Transcript AMI Presentation PSC 6-26-09

Public Service Commission of Maryland
Proposal for Advanced Metering Infrastructure (AMI)
Delmarva Power and Light Company
Potomac Electric Power Company
June 26, 2009
0
Contents
AMI Overview ……………………………………………………………………………………... 2
AMI Business Case ………………………………………………………………………………. 12
AMI Vendor Selection …………………………………………………………….……………… 28
AMI Program Timeline …………………………………………………………………………… 36
Conclusion ………………………………………………………………………...……………… 38
1
AMI Overview
Introduction
Advanced Metering Infrastructure (AMI)…
• Is a foundational element of Smart Grid and enables our efforts to provide more information to
our customers and help them to manage energy use
• Enables goals of EmPOWER Maryland
• Is cost effective and a good investment for Pepco and Delmarva customers
• Is an extraordinary value for the residents and businesses of Maryland when partially subsidized
through a DOE “stimulus” grant
Regulatory approval for AMI will strengthen Pepco’s and
Delmarva’s ability to compete for DOE funds.
2
AMI Overview
PHI’s Smart Grid Footprint
Communication
Infrastructure
Workforce
Management
Transmission
Transmission
Substation
Distribution
Automation
AMI/DSM
Smart Substation
Feeder Automation
Intelligent Sensors
3
AMI Overview
PHI’s Smart Grid

AMI is part of a broader Smart Grid System

Smart Grid components:
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Advanced meters which, among other purposes, serve as customer-specific sensors
Distribution, transmission and substation sensors
Distribution, transmission, and substation automation devices
 Fault detectors
 Automatic circuit reclosers
 Voltage controls
 Automatic Sectionalizing & Restoration devices
 Synchrophasors
 High Voltage Direct Current
 Smart relays
Demand response components including smart thermostats
In-home displays
Telecommunications network
Integrated IT network including Meter Data Management System
Greater access to customer and grid information for all stakeholders
4
AMI Overview
AMI is fundamental to delivering Smart Grid benefits
PHI’s Smart Grid Program: Connecting the Smart Grid dots…
PHI’s Smart Grid Program: Connecting the Smart Grid Dots…
Smart Grid Benefits
Economic Growth Benefits
Customer Benefits
Lowers
Energy Bills
Improves
Reliability
Improves
Restoration
Better Billing
Better
Energy Info
& Control
Greener
Options
Create US
Jobs
Promote US
Energy
Independ.
Enables New
Markets
High Interoperability
Environmental and Societal Benefits
Reduces
Energy
Usage
Increases
Green
Energy
Combats
Global
Warming
Better
Planning &
Forecasting
Resists
Attack
Advanced Metering
Infrastructure
PHI’s Smart Grid Activities
Distribution
Automation
Demand Response
Dynamic Rates
Direct Load Control
Transmission
Automation
Smart Home
Automation
Distributed Generation
Energy Efficiency
Full Smart Grid
Deployment
Key:
Increasing
degree of
benefits
5
AMI Overview
AMI is a critical step in the evolution of the Smart Grid
•Step 5
Optimization:
– Capability of
real-time
• Analytical
optimization of
distribution
infrastructure:
•Step 3
network
– Development
performance
of new data
Integration:
– Decisions
analysis
– Corporate IT
based on near
capabilities
systems
real-time
– Increased
integrated to
information, no
ability to
allow rapid
longer only
display
processing of
historical data
information (in
data
Maturity
•Step 4
•Step 2
•Step 1
•
• Communications
infrastructure:
– Enterprise
Intelligent devices
communication
infrastructure:
system for rapid
and accurate
– AMI, or “Smart
transmission of
Meters”
data
– Demand
Response Devices – Integration of
fiber and mesh
– Advanced DA
broadband
devices
networks
– Substation IED
Controllers
– Open
architecture
based design to
facilitate sharing
of information
form of
dashboards,
etc.)
Capability
*Adapted from IBM
6
AMI Overview
AMI is a key component of a Smart Grid
• AMI refers to the full
measurement, collection
and processing of meter
and other customer data
• AMI includes “smart”
meters installed at each
premise, a two way
communications
network, and data
management systems
• AMI enables more
granular measurement
of consumption, the
matching of
consumption to price
signals and more
frequent transmittal of
consumption data
• AMI enables a
partnership between PHI
and their customers to
help customers make
better energy decisions
7
AMI Overview
AMI Meter Capabilities
•
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•
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•
•
•
•
•
•
•
•
•
•
•
•
Daily/Hourly/15 Minute Interval Meter Reads
Customer Move In/Out and Other On-Demand Meter Reads
Remote Upgradeability of Firmware
Interoperability
Radio Frequency (RF) Communication to Field Network Devices
Radio Frequency (RF) Communication to In-Home Devices via Zigbee Protocol
Connect/Disconnect Switch
Load Limiting Capabilities
Bi-Directional Metering
Interval Register Data
Voltage Readings/Power Quality
Outage Notification, Power Restoration, and Energized Meter Verification
Configurable Settings and Internal Clock
Diagnostic Alarms, Tamper Flags, and Outage/Switch Counters
35 Days Non-Volatile Storage of Data
Register Display
Support for Home Area Network, Distribution Automation, and Demand Response
Tamper reporting
8
AMI Overview
Benefits from AMI Meter Capabilities
Item No.
Feature/Functionality
Benefit
1
Hourly interval data recording for electric
customers, depending on their rate. (Note
meters are capable to be programmed to obtain
15 minute interval data)
Enable innovative rate structures, e.g., Critical Peak Pricing (CPP), CPP
Rebate, & Hourly Pricing. Present customers with energy usage data. Provide
customers with improved response to billing & other inquiries. (Requires
integration with the meter data management system, customer billing system
and “My Account” web functionality)
2
Two-way radio frequency communication to
the meter
Reduce manual meter reading while improving accuracy and lowering the
number of estimated bills. Less intrusive to customers by not having meter
reading personnel in or near the customer’s home or business.
3
American National Standards Institute (ANSI)
certified 200A full-load remote disconnect
switch and on-demand meter reading
Enable remote turn-on/off reducing field visits and enhancing customer
service, e.g. faster and better scheduled turn-ons/offs.
4
Tamper reporting and diagnostic alarms
Enhance tampering detection. Detect meter malfunctions sooner and reduce
number of incorrect bills. Integration with the revenue protection module in the
MDMS will help the Company proactively reduce theft of service.
5
Configurable outage definition and time
stamped outage and power restoration
reporting
Enhance detection and location of outage causes. Provide outage notification
and estimated time of restoration information to customers as an optional
service offering.
6
Bi-Directional Metering, Net energy metering
capability
Enable innovative rate structures, supporting renewable energy sources.
(Requires integration with the meter data management system and the
customer billing system)
7
On-demand remote meter “ping” capabilities
Support move in/out process. Provide improved customer service by remotely
verifying that a meter is currently in or out of service, helping to alert the
customer that the problem may be on the customer side of the meter.
Web presentation
Includes the implementation and configuration of Aclara’s Load and Rate
Analysis Module, the development of a meter read relational database, and
the integration of the Aclara’s Load and Rate Analysis Module with this
database and SSN system to support web presentation of electric and gas
consumption profiles.
8
9
AMI Overview
AMI facilitates advanced load control and energy efficiency programs
AMI enables other Smart Grid and related Energy Efficiency, Demand Response and Distributed Generation
efforts such as:
• Dynamic Pricing Options
• Direct Load Control (via AMI-enabled switch)
• Integration of AMI System with Programmable Controllable Thermostats (PCT) and/or Direct Load
Control (DLC) Switches for Load Control Purposes
• Web Presentment and Analytics Using Interval Usage Data including In Home Displays (IHD) and
PCTs
• New or Expanded Bi-Directional and/or Net Metering Rate Designs and Customer Offerings
• Expanded Home Area Network Integration (as needed)
• Engineering Analytical Data and Tools to Improve System Planning
• Integration of Plug-in Hybrid Electric Vehicles, also known as PHEV (dependent on degree of PHEV
penetration in customer base)
10
AMI Overview
PHI will deliver these AMI benefits securely
PHI applies security measures to many systems, including Smart Grid applications (AMI, DLC, DA) as well
as existing power delivery and IT assets. PHI is participating in the development of DOE and NIST
guidelines on Security and Interoperability and will adapt to newly established standards.
Assess Risks
Understand
systems
Understand
threats
A holistic approach
on physical and
cyber security…
Understand
impacts
Understand
vulnerabilities
We identify, evaluate and monitor risks
across the entire grid, paying particular
attention to data interfaces between levels,
as shown below.
Transmission
Substation
Transmission Level
“Bulk Power”
Distribution Substation Level
Customer Level
Feeder Level
11
AMI Business Case
The AMI Value Proposition
AMI benefits flow to customers through both the Distribution and Supply components of the bill.
Approximate Residential
Customer Bill Breakdown
Supply
Operational Benefits
• Eliminate Manual Meter
Reading
• Remote Connect / Disconnect
• Improve Billing Activities
• Reduce Off-Cycle Meter
Reading
• Asset Optimization
• Reduce Expenses due to Theft
• Operating Efficiencies
• Enhance Customer Service
• Load Research
75%
Distribution
25%
Customer Savings from
Reductions in Peak Load
• AMI-Enabled Dynamic Pricing
• Demand Response
• Energy Conservation
• Distributed Generation
• Reduced Usage Enabled By
AMI Energy Information
• Load Research
12
AMI Business Case
AMI Business Case summary
Under any one of the projected market scenarios, this initiative promises a positive overall net
present value for Pepco and Delmarva in their Maryland customer base…
$400.0
$400.0
$314
$375.0
$375.0
$350.0
$325.0
$300.0
15 Year Present Value Scenarios
15 Year Present Value
for Demand
Response for
Scenarios
for Demand
Delmarva
Maryland
Response for Delmarva
Maryland
$350.0
$325.0
$300.0
$275.0
$275.0
$250.0
$250.0
$225.0
$225.0
$200.0
$200.0
$175.0
$150.0
Voluntary
Growing to
20%
Participation
$125.0
$100.0
$75.0
Total
Costs
Operational
Benefit
$50.0
Mandated
Dropping to
80%
Participation
$175.0
$52
$100.0
$150.0
$95
Total
Costs
$125.0
Operational
Benefit
$75.0
$18
$123
$50.0
$75
$25.0
$0.0
Green bars
represent
savings on the
supply portion
of the
customers’
bills derived
from the
combination of
AMI-enabled
dynamic
pricing and
AMI-enabled
direct load
control
programs
15 Year Present Value Scenarios
15 Year Present Value
for Demand Response for
Scenarios for Demand
Response for Delmarva
PepcoMaryland
Maryland
$54
$37
$25.0
Voluntary
Growing to
20%
Participation
Mandated
Dropping to
80%
Participation
$0.0
Source: Brattle Group Study
1
2
3
4
1
2
3
4
Conclusion:
• AMI is a net-positive investment for our customers even in the most conservative, lowest-value scenario
• The benefits from AMI-enabled critical peak pricing (CPP) will be more than doubled if dynamic pricing is the
default rate structure
13
AMI Business Case (Delmarva-MD)
Original business case estimates, excluding supply-related benefits
Initial Deployment Costs
Only, $ in 000s
Line AMI System Components
1 Meters, including Installation Cost
2 Communications Network, including Installation Cost
AMI Network Management System and Meter Data
3
Management System
4 Contingency
Total Capital Expenditures
$
$
Delmarva Maryland
30,060
14,908
$
2,988
$
$
3,069
51,025
Annual Estimated Costs After
Deployment, $ in 000s
5
6
7
8
AMI System Incremental Cost to Operate
MDMS Software Maintenance & License Fees
MDMS Hardware Leasing
AMI Network Management System O&M
Communications Network Infrastructure O&M
Total Incremental Cost to Operate
15 Year Revenue Requirement of
Total Costs
Line
1
2
3
4
5
6
Benefit Category
Eliminate Manual Meter Reading Costs
Implement Remote Turn-on/Turn-off Functionality
Improve Billing Activities
Reduce Off-Cycle Meter Reading Labor Costs
Asset Optimization
Reduce Expenses Related to Revenue Protection
Eliminate Hardware, Software, Maintenance and
Operations Cost for the Itron Handheld Data Collection
System
Delmarva Maryland
$
$
$
$
$
42
114
132
143
431
$53.5 million
In Projected 2008 Dollars,
$ in 000s
Benefit Dollars as
a % of Total
Delmarva Maryland
Delmarva Maryland
$
$
$
$
$
$
2,579
746
317
367
188
60
59.3%
17.2%
7.3%
8.5%
4.3%
1.4%
$
51
1.2%
Reduce Volume of Customer Calls Related to Metering $
9 Improve Complaint Handling
$
10 Total
$
20
16
4,335
7
8
15 Year Revenue Requirement of
Operating Benefits
0.5%
0.3%
100.0%
$36.5 million
14
AMI Business Case (Pepco-MD)
Original business case estimates, excluding supply-related benefits
Initial Deployment Costs
Only, $ in 000s
Line AMI System Components
1 Meters, including Installation Cost
2 Communications Network, including Installation Cost
AMI Network Management System and Meter Data
3
Management System
4 Contingency
Total Capital Expenditures
$
$
Pepco Maryland
74,620
38,653
$
$
$
7,747
6,656
127,676
Annual Estimated Costs After
Deployment, $ in 000s
5
6
7
8
AMI System Incremental Cost to Operate
MDMS Software Maintenance & License Fees
MDMS Hardware Leasing
AMI Network Management System O&M
Communications Network Infrastructure O&M
Total Incremental Cost to Operate
Pepco Maryland
$
$
$
$
$
15 Year Revenue Requirement of
Total Costs
Line
1
2
3
4
5
6
7
8
Benefit Category
Eliminate Manual Meter Reading Costs
Implement Remote Turn-on/Turn-off Functionality
Improve Billing Activities
Reduce Off-Cycle Meter Reading Labor Costs
Asset Optimization
Eliminate Hardware, Software, Maintenance and
Operations Cost for the Itron Handheld Data Collection
System
Improve Complaint Handling
Total
15 Year Revenue Requirement of
Operating Benefits
108
295
346
289
1,038
$122.8 million
In Projected 2008 Dollars,
$ in 000s
Benefit Dollars as
a % of Total
Pepco Maryland
Pepco Maryland
$
$
$
$
$
3,182
1,750
1,727
803
1,301
35.5%
19.5%
19.3%
9.0%
14.5%
$
$
$
124
71
8,958
1.4%
0.8%
100.0%
$74.5 million
15
AMI Business Case
Demand reductions enabled by AMI
System-Wide Peak Demand Reductions Attributable to Dynamic Pricing
Critical Peak Pricing - Default Scenario
Critical Peak Pricing - Voluntary Scenario
700
500
180
ACE
DPL MD
DPL DE
Pepco MD
Pepco DC
32
56
400
42
200
90
0
148
56
57
90
91
90
300
100
108
14
45
2009
251
224
140
39
2011
ACE
DPL MD
DPL DE
Pepco MD
Pepco DC
15
12
100
15
80
25
60
11
40
78
79
0
2012
2013
41
31
120
20
96
2010
244
160
Peak Reduction (MW)
Peak Reduction (MW)
600
200
23
4
11
2009
24
2010
25
16
26
69
74
21
22
2012
2013
58
10
2011
Brattle Group Study, September 2007
The Brattle Group study excluded large, non-residential accounts. As such, these results are conservative.
16
AMI Business Case
Ensuring direct benefits from AMI for low-income customers
• Availability of Critical Peak Rebate Rates for State Identified Low Income Customers
– Provides “NoRisk” Opportunity to Reduce Energy Costs
– Estimated peak reductions due to CPR rates from recent BGE pilot range from 18% to 29%,
depending on rate design and enabling technology
• Availability of Supporting Direct Load Control Technology to Automatically Reduce Energy Demand
During Critical Peak Periods – Smart Thermostats or Direct Load Control Switches
• Proposed Availability of Information Display Devices (at no additional cost to low income customers) to
Provide Daily Information About Daily Energy Consumption and Energy Prices
– Helps Customers to Avoid Exceeding their Monthly Energy Budget
• Supporting EmPower Energy Efficiency and Conservation Programs and General Awareness Planned
17
AMI Business Case
The AMI Value Proposition
• AMI is cost effective for individual Pepco customers.
• Operational and supply-related benefits outpace cost by year 3 under most conservative of scenarios (e.g.,
passive supply-related benefits).
• Does not incorporate any service-related benefits.
Potomac Electric Power Company - Maryland
AMI Implementation
Estimated Trend of Monthly Incremental Customer Bill Impacts
Supply-related
benefits derived
from Brattle
Group’s most
conservative
scenario (2007
supply rates)
$5.00
$4.00
$3.00
$2.00
$1.00
$$(1.00)
$3.02
$3.07
$2.81 $2.42 $2.28
$2.13 $1.98 $1.83 $1.68 $1.54
$1.55
$1.40 $1.26
$$(0.71) $(0.63)
$(1.08) $(1.73) $(1.78) $(1.83) $(1.88) $(1.93) $(1.98) $(2.03) $(2.09) $(2.14) $(2.20) $(2.26)
$(2.00)
$(3.00)
$(1.44) $(1.80) $(1.78) $(1.78)
$(1.78) $(1.78) $(1.78) $(1.78) $(1.78) $(1.78)
$(1.78) Recovery of Existing Meters
$(4.00)
AMI Cost
$(5.00)
Supply-Related Benefits
1
2
3
4
5
6
7
8
Full Service Year
Residential customer depiction; based on 1000 kwh per month.
9
10
11
12
13 AMI Operational Benefits
Net of Cost /Operational and Supply Benefits
Net of Cost/Operational Benefit
18
AMI Business Case
The AMI Value Proposition
• AMI is cost effective for individual Delmarva customers.
• Operational and supply-related benefits outpace cost by year 8 under most conservative of scenarios (e.g.,
passive supply-related benefits).
• Does not incorporate any service-related benefits
Delmarva Power and Light
AMI Implementation
Estimated Trend of Monthly Incremental Customer Bill Impacts
$5.00
$4.00
$3.00
$2.00
$1.00
$-
$2.91
$3.72
$3.56
$3.34
$2.94
$2.78
$2.62
$2.47
$2.31
$2.16
$2.01
$1.86
$1.71
Supply-related
benefits derived
from Brattle
Group’s most
conservative
scenario (2007
supply rates)
$(0.47)
$(1.00) $(0.44) $(1.93) $(1.98) $(2.03) $(2.08) $(2.12) $(2.18) $(2.23) $(2.28) $(2.33) $(2.39) $(2.45) $(2.51)
$(2.00)
$(0.42) $(0.41) $(0.40) $(0.39) $(0.39) $(0.39) $(0.39) $(0.39)
$(0.39) $(0.39) $(0.39) $(0.39)
$(3.00)
Recovery of Existing Meters
$(4.00)
AMI Cost
$(5.00)
Supply-Related Benefits
1
2
3
4
5
6
7
8
Full Service Year
Residential customer depiction; based on 1000 kwh per month.
9
10
11
12
13 AMI Operational Benefits
Net of Cost /Operational and Supply Benefits
Net of Cost/Operational Benefit
19
AMI Business Case
The AMI Value Proposition
• The investment in AMI will produce benefits that outweigh the costs for Maryland
customers – even without funds from the Department of Energy (DOE)’s American
Recovery and Reinvestment Act (ARRA).
• Contract-based cost expectations: $179M*
• Meters and Communications network (including installation): $149M
• AMI network mgmt system and meter data mgmt system: $11M
• Contingency: $19M
*There is a prevailing wage requirement for DOE ARRA grants, which is projected
to increase the cost to $190M
• Projected benefits (distribution): $111M
• Projected benefits (supply): $113M (voluntary participation) or up to $366M (default
participation)
source: Brattle Group
20
AMI Business Case
DOE American Recovery and Reinvestment Grants for AMI
AMI subsidized through a DOE “stimulus” grant offers an extraordinary
opportunity for the residents and businesses of Maryland.
• The DOE Stimulus Program offers up to 50% grant ($200M maximum) for Smart Grid investments
such as AMI.
• This could result in up to $95M of $190M project in MD being funded at the federal level.
• Time is of the essence – letter of intent due July 16th, application window closes August 6th.
• Two additional windows planned for 4Q09 and 1Q10, but no guarantees from the DOE that any
funds will remain to be awarded after the first window – significant risk in waiting for second round.
• DOE Funding Opportunity Announcement (FOA) indicates that regulatory support for cost recovery
of the investment amount above any stimulus grant will be factored into Smart Grid Investment
Grant (SGIG) review process.
• Cost recovery is not a DOE prerequisite but is an area of DOE consideration.
• PHI’s existing DOE loan application for Mid-Atlantic Power Pathway (MAPP) has moved to
the third phase of review and has shown the importance that DOE places on cost recovery
21
AMI Business Case
The AMI opportunity created by ARRA
• The impact of AMI, subsidized through a DOE grant, is of even greater benefit to the Pepco customer.
• Does not incorporate any service-related benefits
Potomac Electric Power Company - Maryland
AMI Implementation
Estimated Trend of Monthly Incremental Customer Bill Impacts
Excluding Supply-Related Savings
$5.00
Net of Cost/Operational Benefit
$4.00
Net Cost/Operational Benefit 25% Stimulus
Net Cost/Operational Benefit 50% Stimulus
$3.00
$ per cust per month
$2.00
$1.00
$-
$(1.00)
$(2.00)
$(3.00)
$(4.00)
$(5.00)
1
2
3
4
5
6
7
8
9
10
11
12
13
Full Service Year
22
AMI Business Case
The AMI opportunity created by ARRA
• The impact of AMI, subsidized through a DOE grant, is of even greater benefit to the Delmarva customer.
• Does not incorporate any service-related benefits
Delmarva Power and Light - Maryland
AMI Implementation
Estimated Trend of Monthly Incremental Customer Bill Impacts
Excluding Supply-Related Savings
$5.00
Net of Cost/Operational Benefit
$4.00
Net Cost/Operational Benefit 25% Stimulus
Net Cost/Operational Benefit 50% Stimulus
$3.00
$ per cust per month
$2.00
$1.00
$-
$(1.00)
$(2.00)
$(3.00)
$(4.00)
$(5.00)
1
2
3
4
5
6
7
8
9
10
11
12
13
Full Service Year
23
AMI Business Case
Proposed Cost Recovery
● The Companies seek the establishment of two regulatory assets for each utility - one by
which the Companies recover incremental costs associated with AMI deployment incurred
between rate cases, and one by which the Companies fully recover the net book value of
un-depreciated non-AMI meters
● Regulatory asset treatment is necessary to afford Pepco and Delmarva the opportunity to
recover prudently incurred costs associated with the deployment of AMI in Maryland
● The balance in the regulatory assets will accrue a return based on each Company’s most
recently authorized rate of return:
▪ For Pepco, currently 7.99% (as approved in Case No. 9092, Order No. 81517)
▪ For Delmarva, currently 7.678% (as approved in Case No. 9093, Order No. 81518)
24
AMI Business Case
Regulatory Assets – incremental AMI costs
● Elements of Regulatory Asset – Incremental Costs
▪ Incremental depreciation expense for new meters (15-year life), that is incrementally above what
is currently already being recovered
▪ Leasing Costs for computer hardware (Meter Data Management System)
▪ Amortization of software (5-year period)
▪ Incremental costs (labor, consulting)
▪ Known and measurable utility cost savings resulting from AMI deployment will be reflected as an
offset in the regulatory asset
● Creation of a regulatory asset for these costs preserves the ability of the Commission,
Staff and other interested parties to review the prudency of those costs when Pepco and
Delmarva seek to recover them
● Deferred amounts will be reviewed in the context of each utility’s next base rate
proceeding, and, upon Commission approval, be recovered over an appropriate period of
time, such as three to five years
25
AMI Business Case
Regulatory Assets – NBV of un-depreciated non-AMI meters
●
Elements of Regulatory Asset – NBV of Un-depreciated meters
▪
Amortization of the net book value of un-depreciated non-AMI meters over a 15year period
− Coincides with life of new meters
− Conservative approach with lower revenue requirement than shorter amortization
period requested by other utilities (e.g. Florida Power & Light requests 4-year
amortization)
26
AMI Vendor Selection Process
Overview
PHI went through a competitive selection process in order to select the vendors for its AMI equipment,
software and services.
PHI conducted the following two evaluations:
1.
2.
AMI Technology (which included electric meters, gas communication modules, communication
network and software)
–
This includes a review of the integrated communications solution for AMI together with other
Smart Grid applications
–
This also includes a distinction of meter vendors from other AMI technology vendors
End Point Installation services
Note: Prior to the above, PHI performed a separate competitive selection process to obtain a consulting firm
to assist with the AMI Selection Process.
27
AMI Vendor Selection Process
Selection Process Steps
28
AMI Vendor Selection Process
Requests For Proposal
The scope of the AMI Technology RFP included:
• Installation of AMI Local Area Network (LAN), integrating with the PHI Wide Area Network (WAN)
• 1.9 million Electric Meters, from two different manufacturers
• AMI IT System (Head-End System w/ application, database, and other components)
The scope of the End Point Installation RFP included:
• Installation of new Electric AMI Meters
• Installation of Gas Modules onto existing Gas Meters
• Removal and Salvage of Existing Electric Meters and Gas Modules
29
AMI Vendor Selection Process
Integrated Communications Solution (for AMI & Other Smart Grid Applications)
PHI developed an Internet Protocol (IP) based communications design that included the possibility of using the
wireless mesh technology for both AMI and other Smart Grid applications (including distribution automation).
AMI communication network vendor finalists were evaluated against these key strategic drivers:
1.
2.
3.
4.
5.
6.
7.
8.
Robustness
Open standards
Bandwidth for utility operations (Distribution Automation and substations)
Bandwidth for AMI, Demand Side Management and Home Area Network
End-to-end Quality of Service (Prioritization of critical path)
Performance risk mitigation and reliability
Design protocol capabilities of Distributed Network Protocol 3 (DNP-3)
Available memory in the Network Interface Card (NIC)
The selection of Silver Spring Networks (SSN) enabled PHI to realize the following benefits:
– An integrated communication system resulted in the deployment of fewer communication devices than individual
communication systems. It also created a stronger communication system that supported the overall smart grid initiatives.
– The ability to connect distribution devices to either the wireless mesh or broadband wireless networks.
– An overall communications network where only 10-15% of total network bandwidth is needed to manage AMI functions
(including network overhead) – providing PHI with the ability for future enhancements and benefits
– Prioritized routing of data (QoS)
– More robust security design with an integrated communications network
30
AMI Vendor Selection Process
Outcomes
• On August 21, 2008, the PHI’s AMI and Communications Infrastructure Teams recommended an
integrated solution to the Executive Leadership Team:
– Silver Spring Networks (SSN) for AMI Communications
– Direct purchase with Landis+Gyr and General Electric (GE) for electric meters
– Scope Services for AMI end point installation
• In January 2009, PHI completed its negotiations with SSN
• In March 2009, PHI completed its negotiations with GE and L+G
• In April 2009, PHI completed its negotiations with SCOPE Services
These contracts apply to all PHI jurisdictions
31
AMI Vendor Selection Process
Contracted costs against original business case estimates
Delmarva - Maryland
Original Business Case
Current Forecast
Initial Deployment Costs
Initial Deployment
Only, $ in 000s
Costs Only, $ in 000s
Delmarva Power - MD
Delmarva Power - MD
$
30,060 $
38,347
$
14,908 $
1,509
Line AMI System Components
1 Meters, including Installation Cost
2 Communications Network, including Installation Cost
AMI Network Management System and Meter Data
3
$
Management System
4 Contingency
$
5 Total Capital Expenditures
$
6 Estimated Number of Meters Installed
Note: Excludes impact of paying prevailing wage for meter installation.
2,988
$
3,781
3,069
51,025
204,778
$
$
7,388
51,025
220,814
Pepco - Maryland
Original Business Case
Current Forecast
Initial Deployment Costs
Initial Deployment
Only, $ in 000s
Costs Only, $ in 000s
Pepco - MD
Pepco - MD
$
74,620 $
105,088
$
38,653 $
3,620
Line AMI System Components
1 Meters, including Installation Cost
2 Communications Network, including Installation Cost
AMI Network Management System and Meter Data
3
$
Management System
4 Contingency
$
5 Total Capital Expenditures
$
6 Estimated Number of Meters Installed
Note: Excludes impact of paying prevailing wage for meter installation.
7,747
$
7,374
6,656
127,676
530,952
$
$
11,594
127,676
570,182
The current forecasts are based in large part on executed contracts for Delaware which are
potentially applicable to other jurisdictions
32
AMI Vendor Selection Process
Interoperability & Upgradeability
PHI selection of vendors has enabled improved interoperability
and future expansion capabilities
• Appropriate selection and application of open
Silver Spring Networks' Bandwidth Utilization
approximately 80 Kilo Bits per second reserve capacity
standards
• Collaborations with industry standards-making
Routing
Network
AMI
2.0%
Management
8.0%
organizations such as IEEE, NIST, EPRI,
0.5% Distribution
together with other utilities technical
Automation
10.0%
developments and issues
• Actively engage technology vendors to
address needs
• AMI Network solution contains significant
bandwidth for future use, providing further
flexibility to meet future needs
• Field acceptance testing before full
Future Grid
deployment
Applications
79.5%
• Involvement of industry experts in systems
integration (e.g. IBM)
• Close monitoring of technology system performance
• Requirement that AMI system includes the ability to perform over the air firmware upgrades to protect
against technology obsolescence.
33
AMI Vendor Selection Process
AMI and Communications Equipment
General Electric
Smart Electric Meter
Silver Spring Networks
Wireless Mesh Network Communications Equipment
Landis+Gyr
Smart Electric Meter
34
AMI Program Timeline
Delmarva Power (Delaware and Maryland)
Delaware (Delmarva Power) - in progress
Q2 2009
Q3 2009
Field Acceptance Test
In progress
Automated Field Deployment System Integration
In progress
Customer Benefits System Integration
In progress
Q4 2009
Q1 2010
Q2 2010
Q3 2010
Q4 2010
Q1 2011
Q2 2011
Q3 2011
Q4 2011
Q2 2011
Q3 2011
Q4 2011
Field Deployment - Communications Equipment
Field Deployment - Meters & Gas Units
Dynamic Pricing and Rate Options
Start
design
Maryland (Delmarva Power)*
Q2 2009
Q3 2009
Q4 2009
Q1 2010
Begin
program
offering
Q2 2010
Q3 2010
Implement
program
Q4 2010
Q1 2011
Begin
program
offering
Implement
program
*The following timeline is dependent on regulatory
approval
Automated Field Deployment System Integration
In progress
Customer Benefits System Integration
In progress (same as DE)
Field Deployment - Communications Equipment
Field Deployment - Meters
Dynamic Pricing and Rate Options
Start
design
35
AMI Program Timeline
Pepco (District of Columbia and Maryland)
District of Columbia (Pepco)
Q2 2009
Q3 2009
Q4 2009
Q1 2010
Q2 2010
Q3 2010
Q4 2010
Q1 2011
Q2 2011
Q3 2011
Q4 2011
Program set-up & material procurement
Regulatory
approval
Automated Deployment System Integration
Customer Benefits System Integration
Field Deployment - Communications Equipment
Field Deployment - Meters
Dynamic Pricing and Rate Options
Start
design
Maryland (Pepco)
Q2 2009
Q3 2009
Q4 2009
Q1 2010
Q2 2010
Q3 2010
Begin program Implement
offering
program
Q4 2010
Q1 2011
Q2 2011
Q3 2011
Q4 2011
Program set-up & material procurement
Regulatory
approval
Automated Deployment System Integration
Customer Benefits System Integration
Same as DC (above)
Same as DC (above)
Field Deployment - Communications Equipment
Field Deployment - Meters
Dynamic Pricing and Rate Options
Start
design
Begin program
offering
Implement
program
36
Conclusion
Our Response to the Concerns Related to AMI
• AMI is an essential element of a Smart Grid
• PHI’s opinion, supported by studies from Brattle Group, demonstration projects, and other
experts, is that individual customer Smart Sensors (automated meters) are fundamental to
changing customer behaviors and achieving Smart Grid operational and reliability benefits.
• AMI will help reduce customer bills
• Multiple studies from around the country demonstrate that this technology will help customers
spend less on energy through AMI-enabled dynamic pricing.
• AMI-enabled dynamic pricing is essentially an investment in the smaller (25%) distribution
portion of the bill offset by savings in the larger (75%) supply portion of the bill.
• PHI considered the technology obsolescence issue at length in its extensive due diligence and
selected a long-term solution for AMI with remotely upgradeable meters.
• PHI sourced AMI through a rigorous and competitive process, resulting in a reasonable level of
spending.
37
Conclusion
Summary
Advanced Metering Infrastructure (AMI)…
• Is a foundational element of Smart Grid and enables our efforts to provide more information to
our customers and help them to manage energy use
• Enables goals of EmPOWER Maryland
• Is cost effective and a good investment for Pepco and Delmarva customers
• Is an extraordinary value for the residents and businesses of Maryland when partially subsidized
through a DOE “stimulus” grant
Regulatory approval for AMI will strengthen Pepco’s and
Delmarva’s ability to compete for DOE funds.
38