Tuesday, June 09 2009
Duke Energy moves to roll out 'smart grid' in Indiana
Even though most utility customers can’t see it, the price of electricity rises and falls throughout the day. With a way of monitoring those fluctuations, they could turn on a clothes dryer or other appliance only at times when both electricity demand and cost are at their lowest. Under a proposal put forth by Duke Energy, residents of Southwestern Indiana may be able to do just that.
Duke has announced plans to install 800,000 so-called “smart meters” throughout its Indiana service area, which includes all or parts of Daviess, Dubois, Gibson, Pike and Warrick counties in Southwestern Indiana. The devices can tell customers how much electricity they use every day and how much they pay for it. Such information can be found now only on monthly reports.
The hope is that customers who know more about their electricity use will be more likely to wait for times of low energy demand before turning on appliances. Lew Middleton, a Duke spokesman, said that a peak in demand usually comes in the evening hours, when most residents have gone home from work.
“But by 10 (p.m.) people go to bed,” he said. “Demand falls off, so the price is cheaper.”
The meters will be incorporated into a number of other improvements leading to the creation of a smart electrical grid, or “energy Internet.” Some day the devices may be able to send messages to appliances, automatically turning them on when electricity is cheapest. The system also promises benefits for users of alternative energy sources, like wind and sunlight, and owners of electric cars.
Vectren Energy is looking at a similar system for Vanderburgh and other counties it serves in Southwestern Indiana. Chase Kelley, a Vectren spokeswoman, said the company has enlisted the help of consultants.
Duke is also working with outside companies. On Tuesday, it announced an agreement with Cisco Systems, Inc., which will provide much of the equipment and software needed for the smart grid.
But before the plans can move forward, they must first be approved by the Indiana Utility Regulatory Commission. Middleton said Duke has asked that a hearing on the matter be set for later this month.
Duke arrived at its plan through negotiations with a number of interested parties. They included the Citizens Action Coalition of Indiana Inc. and the Indiana Office of Utility Consumer Counselor.
A chief concern was to prevent the cost of improving the grid — estimated to be about $445 million in Indiana — from falling too heavily on ratepayers. In fact, bills will fall during the initial six months of the project.
Middleton said the average utility customer, who uses about 1,000 kilowatts a month, will at first pay about 59 cents less on a monthly electricity bill.
The drop will stem from Duke Energy’s having obtained the right to write off the cost of the meters from its income taxes over the course of two years. Those savings will be passed onto customers, he said. After six months, the costs will start to rising. By 2015 or so, when most of the of the meters will have been installed, the project will have caused bills to be about $5.35 higher than otherwise.
Middleton said Duke plans to start by installing 500 meters within six months from the time that utility regulators approve its plan. The company doesn’t know where the first phase of the project will occur, he said.
If it is successful, Duke will begin installing more meters. The company has already won an approval to install nearly 700,000 electric smart meters in Ohio and is looking to undertake similar projects in North Carolina, South Carolina and Kentucky.