Keeping the Lights ON

Investments in smart grids are happening all over the country. Commitments stemming from Ontario and British Columbia’s Green Energy Acts, to the federal government’s Clean Energy Fund that just gave $6 million to Quebec, make it clear that these high-tech electrical distribution systems are on the agenda. Significant funds are being spent on installing sensors, control systems, self-healing switches, line monitoring tools and other technologies within provincial and local distribution networks in an attempt to make grids more reliable, resilient and responsive.

Consulting Engineers of Ontario applauds these investments. With limited resources to invest however, the allure of the “smart grid’ may be distracting from the need and capacity for existing lines to be renewed.

Investing in smart meters, switches and other technologies, does not replace the needed repair and renewal of existing power lines. Many local power distribution companies are having a hard time keeping up with the maintenance and renewal schedules of these assets. With such a burgeoning focus on investing in smart technology, one must ask how these companies will come up with the money for both.

Recently, Toronto Hydro entered a dispute with the Ontario Energy Board (OEB) after the Board would not allow the utility to raise rates by $5 per month. This would have increased the capacity of the utility to invest around $500 million each year in renewal of the system. It is estimated that a total of $12-billion in investment is needed to renew electrical distribution in the Greater Toronto Area.

According to Toronto Hydro vice president Blair Peberdy, “Though the utility has spent $400-million a year for the past two years on repairs and upgrades, we’ve just been treading water because conditions on the grid have been worsening. Now stuff is popping up all the time. It’s almost like a Whac-a-Mole.”

The utility has suggested that 40 per cent of power outages are caused by defective equipment. With major assets such as Toronto’s Midtown and Lakeshore power corridors in need of replacement, and the failure of transformer stations like Manby becoming more prevalent, the implications of underinvestment are already surfacing.

We need to live within our means. Investing in core infrastructure before directing resources into bells and whistles makes prudent financial sense.

Pollara, a Canadian public opinion and market research firm, conducted a report in 2010 for the Ontario Electricity Board and found that 68 per cent of respondents had an outage during the previous 12 months; among such customers, outages range from 4 to 12 a year, pegging the mean number of outages at 4.8. Based on current investment rates, these outages are likely to become more frequent as equipment continues to age.

The electrical infrastructure deficit is not unique to Ontario. All provinces across the country need to take a hard look at current investment needs to prioritize where money will be spent. Can utilities afford critical upgrades in addition to new smart grid investments in a climate of fiscal restraint? Each jurisdiction will have to determine that for itself.

However, the OEB-Toronto Hydro dispute does raise an important flag that Consulting Engineers of Ontario urges all provinces and local distribution companies to heed.

If local distribution companies can’t raise rates, are expected to reduce the infrastructure maintenance deficit, and implement innovative new systems like “smart grids,” the money has got to come from somewhere. If not, priorities need to be established and CEO would argue that the reliability of core infrastructure trumps its intelligence.cce

Barry Steinberg, P.Eng., is chief executive officer of Consulting Engineers of Ontario, vice-chair of the Construction Design Alliance of Ontario, and chair of the Professional Engineers Ontario Government Liaison Committee.