Central Maine Power Co. has begun a two-year effort to remove 600,000 old-style electric meters from every home and business it serves and replace them with digital devices that, over time, can change how people use electricity and what they pay for it.

These “smart” electric meters will feature wireless communications technology that allows CMP to automatically monitor power use across its system and detect outages. Customers, through special displays and personal computers, will be able to see how much electricity they’re using at any hour.

Eventually, customers may pay lower rates for turning off water heaters or air conditioners during periods of peak demand, possibly through radio signals to a new generation of smart appliances and thermostats. These so-called dynamic pricing programs are under way in other states and countries, although Maine utility regulators are just starting to study how they might be structured here.

The smart meter switchout coincides with the start of a five-year reconstruction of CMP’s bulk transmission system. The $1.4 billion project will create an estimated 2,000 jobs and $60 million a year in wages. It’s aimed at improving reliability, but also will extend new high-voltage lines into western Maine, where additional wind farms are proposed.

Within the next decade or so, the combination of smart meters and a smarter grid could fulfill a dream of some environmental groups. They envision Mainers charging electric vehicles at night, when demand and prices are low, with renewable power from the wind and tides.

CMP’s power grid dates to the 1960s. Its analog meter technology was around when Thomas Edison was alive. Bringing the grid and meters into the 21st century has been a priority for CMP’s parent company, Iberdrola S.A. The Spanish utility is the second largest wind power developer in the United States. The company’s chairman, Ignacio Galan, is scheduled to be in Gorham and Portland on Tuesday, at ceremonies marking the start of both projects.

But as with all emerging technologies, smart meters are not without problems.

Consumers in California and Texas launched lawsuits over higher bills that they say were triggered by faulty gas and electric meters. Recent independent studies cleared the utilities, but the controversy has been a public relations disaster and many residents remain suspicious of the meters.

CMP says it has learned lessons from these early programs, but some consumer advocates question whether Maine customers will see the promised benefits any time soon. Others, however, equate the emerging smart grid with the Internet of 20 years ago, or smart phones of today. Until the network and the technology exist, they say, it’s hard to imagine exactly how people will use them.

CMP will clearly benefit from smart meters. They will eliminate 140 meter reader jobs and the 2 million miles they drive each year. CMP will be able to see precisely where power is out following a storm, saving time and resources, as well as track electricity consumption by the hour during periods of high demand.

“It will give us a clearer picture of how our system is performing,” said John Carroll, a CMP spokesman. “All this information will allow us to make adjustments in how we operate and invest in the system.”

The entire project will cost $192 million. CMP had initially been unsuccessful in persuading state regulators it was worth the investment. That changed after CMP won a $96 million economic stimulus grant last year, part of the Obama administration’s efforts to upgrade the national utility grid. Shareholders — not ratepayers — will pick up almost all of the balance.

Over the next few months, a private contractor will begin installing meters in the Portland, Augusta and Dover-Foxcroft service areas. Roughly 200 people will be hired for the job. The work in Portland and Augusta is scheduled to end by next April. Early next year, work will start in York County and the midcoast. Some customers may receive letters to let them know when the work is scheduled, but most people will get notices in their bills. Technicians will hang tags on doors to say when the job is done. As part of the federal grant, CMP will conduct a year-long study on how it publicizes the program and how people respond.

For most people, no response will be necessary. The meters don’t require any customer interaction, or even any awareness.

“This is just another technology,” Carroll said. “We’ll get the information, but if customers never want to use that information, that’s their choice.”

But some people might want to track their power use, to save money. It takes more power plants — and more expensive forms of generation — to meet demand on the hottest and coldest days. If rates are set high during peak hours, some customers might wait to run their dryer or washing machine.

But dynamic pricing isn’t available yet. For one thing, CMP can’t offer these optional rates. Following deregulation 10 years ago, CMP distributes power but doesn’t generate or sell it. The PUC has started a formal proceeding to consider how private companies in the competitive energy business might develop and market these special rates.

Some critics of the process say Maine is going about things backwards, installing the meters and then trying to figure out how — or even if — customers will benefit.

“I know of no state that’s pursuing smart meters and relying on competitive energy providers for the programs that would justify these meters,” said Barbara Alexander, a consumer affairs consultant and former head of the PUC’s consumer division.

Alexander helped prepare a new report on smart meters for national advocacy groups that include AARP and Consumers Union. Maine, Alexander said, doesn’t know what dynamic pricing programs will cost, who will offer them, and whether customers even want them.

“A lot of the benefits in Maine are hypothetical,” she said.

But Richard Davies, Maine’s Public Advocate, said those potential benefits can be explored in pilot programs, once the technology is installed. He wants any new programs to create incentives that reward customers who voluntarily take part, rather than set higher rates for those who choose not to participate.

Davies makes an analogy between smart meters and the evolution of mobile communications. Cell phones are a mature technology, and some people are happy just to talk on them. But the introduction of Apple’s iPhone and other smart phones has led to a surge of innovation, with thousands of software applications that few people envisioned. In time, Davies suggested, it may become common to remotely turn on your home’s lights or air conditioning with a smart phone communicating with a smart meter.

Changes in meters and grid management extend beyond CMP’s service area. Bangor Hydro Electric Co. installed an earlier generation of smart meters in most homes and businesses, to automatically read meters and detect outages. Unlike CMP, it failed to receive federal stimulus money to set up a two-way communications network, but is moving ahead anyway on a smart grid upgrade.

Mainers may not embrace these changes at first, but the ability to save money by changing habits, such as when to do laundry, may gain appeal, according to Greg Cunningham, a senior attorney at the Conservation Law Foundation. Smart meters and a smarter grid give Maine the tools to offer future options for how power is consumed, he said, such as charging electric vehicles with renewables.

“The meters are the beginning of what may be a transformation of how power is delivered and managed,” Cunningham said.

But utilities first have to win customer acceptance of smart meters, and judging from the experience in other states, CMP will face challenges.

Education and outreach are crucial, according to Sam Spencer, publisher of Smart Grid Today, a trade publication that follows the industry. People need to understand what’s happening and why, and utilities in California and Texas didn’t do a good job, he said.

The second point is to anticipate that some problems are inevitable, and to have a plan in place when customers get angry.

“How a utility reacts to a public outcry is the second part of that lesson,” Spencer said.

Staff writer Tux Turkel can be contacted at 791-6462 or

tturkel@pressherald.com