NorthWestern Energy is among a consortium of 12 utilities across the Northwest that learned Tuesday they had received an $89 million grant from the U.S. Department of Energy to implement a regional smart grid demonstration project designed to make the electrical grid more efficient and reliable.

The money will be matched by the utilities — a total project investment of $178 million.

In addition to expanding existing electric infrastructure, the project will test new smart grid technology with 60,000 customers in a five-state region. Along with NorthWestern Energy, the Flathead Electric Cooperative is participating.

Other utilities involved are Portland General Electric, Seattle City Light, Idaho Falls Power and Lower Valley Energy of Wyoming.

NorthWestern’s portion of the project is expected to be implemented in the neighborhood that includes the Capitol Complex in Helena. The project will be managed by Battelle, a Columbus, Ohio-based firm that manages several laboratories for the Department of Energy, including the Pacific Northwest National Laboratory in Richland, Wash.

The pilot will include “a variety of different types of projects, and each one will be tailored to the specific region or the needs of that area,” said Annie Haas, a spokeswoman for Battelle in Richland. The study will test new combinations of two-way communications equipment, software and measuring tools to improve the grid’s reliability and performance.

The pilot project will run for several years. Crews will install equipment and technology in 2010 and 2011, then the utilities will spend the next two or three years gathering data to measure smart grid performance.

In a statement, NorthWestern CEO Bob Rowe said that teaming up with several other utilities will allow groups to learn more about the different technologies being employed.

“Participating in this regional effort will allow us to share information and lessons learned to determine how best to move forward with cost-effective deployment of a broad range of smart grid technologies,” Rowe said. “This is particularly critical from our perspective as one of the most rural investor-owned utilities in the country. The project also complements our focus on enhancing distribution system infrastructure.”

Expect an expanded look at smart grid technology and what it could mean for consumers coming up in the Independent Record.

John Harrington: 447-4080 or john.harrington@helenair.com