Q&A: AEP Ohio's Karen Sloneker explains "smart grid"

How do you summarize smart grid for someone who may be hearing about it for the first time?

We're looking at it as an integration of innovative technologies in a way that will enable our consumers to take advantage of energy conservation -- and be able to have additional knowledge that will enable them to manage their electric consumption to save money. We're also including distribution automation and integrated volt controls, which will enhance not only the efficiency of the distribution system, but the reliability -- which allows us to minimize the number of service interruptions to customers and to speed restoration in the event there is an outage.

AEP Ohio, Duke Energy and First Energy are all pursuing smart grid technology in Ohio. What is driving that?

There's the maturing technology that enables utilities to do things that we've never been able to do before. So it's transforming the way we deliver energy to our customers. The second thing is our customers' loads are growing, and the need for energy is growing, so we're looking for the most effective ways of meeting that demand. And thirdly, society as a whole is looking for environmentally friendly ways of using energy. 

And the environmentally friendly technology is part of your gridSMART demonstration project, isn't it?

That's correct. We're looking at helping customers control their energy, and that will reduce their need for generation during peak times. We're exploring smart appliances, we're also looking at electric vehicles, and we're using community energy storage units, which are batteries that will be installed adjacent to transformers for about 200 to 300 customers. At a peak period (when demand is highest) we could use those batteries to provide service to the residential customers that are served off of the community energy storage unit, which would decrease your need for generation in those peak periods of time. The most obvious use for those, and the ones we'll probably begin with first, is the ability to use those energy storage units as backup power in the event there's an outage on the distribution circuit.

If I'm a business or a homeowner, what will I gain through smart grid technology?

We're going to be providing customers with near real-time information about their energy usage. If you think about the way you buy and are billed for energy today, you don't know what you're consuming day in and day out and you don't know what that's costing you until you get your bill on a monthly interval. With this new technology, people will be able to go on line or use in-home displays and see what their energy consumption looks like and be able to take advantage of consumer programs that will allow them to consume energy in a different way, thereby saving them money and helping us avoid the cost of generation.

There have been some privacy concerns about the information gathered through smart grid technology. Are those concerns justified?

We understand their concerns, and we wouldn't make that information available to anyone. Frankly, there is so much information that is available that our systems wouldn't be capable of delving into any individual customers usage patterns for any reason. We're working within the industry to make sure that we protect that consumer's information.

Will smart grid technology raise electric rates?

The idea behind it is we work with consumers to help manage electric consumption in a way that will keep rates low. And that's by avoiding that cost for new generation, by avoiding the cost of improving the infrastructure as a result from capacity constraint issues. The other thing is these technologies are allowing us to operate more effectively. By using the smart meters in conjunction with the distribution automation, we're able to reduce the number of times we have to send a truck into the field to investigate reported outages. We're doing remote opens and closes for customers who move in or move out of an apartment. So all of those things are decreasing our costs as a company and that translates into savings for the customers.

Since innovative people tend to piggy back onto new technology, do you know of any up and coming technologies or industries that would benefit from better information about electric usage?

There are all sorts of in-home monitoring devices and in-home control devices that are being developed or improved. There are all new controls that are associated with appliances that allow them to receive signals from the utility about price or peak, and it will change the way those appliances operate. I think the whole charging system for electric vehicles is another example. It's almost difficult to imagine all of the possibilities for where all these technologies will take us.

One of the FAQs on the gridSMART website says that energy efficiency and and smart grid technology will stimulate growth. Is that what you're talking about � economic growth tied to innovation? 

Yes. Another part of the program is to look at ways of being able to integrate renewables, and that's an area of emphasis within the state of Ohio. We're trying to encourage solar development and wind development and, to the extent that we can integrate those renewables into our system easily, that will help with economic growth. I think by improving the reliability to commercial and industrial accounts, which translates to business operational savings, that will make them a more attractive company and make their businesses more viable.

Is anybody predicting where this will go in the next five, ten years?

We're very anxious to see the results of the demonstration project, which will help us to quantify the cost and the benefits. But as I envision it, probably over the next seven or eight years we'd like to be able to roll out smart grid in some form or another to all of our customers at AEP Ohio, so we'd like to be able to have smart meters for 1.5 million customers and be able to continue to expand with the distribution automation, where that makes sense. Our long-term vision is that this is the wave of the future.