LEWISTON — The Obama administration announced Tuesday it has awarded nearly $96 million in stimulus funds to Central Maine Power Co. to invest in "Smart Grid" technology in Maine.

Officials say the investment will result in smaller electricity bills through a combination of conservation and new pricing packages.

"We're behind, but we're leaping ahead," CMP spokesman John Carroll said. "This is a good time to be entering into this technology."

The $95.9 million CMP grant is part of $3.4 billion in Smart Grid technology funds awarded nationwide through the American Reinvestment and Recovery Act. The federal money will be matched with industry funds in a public-private partnership that will result in an $8 billion investment, according to a White House release.

"I think it's the 14th largest grant awarded overall," Carroll said. "And as important as we are to the state of Maine, we're really a fairly small utility by comparison. So I think this really represents a spectacular benefit for Maine."

CMP will invest its own money into the Maine upgrade to bring the total project cost to about $200 million.

Carroll said CMP will use the money to upgrade electricity meters for its residential, commercial and industrial customers, about 650,000 meters in all.

"It's about consumer empowerment," Carroll said. "It gives them first-off information, so they will be able to get readouts in real time about their usage, so people can start to recognize how much electricity they are using and what their patterns are and what it's costing them. Just having that knowledge makes it easier for people to identify ways to save electricity."

The upgrade eventually will allow for more choice, and ultimately, a savings for consumers, he said.

"With these meters in place, the energy suppliers may come forward with programs that can offer what's sometimes called dynamic pricing," Carroll said. "At certain points, as electricity prices rise during a peak period, people may opt to curtail their use and actually be compensated for that."

The project is contingent upon approval from the Maine Public Utilities Commission, which is waiting on a report from CMP to demonstrate customer benefits of the upgrade. PUC and CMP officials expect approval by the end of this year or the beginning of 2010.

Carroll said CMP expects the project to result in up to 200 jobs in 2010 stretching to 2012, when the upgrade is expected to be completed.

"For the next two years, these will be new jobs and hopefully, by the time the installation dies down in 2012, the economy will be better," he said.

The upgrade will allow CMP to make quicker repairs because the company will be able to test meters remotely to see which ones are working and which ones aren't, Carroll said.

"It will also cut down on the amount of travel for us. We anticipate that we can eliminate about 2 million vehicle miles a year," he said, adding that from an environmental perspective, that equals about 1,400 tons of carbon emissions.

Without the grant, Carroll said CMP wouldn't have been able to move forward with the upgrade in a cost-effective manner.

The meter upgrades will offer benefits to electricity suppliers because of the more sophisticated ability to manage demand during peak and off-peak times, Carroll said, but because Maine does not have suppliers, the economic benefits of an upgrade were stunted.

"The importance of that was recognized by (the Department of Energy) and that's why we got such a large grant," he said. "It's because the way Maine has been restructured, it was impossible to rationalize a single company making the investment that was necessary."

But with the grant, Carroll said the upgrades can be made for no added cost to consumers.

ISO-New England, the nonprofit company that oversees power in the region, was also awarded $18 million on Tuesday.

Vamsi Chadalavada, chief operating officer for the company, said the grant will be used to modernize the transmission and distribution system and introduce smart grid tools and technology to the ISO-New England grid, including Maine, allowing for remote information updates up to 30 times per second.

He said the frequent updates would mean reduced congestion, "which translates to dollars for consumers and increased reliability."

rmetzler@sunjournal.com