Wednesday, February 25, 2015
Con Ed spending $1.5 billion on ‘smart meter’ program
Con Edison is planning to spend $1.5 billion to make its electric and gas meters "smarter.
The utility, which serves nearly 10 million people in New York City and Westchester, wants to embark on an eight-year "advanced metering initiative," as part of its recently filed rate case. If successful, the program would replace roughly 4.7 million meters and could serve as a platform for many of the state's renewable energy plans in New York City, by far the biggest consumer of energy in the state.
Advanced meters provide near real-time, two-way communication between customers and the utility, allowing for precise voltage control, demand response and a more streamlined incorporation of the myriad renewable energy and energy efficiency technologies envisioned for New York's power grid.
"The smart meters enhance that capability," said Thomas Magee, general manager for Con Ed's Smart Grid Implementation Group. "They facilitate the ease with which you can integrate these resources into the grid."
But even before many homes and offices are equipped with solar arrays, wind turbines and battery systems, the advanced meters can change how customers understand and engage with their energy use right now—a major tenet of the state's plan to overhaul its energy grid, officially called Reforming the Energy Vision.
The utility has explored demand response initiatives for more than a decade to get customers to turn down the power during peak demand periods, typically on hot summer afternoons. Advanced metering involves the same principle, though with much more precision.
Customers would be able to track when energy is most expensive and adjust their use, conceivably doing so remotely by smart phone.
Karl Rábago, director of the Pace Energy and Climate Center, refers to the technology as Smart Grid 2.0—a more modern version of traditional demand response and efficiency programs.
"Smart Grid 2.0 is about a wealth of new services built on the Smart Grid 1.0 platform," he said, adding the advanced technology is about "offering customers value, mostly from third parties, and including, if there is a market for it, the option to control our toasters with our phones."
What other energy companies will be watching for over the course of the rate case is how welcoming Con Ed's system is to competing forms of energy. The utility touts a wide array of technologies that can interact with their new meters but renewable energy companies are concerned that Con Ed will shut out competing power vendors.
Ultimately it will be up the state Public Service Commission to determine the rules of play.
Con Ed is excited about voltage control—essentially raising or lowering the level of power pumped into buildings with greater accuracy.
"We manage the grid here to a certain voltage level but we really don't know where are customers precisely," Magee said.
If voltage can be lowered to certain areas, the utility can deploy it elsewhere where it might be needed more.
The meters would also provide real-time information on outages, allowing the utilities to more quickly pinpoint where problems lie and how to isolate them.
Smart meters have been the subject of some controversy. Because they receive and send signals like wi-fi devices or cell phones, some people fear they emit harmful electromagnetic waves. A group of mid-Hudson valley residents recently upbraided P.S.C. staffers at a hearing in Kingston, N.Y., over the technology.
Customers have also expressed privacy concerns, because the information exchanged between the utility and customer would give a much more detailed profile of how a single household uses electricity
Rábago, a former Texas energy regulator, said utility companies already know plenty about their customers.
"The utility already knows how you use your electricity," he said. "If you're growing pot, they know it, believe me,"
Con Ed proposes rolling out the program over an eight year period. They plan to spend $8 million in 2015, $69 million in 2016, $174 million in 2017, $317 million in 2018 and $306 million in 2019
Future expenditures will put the total price tag at roughly $1.5 billion. Each meter, with installation, will cost the company $270 a piece.
"We're hoping that that price comes down now," Magee said. "We think we're coming in with this at the right time."
In 2010, using federal stimulus dollars, governments and utilities around the country began installing smart meters. There are about 50 million advanced meters in the U.S., covering 43 percent of households.
Magee said there is more competition now that the technology has been deployed on a wide scale.
Over the next few months Con Edison will put out requests for proposals from meter vendors, but the program can't begin in earnest until the utility's rate case is approved by the Public Service Commission.