Smart Grid FAQs

Smart Grid FAQs

What is Smart Grid?
• Smart Grid is a combination of equipment, communications and processes that utilities use to provide enhanced operations.
• Smart Grid includes smart meters, distribution system automation, demand response and other features that provide information for customers to lower their energy use.
• Smart Grid builds on many of the technologies already used by electric utilities in the U.S. and around the world, but adds communication and control capabilities that will optimize the operation of MLGW’s electrical grid.

Are other utilities implementing Smart Grid?
• Yes, the seeds of Smart Grid were planted in summer 2003 in the aftermath of the massive blackout in the Northeast, as government and utilities analyzed how to fix the vulnerabilities of the nation’s aging electric grid.
• Many utilities began implementing Smart Grid in the years following, with the recent influx driven by a national initiative supported by President Obama.
• MLGW is applying for federal stimulus dollars to cover a portion of the project cost.
• The Department of Energy allocated more than $3.4 billion for Smart Grid projects under the American Recovery and Reinvestment Act of 2009, with many utilities competing for funding.
• In addition, many utilities have moved forward with Smart Grid enhancements without government assistance.
• This link shows a map that displays where utilities are installing smart meters across the nation:

When will Smart Grid be installed?
• Grant recipients will be notified by March 2010; if selected, MLGW will complete the Smart Grid contracting phase and begin installation.

How long will it take to implement Smart Grid?
• Any part of the Smart Grid project that includes stimulus funds must be completed within three years, so the initial area targeted for full Smart Grid deployment would be completed by 2012.
• Smart Grid would then be expanded into other areas.
• Components that provide distribution system automation, however, will be installed across MLGW’s entire service territory to provide enhanced system monitoring and operations.

Will Smart Grid cause rates to go up?
• MLGW will only move forward with Smart Grid as it becomes feasible to do so.
• MLGW staff is doing extensive research to determine the costs and build a solid business case.
• While federal funds will reduce the cost, MLGW will still have to pay the remainder of the project cost.
• Most, if not all, of these costs can be offset over time by operational savings such as reduced meter reading and electric service connection costs.
• While MLGW is still in the early staging of analyzing Smart Grid implementation, the project would have to pay for itself for MLGW to pursue it.

Will this mean layoffs for MLGW employees?
• With full implementation of Smart Grid, there will no longer be a need for traditional meter readers to access your property and read your meter each month.
• Certain other field positions would likely be affected also.
• MLGW is developing a plan that will transition affected employees from their current roles into new roles in the event of Smart Grid deployment.
• Since the meter reader job is often used as an entry-level position for people wanting to be hired by MLGW, about 25 percent of meter readers leave the department each year. This high turnover rate will reduce the impact that Smart Grid has on MLGW employment.
• Full implementation would take at least six years, and the job transitions would take place gradually over time rather than all at once.
• Affected employees would have the opportunity to transition to other jobs within the company.
• Because of this, MLGW does not anticipate employee layoffs as a result of the Smart Grid implementation.

How does Smart Grid benefit the customer?
• The primary benefit is reduced costs.
• As the customer, you would have the opportunity to reduce your energy consumption because you’d have much more information about your energy usage.
• MLGW would have reduced operational costs, and TVA (MLGW’s electric supplier) would not need to build as many plants or generate as much energy during periods of high customer use—which controls electric rates.
• Have you ever had to wait for MLGW to arrive to connect your electric service? Smart Grid will solve that.
• Have you ever wondered how much energy you were using at that very second? Smart Grid can tell you that.
• Have you ever wondered how much your bill was going to be, days or weeks ahead of time? Smart Grid can answer that.
• Have you ever had to call to report a power outage? Smart Grid will eliminate that.
• Have you ever wanted to explore other rate options that reward customers for off-peak energy use? Smart Grid will enable that.

What other improvements will this system offer?
• Smart Grid includes many, many benefits for customers and MLGW.
• Future possibilities include pay-as-you-go metering, in-home energy displays to see up-to-date information, communications with home area networks that allow you to control your appliances and equipment remotely and other proven technologies that help customers better understand and control energy usage.

Will I still get a bill?
• Yes, but customers won’t have to wait for their bill to find out how much they have spent, as you can monitor usage with in-home energy displays and at www.mlgw.com.
• There are even features that can project how much your bill will be, based on what you have used so far during the billing period.
• Smart Grid also enables customers to change billing dates.

Will this help get my services restored faster?
• Yes, Smart Grid increases monitoring and automated functions for MLGW’s operations, which means customers will no longer need to call to report outages and MLGW will be able to identify the problems and respond automatically or send the appropriate crews more quickly.
• Smart Grid also enables quick remote connection of electric service, when customers move in and out.

Will this help me conserve energy and lower my bill?
• Smart Grid provides information to educate and motivate customers to make changes that save money.
• Smart meters and numerous communications devices--including website tools and in-home devices--show when your home or business uses energy.
• This allows you to better make decisions to reduce or delay usage. By reducing or shifting usage to other times of day, you are helping reduce TVA’s electric generation costs during times of maximum customer user, which helps control power costs. Of course, if you choose not to make changes to lower your energy usage, you won’t save any money.
• Therefore, with Smart Grid, saving money really is up to you.

Where will Smart Grid be installed first?
• Should MLGW receive the federal grant, Smart Grid initially will be deployed in these ZIP codes: 38104, 38106, 38108, 38111, 38114 and 38122.
• This interconnected area inside the I-240 loop has a good mix of business, industry and households, whose demographics reflect the City of Memphis’ population.

Why are Smart Meters being installed?
• For customers, smart meters provide time-based information so you are informed about energy usage and motivated to make changes that will save money.
• For MLGW, smart meters improve operations by providing enhanced system monitoring and new customer services.

How will Smart Meters work?
• These digital, secure, two-way communicating meters will measure electricity, natural gas and water usage up-to-the minute and, when fully implemented, will enable customers to more easily track how much they use, and to determine how much it costs before the bill is produced.

What do these new meters provide that the old ones can’t?
• For homes, existing meters are read once a month.
• Unless you read your meter yourself, you have little idea how much energy you have used and how much you owe until your bill arrives.
• Some large businesses have meters that are read nightly, but most are still read once a month.
• Existing meters do not have the communication capabilities to report outages, so customers must call.
• Much like the automobile changed our method of transportation, smart meters are transporting customers and utilities into the future with better ways to control operations and costs.

How will I know if I am getting a new meter?
• If MLGW receives the grant, customers within the six initial ZIP Codes—38104, 38106, 38108, 38111, 38114 and 38122—will receive smart meters.
• Customers will be notified in advance when installations are scheduled in their neighborhood.
• Several hundred households and small businesses will be selected to participate in a market research effort to determine the best communication methods for MLGW customers.

Do I have to be at home to have my smart meters installed?
• Customers do not need to be home, but they do need to provide clear access to their meters so it will be important to unlock gates, move outdoor pets and clear any obstacles to your meters.

Will it cost me anything to get the new meters?
• The cost of Smart Grid will be incorporated into MLGW’s operating budget, with the Department of Energy providing up to 50 percent of the cost for the electric portions of the system through its Smart Grid Investment Grant.

What benefits would Time-of-Use (TOU) rates provide the customer and MLGW?
• Smart Grid gives us the capability to provide time-based metering but it doesn’t necessarily mean we would implement time-of-use rates.
• TVA has discussed TOU rates as a possibility, but it would likely be several years in the future if they chose to do this.
• Smart Grid will give customers who wish to participate the tools and information to save on their utility bills in the event that TVA implements time-of-use rates.
• Other utilities have implemented this successfully, usually as an opt-in program.
• The incentive is the discounted rate customers pay for their off-peak energy use.

Would Smart Grid allow MLGW to cut-off my power if they think I’m using too much?
• No, MLGW would not have the right, or the desire, to cut-off your service because you used more electricity than “average.”
• Today, the average MLGW household uses nearly 16,000 kilowatt hours of electricity per year, but we have some households that use far less and some that use far more. (In fact, local households are using 42% more electricity than the national average!)
• The only penalty for using more electricity is a higher utility bill.

Will MLGW sell my information?
• No, MLGW will not sell or share any information about your home’s or business’ specific energy use.
• MLGW will combine the information on all customers, and subsets of customers, to perform analysis to help us develop new programs and services.
• This aggregated information may also be reported to the Department of Energy as evidence of Smart Grid benefits.

Will Smart Grid devices cause interference with my electronics?
• Smart meters transmit at a power level of less than one watt on special frequencies that will not interfere with the operation of televisions, radios, stereo equipment, garage door openers, wireless Internet connections, or other electronic devices commonly found in a home or a business.

Where can I get Smart Grid information?
• MLGW: www.mlgw.com/smartgrid
• Smart Grid Today: www.smartgridtoday.com