Transforming the Grid: An Executive Summary
Aging, unreliable, inefficient, insecure and incompatible with the needs of a digital economy, the U.S. electric system is in dire need of modernization. With technology that pre-dates the 1950s, the system includes decades-old equipment on the verge of failure. While these parts can and will be replaced, the situation presents the nation with an unprecedented opportunity – a chance to also reinvent and change America’s electric grid in ways that are profoundly beneficial to consumers, the environment and the economy. Founded by former Motorola Chairman and CEO Robert Galvin, the Galvin Electricity Initiative is a catalyst for this transformation.
The first objective of the Initiative is to promote regulatory reform, based on a guiding set of Electricity Consumer Principles. Current regulations set incentives for utilities to maximize the amount of power they produce and sell, with no real rewards for reliability, customer service, innovation or resource conservation. Since regulations that protect the status quo also effectively prohibit the introduction of technologies that would enhance the grid’s performance, reform is a vital initial step.
The Initiative’s second objective is to support projects that concretely demonstrate the benefits of regulatory change, incorporating technologies already in existence into smart microgrid electricity distribution systems, using Six Sigma quality principles not often employed by the industry. Designed to augment the bulk electricity grid and improve the quality, reliability and security of service, such interactive microgrids – small, modernized versions of the bulk power grid – comprise what the Initiative calls the Perfect Power System. A working example of Perfect Power is now under development in Chicago, at the campus of the Illinois Institute of Technology.
Third, since these impending changes challenge those comfortable with a known system, communications on the advantages of Perfect Power are critical to reform. The Initiative’s advocacy efforts are focused on influential state and federal stakeholders, as well as others in a position to lead policy change.
The existing grid served the U.S. well for much of the 20th century. Its hardware and the people who operate it will continue to deliver power to end-users into the future. The industry, however, has failed to spawn significant innovation in more than 50 years, largely due to a regulatory structure not attuned to the needs of the 21st century. The essence of the Galvin Electricity Initiative, then, is to stimulate entrepreneurial innovation and investment aimed at providing consumers with choices, while removing barriers that prohibit a value transformation of the electricity system.
