Baltimore Gas & Electric Co. hopes 'smart meters' raise energy

Daily Record, The (Baltimore), May 2, 2007 by Andy Rosen

Baltimore Gas & Electric Co. can move forward with plans to measure customers' electric and natural gas use on an hourly basis, a move that could eventually decrease peak demand by making people more aware of how and when they're using energy.

The Maryland Public Service Commission has authorized BGE to begin a pilot program in which it will test its new "smart meter" in 5,000 homes. The meters will be able to report energy use remotely, and can be monitored online by customers.

The program, approved April 18, is expected to begin next year. If the meters work as planned, officials said, BGE plans to replace all of the existing meters with new models beginning in 2009. The pilot program is expected to cost between $7 million and $10 million, according to PSC documents. It could cost up to $350 million to upgrade all of BGE's existing meters - which give monthly readings - but that move would need further PSC approval.

The pilot program will ultimately be funded by ratepayers, but BGE will not pass those costs on until after the project is complete, said Mark Case, the company's vice president of business performance, strategy and regulatory services. Only residential customers will participate in the pilot program, but commercial and industrial customers - some of whom already have similar "interval meters" - will be able to sign on if the program is expended.

BGE has high hopes for the program, which will create what it terms "advanced metering infrastructure." In time, the new meters could make the utility's system more responsive to customer needs, and help customers be more responsive to the needs of the system.

The meters will open the door to the expansion of power pricing based on time of use, where customers would pay more when the wholesale price of power is higher. When demand for electricity reaches its highest levels, producers turn on the most expensive types of generation to meet that need.

About 10 percent of BGE's residential customers already use a pricing model where they pay more for use during times where demand is high, and less when demand is low, said Case. The pilot program will give more specific indications to customers, especially on high- demand summer days.

Walt Auburn, assistant director of energy efficiency programs at the Maryland Energy Administration, said customers tend to make wiser choices when they have information.

"It's going to provide constant data for customers, and ultimately peak demand reduction on the system," he said. Under the pilot program, he said the meters will allow BGE to identify outages more quickly and bill customers based on more accurate information.

Still, Auburn said the "smart meters" have the potential to help customers better understand the signals that the power market is sending.

"If you don't know the price of power at a given time, how can you respond adequately?" he asked.

PJM Interconnection, which oversees the regional power grid, has incorporated next-generation meters into its view of the future of the electric supply system. PJM envisions meters that are connected to household devices and can reduce the amount of power a home is using at a given time.

Though such plans are not specifically included in BGE's advanced metering infrastructure, they are part of a larger "smart energy savers" program that also includes thermostats that can be adjusted to reduce power at times of high demand, as well as incentives to buy more energy-efficient appliances and conserve electricity. The thermostat program has been approved, while BGE is awaiting word on the conservation programs.

"We view the three programs as working together and having a significant impact on the growth of peak demand in our area," Case said.