‘Smart’ power meters track electricity use

By Marc Levy

updated 1:39 p.m. ET May 5, 2008

ELIZABETHTOWN, Pa. - Determined to cut his electricity bill, Darrell Brubaker took the usual steps of raising his air conditioner's thermostat and cooking more on the grill.

But the key to maximum savings — as much as 6 percent a month last summer — was his grasp of the state of the electrical grid and his family's willingness to adjust their power usage accordingly.

His utility, PPL Corp., is among a growing number of electricity providers that are testing pricing plans in which rates are set higher during the hours of peak demand, roughly following the curves of supply and demand in the wholesale energy markets.

As more utilities install "smart" power meters that track how much electricity flows into a home in real time, they are freer to offer alternatives to the average monthly rate that they traditionally charged to consumers.

The pilot programs are the first step in what's expected to be a complete transformation of the century-old power grid. Once a silent supplier of electrons to homes and businesses, it's gaining the ability to talk back — not only to power companies, but to consumers and their appliances.

Armed with information, Brubaker, 56, took action. Besides switching his lamps to energy-saving compact fluorescent light bulbs, he chose to run his pool pump and dishwasher at night at his home in the suburbs and dairy country of south-central Pennsylvania.

"Essentially, it was just more conservation, being more cognizant of, 'Yes there are more savings here if we do things differently,'" Brubaker said.

By signing up tens of millions of people like Brubaker to change patterns of electric usage, the companies expect the new power meters and time-based rates to help avoid blackouts, curb greenhouse gas emissions and beat back the immediate need to build expensive new power plants.

Many utilities hope to make such rates available to all their customers within several years, with an eye toward shaving usage on the most demanding days of the year when electricity prices rise sharply.

While major industrial and commercial ratepayers have operated on time-based rates for years, the concept remains relatively foreign to residential users.

Various kinds of smart meters are available and in use around the country. Depending on its capabilities, a smart meter — at a cost of about $200 per home — also can play a role in how much information about energy use is made available to customers and how much money can be saved. The most advanced ones allow the utility and the customer to gauge usage and cost immediately, instead of once a month after a meter reader makes the rounds.

Utilities plan to offer a menu of rate plans. In its pilot, PPL offered something referred to as a "time-of-use" rate, where set periods of higher prices contrast with periods of lower prices. In this case, pilot participants paid more between noon and 7 p.m. on weekdays and less the rest of the time.

Some rates, called "real time," change throughout the day as the wholesale price floats up and down. People who sign up for such plans may receive signals, such as e-mails or cell phone messages, to tell them prices are climbing dangerously.

"Critical peak" rates would apply only on the dozen or more highest-demand days of the year.

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