1. What does "Smart Grid" mean?
2. How does it work?
3. What does BGE have planned in terms of Smart Grid?
4. How does a new smart meter help to conserve energy and reduce monthly bills?
5. When will BGE begin implementation of the Smart Grid program?
6. How much will this cost BGE customers?

What does "Smart Grid" mean?

Smart Grid means using digital information and controls technology to improve the reliability, security and efficiency of the electric grid.

How does it work?

Smart Grid uses advanced technology to drive improvements to utility operations and to support new consumer products that enable cost savings, demand reduction and conservation. The heart of the system is a utility-to-customer two-way communications network that can transmit real-time data.

This new communications capability improves many utility processes, including: meter reading; outage detection and restoration; grid monitoring and control; system optimization to limit technical losses; and fault detection, isolation and restoration.

In addition, Smart Grid enables large-scale penetration of renewable generation resources, distributed generation resources, plug-in hybrid electric vehicles (PHEVs) and home area networks.

What does BGE have planned in terms of Smart Grid?

BGE is applying to the Maryland Public Service Commission for approval of what we believe is one of the most comprehensive Smart Grid programs in the nation. Among other things, it would include the installation of approximately 2 million new electric and natural gas smart meters at customer locations.

BGE will be applying as well for a matching grant from a Department of Energy (DOE) stimulus fund, which would reduce implementation costs and lower costs for customers.

How does a new smart meter help to conserve energy and reduce monthly bills?

Smart meters are just one element of the Smart Grid program. They represent the foundation supporting a number of dynamic products and services to help customers reduce their energy consumption and lower bills.

For example, BGE plans to roll out a new Smart Energy Pricing (SEP) program, which would pay customers rebates for reducing power consumption during peak periods. More than 90 percent of enrolled customers took action to lower their demand during BGE's pilot program.

The results of the pilot illustrate how customers can reduce energy consumption and save. Customers with advanced metering technology paired with Smart Energy Pricing reduced their consumption during peak periods by 26 percent to 37 percent, saving an average of more than $100. Participants gave the program a 93 percent satisfaction rating. The savings with these innovative pricing plans flow directly to customers. Energy usage will be tracked on an hourly basis through advanced meters and automatically reported to BGE without the need to read meters in the field.

When will BGE begin implementation of the Smart Grid program?

PSC approval would position BGE to move to the next phase in this proposed Smart Grid investment. The first step of the initiative would be the installation of 2 million smart electric and gas meters, which could begin as early as 2010.

Development of the Smart Grid projects will span several years, with full deployment completed by 2014.

How much will this cost BGE customers?

Over the life of the program, customers would save in excess of $2.6 billion, an amount that is several times the estimated implementation costs. Customer costs have not been finalized and are dependent in part on the potential for a DOE stimulus grant, which reduces the implementation costs for consumers. Based on preliminary estimates, over the life of the program, the impact on monthly bills would be small - just pennies per day - and the investment in new technologies would lead to significant long-term savings. Preliminary estimates are that over the life of the program the monthly surcharge would average approximately $1.24 for residential electric customers; $1.52 for natural gas customers.