By March end, the Connecticut Department of Public Utility Control will decide whether the state’s electricity grid will be smarter.
Connecticut Light & Power wants to equip the homes and businesses of its 1.2 million customers with smart meters, at a cost of $429 million. The new system is designed to give the utility and ratepayers a more detailed readout of energy use, with an eye on ways both parties can control costs.
While Norwich Public Utilities has already picked a vendor to install smart meters for its 22,000 water, natural gas and electric customers, the proposed CL&P rollout represents the largest shift toward the technology in the state.
The draft decision by the DPUC on the CL&P smart meter rollout is expected on March 22. After a public comment period, the DPUC will issue its final ruling April 6.
The deliberation comes as businesses and state officials worry about the upfront costs of CL&P’s smart meters, even though bigger cost savings are expected. At the same time, the industry still is working to resolve issues such as security and privacy while ratepayers remain passé about the new technology.
“At the end of the day, there is an investment in the infrastructure,” said Camilo Serna, director of strategy and business development for Northeast Utilities, the Hartford parent of CL&P.
At a smart grid conference in Boston on March 2, experts said the most important part of a smart grid rollout is exciting consumers about the product. That, in turn, will help regulators see the benefits. Utility companies and smart grid providers say they must get ratepayers more informed about the benefits of tracking their energy use, particularly the cost savings.
“The average consumer right now is not that interested in having daily control of their energy use,” said Taff Tschamler, director of retail energy for KEMA, an energy consulting company with operations in Middletown.
Before submitting its 1.2 million customer proposal, CL&P completed a three-month pilot smart meter project in the summer of 2009 with 3,000 residential and business customers. Serna said pilot customers liked the idea of smart meters and the resulting dynamic pricing, including money-saving options for reducing their electricity use during peak periods.
“If you increase the prices, the customer will respond,” Serna said.
Tschamler compared the future of the smart grid to the eventual embrace of the call-waiting feature for phones. In the 1980s, an AT&T survey showed most customers did not understand the concept and therefore didn’t want it. Ten years later, once call-waiting rolled into the market, it was a feature everyone wanted.
The smart grid should follow a similar track; once customers have a better understanding of the benefits, they will want them, he said.
“At the end of the day, the smart grid is really about creating value for customers,” Tschamler said.
The upfront cost of the smart grid rollout is a major concern in Connecticut.
Attorney General George Jepsen said the $492 million pricetag over 20 years is too high while the cost benefits are still unknown. NU estimates the new technology could save up to $600 million initially and more into the future, but those savings are dependent upon how customers respond.
Jepsen asked the DPUC to deny the CL&P smart meter rollout, saying that the upgrade should wait until the current meters run out of useful life.
Because smart meters provide such detailed information on ratepayers’ energy use, privacy also is emerging as a big concern, said Chris Reid, CEO of Energent, an Ontario, Canada, provider of energy information solutions.
An analysis of a smart meter’s data shows when the users are there, when they aren’t, what appliances they are using, when they flush the toilet; and many patterns emerge, Reid said.
The key is to include privacy as part of the design of a smart meter rollout, Reid said. The information being transmitted from the smart meter needs security, and utilities should agree only to use the data as it relates to better cost controls and efficiencies for the entire system.
“The industry at large is still grappling with this,” Reid said.
The Connecticut Business & Industry Association sees smart meters as the future of energy use, but shares the attorney general’s concern about the upfront cost of CL&P’s plan vs. the initial benefits.
“It can benefit consumers, but we want to make sure you do it in the most cost-effective way possible,” said CBIA energy lobbyist Kevin Hennessey. “This is a tool to help people measure their use of energy.”
If DPUC approves CL&P’s plan, the utility expects to deploy smart meters in late 2012 and start offering dynamic pricing choices for consumers by 2015. Those options include charging more when usage is highest and certain rebates for low-income customers.
“The smart grid is unavoidable,” David O’Brien, former commissioner of public service for Vermont, said at the smart-grid conference. “The digital revolution is effecting every part of our lives.”
