Baltimore Gas & Electric has proposed switching all its customers to "smart grid" technology -- particularly advanced meters that provide frequently updated information about energy consumption -- that the company says will encourage them to conserve when it matters most, at peak times when we're paying the most.
Company officials said the initiative could result in demand reductions of 500 megawatts --- the amount of electricity generated by a new power plant, without having to pay to build it (or fuel it).
The program has a hefty price tag: $500 million, to be funded through bill surcharges that start at 38 cents for electric customers and 44 cents per month in the first year. These are expected to increase to an average of $1.24 and $1.52 respectively over the five-year program --- or perhaps less, if BGE receives federal stimulus grants for smart grid technology of up to $200 million for smart grid technology.
They submitted the initiative to the Maryland Public Service Commission on Monday, which will ultimately decide whether to give it a green light.
The Sun's business columnist Jay Hancock said the smart grid proposal will be worth it if it works out as planned -- with federal stimulus grants, and if the savings pans out.
And, he points out, the smart metering pricing could have been set up so that people who continue to use energy during peak periods pay more. Instead, they set up incentives: rebates to reward those who cut back at critical times, instead of penalties.
Still, consumer advocates such as the Office of the People's Counsel want to be able to carefully vet the terms of any potential deals before they are on the hook for the price of this program. They want to know why it has to be rolled out so quickly, instead of just installing the "smart" meters as the existing ones grow obsolete. There are also concerns about smart grid security. And they're just working out the standards for these smart grid devices now.
Most importantly, they question whether the actual savings will match the predictions.
How does BGE say the initiative would work?
In pilot programs, about 3,000 BGE customers got devices that showed them detailed information about their consumption. They also got lighted orbs that glowed green most of the time, but started to flash when critical peak periods (when demand and costs are high) were predicted due to high temperatures, for example.
When the peak times arrived (between 2 p.m. and 7 p.m.), the orbs switched to red, as a signal to consumers to conserve. During the tests, customers saw the light and reduced their energy consumption by about a third in the peak periods, which translated into cash back on their bills.
BGE says by reducing demand at these peak times, the company would pay less for the energy used by other customers who won't (or can't, for health or other reasons) --- cut their consumption during those times.
BGE also says that even those customers who don't change their consumption behavior would see savings, because these new meters would also serve as two-way communication hubs, allowing the company to read the meters remotely and get information about outages and other problems. That would eliminate about 100 meter-reader jobs and other costs, for about $600 million in savings, according to BGE.
What do you think about the proposal?
(photo: Jed Kirschbaum/Baltimore Sun)