IBM and Houston-based utility CenterPoint Energy on Tuesday announced the creation of a coalition to digitize electrical grids.
The Intelligent Utility Network Coalition will test out technologies that will give utilities serving consumers better usage information and make power distribution grids more reliable, according to executives from both companies.
Through the initiative, CenterPoint intends to invest about $750 million over the next five years to upgrade its gear, including meters, switches, and equipment at power substations, said Georgianna Nichols, president at CenterPoint Houston Electric Operations.
The utility is installing a broadband-over-powerline, or BPL, network over its Texas territory to gather and transport information such as real-time usage or overloaded distribution points.
With more detailed information on usage, consumers can potentially save money by changing their consumption patterns, executives from Centerpoint and IBM said. The digital equipment and accompanying software will also allow energy retailers to introduce more services, such as time-of-use pricing, which will allow them to better manage demand.
"A year ago we were very optimistic like other utilities about automated meter reading. This is much bigger than that. It's more of a discussion about almost revolutionizing the electric utility industry," Nichols said. "We are testing equipment. It will happen."
CenterPoint, an electricity distributor with 2 million customers, is a founding member of the Intelligent Utility Network Coalition. Other utilities from the U.S., Europe and Asia are expected to join later this year, executives from IBM and CenterPoint said.
The cost for full upgrade to digital equipment on CenterPoint's grid would be about $2.50 per customer per month, Nichols said. The utility is now talking to regulatory bodies on any potential rate change.
IBM intends to supply software for gathering information as well as analytical tools for things such as measuring usage patterns.
There are already several initiatives to promote use of so-called smart grids, but the Intelligent Utility Network Coalition will focus on deploying and testing equipment, executives said.