Southern Co.’s smart meters good for bottom line

The green energy buzz behind the high-profile federal push for smart electric technology is the kind of rhetoric that normally makes Atlanta-based Southern Co. see red.

But Southern is already on board.

Its operating utilities are rolling out so-called smart meters in Georgia and smart wires in Alabama — and considering whether to tap some of the more than $4 billion in newly available federal dollars intended to encourage a smart electrical grid.

But green-ness isn’t Southern’s point.

Although Southern’s operating utilities can point to green byproducts of their projects, they’re investing in smart technology for business reasons.

The technology is supposed to cut costs and improve reliability of its operating systems.

Energy conservation advocates applaud Southern utilities Georgia Power and Alabama Power for embracing the new technology.

But they say the company’s bottom-line focus is preventing it from achieving the motivation behind the federal funding — and that the company’s smart technology is dumber than it looks.

How smart is smart?

Smart electric technology adds computer intelligence to the components of the electric grid, which include transmission and distribution lines and meters.

The smart grid’s definition is in flux, partly because so much federal money is now aimed at creating one.

Deepak Divan, who heads Georgia Tech’s Intelligent Power Infrastructure Consortium, says even the U.S. Department of Energy is getting frustrated at claims coming from fund-seekers.

“What happens when money becomes available, everybody targets whatever they have already developed in terms of technology and says that’s the smart grid,” he said.

At a macro level, a smart grid could be controlled enough to let power travel long distances efficiently. Wind energy from Texas could travel cross-country, for instance.

A smart grid could also handle power fed from small, diverse sources, such as future fleets of charged-up electric cars that would give as well as receive energy.

Today’s transmission system can do neither well, Divan said. Power flows where it’s easiest, a fact that helped turn a downed Ohio tree branch into 2003’s massive East Coast blackout. There aren’t a lot of smart components to direct it around problem areas. “All we have is dumb breakers,” Divan said.

At the consumer end, smart meters would allow utilities to do with residential customers what Southern does now with most business customers.

They can allow utilities to charge more when power demand and generation costs are at their highest. Capable of two-way communication, the meters would tell customers when prices are high, encouraging them to power down.

It’s controversial. Senior advocates oppose it, for instance: “Our customers can’t afford to respond to price signals,” Georgia AARP spokesman Will Phillips said.

Environmentalists are more interested in day-by-day conservation than in shaving demand at the peak, which is when utilities use pricey, cleaner power sources such as natural gas.

The meters could help that, too: “The readout to consumers, even in the absence of price signals, can educate consumers about how they’re using energy,” said Marilyn Brown, a Georgia Tech professor and visiting scientist at the Oak Ridge National Laboratory.

The bottom line

Southern’s smart grid work is centered in Alabama, where its Alabama Power expects to debut smart grid software next year.

The software synthesizes all data from its wires and will eventually roll out across Southern’s entire four-state system.

The new system will be smart enough to coordinate with a wide range of “distributive” power sources — such as fleets of cars, said Simon Bowen, who manages Alabama’s smart grid project. Electric cars could not only pull power off the system but sell it back while parked.

“We’re making provisions to be creative in distributive resources,” he said.

But that’s not the driving force behind the improvements. “We look at the business case first,” Bowen said.

The business case is reliability and cost. The smarter grid in Alabama will help the company find and isolate power outages, predict vulnerabilities, shift resources more quickly to meet demand and cut the amount of power lost in transit over the wires.

Georgia Power, meanwhile, installed smart meters in 400,000 houses last year. They’ll be all over metro Atlanta by next year and across the state in 2012.

The new meters will be capable of the two-way communication that smart grid advocates want.

But Georgia Power doesn’t plan on instituting that, at least not yet.

Like its Alabama sibling, “we justified this on the business case,” said Mike Clanton, Georgia Power’s vice president of customer service.

That business case is “the rising cost of meters and the personnel costs of reading meters.”

Georgia Power’s meters will let it read usage remotely, cut its meter reading work force from 400 to 130 and take a similar number of meter reading — and air polluting — trucks off the road.

The meters have other benefits. Equipped with GPS, they’re easy to find if stolen. They’re hard to tamper with. They find power outages fast.

The company said it will consider expanding the meters’ duties over time, including adding the ability for consumers to monitor their usage online.

But each expansion “comes with a cost,” Clanton said.

He said the company isn’t sure how many customers would be willing to pay.

To Georgia Tech’s Brown, that means the company is missing the point.

“They’re calling it a smart meter, but it’s really a smart meter reader,” she said.

“The goal that most people have is that the meters should listen and talk. These just listen. We’ve invested so much in these meters, that I see it as a missed opportunity.”