Smart Grids For Energy Conservation

Smarter grids and meters help revive an aging U.S. utility system.

by / September 19, 2007

In August 2003, the largest blackout in North American history left 50 million people without power in eight states and Canada. The blackout cost an estimated $6 billion and revealed a flawed and aging power infrastructure developed shortly after World War II.

As a result of the Northeast blackout - and subsequent smaller blackouts and brownouts in California and Texas - power companies nationwide have been researching wide area energy measurement technologies. "Smart" is the term used to define a host of new technology-empowered tools in the energy sector that are part of a trend in electricity conservation fueled by increasing power demand, an overburdened and antiquated electrical grid and a desire to curb energy use because of global warming.

Congress called for reform of the U.S. power infrastructure, including increased spending for a national smart power grid. Both Congress and U.S. power companies are conducting research to update power grids to "smart grids". "Smart meters" allow interactive connectivity with smart grids and are now used throughout the U.S., Canada and some Western European countries.


Better Tools
Southern California Edison (SCE) said it developed a new grid measurement technology that will help prevent future cascading blackouts and would've helped control the Northeast blackout. Last May, Edison International testified before a U.S. House of Representatives Energy and Commerce Subcommittee about its Synchronous Phasor Measurement, which gauges stress on utility transmission grids and provides an early warning system to help prevent blackouts.

"We've had a lot of smart people who have wanted to apply better tools for at least a dozen years at Edison, but we hit a point in history of unique convergence where all the stuff we knew was possible in terms of energy and mathematics is becoming practical now because of advances in computing and communications," said Jim Kelly, vice president of engineering and technical services at SCE.

The notion behind SCE's smart grid is that manual systems, which are still being used, can be computerized to enable automated responses -- which are faster and more accurate -- to grid conditions that change at a pace only a microprocessor can keep up with.

"In order to have a truly smart grid when you've got a product that is operating 60 times a second alternating current, you really need to be able to monitor it almost that rapidly, make decisions and do things to make the grid more reliable in real time in very short intervals," Kelly said. "You've got to have computers that enable you to send signals back and forth hundreds of miles in tiny fractions of a second and react to them as quickly."

SCE's system, which has been implemented already in certain areas, gives grid operators more information at a faster rate about the causes and impacts of power outages. Synchronous Phasor Measurement can detect how stressed a power grid is, determine where the problem is and take corrective action before customers notice a glitch in their power.


Intelligent Meters
At the residential level, smart meters work in conjunction with smart grids. Smart meters identify consumption in more detail than a conventional meter and communicate the information back to a network at the utility company for monitoring and billing purposes.

After Congress enacted the Energy Policy Act of 2005, ordering utility companies to consider implementing advanced meters, programs to deploy smart electric meters have been put in place throughout the country. Power companies in California, Texas and Illinois all have smart meter programs, and pilots are planned or under way in New Jersey, Washington, D.C., and Baton Rouge, La., among others.

Smart meters will let customers pay "time-of-use" prices for electricity, which may vary depending on the time of day, according to utility companies. This

encourages electric customers to conserve energy during peak electric hours, the companies say. Time-of-use pricing has been discussed by utility companies and regulators, but hasn't yet been implemented. SCE estimates time-of-use pricing options could reduce peak demand by as much as 1,000 megawatts, the output of a large power plant.

California has been a leader in the smart meter movement since 2002, when the California Public Utilities Commission conducted a two-year statewide pilot to gauge customer interest in electric pricing options and directed power companies to explore advanced metering. The pilot found strong consumer interest in the program, with 70 percent cutting their monthly electric bills an average of nearly 10 percent.

Pacific Gas and Electric (PG&E), which supplies electricity and gas to most of Northern California, began installing the first of 9.3 million of its trademarked SmartMeters last year and is expected to finish in 2011. SCE, which supplies energy to Southern California, will soon install 5 million smart meters.

Once in place, PG&E's SmartMeters will let customers save money on their power bills by providing financial incentives to reduce power consumption during peak hours. This will minimize PG&E's need to purchase power to meet demand during critical times, help avoid strain in the power grid and reduce reliance on fossil fuel, the company says.

Overall, California utility companies are spending $3.5 billion to install 16.5 million meters by 2012, with a majority of the cost being passed to the consumer. The total cost of PG&E's project is $1.74 billion, and customers will soon see price increases of 49 cents to 99 cents per month for the first five years and price decreases afterward. PG&E says the savings from its SmartMeters will offset costs in 12 years.

SmartMeters will allow utility companies to remotely read usage totals, spot outages and connect and disconnect customers. When smart readers are installed, meter readers will be moot, with PG&E expected to layoff, or find new jobs, for 900 of its meter readers.


Energy Networks
The smart meter project has its critics, however, many of whom believe the cost of the new meters outweigh the benefits.

"We think what consumers want and need are programs that will lower rates and help conserve energy. These smart meters will do neither," said Mindy Spatt, communications director with The Utilities Reform Network (TURN). "It's a load shifting program, not a cost savings program, and it's extremely costly, with no evidence that customers will see benefits that come with the costs of the new meters."

California's power strain often comes from air conditioner use during hot days. TURN would like to see air conditioning cycling programs, where energy consumers agree to have their air conditioners remotely shut off for short increments during hot days, reducing the strain on power grids.

With the SmartMeter implementation, utility companies see a new wave of smart, energy-saving household appliances, such as dishwashers, electric dryers, refrigerators, air conditioners and pool pumps, which can communicate with smart meters to automatically adjust usage when power costs rise. Some appliance companies, such as Whirlpool, have already begun to create smart appliances to work in conjunction with the new meters.

"We will start to tie together smart devices, ranging from very simple to complex all through a home energy network," SCE's Kelly said. "Now you can make decisions and really optimize your savings. We believe as these smart meters are installed, more and more of these innovative applications will be developed by third parties."

Edison International and other utility companies have been working with the House Ways and Means Committee and the Senate Finance Committee on new tax policies to invest in the new generation of high-tech equipment.

Savings through smart energy technology isn't a guarantee, but some pilots have shown that new technologies

and time-of-use pricing options can help prevent blackouts and curb usage during peak hours. New legislation that requires efficiency standards could also help, said Brad Williams, research director for Gartner's energy utilities industry advisory service.

"Legislation is needed to require the use of grid-friendly appliance technology that can respond to disturbances," Williams said.

Future PG&E SmartMeter program customer benefits:

  • Fewer interruptions. PG&E will collect meter data without visiting customers' properties and interrupting their schedules.
  • Faster power restoration. The company will pinpoint power outages and restore power faster.
  • Faster problem resolution. PG&E will resolve service problems more easily and, in many cases, eliminate a personal visit to the home or business.
  • Better billing. Because PG&E doesn't depend on in-person meter readings, the company no longer has to estimate customers' bills when meters can't be accessed.
  • Energy usage data. In the future, customers will monitor their own energy usage via the Internet and see when they're using the most energy.
  • New rate options. As a result of the SmartMeter program, customers will have more rate choices designed to meet their needs. When these become available, customers can better manage their energy consumption and control their energy bills.


Chandler Harris is a writer living in Santa Cruz, Calif.

Chandler Harris Contributing Writer