Entergy's Latest Tech Effort: $215M in Smart Meters

James McMahan, the advanced metering infrastructure manager for Woodruff Electric Cooperative, installing an advanced meter in 2011.
James McMahan, the advanced metering infrastructure manager for Woodruff Electric Cooperative, installing an advanced meter in 2011. (Woodruff Electric Cooperative)
An example of the smart-grid meters Entergy Arkansas is planning to place in more than 700,000 homes and businesses.
An example of the smart-grid meters Entergy Arkansas is planning to place in more than 700,000 homes and businesses.

People used to put all kinds of things on their electric meters: magnets, potatoes, even bags of flour. The idea was to somehow slow down the little dials spinning inside, cutting their electric bills.

Today’s “smart” meters won’t be confounded by a potato, but they may help cut electric bills by helping consumers and utilities cut consumption and waste.

Entergy Arkansas is the latest utility in the state to embrace smart-grid technology, committing $215 million to install smart meters and corresponding equipment for its 727,000 customers by 2021. Installation is set to begin in 2019.

“Transitioning to advanced meters is a multiyear effort, but it’s the foundation for additional grid modernization,” Entergy spokeswoman Julie Munsell told Arkansas Business. “All homes and businesses in the Entergy Arkansas service territory will benefit.”

As part of an advanced metering infrastructure, meters deliver real-time usage information through wireless signals or along the power lines themselves, making human meter readers increasingly obsolete. Conservation efforts aided by the systems may also help utilities avoid building costly new power plants.

Munsell said the new meters will let publicly traded Entergy help customers manage their power use while Entergy gains the ability to read meters remotely and avoid the cost of manually connecting and disconnecting service.

Entergy’s meter-reading is largely done by contractors rather than utility employees, but at the end of the project “the majority of these functions will be automated,” Munsell said.

Despite some public wariness about privacy and suggestions that utilities could rig the new systems to pad profits, 65 million smart meters had been installed by the end of 2015. That represents more than 50 percent of American households, according to a 2016 study by the Edison Foundation’s Institute for Electric Innovation.

Co-ops Early Adopters
Entergy’s project is familiar territory for the state’s electric power cooperatives, which have been using advanced meters for years. About 97 percent of Arkansas’ 511,500 electric cooperative members are served by automated meters, and the co-ops’ experience suggests that Entergy’s investment will pay off, several managers said.

The co-ops have largely eliminated contracted meter-reading or reassigned staff meter readers to do other tasks. They say the devices reduce human error and allow cutting and restoring power remotely when consumers move or fail to pay their bills.

“They have saved us a lot of money in trips for delinquent accounts and for move-outs and move-ins,” said Carl Horton, vice president of member services for Woodruff Electric Cooperative in Forrest City, an early adopter of the technology. “Smart meters and [advanced metering infrastructure] also let us know what is going on in the system as it happens.” This lets power companies manage overall energy consumption during peak use periods and locate outages quickly and speed up repairs.

In testimony before the state Public Service Commission in September, Entergy’s director of advanced metering infrastructure, Rodney W. Griffith, broke down estimated costs of the project. Some $95.1 million will go for meters and installation, $25.4 million for communications equipment, $17.7 million for data integration, $12.5 million for outage and distribution management systems, $6.9 million for master data management and $57 million for other costs. He also estimated $5 million a year in expenses in maintaining the system.

The nonprofit, member-owned cooperatives, which serve fewer consumers per mile of power line, seized on the technology early, finding that it aligned with their incentives to help members cut electricity use. First Electric Cooperative of Jacksonville introduced the meters more than 13 years ago, and Woodruff Electric began using early models as far back as 1997.

Entergy Arkansas, which made its regulatory filing before the PSC in September, hopes to benefit from the other companies’ experience. Deploying meters over three years ending in 2021 reflects a “timeline we believe best allows for the regulatory approval process and encompasses time to build and deploy systems … based on experiences from other utilities who have already taken similar efforts to modernize their power grids,” Munsell said.

Horton described Woodruff Electric’s long history with advanced systems.

“We were looking for a way to get our monthly meter readings more reliably and for less cost,” he said. “We used part-time contract meter readers, and we had a lot of hassle getting readings correctly and on time. Those first units [in 1997] were not considered smart meters, but with a relatively low cost we got a reading every 27 hours and a demand reading.”

In 2011, as President Barack Obama heralded an age when “smart meters will allow you to monitor how much energy your family is using by the month, by the week, by the day, or even by the hour,” the U.S. Department of Agriculture awarded funding to rural power companies, including Carroll Electric Cooperative in Berryville, which installed advanced meters for its 69,000 members.

In 2010, Woodruff Electric got a federal grant to pay nearly half of its cost of installing even more advanced meters, about $5 million, according to Horton. Now, even those meters are considered obsolete. “In 2016 we deployed approximately 750 meters that communicate using a wireless technology, and we plan to deploy 2,000 more this year,” pending review and board approval, Horton said.

“This wireless technology allows us to send and receive more data in a short period of time … data that will enable us to design our system to be operated more efficiently with greater reliability. Over the next few years we hope to replace all meters with wireless.”

The average cost per meter is about $265 — somewhat less for single-phase meters common in residences and more for three-phase meters often used in businesses and industries, Horton said.

At Arkansas Valley Electric Cooperative of Ozark and Oklahoma Gas & Electric, which serve thousands of customers in western Arkansas, consumers used less power after advanced metering technology was fully deployed. OG&E’s Brian Alford told Talk Business & Politics in 2014 that consumers were saving about $20 per month during the summer after new meter installation was completed in 2011. Greg Davis of Arkansas Valley, which began installing advanced meters in 2003, said its members reduced power consumption in 2012 and again in 2015.

“The technology allows us to help members understand their daily usage and answer questions and concerns about their bill,” said Tonya Sexton, vice president of marketing and communications at First Electric. “Personnel can also check meters along the line to see if they have power. This helps locate an outage and speed power restoration. It also reduces unnecessary trips for servicemen and linemen.”

Some Consumers Suspicious
Entergy hopes to replace all meters, but it has recommended letting residential customers opt out. Groups fearing government snooping and potential health hazards from radio-frequency radiation have proposed legislation to restrict smart metering in many states, including Arkansas. The radiation concerns are similar to worries about the effects of emissions from cellphones. The legislation has rarely advanced, but some consumers remain suspicious.

One utility executive, speaking anonymously, said even the mention of smart meters can provoke an uproar with some consumers.

Still, the co-ops say most members have been receptive or even enthusiastic. Horton said that while the systems collect “massive amounts of data,” the cooperative doesn’t use it to see which household devices are using the power.

“Members actually liked the fact that people aren’t coming onto their property to read the meter. They thought that was more invasive,” he said. “There is misinformation out there about how Big Brother is gathering data. But we’re not using it to see if you’re using grow lights in your house.”

The data must be analyzed and is of little use except to power companies and the customers themselves, Horton said. Ashley Harris of Ozarks Electric Cooperative in Fayetteville said it had found many ways to help members make use of the data since it began overhauling its system in 2001. “Fully deployed, the system reads nearly 70,000 meters a day, once for billing and three times daily for hourly usage,” she said.

The hourly data not only helps the co-op track the efficiency of its substations, but also lets employees tell members when they are using the most and least energy. This lets them track “activities in their homes in a given time frame to identify” what drives their energy bills. “As far as technology goes, we are always looking for new and innovative ways to serve our membership,” Harris said.

Former Entergy Arkansas President Hugh McDonald, who retired a year ago, offered his vision of a smart-grid future in a 2013 interview with Arkansas Business.

“When you start installing smart grid meters and you’re able to see what 700,000 customers are using at a given moment, and when customers can see that as well, we’ll assimilate that data to create information that we can use and our customers can use,” McDonald said. “That’s where the industry has got to get to in the next 10 to 20 years. Houses will be built as smart houses. You’ll be able to remotely control your appliances. The technology is here today, but how do you get it all built and deployed?”

McDonald’s successors at Entergy are figuring that out now.