Later this year, the Chicago utility company will mount solar panels on the roofs of 100 homes in the near west suburbs and possibly the city's Near West Side.

The utility will outfit 50 of those homes with smart electric meters, hourly electric pricing, battery solar-power storage and the ability to gain credits for emitting excess solar power back to the electric grid for others' use. The other 50 will get those same additions, except they won't be able to store their energy.

"We want to see whether consumers have the ability, with this technology, to become little utilities. They will be able to buy and sell electricity at a real-time hourly price, which is very close to the wholesale price, from their homes," said Val Jensen, ComEd's vice president for marketing and environmental programs.

ComEd will mail surveys to customers who live in single-family homes to see who is interested in getting solar power, Jensen said. The outcome will depend on such things as the type of house, how shaded it is by trees, and the orientation of the roof.

The solar power experiment is being funded with an anticipated $5 million in stimulus money from the U.S. Department of Energy, plus $3 million in matching funds from ComEd and its vendors, including solar-power technology firm Gridpoint, based in Arlington, Va.

These 100 homes are among 131,000 that will gain experience with smart meters capable of transmitting data wirelessly to in-house consoles that show customers how, and at what cost, they are using electricity. ComEd has 3.8 million customers in Northern Illinois.

Of the 131,000 homes, 8,000 will test how consumers can use basic information about their electricity consumption to change their behavior to lower their utility bills and help reduce overall power-supply costs.

They will be assigned to pay one of six electric rates, including the utility's current flat rate. The others are: a rate that increases as a customer uses more electricity; an hourly rate set at the day-ahead hourly wholesale price; a rate that jumps sharply at peak times; a rebate rate for those who reduce electricity at the peak times, and a time-of-use rate that is high at peak times and lower at non-peak times.

About 3,100 of these customers will get a basic display device starting in May that will show them how they are using electricity and what it is costing them.

Another 1,500 customers will receive a larger, touch-screen console that hooks up to the Internet and lets users not only see the details of their electric use and bill, but also is capable of Web applications that can provide anything from sports scores to news headlines.

"We're hoping the [more sophisticated device] will prove more useful to customers so they'll take action to modify their energy use," Jensen said.

A subset of 400 customers will receive programmable thermostats that they can set to change temperatures at pre-determined times of the day when electric rates are cheapest.

"This pilot program, which will run for a year, is the largest in the country to focus on the customer experience," Jensen said.

Ahmad Faruqui, who has designed smart-metering and pricing pilot programs and has worked with ComEd on this experiment, said it is the first globally to combine a variety of electric-rate pricing options with detailed information about customers' electric use on such a large scale.

Faruqui said the "No. 1 issue" hindering implementation of smart meters and dynamic pricing is the fear that the elderly, low-income and people who depend on special medical equipment will panic at the moment electric rates go up during the day and unplug all of their appliances, thus harming themselves.

"This [behavior] has not been observed in any experiment, but there is a fear factor that kicks in when it is brought up," Faruqui said. Faruqui suggests that such vulnerable customers be allowed to keep their existing electric rates.

By Sandra Guy Staff Reporter; Chicago Sun-Times