How a ‘smart’ meter and ‘smart’ grid encourage a smarter consumer: A look at San Diego Gas & Electric’s smart meter program


By Ted Reguly, Director, San Diego Gas & Electric’s Smart Meter Program

Today, we use smart phones while we’re on the go, wave smart debit cards to make our everyday purchases, and drive smarter cars. In the electricity industry, smart meters, smart homes and the smart grid are on the way. All these 21st century “smart” technologies share a common goal: making life easier for consumers. But, do these new high-tech tools really lead to smarter consumers? As far as helping them to be smarter about how they use energy, the answer is “yes.” San Diego Gas & Electric (SDG&E) is quickly positioning itself as one of the first U.S. utilities to show consumers the benefits of smart meters – greater choice, control and convenience.

SDG&E’s smart meter program is an ambitious undertaking, designed to allow residential as well as commercial and industrial consumers to see their energy usage habits in near real time. It’s a progressive combination of an integrated smart meter system, customer service tools and new programs aimed at providing valuable information to consumers and delivering more reliable, efficient service today and in the future. This historic program will help customers obtain more detailed data about their energy usage faster than ever. SDG&E’s goal is for customers to use that information to make simple and easy changes that ultimately save them money, and help the environment. A smarter consumer indeed.

SDG&E, a Sempra Energy regulated utility, supplies gas and electricity service to 3.2 million people in a 4,100-square-mile southern California service area. The territory spans two counties and 25 cities from the U.S.-Mexico border to southern Orange County.

SDG&E, the state of California and the other investor-owned utilities have aggressively championed and collaborated on many energy conservation efforts over the years. The state’s Energy Action Plan considers reducing energy demand to be the first and most cost effective resource – whether it’s achieved through conservation, energy efficiency and/or demand response programs for businesses, in which companies receive a financial incentive for shifting their electricity use off-peak during hot summer days. One of the key benefits of smart meters is that customers will see how much energy they’re using and can choose to cut back. Research shows that people will reduce their energy usage 5 to 10 percent just by knowing how much they’re using. Once all 1.4 million smart meters are installed by the end of 2011, SDG&E expects residential and business customers will respond by cutting their usage by a total of 200 MW – enough electricity to power about 130,000 homes.

By deploying meters and modules throughout its service area, SDG&E now has 2.3 million data points that can monitor the ebb and flow of energy use 24/7. From an operational perspective, mining this data is a golden opportunity to identify weak spots on the electrical grid and make repairs before a problem occurs, and to pinpoint the cause of outages more quickly and restore service faster. These kinds of applications are immediate benefits for consumers. They also serve as the foundation for SDG&E’s smart “green” grid. Over the next few years, as more high-tech equipment is added to the system, sensors will be able to recognize automatically when there’s a problem and re-route or restore power without human intervention. This is the so-called “self healing” aspect of the smart grid. Still more sophisticated technology will be required to help integrate intermittent renewable resources such as solar or wind power, while ensuring reliability of the system.

At the onset of the smart meter initiative, SDG&E established high level objectives that needed to be met for the project to be successful well into the future:

  • Remain as vendor and technology neutral as possible
  • Design for vertical integration wherever possible and sensible
  • Employ open standards and standards-based architecture
  • Embrace interoperability principles to aid in future proofing the system
  • Undertake a rigorous request for proposal process
  • Keep a consistent focus on business process improvement
  • Recognize this is nascent technology and that this is not business as usual
  • Identify and manage risks to the highest degree possible
  • Undertake a phased release approach
  • Ensure a robust security architecture
  • Emphasize the reality of “we must learn to walk before we can run”
  • Focus on internal and external stakeholders
  • Remember that, at the end of the day, it’s all about the customer.

SDG&E recognized the importance of the consumer in all aspects of its smart meter program. One of the most critical challenges facing utilities today is the need to support customer behaviors that help realize the benefits of energy saving programs.

The smart meter system is bolstered by a suite of innovative technologies, namely a full featured advanced metering infrastructure (AMI) system – in this case, OpenWay® by Itron – that can evolve as future applications of an intelligent grid are identified. The AMI system supports smart transmission and distribution grids by providing a two-way communication network between the utility and each meter. It also enables interval data collection, time-of-use metering, load limiting remote disconnect and reconnect capabilities, outage detection, net metering capability and ZigBee® home area network (HAN) connectivity – all of which empower customers to play an important role in energy management and conservation.

Combining the AMI system with HAN devices, and secure, flexible control and management software, enables a robust communications ecosystem – one that can help fully realize the benefits of the smart grid. This ecosystem not only delivers two-way command and control functionality from the utility down through associated subsystems to the meter, but also provides for a second layer of two-way communication that makes the effort truly smart: the meter acts as a gateway option into the home and communicates with HAN devices for today’s implementation as well as future applications.

The network technology behind the smart meter program will eventually be able to connect to and control many different automated digital devices, including remote appliance controllers, programmable communicating thermostats, in-premise displays, and electric vehicles. In the future, the HAN connectivity also allows SDG&E to communicate peak times to digital devices, as well as tell customers how much energy they’re using at a given time and allow them to view energy usage online, or eventually on their personal devices (i.e. cell phones). All customers will be eligible for incentives when they shift energy use from peak times. The smart meter system encourages customer response by making it easy for them to participate.

Further marriage of its smart meters and endpoints, network technology, in-premise displays and meter data management software allows for a feature rich experience that truly helps customers see how much energy they are consuming, and how much they are spending. Without better understanding their usage and the impact it has on overall energy delivery as well as the community, the prevailing behaviors stressing the energy system and the environment today will continue.

The technology behind SDG&E’s smart meter program

  • OpenWay® by Itron – OpenWay CENTRON® electricity meters and 2.4 GHz OpenWay Gas modules provide the foundation for collecting advanced metering information and providing it to the headend system. OpenWay CENTRON meters act as a gateway for the 2.4 GHz modules and pass gas information back upstream to the utility.
  • Itron Enterprise Edition™ Meter Data Management (IEE MDM) – software to help manage the large volumes of electric and gas meter data and allow for adaptable, scalable integration between backend utility systems. With the collection, analysis and application of this data, SDG&E can develop peak time rebates and time-based rate structures that can help incentivize consumers to change their behavior and ease the burden on an already strained grid at critical times.
  • Itron Enterprise Edition Customer Care Mass Market – being integrated as a web presentment tool for residential customers to view usage and billing data, both current and historical. When leveraged with advanced meter data, this innovative software enables consumers to interact with their energy usage to more fully comprehend how much they are using and when. By providing this information, SDG&E can better educate consumers on how their behavior impacts not only the energy grid as a whole, but their bill at the end of each month, giving consumers the necessary tools to make informed decisions about their consumption.

With these objectives in mind, initial business process improvements and enterprise implementation support were also identified. Any smart metering initiative must not only investigate and evaluate technology, but also identify the purpose, procedures and implementation guidelines that will allow that technology to help refine business processes, along with appropriate investments in integrated change management to help successfully transition employees to the future state.

Goal Current process Benefits from smart meter program and associated technology
Automate meter
Manual meter reading Lower costs and operation efficiencies gained by automated meter reading
Reduce necessity for access to
customer properties
Manual reads
requiring visits; all
meter maintenance
requires access
Automated meter reading requires fewer visits and access complications. Two-way communications to smart meters enable meter reprogramming and updating to be accomplished remotely, reducing fleet on the road
Reduce re-bills Re-bills often required for late reads or
reading errors
Fewer re-bills required from accuracy of automated reading
Account for
unmetered energy usage
Theft, meter errors and meter changes lead to energy that is used but unbilled or unaccounted for Validation, estimation and editing (VEE) provided by meter data management system help recognize unaccounted for use and fill gaps. Two-way communications allow for faster detection and remote meter reprogramming when theft or errors are determined
Avoided energy
and capacity
Limited demand
response and
incentive rates
Extensive demand management,
conservation and incentive programs will be available for all classes of customers

Improve outage
Customer outage
reporting and
manually initiated
response analysis
Automated outage and restoration
reporting and analysis integrated into the smart meter system
Enhance capital
efficiency and
Plan for peak load conditions with limited feeder visibility Better planning for and management of peak loads with interval meter data
Improve customer service and
reduce operating
Advanced data collection and
application leads to improved research and compliance processes
Improve other
management cost
Program enables a streamlined cost
structure in out years

SDG&E’s smart meter program highlights

  • Encompasses 1.4 million smart electric meters and 900,000 gas modules.
  • Replaces existing technology and business processes, including analog, mechanical meters and manual meter reading.
  • Provides cutting edge electric meters using digital, solid state technology, capable of remotely collecting reads.
  • Enables a true “smart metering” environment that:
    • Allows for remote measuring of energy usage.
    • Provides two-way communication between SDG&E and the electricity meters, as well as communication inside the customer premise via HAN.
    • Ties gas meters into the smart metering initiative.
    • Presents data to consumers and customer service representatives through the web, phone and eventually personal devices.
    • Enables remote disconnect and reconnect capability for residential electric meters.
  • Includes 57,000 programmable thermostats capable of communicating with the HAN.
  • Enhances reliability and outage detection, as well as speed restoration efforts.
  • Gives customers more control over their everyday energy usage, including the opportunity for lower bills with:
    • Better energy usage information.
    • New incentive programs.
    • Availability of variable rate pricing programs.
    • Lower operating costs for SDG&E, which in turn can be passed through to the consumer.
  • Improves customer service.
  • Allows for on-demand remote meter reads.
  • Facilitates more flexible and customized services.
  • Reduces the need to access customer property.
  • Enterprisewide initiative that effects almost every department, requiring robust project, risk, issue, dependency and change management support to be successful.

SDG&E aims to have all smart meters and endpoints installed at customer sites by the end of 2011. So, while society is busy applying the decidedly human adjective of “smart” to a host of inanimate technologies, SDG&E is truly encouraging a smarter consumer.

To find out more about SDG&E’s smart meter program, visit