Springfield City Council is exploring an upgrade to City Utilities' metering and energy usage monitoring systems in an effort to reduce energy usage and environmental impacts. But, as leaders of the municipal utility told City Council March 3, CU would have to spend money to save money.
CU officials presented requested information to council on "smart grid" technology, a term used to encompass a variety of utility concepts from automated meter reading to two-way communications between homes and utilities.
On their way
Director of Distribution Gary Gibson said CU already has implemented smart technology in many ways.
"All of our substations are automated - we have a fiber backbone to all of our substations - and we can do automatic re-closing of breakers and similar (tasks)," Gibson said. "That's what smart grid is - automating those things that used to be done manually to make sure energy flows as efficiently as possible from production through distribution down to the customer."
Automated meter reading systems also are in place for some CU customers - Gibson said nearly 6,000 meters can send signals to readers driving through neighborhoods, eliminating the need to search for hidden meters.
In that way, CU is following a national trend. The federal Energy Independence and Security Act of 2007 put standards in place for implementing smart technology, and the federal government has tracked implementation of the new systems as a result.
The latest information from the Federal Energy Regulatory Commission says more than 6.7 million meters nationwide are using some kind of smart grid technology, up sevenfold from 2006.
Electric co-ops are leading the way; more than 16 percent have implemented some part of the system, mostly automated meter reading. The reason, according to Gibson, is that rural electric providers see a much quicker return on investment by not having to travel to each customer to read meters.
Branson-based White River Valley Electric Cooperative began reading its 49,000 member's meters by automation five years ago.
John Bruns, White River's manager of engineering and technology, said the system allows the co-op to accurately plan its financials; members previously read and reported their own meter usage.
"By the time you gave them some time to pay their bill, it could be as much as 105 days before you actually got a payment," Bruns said. "With this system, you can read the meter one day and bill them the same day, and actually be current in meter reading and billing. We know exactly how much (energy) the customers use, and in five to 10 days we get the money from our customers."
Advanced technology
The smart grid, also called advanced metering infrastructure, or AMI, goes well beyond automatic meters.
Much of the system is based on two-way communications. Utility users would have the ability to send CU information about their usage, including when power was lost, and CU would have the ability to send information to users.
That data could range from simple rate information or messages about the utility to the ability to remotely turn on or off service based on payment status. The most advanced systems would allow customers to have the utility cycle appliances on and off to conserve energy usage, though those systems weren't included in CU's cost estimates.
Gibson said the advanced technology would allow the utility to save about $4.8 million a year through a combination of factors: fewer people to collect meter readings; saved time and fuel needed to send an employee to turn power on and off; and more accurate accounting. Also, power outages would be reported automatically.
"We saw with the 2007 ice storm some of the benefits we could have gotten, with outage management and outage response, by knowing when customers were off and when they came back on," Gibson said. "We could have shaved some time off of that restoration if we had that system."
White River's Bruns said the automated system was essential in addressing the 2007 ice storms; the recovery was complete in about week.
"It was ultimately the only way to handle that outage," he said. "Otherwise, we would have probably been working on that for two or three weeks."
The price tag
CU estimates a $36.5 million investment for the smart grid system, which would take about four years to install.
CU Chief Financial Officer Jim Shuler said there are three possible options to pay for the technology, and each would include a rate increase for customers.
One option is a "pay as you go" system, including a rate increase that would sunset after four years; the average residential customer would see $1.90 per month in additional expenses for electric usage, the same amount for gas and about $3.40 per month in water bill increases.
Another option would call for issuing bonds to pay for the process up front and enter a 10-year payback schedule. The accompanying rate increases are an estimated 90 cents monthly for electric and gas usage and $2 monthly for water.
The third option, which also includes borrowing for 10 years, would impose higher rates based on which utility would benefit most from the new technology. In that scenario, electricity bills would go up $2.60 a month, while gas bills would increase 40 cents a month and water bills 60 cents a month.
CU could benefit from the recently signed federal economic stimulus package, which includes $4.5 billion in matching grants for smart grid infrastructure improvements, though Gibson said it's unclear how that money will be distributed to the states.
While there is no set timetable for implementing any of the smart grid technology, none of the discussed changes would likely happen before 2011, due mostly to the fact that customers already will pay higher rates beginning in October 2010, to cover the Southwest 2 Power Station expansion.
And while there are no set proposals for how to phase in the new technology or cover the costs, CU General Manager John Twitty told council the utility wouldn't be doing its job if it didn't look into the potential risks and benefits of upgrading.
"We characterize this as our responsibility to make sure we're operating the most advanced, forward-looking utility that we can, consistent with the (monetary) constraints," Twitty said.[[In-content Ad]]
