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| FAQs for Smart Grid Announcement – August, 2009 |
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SmartStar Lawrence Fact Sheet
News Release (2009-8-4)
Section One - Application
For what has Westar Energy applied?
Westar Energy has applied with the Department of Energy (DOE) for funding under the Smart Grid Investment Grant program. This program is part of the American Recovery and Reinvestment Act that was signed into law in February. Through the program, companies can receive matching federal funds for pre-approved programs that advance the electric smart grid system.
For how much is the application?
Our concept town project, SmartStar Lawrence, is estimated to cost about $40 million. If the DOE approves our application for funding, Westar would receive up to 50%, or $20 million, to apply to the project. Westar would fund the other 50%.
How will the $40 million be spent?
Westar will install equipment and technology to implement a smart grid system. The company will install up to 48,000 “smart” meters, advanced distribution equipment, new outage management technology and other supporting technology infrastructure for the smart grid environment.
Why only one town? Why Lawrence?
While there are many anticipated benefits of the smart grid for both customers and Westar, we prefer to take a more cautious approach before making a much larger financial commitment. Implementing smart grid technology in one town will allow Westar to determine the best approach for the smart grid system in the Westar service territory. We’ll also be able to work with our customers to identify the most meaningful types of information and services to offer through the smart grid.
We are choosing Lawrence for a number of reasons including size and the wide variety of customers there, such as a mobile student population, commercial and industrial customers and educational institutions. While Lawrence customers will be the first to receive smart meters, the systems and equipment the company plans to install will enable the same technology throughout Westar’s service territory.
What’s in it for me as a Westar customer?
The funding would allow the company to begin implementation of a smart grid infrastructure in its service territory without passing along much of the cost to its customers. If Westar’s application for stimulus funds is approved, we would receive about $20 million to help reduce the expense of this initial smart grid test deployment. This initial deployment will help Westar identify the best operating practices for our company and customers. Later, as Westar moves further with smart grid deployment, this actual experience will result in a more cost effective and meaningful approach for our customers.
What happens next with the application?
It’s important to note that as of right now, we’ve only applied and have not received funding. The DOE will conduct a 90-day initial review period before applicants will be notified of selection for further consideration. Following notice of selection, there is another 90-day period of consideration for funding. What this means for Westar is that it could be early November before we know if we are selected and early 2010 before we know if we receive funding for the project.
What happens if Westar does not receive funding?
Westar management team will review the project and determine what work, if any, would continue without stimulus funding.
Can I see the application?
Yes. The application will be available at the Recovery Act web site located at www.recovery.gov. In brief, the application is about 80 pages long and contains information on what the project will entail and how it will be managed. Once the document is posted to the Recovery Act Web site, Westar Energy will post it to its own Web site – www.westarenergy.com.
How will I know how Westar is spending the money?
If the DOE approves Westar’s application, the company will be required to file quarterly project progress and financial reports. You can see these reports at www.recovery.gov. The program rules stipulate that the reports be publicly available within 30 days of submission. The 30 days allow for DOE review.
Section Two - Rates
Will this funding reduce my rates?
No. The objectives of the Smart Grid Investment Grant program specifically state that the money must be used for smart grid development. The intent of the federal funding is to provide a stimulus which will speed up the deployment of the smart grid on a national basis, move the grid toward better reliability, create jobs and permit more flexibility in integrating renewable resources.
Will installing a smart grid affect my rates?
Not right now. However, large smart grid investments must eventually be recovered through rates. We do expect smart grid investments to be less costly than simply resorting to building additional power plants.
Will my rates go down?
No. Westar believes that implementing the smart grid system wide will result in significant efficiency gains that will help us delay the need to build new, costly power plants. For the customer, the smart grid will supply greatly enhanced energy usage information and service options. This information gives the customer the ability to manage their energy usage resulting in lower costs.
Will my rates go up?
Not under the funding application for the concept town project. The project in Lawrence will help identify the right approach to smart grid investment. Rates would eventually go up for the amount not funded by grant money and as Westar proceeds with implementing a smart grid system throughout its system.
Why did you raise your rates if you're asking for this money?
The recent rate adjustments were not related to this federal funding program and instead were related to investments made to increase Westar’s natural gas generating capacity and in renewable energy (three wind farms). Our hope is to take advantage of this federal funding opportunity to help offset some future costs to customers.
Section Three - Smart Grid
What is a smart grid?
Smart grid technology is a state-of-the-art approach to managing electricity systems. It uses new technology to tie together the pieces of an electric system, resulting in better reliability and improved efficiency. It also provides more energy usage information to customers. The smart grid enables you to monitor your daily energy use and cost information, and better manage your energy bill. It will also eventually allow the introduction of a number of new programs and services.
What do I get from the smart grid?
The smart grid will give you more frequent and detailed energy use and cost information than you have ever had available. You’ll be able to sign on to your account at WestarEnergy.com and look at your previous day’s usage, month-to-date and historical energy usage and cost information. Plus, you’ll have access to data for your area for cost comparisons and a number of other energy conservation tools and tips.
Can I save money with the smart grid?
Nationwide industry studies show that people who take advantage of smart grid technology by reviewing their usage lower their energy consumption by 5% to 15%. That’s because customers make changes in how they use energy. It’s one of the big benefits of the smart grid – you can see what you’re using throughout the month, rather than finding out what you used when you receive your bill.
What are the other benefits?
You’ll also be able to sign up for things like email or text alerts for bill amount trends you set, or for outages alerts at your home or business. Those types of services will be available through our Web site, once the technology is installed, probably sometime in the 3rd quarter of 2010.
Also, the smart grid will eventually support things like smart appliances, in-home energy displays and management programs, and even connections to other programs such as the Google PowerMeter and Microsoft Hohm Web applications.
Will Westar control my usage?
No. The smart meter and smart grid do not mean we will control electricity usage at your house. Smart grid technology does improve Westar’s ability to offer voluntary programs that can lower your usage during periods of peak generation. However, customers can choose if they want to participate.
Will Westar offer different rates for participating?
Because of the smart grid, Westar will eventually have the opportunity to offer different rate options to customers. These are often called dynamic rates. What that means is Westar could charge participating customers different prices for electricity during different times of the day and/or when electricity is more expensive to generate. It’s designed as an incentive for customers to use less during peak usage times. If Westar and customers work together to reduce peak usage, then fewer expensive power plants will have to be built, saving all customers money.
When will these rates be available?
One of the major objectives of SmartStar Lawrence is to better understand what will and what won’t work in the rest of the Westar service territory. While there are a lot of smart grid and dynamic pricing studies available from other areas of the country, we’re not sure those apply to us in Kansas.
In Lawrence, we hope to offer pilot programs for different rate options and other energy services. The results will tell us the best approach for the whole Westar territory. We anticipate some rate pilot programs to be available sometime during 2011. We’ll work closely with the Kansas Corporation Commission and the Kansas Energy Office to develop good rate options.
Section Four - Smart Meters
What is a smart meter? How is it different from my current meter?
A smart meter is a state-of-the-art digitized electric meter. The biggest difference between your current meter and a smart meter is that a smart meter has a two-way communication module that allows data to flow from your meter to Westar and vice versa. It allows the meter to report your daily energy usage information back to Westar so we can then make it available to you on your “my account” page at WestarEnergy.com. Smart meters can monitor electric usage in short time increments, even minutes, and give customers virtually real-time feedback.
Do I have to do anything with the smart meter to make it work or get information from it?
You don’t have to do anything with your meter once installed. The energy usage information that will be available from the meter will be at your “my account” page at WestarEnergy.com. More information on using that page will be available once it’s up and running.
Do I have to pay for the smart meter?
No, not immediately. The costs incurred in the SmartStar Lawrence project will be accounted for and recovered later. . However, the impact on rates is lessened if we’re successful in receiving federal grant funds. We also believe that because the smart grid provides an opportunity to defer new generation. These investments may prove to be less expensive than “business as usual.” .
Are you going to tell me before you change my meter?
Yes. Once we start installing meters, we will let you know the dates and areas we’ll be in.
Does this smart meter replace my current meter?
Yes. The smart meter will replace your current meter. It does not require any change to your current meter box and will fit exactly where your current meter is.
Does the smart meter change the electricity in my house?
No. There is no change in the electricity in your home or business.
Who is going to put in the smart meter?
Westar will have professionals install the smart meters. They will be wearing clearly marked identification. They will also leave information behind that helps explain the smart meter and other information. We will let you know what to look for and expect when we get closer to actual meter installations.
Will the smart meter control how much electricity I get?
No. The smart meter will allow for Westar to offer some peak usage reduction programs, often called demand side management plans. These programs are voluntary and may include things such as controllable thermostats, time-of-use pricing plans and other in-home energy management approaches. We plan to offer several pilot programs in the SmartStar Lawrence project to better identify what works best for the customer and company.
Section Five - Why Lawrence?
Why did you pick Lawrence?
Several Westar communities would have been good for the project. In choosing Lawrence, we found an ideal size for the project (about 50,000). Lawrence also has the full range of our customers, from residential, to commercial, to large industrial. Lawrence also has diverse neighborhoods and characteristics, from quite old areas and homes, to new developments and new business areas. Because it's a university town, we also have a large number of new service connections every year as college students arrive and set up Westar acccounts.
When will other cities get smart grid?
That depends on the results we get from SmartStar Lawrence. We’ll better understand customer benefits and acceptance, as well as requirements and benefits for company. The success of this project will play a large part in determining how quickly Westar moves forward.
I live in Lawrence. When will I get my meter?
Keep in mind that we’re just now applying for federal grant money. We haven’t been awarded anything yet. If we do receive a grant, actual meter installations probably won’t start until late 3rd quarter of 2010. That’s because there’s a tremendous amount of internal technology infrastructure work that has to be completed before handling data from the meters. Westar doesn’t want to install meters until customers can immediately benefit from the availability of daily energy use and cost information. This information will be available on your secure account on the WestarEnergy.com Web site.
I live in Lawrence, and I don't want anything to do with this.
Westar will be installing smart meters throughout Lawrence. However, you won’t notice any difference in your service. We’ll use the smart meters as an automated monthly billing tool. But, nothing will change for you, unless you want to find out your daily usage or use energy efficiency tools online.
I'm interested. What should I do?
Soon, Westar employees will conduct community presentations on SmartStar Lawrence, so you can find out more about it and have your questions answered. If you are member of or know of a group that might be interested in having a presentation, please give us your contact information and I’ll pass it on to the right people.
There will later be a number of opportunities for Lawrence residents to participate in various pilot programs. We'll announce those as we get closer to that time.
I have rental properties in Lawrence. How does this affect me?
You can still receive monthly billing in the format and schedule you always have. The smart grid does offer many benefits for rental property owners, however. One benefit will be the convenience of remote service turn-on and turn-off that offers flexibility in scheduling service changes. Another will be that for properties whose electric account is in the owner’s name, the owner will be able to see daily energy usage and set alerts for the property just like any other customer.
Where do I find out more information?
Get more information about SmartStar Lawrence at www.WestarEnergy.com.
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