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$88M Grant Aids Utilities in Quest for Efficiency by Justin Carinci Daily Journal of Commerce, November 30, 2009

Tiny Milton-Freewater City Light & Power in Eastern Oregon has only 4,600 customers. But it's one of two Oregon utilities, plus the Bonneville Power Administration, participating in a $178 million program to show smarter ways to transmit electricity and manage its use.

A five-state, 12-utility team led by Battelle, the company that operates the Pacific Northwest National Laboratory in Richland, Wash., received an $88 million grant from the federal Department of Energy for the program.

Milton-Freewater will install meters that allow customers to monitor their real-time electrical use and change how they use power accordingly. That will allow the utility to set up a rate structure in which off-peak usage is cheaper, Electrical Superintendent Mike Charlo said.

"(Customers) can make decisions as to whether or not they want to, for example, run a clothes dryer in the daytime or in the evening, when electricity is cheaper," Charlo said.

Milton-Freewater was one of the first utilities in the region to install so-called "smart" meters, in 1985.

When the demand on the grid increases, the utility can briefly switch off water heaters, electric heaters and air conditioners for 700 customers who volunteered for the program, helping level off demand peaks.

That signal only went one way, Charlo said. The new meters will allow customers to send a confirmation message back to the utility.

The Milton-Freewater piece of the program will cost $2.5 million, with the grant covering $1.25 million.

Portland General Electric will set up a project in Salem showing how to best blend renewable power into the grid. "We want to study how, when the wind isn't blowing, we can maintain a reliable flow of power," spokeswoman Elaina Medina said.

The PGE project will use batteries and generators to provide power when renewable sources aren't producing, Medina said. "Say it's a hot summer or cold winter day. Instead of having to fire another power plant to meet the demand, we would rely on other sources out there, like back-up generators."

Milton-Freewater, PGE and 10 other utilities from Idaho, Montana, Wyoming and Washington will manage sites and compile data for the project. The Bonneville Power Administration then helps crunch the data for Battelle.

"The BPA's part is a little more about managing information, the back-end stuff, the data collection," spokeswoman Katie Pruder said. "It's not exciting-sounding, but it makes the project come together and serve as a national model."

The Northwest demonstration, one of 16 regional projects to receive grants from the Department of Energy, will last five years, said Ron Melton, project director with Battelle. The first year will be for design and setup.

After that, with the individual sites up and running, officials will test and evaluate the system for two years. The final two years will be devoted to analyzing results and reporting them back to the Energy Department.

It might not take five years for the Northwest project to have wider influence, Melton said. "Once it's into the operational phase, if another utility (said) 'Wow! That's really useful. We'd like to be able to do that,' we'd be open to them talking to the project (team) and finding a way to take advantage of that."