April 6, 2009

CenterPoint Energy's AMR plan calls for 2.4 million Itron meters using that manufacturer's proprietary OpenWay networking technology -- and the rollout is underway.

          Besides CenterPoint, Itron has deals with Southern California Edison, San Diego Gas & Electric and Detroit Energy -- totaling 14 million meters, said Itron.  Deloris Duquette, a spokesperson for Itron, estimated the Liberty Lake, Wash-based firm has landed about 40% of all smart metering contracts awarded in the US thus far for full field deployment.

          Contracts for the purchase of about 40-60 million more smart meters are likely to be awarded in the US in the next five years, Patti Harper-Slaboszewicz told us.  She's senior director at the consultancy Utilipoint.

          Itron entered the smart meter market in 2007 and will be competing with Silver Spring Networks, Elster, Landis+Gyr, Sensus, Trilliant and Echelon, she reminded.  Itron's path to cash includes selling its OpenWay platform as a standalone solution plus selling parts of it to be combined with competitor's products.

          CenterPoint sees the meter deployment as a “foundational step” toward forming a smart grid in its 5,000-square-mile service footprint in and around Houston, CenterPoint's Vice President of Corporate Communications Floyd LeBlanc told us.  The IOU is spending $640 million over five years with the expectation that it will be recovered in 12 years from the retail electricity providers -- or REPs -- that operate in its footprint (EDITOR'S NOTE: Texas has an open retail electricity market where the IOUs deliver the electricity and the marketers sell it and compete for customers.  That model offers the hope of driving prices down and innovation up for the consumer -- and smart grid is expected to act as a platform for inventive services that marketers can use to gain an edge in competition such as bells and whistles that make electricity “greener,” easier to conserve and all around “smarter.” Getting the REPs to foot the bill is an added bonus for IOUs that seems to make some sense to us, though it's not the only reasonable approach).

          “We're really interested in changing the way the electric grid operates -- from analog to digital,” said LeBlanc.  If Thomas Edison came back to life today, he would recognize an electric system he built,” LeBlanc quoted a senior officer at CenterPoint.  “With smart meters in play, we're getting a lot of information about what's going on in the system,” LeBlanc said.

          The firm can create a power outage and watch as its intelligent, automated systems puzzle out the problem, he added.

          “We have sensors monitoring power flows on lines, and they see the ‘signature' of an event.  The sensors can recognize the difference between lightning hitting equipment and a pole down because a car hit it, for example,” said LeBlanc.  The “self-healing” system also isolates the problem, quickly bringing power back to adjoining power grid areas and directs repair crews to the spot that needs fixing.

          CenterPoint won approval from the Texas PUC in December to roll out the smart meters.  By September, consumers will begin saving money because of the new meters.  “They'll have a lot more insight, knowledge and control over their consumption.  Countertop devices will show electric bills month-to-date and projected month end.  By seeing what you are consuming, you can make adjustments.”

          The cost of turning electric service on and off will gradually drop as the smart meters are installed.  The cost associated with traditional meters is $8.  With smart meters it's $1.  The savings will be averaged so that all electricity users experience the same benefit from CenterPoint's smart-meter deployment.

          With usage data being collected and disseminated every 15 minutes via a system from eMeter, power generators will eventually be able to avoid using more expensive units to meet demand when consumers pile it on.  In hot and humid Houston, that mostly means AC use.  Grid operators will see peak demand fall, which reduces the need to use inefficient peaking power plants and pushes back the time the next power plant needs to be built, LeBlanc predicted.

          OpenWay is a network architecture that uses RF mesh technology at the meter level.  “Every meter talks to another meter,” all the way back to cellular and BPL networks -- the Corinex technology IBM famously started deploying with the IOU in years past.  IBM remains the systems integrator at CenterPoint, Duquette reported.

          OpenWay was designed using open standards and protocols including ANSI C12.22, GPRS, IP, SOA, WSDL, XML and ZigBee, she added.

          Itron has been working diligently on security issues, with outside security firms Certicom and Industrial Defender, said Duquette.  Itron's security architecture is based on elliptic curve cryptography or ECC.  The firm's license agreements let utilities test for security, she added.

          Smart-meter deployment for San Diego Gas & Electric, Southern California Edison and Detroit Energy are to start this year, too, reported Duquette.

          Thus far, selections have been made for the purchase of 43 million to 55 million smart meters -- full field deployment and pilots -- in the US, Harper-Slaboszewicz reported.  At the end of 2007, about 6.7 million electric smart meters had already been installed.