Friday, Oct. 9, 2009 | 3 a.m.
Beyond the Sun
An overhaul to the way homes and businesses consume, and pay for, energy is on the plate of NV Energy customers.
By 2012, the power company expects to have retrofitted as many as 1.54 million homes and small and medium-sized businesses with smart meters, a technology that would allow customers to closely monitor and manage their energy use, if NV Energy receives a $138 million federal grant from the Energy Department. The department is expected to announce grant recipients by the end of October.
If NV Energy doesn’t receive the grant, it will still begin the retrofitting process, but at a much slower pace.
When a smart meter is installed in a home or business, the utility customer can choose to monitor his usage, pinpointing where and when energy is being used. This can cut costs by 20 percent to 25 percent, said Bob Stewart, senior vice president of customer relationships for NV Energy.
“Customer choice is the biggest part (of the program),” he said.
Customers who sign up for the program will be able to monitor not only their usage, but also how much it will cost to use certain appliances or other technologies during different times of the day.
For instance, someone with an electric car can determine whether to charge her vehicle during the afternoon or overnight, based on the cost difference.
Converting to smart meters will also give the utility an opportunity to change the way consumers are charged for their electricity. Currently, NV Energy customers are charged a flat rate, regardless if the power is used during on or off peak hours.
With a smart meter, different rates could apply. During the two-year pilot program NV Energy is planning to start mid-2011, 144,000 homes in the program will be paying for their use depending on the time of day and different pricing options — peak hours when more energy is consumed costs more, and off-peak use costs less. But because those customers will be part of a study, they won’t pay more than what they had in the past, NV Energy spokesman Rob Stillwell said. If their bill is lower, they will pay less, he said.
Following the study, the state’s Public Utilities Commission will decide whether to allow NV Energy to change from a flat rate pay system to a tier-based one.
If the smart meters help consumers lower their energy use, that would cut operational costs, he said, lowering prices for rate payers.
The company has yet to select a vendor to provide the smart meters and is still testing various technologies.
This is a significant investment for NV Energy, requiring not only the installation of smart meters, but also reconfiguring how its meters communicate with the company. The utility expects to use radio signals to send meter information from the home or business back to the company, Stewart said.
Before the smart meters are installed on a mass scale, the company will be conducting pricing pilots, primarily in Southern Nevada and, to a smaller degree, in the north, he said.
Customers can elect to not participate in the smart meter program, he said, but the meters will be installed, regardless.
“Not everybody is going to sign up for the same option,” Stewart said. “They can choose to do nothing. (But) people who do nothing pay more.”
Completing installation by 2012 is contingent on NV Energy receiving the $138 million from money set aside by the Recovery Act, half the cost of the switchover. The company would have to pay the rest of the cost, also $138 million, Stillwell said. It will cost another $22 million to retrofit the company’s gas customers in Reno.
“There is still a lot of uncertainty around this,” Stewart said.