PORTLAND, Ore.--(BUSINESS WIRE)-- The Department of Energy has selected a Pacific Northwest team including Portland General Electric (NYSE:POR) to conduct a regional smart grid demonstration project designed to expand upon existing electric infrastructure and test new smart grid technology with up to 60,000 customers in five states.

The Pacific Northwest Smart Grid Demonstration Project was one of 16 announced by DOE today. The team includes energy providers, utilities, vendors and research organizations.

Total estimated cost for the project is $178 million. DOE will provide half the funding through the American Recovery and Reinvestment Act. The project's participants, primarily utilities and industry team members including PGE, will provide the remaining funds.

The Northwest study will involve more than 60,000 metered customers in Idaho, Montana, Oregon, Washington and Wyoming. Using smart grid technologies, the study will test new combinations of devices, software and advanced analytical tools that enhance the power grid's reliability and performance.

As part of the study, PGE will develop a demonstration project in Salem serving residential and business customers to document how smart grid technologies can  help maintain and improve the electrical system's reliability when integrating variable renewable power resources with battery storage, peaking distributed generation and customer-sited equipment that can kick in to manage peak demand periods during winter and summer.

"This was a highly competitive process," said Joe Barra, director of customer energy resources, PGE. "PGE is working hard to pave the way for the smart grid in the region, and we are grateful to be part of this important project that will help Oregon and the nation make cost-effective, intelligent energy technologies a reality for customers."

PGE's partners on the Oregon project include Eaton Corporation (NYSE:ETN), EnerDel Inc., and Utility Integration Solutions, Inc. PGE's project details, including customer participation, will be determined in the coming months.

"Eaton Corporation is excited to participate  in a project that is at the forefront of smart grid development," said Jerry Whitaker, president, Electrical Sector - Americas, Eaton Corporation. "Our power management expertise, and skilled product and service divisions, position us well to deliver effective power management technologies that help customers control cost and reduce their energy requirements."

At its peak, the regional project could create about 1,500 jobs in manufacturing, installation and operating smart grid equipment, telecommunications networks, software and controls in the five states.

The project team will install equipment and technology in 2010 and 2011. Then, for the next two to three years, project leaders will gather data on smart grid performance from 15 test sites that represent the region's diverse terrain, weather and demographics. The project will involve more than 112 megawatts of power, enough to serve 86,000 households.

In 2006, PGE participated in the region's DOE-funded Pacific Northwest GridWise Demonstration Project's grid-friendly appliance project in Oregon. The project was designed to test and speed adoption of new smart grid technologies that can make the power grid more resilient and efficient. The study showed advanced technologies enabled consumers to be active participants in improving power grid efficiency and reliability. The new project builds on those results, expanding the scale of the effort and introducing additional technologies.

Smart grid technology includes everything from interactive appliances in homes to substation automation and sensors on transmission lines. It is a system that uses various technologies to improve power delivery and increase energy efficiency through intelligent, two-way communication. Generators of electricity, suppliers and users are all part of the equation.

About Portland General Electric Company

Portland General Electric, headquartered in Portland, Ore., is a fully integrated electric utility that serves approximately 818,000 residential, commercial and industrial customers in Oregon. Visit our Web site at PortlandGeneral.com or on Twitter at http://twitter.com/pgemedia.

Eaton Corporation is a diversified power management company with 2008 sales of $15.4 billion. Eaton is a global technology leader in electrical components and systems for power quality, distribution and control. Eaton has approximately 70,000 employees and sells products to customers in more than 150 countries. For more information, visit www.eaton.com.

Project Test Site Locations and Corresponding Utilities: Idaho: Idaho Falls (Idaho Falls Power); Montana: Northwest Montana (Flathead Electric Cooperative, Inc.), Southwest Montana (NorthWestern Energy); Oregon: Salem (Portland General Electric), Milton-Freewater (City of Milton-Freewater), Portland (Bonneville Power Administration); Washington: Airway Heights (Inland Power & Light Co.), Ellensburg (City of Ellensburg), Fox Island (Peninsula Light Co.), Kennewick (Benton PUD), Pullman (Avista Utilities), University of Washington (Seattle City Light); Wyoming: Western Wyoming (Lower Valley Energy)