Duke Energy Indiana has proposed a sweeping modernization of its power delivery system including the installation of more than 800,000 new digital "smart meters" -- one for virtually every home and business in each of the 69 counties served by the state's largest utility.

The five-year initiative -- called "Smart Grid," referring to the power delivery system -- would employ extensive digital and other advanced technology to save energy, bolster system reliability and improve customer service.

The multi-pronged initiative would allow the company to reduce voltage levels along its power delivery system with no customer service impact, saving enough energy to power 40,000 homes for a year.

The initiative also would allow the company to potentially lessen the frequency and duration of power outages.

In addition, the Smart Grid initiative includes a proposed demonstration project that would place electricity-generating solar panels or other renewable energy sources on the property of interested customers.

"The entire electric utility industry nationwide is moving in the direction Duke Energy hopes to move in Indiana," said Jim Stanley, president of Duke Energy Indiana.

"Smart Grid would replace less efficient analog technology with advanced digital technology, bringing our electricity delivery system in Indiana into the 21st century," Stanley said.

The new smart meters would allow two-way electronic communications between the utility and the meters, greatly reducing the frequency and expense of on-site meter reading.

Coupled with additional information technology enhancements in the future, the meters could eventually enable customers to monitor their real-time energy usage via online access to their electricity accounts.

In addition, the meters and other components of the Smart Grid initiative would provide the digital gateway necessary for the utility to eventually offer customers a variety of sophisticated cost-saving energy efficiency programs.

Smart Grid's new technology also would automate many processes currently performed manually. Power connections for new customers could be performed remotely from a utility office, rather than by an on-site technician, for example.

In addition to the new meters, the company also would build a state-of-the art communications system along its thousands of miles of power lines in Indiana, and install new digital automation equipment capable of detecting and preventing power line trouble before outages or other electricity delivery problems develop.

"The Smart Grid initiative would strengthen the reliability of our electricity distribution system using new, state-of-the-art equipment and sensors that would operate and communicate with each other through a unified computer network," Stanley said.

Digital monitoring would routinely and automatically test all system circuits, allowing rapid problem identification and isolation and, in many cases, remote-control restoration following power outages.

If automated restoration could not be executed, electricity from other distribution lines could be rerouted to outage areas using remote-control operation centers without the need for power line technicians in the field.

Duke Energy Indiana has filed a petition with the Indiana Utility Regulatory Commission as a first step in seeking approval for the Smart Grid initiative. The company expects to submit cost estimates and additional initiative details in June.

Indiana is the first state in Duke Energy's five-state service area in which it has sought to launch a full-scale version of the initiative. The company plans to unveil similar Smart Grid proposals in its four other states -- Ohio, Kentucky, North Carolina and South Carolina -- in the future.