In what could take years and expend hundreds of millions of dollars, California’s major utilities are taking different tacks to respond to state regulatory encouragement to switch their vast utility systems to smart metering in which a whole host of special ratemaking and demand-side management programs can be offered to retail utility customers, particularly on the electric side.
Sempra Energy’s San Diego Gas and Electric Co. held a media briefing Tuesday to unveil its plans for testing 1,000 two-way, automated smart meters. Small groups of meters will be on customers’ premises around different parts of the utility’s service territory in San Diego County, starting next month. The test will conclude next July.
If the test of two vendors works out and SDG&E receives regulatory approvals, it plans to replace virtually all of its 1.3 million customers’ meters over the next six years at an estimated cost of $450 million, according to a utility spokesperson.
On an even larger scale in northern California, San Francisco-based Pacific Gas and Electric Co. has a $1.74 billion, five-year plan to change out all of its gas and electric customers’ meters with so-called smart, two-way communications modules. Members and staff at the California Public Utilities Commission (CPUC) are encouraging the move as a way to have energy used more efficiently and at the off-peak times.
PG&E is seeking CPUC approval of the plan by this fall, which it said will allow it to complete the changeover by 2011. (The northern California utility, which was the first in the state to embrace the smart meter shift as a strategic objective, completed pilot studies in 2004-05 with a number of its customers and technologies. One customer profiled in a local newspaper report estimated $180 in annual savings from the meter change.)
To begin the company-wide deployment, PG&E will start in the hottest parts of its service territory — the inland central valley from Bakersfield north to Sacramento over the next two to three years. Communications modules on electric meters will transmit data over power lines and the gas meter modules will use radio signals to send information to 5,000 data collection units mounted on utility poles throughout the utility’s territory.
Eventually 900 current meter reading jobs will be eliminated, and PG&E has committed to finding other positions for the employees. It has a negotiated agreement with the International Brotherhood of Electrical Workers Local 1245 on how to provide alternatives.
Lowering utility and customer costs and increasing the stability and reliability of the state energy infrastructure are the two main incentives from the CPUC’s standpoint. PG&E estimates that it can recoup 10% of the multi-billion-dollar cost of the new metering system through operational savings, assuming that at least 15% of its customers choose peak-pricing options and manage to significantly reduce their energy usage at peak hours.
The third major utility, Southern California Edison Co., has said and done less in regard to smart meters. A call to Edison by Daily GPI Tuesday seeking a status report was not returned at the time this item was written.
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