Smart Grid, Poor Economy Keeps Power on During One of the Hottest Summers Ever

The sun sets over the New York City Skyline, Thursday, June 21, 2012, in New York. (ASSOCIATED PRESS)

In May, the North American Electric Reliability Corporation projected that extreme weather this summer could lead to stressed conditions on the nation's power grid. Yet despite one of the hottest years on record so far, the grid has been humming along without blackouts, brownouts, or even urgent pleas by utilities for customers to conserve energy.

One major reason for the good fortune is the misfortune of many Americans: The sluggish economy that is keeping unemployment above 8 percent has reduced demand for electricity to levels below what was anticipated by power generators this summer.

(LISTEN: Voices From the Drought)

But there's a positive factor at work, too: Improvements have been made to the grid in recent years that make it easier for utilities to distribute electricity smarter and more efficiently, without running power plants at the edge of their capacity.

"It's not just smart meters; it's smart technology all along the grid," said Bill Massey, a former member of the Federal Energy Regulatory Commission who is now a partner at Covington & Burling.

A prime example of the smart grid is improved demand-response, a form of two-way communication that allows energy providers to pay consumers to use less electricity at times of peak demand. At its best, demand-response can harness the electricity saved by dimming the lights at thousands of grocery stores (in a way that most shoppers wouldn't even notice) and create the equivalent generation of a typical power plant.

The current chairman of FERC, Jon Wellinghoff, has called demand-response the "killer app" for the smart grid.

"It has quickly become a tool to prevent blackouts and brownouts," said Gregg Dixon, senior vice president for sales and markets at EnerNOC, an energy management firm based in Boston that shifts power loads to the grid.

And demand-response can be deployed in less than a second, Dixon said. The speed allows utilities to react more quickly to changing demand throughout the day, especially as errors in demand forecasts are growing and weather patterns are changing.

"We lead the world in demand-response," Dixon said. One reason is that the economic stimulus crafted by the Obama White House in 2009 set aside $11 billion for development of a smart grid. The improvements from this investment are still nowhere near completion, but some of them have already been deployed.

The technology puts the United States far ahead of developing nations like India, which recently experienced a record blackout that knocked out power in 20 of its 28 states.

Countries like India use load-shedding as a grid-management tool -- utilities or grid operators simply turn off the switch for many customers without consultation. With power supplies stretched to the limits, growing countries like India essentially need to plan rolling blackouts.

(GRAPHIC: See U.S. History of Droughts)

"In the U.S., load-shedding is only an emergency procedure," said Arshad Mansoor, senior vice president for research and development at the Electric Power Research Institute, the research arm of the utility industry. "If you are using an emergency procedure, you are running your system much closer to the edge."

A smarter grid is only part of the reason there hasn't been a power crisis in the intense hot weather of 2012. "The bigger influence is the state of the economy," said John Kassakian, professor of electrical engineering at the Massachusetts Institute of Technology.

Kassakian said demand for electricity this summer is below what many utilities had anticipated, so now "we have more generation in general than we need to supply the load."

That doesn't mean everything is rosy in the electricity sector. "We do have an aging power grid. There's no question about that," said Massey, the former FERC member.

"As a nation, we are going to need to upgrade this aging transmission infrastructure over time, but it takes time to get transmission built," he said. "It's a long, difficult process, but I will say that utilities are stepping up to do it."

Of course, no utilities can fully prepare for the kind of crippling storms that swept across the eastern half of the nation at the end of June, wiping out power for millions.

"No matter how well you prepare, natural disasters have characteristics of their own," said Ellen Vancko, a senior energy adviser for the Union of Concerned Scientists, who worked for the electric-reliability corporation when much of the Northeast was hit by a rolling blackout in 2003. "But you can prepare for summer," she said. "We have adequate reserve margins in all regions of the country. There's no indication that we're having problems because of the heat."