Demonstrating Smart Grid Viability

OG+E Gets Stimulus to Move On

Published In: Intelligent Utility Magazine January/February 2010

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SUBSTANTIVE PROGRESS IN ESTABLISHING SMART GRID INFRASTRUCTURE isn't always easy to see or measure.

But that progress may soon become much more noticeable-in the wake of the U.S. Department of Energy's (DOE's) fall 2009 announcement of utility recipients in its economic stimulus grant program.

One of the awardees on the DOE's lengthy list is Oklahoma Gas & Electric (OG&E), which has arguably already entrenched itself ahead of many other electric utilities in both thought leadership and action in the smart grid space.

OG&E's first actual test and evaluation of the principles of smart grid occurred during the sweltering summer of 2008, when the utility conducted a study of actual user behavior within a small sample of its customer base. The study involved installing 6,600 digital smart meters as well as a number of in-home informational devices for the benefit of volunteers (many living in apartments) in the Quail Creek neighborhood of northwest Oklahoma City.

Among Quail Creek volunteer participants, the overall reaction to dynamic pricing and the broader advantages of having smart meters and in-home devices was so overwhelmingly positive that the neighborhood continues to operate in its own individual smart grid sphere-effectively living and consuming electricity, in comparison with other OG&E customers, somewhat ahead of the curve.

That won't be the case for much longer, however, as the DOE grant represents $130 million toward what OG&E has slated as a comprehensive program to install smart meters throughout its system. That means more than 770,000 smart meters are to be installed throughout OG&E's entire customer constituency in most of Oklahoma and a small portion of western Arkansas.

The total cost is projected by OG&E at approximately $300 million (including the $130 million contributed by federal taxpayers) over the three-year period during which smart meters are to be installed.

To further demonstrate the viability of its smart grid efforts, OG&E is working on its next test market and case study (one much larger than Quail Creek) in Norman, Okla., where the utility is establishing what it calls its first Positive Energy Community (''Positive Energy'' carries an OG&E trademark).

Within the next several months, OG&E plans to deploy 42,000 smart meters in Norman, accompanied by a wireless mesh communications network.

''We're going to do an in-home study with about 3,000 volunteer customers in Norman, who will now have some form of in-home device, and a variable peak-pricing tariff,'' said Ken Grant, managing director of OG&E's smart grid program. ''This will be a statistically valid study to prove out how those customers respond to price signals, and how much load they're willing to shift: What is their actual behavior change?

''And from this study, we'll learn how to proceed with our demand response program.''

Beyond the advantages of remote meter reading as well as automated connect/disconnect capabilities in Norman, OG&E wants to compare various arrangements in demand response technology.

''Some of the participants will have in-home displays and programmable communicating thermostats,'' Grant said. ''Others may have a Web portal and a programmable communicating thermostat. We're trying to get an idea of which technology works best.

''Also, some of the customers will be on a variable peak-pricing tariff with four price tiers. And some will be on kind of a 'standard' time-of-use tariff that we've traditionally offered with just two price tiers-and that one may have a critical price overcall we could implement if we ever had some sort of system emergency or a really highpriced period,'' he said.

OG&E's design for Norman is intended to be both broad and demographically varied enough to provide strikingly valid data that can be used in configuring the utility's implementation of smart grid throughout its system. And small business has not been left out.

"Our efforts in Norman are mostly residential," Grant said. "But we're including about 200 small commercial customers with whom we'll also be using in-home devices - or in this case, I guess, 'in-business' devices. And we'll have some home area network-type devices in their places of business to see if they also can take advantage of price signals and demand response."

One key caveat is that, not only in Norman, but eventually throughout OG&E's service territory, it's all up to the customer.

"This is not a 'direct load control program' - this is solely customer-directed," said Grant. "The utility is not 'controlling their power.' And we like to make that really clear, because that's a big deal in this part of the country."

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