August 31, 2009

EPB Chattanooga has in the last three years invested $134 million to build a fiber optic network that will serve as a communications backbone for smart grid services in a region experiencing regular double-digit wholesale electric rate increases.  Now, the Tennessee public utility is seeking a $111.5 million matching grant from DOE to help it complete its smart grid network, Jim Ingraham, vice president of strategic research for EPB, told us Friday.

“We're asking DOE to partner with us to install smart meters on every home and business in Chattanooga,” Ingraham said.  “We will deploy about 170,000 meters that will have virtually limitless bandwidth capacity.”

Infrastructure provider Alcatel-Lucent is aiding in the development and deployment of the fiber optic-based smart grid network.  As the systems integrator for EPB's fiber-to-the home deployment, Alcatel-Lucent is using some technology coming out of its Bell Labs research arm to expand the existing network to include smart grid functionality.  Alcatel-Lucent is helping to develop new modeling tools for customer, distribution and transmission level metrics.

          “In an era of rising energy costs, it became clear that we could not afford to not build a smart grid based on a fiber optic network,” EPB CEO Harold DePriest said in a prepared statement.  “Information technology and new approaches to managing customer relationships is the key to managing energy costs and environmental impacts in the future.”

To match the anticipated DOE grant, EPB has $110 million cash on hand and a network already under construction.  EPB's investment in automated switching solutions has resulted in significant reductions in outage costs for customers, Ingraham said.  And EPB projects that smart grid services will over a 10 year period save it $300 million in operational costs.

An independent analysis of the value of the project conducted by finance and engineering experts at the University of Tennessee at Chattanooga and Tennessee State University predicts that the project will create more than 4,700 permanent jobs.

EPB has invested in system automation to leverage fiber optic network connectivity to customers.  Smart metering technology developed with Tantalus Systems uses a combination of fiber optic and wireless networks to communicate up to 80 billion data points/year of customer consumption information – a significant increase over previous methods, Ingraham explained.

          Dynamic pricing is among the utility's plans:  Real-time energy use data and pricing options will be available via the internet and through an IPTV “customer portal,” said Ingraham.