General Electric thinks 100 kilobits per second might be fine for reading electric meters. But 1 to 2 megabits per second is what's needed to make the split-second automation of the electricity distribution grid a reality.

That's what GE expects its new WiMax-based wireless communication system will be able to achieve for utility CenterPoint Energy.

In a contract announced Monday, GE will install a network of its WiMax-based MDS Mercury 3650 radios to link the utility's "backhaul" communications systems to collection points. Those collection points will aggregate data from millions of so-called "smart meters" that CenterPoint is installing for its 2.4 million customers in the Houston area.

Whether or not this marks a new trend in using WiMax for smart meter deployments – something that Intel and GE-backed startup Grid Net wants to see happen – remains to be seen (see this Green Light post).

Like almost all the other "smart meter" deployments in the country so far, CenterPoint's smart meters themselves – built by meter manufacturer Itron – have radios with lower bandwidth to connect with each other in a mesh and transmit data to and from collection points.

In general, utilities have opted for lower-bandwidth, lower-cost wireless technologies for this "neighborhood area network" communications, since sending energy usage information and simple instructions to and from meters don't require high-bandwidth systems (see Smart Grid: A Matter of Standards).

But when it comes to distribution automation – using high-speed digital communications to control equipment that keeps the grid from breaking down – it's likely that utilities will need a lot more bandwidth, said Larry Sollecito, president and CEO of GE Digital Energy.

That's because, "If you're talking about doing distribution automation, you're talking about very fast response times, and you cannot miss a read on a communication," he said. Without that speed and reliability, "you'll damage a transformer, you‘ll break a generator, and you may even have a safety concern."

While GE is among the top smart meter makers in the country, this is the first smart meter deployment that includes its WiMax-based communications technology, Sollecito said.

And GE's system will be self-contained, rather than using WiMax networks being deployed by Sprint and Clearwire around the country.

"CenterPoint is actually the first [U.S. utility] that's put a stake in the ground around WiMax," said Rick Nicholson, vice president of research for IDC company Energy Insights.

Intel, Google, Comcast, Time Warner Cable and others last year invested about $3.2 billion in a Sprint-Clearwire partnership aimed at building a nationwide WiMax network.

But that Sprint-Clearwire partnership has had its struggles, and is a second go-around for the two companies, which first announced a partnership in 2007 only to terminate it later that year.

Utilities – which are already known for being reluctant to use public communications networks (see Your Electrical Meter Becomes a Cellphone) – may be reluctant to try out WiMax for smart grid communications until the Sprint-Clearwire efforts play out, Nicholson said.

Still, backers of WiMax for smart grid may see this deployment as a way to test the proposition that the wireless technology is perfectly suited for a broad range of tasks.

"Utility customers are actively interested in the WiMax solution," said Judith McGarry, spokeswoman for San Francisco-based Grid Net, which has developed technology for installing WiMax Internet routers in smart meters.

The company has licensed tat technology to GE, which is now testing out the WiMax smart meters with SP AusNet and Energy Australia, two utilities in Australia, McGarry said.

GE is also talking with U.S. utilities American Electric Power (AEP) and Consumers Energy about testing WiMax smart meters, and could announce a commercial deployment using the Grid Net technology in the next few months, she said.

Both the Australian utilities are using public WiMax networks, McGarry noted. Australia's WiMax coverage is far greater than in the United States.

But utilities can always build their own communications networks. Nicholson said he wouldn't be surprised if GE continues to seek to build utility-owned WiMax networks like the one it's doing for CenterPoint as a way to support Grid Net-enabled smart meters in the long term.

"WiMax is one of many options," he said. "It's hard to predict of there's going to be a winner – or, more likely, there will be multiple options out there."