Oncor, Landis+Gyr Reach National Leadership Milestone in Advanced Meters

NEW YORK/DALLAS – Oncor, the owner and operator of the largest distribution and transmission system in Texas, and Landis+Gyr, the global leader in next generation energy management, today announced a milestone in its advanced meter system rollout with the deployment of more than 300,000 smart meters in the Dallas metro area. By year-end, Oncor anticipates nearly 700,000 advanced meters and the supporting network communications systems will be in place, making the deployment one of the largest and most quickly installed in the US.

With the support of Texas lawmakers and utility regulators, consumers in Oncor’s service territory are now part of the most advanced grid in the United States. By 2012, Oncor will install more than 3 million smart meters that utilize Landis+Gyr’s Gridstream™ solution to all of its residential and small business customers. Oncor is currently collecting and transmitting electricity usage data in 15-minute intervals for each of its deployed advanced meters, providing data to retail electric providers, and equipping the network to support in-home functionality such as in-home displays that further enable consumers to be involved in the energy management process

“Oncor is already on-the-ground making the benefits of smart grid technology a reality. Our consumers can more easily take control of their electric usage the way they want to, instead of how their utility wants them to,” said Bob Shapard, Chairman and CEO of Oncor. “Combined with our customer education program, the installation of this smart metering infrastructure will empower 7 million customers to save more than $284 million annually and avoid the need for more than a dozen new power plants over the next decade. If every home or business in the United States had a smart meter, consumers could put $20 billion back in their pockets. That’s real savings for real Americans.”

Cameron O’Reilly, CEO of Landis+Gyr added, “Our partnership with Oncor is a significant step toward securing our nation’s energy future. In the Texas market, we’ve worked with Oncor to discard old philosophies and to start thinking creatively about energy management. Using Gridstream as the platform, Oncor is making impactful and immediate improvements on the distribution side rather than the generation side, enabling both consumer involvement and operational efficiency gains at the utility.”

Besides the obvious of advantage of using less electricity, the benefits materialize through customers getting information about their energy use, and understanding that there can be a benefit to them for using more energy at off-peak hours, which in turn allows utilities to supply a steadier flow of energy, slowly phasing out the dramatic peaks and valleys that currently define energy supply patterns. Load-shift, as this is more commonly known, is proven to offer enormous benefits. A recent Brattle Group study found that just a 5 percent drop in peak demand nationally would eliminate the need for installing and running some 625 infrequently used – and highest emissions-emitting – peaking power plants, translating into annual savings of approximately $3 billion along with all the environmental benefits.

Shapard and O’Reilly noted Texas and Oncor achieved this national leadership milestone through five key steps which can be a foundation for any state:

1. Commitment from Utilities to invest in the Smart Grid

Oncor’s smart grid deployment represents the largest and fastest of its kind. While other utilities are announcing pilot projects for select customers, Oncor is able to empower its entire customer base and equitably deliver the benefits of smart meters. The Texas utility is able to deliver what numerous pilot projects and studies around the world have reinforced, which is that consumers can cut their electric bill by 5 to 10 percent and up to 20 percent with a full complement of supporting product offerings. For Texas residential customers, this translates to potential annual savings of $250 and $500 per year. Finally, with Oncor’s full-scale deployment of the advanced meters, manufacturers of home appliances will be quicker to offer new products that can multiply the savings demonstrated in the pilot projects.

“When you look at it that way, and realize that a full deployment actually lowers the total cost to ratepayers, it’s an easy decision on paper to launch a full deployment. But even with the facts so clearly laid out, we and other utilities have to have regulatory approval so it can still be a difficult decision,” said Shapard.

2. Regulatory Environment that Facilitates a Smarter Energy Future

Texas lawmakers and regulators understood the benefits of advanced meters and full deployment, which is why all of the large Investor-Owned Utilities in the state have sought permission to install the new advanced systems. That support from state leaders enabled Oncor to begin deployment faster than what utilities in other states might be able to achieve.

The federal government is trying to serve as a catalyst through the American Recovery and Reinvestment Act, the so-called stimulus bill, which contains specific provisions for the establishment of a $4.5 billion grant program to support the rollout of smart grid and smart metering projects across the country. More important than monetary support for smart grid initiatives, is a supportive regulatory framework that will encourage the projects necessary to secure our energy future and to benefit all customers.

“From the beginning, the clear objective was to provide benefits to all customers — from the poor who need the help the most to the small businessman trying to compete in these difficult economic times and everyone in between,” said Shapard.

“It is well known that our hunger for energy continues to grow and we will need to address it on multiple fronts to be successful”, stated O’Reilly. “While the deregulated Texas market may not be ubiquitous across the nation, a regulatory environment that encompasses rate recovery and decoupling mechanisms provides the incentive needed to move these programs – critical to our energy future – forward.”

3. Improved Grid Technology and Efficiency

When they supported the launch of an advanced grid initiative, Texas’ lawmakers and regulators set statewide standards that assisted the utilities in understanding the systems that would be deployed by other utilities, streamlining the entire process. Improving and standardizing grid technology across the country, or at least by region, will be critical to having one united and truly smart grid. The foundation of the grid lies in its communication capabilities; however, at present, there are no guidelines as to the “language” that each technology must use to interact with other aspects of the grid.

While much work had been accomplished in various working groups at the national level, there is still much to be done on policy side. ”We continue to support the deliberate and thoughtful development of standards within the industry”, said O’Reilly. “NIST will be releasing its recommendation for standards in the coming week. We ask FERC to adopt and move these recommendations forward to the states, and encourage states to do their part in bringing the recommendations to reality.”

“In a system with so many moving parts, different standards and regulatory environments to name a few, creating a system that is not only efficient, but easy to deploy is a feat that only the best solution providers and utilities can overcome. This is what we’ve been able to achieve in Texas,” echoed Shapard.

4. End-user Empowerment & Ownership

One of the challenges of realizing the enormous benefits of the smart grid is successfully urging consumers and utilities to take responsibility and proactively manage their energy consumption and supply. Correspondingly, Oncor has embraced this responsibility and created a major customer education element as part of its deployment to help consumers understand the capabilities and benefits of the new technology.

“This is not about sacrifice – about wearing a sweater in the winter so you can use less electricity. This is about using electricity smarter. This is about rethinking how you use it because for the first time in history customers will have the information and tools to be part of the process. So, our first big step is to teach our customers how to use it,” said Shapard. “But this doesn’t happen if we don’t educate customers on how to use the technology, so we also have launched a four-year customer education program to visit hundreds of cities and millions of customers face-to-face so they can ask us questions and understand the power they have.”

“Consumer engagement and enablement are key to creating the cultural shift needed to address our energy future,” said O’Reilly. “Landis+Gyr is pleased to be working with Oncor in bringing these capabilities direct to the consumer and is well positioned to evolve our systems quickly and gracefully to support the innovative offer being developed in the market today.”

5. Leverage Advanced Meters to Catapult Capabilities of Renewable Energy Sources

Measuring, collecting and verifying energy consumption are key to taking full advantage of alternative energy sources. In addition, this information is key to developing consumer friendly programs that increase participation.

Renewable energy, especially wind energy, is notoriously unreliable and limited in its scope. While Texas has more wind energy installed than any state in the nation and more than most countries, the problem is that on a hot summer afternoon when electricity demand is at the peak, wind turbines are producing near zero electricity. At night, when the electricity demand falls, the wind energy is at its peak production. With a full deployment of advanced meters, customers will finally have the information they need to easily shift their personal electricity demand to the evening in order to take advantage of the wind production – reducing the state’s peak demand, lowering the risk of electricity shortages, and ultimately lowering the costs to customers.

Combine advanced meters with night wind energy and plug-in vehicles, utilities and carmakers could finally achieve the wind-energy storage problem that has vexed experts for decades.

“Load shifting to the evening hours and plug-in vehicles are the tip of the iceberg,” said O’Reilly. “When the technology and appliance manufacturing leaders get fully engaged – because of broad advanced meter deployment – I think we will all be shocked at what can be accomplished.”