News Releases

August 07, 2012

Smart Meters and a Smart Grid: What These Mean for Vermont’s Energy Future

In many Vermont communities, we are now seeing smart meters replace traditional analog meters. While we may not notice much of a difference in our service up front, this change will facilitate many benefits for how we use electricity in the near future. The purpose of this article is to clarify why these changes are happening, what benefits they currently provide, and what opportunities they will make available to us in the future.

Power Grid: Since the electric light bulb’s introduction in the 1870’s, public utilities have formed across the country for the purpose of supporting networks of power lines that meet the electricity demands of residential, commercial, and industrial consumers. At one end of the power line sits a generator, or power plant, and at the other end, the consumer. This basic layout has remained largely unchanged for more than 100 years.

Smart Meter: In 2009, 20 Vermont electric utilities applied for and were awarded with a US Department of Energy grant that provided $69 million to help retrofit nearly every household in Vermont with a smart meter. What differentiates this meter from our old, analog meter is the time interval between readings. With analog meters, an electric utility worker would visit our homes about once a month and read the meter to calculate our consumption over the past 30 days. Although we pay a constant rate for electricity, the utility buys power from many different sources of generation, and those prices can fluctuate by the minute. In order to determine how much we owe, the utility does its best to calculate the average cost of electricity over a long period of time (subject to the Public Service Board’s approval). This rate assumes that our consumption can only be checked once a month, meaning that we cannot take advantage of electricity when it is inexpensive and plentiful.

With a smart meter, our consumption can be communicated every 15 seconds, which will allow for the utility to charge us, the customers, a rate that is closer to the real cost of electricity throughout the day. This is called a “time of use” rate structure. For now, the utilities are busy deploying the new network of smart meters and will continue to charge the same flat rate that we have traditionally paid. The immediate advantages are that utilities do not need to send someone to read your meter every month, and when your power is interrupted, the utility is automatically notified. While the new smart meters are being deployed, our utilities are busy developing a new breed of billing system that will handle this time of use rate structure so that Vermonters experience a detailed, accurate and easy to understand bill at the end of the month. Although some utilities currently have a time of use rate structure available, it is mostly reserved for net-metered customers with some form of renewable energy (i.e. solar or wind), and some legacy CVPS customers. To find out if you can take advantage of these rates once your new meter is installed, you can inquire directly with your provider.

Smart Grid: Modern pressures such as climate change and unsustainable pricing for energy have inspired a movement that trades Greenhouse Gas (GHG) intensive power production, like burning fossil fuels, for clean and renewable power, like solar and wind as well as investments in energy efficiency. Although we have recently seen a reduction in our GHG emissions, adoption of renewable energy is slow and improving efficiency is a tedious and costly endeavor. However, a solution to these challenges can be found: it’s called the smart grid and it is powered by smart meters.

The smart grid is a catalyst that will directly help change the way we use electricity. Currently, when electricity demand peaks in the summer, the utilities need to meet that demand with additional generation to avoid brown-outs and blackouts. This is often accomplished with diesel and natural gas generators (known as peak load generators) which are both expensive to operate and pollute the atmosphere. However, if the utilities can encourage and incentivize customers to divert energy usage to “off-peak” or low-demand periods (like nighttime) then demand for electricity will lessen during those peak hours, thus reducing the need for expensive, GHG intensive peak load generators. Smart meters make this possible because they can inform the utility of how much power you used and when you used it. This information will enable the utility to offer you a reward, in the form of a lower rate during off-peak hours. This will not only save everybody money and lessen our GHG emissions, but will also help integrate more renewable energy into our grid.

Smart Appliances: Smart grid technology will eventually provide real-time market rates, giving the consumer a choice of how and when to consume energy. The immediate advantage of this will be realized by delaying the use of power intensive appliances, such as electric water heaters and laundry dryers, to the evening, when demand for power from the utility is low and therefore so is the price. Eventually, appliances will communicate with your utility, and can be set to turn on when the price for electricity has reached a certain threshold that is set by the consumer. In fact, the General Electric Company has introduced their BrillionTM line of appliances that do exactly this. You can contact your utility to find out when and if they will support this new technology.

Building on the idea of smart appliances, electric vehicles will also take advantage of this time of use price structure due to the fact that they recharge throughout the nighttime hours. This is particularly attractive because 47 of Vermont’s GHG emissions come from the transportation sector. One technology that is currently in development involves electric plug-in vehicles that are connected to the grid. These vehicles are able to discharge energy when the grid is under peak load, thereby avoiding the need to operate peak load generators, while compensating the owner of the vehicle with a premium for that service.

This same principle of real-time rate consumption can also be applied to production. Brownouts usually occur during hot summer days when people are relying heavily on A/C to combat the summer heat. Coincidentally, solar power produces the most energy on sunny days. Therefore, when demand is high enough to cause brownouts, solar power, which is clean, plentiful and inexpensive, as compared to peak load generators, is of great value to the utilities in order to suppress the cost of electricity and avoid outages. With the implementation of smart meters, combined with residential scale photovoltaic panels for private homes, the utilities will be able to pay homeowners a premium for the energy they produce while also avoiding reliance on peak load generators. This means that not only will we reduce our reliance on GHG intensive, and expensive peak load generators as well as the occurrence of brown-outs, but we will strengthen our renewable energy infrastructure. It will also provide considerable market-based incentives to homeowners to bolster the Vermont economy, and we will maintain our reputation for being a leader in curbing our energy and carbon footprint.

Efficiency Vermont was the first ratepayer funded public energy efficiency utility in the country, and Vermonters emit roughly 40 less CO2 per capita than the average American due in part to efficiency programs and the current low-carbon profile of the electricity mix used in Vermont. By the end of 2013 the vast majority of Vermont households will have smart meters, allowing for Vermont to be the first smart grid state in the country while also ensuring that we continue to be leaders with regard to preserving our environment.

For more information, please visit the Public Service Department webpage for the smart grid: www.publicservice.vermont.gov/electric/smart-grid.html

Source: Agency of Natural Resources
Last Updated at: August 07, 2012 10:17:22