Duke Energy Corp. today tapped Cisco Systems Inc. to test "smart grid" software and hardware that the utility hopes will enable its customers to track and reduce their electricity consumption more efficiently.

The Charlotte, N.C.-based utility (NYSE: DUK) will deploy communications architecture based on Internet protocol-based open standards -- an approach Cisco says will permit easier accommodation of new technologies into the grid. The companies plan to start by installing nearly 2 million residential "smart meters," as well as routers, switches and other "distributed automation" infrastructure, throughout Duke's service territory in Indiana and Ohio during the next five years.

Duke, the nation's third-largest electric utility, provides service to 11 million natural gas and electricity customers in North Carolina, South Carolina, Ohio, Kentucky and Indiana. The company plans to invest nearly $900 million to deploy the smart-meter infrastructure in Ohio and Indiana and apply for federal stimulus funding to cover part of the project cost, said Todd Arnold, Duke's senior vice president for smart grid and customer systems.

"Our goal is to rapidly transform the way electricity is delivered and used," said Arnold, who added that Duke plans to expand the smart-grid effort to Kentucky and the Carolinas eventually.

The economic stimulus package that President Obama signed in February includes $11 billion to build a bigger and more efficient grid, but a recent study by Oracle Corp. suggests that privately funded smart-grid projects face perception challenges.

Ninety-five percent of electricity customers would like to have detailed data about when and how they use power, but 20 percent are willing to pay for real-time information, according to the survey of 604 U.S. customers and 200 utility managers (Greenwire, March 9).

Such findings have not prevented cities and other utilities from trying to build a smarter grid.

Florida Power & Light Co. embarked recently on a $200 million project to supply Miami-Dade County with power-monitoring and renewable energy technologies during the next two years. The "Energy Smart Miami" initiative will deploy photovoltaic panels, plug-in electric vehicle charging stations and more than 1 million smart meters (Greenwire, April 21).

Environmental Defense Fund, Austin Energy and more than a dozen other stakeholders are leading a broader effort in Texas' capital city. The Pecan Street Project's goals include the deployment of 400,000 smart meters in Austin by the end of August as well as the generation of 300 megawatts of "clean, locally produced" energy, according to officials familiar with the project.

"This is developing a new, sustainable business model -- that's key," said Chris Smith, an EDF spokeswoman. Utilities "need a new financial structure as people begin to sell power back to the grid."

Cisco, which is also involved with the Austin and Miami projects, estimates that the global market for smart-grid communications will be worth $20 billion annually within five years.

Reprinted from Greenwire with permission from Environment & Energy Publishing, LLC. www.eenews.net, 202-628-6500