THE BAKER ADMINISTRATION authorized the state’s utilities to spend $220 million over the next three years upgrading the power grid to accommodate renewables, electricity storage, and more efficient ways of detecting outages.
An order issued on Thursday by the Department of Public Utilities put off a decision on the purchase of smart meters, which allow consumers to track their electricity usage on a real-time basis at home. Officials said smart meters could be introduced in the future in settings where a high percentage of homeowners are likely to use them, such as communities where all residents are aggregated for electricity purchases.
The DPU order was a long time in coming. The state’s utilities were ordered to come up with grid modernization initiatives in 2014 and responded with plans in 2016. One of the biggest differences between the plans of National Grid and Eversource Energy had to do with smart meters.
Grid, based on information gathered from pilot programs, thought the meters had great potential and offered up a series of recommendations for their use, some of which called for a meter in every customer’s home unless the homeowner opted out. Eversource proposed offering smart meters only to customers who wanted them, citing evidence from its pilot programs suggesting a very small percentage of customers actually use them.
Environmental advocates say smart meters have enormous potential to reduce the cost of operating the power grid. Currently, homeowners pay the same price for electricity whether they buy it at peak or low demand periods, yet the wholesale price of electricity fluctuates wildly depending on demand.
The power grid is geared toward meeting peak demand, so investments get made in power plants that only get used when demand is high. Advocates say smart meters, coupled with retail pricing reflecting the fluctuations in wholesale prices, could reduce peak demand by incentivizing customers to use less electricity when prices are high and more when prices are low. For example, a family might wash clothes at night, when electricity demand is low. Or a homeowner could turn off his air conditioner during the day when demand and prices are high and he is away at work.
The DPU order reflects the mindset of Eversource, and will take a go-slow approach to smart meters. Instead, the $220 million in approved spending will target improvements of the electricity distribution system. Officials said the money will be used to make it easier for the grid to incorporate solar power and electricity from storage systems. It will also improve the grid’s ability to detect power outages; the current system often requires a customer to report a power outage because existing equipment is not capable of tracking exactly where outages occur.
