Despite challenges, grid modernization is paying off for customers. Smart grid progress depends on clarifying the vision and communicating value.
Proving Smart-Grid Savings
Real-world projects show tangible returns.
place during the second quarter of this year through to year end with the meter-installation process, optional customer pilot programs, and customer feedback channel implementations all beginning in 2011.
Shifting Peak Demand
BGE’s Demand-Response Infrastructure Program: Baltimore Gas and Electric (BGE)
• 1.2 million electric customers
• Service area in Baltimore, Maryland
• 6,200-MW generating capacity (from holding company Constellation Energy Group)
• About $2.68 billion (2008 regulated electric revenues)
• Coverage: 420,000 residential customers.
• Cost: The overall cost of BGE’s comprehensive smart-grid initiative is $500 million. The demand-response infrastructure program is a subset of this initiative and the cost has not been made public.
• Overview: Rate freezes recently expired in Maryland, and as a result BGE instituted two rate hikes. To reduce energy usage and help customers lower their bills, the utility launched a demand-response infrastructure program in 2008 that’s expected to enroll 420,000 customers over the course of 40 months—a rather high 47-percent penetration. In the program, customers have a choice of getting an air conditioner switch that mounts outside the home or a Honeywell Utility Pro thermostat that mounts inside and is professionally installed. Both the thermostats and AC switches have Cooper Power modules that connect the devices via radio signal back to BGE.
On a hot afternoon in July, the utility can send a signal to participating customers’ AC units or thermostats. The AC unit then will cycle so that it’s off when a neighbor’s unit is on and vice versa, except the resident only experiences a temperature rise of about three degrees. “We’ve had a great acceptance rate and very little dropout,” says Steve Smith, sales and marketing director for Honeywell Utility Solutions. Honeywell makes the thermostats and is also delivering the marketing, field implementation, and customer service for the program.
• Returns: During the summer peak, BGE relies heavily on imported power supplies so the demand-response infrastructure program is one way of addressing this challenge. The utility estimates that its program will cut peak energy use by 600 MW over the next two years, which is about as much as a mid-sized power plant generates. For customers, the thermostats and AC switches can reduce energy costs by up to 20 percent.
• Timeline: The program officially launched in early 2008 and should reach maximum enrollment by June 2011.
Managing Voltage Effectively
Volt/Var Conservation Voltage Reduction Program: Modesto Irrigation District (MID)
• 111,379 customers
• Service area in California
• 700-MW generating capacity
• About $299.9 million revenue (2006 electric revenue)
• Coverage: More than 100,000 customers in its area.
• Cost: $1.5 million from a DOE grant.
• Overview: Modesto Irrigation District is a customer-owned multi-service utility that has long kept a close eye on regulatory activity in the state of California. “There was a big push in demand response, less generation, renewable portfolio standards, greenhouse-gas standards,” says Tom Kimball, assistant general manager for transmission and distribution at MID. “We did a benefit-cost analysis on the types of systems we were looking at to