gov.’s Pat Quinn’s veto. Quinn had argued that the legislation would result in automatic rate hikes to fund the improvements rather than the traditional method of the state approving new rates.

Illinois becomes the latest state to expand its efforts to bring modernization of its electrical grid.  Other states that recently approved electrical grid expansion include Florida, Connecticut and Colorado.

The bill becomes effective immediately, which will be a boon to many electrical companies involved in the distribution /manufacturing process for the Smart Grid. These include companies that manufacture and distribute smart meters, sensors, cable and other equipment. It also means an upgrading of transformers, substations and transmission lines.

The Smart Grid project will result in many badly-needed construction jobs.

“The law ensures (Commonwealth Edison) can invest in a modern grid that will reduce power outages and give customers more choice and control over their energy use,” the Chicago-based utility said in a statement. “ComEd’s modernization efforts are designed to reduce outages by 700,000 per year, saving customers an estimated $100 million in outage-related costs.”

ComEd had argued for a clearer understanding of the 2011 original legislation allowing utilities to raise rates to fund a the electrical grid improvements.. But the Illinois Commerce Commission and ComEd disagreed over implementation procedures.

The installations of the meters will continue through 2021. Smart meters provide real-time data to electrical customers-both residential and businesses-as to how much power they are using. A number of businesses reportedly plan to operate new facilities and operations in the Chicago area in order to support the manufacturer and installation of the meters.

“This legislation will mean improved and more reliable electric service for Illinois residents, and it will create jobs and spur economic development,” said Representative Lou Lang (D-Skokie), chief House sponsor of the legislation. “Now that this bill has become law, electric utilities can proceed with investing millions of dollars into Illinois’ economy and create thousands of new jobs.”Last year, ComEd awarded grid modernization contracts worth a total of $118 million, including 71 percent to Illinois companies providing services and products from engineering cable to smart switches. Of the total, $54 million or 56 percent was spent with diverse suppliers.

ComEd is partnering with a number of Chicago-area companies attracting new businesses to the region. Local partners include Meade Electric, S&C Electric, GW Electric, Intren, and Aldridge.

Growing Chicago-based entrepreneurial firms such as PMI Energy Solutions and electrical contractor MZI Group are reportedly expanding their Illinois operations as a result of the grid modernization program, according to news reports. And Choctaw-Kaul, a Native American-owned distributor of safety products, opened a new distribution center near Midway Airport.

Work related to the Smart Grid new program has already created nearly 2,700 full time jobs in the first quarter of 2013, according to ComEd.

ComEd estimated that the grid modernization also created 1,792 indirect jobs generated in the first quarter among a variety of businesses including those companies that produce and install smart meters. A pilot program last year resulted in the installation of more than 100,000 homes and businesses.

By the time the project is finished more than 4 million smart meters will have been installed.

A report by Navigant Research points out that the overall market for residential and commercial electrical meters is gaining traction as many utilities look for ways to reduce operating costs and provide consumption data to C&I customers.

But the smart grid expansion is creating opportunities for those electrical companies that are not just involved in smart meters. Schneider, for example, two years ago bought Telvent GIT, SA based in Madrid Spain for $2 billion two years ago. Telvent provides software to manage distribution networks.

The smart grid also could mean big business as many, many miles of cable will be needed by utilities.

Jack Keough was the editor of Industrial Distribution magazine for more than 26 years. He often speaks at many industry events and seminars. He can be reached at john.keough@comcast.net or keoughbiz@gmail.com

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