Jean Oliphant won't be one of the many Marblehead residents signing up for a test of the newly installed electric smart meters this summer.

A letter recently distributed by the town's Municipal Light Department informing residents of a "leading-edge pilot program called EnergySense" has prompted more than 100 residents to sign up for the test.

Light department officials say they are seeking 500 households to participate in the test, which is designed to reduce electricity usage during critical peak periods.

Funded by a $1.3 million matching U.S. Department of Energy grant, the EnergySense pilot program will be among the first tests that can reflect the actual cost of electricity delivery on critical peak days and offer customers price incentives to reduce energy usage during such periods.

Robert Jolly, the light department's general manager, said he thinks the EnergySense pilot program is a great way for local customers to conserve energy and opt into lower-rate electric plans.

“We are excited about the possibilities this program brings to the Marblehead Municipal Light Department customers as we work with the Department Of Energy to explore the potential of advanced smart metering to reduce our peak energy load and reduce energy costs for our customers,” he said.

The department will begin installing the smart meters this spring, he said.

Still, some are wary. Oliphant asked if other residents have done research on whether or not smart meters can negatively impact someone's health.

“I am very nervous about it,” she said.

Admitting that her children think she is “off the wall” on the issue, Oliphant said she is concerned that some electrical devices may cause brain cancer and other tumors. Just to be safe, she said she doesn't use a cell phone and has a cord on her land-line phone.

Jolly said he will put information about radio frequency and health issues on the department's web site.

“To date, there is no evidence of any detrimental health effects from smart meters,” he said, before comparing current concerns to those of the 1980s and 1990s, when people feared the electromagnetic fields created by electric wires.

The EnergySense program is voluntary and Jolly reminded residents that “we are still in the testing phase with this technology.”

The pilot program is designed to reduce Marblehead’s electric demand during 12 summer weekdays when the most energy is being consumed. These so-called “critical peak” days in town usually see increased use of home and business air conditioning systems. The total energy demand on these days can be as high as 28,000 kilowatts - which is more than 85 percent higher than the average daily demand, Jolly said.

The light department, like most electric utilities, buys their energy at higher costs during these peak demand days, which results in higher energy costs for all customers. By purchasing less energy at these high rates on peak demand days, Marblehead can cut its energy costs and share the savings with its customers, Jolly said.

This spring, the light department will begin replacing all of its older electro-mechanical meters with new advanced “smart” meters. These meters will serve as the heart of the smart grid technology program.

Customers who participate in the EnergySense pilot program will be among the first to have a new electric meter installed. The Department Of Energy has required that the selection process for participatants in the pilot program be totally random. Therefore, only customers who receive a direct mail request from light department will be eligible to participate.

The pilot program will run for three months during this summer and continue through next summer. Participating households will get a reduced electric rate during either the summer of 2011 or 2012. During the testing period, participants will pay a lower electric rate of about 9 cents per kilowatt hour for 97 percent of the time, versus the estimated 14 cent standard rate.

To encourage the test households to reduce electricity consumption on peak days, the electric rate for the remaining 12 critical peak days will be $1.05 per kilowatt hour.

Customers who can reduce electricity usage during a critical peak day should realize bill savings, Jolly said. However, no customer will pay more than they would have on the standard rate.

Peak periods are between 12 and 6 p.m. on 12 non-holiday weekdays during the summer.