ComEd, the Illinois utility, has had quite a go of it over the past year, since announcing plans to pursue a $2.6 billion grid modernization project. After the company said in early 2012 it will install more than 4 million meters over a 10-year period, beginning with 500,000 by the end of 2012, outcry by special interest groups and wary customers gradually increased, due to fears of rate hikes and privacy intrusions. As a result, Senate Bill 9, which would have funded the project via rate increases over the installation period, was vetoed by Governor Pat Quinn in early May. Shortly thereafter, the Illinois house and senate both voted to override the veto. Meanwhile, consumers filed a class-action lawsuit demanding compensation of $182 million cost that was incurred in rate increases over the 1-year delay of the rollout.
Those last three events occurred over the course of a few days last May. Does it get any more exciting?
With a thumbs-up from the Illinois state legislature to move forward, ComEd has started awarding vendor contracts for integrated grid solutions. This week, both GE and Silver Spring Networks announced contract wins for the 10-year project. For GE, the $200 million deal will include the delivery and installation of approximately 4 million meters in Chicago-area residences, while Silver Spring will provide smart grid infrastructure solutions and support.
What a Bargain
As the North American market for smart grid deployments (meters in particular) has leveled over the past year, a project of this size is represents a significant win on behalf of GE. The advanced meters will provide hourly usage data, remote meter reading, and outage detection. This offers both the utility and its customers the ability to better monitor personal and aggregated energy use. As a result, ComEd hopes to gain increased reliability, savings and clarity in scheduling and planning for future generation assets, and more effective integration of smaller renewable sources into the grid.
Given these advanced capabilities, ComEd is getting these meters at a bargain rate. At about $50 per meter, the price is substantially below the average selling price that Navigant Research foresees for advanced meters through the remainder of the decade, which is closer to $80-$100 per meter.
This comes back to the leveling off of the North American smart meter market, which is increasingly shifting toward smaller, specialized deployments as Smart Grid Investment Grant mega-rollouts came to an end in 2012. Large utility contracts are increasingly scarce, leaving contracts for smaller batches of custom (translation: cumbersome) meters for municipal and cooperative utilities. With the scope of ComEd’s smart grid upgrade, this alone seems like incentive enough to bid low and invest in a more efficient supply chain.
Tags: Policy & Regulation, Smart Grid Infrastructure, Smart Meters, Smart Utilities Program, Utility Innovations
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