In Borrego Springs, Calif., a remote village in a desert valley 90 miles northeast of San Diego, Sempra Energy is reinforcing its reputation as a forward-thinking energy company. Through its San Diego Gas & Electric subsidiary (SDG&E), Sempra is implementing a microgrid, a self-contained mini power grid that can keep the lights on in a community cut off from its main power supply due to a blackout, natural disaster, or terror attack.
The project, among only a handful underway nationwide, is part of a diverse SDG&E technology portfolio that includes solar, wind, electric-vehicle technology, and the use of online resources to spur conservation. The utility has installed 1.4 million smart electric meters, reaching nearly every corner of its service territory.
Late last year, SDG&E inaugurated a new tagline, "Connected," that sums up its mission: "Connected to the customer, connected to the environment, connected to technology," says Michael Niggli, SDG&E's president and chief operating officer. In recognition of the utility's track record as an innovation leader, U.S. News selected Sempra, its corporate parent, as one of America's "Most Connected" energy companies.
Niggli says SDG&E has to stay ahead of the curve to meet the expectations of tech-savvy Southern Californians. "Our customer base are early adopters," he explains, noting that San Diego has some of the "highest penetrations in the country" of electric vehicles and photovoltaics on rooftops.
Sempra's other major utility, Southern California Gas, which serves Los Angeles and communities up to the Mexican border, plans to install six million smart (or what it calls "advanced") natural gas meters from late 2012 through 2017. SoCalGas also occasionally draws headlines for its research efforts, such as its recently launched multi-year test of solar thermal technology that uses sunshine to heat water to run air conditioning systems. An ongoing collaboration with Gills Onions in Oxnard, Calif., turns onion waste into methane to operate fuel cells that power the business.
On March 21, President Obama visited Sempra U.S. Gas & Power's Copper Mountain Solar 1 plant in Nevada, among the nation's biggest solar farms, to reaffirm his support for renewable energy. Sempra U.S. Gas and Power was formed January 1 through the combination of Sempra's U.S. operations outside California. With subsidiaries in Mexico and South America, Sempra Energy reaches more than 31 million customers.
Many of the expenditures that SDG&E and other California utilities make are designed to meet strict mandates imposed by state regulators. "To a certain extent, they have to" invest because "they have one of the highest targets for clean and renewable energy," says Todd Allmendinger, vice president at Charles River Associates and an energy specialist. He notes that the state also sets emissions and mileage standards for cars.
But according to the market intelligence firm IDC, SDG&E has surpassed its peers in California and nationwide with its robust technology portfolio. In its latest rankings, IDC Energy Insights chose SDG&E for the third straight year in a row (2009 to 2011) as the most "intelligent utility" in the United States. "The company has worked hard to develop and deploy a well-planned road map and business plan for smart grid initiatives, supported by farsighted IT spending. This is what has ensured San Diego Gas & Electric's place at the top," IDC said.
The runner-up, Pacific Gas & Electric, has one of the largest smart meter deployments in the country and reached a milestone in mid-May when it installed its 9 millionth device. The utility has faced a particularly vocal backlash, however, from customers worried about everything from health effects to privacy.
SDG&E regularly explores new ways to connect with ratepayers. Through a partnership with Boulder, Colo.-based Simple Energy, a software company, it held a contest last year in which 200 customers competed via an online game platform to save the most energy. A new contest to debut this summer will encourage customers to compete to save energy on behalf of local middle schools that will vie for cash grants.
In response to a White House challenge, SDG&E in January was among the first of several utilities to offer customers quick online access to energy usage data with the click of an easy-to-use "green button." To supplement the content, the utility has teamed with Arlington, Va.-based Opower on a pilot project that will provide 30,000 customers with twice-monthly paper reports that track their energy habits over time and compare recent consumption levels against neighborhood data.
The $25 million Borrego Springs initiative, which launches late this year, is funded by the U.S. Department of Energy, California Energy Commission, and SDG&E. Niggli says the community will serve as a "living, breathing laboratory" for the capabilities of a microgrid. The network will draw power from solar, rely on diesel as back-up, tap energy stored in special batteries, and be self-healing, meaning it can detect, diagnose, and isolate problems and shut-off or reroute power depending on the grid's condition. Local residents will participate by reducing energy usage during periods of peak demand, such as heat waves.
Microgrids offer a cost-efficient way to serve remote communities and are particularly suitable for military installations and universities, where power outages pose extra security and safety risks, experts say. Niggli notes they could have important implications for major cities, too. If large grids are segmented into microgrids, "this can help improve reliability and restore service quickly" when there are transmission interruptions or distribution challenges, he explains.
Regarding the installation of electric-vehicle chargers, SDG&E is part of the EV Project, a partnership that includes the U.S. Department of Energy; ECOtality, a manufacturer of recharging equipment; Nissan, and Chevrolet, which is the largest electric vehicle infrastructure build-out in the United States. SDG&E also has a patent on a "smart transformer" that sends wireless signals to electric cars to control when they recharge to avoid circuit overloads.
What's next for SDG&E? Niggli says the company's primary focus is to invest in areas "that will improve our customers' ability to use our product well." Which means finding fresh ways to live up to that new motto: Connected.
Corrected 06/12/2012: A previous version of this article misstated the location of Southern California Gas’ service territory. It includes Los Angeles and extends to the Mexican border.