The first project is an innovative Smart Grid program that enables customers to make real-time energy decisions to reduce energy usage and costs. The second award is for a pilot project that will test the feasibility of connecting distributed resources like solar power projects into an urban electric grid, a problematic engineering challenge for utilities in large cities across the country.

“We’re thrilled that the Department of Energy has recognized our pilot projects by granting this funding to spur the development of clean energy technologies and increase the availability of real-time information to our customers,” said Tom May, NSTAR Chairman, President and CEO. “These innovative programs, along with our previously announced electric grid “self-healing” project, will pave the way for the electric grid of the future.”

NSTAR is the only Massachusetts utility to receive stimulus funds in this round of awards for a smart grid demonstration. The company’s smart meter pilot program will use advanced technology to pair existing automated meter reading equipment with broadband Internet service to provide two-way communications directly to a customer’s computer.

One aspect of the pilot will be to test the effectiveness of rates that vary based on the time of the day, allowing customers to reduce electric bills by shifting consumption away from high-cost hours. This research will provide crucial information on the benefits and cost-effectiveness of the Smart Grid, including energy and cost savings.

The urban grid monitoring pilot will lay much of the groundwork to understand what is necessary to integrate distributed resources like solar power, plug-in electric hybrid vehicles or battery storage, into urban grids in major metropolitan areas across the country. Due to the design nature of these urban grids, technical barriers have limited such integration. The results and knowledge gained from NSTAR’s pilot in Boston would be broadly applicable to other major cities including New York, Philadelphia, Chicago and Los Angeles.

“NSTAR already has one of the most technologically advanced distributions systems in the country and these grants will help it to become even more sophisticated,” May added. “In addition, every dollar in stimulus funding directly offsets costs to our customers, which is truly a win-win.”

NSTAR is the largest Massachusetts-based, investor-owned electric and gas utility. The company transmits and delivers electricity and natural gas to 1.4 million customers in Eastern and Central Massachusetts, including more than one million electric customers in 81 communities and 300,000 gas customers in 51 communities.