Dive Brief:

• The Massachusetts Department of Public Utilities on Thursday threw cold water on utility plans to install smart meters, noting in an order that the proposals "revealed weaknesses in the business case for advanced metering functionality."
• The DPU ordered an investigation into how to effectively ensure advanced metering infrastructure (AMI) is cost effective, while at the same time reaffirming its belief that grid upgrades are central to the industry's future.
• Regulators approved other modernization investments — just nothing customer-facing. The DPU called other upgrades, like advanced distribution management systems, automation, and Volt/VAR optimization, "foundational" to distributed resource growth. 

Dive Insight:

Regulators couched the news a couple of ways, but in the end the DPU determined the broad failure of the utilities to show a cost-effective AMI rollout meant it was necessary to do some rethinking.

Four years ago regulators ordered the state’s utilities, including Eversource Energy and National Grid, to develop grid modernization plans. Among the central objectives of Order 12-76-B was the development of strategies for the deployment of advanced metering functionality.

Utilities took varying approaches, the DPU said, but ultimately "the evidence in these cases revealed weaknesses in the business case for advanced metering functionality presented by each company."

While the DPU "does not make this decision lightly," regulators also said that they "declined to preauthorize any customer-facing investments at this time."

The commission said they would work with stakeholders to investigate how to roll out AMI in a way where the costs and benefits pencil out. Part of that could include an investigation into whether "an immediate targeted deployment of advanced metering functionality to certain customer groups will yield benefits that justify the cost," regulators said.

The commission noted that grid modernization remains essential, pointing out that in the last six months the state has been hit by a series of storms that "exposed weaknesses" in both the resilience and restoration capabilities.

Regulators said the evidence supported utility investments in grid-facing technologies like advanced distribution management system, automation, and Volt/VAR optimization, as opposed to AMI.

"[G]rid-facing technologies lay the foundational framework to improve the companies’ ability to integrate distributed energy resources onto the electric grid, including improved visibility of where distributed energy resources can be interconnected, and management of intermittent power flow associated with these distributed
energy resources," the commission wrote.

Regulators said the DPU will establish a process to facilitate stakeholder input into the ongoing implementation of the utilities' grid modernization plans. The DPU signed off on a three-year plan for grid-facing investments, which it said "will allow the companies to adjust their deployment strategies in order to respond to stakeholder input and lessons learned."