Long Island Smart Metering Pilot Project

Abstract

The Long Island Power Authority (LIPA) Smart Meter Pilots provided invaluable information and experience for future deployments of Advanced Metering Infrastructure (AMI), including the deployment planned as part of LIPA's Smart Grid Demonstration Project (DE-OE0000220). LIPA will incorporate lessons learned from this pilot in future deployments, including lessons relating to equipment performance specifications and testing, as well as equipment deployment and tracking issues. LIPA ultimately deployed three AMI technologies instead of the two that were originally contemplated. This enabled LIPA to evaluate multiple systems in field conditions with a relatively small number of meter installations. LIPA experienced a number of equipment and software issues that it did not anticipate, including issues relating to equipment integration, ability to upgrade firmware and software over the air (as opposed to physically interacting with every meter), and logistical challenges associated with tracking inventory and upgrade status of deployed meters. In addition to evaluating the technology, LIPA also piloted new Time-of-Use (TOU) rates to assess customer acceptance of time-differentiated pricing and to evaluate whether customers would respond by adjusting their activities from peak to non-peak periods. LIPA developed a marketing program to educate customers who received AMI in the pilot areas and to seek voluntary participation in TOU pricing. LIPA also guaranteed participating customers that, for their initial year on the rates, their electricity costs under the TOU rate would not exceed the amount they would have paid under the flat rates they would otherwise enjoy. 62 residential customers chose to participate in the TOU rates, and every one of them saved money during the first year. 61 of them also elected to stay on the TOU rate without the cost guarantee at the end of that year. The customer who chose not to continue on the rate was also the one who achieved the greatest savings. However, after the first year, the customer in question installed equipment that would have made TOU rates a more costly option than the residential flat rate. During the second year, all but one customer saved money. That customer increased usage during peak hours, and as a result saw an increase in annual costs (as compared to the flat rate) of $24.17. The results were less clear for commercial customers, which LIPA attributes to rate design issues that it will take into account for future deployments. LIPA views this pilot as a complete success. Not only is LIPA better prepared for a larger deployment of AMI, but it is confident that residential customers will accept AMI and TOU rates and shift their energy consumption from peak to non-peak periods in response to pricing. On a larger scale, this will benefit LIPA and all of its customers by potentially lowering peak demand when energy costs are highest.