Center Point Energy, which serves 2.2 million customers in the metropolitan Houston area, expects to spend $1 billion over the next five years on smart grid. Residential customers are seeing an additional $3.24 a month on their electric bills, but Center Point says that should be more than offset by energy savings.
An Energy Department study projects energy savings of 5 percent to 15 percent from smart grid.
"This pays for itself through efficiency and demand reduction and if you don't look at it from that perspective you won't get your money back," said Thomas Standish, group president for regulated operations at Center Power Energy.
The cost and payback have some state regulators worried.
"We need to demonstrate to folks that there's a benefit here before we ask them to pay for this stuff," says Frederick Butler, chairman of New Jersey's utility commission and president of NARUC, the national group that represents these state agencies.
Energy Secretary Steven Chu, said the current grid stands in the way of increasing the use of renewable energy sources such as wind and solar that "will need a system that can dispatch power here, there and everywhere on a very quick basis."
But Chu and others also worry about security. "If you want to create mischief one very good way to create a great deal of mischief is to actually bring down a smart grid system. This system has to be incredibly secure."
And there is the issue of intrusion.
"Is the average consumer willing to pay the upfront costs of a new system and then respond appropriately to price signals? Or will people view a utility's ability to reach inside a home to turn down a thermostat as Orwellian?" Sen. Lisa Murkowski, R-Alaska, said at a recent hearing on smart grid.
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