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VOL. 126 | NO. 168 | Monday, August 29, 2011

Let There Be Light

MLGW turns up the power on smart grid project

By Bill Dries

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This fall, a group of 1,000 Memphis Light, Gas and Water Division customers move deeper into a three-year, futuristic-sounding “Smart Grid” test project that began this past January.

The lights of Downtown Memphis as seen from the corner of Monroe Avenue and Front Street. The city’s utility company, Memphis Light, Gas and Water Division, is working to make the transfer of electricity throughout town more efficient through its smart grid project.

(Photo: Lance Murphey)

They volunteered last year to get new automated meters for their homes, and half of them got a wireless digital counter top readout for inside their homes that allows them to watch their electricity usage. With a computer dashboard readout they can also follow trends for energy usage over time, and the device even suggests scenarios for cutting costs.

Smart grid technology, which optimizes the delivery of electricity to end-users, doesn’t involve installing new wires, transformers or substations that someone can point to and say, “That is the smart grid.”

It tends to be software and, at least for now, is built around the belief that the more utility customers know about their energy usage, the more they will tweak it, control it and ultimately use it in a more efficient way.

But starting Oct. 1, those in the test group can opt to pay “time of use” rates for electricity rather than a general rate based on usage that is a constant base rate no matter the time of day.

“It will allow customers to pay the lower cost of electricity used during the lower cost, lower demand period,” said MLGW spokeswoman Becky Williamson. “They’ll pay a higher cost for electricity used during the higher cost, higher demand period when it costs more for TVA (Tennessee Valley Authority) to generate that electricity or (TVA) has to buy it on the market for higher prices.”

With 430,000 electric customers, MLGW is TVA’s largest customer, accounting for 11 percent of TVA’s total load, according to the MLGW website.

The base rate for summer months is 6 cents per kilowatt hour plus a fuel cost adjuster calculated each month based on what it cost TVA to either generate or buy the electricity used is added to that.

But the time of use summer rate for electricity ranges from 4 cents in off-peak hours to 13 cents during peak hours.

“It is going from the assumption that the cost for the electricity I use is the same 24 hours a day, 365 days a year, to the electricity I use at 6 p.m. on a Wednesday in August is more expensive that what I use at 2 p.m. on a Sunday in December,” Williamson said.

MLGW had even bigger plans for a smart grid transition when federal stimulus money was still plentiful. The utility got $5 million from the U.S. Department of Energy for its phase one proposal and had plans for a larger scale deployment in phase two. That was canceled when federal officials awarded all of the money they had for the phase one applications across the country. MLGW adjusted with a smaller scale test project.

And the utility didn’t get as many volunteers as they had thought – slightly less than 2,000 for 1,000 slots.

“It represents every ZIP code in Shelby County,” Williamson said. “We had volunteers from all across the county. It covers all the demographics. It skews a little bit higher income, higher education. We have homeowners. We have renters. We have people with master’s degrees and people who didn’t finish elementary school. We have the gamut.”

Other cities have made trial steps with smart grid technology in specific areas instead of a scattered use of the technology.

Austin Energy in Austin, Texas, is involved, along with the University of Texas at Austin and several technology companies, in a grant-driven demonstration area called the Pecan Street Project.

“They have home area networks. They would have solar panels and they might have plug-in electric cars,” said Austin Energy spokesman Carlos Cordova. “All of these things are being experimented with and tested in this neighborhood. It all relates to the smart grid. They want to test how can your car talk to your house and your house talk to your appliances and all of this talks to the grid.”

Austin has been experimenting with smart grid technology since 2003. Almost all of Austin Energy’s 400,000 customers have smart meters but Cordova describes the pace of the utility’s work as slow.

“We’re working on several different fronts and taking it slowly where there is still work and research that needs to be done,” he said. “Much of this equipment is expensive. That has to be put into budgets. A lot of this is developing slowly and we are testing it as we go along.”

In a lot of ways, the smart grid technology is about changing decades of reality when it comes to the public’s use of utilities and what the public expects in those transactions.

There is the monthly bill that even with the knowledge that the hottest and coldest months will involve more energy usage can come as an economic wallop to even the most conscientious consumer.

Starting in February, those with smart meters got more information when they logged onto their account information on the MLGW dashboard. Their usage is broken down to every 15 minutes of the billing period and has graphs for every day of the period as well as projections about what the bill will be like based on current usage levels.

“I was totally amazed,” said MLGW president Jerry Collins of his own household usage levels, which spiked between 5:30 and 6:30 on weekday mornings. “It was the hot water heater running because we’re taking showers. Now, we’re taking shorter showers.”

Memphis resident Denise Watts shows the home display for her MLGW Smart Meter that shows peak energy usage, projected electricity cost and daily usage.

(Photo: Lance Murphey)

Collins’ decision is what utility executives experimenting with the smart grid technology see as the ultimate goal.

“That’s the short- and long-term goal,” said Cordova, “to raise everyone’s awareness about how much electricity they use, when they use it, how they want to use it. Those are the ultimate goals of all of the smart grid projects.”

And Williamson said in that direct pocketbook application is a direct path to broader goals.

“When the community uses more power, it costs more to generate that power. Everybody’s costs go up,” she said. “If TVA has to generate less power overall or buy less power overall then everyone’s rates are held down because that fuel cost adjustment portion of the rate would be lower.”

Outside the general definition of the project are other efforts lumped in with smart grid efforts. Those include MLGW’s involvement in installing electric vehicle charging stations as well as small amounts of solar energy sold back to TVA and MLGW by Sharp Manufacturing Co., which makes solar panels, and a handful of private homes with solar panels.

Cordova said the smart grid technology through meters that is the most specific definition of the concept was unimaginable 10 years ago for even the limited use that is emerging now.

Austin Energy is automating all of its 70,000 street lights with smart grid computer technology that is aimed at replacing the old photo cells that turned lights on and off at the preset hours for dusk and dawn.

“We can time them to where some are coming on late and some are turning off later than they should,” Cordova said of the project he estimates will pay for itself in just a few years. “We can cut off a minute here, a minute there – before dawn or before dusk – and you can save electricity that way without making a big difference in the lighting quality.”

There are also some other possibilities that are aimed at long-standing practices and technological limitations utilities have.

Despite all of the technological advances, MLGW, Austin Energy and other utilities still rely on customers to call and tell them specifically where power is out. The smart meters include in them software that could notify the utility when there is an outage.

A group of 40 automated switches are to be installed by MLGW to automatically redirect power to areas with an outage. Those areas that have the longest average restoration times are being targeted by MLGW for the switches.

“You don’t have to call on us,” Collins said. “We will dispatch a crew within a few minutes. If you are at work, you will never know your power was out unless you see the clock blinking.”

Austin Energy’s use of similar technology attached to power lines has been in one part of the city and limited to six circuits out of 400. But Cordova notes that for a business running a fleet of trucks using $3.50-$4 a gallon gasoline, the savings are obvious.

“We don’t roll a truck all the way to your house to find out if you have an outage. … Right now, our call center calls our customers back and asks if their power is back on,” he said. “Once utilities start doing this, their efficiency is just going to improve so much and their costs are going to go down as well. Utilities haven’t been able to do it until they installed these smart meters.”

The smart meters have been talked about theoretically for years. And they have been one of the perennial points of contention in MLGW’s relationship with some members of the Memphis City Council.

Council member Joe Brown has grilled Collins and his predecessors about the use of the technology, even in its infancy. Brown is adamantly opposed to the meters because using them will eventually lead to putting meter readers out of work.

Meter readers still read smart meters, even though they send the data automatically to the utility. But the utility says since meter readers will be reading the other kinds of meters in the same areas, they will continue to read the smart meters manually as well.

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