Baltimore Gas and Electric Co. (BG&E) has filed with the Maryland Public Service Commission (PSC) a smart grid initiative that includes the planned installation of two million residential and commercial smart electric and gas meters, the company said Monday.

Implementation of the plan could save BG&E customers more than $2.6 billion over the life of the project, according to the Constellation Energy Group Inc. (CEG) subsidiary. Smart meters and a new pricing plan tested in a pilot program last year proved that customers can reduce peak electricity usage and enjoy significant savings, the company said. In the pilot residential customers reduced peak period consumption 26-37%.

BG&E is seeking federal stimulus dollars to help fund the next phase of its smart grid investment. BG&E is planning to file an application for up to $200 million of grant funding with the Department of Energy (DOE) next month and anticipates a decision from DOE in October. The utility estimates initial deployment and operating costs of nearly $500 million over five years.

“The successful pilot programs we’ve instituted to date demonstrate that customers can make meaningful changes in how they consume energy in response to appropriate education, price signals, information about usage and economic incentives…investment in smart grid is the next major step in our journey to reducing peak demand and long-term energy costs,” said BG&E CEO Kenneth DeFontes.

The new meters would operate through a two-way communication network that would form the foundation for an intelligent grid. The utility is planning to roll out a smart energy pricing program as its standard rate schedule, which would pay customers rebates for reducing power consumption during peak periods.

BG&E’s proposal includes a monthly surcharge of 38 cents for electric customers and 44 cents for gas customers in the first year of implementation. Over the life of the program the monthly surcharge would average approximately $1.24 for residential electric customers and $1.52 for residential gas customers, according to BG&E. Those costs could be reduced based on the award of a DOE grant.

Baltimore-based BG&E serves more than 1.2 million electric customers and more than 640,000 natural gas customers in central Maryland.

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