Costs shadow Vectren test of smart grid technology

Costs shadow Vectren test of smart grid technology

Imagine a world where electric bills are never estimated. There are no meter readers, outages are pinpointed immediately, power is connected remotely, and households track their energy consumption at any time.

Its a reality somewhere. About half of the nations power customers are connected to an electrical grid that monitors their usage in real time. Called a smart grid, its a wave of the future that has not reached Evansville but it may one day.

Vectren is conducting small pilot projects to test various smart grid technology, but the company has no plan to update its entire grid.

The technology is proven to many other utilities, Vectren spokeswoman Chase Kelley told the Evansville Courier & Press. Youre not going to see us resist it, but to do this project well have to not do some other project. And wed have to pass the cost on to customers in the form of rate increases.

That wont be popular, Kelley added.

But a smart grid could completely change the relationship between Vectren and its customers, industry experts say. For starters, estimations would cease.

Currently, Vectren contracts with meter readers, who traverse the city reading almost every meter once a month. On average, they miss 1 percent to 2 percent of the meters every month, so about 140 to 280 customers receive estimated bills. This usually happens when new meter readers cant find a meter or theres a locked gate or an intimidating dog. And estimations always jump during severe weather, Kelley said.

This summer, the number of estimated electric bills skyrocketed reaching 14 percent in August for a completely different reason.

The utility experienced a perfect storm of issues Kelley said. In June, it purchased a computer program that generated new meter reading routes that were meant to be more efficient, but the rerouting process was not smooth. Vectren then hired a new meter reading vendor in September. The utility reported the previous contractor did not perform well in its last month August and the new contractor still is getting acclimated.

The utility expects to be back to estimating 1 percent to 2 percent of meters within the next couple of months.

That is one of the advantages of smart meters, said K.C. Boyce, the assistant director of the Smart Grid Consumer Collaborative. They communicate remotely. You get rid of estimated bills entirely.

And thats just where the advantages start.

Smart meters tend to facilitate the flow of information, Boyce said. I remember a story about one woman in California whose energy bill was so high she called the company. They took her to an online portal to see her smart meter data.

She saw there was a spike in usage at 6 p.m., and that was when her kids and her husband got home and turned on the TV and video games. So it provided her information she was able to use to manage her electricity bill better.

Vectren envisions using the technology to offer rebates to customers who conserve during peak energy loads, Kelley said.

It also would change the way the utility responds to outages.

Currently, Vectren relies on customers to report when they lose power.

Were not clairvoyant, said Vectren Engineer Brad Adelman. Without (advanced metering infrastructure) we have to rely on the customers feedback.

Once the initial call is made, the company makes educated guesses to find the problem. If one person calls in, the system guesses that the issue is with the line that connects their house to the nearest transformer. But, if a second person on the same street calls in, the system uses that information to guess that there is a bigger problem, Adelman said.

The more people call in, the better chance the system has of pinpointing the true problem.

If we had AMI fully integrated with IT deployment and meter data management, you wouldnt have to call in anymore, Adelman said. You lose power, instantly they all sit there and communicate with each other. We get the full picture right away.

But installing such technology could cost millions. According to national averages compiled by The Smart Grid Consumer Collaborative, upgrading Vectrens electrical grid could cost about $50 million thats about $350 per person.

Those numbers are just estimations. How much an Evansville grid modernization project would actually cost is difficult to say, Kelley said.

In 2009, Vectren had plans to update its grid, and applied for federal stimulus money to fund the project. At that time, the company estimated it would cost $90 million which would translate into a roughly $4 a month rate increase for customers.

Vectren was not awarded any money, thus the project didnt happen.

Most of the grid modernization projects around the U.S. were funded by stimulus grants. That program has ended, and there are fewer new grid modernization projects happening around the country.

Its a big decision for a utility, said Neil Strother, a research analyst for Navigant Consulting, Inc., an energy industry consulting firm. The pro is, if they have the capital, not paying people to go out and read those meters. Ive seen a variety of figures, 4 to 6 percent savings from labor costs, which is not nothing. There is a real cost for the labor, fuel, vehicles to read meters. Thats real operational savings.

Right now, Vectren has started to dabble in smart grid technology, laying groundwork for future pilot projects. All the new meters they install are smart meters there are about 8,000 now. Those meters are not yet connected with a program that reads the data, so they must still be manually read.

The company recently bought a collector box that is saving the data from existing smart meters, and hopes to have a program to read the data on a small pilot scale within the next couple of years.


Smart Grid Bulletin May 2018

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22 June 2018