Seeking Alpha
Alternative energy, solar, energy efficiency, grid modernization
Profile| Send Message|
( followers)  

by Michael Kanellos

Austin, Tex. -- CenterPoint Energy (NYSE:CNP) has only good things to say about power line networking, except when it comes to the cost.

The energy delivery company conducted a trial earlier in the decade with power line networking in approximately 10,000 homes, said Ken Murphy, Director of Intelligent Grid Deployment at the company, during a talk at NI Week, a conference sponsored by test and measurement specialist National Instruments (NASDAQ:NATI) taking place in Austin. Because of the high bandwidth that power line offers, the company also gave computers to consumers who were participating in the test.

The idea was to both test the technology and see if consumers might be willing to get their internet service from CenterPoint. In Australia, some electricity retailers have started to bundle Internet, TV, phone and utilities.

The technology worked. Consumers, however, seemed indifferent to the idea of switching their broadband providers. With the potential to sell internet services off the table, power line was just too expensive compared to competing technologies.

"BPL (broadband over power line) may be the way to go if you need bandwidth," he said. "It worked well for us, but it would have been more expensive."

Instead, the company opted to install Itron (NASDAQ:ITRI) meters on homes, which communicate with a lower-bandwidth mesh technology to a hub. The hubs then relay data to substations via WiMax and from there, everything gets put on fiber and sent to the utility.

"There are already a lot of internet service providers, so we decided not to get into that part of the business. Our network now is not a public system. It is only used for utility purposes," he added.

CenterPoint is in the middle of a project that will install 2.2 million smart meters by the end of 2012. The initial deadline was 2014, but a $200 million DOE grant allowed the company to accelerate the project. So far, it has installed 500,000 meters, 351,000 of which are already sending meter data to the grid every fifteen minutes. The discrepancy between the two numbers -- 500,000 vs. 351,000 -- exists because the final testing and verification has not occurred on all of the meters yet.

Since the meters started getting installed in early 2009, CenterPoint has managed to cut out around 220,000 truck rolls. A service order to shut off or begin service can now get completed in 30 minutes. With standard meters, the process -- even on a rush order -- can take several hours. A regular order with a standard meter takes a day or two, he added, because a technician has to go to a house and physically shut off, or turn on, the power.

The company is also beefing up the grid in the Houston area. It will add a device devised by NI called a Smart Grid Analyzer to the grid there, that will allow it to obtain information on failures, anticipated repairs, power quality, current and voltage, and other data. The device fits inside the power line equipment pictured here from Siemens (SI).

"If there is a lightning strike, it [the Smart Grid Analyzer] will sense it and protect against it," said Owen Golden, vice president of the global energy segment at National, about the Smart Grid Analyzer. "It is also for fault anticipation. It can see low-level failures."

Like many execs at energy delivery and grid companies, CenterPoint is having a tough time getting customers engaged or convincing them of the benefits -- lower costs, quicker recovery from outages, the potential for energy efficiency -- of smart grid technologies. In Texas, consumers with smart meters can check their consumption online and get energy savings tips. But so far, not many consumers are accessing their data, Murphy said. (To date, the main news coming out of the project has revolved around complaints from consumers. Test results, though, show the meters work.)

When home area networks roll out, CenterPoint believes that it may even have to set up help desks to answer questions and help consumers with the home energy equipment they might purchase at Home Depot (NYSE:HD) or Best Buy (NYSE:BBY).

"We may have to take responsibility," Murphy said. "To make it all work is going to require some coordination."

Side note: as stated, CenterPoint is not a utility. It is an energy delivery company that takes power from a third party and delivers it to the meter. Retailers -- and there are already around 100 in the state -- then sell power to consumers. Legally, CenterPoint is not allowed to deal directly with consumers. (Providing Internet service would likely have required some sort of regulatory finagling.) Still, even though it doesn't generate power, CenterPoint's services account for around 20 percent to 30 percent of a consumer's bill.

Source: CenterPoint Energy: Why One Should Pick WiMax, Mesh Over Power Line