Vectren Energy Delivery of Indiana - South (Vectren South), a subsidiary of Vectren Corporation, has filed for regulatory approval from the Indiana Utility Regulatory Commission (IURC) to move forward with the accelerated grid modernization project should federal dollars be awarded.
Recently, the company submitted a grant application to the U.S. Department of Energy (DOE) to support smart grid implementation in its southwestern Indiana electric service territory.
Creating a smart grid requires a complete modernization of a utility’s electrical system and infrastructure. Using wireless sensors, communications networks, software and other technology, upgrading to a smart grid enables utilities to see how much and where energy is being consumed in real-time and instantly detect if there are problems in the system. Smart grid development also encompasses digital smart meters on homes and businesses that provide two-way communication between customers and utilities and will replace traditional meters. Furthermore, if installed, these enhancements will dramatically improve system reliability, positively impact outage prevention and response and enable the expansion of renewable energy generation.
“Smart grid technology creates a two-way digital communication link between Vectren and its customers as well as Vectren and its energy delivery infrastructure,” said Vectren President and Chief Operating Officer Carl Chapman. “For customers, it means a better understanding of how to utilize energy as efficiently as possible, which could lead to substantial cost savings. Smart grid technology brings a clearer picture of how much and where energy is being consumed in real-time, which will help minimize excess generation, and thus, reduce carbon emissions. Furthermore, the technology improves our ability to pinpoint outages, including direct communication with substation equipment and individual smart meters, to ensure efficient restoration.”
Details of the filing include a request for project pre-approval and an ability to recover project costs as incurred as well as approval of dynamic pricing tariffs, which would provide the means for customers to effectively manage their energy costs by limiting energy use, for example, during higher-cost peak times in the summer.
“If implemented, the project will also include new residential rate designs, which take advantage of smart meter technology and provide customers a tool to better manage their electric energy consumption and potentially reduce their electric bills,” added Chapman.
Later in October 2009 or in early November 2009, the DOE may award up to $4.5 billion in smart grid grants nationwide as part of the economic stimulus and infrastructure bill passed earlier in 2009. Vectren’s proposal to the DOE includes a request for $45 million, or roughly 50% of the project’s total cost.
“If awarded, the DOE would require implementation to begin almost immediately to ensure the funds are spent within the next three years,” said Chapman. “We want to make sure we have the necessary regulatory approval in progress to capitalize on any awarded dollars and quickly initiate the project.”