The poles and wires of America's electric grid have changed little from their 19th century origins, even as consumer demand for reliable electricity skyrockets in the 21st century. To meet rising demand and consumer expectations for reliability, CenterPoint Energy Houston Electric is bringing its electric grid into the digital age by deploying more than 2 million smart meters over the next two years and beginning to build an intelligent, self-healing grid. More than one year and 400,000 meters into the deployment, this transmission and distribution utility has already learned valuable lessons to share with the industry.

Opportunities for Competitive Electric Market

In its deregulated Texas electric market, CenterPoint Energy delivers electricity to more than 2 million meters in Houston, Texas, on behalf of nearly 100 competitive retail electric providers. Advanced metering systems (AMS), now being deployed by several T&D utilities across the state, will help foster retail competition and deliver many potential benefits to consumers, such as new retail products and services, which could include the following:

  • Prepaid service
  • Time-of-use rates
  • Off-peak usage rebates
  • Energy analysis and cost-comparison tools
  • Remote control of appliances and thermostats in a home area network (HAN).

For CenterPoint Energy, AMS is an integral part of a comprehensive project to build an intelligent grid with power line sensors, remote switches and other distribution automation equipment to improve electric reliability and power restoration.

Smart Grid Journey

Though CenterPoint Energy is making its system smarter, it is far from dumb now. For more than 20 years, the utility has used limited distribution automation equipment such as remote switches, solid-state relays, supervisory control and data acquisition (SCADA) and remote capacitor controls.

From 2005 to 2007, the utility conducted research and development of smart grid technology and executed a pilot deployment of 10,000 smart electric meters in Houston. One product of the research and development effort, which has reaped ongoing benefits, is the CenterPoint Energy Technology Center, where the utility performs some key tasks:

  • Tests the interactive performance characteristics of diverse smart grid components

  • Evaluates the performance and security of HAN-controlled devices and appliances

  • Educates consumers, public officials, the media, vendors and industry peers about smart grid technology, having conducted more than 500 escorted tours of the Technology Center to date.

In December 2008, the utility received approval from the Texas Public Utility Commission (PUCT) to deploy more than 2 million smart electric meters, beginning in March 2009. In October 2009, CenterPoint Energy was one of six utilities awarded a US$200 million smart grid investment grant by the U.S. Department of Energy (DOE), $150 million of which will accelerate completion of the AMS deployment, moving up the date from 2014 to 2012.

CenterPoint Energy will match the remaining $50 million to begin building an intelligent grid serving more than 500,000 customers in central Houston by 2013, which the utility hopes eventually to extend throughout its 5000-sq mile (12,950-sq km) electric service territory in greater Houston.

More Than a Meter

CenterPoint Energy's smart meter of choice is Itron's OpenWay digital meter with an open-protocol, standards-based architecture and a ZigBee radio chip, capable of two-way communications and a host of smart functionality:

  • Automated meter reading and on-demand reads

  • Remote connect and disconnect

  • Outage and tampering detection

  • Support of HAN devices, load control and demand response

  • Mutlichannel metering for distributed generation.

The meters collect 15-minute interval data, transported from the meters through a radio-frequency mesh network to cell relays on distribution poles, featuring GE radios, to radio tower take-out points at substations (with failover to cellular GSM [Global System for Mobile communication]), and then by microwave or fiber-optic cable to the utility's data center. There, eMeter's Energy IP meter data management system processes the 96 daily reads per meter and electronically executes all types of customer-requested service orders remotely.

With IBM, a consortium of Texas T&D utilities, including CenterPoint Energy, has designed, developed and deployed the Smart Meter Texas common portal and data repository to serve as a single repository of usage data for customers with smart meters in areas served by these utilities. The portal gives consumers and their retail providers access to historical 15-minute interval data to show in a graphical format how much electricity has been used and when it was used without having to wait for a monthly bill. Retail providers — and soon consumers — may provision and de-provision HAN devices through the portal, through which retailers will be able to send price signals and load-control commands to their designated customer base. Consumers also will be able to receive outage notifications through the portal and authorize aggregators, energy analysts or other third parties to access their usage data.

Development and Deployment Phase

To manage this huge effort, CenterPoint Energy has brought together a cross-functional, high-performing team, wholly focused on the program and co-located at a single facility. Vendors and employees work on the same floors, attend the same meetings and solve problems together.

Disciplined program governance includes a comprehensive risk management process as well as rigorous planning, scheduling, tracking and reporting. The team pursues clear deliverables and timelines to achieve detailed benefits, which are identified, realized and tracked by a dedicated sub-team.

CenterPoint Energy employees — both on the project and off — know what the smart grid team is doing, why, how and when. More than 1800 employees from across the utility have completed training as ambassadors to educate their families, friends and neighbors about the benefits of a smarter grid.

The disciplined deployment process includes house-to-house “pre-sweeps” before meter installations to identify hazardous conditions, accessibility issues or diversion. When the old meter is removed, the technician takes a digital photo of the final read, which customer service representatives can access, to guard against billing errors in the transition. Construction of the communications network runs three months ahead of meter installations, so that when meters are installed, they can immediately begin meshing with the network.

Moving the Back Office to the Front Lines

As development and deployment continues, AMS has been integrated into the utility's daily operations. CenterPoint Energy's AMS became functional to the retail market on Aug. 1, 2009, a mere five months after the first meter was installed. Since then, the utility has been able to connect and disconnect service to these meters remotely, read them remotely, and obtain daily register reads and 15-minute interval reads as well as provision HAN devices. After an acceptance and approval period of up to 60 days, AMS register reads are used for billing and regular meter reader visits cease.

In the first 16 months, CenterPoint Energy installed more than 400,000 smart meters and 1600 cell relays plus 50 radio tower take-out points. In addition, 98.6% of accepted and approved meters provide daily register reads and 96.4% of all 15-minute intervals are collected each day, beating project team expectations. Since August 2009, the utility has completed more than 160,000 remote service orders.

The project team is executing knowledge transfer and organizational transformation plans to ensure operational ownership by the business, rather than vendors or the project team. The business is responsible for the hardware, software and resources to make the system work. With business ownership of operations, CenterPoint Energy's smart grid project is moving the back office to the front lines.

Service Management is Transformational

Complex, integrated AMS technologies require a new way of management. Meters communicate through a dynamic mesh, cell relays automatically switch between radio and GSM, and servers have highly available, redundant components. To better manage this dynamic system from end to end, CenterPoint Energy is transforming its focus to services rather than each separate technology. Services include tasks such as obtaining scheduled interval and register reads, performing on-demand reads, executing connect/disconnect orders and provisioning in-home devices.

The team monitors, measures and reports such services' end-to-end performance as well as the performance of each technology component. An end-to-end monitoring solution with a dashboard and alert system — along with rigorous production support and issue-resolution processes, which translate empirical event data into rapid mitigation and resolution — will allow the utility to manage the services that are most meaningful to customers.

CenterPoint Energy's AMS and intelligent grid initiatives are interrelated efforts. With the Department of Energy grant, a grid automation team is being integrated into the existing governance process. This year, the team will select a vendor for an advanced distribution management system (ADMS) to be integrated with the utility's outage management system (OMS) and AMS while automating four substations and installing more than 100 automated switches, line monitors and remote terminal units (RTUs). By the completion of phase one of the intelligent grid in 2013, the utility plans to have automated 29 substations and installed more than 500 automated switches, line monitors and RTUs.

As it builds the intelligent grid, the utility will use the same communications network of meters, cell relays and radio towers as well as using AMS meter data — such as on/off notification — to feed OMS and ADMS. This will help CenterPoint Energy not only respond more quickly and efficiently to outages, but also eventually prevent some outages as consumption data from the meters can identify load issues and predict transformer failures.

Critical Success Factors

The ultimate success of CenterPoint Energy's smart grid program depends not on the mere deployment of technology, but on business process transformation and consumer engagement. To translate this significant technology investment into sustainable operational benefits, refined business processes must capture operational efficiencies, and support organizations must practice end-to-end service management to deliver improved service. Technology and processes must be flexible and scalable to enable future advancements to serve the evolving Texas electric market.

For maximum value, smart meters need smart consumers. A truly successful smart grid deployment transforms the consumer experience as much as the grid itself. With the Smart Meter Texas portal, in-home displays and HAN technology, consumers will not have to wait for a monthly bill to raise their awareness and take control of their energy use. A smart meter alone will not save energy, money or the environment, but informed consumers willing to adjust their usage habits can. Likewise, customers accustomed to reporting outages must learn to trust the smart grid to know when their power goes out.

In support of these goals, CenterPoint Energy will encourage changes in consumer behavior to reap the full benefits of automatic outage notification and shifting consumption to less-expensive off-peak periods.

Working Together on Common Standards

The need for cooperation goes beyond CenterPoint Energy's smart grid project to the electric industry as a whole. The complexity and variability of not only electric components — the myriad meter cans and transformers — but also communications and computing components demand attention for the development of industry standards to ensure these technologies can be economically deployed, operated and maintained.

CenterPoint Energy supports the common information model (CIM), which provides a common definition of management information for systems, networks, applications and services. The common definitions of CIM enable interoperability between systems and products. CIM functionality is being specified in the smart grid equipment and systems the utility will use.

CenterPoint Energy is complying with emerging standards from the American National Standards Institute, North American Electric Reliability Corporation and National Institute of Standards and Technology when selecting smart grid technology. The utility will continue to work toward the refinement of interoperability standards through collaboration with public and private industry consortia and interest groups. It also supports nonprescriptive, performance-based cyber security standards that give utilities the flexibility to achieve security objectives.

CenterPoint Energy and other utilities pursuing smart grid projects are part of a national movement to reinvent the grid beyond Thomas Edison's imagination. These utilities are building systems that will be the industry's legacy to future generations and should invest in technology that will stand the test of time.

Kenny Mercado has 24 years experience with CenterPoint Energy and is currently division senior vice president, responsible for smart grid deployment. He previously served as division senior vice president, electric operations. Mercado holds BSEE, MSIE and EMBA degrees and is a licensed professional engineer registered in the state of Texas.

Companies mentioned in this article:

American National Standards Institute

CenterPoint Energy





National Institute of Standards and Technology

North American Electric Reliability Corporation

Smart Meter Texas

Texas Public Utility Commission

U.S. Department of Energy


This material is based upon work supported by the U.S. Department of Energy under award number DE-OE0000210. This report was prepared as an account of work sponsored by an agency of the U.S. government. Neither the U.S. government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favoring by the U.S. government or any agency thereof. The views and opinions of authors expressed herein do not necessarily state or reflect those of the U.S. government or any agency thereof.

Infrastructure Deployment and System Performance (through June 2010)

Meters installed Cell relays installed Radio take-out points built
455,824 1668 50
Register read rate Interval read rate Remote service orders
98.6% 96.4% 161,713