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About MLGW : SMART GRID FAQ

What's the latest news on Smart Grid?

Smart Grid is coming to MLGW customers

MLGW reviewed bids from its Smart Grid Request for Proposal and selected a vendor, Smart Synch, who will provide the majority of components, including smart electric meters, telecommunications and in-home displays. The contract was presented to the MLGW Board of Commissioners on 6/17/2010 and approved. The contract now goes to the Memphis City Council for approval in July.

MLGW has selected and notified 1,000 households who volunteered for the Smart Grid Demonstration. Emails with a custom survey link were sent 6/18/2010, with letters mailed to customers not providing email addresses.

The remaining applicants received emails or letters advising that they were not among the 1,000 households selected--but that MLGW's Board supports expanding the demonstration so all who applied by 5/14/2010 can participate. To accomplish this, after the original Smart Synch contract is approved by the Council, MLGW will submit a change order to its Board and Council to accommodate the remaining applicants. If approved, those households will begin participation in 2011. Please note that MLGW will not be accepting new applications. Only those who applied during the four-week period this Spring will be added.

Did you know? In 2008 MLGW households used 36% more electricity than the U.S. average. Imagine how much money you spent on wasted energy. Smart Grid technology is another tool to help customers identify energy consumption and make improvements to lower their usage—which lowers their utility costs.

Frequently asked questions concerning Smart Grid

What is Smart Grid?
Smart Grid is a combination of equipment, communications and processes that utilities use to provide enhanced operations. Smart Grid includes smart meters, distribution system automation, demand response and other features that provide information for customers to lower their energy use. Many believe that AMI (Advanced Metering Infrastructure)—simply called “smart meters”—is synonymous with Smart Grid, but that is not fully accurate. There are many Smart Grid projects that do not involve meters at all. Smart Grid includes smart meters under its umbrella, but it also includes switches, monitors, analysis software, and other communications equipment between the utility and customers. The basic concept of Smart Grid is to add monitoring, analysis, control, and communication capabilities to the national electrical delivery system to maximize its capabilities while simultaneously helping consumers to reduce their energy consumption. At MLGW, the Smart Grid projects now underway are building on many of the technologies already used by electric utilities in the United States and around the world.

How has Smart Grid been developing at MLGW?
In 2009, as part of the American Recovery and Reinvestment Act, the federal government developed a plan to distribute more than $3.3 billion in “Smart Grid” technology development grants and an additional $615 million for smart grid storage, monitoring and technology viability. In other words, the federal government was willing to help utilities pay for huge upgrades to their systems. There are three distinct components to the Smart Grid enhancement now underway at MLGW.

1. Medical center and downtown. MLGW received a grant of $5 million from the federal government for Smart Grid upgrades. MLGW is matching the grant, resulting in a $10 million project for digital upgrades to the medical center and downtown areas. A high-speed data communication and control system will be created that will enhance power quality in those areas, reduce maintenance costs, and will serve as a platform for future electric-system enhancements. This component does not include the installation of any smart meters.

2. Automated switches. MLGW also plans to implement a smaller Smart Grid project that will add 40 automated switches that would help to reduce the number of customers affected by a particular outage. The switches would allow power to be automatically redirected in order to minimize an outage’s effect. MLGW is targeting those circuits that have had the longest average restoration times for these automated switches.

3. MLGW Smart Grid Demonstration. Another $1 million from the budget was approved by the Memphis City Council to create a three-year demonstration of 1,000 electric smart meters among volunteer customers within the MLGW service area. These meters will have distinct advantages for customers. For example, meters will be automatically read, any power outages will be communicated to MLGW automatically and customers will be able to monitor their energy consumption throughout the month, rather than waiting for the bill to arrive to learn how much electricity they’ve used.. The Smart Grid Demonstration will inform and motivate customers to better control electricity usage.

Why is MLGW conducting a Smart Grid Demonstration Project?

Initial plans were made to do a larger project, involving thousands of customers over a wider service area. When federal funds were no longer available, MLGW, the Board of Commissioners and Memphis City Council agreed to fund a three-year, 1,000-customer demonstration that will provide MLGW engineering, telecommunications, metering, billing and customer service staff—as well as customers—valuable information about the best options, features, uses and benefits of Smart Grid technology. The demonstration will provide actual results for MLGW to develop a business case to pursue Smart Grid system-wide. Our customers want an important project of that enormity done right the first time—and so do we. The feedback we receive from our Smart Grid Demonstration volunteers will be invaluable to all our customers. When the building of a countywide system does begin, all the advantages of having a smart meter in your home will have been demonstrated by 1,000 energy information pioneers—your friends and neighbors. We intend to listen closely to these pioneers and to use their analysis of the Smart Grid to make continuous improvements from the first day of the project.

What is a smart meter?

Smart meters provide secure, digital, two-way communications to measure electricity usage throughout the day and enable customers to see how much electricity they are using and how much their electric cost is going to be, rather than waiting until the bill arrives to see the total. Smart meters are read automatically, which eliminates estimated bills due to weather and property access issues Smart meters also communicate power outages directly to their utility company. A person with a smart meter never has to report an outage.

Why will smart meters be installed for only a few MLGW customers?

Because the Department of Energy awarded all $3.4 billion during Phase 1 and subsequently canceled Phases 2 and 3, MLGW was not able to submit its Phase 2 proposal to install smart meters for about 70,000 customers in six ZIP Codes concentrated inside the I-240 loop. Instead, MLGW has scaled back its plan to install smart meters. MLGW is seeking 1,000 customer volunteers for a three-year Smart Grid Demonstration project, in which smart meters will be installed at these customers’ homes.

There is no particular part of town targeted for the Smart Grid Demonstration. Residential customers can live anywhere within Shelby County, provided there is adequate cellular coverage. These demonstration volunteers will receive an advanced electric meter that will record hourly information about their energy usage. Additional energy saving tools will be available through MLGW's My Account feature online. Some customers also will receive a free in-home energy display to monitor real-time energy use and cost information. Participants in the demonstration will not have to report outages (since the meters would send outage signals automatically) and will not be subjected to estimated meter readings.

Will Smart Grid cause rates to go up?

The current Smart Grid projects will not have an effect on MLGW rates. The cost of the three projects currently underway are already included in MLGW's budget.

What is hoped is that consumers will be able to reduce their monthly utility expense because they will now be provided with feedback about their real-time utility usage. Understanding how their own usage patterns can affect their consumption is a major tool to discovering ways to reduce that use.

This is one reason it's called the Smart Grid -- for the first time, consumers will know how much power they are using right now, instead of waiting until the end of the month to see a bill. The Smart Grid empowers consumers to become Smart Consumers!

Are other utilities implementing Smart Grid enhancements?

Yes, the seeds of Smart Grid were planted in summer 2003 in the aftermath of the massive blackout in the Northeast, as government and utilities analyzed how to fix the vulnerabilities of the nation’s aging electric grid. Many utilities began implementing Smart Grid in the years following, with recent new projects driven by a national initiative supported by President Obama. More than 8 million smart meters have been installed by electricity providers or utilities across the United States, and in 10 more years nearly 60 million will be in place for customers.

MLGW, along with most other major utility companies in the nation, applied for federal stimulus dollars to cover a portion of the costs of their Smart Grid projects. The Department of Energy allocated more than $3.4 billion for Smart Grid projects under the American Recovery and Reinvestment Act of 2009, with many utilities competing for funding. In addition, many utilities have moved forward with Smart Grid enhancements without government assistance—including MLGW’s Smart Grid Demonstration.

The national electric grid system has only around five percent “smart” electric meters, but the number is expected to grow to 33 percent by 2015. Some utilities have had automated meter reading systems for some time now. For example, the 18,000-customer utility Tri-State EMC (McCaysville, GA) has had an automated meter reading system in place for 10 years. Other utilities are poised to significantly add to the number of smart meters in the nation’s electric grid system. In 2009, CenterPoint Energy Houston Electric began the creation of an advanced metering system that will add more than two million electric meters across its service area. And at our cross-state colleague in Knoxville, the Knoxville Utility Board (KUB) is planning to install 3,800 smart meters along with infrastructure and substation automation on and near the main campus of the University of Tennessee. The Knoxville utility estimates that it will achieve increased reliability of its electric system in addition to saving $2 million, reducing 13,500 megawatt-hours in usage, and also reducing carbon emissions by 35,000 tons—all from Smart Grid projects.

The following online address shows a map that displays where utilities are installing smart meters across the nation: http://www.smartgridnews.com/artman/uploads/1/SmartMeter_Rollouts0209.pdf

How long will it take to implement the Smart Grid Demonstration project?

Any part of the Smart Grid project that includes stimulus funds must be completed within three years. MLGW expects the Downtown/Medical Center enhancements to be completed well before the three-year deadline.

MLGW will seek bids from vendors in the second quarter of 2010 with plans to install smart meters for all selected volunteers during 2010.

Will the information collected by MLGW be secure?

Absolutely. MLGW will maintain, during the Demonstration Project and any future smart meter installation, strict confidentiality and privacy policies concerning customer information and will use state-of-the-art security technologies to safeguard that information. All information transmitted between the customer meters and MLGW is encrypted using U.S. Government-approved recommended standards. Similar security standards will be implemented for information transmitted between the utility meter and customer-owned smart communicating appliances. MLGW will not sell or share any information about your home’s or business’ specific energy use.

What do your neighbors think of the Smart Grid Demonstration by MLGW?

From April 2010, Hein Park Neighborhood Association newsletter:

"During the next year MLGW will do the first test run of new Smart Grid meters which will ultimately take 10 years to install county-wide. The Smart Grid meters have lots of advantages. They will start with 1,000 homes. It is a really, really good thing for a neighborhood to have. To get it, you have to call MLGW and ASK to get it. If lots of folk on one area call and ask, they are more likely to be the first 1,000. I would like to ask, beg, recommend, suggest, plead our neighbors and any other neighbors in our area...remember we need 1000 homes...to call and ask to be in the first 1000. Why? They automatically know if you have an outage. No one has to call. They can truly estimate your power usage and tell you what it will be in advance. If you have appliances that use too much, they can tell you what it is. They do not require a meter reader."

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