PPL Electric Utilities has finalized a contract with the US Department of Energy for a $19m matching smart grid grant that will help the company improve electric service reliability for more than 60,000 Harrisburg area customers.

It’s a key step in the company’s $38m PPL Smart Grid project, the company said. PPL Electric Utilities is partnering with Drexel University and GE Energy, Lockheed Martin and Alcatel-Lucent on the two-year project.

The company will install hundreds of automated electrical devices across 150 square miles of Dauphin and Cumberland counties in south-central Pennsylvania. The devices will be connected to a dedicated high-speed communications network and a centralized distribution management system.

The engineering work as part of the project is already well under way, and the company will begin installing new equipment in the coming weeks. GE Energy’s distribution management system will act as the brain for the newer, smarter grid. New sensors and automated switches in the field will be in constant communication with the distribution management system, and the system will be able to automatically control those devices in response to changing conditions.

Lockheed Martin is focused on systemwide cyber security. Alcatel-Lucent is focused on wireless communications, as well as implementation and management of a high-speed fiber-optic communications infrastructure. And Drexel University will be assisting with design and best placement of the newer, smarter devices that are being added.

The company said that its customers already have advanced meters that track hourly usage, provide it to PPL over power lines, and allow customers to view it via the web.

The company claims that the new network will operate more efficiently than current delivery system, enabling customer appliances in the project area to use less electricity to operate. It also will help the company better integrate more dispersed, smaller customer-based generation facilities into PPL Electric Utilities’ delivery system.

The centralized computer system will help the company more effectively manage outages across the company’s 29-county service territory, speeding power restoration. In addition, it will give planners more detailed information about electricity usage and load on different utility equipment so that they can better plan reliability improvements and prioritize investments, the company said.

PPL Electric Utilities’ project was one of 100 to receive smart grid grants from the US Department of Energy. DOE evaluated more than 500 proposals submitted from across the country for stimulus grants.

The initial implementation of smart grid technology this year is part of PPL Electric Utilities’ $410m capital investment program in 2010. The expanded capital program aims to modernize, upgrade and maintain the company’s transmission and distribution system to ensure strong service reliability, meet customer needs and improve operations.