State looks to future with 'smart grid' technology

Posted:  08/18/2009 

MONTPELIER — Whether the state is successful in its application for $66 million worth of federal funding or not, Vermont's utilities and regulatory agencies will move forward in an effort to create a "smart grid" for power distribution, state officials and industry executives said Thursday.

However, without the federal assistance, it will take much longer to complete the ambitious project, they said.

The smart grid proposal would involve installing new electric meters in Vermonter's homes and creating the fiber optic pathways and technological links. That, in turn, would allow those meters to "talk" back and forth with utility computers, coordinating when electricity is used and reducing how much electricity is used and how much it costs.

And, Commissioner of Public Service David O'Brien said, such a smart grid could prepare the state for using electricity in new ways, from electric cars to, in certain cases, new kinds of electric heat that use off-peak power.

Such uses of electricity, for instance for heating domestic hot water, have long been anathema in a state that has invested heavily in slowing the increased use of electric power and efficiency.

However, given new technologies for using electricity, a smart grid could allow the use of electricity for those purposes without increasing peak demand — that is expensive power during the time when it is most in demand — and reduce carbon dioxide emissions from using fossil fuels for transportation and heating, O'Brien and others said during a discussion of the smart grid application Thursday.

If Vermont's application, led by Vermont Electric Power Co. with assistance from all of Vermont's electric utilities, the state and the congressional delegation, is successful it will mean the upgrade of the electrical transmission network will be much quicker than it would be otherwise, officials said.

In all, the project is expected to be completed in three years if Vermont is the state to win the money and will cost about $133 million. Half of that would come from federal stimulus money, while the remainder would be put up by the utilities.

The money would likely come from cash flow of the utilities and from debt financed as the utilities typically backed by their future earnings in rates, said Bob Young of Central Vermont Public Service.

Considering where electricity can be used more effectively with the aid of a smart grid is not so much a change in state policy as it is a refinement of it, Young and other utility executives said.

One of the advantages of a smart grid is that power is not used at peak demand times and it also allows renewable sources that do not generate electricity as continuously as fossil fuel or nuclear plants to be integrated into the power supply, officials said.

Mary Powell of Green Mountain Power said that Vermont already has electricity customers who are savvy about saving electricity and that could result in a reduction of many percentage points in their electricity bills if they received information — and price changes — based on when they used power, which would be possible with a smart grid.

The Vermont application is an attempt to get federal money utilities and states in other parts of the country will also be seeking. But because the Vermont application is a unified approach, the Vermont Electric Cooperative already has smart meters installed in most of its customers' homes and for other reasons it stands a good chance of success, said officials. Its fate will be known in a few months.

"We believe it has a very good chance of success," said Kerrick Johnson of VELCO.

Sandra Levine, an attorney with the Conservation Law Foundation who works on electrical utility issues, said the smart grid could be very beneficial to the state if built and used properly.

"In fact it should enable both utilities and Vermonters to use less power overall and to use electricity wisely," she said. "It is not an opportunity for Vermonters to go back to the days of electric heat. Using electricity for heat is very inefficient. When Vermont priced that electric heat at the level it really cost we saw a significant downturn in electric heat usage."

A smart grid should be "an opportunity to price electricity at what it really costs. In that scenario you won't see electric heat."

By Louis Porter VERMONT PRESS BUREAU - Published: August 14, 2009