PG&E Gets Thumbs-Up for Smart Meter Program

Mar.12.09 | About: PG&E Corporation (PCG)

By Jeff St. John

It’s official — Pacific Gas & Electric Co.’s (NYSE:PCG) smart meter program will roll on with Silver Spring Networks.

The utility got the sign-off from the California Public Utility Commission on Thursday to charge ratepayers for an additional $467 million to bring 10 million gas and electric meters with two-way communications capabilities to its customers by 2011.

That brings the program’s total cost to $2.2 billion, and allows the utility to officially add technology from Redwood City, Calif.-based Silver Spring to its electric smart meters.

The utility’s smart meter rollout has gone through a few changes since it was launched in 2006, including bringing Silver Spring on board to install its communications cards in electric meters from General Electric (NYSE:GE) and Landis+Gyr (see Q&A: PG&E’s Andrew Tang).

So far PG&E has installed communications equipment from Aclara on 1.5 million gas meters, as well as about 600,000 electric smart meters, PG&E's Paul Moreno said in a Thursday email.

Of those electric meters, about 380,000 are using a combination of radio transmission and powerline carrier technology to send and receive data (see Will Smart Grid See a Push for Power-Line Networking?).

The remaining 220,000 are equipped with Silver Spring’s circuit boards and radios, which communicate with one another and with utility communication nodes via radio frequency mesh technology. That’s the technology that PG&E intends to use for the rest of the electric smart meters it will install.

Silver Spring also has deals to provide smart meter communications and networking to Florida Power & Light, American Electric Power (NYSE:AEP) and other utilities. But the PG&E project has been its highest-profile smart meter contract to date, and is seen as a critical test of its technology (see Silver Spring Grabs $75M).

PG&E will start out by reading the meters remotely, eliminating the need to send workers out in trucks to read them. But the long-term goal is to bring a set of two-way communications between customers and utility to measure and control energy use — the promise of so-called “smart grid” improvements being undertaken by utilities across the country.

That’s where the upgrade comes in. PG&E envisions using the smart meters to detect and pinpoint power outages more quickly at first. Eventually, it wants to connect smart meters to in-home devices that will be able to monitor and potentially control power usage by thermostats, appliances and other devices remotely, whether by the homeowner or the utility.

And for now, PG&E is looking to ZigBee to communicate between smart meters and in-home devices. The protocol based on the 802.15.4 standard is emerging as a favorite for this kind of communications, although WiFi and WiMax are also being considered by some utilities.

Silver Spring has named Vancouver-based Exegin Technologies Ltd. as its ZigBee partner for most of its smart meter contracts.