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Baltimore's Smart Meter Project Is Back On Track

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After weeks of testimony and 11th-hour changes to its big smart meter project, Baltimore Gas & Electric has gotten itself back into the good graces of Maryland state regulators. The utility announced Monday (PDF) that the Maryland Public Service Commission approved the redrawn project on Friday, meaning BG&E won’t have to return a $200 million Department of Energy stimulus grant for it.

That’s good news for BG&E, and good news for smart meters as well. They’ve been getting a lot of bad press lately, with state utility regulators questioning whether or not the two-way communicating digital meters deliver enough money-saving potential to justify raising customers’ rates to pay for them. Both Pacific Gas & Electric in California and Oncor in Texas are facing lawsuits from customers who claim their new smart meters are overcharging them for electricity. Hawaii’s Public Utilities Commission last month rejected smart meter testing in advance of a planned $115 million smart grid by Hawaii Electric Co., saying it wanted the utility to find a way to install the meters without raising rates.

In BG&E’s case, its original plan called for increasing customer rates over the next 15 years to cover the $835 million cost of the project over that time. The new plan approved by the commission, on the other hand, would only set in place rate increases to cover one-quarter of the project’s expected cost, and would resubmit rate cases in the future to pay for the remaining costs.

In BG&E’s words, the commission promised to allow “prudently incurred costs” for the project. In what seems to be a verbal jab at the commission, BG&E’s press release also said that regulators had promised not to subject future cost reviews to “unfair, post hoc nickling-and-diming.” The utility also dropped its idea of forcing all customers to pay peak time prices, or more expensive rates when power is in the highest demand — the new program will make those time-of-use rates optional.

BG&E has said the project will eventually save customers some $2.5 billion in electricity costs, but the big question is when and how those savings will be delivered. While the biggest share of the $835 million smart grid plan involves installing smart meters, those may or may not help customers save energy. Rather, smart meters must be connected to some kind of consumer energy management system, whether a customer dashboard or some kind of automated system for cutting power use during peak power times, to help save power.

BG&E plans to deploy these kinds of systems as part of its project, but the new plan calls for an accelerating their deployment to late next year, rather than the previous plan to provide interfaces about one year after smart meter installation began. The utility also said it would beef up its customer outreach and support plans to make sure “all of its customers, including limited-income customers and senior citizens, have the information they need prior to each phase” of the project.

That’s critical, as the experience of PG&E has shown — the California utility reported in May that its multi-million smart meter deployment was plagued by a lack of customer outreach and education, and BG&E is likely looking at that 700-page report for do’s and dont’s for its own smart meter rollout.

The two utilities also happen to share a common vendor — Silver Spring Networks, the well-funded startup widely rumored to be planning an IPO this year. Silver Spring’s networking and communications gear is inside some 3.6 million of the roughly 16 million smart meters installed in the U.S. so far.

For more research on the smart grid check out GigaOM Pro (subscription required):

Report: Open Source & the Smart Grid

Home Energy Management: Consumer Attitudes and Choices

Cisco Seizes Smart Grid Low Hanging Fruit

Image courtesy of rainy city.