$1.6B smart meter program starts in California

The California Public Utilities Commission (CPUC) said today it has approved a $1.63 billion funding program for Rosemead, Calif.-based Southern California Edison’s (NYSE: EIX) to place 5.3 million smart electricity meters into houses and small-business sites from 2009 until 2012.

The metering program, SmartConnect, got started in 2005 when Southern California Edison (SCE) began R&D on the smart meter device. In the summer of 2007, SCE submitted an application for $1.63 billion from ratepayers to fund the third and final execution phase of the program.

Over the past year, Edison has been working closely with other utilities on the smart meter technology and program elements (see What's so smart about smart metering?).

“We are really learning from some 60 utilities from across the world that are adopting smart metering technology at the same time as us,” Paul De Martini, SCE vice president for Edison SmartConnect told the Cleantech Group.

“Smart metering is happening on an international basis. It’s not just about California or the U.S. … the world is pretty flat,” he added.

SCE said it has signed a $480 million supply deal with Liberty Lake, Wash.-based Itron for 80 percent of the meters, said De Martini.

In the early part of next year, Edison said, it plans to roll out the first wave of meters. By the fourth quarter, it plans to offer cell phone alerts for customers so they can keep tabs on their home electricity usage.

The meters use the ZigBee wireless standard to support two-way communication so the meter can connect to the utility and provide data on an ongoing basis. The meters cost less than $100 each.

Once in place, the smart meter will be able to provide what Edison claims is near real-time information from the meter into the home so customers can monitor electrical usage and costs. Customers will be able to view home meter data from the SCE Web site.

The direct benefits of the smart meter program are estimated to reduce greenhouse gas emissions and smog-pollutants by a minimum of 365,000 metric tons per year. The company said that’s the equivalent of 79,000 cars being removed from the road.

As more customers plug in electrical vehicles to their home electricity for recharging, Edison said the smart metering technology will figure centrally into that strategy.

“The metering component is a key piece of the smart grid as we move forward with distribution automation," De Martini said.

Edison’s SmartConnect system are designed so that thermostats and appliances can respond to meter reading levels, especially during peak grid hours when prices are higher. SCE said the adoption of the several million meters are expected to reduce the overall peak power consumption by about 1 gigawatt.

As more customers plug electrical vehicles into their homes for recharging, Edison said the smart metering technology will figure centrally into that strategy.

“The metering component is a key piece of the smart grid as we move forward with distributed automation,” De Martini said.

Smart metering systems are also being adopted in other geographies. A recent research report from Berg Insight said the installed base of smart electricity meters in Europe is projected to have a compound annual growth rate of 15.6 percent between 2008 and 2013. The market is expected to reach 81.2 million by 2013.

Berg Insight said those levels of smart meters means that one in three households will receive electricity bills based on their actual usage of electricity and thereby save money on energy.

The research company said smart meters have already been rolled out in Italy and Nordic countries. The next wave of European countries expected to adopt smart meters in homes includes France, Spain and the Netherlands (see Danish utility to use Echelon's smart grid systems).

New installations are expected to reach a rate of 11 million units annually in these countries by 2013. In Germany and the UK, the outlook is more uncertain.