The JCPB approved a plan Tuesday that would bring “Advanced Metering Infrastructure” to all customers by the end of 2011, at an estimated cost of $13.6 million. Instead of sending meter readers out in the field to collect usage data once a month, the JCPB can use the new system to measure each customer’s usage remotely.
Customers, too, will be able to make decisions about when they use power, and distributors like the JCPB are being pushed to tie electricity rates to time of use. In fact, General Manager Homer G’Fellers said, the Tennessee Valley Authority has pushed the schedule forward on when it wants distributors to be prepared for those kinds of changes.
“Starting in April 2010, we will be billed off of peak demand,” G’Fellers said. “And in 2012 they’ll be offering time of use rates and seasonal rates, so that has hastened our time frame as far as AMI.”
JCPB has about 74,000 customers, and all of them — residential, commercial and industrial — will get a new General Electric meter with the Eka Systems’ designed AMI software and hardware. The new system will also be compatible with JCPB’s coming move to fiber-optic transmission lines, which will start by connecting substations.
“This will provide a tremendous amount of things that will help us operationally, and it will put us in the position that we can transition better to the demand side of things, be able to know where our peaks are,” G’Fellers said.
The JCPB already has a bond that has made $28 million available to it, and some of those funds will be used to pay for the project.
By providing information to customers, the system assists a change in energy usage from normal consumption patterns, either in response to changes in price or as incentives designed to encourage lower energy usage at times of peak demand periods or higher wholesale prices.
The JCPB began using automatic meter reader systems several years ago and has cut its labor costs significantly since. Reading meters from a distance or reading multiple meters at one time are that system’s main benefits, though, and don’t help the JCPB get ready for the nation’s move toward a “smart grid.”
JCPB Chief Operating Officer Mark Eades said distributors have been “riding the wave” but now must begin “driving” how power is used. A key for his department will be something called “peak shaving” — decreasing the maximum amount of power needed during peak usage.
With the AMI system, Eades said, it’s likely that residential water heaters, for instance, could be programmed to shut off temporarily during peak demand, saving customers money and helping the JCPB.
That, in turn, could decrease the amount of substations and other infrastructure the JCPB needs to build — which is the plan, since much of the $28 million bond would initially have gone toward increased transmission capacity.
“You can’t have a system that can’t operate when it’s at its maximum (demand), so we have to design for that,” Eades said. “If we are able to shave that maximum off and push people to start using their energy at a more flat rate, we can actually save in the sense that we don’t have to build substations, which is what the TVA’s motivation is as well.
“Our goal here is to drive the system — to steer it in a direction that will benefit us as well as customers.”
In other business, the board learned that despite successful cost-cutting measures, the JCPB will likely miss its budget for the year ending June 30. Chief Financial Officer Brent Kitzmiller said the recession, combined with the JCPB’s own efforts to get customers to conserve, are lowering demand and usage.
“We’ve cut costs. We’ve done what we can do,” Kitzmiller said. “It just comes down to sales, and our sales are down 2 percent.”