Intelligent Utility MarApr2010

» CONSUMER CONNECTIONS

SMART GRID GURUS

VOL 2, ISSUE 2 » MAR/APR 2010 » WWW.INTELLIGENTUTILITY.COM

Where smart grid meets business—and reality.

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Company champions across the country

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Power in numbers Iowans take a load off

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Beyond regulators + legislators Consumer advocates raise their collective voice

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Utility insights » AUSTIN ENERGY » AVISTA UTILITIES » CENTRAL IOWA POWER COOPERATIVE » E.ON US » HAWAIIAN ELECTRIC COMPANY » IOWA ASSOCIATION OF MUNICIPAL UTILITIES » MID-CAROLINA ELECTRIC COOPERATIVE » SEATTLE CITY LIGHT » TORONTO HYDRO

AN EN ER G Y CEN T R AL PU B LI C AT I O N

ek e SW

tC a ys 27 g r ve TH 4 n o C BOO t i s Vi

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information about their energy usage so they

1

CONTENTS Special report: Customer Connections

34 Web site reboot

Avista provides ROI of responsiveness

36 CIS collaboration

Austin Energy provides customers ways to monitor usage

38 Changing messages

Utilities are switching gears in order to better communicate with customers

TOU Ministry

Decals_Nov

22

Page 1 09 11:52 AM ut 1 10/16/

4 6

POWER. SMARTER.

ty Time-of-Use

Ontario Electrici

Features // Mar/Apr 2010

16

Summer 31) (May 1 - October weekdays For current TOU

Smart grid gurus

22 Keith Sturkie

MCEC information technology VP has new goals

24 Paul Fetherland

HECO AMI director taking careful, measured approach

26 Corey Knutsen

Seattle City Light strategic planning director welcomes challenge

Power in numbers

28 Iowans take a load off

I n t e ll ig e n t U t i l i t y /// M a r /a p r 2 0 10

Learn how IAMU is marrying home energy management with load management

2

Beyond regulators + legislators

30 A rising consumer wave

NASUCA is working to elevate the voice of the consumer

33 Greening the grid

Environmental groups support smart grid efforts

Departments

09 Rates:Layo

go to pricing, please

Winter April 30) (November 1 weekdays

.ca www.oeb.gov.on

28

44 52 57

Price Periods

get and the Help your bud run your dryer environment – k periods during off-pea n in the (depicted in gree chart below).

Drawing the line Transmissions dryer as a decal on your periods.

Put this removable of-Use (TOU) price reminder of Time-

6

Letters from readers

¢ 10 What is an intelligent utility?

Off-peak

12 Real-time 14 The big picture ¢¢

Mid-peak

k ¢¢¢ On-pea

14 Top 10, er, 11

Weekends and idays Statutory Hol

16 Smart mandates

44 Grid(un)lock

44 Progressive interconnection 45 Transmission disconnect

48 End of the line

48 Utilities not yet inundated in data

49 A recipe for energy efficiency

52 4D

52 GIS repositioned

54 Connections

54 Talking about secret stuff 55 Why the smart grid is inevitable

56 Out the door

56 M2M revolution 57 Winter of ice

Vol. 2, No. 2, 2010 by Energy Central. All rights reserved. Permission to reprint or quote excerpts granted by written request only. Intelligent Utility® is published bimonthly by Energy Central, 2821 S. Parker Road, Suite 1105, Aurora, CO 80014. Subscriptions are available by request. POSTMASTER: Send address changes to Intelligent Utility, 2821 S. Parker Road, Suite 1105, Aurora, CO 80014. Customer service: 303.782.5510. For change of address include old address as well as new address with both ZIP codes.

Allow four to six weeks for change of address to become effective. Please include current mailing label when writing about your subscription.

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3

D R AW I N G T H E L I N E

Adventurous journeys My family has always had the travel bug. We never had the budget for air travel,

but that was OK, because for us, the experience was to be found in the journey itself, not in the destination. So, I saw a lot of North America, growing up, by taking the side roads, knowing in general where they would lead, but also making the most of every surprise along the way.

About a decade ago, I took part in a four-day cattle drive in southern Alberta. On the second morning, as my horse ambled along next to one of the wagons, I happened to remark that I hadn’t truly realized how beautiful the countryside was, even though I’d lived only a few miles away for years.

The wagon driver, the father of the friend who had talked me into this latest adventure, just smiled. “The only way to truly see God’s country is from the back of a horse,” he told me. “In a car, you just fly on by, and all you see is the road ahead of you.”

I thought again of his sage words as we put together the articles for this issue. Utilities across North America are experiencing their own journeys, traveling their own roads towards a more intelligent utility. Some, by necessity, are taking side roads, while others are taking the interstate. No matter what their paths, though, it’s safe to say that all are experiencing more on their journeys than they expected when they first set out.

This issue of Intelligent Utility looks at a number of utility journeys: ??

I travelled to Toronto, Ontario, to learn more about Toronto Hydro’s road map to the smart grid, and discovered it included a provincially mandated move to smart meters and time-of-use billing. [page 16]

??

From the Mid-Carolina Electric Cooperative to Seattle City Light and Hawaiian Electric Company, we look at three “company champions” moving smart grid efforts forward in their own utilities. [page 22]

??

The Iowa Association of Municipal Utilities, with the aid of a $5 million Smart Grid Investment Grant from the U.S. Department of Energy, is moving forward with its plans to install programmable thermostats in 32,000 households and businesses served by its membership’s 75 electric utilities. [page 28]

??

Avista Utilities discusses the thought process behind its recently redesigned Web site.

While some follow the Field of Dreams approach—“If you build it, they will come”—

I n t e ll ig e n t U t i l i t y /// M a r /a p r 2 0 10

Avista based its redesign on what people want to do once they get there. [page 34]

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As electric utilities traveling on the road to a smarter grid encounter their own bumps, and their own stunning horizons just over the next hill, we intend to be there, sharing their journeys, and telling their stories.

Please enjoy the issue, and, as always, let us know your own thoughts, insights and stories from your own intelligent journeys. sue? Then Enjoy the is for free at subscribe .com/ igentutility ll te .in w w w subscribe Kate Rowland Managing editor, Intelligent Utility magazine krowland@energycentral.com

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5

T R A N S M I S S IO N S

Letters from readers Energizing defense contractors (Jan/Feb)

The question isn’t technological brain power, it is business acumen. When you are set up to spend prodigious amounts of money, trying to be an entrepreneur is not easy. The defense contractors need to retool their management before they retool their plants.

David McGee

Our new Intelligent Utility Daily, with insights from the entire Intelligent Utility team, is garnering numerous thoughtful comments, as well. In particular, Daily editor-in-chief Phil Carson drew quite a few comments on his back-to-back articles on vehicle-to-grid and smart charging on Feb. 17 and Feb. 18. This is always a hot topic with readers, and we thought we’d share some of their responses here.

I n t e ll ig e n t U t i l i t y /// M a r /a p r 2 0 10

To V2G or not to V2G

6

Vehicle-to-grid (V2G) development began with a handful of dedicated folks (some listed in your article) and the naysayers were discouraged from the start. For Dr. Kempton, his efforts began in the mid-1990s. Today, V2G is on the verge of shaking up the electric and automotive industries like a tsunami. Already, some island states and countries are putting V2G plans in place to incorporate wind and other renewable generation with the battery storage available in electric vehicles.

Once the general public learns car owners with V2G are earning an income while the car is parked and plugged in, their inquiries will drive the Original Equipment Manufacturer (OEM) to make V2G available in their electric vehicle offerings. In the near future, the OEM’s mentality of V2G will wisely be, No car left behind. The

Mini-E demonstration participants will be shocked to learn that their beloved electric vehicles already have V2G ‘inside’ but no one to aggregate their potential power and pay them for the service!

I would hope every new advanced battery vehicle has V2G built in. It’s like many other features that are now standard. How can we not have it?

When the bean counters at the electric utilities realize that the needed grid storage can be provided by the utility at great cost, installation and maintenance fees, OR motivate their customers to buy and use V2G cars, the decision will be simple.

In response to the previous letter:

Len Beck

How could anyone not want V2G? Just as a battery trickle to provide power regulation, which costs the utilities a lot of money, you would get paid to be plugged in and just provide a few seconds of charge or discharge of energy.

You get paid just for being connected— with almost no power being added or taken from the battery. AC Propulsion did a study and found it increased battery life. It’s like a deep discharge cycle.

When you charge off-peak it costs pennies per mile. With an advanced battery that can go 300 miles on a charge like the new Tesla S family sedan, it can pay for itself. If there is a power outage your vehicle could provide the power until the grid is back. Smart metering, V2G and smarter drivers all adds up. Solar and wind make it amazing.

Or you could keep importing oil (which we do now for 60 percent of the oil we burn each day that kills our economy), pollute the air and drive an 80-percent inefficient gas internal combustion engine. It’s all up to you.

J. Stack

Because it will be an economic loss for the owner of the vehicle. To analyze the economics of V2G you will need to begin by taking into account total cost of ownership. It also is necessary to use units of measure that have real meaning (pennies per mile is not relevant to V2G economics since no miles are traveled). When considering the energy portion of the equation, what is meaningful are the kilowatthours (kWh)added and extracted from the batteries, the cost differential between charging at off-peak and discharging back to the grid at or near peak, and the inherent losses associated with the conversion and storage. Unless you are able to receive orders of magnitude more for the energy the system provides then your cost to charge, there is no way V2G can be viable.

Here’s a rough calculation that is very unrealistic and ignores system losses, but will use numbers that entirely favor the V2G concept.

Battery storage capacity—20 kWh (more than twice the rated amount usable in the Chevy Volt at 8 kWh).

Charging rate is 5 cents/kWh, so a full charge cost would be $1.

Discharging rate is 50 cents/kWh, so if you remained parked all day and completely sold back to the utility the entire 20 kilowatts you’ll

Consumer to Grid: Making the connection.

R E A L I Z I N G T H E B E N E F I T S O F S M A R T G R I D investments will depend on how customers respond to new technology. With two-way digital communications, utility consumers will have more information and flexibility to make sustainable energy choices and manage their utility costs. Are your customers ready? For over three decades, KEMA has been helping utilities maximize technology investments and connect with customers. From customer research, demand response and energy efficiency, to smart grid planning, design, deployment, testing and operations, we know how to help utilities make the connection between technology and customers. Visit or call: www.kema.com/C2G 1.800.892.2006 w w w. i n t e ll ig e n t u t i l i t y.co m

Experience you can trust.

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T R A N S M I S S IO N S receive $10, a tidy $9/day profit. (Of course, no utility has a 10-times price differential between peak and off-peak, but let’s continue.)

innovations proceeds more smoothly when they conform to existing systems and ways of doing things. If I have an emergency and need to get in that vehicle, it better be charged up and ready to go rather than having me get in it only to learn that the utility has been discharging it for the past four hours!

Cost of battery replacement— $3,000 and up, depending on model.

So how many days will you have to make your batteries stretch while being willing to travel nowhere so There are so many more issues with you can at least break even? Almost this that the space prohibits addressing a year (333 days). It is possible that them all here. the battery life will be reduced by less, but I doubt it. I looked for your Richard Mignogna study online that claims extending battery life but did not find it.

I’m glad you wrote about the PNNL Perhaps you could provide a URL. charger. From my separate conversaI would be interested in reading tion with one of Mr. Kintner-Meyer’s how they have solved the problems colleagues, they’re on the inherent in the charge/ right track. discharge cycle.

Don’t be left out of the discussion.

Mr. Mignogna makes one excellent point, which is the human factor. at http://www.

The V2G concept that intelligentutility.com envisions using storage for grid balancing is unlikely to come to fruition because Patrick Good customers will be concerned enough about having a fully charged vehicle without having to worry about how Smart charging much storage capacity their utility is Mostly fantasy is the way I would using. If utilities insist on V2G, electric characterize the hype about smart vehicles are unlikely to catch on. grid in general and electric vehicles in particular. The path to adoption I’m not quite sure where the $10,000 of both will be much longer and per site cost for communications [that more difficult than most proponents you noted] comes from. For homes realize. They should become students and businesses with Internet connecof technology diffusion history to tivity, the cost of communications understand that the path is always should be trivial. more convoluted than anticipated.

I n t e ll ig e n t U t i l i t y /// M a r /a p r 2 0 10

Ultimately, the only electrical storage system that holds any economic viability remains to be pumped storage, in my opinion.

8

Join us daily online

It is really the human element that I believe is underappreciated. Aside from a handful of aficionados, how many people really want to micromanage their electricity consumption?

And, the notion that I would purchase an electric car and allow it to be used to provide backup capacity to a utility, regardless of how they compensate me, is pure fantasy. The adoption of

Jack Ellis

Edito r In Chi ef H. Christine Richards

crichards@energycentral.com 303.228.4762 M A N AG ING EDITOR Kate Rowland

krowland@energycentral.com 720.331.3555 CHIEF CO PY EDITOR s Martha Collins, Joe Kovacs SENIOR CONTRI BUTORS Ken Silverstein

Editor-in-chief, EnergyBiz Insider ksilverstein@energycentral.com 304.345.5777 Bart Thielbar

Senior research analyst, Sierra Energy Group bthielbar@energycentral.com 507.283.9034 Featu r e W riter s Mike Breslin, Warren B. Causey,

John Johnson, Phil Johnson, Joe Kovacs, Elizabeth McGowan S ENIOR V ICE PR E SIDENT/G ROU P PU B LISH ER Tim L. Tobeck

ttobeck@energycentral.com 303.228.4752 Di rec to r o f M a rk e ti ng a n d Au di ence Develo pment

Michael Guilfoyle mguilfoyle@energycentral.com 303.228.4763 Di rec to r o f pro duc ti o n a n d ci rculati o n

Sarah W. Frazier sfrazier@energycentral.com 303.228.4733 Accou nt E x ecuti ve s

Todd Hagen, Alexsandra Lemke, Ken Maness, Jean Micketti sales@energycentral.com 303.782.5510 x100 A dverti si ng Coo rdi n ato r S

Stephanie Wilson, Eric Swanson M a rk e ti ng ma n ager Stephanie Fisher Tech n o logy M a n ager Dan Wilson Ci rculati on Custo mer Serv ice Cindy Witwer B i lli ng Monica Coffey EN ERGY CENTR A L w ww.energycentral.com Pre s i dent/CEO Steve Drazga Chi ef Oper ati ng O fficer Steven D. Solove V ICE PRE SIDENT/CONTENT Mark Johnson

2 82 1 S outh Pa rk er Roa d, Su ite 1105 Au ro r a , CO 80 014 Ph o n e 303.782.5510, Fax 303.782.5331 Repri nt s For high-quality reprints, please contact

Nancy Burton, nburton@energycentral.com 303.228.4764 Intelligent Utility is available free to a limited number of

qualified subscribers. Basic subscription rates are $99 per year U.S. and $129 outside the U.S. Single copies are $10.

Request a subscription at www.energycentral.com/iumag.

A dverti ser s Media kits are available by contacting

To contribute to the Transmissions department, please e-mail your submission to intelligentutility.editor@energycentral.

Tim L. Tobeck, senior vice president/group publisher 2821 S. Parker Road, Suite 1105, Aurora, CO 80014 or e-mailing sales@energycentral.com.

O ffici al A s s oci ati o n Pa rtn er s

com. Provide your name, address and daytime phone number. Letters may be edited for style and space.

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energy facilities, and utilities large and small to

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T R A N S M I S S IO N S

Balancing reality with vision and strategy. This magazine

What is an intelligent utility?

focuses on what real utilities are doing

©©

with the vision, strategy and reality on

It’s all about delivering information-enabled energy.

today to build a more intelligent utility.

At the same time, however, we need to consider how today’s actions contribute to a company’s smart grid and intelligent utility vision. Therefore, this magazine groups articles that deal key topics. Note that some articles may cover more than one area.

You will notice the following tabs

An intelligent utility applies information to energy,

maximizing its reliability, affordability and sustainability from generation to end users.

Energy Central examines the possibilities of the intelligent utility in terms of: ??

People The knowledge, skills and abilities required in an information-enabled environment

??

Process & technology Business objectives and their impact on process and smart technology deployment

??

Economic models The challenges and opportunities of new paradigms

??

Finance Investment trends associated with smart technologies

??

Public policy

throughout the issue: V ISION STRATEGY REALITY

Vision: An article that focuses on a utility’s long-range goals, a direction the utility industry may be heading in or the possibilities with a new technology or a technology that has yet to be introduced.

V ISION STRATEGY REALITY

Strategy: An article that discusses a plan of action for achieving the goal or dealing with changes in the industry.

V ISION STRATEGY REALITY

The impact of politics on energy Reality: An article that looks at where utilities really are today.

For example, there may be great strategies and visions out there, but utilities today may face challenges

I n t e ll ig e n t U t i l i t y /// M a r /a p r 2 0 10

in heading toward the vision.

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Focus on Smart Grid Reality, Not the Hype.

You need smart grid information without all the hype and noise. And you need to know what that information means to your business.

Your needs have just been met.

Introducing IntelligentUtility.com

Comprehensive content Unique interviews, original commentary as well as breaking news User blogs and editorial contribution opportunities A supporting daily e-newsletter

Where smart grid meets business— and reality.

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Visit www.IntelligentUtility.com to see what it's all about.

11

R E A L-T I M E

Get involved now For real-time news feeds

on anything and everything related to smart grid and intelligent utility, please go to our new Web site at www.IntelligentUtility.com.

Here, you’ll find a daily dose of what you’ve come to expect in Intelligent Utility magazine as we cut through the hype to cover the realities of smart grid and intelligent utility initiatives. These new online resources will bring “real-time” intelligence to all of the information out there about the smart grid—and beyond. We offer a detailed view of the systems, process and people necessary to delivering information-enabled energy.

Intelligent Utility Daily

Our new Intelligent Utility Daily e-mail publication, along with www.IntelligentUtility.com, doesn’t just cover the news, but also provides you with original daily analysis and commentary from our team of intelligent utility experts. You can see a sample of the coverage on pages 54 and 55 of this issue. Our experts include:

In between magazine issues, please join us every weekday as we track how utilities and other critical organizations are forging ahead to deliver on the promise of information-enabled energy—all the way from generation to end user.

Here are some other ways to interact in real-time:

gatherings To view any of these events, please go to www.IntelligentUtility.com/conferences and click the appropriate link.

April 19-20

Phil Carson Editor-in-chief,

Vice president,

I n t e ll ig e n t U t i l i t y /// M a r /a p r 2 0 10

Intelligent Utility division

12

Calgary, AB

New Power into the Grid 19-22

IEEE PES Transmission and

New Orleans, LA

Distribution Conference

Intelligent Utility Daily

H. Christine Richards

Transmission and Integrating

20-21

Metering Central America & Caribbean 2010

Bogota, Columbia

22-23

Smart Grid China Summit 2010

Beijing, China

May

Editor-in-chief,

23-26

UTC Telecom 2010 Smart Grid Symposium

Indianapolis, IN

Intelligent Utility magazine

24-27

Connectivity Week 2010

Santa Clara, CA

25-28

CS Week

Nashville, TN

Kate Rowland Managing editor, Intelligent Utility magazine

Contribute We welcome your voice, and your thoughts, as we all contribute to the emerging intelligent utility. Here are a few ways in which you can join the discussion:

Bart Thielbar Senior research analyst, consulting with Sierra Energy Group, a division of Energy Central

Comment on team Insight articles at www.IntelligentUtility.com/Insights Create your own blog at www.energycentralblogs.com Submit your own article to www.energypulse.net

Smart Grid Smart Devices Smart Services • Smart meter deployments • Smart Grid & cyber security • Cloud computing & Smart Grid • Consumer viewpoints

Buildings

Industrial

AD Gridwise

• Defining Smart Grid value • Leveraging innovation • Exploring business models • Integrating renewable energy

At the dawn of the revolution that is Smart Energy, the fifth annual GridWise Expo will focus on the interoperability framework for the Smart Grid, covering issues relevant to utilities, energy providers, regional and system operators, smart meter and AMI players, as well as the full scope of consumer-side issues related to residential, commercial and industrial energy systems.

Held as part of ConnectivityWeek in Santa Clara, the GridWise Expo agenda topics range from education to deployment case studies, and discussions on business value and related key issues of the Smart Grid.

ConnectivityWeek is a unique event focused on three important attributes: the grid, automation devices and new forms of value services. These three elements are pervasive throughout all sectors of energy consumers and energy providers.

Engaging Energy Consumers

Don’t miss this important event.

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At this critical time of mass deployment, the Smart Grid conversation at ConnectivityWeek will turn to fully engaging and understanding today’s energy consumer who demands a solid value proposition for any innovation technology implemented on behalf of rate payers.

sales@clasma.com +1(972)865-2247

Homes

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T H E B IG P IC T U R E V ISION

STRATEGY

REALITY

Top 10, er, 11 ©©

Top 11 knowledge centers for gaining smarts

By H. Christine Richards If we’re going to make grids and utilities smarter,

we have to get the knowledge from somewhere on how to do that.

Therefore, it is important to take a closer look at the places out there to soak up that knowledge. So to help you quench your thirst, last year we developed a list of the top 10 knowledge centers in the Smart leaders smart grid and the intelligent utility. To The next two articles focus on improve the list (and in the spirit of Spinal leadership. Our annual list of top Tap), we are taking it up a notch this knowledge centers raises the bar year and looking at the top 11 knowledge again this year. And in Canada, centers. We whittled down a list of more Kate Rowland visits another than 30 organizations—from those that bar-raiser, Toronto Hydro. exclusively cover smart grid to those that cover smart grid as part of a larger organization—to arrive at the organizations that excel at delivering information about and building camaraderie around smart grid and intelligent utility. We rated each knowledge center on four factors: ??

Events, including their scope and frequency

??

Research, from thought leadership pieces to white papers

??

Members, particularly the number of members

??

News activity, including number of “smart” press releases

Top 11 Knowledge Centers Events

Research

Members

News activity

•••

•••••

•••••

•••

IEEE

••••

•••••

••

••••

ZigBee Alliance

••••

•••

••

•••••

•••••

•••••

•

•

•••

•••

••

•••

Advanced Power & Electricity Research Center

••

•••••

•••

•

HomePlug Powerline Alliance

••

•••

•••

•••

National Association of Regulatory Commissioners

••

•••

•••••

•

GridWise Alliance

United Telecom Council

I n t e ll ig e n t U t i l i t y /// M a r /a p r 2 0 10

National Rural Electric Cooperative Association

14

Peak Load Management Alliance Demand Response and Smart Grid Coalition (DRSG) Edison Electric Institute Scaling system: ••••• = excellent

Based on our research, topping the list again this year is the GridWise Alliance. With its diverse membership—from utilities to vendors to influencing organizations, in particular universities—and all-inclusive resources (such as a list of all the smart grid events out there, not just their own), GridWise Alliance truly draws from all parts of the smart grid world.

The Alliance also supports the Smart Grid Policy Center, which actively educates stakeholders about the smart grid. An interesting twist for this year, however, is that the Alliance is splitting off from the popular GridWeek event.

The Alliance is now running its own event, the GridWise Global Forum, from September 21 to 23, 2010, in Washington, D.C. GridWeek will continue on without the Alliance.

GridWise Alliance is certainly a smart grid-focused organization, but this year’s ranking saw the rise of two larger organizations that focus on more than just smart grid (see sidebar)— IEEE and United Telecom Council (UTC). Both groups have effectively developed a smart grid focus in their organizations. Second on our list is IEEE with its comprehensive smart grid Web portal, publications such as IEEE Transactions on Smart Grid, and education programs.

Likewise, UTC, an organization focused on utility communications, is taking up a smart grid focus. In addition to webcasts and events focused on the smart grid and its supporting communications, UTC launched the Smart Networks Council, which focuses on: ??

Helping people select and maximize advanced metering infrastructure (AMI) and demand response systems.

??

••

•••

•••

••

•

•••

••

••••

••••

•

•••••

•

••• = average

• = not available

Source: Energy Central

Ensuring the most favorable regulations for utilities deploying AMI and distribution automation applications.

Source: Energy Central

“

Overall this year, we didn’t see many new organizations form to fulfill smart grid

knowledge needs.

”

Coordinating standards activities to support interoperability for AMI and demand response systems.

UTC is also partnering with Clasma Events on the GridWeek event, which will help expand UTC’s coverage of the smart grid space.

Two accreditation organizations also made the list: the ZigBee Alliance, which appeared on the list last year, and the HomePlug Powerline Alliance. Both organizations have strong memberships that go well beyond the utility industry, but have a wealth of published references and an active involvement in the smart grid space. They will likely become increasingly important as the utility industry continues to focus more and more on end user technologies, which is a focus for both of these groups.

Overall this year, we didn’t see many new organizations form to fulfill smart grid and intelligent utility knowledge needs. The top 11 list consists primarily of organizations that already served areas beyond smart grid, with the exception of the GridWise Alliance and the Demand Response and Smart Grid Coalition. It looks like existing, established organizations are stepping up to the plate, er, glass to help quench the industry’s thirst for knowledge.

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and intelligent utility

??

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T H E B IG P IC T U R E

comes from unlikely sources. In Ontario, the biggest thrust came from the provincial government.

For Toronto Hydro, the provincial government’s focus on green energy, conservation and demand management, and green jobs came as welcome support to its own smart grid plans. In late January, I headed north to visit Toronto Hydro Corporation and to find out more about its “wires” affiliate, Toronto Hydro-Electric System Limited, one of the largest electric distribution utilities in Canada.

The City of Toronto, covered by Toronto Hydro, consumes about one-fifth of the electrical load in the province. In 2007, Toronto Hydro began one of the largest production deployments of smart meters on the continent, followed by the introduction of time-of-use rates.

The City of Toronto consumes about 20 percent of the electrical load in the province. So it became clear that Toronto Hydro would have to participate very effectively in conservation and demand management programs if the provincial intent to create a ‘conservation culture’ in Ontario was to get traction,” Peberdy explained.

Building on the company’s success in its early years of conservation programming, it made sense to Toronto Hydro to be able to manage electrical usage, to track it and to measure it, “so we could track every kilowatt saved to the dollar we were investing in conservation and efficiency,” he said. “We saw the value to the brand, and our consumer research showed that customers expect the company to be involved in those activities and wanted more.”

Intense changes

Residential smart meters first

V ISION

STRATEGY

REALITY

Smart mandates ©©

Tracking Toronto Hydro’s journey

By Kate Rowland Sometimes the impetus for smart grid movement

Toronto Hydro’s corporate offices stand tall in the center of downtown Toronto, not even a block away from the busy flurry of Yonge Street, right in the middle of its customer territory. My guide for the day was Blair Peberdy, the company’s vice president of communications and public affairs, who walked me through the steps the company has taken, especially over the past year and a half, as it kicked its smart metering and time-of-use billing programs into high gear.

Peberdy is part of a Toronto Hydro steering committee that also includes the company’s vice president of customer care and the chief information officer. This committee, supported by its respective business units, has been working for many IN TR OD UC IN G years on its smart meter and time-of-use TI M E- OF -U SE rate deployment. Over the past two years, RA TE S A Qui ck Gui de the work has been what Peberdy can only describe as “intense” as the company took the lead in the province in deploying smart meters and time-of-use rates throughout its residential customer base.

One of the key thrusts in Toronto Hydro’s current smart grid activity, Peberdy said, came from the Ontario government’s push, as part of its new direction in its energy policies, to install smart meters across the province by the end of 2010.

“We looked at this provincial direction and the energy policies of the government and felt there are certain areas that are a natural fit for the company. One is the delivery of conservation and demand management programs, because we have the direct relationship with the residents and business people of Toronto.

TOU Ministry

Brochure_Nov

09 Rates:Layout

1 10/16/09 12:07 PM Page 2

Simple changes can bring real bene fits.

yout 1 10/16/09

_Nov 09 Rates:La

TOU Ministry Brochure

The price of your electricity use will new “Time-of-Use now be calculated ” manage your electric(TOU) rates. By using Time-of-Use using rates to for additional power ity costs, you can help reduce the need generation during changes to your peak periods. Simple regular and create real supply routine can help smooth those peaks and environmental benefits.

1 12:07 PM Page

Putting you in cont

Energy saving tips now! you can use right

Here are some low and right now.

no-cost ways to start

rol.

and Heating and Cooling your winter heat out and leaks that will let weather-stripping are • Check for drafts air in. Caulking and invite muggy summer ive. simple and inexpens set it to reduce your mable thermostat and you’re sleeping.

• Install a program not home and when you’re when use energy s at off-peak times.

Appliances er and laundry appliance • Run your dishwash dishwasher. Always run full loads, set your setting.

• Economize on your cycle and use the air-dry dishwasher to the economytor and freezer doors are sealing refrigera hold on to a and • Make sure your on close they firmly tightly by testing how it slips out easily, the as a five-dollar bill. If piece of paper, such be replaced. just for rubber seals should running tor refrigera extra per year in • Don’t keep an old, cost you $150 or more occasional use. It could

See for yours elf!

inform a tion The smart meter no w online ! for your home is to see ohydr o.com /tou Visit www. toront using off-pe ak, exactl y when you’re ak po wer. mid-p eak, and on-pe

Pow er. Sma rter.

electricity.

I n t e ll ig e n t U t i l i t y /// M a r /a p r 2 0 10

16

Smart meters and Time-of-Use rates management tools are that will enable you new energy demand”. to help smooth “peak

When we’re all using create “peak deman a lot of electricity at the same time those peak times d” periods. And supplying electric we has a range of impact ity at s: • It adds to our electricity costs becaus to higher prices. e higher demand leads • It's hard on the environment becaus may require the building of additio e meeting the peaks nal electricity genera plants. tion • It adds to the amoun distribution infrastr t of new generation, transmission ucture Ontario must and consumers must build; and • It puts a strain pay for. on our electricity system.

So working togethe r to reduce our use good sense. at peak times makes

in use. Powering up Electronics r down when it’s not reduces wear.

• Shut your compute extra energy and actually and down does not use instead of using a screen saver. Screen off And turn the monitor energy use by preventing your monitor savers actually increase from sleeping.

Summer

(May 1 - Octobe r 31) weekdays

Want to know more?

Read this Quick rates, then go to www.torontohydro. Guide to Time-of-Use discover how TOU com/tou today – rates can help you and needs. manage your electric ity

heating. A one Hot Water to save on hot water litres per year!

• Fix leaking hot faucets will waste about 9,000 showers (and drip per second leak te for about 95 five-minu That’s enough water efficient showerhead). that’s using a less than today’s detergents, clothes come just With • Wash in cold water. as clean. pipes in a special tank hot water tank and a gas heater, as • Wrap your electric its heat. (But don’t wrap dangerous.) blanket to help it keep ly installed blanket is an inappropriate or incorrect

cent bulbs Lighting frequently used incandeswhich will use • Replace your most nt light bulbs (CFLs) with compact fluoresce last up to 10 times as long. There and use. Make sure 75 percent less power for indoor and outdoor are many kinds of CFLs for you. ones right the and dimmers, you choose ic timers, motion sensors • Consider automat CFLs, to help maximize your control over can be where you can’t use with a mechanical switch timers Only costs. lighting used with CFLs.

Time-of-Use pricing low-demand periods rewards you for using electricity during These Time-of-Use whenever possible (reflected in green). will vary between rates – off-peak, mid-peak and on-pea summer and winter. seasonal charts As you can see fromk, below, the weekends and statuto the lowest rates are at night, on ry holidays.

Introducing a new way to manage electricity cost your s and province’s cons be part of the ervation plan.

saving electricity

Note: If you current ly purchase your through a retailer electricity commo , you dity price stated in your will continue to follow the terms and contract.

Weekends and Statutory Holida ys

¢

Off-peak

Note: Visit the Ontario

The figure and star

design is a trademark

of Toronto Hydro Corporation

used under license.

Winter

(November 1 - April 30) weekdays

¢¢

Mid-peak

Energy Board at

¢¢¢ On-peak

www.oeb.gov.on.c a for current pricing.

“And then we looked at the smart meter issue and said, you know, smart meters are a technology that utilities across North America are talking about. It’s been difficult to build a business case to install it, because traditional meters were so inexpensive, though not conducive at all to driving conservation.

So here was an opportunity, basically a requirement, to look heavily into smart meters.

We were the first utility out of the gate with a smart meter installation plan, and worked very hard to quickly get the technology that we felt comfortable with,” Peberdy said.

With that commitment to smart meter installation also came a commitment to the provincially mandated Choose your time Manage your cost . s.

Your smart meter automatically records consumption on your electricity an hourly basis so of Time-of-Use pricing you can take advant age : • During on-pea k periods, when demand (and produc costs) are highes tion • During mid-pe t, prices will be higher. ak times, when deman will be lower. d is moderate, prices • During off-pea k hours, the least busy periods of the prices will be the day, lowest.

Depending on when you choose to run here are some sample your appliances, find how much electric costs for typical appliances. You consumes by visiting ity your specific appliance/mod can el Energy Efficiency’s Natural Resources Canada’s Office of by calling NRCan website at www.oee.nrcan.gc.c a or ’s 1-800-387-2000 Office of Energy Efficiency at (toll-free).

Time-of-Use Rate

Off-peak 4.4¢ per kWh

Appliance

Clothes Dryer (1

Clothes Washer

Electric Stove (1

load)

(1 load-wash)* family meal)

Dishwasher (1 load)*

AC Central – 25 degrees (1 hour) AC Central – 20 degrees (1 hour)

Mid-peak 8.0¢ per kWh

10¢

18¢

34¢

62¢

22¢

Examples

On-peak 9.3¢ per kWh

20¢

73¢

40¢

16¢

47¢

29¢

12¢

33¢

22¢

26¢

14¢

26¢ *Cost of electrical 30¢ water heating included.

Prices shown here only reflect the electricity or commodity include delivery, regulatory or other cost on your bill. charges as those They do not a fixed cost, and are based on your do not reflect the consumption or time of use. Electricity You can visit the are Ontario Energy prices change every Board at www.oeb. six months. gov.on.ca for current pricing details.

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17

T H E B IG P IC T U R E time-of-use rates, which are set twice a year (Nov. 1 and May 1) by the Ontario Energy Board (OEB). By way of example, the current time-of-use rates, set Nov. 1, 2009, are shown in the following chart:

mandated conservation target to come from the OEB imminently, possibly tripling what the utility is already doing.

“We’re going to have to find ways, and most of these targets are going to have to come from the business sector, because that’s where the power consumption is.

So, we’re working on ways to get into that customer sector with programs that make sense to them, that they’re willing to sign onto. And that is one of the biggest challenges we’re going to face.”

For Ontario customers on time-of-use (TOU) pricing, the regulated OEB Winter rates are: Rate

Price

Hours

Off-peak

4.4 cents/kWh

9 p.m.-7 a.m.

Mid-peak

8.0 cents/kWh

11 a.m.-5 p.m.

On-peak

9.3 cents/kWh

7 a.m.-11 a.m., 5 p.m.-9 p.m.

* Electricity used on weekends and holidays is priced at the lowest, off-peak price all day. ** Regulated Price Plan (RPP) rates, by way of comparison, are currently set at 5.8 cents/kWh up to 1,000 kWh of electricity consumed each month; and 6.7 cents/kWh for any additional usage above that threshold. (These rates are received by those consumers currently under contract to energy retailers.)

Will it spark change?

“We started back in July of last year, and we’ve been bringing them on in groups of about 100,000 a month,” Peberdy said. “These are the residential customers. We will be moving the commercial customers on through the latter part of 2010, and then all customers should be on time-of-use rates as we move into 2011.”

Toronto Hydro made a conscious decision to focus in on its residential customers first. “That’s the largest piece of our customer base,” he explained.

“Out of close to 600,000 residential customers, almost 500,000 are now on time-of-use rates. There’s another 75,000 or so who are with energy retailers, many of whom will be moving to time-of-use rates as their contracts expire, if they choose not to renew with a retailer, and there’s another several thousand whose meters are in hard-to-access places that we haven’t been able to get to yet, so we’ll get PO WE R. SM AR TER . to those in the next year.”

PO W ER 1 11:52 AM Page yout 1 10/16/09

Nov 09 Rates:La

TOU Ministry Decals_

the Help your budget and dryer environment – run your during off-peak periods

TOU Minist (depicted in green in the ry Decals_Nov chart below). 09 Rates:Layo on your dryer as a Put this removable decal (TOU) price periods. reminder of Time-of-Use

ut 1 10/16/09 11:52 AM

se Price Periods

Ontario Electricity Time-of-U

.

SM AR TE R. ¢

¢¢

Commercial smart meters next

city Time-of-Use

Weekends and Statutory Holidays

While approximately 75 percent of Toronto Hydro’s customers are residential customers, they only use about 20 percent of the utility’s total load. “So,” Peberdy told me, “we have this smaller core of business customers out there who are using about 75 percent of the load in the city, that are being exposed to time-of-use pricing, that are conducting business during weekday business hours, which are also peak electricity hours.”

Toronto Hydro is a summer peaking utility, primarily driven by air conditioning load. Most of that load, both summer and winter, is business commercial customers, with a mix of office towers as well as small industrial malls and industrial parks. These medium-sized customers are the hardest to get to, because there are a lot of them, they’re dispersed all over Toronto Hydro’s territory, and many are renting the facilities they use.

With its residential customers nearly all switched over, the utility is focusing on improving its sales channels and key customer account management channels, so it can have the business-to-business discussion necessary with its customers about conservation programs and demand management programs it is bringing into the market, as well as time-of-use rates.

“It’s really getting to these business customers on a one-to-one basis with programs that make sense to them, that they can take advantage of to lower their business costs, their operating costs,” Peberdy said. Toronto Hydro expects a Winter 30) (November 1 - April weekdays

www.oeb.gov.on.ca

Summer (May 1 - Octobe r 31) weekdays

I n t e ll ig e n t U t i l i t y /// M a r /a p r 2 0 10

For current TOU

18

Mid-peak Ontario Electri

please go to For current TOU pricing,

pricing, please

go to www.oeb .gov.on.ca

Page 2

Help your budge t and the environment – run dishwasher during your off-peak periods (depic ted in green in the chart below ).

Off-peak

¢¢¢ On-peak Summer (May 1 - October 31) weekdays

An oft-debated topic when it comes to time-of-use rates is whether there needs to be a definitive—some say punitive—difference between off- and on-peak rates in order to trigger response. While Toronto Hydro’s timeof-use rates are set by the OEB, rather than the utility, Peberdy was willing to weigh in on the subject with me from the utility’s perspective.

“If you’re trying to trigger consumer revolt, then you bring in a very aggressive time-of-use regime that will send price shocks to consumers,” he said. “But our feeling is that the more moderate approach the province is taking is the right way to go to get consumers to understand the concept, to be able to achieve some reduction on the bill should they start to make the behavioral changes.

“It also gives the company time to start to bring out new programs for customers to make conservation and load shifting more practical and more realistic. Then, over time, as the conditions may warrant, aggressive pricing signals could be set. I think for us the key thing now is to get the rates in, to get the billing systems stabilized, and to help consumers to understand and accept this pricing model. By trusting that the bills are accurate and that the rationale is sound, we can then provide them

Winter (November 1 - April 30) weekdays

Price Periods

Weekends and Statutory Holida ys

Put this removab le reminder of Time-of-decal on your dryer as a Use (TOU) price periods.

¢

Off-peak

¢¢

Mid-peak

¢¢¢ On-peak

with the tools, over time, to be able to either manage it themselves or have the utility or someone else manage it for them.”

“We’re thrilled with the Web site. We feel that 100,000 customers who have registered onto their own personalized time-of-use site out of 500,000 is a good penetration through this first go-round,” he said. “And this begins to get people to understand the rates, and to get some idea as to what are the behavioral things they can do, and get them thinking about that.”

So far, so good

Toronto Hydro is the largest jurisdiction in North America that is moving all of its customers onto time-of-use rates. The company has, as of January 2010, issued more than 100,000 bills on a two-month billing cycle, supported by a lengthy advance notification

Moving beyond the smart meter

Toronto Hydro sees the smart meter, and the change in consumer behavior with time-of-use billing, as foundational supports to it smart grid aims. One of the next steps, Peberdy said, is to move beyond the meter: “We’re talking to appliance manufacturers about smart appliances—what they look like, what can we start to pilot in Toronto, and what is the communications gateway into the home. Through the meter? Or is it through the Internet? Or is it some other way?

We’re open to all options and I expect we will be testing all of those different It’s really getting to these business gateways in the near future.

“The interesting thing around the customers on a one-to-one basis with meter is, the thought has been that the smart meter will provide the commuprograms that make sense to nications gateway into the home. And it may well. However, having done a them, that they can take advanmassive deployment of them now, and moving customers onto time-of-use tage of to lower their business rates, we’re starting to think that the meter is a meter, and should operate costs, their operating costs. as a meter, and that’s what we should expect it to do. Whether or not it and education program for its new becomes a communications gateway is something now that we’re rethinking time-of-use customers. By May, as to whether or not we want it to, or do we want it to do what it was originally 500,000 bills will be in production. designed to do, which was to accurately track consumption at times of day and So far, calls to the call center have feed absolutely accurate information back to the company so that we can issue increased by only 10 percent, Peberdy timely, accurate bills based on time-of-use rates?” said: “The accuracy of the bills has However, the issue of smart grid and smart home won’t wait idly by while not been a question. It’s been more of Toronto Hydro establishes its metering protocol, so the utility is actively a clarification around the rates. We’ve exploring other communication gateways into the home besides the meter. set up a password-protected Web site “Now is the time for us to ensure that these bills are going out in an accurate so consumers can go on and actually way, in a way that consumers understand. And that’s what the meter’s designed track their consumption day to day, to do,” Peberdy said. “So we’re thinking of ‘Hey, meter, do your thing. We may and make a comparison of what their be back to you to talk about a smart home, but in the meantime, we’re going to rates will be under time-of-use rates explore some other avenues.’” versus the tiered rate.”

It is also looking at other computer applications it can offer consumers, such Here’s how it works: As part of the as the ability to access their daily consumption, receive outage notifications, or advance notification to each customer turn appliances on and off via BlackBerry and iPhone applications. that they will be moving onto timeof-use rates as of a certain date, they Infrastructure rebuild receive a communiqué with a log-in In the meantime, Toronto Hydro shares the same boat as many other utilipassword. This password then allows ties across North America, with a one-two punch combination of an aging them to “play” with their energy usage infrastructure and an aging workforce. In February, the utility announced its at certain times of day, to see how they plans to invest more than $275 million this year to replace and upgrade its aging can change their electric bill by shifting distribution system. Since launching its infrastructure renewal program in 2007, some of their normal on-peak load to the utility has invested approximately $420 million to upgrade its distribution off-peak times. system in Toronto, much of which was installed in the 1950s, 1960s and 1970s.

“

”

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19

T H E B IG P IC T U R E “We’ve taken forward rate applications to the Energy Board that have been very, very forthright and ambitious in addressing the fundamental problems on the grid that relate to aging infrastructure,” Peberdy said.

As a distribution utility, Toronto Hydro sees a clear opportunity, as it is rebuilding its infrastructure, to start looking at smart technologies on the ground floor, and to be able to plan and build them into the utility’s new grid infrastructure. The company is adding smart transformers, transformer monitors and other smart technology as it goes.

“As we replace capital and assets, we’re looking for what’s out there in the market that we can put in to tie into a smart grid kind of strategy that we need to put together,” he said. “So, the approach then to the grid is to think smart technology as we’re doing a design and rebuild.”

Ivano Labricciosa, Toronto Hydro’s vice president of asset management, built on that even further: “Our model for the future is forecasting the demand for service before it arrives,” he said. Labricciosa is also looking to a future in which hardware integration becomes second nature to manufacturers. “The guys that I think will make it at the end of the day are the ones who will work together on the manufacturing end,” he said. “A lot of my dialogue is ‘Help me work 19 with you and others to help make this work as we develop it going forward.’ Coordination between all stakeholders is of essence.”

I n t e ll ig e n t U t i l i t y /// M a r /a p r 2 0 10

Workforce rebuild

20

“Another area that we’ve been working on that I think will resonate with many utilities is the fact that we’ve got an aging workforce,19so we have an interesting situation where we’re quadrupling the capital budget and the capital construction program, but we’ve got a workforce with an average age of close to 60 years old, with close to 40 percent retiring within the next six or seven years. So clearly, we have a workforce renewal issue, 19 as well,” Peberdy said.

19 “About three years ago we again went forward as part of a rate application to the Energy Board and said, ‘look, we’re facing this problem’.” We argued for an increase in head count, which many utilities going before regulators are loath to do. But we said that it’s critical for us to start recruiting younger employees specifically into the electrical trades, the skilled trades. This is a 4-1/2 year apprenticeship. We’ve got to have these younger employees on the job while these older workers are still here so that we can have a knowledge transfer and a safe transition from an aging workforce to a younger one.”

The OEB agreed, and Toronto Hydro started actively recruiting. Since 2003, it has hired more than 120 new apprentices into its workforce and plans to hire 40 additional apprentices by the end of 2010 into the overhead line profession, the underground cable splicing profession, substation mechanics, and other areas.

In addition, the utility now operates what is considered one of the best and most comprehensive in-house electrical utility trades training centers in Canada, fully accredited as a training delivery agent by the Ontario Ministry of Training, Colleges and Universities.

Greening the Toronto grid

Thanks to Ontario’s Green Energy and Green Economy Act, passed in May 2009, distribution utilities such as Toronto Hydro-Electric System Limited can now also become renewable generators through the government’s newly announced Feed-in-Tariff (FIT) program.

Here, too, Toronto Hydro is looking at all of its options, and wasting no time getting involved. “We’re considering a fairly significant solar PV down at Exhibition Place [at the edge of Lake Ontario] and we’re testing offshore wind off of Lake Ontario for a potential wind farm,” Peberdy said. As well, the utility is involved in an electric car program announced in late January.

The beauty of these “ The beauty of these,

is it starts to make is it starts to make smart homes and smart plants and smart smart grids make grids make sense to the sense to the consumer consumer on another level. on another level.

”

But for the moment, the biggest piece of the puzzle remains successful implementation of smart meters and time-of-use rates. “The beauty of these,” Peberdy said, “is it starts to make smart homes and smart grids make sense to the consumer on another level. So if we’re talking about load shifting to bring peak demands down, to provide less stress on the provincial grid, to provide the province more time to consider its generation issues of how it’s going to shut down coal plants without overloading the grid, then it all starts to make sense to the consumer…and that’s why these smart meters and these time-of-use rates are so critical to us.”

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SMART GRID GURUS VISION

S T R AT E G Y

REALITY

Keith Sturkie ©©

MCEC information technology VP has new goals

22

KEITH

STURKIE

WAS

NO

STRANGER

TO

electric cooperatives when he joined Mid-Carolina Electric Cooperative (MCEC) in 2002. For about 20 years prior, he had dealt with coops from his position as principal at Southern Business Services, a designer and marketer of CIS and financial software systems.

Yet, when he received an offer to join Mid-Carolina on a full-time basis, Sturkie was conflicted. His decision to leave the company he cofounded was complicated further by the fact that his long-time chief competitor would be his direct boss at MCEC.

ILLUS TR ATION BY MELISSA DEHNER

I N T E LL IG E N T U T I L I T Y /// M A R /A P R 2 0 10

By John R. Johnson

Driving the move into AMI After conducting his due diligence, Sturkie made the switch and drove Mid-Carolina’s move into AMI and other technologies as vice president of information technology.

MCEC completed a 45,000-meter AMI deployment in 2005. Under Sturkie’s direction, the project was completed six months early and $1 million under budget. Among other operational and COMPANY CHAMPIONS productivity gains, the These three articles profile new system reduced three utility leaders who are field trips for highmaking smarter grids a reality usage complaints by within their own companies.

90 percent in the first John Johnson talks to Keith year, to fewer than 25 Sturkie, Mike Breslin profiles field calls for the first Corey Knutsen, and Kate Rowland focuses on Paul Fetherland. summer season that AMI was in use.

For the most part, Sturkie is pleased with his decision to make the career change.

“I miss the action on the vendor side a little bit, but I wear a lot more hats now. In my previous life, I mainly dealt in CIS. I did

Technology roadmap in place “As far as the technology roadmap, I can see a lot of things in the future that we want to embrace,” he says. “We don’t have a comprehensive method for our customers to get into the system and do things themselves. They can make payments but they can’t get in and see their data. We don’t have a selfservice plan in place right now if you will, and we’re looking to explore that.”

Sturkie continues to see the utility industry making giant strides when it comes to technology, and he thinks it will require a balancing act when it comes to harvesting the data that consumers will have at their fingertips moving forward.

“You hear all kinds of meanings for the smart grid, but what I would like to see is the ability to automate people to the degree that they don’t feel like they are being watched by Big Brother, but they have the capability to manage their appliances,” he said.

Keith Sturkie

John R. Johnson is a freelance writer based in Massachusetts.

W W W. I N T E LL IG E N T U T I L I T Y.CO M

have some experience on the financial side but now we’ve got the whole system here, everything including accounting and finance,” he said.

When Sturkie was helping to found Southern Business Services, he never dreamed that utilities would have the capabilities they do today through modern technology. Now, the possibilities seem endless. Currently, MCEC is studying in-home network devices, and waiting for the technology to mature to the point at which it will be more cost efficient for the customer.

“Mid-Carolina hasn’t always been on the leading edge, but they’ve always bought technologies within a framework of being effective and efficient,” he says.

Aside from in-home network displays, Sturkie has other immediate goals. MCEC does not have an ABL [automatic vehicle location] system in place, although Sturkie says, “it’s on our immediate radar,” as is the deployment of a mobile workforce.

23

SMART GRID GURUS

VISION

S T R AT E G Y

REALITY

Paul Fetherland ©©

HECO AMI director taking careful, measured approach

By Kate Rowland

I N T E LL IG E N T U T I L I T Y /// M A R /A P R 2 0 10

WHILE

24

PAUL

FETHERLAND

HAS

ONLY

worked as AMI director at Hawaiian Electric Company (HECO) since 2007, he is no stranger to the industry, or to HECO. Fetherland joined HECO in 1992, and directed its customer technology applications division for 13 years before stepping outside the company for a year in the software development world, and then returning to HECO to head up its AMI work.

“During the bulk of my career at HECO, I have worked on the customer side of the fence, researching and implementing a range of electro technologies, from ultraviolet germicidal irradiation to ice thermal energy storage, as well as advanced heat pump water heating systems and Web-based control systems,” he said. “This was the fun part of working at the utility—helping customers to make the best use of our product and being able to better understand our customers in their real-life operations.”

That’s not to say that he’s not having fun now in the AMI role, too. With a pervasive AMI network in the planning stages, FetherIand’s division is responsible for all aspects of the future AMI program for HECO, Maui Electric Company and Hawaii Electric Light Company, including the operation of a pilot network of 9,000 AMI meters on Oahu. HECO’s AMI division is also participating in the Smart Grid Roadmapping process.

“As in a typical utility AMI project, my team and I are responsible for program definition, front-end (AMI system) and back-end (meter data management system) software implementation and overall project execution as well as providing support in areas such as regulatory approval, financial analysis, contract management, pilot scale testing, and integration with the customer information system,” Fetherland explained. “The HECO companies are at the early stages of their Smart Grid Roadmap development, documenting the ‘as-is’ state, working towards the definition of a ‘future’ state and performing the traditional gap analysis.”

Historic path to energy sustainability To better understand the smart grid path HECO is embarking upon, a bit of history is in order to set the stage.

In late October 2008, an historic agreement was signed between the state of Hawaii and the Hawaiian Electric

companies. This energy agreement, part of the Hawaii Clean Energy Initiative, sets Hawaii on a path to supply 40 percent of its electricity needs and 70 percent of overall energy needs (including transportation) using clean sources by 2030.

For a state now more than 90 percent dependent on imported fossil fuels, this is a monumental shift in energy focus, with only 20 years in which to make an epic change. In 2009, the Hawaii State Legislature moved to etch this goal into law, and established a renewable portfolio standard of 40 percent, and an energy efficiency standard of 30 percent, by 2030.

The connection of renewable energy to Hawaii’s electrical grid is obviously going to play a huge part in the shift.

“Hawaii is experiencing an increasingly rapid penetration of renewables throughout the state, including distributed generation sources such as photovoltaic and wind energy systems,” Fetherland said. This pace will only be further hastened by the feed-in tariff guidelines established by the Hawaii Public Utilities Commission in 2009.

“Compared to many parts of the mainland United States, the penetration of renewable systems in Hawaii is already proving to be a challenge to grid operations,” he said. “From that perspective, smart grid applications can serve an immediate need at the HECO Companies.”

The challenge, Fetherland said, is to develop a comprePaul Fetherland hensive, multi-phased plan The fun part of over the short, immediate and long term. “The shortworking at the term plan would be designed to maximize the return on utility—helping existing assets, while the intermediate term would customers to focus on how to transition from the current state to a make the best use future state with increasing numbers of smart grid devices of our product and software tools to help utility operators manage the and being able to grid safely and effectively in the face of distributed energy better understand resources,” he noted. And, with a pervasive AMI network our customers deep into the planning stages, it’s also imperative to underin their real-life stand the manner and extent to which this network can operations. play in the Islands’ smart grid future.

“

”

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SMART GRID GURUS

Opportunities and challenges on the road Each of the HECO companies has a unique grid, with varying degrees of renewable energy on each. “This presents some unique opportunities amongst the three operating companies, as well as some unique challenges,” Fetherland said. “As many utilities have also discovered, the HECO companies have identified a core need to develop a detailed communications network to support the smart grid, and we are working to assess the manner and extent to which an AMI network can play in this area as part of its Smart Grid Roadmap and subsequent efforts.”

Looking ahead to 2020, Fetherland says the HECO Companies’ goals are likely to include the ability to incorporate large, variable generation into its grid; model and manage dynamic stability issues; integrate significant levels of plug-in hybrid and electric vehicles into the utility’s grid; and provide widespread sensing and control functions using pervasive and secure communications.

“The large potential investments in smart grid technologies, and the competition for capital, makes it important to take a careful, measured approach to their planning and implementation,” he said.

INTELLIGENT UTILITY REALITY WEBCAST

Smart Grid Gurus Smart grid initiatives often rely on company champions to move them forward. We’ll profile designated smart grid leaders at utilities to study how they ended up in the positions and how they are making smarter

I N T E LL IG E N T U T I L I T Y /// M A R /A P R 2 0 10

grids a reality at their companies.

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4/29 | 12p eastern

http://www.energycentral.com/ events/21499/

Exclusively sponsored by Oracle Utilities

VISION

S T R AT E G Y

REALITY

Corey Knutsen ©©

Seattle City Light strategic planning director welcomes challenge

By Mike Breslin WHEN COREY KNUTSEN JOINED SEATTLE

City Light (SCL) in March 2008, he was tasked to develop a plan for taking an aged infrastructure, mostly mid-’70s electromechanical, and bring it into the 21st century with features representing the best in today’s smart grid technology. He welcomed the challenge, something for which he feels his 35-year career in electrical engineering, resource evaluation, business operations and technology planning has well prepared him to face.

“Each utility distribution infrastructure is in a slightly different stage of underfunding and that’s a helpful thing to know as you approach the smart grid. One needs to understand the general functions for operating the distribution system and then what technology can do. As an example, here we have a lot of trees and they are the principal source of outages. If you don’t have smart meters, distribution automation, or sensing equipment, you have to wait for the customer to call and say they are out of power. Then you have to send trucks to find what caused the outage. That’s an operational inefficiency that technology can solve,” Knutsen said.

“To understand the value of that, I think it’s helpful to have spent a lot of time in the utility industry,” he said. “My entire career has been in planning, helping my colleagues set priorities and step through the process of what’s the most important thing for us to do next with the limited resources we always have.”

Improving technology + energy strategy A native of Washington state, Knutsen was drawn to math at an early age and became interested in engineering and technology. He joined the Air Force, attended electronics school and later taught there. At the University of Washington, he earned a bachelor’s degree in Electrical Engineering and a master’s degree in Business Administration.

He was recruited by SCL from his eight-year job as executive director of the Center for Information Services for Washington State’s Community and Technical Colleges.

There he worked with a board of college presidents to improve technology throughout the system. Knutsen’s range of career experience encompasses the direction of business operations, planning and research, with positions at AT&T

Ready to make the leap Last year, Knutsen led the utility though intensive smart grid planning to apply for a grant under the stimulus program, but SCL was, ultimately, not selected by the U.S. Department of Energy. The plan included deploying smart meters, two-way communications with customers, automating substations and much of the distribution system. “We have a year’s work where we have sharpened the focus on what would make sense for this utility. Now we are ready to have a cogent conversation with our governance and with our community to say this is what we think makes sense for us to do as a community,” he said.

Knutsen thinks his organization is ready to make the leap.

“It’s a unique opportunity to avoid multiple steps and come in with a fresh, state-of-the-art smart grid system with uniform security protocols,” he said. entire career has been in planning, helping my “While it’s a negative that it is an old system, it is a positive to work colleagues set priorities and step through the with a clean slate and use the best technology.” process of what’s the most important thing for us

Broadband, Puget Sound Energy and Pacific Northwest National Laboratory, managed by Batelle. He also served on the governor’s task force for regulatory reform and the governor’s state energy strategy committee.

SCL supplies electricity for approximately 400,000 customers and is governed by the city council and mayor.

Ninety percent of generation is hydro with 45 percent cityowned and 55 percent under contracts with the Bonneville Power Administration and others. The rest comes from thermal, wind, other renewables and energy conservation. SCL has the distinction of being carbon neutral since 2005 and is proud of its pioneering energy conservation programs, which are well accepted in an environmentally sensitive community.

“ My

Corey Knutsen

”

to do next with the limited resources we have.

Mike Breslin is a freelance writer and novelist based in New Jersey.

“We need partners that

understand our vision for the Smart Grid.”

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Aclara understands that utilities need to do more than collect data. We are driving a future that integrates AMI, SCADA, distribution automation, and more into an Intelligent Infrastructure™ with the capability for communications and control. With the strength of our solutions for electric, gas, and water utilities, we understand your vision. With our network we will take you there. Aclara Leads.

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VISION

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REALITY

©©

Iowans take a load off

By Elizabeth McGowan

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for a role in “The Nutcracker” anytime soon. But in his quest to showcase strength and synchronicity among a string of small Iowa utilities, the journeyman leader is cognizant that he needs to be as nimble-minded and -footed as master choreographer George Balanchine.

An artistic overlap of home energy management and the ballet? Who knew? Welcome to the inventive and nontraditional era of the smart grid.

In this case, the HOME ENERGY MANAGEMENT “dance” Haug is Elizabeth McGowan looks at the adapting centers around work the Iowa Association of load management. As Municipalities is beginning to pair executive director of demand response with smart, the Ankeny-based Iowa programmable thermostats.

Association of Municipal Utilities (IAMU), he secured a $5 million American Recovery and Reinvestment grant via the U.S. Department of Energy to install programmable thermostats in 32,000 households and businesses served by 75 electric utilities.

Stimulus encourages mass utility movement The monumental value of stimulus funds is to encourage utilities to move in the same direction at the same time, said Haug, head of the trade association since 1986.

“I asked myself, how does it make sense for small utilities to transition into smart grid technology? My answer is that

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BOB HAUG WON’T LIKELY BE SUITING UP

it doesn’t make sense to install smart meters unless you have dynamic pricing because there is no bang for the buck. Otherwise, smart meters are just an expensive way to get automatic meter reading,” he said.

“What does make sense is to capture the short-term benefits associated with demand response.

By building smart grid investments on load management, utilities can afford the technology that will lead to other smart grid technologies,” he said.

Iowa customers receiving the new thermostats can save an estimated 10 to 15 percent on heating and cooling costs if the devices are programmed properly. Slicing peak load reduces costs because most IAMU utilities purchase power from the wholesale market.

“In short, we have the ability to tell customers what the prices of electricity are at different times,” Haug pointed out.

“And we allow them to automate the response to those prices.

Customers don’t want to sit around watching a box to see which way the price of electricity is going.”

“In our part of the country, utilities tend to be very small and there is a community identity with the utility. Customers know that if they reduce the cost to their utility, they are reducing their own costs,” he said.

“Our message is that it’s good for you, good for the community and good for the environment,” Haug said.

IAMU is capitalizing on the cooperative bonds of the region by sharing marketing materials and operating on a customer opt-out basis to save money, foster participation and stick to a tighter schedule.

DOE’s $5 million covers about 40 percent of the $12.5 million price tag for the smart thermostat program. That stimulus grant also covers the installation of 400 smart meters in some of those same households and businesses.

Pairing smart thermostats with smart meters allows utility managers to verify the effects of load control, track exactly when energy was saved and witness the benefits of interoperability. This, Haug said, is a great leap forward from utilities’ older and clumsier attempts at load management.

Reporter Elizabeth McGowan writes about energy and environment issues from Washington, D.C.

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Programmable thermostats could save 57 MW Installers familiar with Iowa communities will be hooking up the 32,000 programmable thermostats as soon as the final contract with DOE is inked. Upon completion, each participating utility expects to meet its target saturation goal—that is, penetration in 50 percent of all residential air conditioners and 25 percent of all commercial air conditioners.

Each recipient agrees to an energy efficiency assessment, a thermostat programming lesson and an incentive payment— $25 per household and $50 per company. Optimally, such joint action could save 57 megawatts of power, the size of a small energy plant.

Dynamic pricing pilot also planned In tandem with that larger-scale initiative, three IAMU utilities are simultaneously participating in a $520,124 dynamic pricing pilot project that includes an additional 1,000 smart meters.

Iowa’s Office of Energy Independence is covering $210,000 of that total with a separate pot of federal stimulus money.

“The beauty is that this utility control system, the infrastructure that’s necessary to control thermostats, also allows for other smart meter functions,” he said. “It pays for itself in two or three years and then utilities are ready to rock and roll.”

Software for the system is hosted at a single secure site to limit cyber security risks.

Utilities can send text messages about electricity prices directly to thermostats. As well, customers can choose to directly program their thermostat or access it via a Web portal.

Most likely, utilities won’t be deploying a pricing schedule in real time. Instead, Haug said, customers will be able to choose from three tiers: off-peak, on-peak and critical-peak.

Rates among IAMU members are locally regulated, so they can be adjusted to maximize benefits for utilities and customers.

“Together, these two grants give us all of the tools we need to determine the price elasticity of demand, or what price differences make customers change their behavior,” Haug said.

“Electricity doesn’t cost the same all the time. But we’re telling customers we can develop a rate that will save you money.”

So, music for “The Nutcracker’s” overture is cued. Haug is eager to push Iowa’s novice load management experiment onto center stage and watch it morph into a prima ballerina.

“We can take advantage of economies of scale by working together,” he said. “This will make a significant difference because nothing would happen at this scale without stimulus money.”

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A rising consumer wave

By Bart Thielbar

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voice so far in the pursuit of the smart grid, but the National Association of State Utility Consumer Advocates (NASUCA) is working to change that—and rightly so.

GROWING CONSUMER VOICE After all, we will be the ones who pay for it, These articles explore the either through taxes to growing role of consumers in support the American the intelligent utility equation.

Reinvestment and Bart Thielbar looks at the Recovery Act (ARRA) National Association of State Utility Consumer Advocates, funding, or through and Ken Silverstein discusses our rates. There is a lot the role environmental groups of money at stake and are playing.

NASUCA’s efforts to ensure that the voice of the consumer receives proper consideration are commendable and a welcome addition to the ongoing dialogue.

Last fall, the U.S. Department of Energy (DOE) announced the smart grid stimulus package. With it came a real opportunity for increased consumer empowerment.

In total, more than $1 billion of the stimulus package was directed toward initiatives related to helping customers

reduce consumption and lower their bills. The DOE announcement was enthusiastic about this possibility and brimming with anticipation of the possibilities for consumers. It said, in part: “These investments will create the infrastructure and expand access to smart meters and customer systems so that consumers will be able to access dynamic pricing information and have the ability to save money by programming smart appliances and equipment to run when rates are lowest.”

DOE vision embraced by industry The vision outlined by the DOE is one that has been embraced and shared by many in the industry. The stimulus grants, while sizeable, reflect only a very small portion of the total investment required to establish a smart grid environment. They are intended to get the ball rolling and attract other investments. Estimates for building out the smart grid and maintaining existing levels of reliability total in the trillions of dollars over the next 20 or so years. So, where will that money come from?

Indeed, the industry has been buzzing about the possibility of such large sums of money flowing into it.

Investments of that magnitude create a lot of supporters and followers. As the buzz increases, the number of supporters does, too, and it isn’t long before everyone is talking about the foregone conclusion of a complete remake of the generation, transmission and distribution systems that are the infrastructure of this country.

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THE CONSUMER HAS HAD THE SOFTEST

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BEYOND REGULATORS + LEGISLATORS

This snowball effect has given many pause and there is a growing consensus that we all take a step back and better understand what we are really intending to accomplish, how the technology really works, what the true costs to consumers might be and how consumers may be impacted. It is no surprise, really, and was as predictable as the initial gold-rush mentality that fed the buzz.

“ The utilities we work with every day have long cautioned that feedback from consumers is a critical part of

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their decision-making process...

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Enthusiasm remains high This is not to suggest that support for the smart grid has wavered, or that it has somehow lost favor with utilities or regulators. Enthusiasm remains high and many great people across the country are engaged full time in smart grid-related efforts. This is simply a call for to take prudent and well thought out steps along the path. The dot-com boom and bust remain fresh enough in our memories to promote a readyaim-fire approach as opposed to a fire-first approach.

NASUCA caught the attention of many industry observers last summer when it developed and promulgated its “Smart Grid Resolution” and its “Resolution on Advanced Electric Metering and Advanced Electric Metering Infrastructure Principles.” In so doing, NASUCA went from a meaningful, though mostly behind-the-scenes association to one with instant credibility and recognition in the ongoing conversation about advanced metering and smart grid. It was a bold and brilliant move and one that was absolutely necessary for the industry. Too much was happening too fast and with too little input from consumer—the very people who will be asked to pay for these investments.

The details associated with each resolution are too lengthy to be discussed here in detail, but they generally call for such things as prudent evaluations of the technology to ensure interoperability and performance, the use of pilot programs to provide a foundation for performance and cost/benefit analysis and, of course, a general desire to ensure that the benefits outweigh the costs. The NASUCA resolutions also advocate that advanced metering and smart grid initiatives should not serve to erode existing consumer protections. The positions outlined in NASUCA’s resolutions are reasonable and, if heeded, will serve as important safeguards for consumers.

Careful studies called for Mary Healey, the current president of NASUCA, shared some of her thoughts with me on NASUCA’s role and the increased visibility it has achieved. Her positions seem grounded in common sense when she discusses the smart grid and how the consumer may be impacted. Healey calls for such things as careful studies to understand the costs as well as the benefits and ensuring that the benefits outweigh the costs. These positions are not meant to deter progress, only to inform consumers about what they may expect and promote more informed decision-making by utilities and regulators. She likens it to the “truth in lending” requirements in the financial industry—consumers should be fully informed before being asked to pay.

NASUCA is not alone in its efforts to elevate the voice of the consumer. The utilities we work with every day have long cautioned that feedback from consumers is a critical part of their decision-making process and that they are working with their respective regulators and state consumer counsels to ensure participation and feedback. Bobbi Schroeppel, VP of customer care, communications and human resources at NorthWestern Energy, recently said “increasingly, we are approaching our decision-making with a stakeholder approach, which entails reaching out to our customers and involving them in ongoing dialogue about the utility, levels of service and even NorthWestern’s role in the communities we serve. This is the same approach we anticipate taking to better understand the near, intermediate and long-term implications and role of smart grid.”

Recent undertakings provide cohesion to an otherwise fragmented voice and it should be commended for it. With so much investment at stake, it is appropriate that the voice of the consumer gain more traction. NASUCA is clearly becoming the go-to agency at the national level and provides a unified voice in Washington for consumers. Indeed, NASUCA is working more closely than ever with the Federal Energy Regulatory Commission and there is even language in a bill before Congress to establish a federal consumer advocate position.

Although much needs to transpire before the technologies that will enable the smart grid can be deployed, it is comforting to know that the voice of the consumer is becoming an increasingly relevant part of the dialogue. It remains to be seen how strong that voice will become, or what issues of contention may develop, but it is abundantly clear that consumers want to be heard on these issues. Their voice is a welcome addition to the ongoing conversation.

Bart Theilbar is a senior research analyst with Sierra Energy Group, a division of Energy Central.

VISION

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Greening the grid ©©

Environmental groups support smart grid efforts

By Ken Silverstein UTILITIES AND ENVIRONMENTAL GROUPS

are coming together to help modernize the transmission system. It’s an arduous job that requires conciliation and patience.

Together, they seek to improve the grid’s capabilities so as to allow it to carry more green electrons as well as provide customers with the information they need to make better energy choices. With Congress now considering national renewable mandates and at least half the states with similar laws on their books, electric companies must have a way to deliver the expected use of such power.

Environmental laws are also anticipated to get tougher. If carbon limits are set, for example, it would necessitate more energy conservation and an even greater percentage of renewable development.

An intelligent utility can send notification of the most efficient generation to dispatch as well as issue warnings to grid operators that power flows be re-directed to avert congestion.

And they can tell consumers to curb power usage because prices are about to skyrocket.

Common concern If the smart grid were truly a national program, then down the line it could cut peak energy usage by 10 percent, said The Brattle Group. That, in turn, would also take a bite out of overall emissions and enable utilities to avoid some capital expenditures.

Without a doubt, market acceptance has been slow.

Industrial and commercial concerns have more to gain than homeowners, who have less financial incentive to monitor their daily energy consumption. Utilities, though, want to maximize the efficiency of their grids so as to avoid any outages—and the smart grid can do just that. Their job now is to convince regulators to permit them to pass the costs through to ratepayers.

While electric companies are more focused on increasing capacity, environmental interests are more concerned with making room for green energy, particularly as utilities grow more comfortable with such alternatives. Regardless of motivation, the two have found a common cause.

Smart grid development a national priority The Sierra Club, for example, says that the development of the smart grid is a national priority. But it also realizes that it must match its words with actions: Constructing an intelligent utility must be viewed in the context of infrastructure expansion.

To that end, the organization says that California’s Renewable Energy Transmission Initiative and the Western Governors Association’s Western Renewable Energy Zone are combining the two concepts. Both are working with all stakeholders to avoid potential snafus while also incorporating “renewable energy zones.”

Such planning seeks to put projects in places that are rich with sustainable resources and where wildlife disturbances can be kept to a minimum. Resistance remains, although the Sierra Club says that it eases if the lines are designated to move wind or solar power.

“Business-as-usual transmission planning has been fraught with conflict, delays and inefficiencies,” said Carl Zichella, director of Western Renewable Programs for the Sierra Club, who testified before the House Committee on Natural Resources. “Involving key stakeholders early on in transmission planning encourages the making of better decisions that can be more easily accepted by the public, shortening approval timelines and initiating project construction more rapidly.”

It’s about building out the intelligent utility, whether it is reserving space for sustainable fuel sources or adding software to encourage energy conservation. It’s the one effort whereby utilities and environmentalists share a mutual interest but one that will nevertheless take time and money to realize.

Ken Silverstein is editor-in-chief of EnergyBiz Insider.

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Suggesting regulatory reforms “This is a great first step toward transforming our entire energy system to be more secure and reliable, and to deliver cleaner and cheaper electricity to American homes and businesses,” said Mark Brownstein, an energy director at the Environmental Defense Fund. “Done right, a new energy grid can enable broad deployment of renewable energy sources like solar and wind and empower consumers to make more informed decisions about their real-time energy use, paving the way for energy efficiency and off-peak power cost savings.”

The green group is partnering with other stakeholders in the so-called Pecan Street Project in Austin, Texas, a comprehensive smart grid enterprise. The parties will suggest regulatory reforms and a business model to allow those new technologies to flourish.

Once proven, momentum will build. Pike Research says that utilities could invest another $21 billion in grid modernization over the next five years. Right now, about 5 percent of the 145 million existing meters are “smart.” But power companies are expecting that share to increase by a third over the next several

years as 52 million modern meters are rolled out, according to a Federal Energy Regulatory Commission report.

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SPECIAL REPORT: CONSUMER CONNECTIONS

CONSUMER CONNECTIONS These articles explore the growing roles customer communications is playing in the intelligent utility. Joe Kovacs looks at updated customer information systems. Dana Anderson and Scott Steele discuss Avista’s new Web site, and Matthew Burks talks about the importance of clear communications.

VISION

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Web site reboot ©©

Avista proves ROI of responsiveness

By Dana Anderson and Scott Steele

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of-dreams approach to Web-site design: “If you build it, they will come.”

At Avista Utilities, we redesigned our site based on what people want to do once they get there. Such responsiveness proved to be a profitable approach.

New online functionality saves our company nearly $400,000 annually.

At the same time, customer satisfaction has risen, and our site was ranked North America’s top electric and natural gas utility web site in 2009, according to a benchmarking study from analysts at E Source, an industry research firm.

Here are some of the steps we took to achieve our online successes.

Starting point Avista Utilities has been supplying energy to customers in Washington, Oregon, Idaho and Montana for more than 120 years. Today, the utility serves 492,000 customers with gas, electricity or both commodities simultaneously.

Back in 2005, a few of us in the marketing department took a good look at our existing Web site and decided it needed updating. We also started talking to our customer service professionals to see if they had any upgrades in mind. They did, and the changes they wanted were big ones.

Other companies were reporting spectacular cost savings gained by giving customers online self-service options. For instance, Polaroid’s Web-based customer service improvements saved $3.9 million, and American Airlines saved $3 million annually by automating two human resources functions, according to news accounts at the time.

Plus, consumers were coming to expect self-service options, and our contact center staff wanted to provide them. They knew that opening or closing accounts, signing up for billing options, making payment arrangements and other routine transactions could easily be done online at a customer’s convenience.

But as we began looking at these types of functionality, it became clear that we couldn’t do such things with our existing Web-site technology. We weren’t Dana Anderson merely looking at a rede-

sign project. We were looking at rebuilding our site to transform it from a contentpresentation tool into a transactional business channel.

the simple task of making a payment can be a tough chore on many Web sites. Self-service

Getting there The changes we sought take money, and the funds we targeted were known at our utility as “productivity capital,” dollars senior management allocates to projects that cut corporate costs. In order to be eligible to receive the money, project planners must provide a business case that demonstrates a minimum return on investment of at least 11 percent. This was our goal with the site rebuild, as well as our final return on investment from this project.

It was a cross-departmental team of marketing, customer service and information services (IS) employees who initially created the business case we presented to management. Once we secured our funding, we created another cross-departmental team, led by a project manager who reported to the chief executive officer of our company, and also included the company president, the chief financial officer and the vice presidents who were responsible for customer service and marketing functions.

We found executive sponsorship for this undertaking was vital to efficient success.

With top-level support and commitment, better cooperation exists among players as well as clear direction to resolve issues and access to resources to get the project done. Other lessons we learned include:

options now play a major role in how well or poorly consumers rate a company’s online presence. ??

Keep log-ins and other vital links prominent and simple.

Customers should be able to find the log-in link on your home page. In fact, they should be able to reach their target destination in one or two clicks.

??

Test the site on real customers.

We repeatedly walked customers through “wireframes,” which are skeleton depictions of the site’s structure and navigation links. If customers couldn’t easily find the site features we asked them to

Find the right experts Our team faced two big challenges in finding the right partner to help with this initiative. First, we had both design and programming needs. Many companies have either artistic or technical strength, but not both, so we had to find a vendor that could handle Web-site design, programming and, in our case, integration with other utility systems, such as the customer information system.

Another issue we faced was integrating content from multiple servers. Today, two of our most popular features are the bill analyzer and energy analyses tools we purchased from a major North American software solutions provider, and we wanted to embed the provider’s programming into our own site. At the time, some utilities were simply linking to these analysis applications.

We determined that we needed a company with design capabilities and a background in writing Web services, which are Web-enabled machine-to-machine protocols that allow software developers to combine functionality from multiple sources into an integrated application. To ensure that we got all the skills and integration we needed, we had our vendor selection team include members from our marketing, customer service and IT departments.

Vendors said this was unusual but, by following this process, we found the right vendor for the job.

??

Make transactions easy. According to energy business intelligence experts,

Spread the word Web site improvements are useless unless customers come to visit. Even though we launched our rebuilt site in late 2007, we continue to promote it. For example, in the first quarter of 2009, a simple campaign that included bill stuffers and online banners drove some 4,000 customers to complete online energy audits.

Knowledge to dollars When customers have insights into their energy use at their fingertips, they’re less likely to call the contact center. We know this because we see it happen.

For example, the bill analysis tool breaks down the customer’s bill, explaining how many days there were between visits from the meter reader, what the weather was, and how the month’s bill compares to bills a month or a year before.

In 2009, 87,000 customers looked into their bills Scott Steele online, and 63,000 of

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Follow best practices Our Avista team also incorporated guidance on site features and architecture by purchasing an energy business intelligence report that showed consumer expectations and evaluations of Web sites. Based on the research, we took care to:

find, we reworked navigation.

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them used the bill analysis tool. This translated into fewer billing questions and high-bill inquiries coming into our contact center. In fact, customers’ decisions to access billing information online translated into approximately 7,000 calls annually that our call-center representatives didn’t have to answer last year.

Customers are getting their questions answered through the bill analyzer.

Meanwhile, nearly 17,000 residential users took the time to explore their household energy use with the energy analyses tool, and 62 percent of those customers filled out personalized home profiles. Some 44 percent went a step further. Along with the home profile, they also filled out an appliances inventory. And, 27 percent of those customers returned to the energy analyses tool multiple times.

Consumers like having this type of information available, and providing it gives our brand a boost. “Awesome changes to your Web site and online payment site,” one customer wrote to us when the new site went live. “I have two accounts, and now I can pay them easily without having to sign in separately.”

Echoing that thought, yet another said, “Your new Web site is just great. I enjoy every feature of it, especially the opportunity to analyze energy consumption.”

Seeing thumbs up To track how we’re doing, we regularly use an online customer-satisfaction survey application. Between our old site and new one, our score rose from 73 to 76 points.

In comparison, the average utility scores only 62 points.

A score that really stands out for us is what our survey application calls “future behaviors,” which measures how many survey respondents say they’ll return to

VISION

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Austin Energy provides ways to monitor usage

By Joe Kovacs

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UPDATING AN ENTERPRISE-SCALE CUSTOMER INFORMATION

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system (CIS) to improve customer communications and empower customers to make well-informed choices is no small undertaking if you’re one of the nation’s largest community-owned electric utilities.

However, Austin Energy has been collaborating with several other Austin city departments to do just that. The end result will be an enhanced account and billing system that will allow customers to monitor power usage—as well as their consumption of other municipal resources—and provide them with opportunities to participate in conservation and energy efficiency programs, according to David Orr, Austin Energy’s project manager responsible for the CIS project.

Customers gain more access The planning process began three years ago when Austin Energy and representatives from Austin Water Utility, Solid Waste Services, Watershed Protection and Public Works began discussing opportunities to upgrade the city’s existing CIS, which has been in place for a decade. At Austin Energy, one sought-after improvement has been for the utility’s nearly 400,000 customers to have access to more complete billing and usage information as well as real-time reflections of adjustments to their accounts.

the site. Our score rose from 82 to 88, a significant jump.

Many of those site visitors are taking advantage of our online selfservice tools. They’re signing up for special billing options, making payment arrangements, paying their bills and more.

All told, we’ve transferred 10 percent of our call-center volume to online selfservice, a percentage that represents 133,000 calls each year. This saves Avista money and empowers our customers, which is a big part of the value that transactional functionality brings. We wouldn’t be seeing our current volume of site visits if customers didn’t like helping themselves online.

Dana Anderson is director of marketing and service development at Avista Utilities.

Scott Steele is Avista’s marketing and Web site manager.

The customer care and billing system selected by the utility will, once rolled out, respond to that need by offering a Web-based interface and equipping customer service representatives with up-to-date account information so customers can interact with the Austin utilities’ contact center in different ways to acquire the same information.

Vision drives new CIS adoption The decision to adopt a robust, technology-enhanced CIS has also been driven by Austin Energy’s vision for a cleaner energy infrastructure.

Austin has long been a green and conservation-focused city, according to Brewster McCracken, a former Austin Energy board member. He calls the communications component part of “an energy Internet.”

McCracken is now executive director of The Pecan Street Project, an ongoing partnership between the city, Austin Energy and other municipal, research and environmental partners to drive

acceptance testing and deployment. The final rollout is scheduled for April 2011 with a price tag for the citywide project, including services, software costs, planning, testing and rollout to come in at $36.4 million.

“By streamlining and improving our processes and workflows, we will have more time to deliver first-rate customer support,” Orr said.

But change is difficult and rolling out a new CIS affects every part of a

The planning and eventual implementation of Austin Energy’s new CIS system is demonstrating how a broad strategy to identify and develop a system design responsive to multiple needs across municipal departments can succeed. While the planning incorporated more than 35 vendor representatives and 50 or more subject matter experts (from meter usage, billing, customer care, conservation programs, and marketing to name a few), the core project team consists of 20 representatives from all participating departments to ensure that communications about the initiative remain consistent throughout the project lifecycle, Orr said.

utility’s operations. Despite the positive feedback the core team has received, the project team is still in the middle of an extensive communications effort, including road shows, demonstrations and newsletter distributions to publicize the system and prepare users for the changes. A three-month training program will ensure that cross-departmental personnel will be ready to utilize the CIS with maximum benefit.

“We think the enhanced capabilities that result from integrating our CIS and smart grid capabilities will make our customers very pleased.” Orr said.

Citywide rollout scheduled for 2011 The proposal team developed the Request for Proposals by tasking different agency representatives with identifying gaps in billing, customer service and other areas, and proposing design solutions that build upon the capabilities of the existing CIS. After several applications were received and reviewed, and the winning system selected, work on the project began in June 2009. Austin Energy and its collaborators completed detailed planning, and in January 2010, entered the current design build test phase, which will continue through November and then be followed by

Joe Kovacs is a freelance writer based in Colorado.

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energy efficiency and conservation. The project, which won a $10 million U.S. Department of Energy grant, creates an enterprise-wide architecture through which the CIS can ultimately market net metering and energy efficiency programs to customers. McCracken said Austin wants to generate 30 percent of renewable generation by 2020; currently, the city generates 12 to 15 percent.

The CIS will take advantage of impending smart metering capabilities. Austin Energy has nearly finished installing smart meters among all residential and commercial customers. Once they are deployed, a meter data management system will allow the CIS to generate two-way communications between the utility, other departments and customers. “This enterprise-scale initiative will be the first in the country to integrate utility and water customer information from the meter,” McCracken said.

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Changing messages ŠŠ

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Utilities are switching gears in order to better communicate with customers

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By Matthew Burks EFFECTIVELY COMMUNICATING ABOUT SMART METER DEPLOYMENTS

and smart grid infrastructure is critically import right now. As smart grid deployments accelerate across the nation, customers are becoming concerned and skeptical about these projects and how it will impact them. This resistance is creating a growing backlash about issues from smart grid technologies to data privacy, the high cost of installing these systems, mandatory pricing programs and the bottom line on the customer bill. Utilities, and the industry as a whole, have to quickly adjust and refine their communications about deployments to address shifting perceptions, growing awareness, as well as increased frustration in the public sphere.

Beyond perceptions of the meters themselves, external pressures are also influencing how the smart grid is viewed.

The sustained economic downturn has created unprecedented emotional fatigue on the American psyche. For most in the general public, the concept of the smart grid is confusing at best, if known at all, and the potential negative impacts of consumers not understanding the value propositions are high.

Corporate bailouts, political jockeying, ongoing wars and perceived lack of federal fiscal discipline have caused a heightened distrust of big corporations, governments, and large scale public spending. Smart grid happens to involve all three, making it an easy target from many different angles.

A harbinger of change Discussions about the technology implications have been in the works for years.

It’s never been a matter of if the technology would be implemented, but when and how quickly.

Within the utility industry, we have spent the past 18+ months negotiating with the public and politicians to imagine our interconnected energy future, which excites great press and garners public support initially, but also has the potential to seriously backfire if the vision falls short. It isn’t that the smart grid technology won’t eventually evolve to do all that is promises, it’s just that this isn’t going to happen for the vast majority of people anytime soon. In fact, organized resistance is already starting to unfold.

The smart grid rollout in Bakersfield, California, by Pacific Gas & Electric (PG&E) is a harbinger of what can go wrong when customer dissatisfaction emerges. The Bakersfield issue was instigated by a disgruntled customer who filed a lawsuit claiming that the smart meter installed on his house tripled his electricity bill. Following, the California Public Utilities Commission ordered PG&E to obtain third-party testing of the meters’ accuracy, and the Senate Majority Leader in California, Dean Florez, has been calling for PG&E to “investigate and resolve” each customer complaint.

Amid the legal wrangling, PG&E must now work to improve the image of the smart meter technology itself; it needs to show not only that technology works, also that it will ultimately help customers save energy and money, and that their data will be kept in a safe and private manner.

Matthew Burks is Manager, Mass Markets, for E Source.

We have been tracking smart grid and smart meter deployment communications for the past two years, and have been impressed with the mid-course communications adjustments that many utilities have made. Those with more mature smart meter systems are now being forced to carefully craft their messages and language to better managing customer expectations for both short- and long-term benefits. Here are some of the key communication talking points we have seen rise to the surface over the past six months in response to evolving customer perceptions: CONTROL AND PRIVACY. More customers are concerned about who controls the data that’s collected and who will get access to that information.

PREPAREDNESS AND THE FUTURE. Many of the utilities we’ve surveyed are explaining to customers that their smart meter and smart grid projects are necessary to prepare for or to meet future energy demand.

NEW METERS AREN’T THAT DIFFERENT. We’ve seen a large increase in the number of utilities saying that the new meters are virtually the same as the old meters—only better. This is intended to offset the public’s potential fear of change or feeling of loss—two things humans generally don’t deal well with.

SAVE ENERGY, NOT MONEY! Few utilities are talking about “saving money” now. In fact, in an attempt to stem customer outrage when new equipment doesn’t result in instant savings, most utilities are explicitly stating that smart meters will not reduce energy bills.

EVERYBODY’S DOING IT. Several utilities with major deployments—especially those with vocal minorities—are harnessing the power of normative messaging by showing the number of meters installed (so that customers don’t feel singled out) and highlighting smart meter deployments as a national and international movement rather than some experiment that’s confined to the utility’s service territory.

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Smart communications grid already exists It is critical to note that the Bakersfield issue quickly became fodder for Internet bloggers and went mainstream soon after.

The interconnected and real-time nature of news and information sharing, along with the contentious character of mainstream media and bloggers today, makes this story, and those that will come, a veritable feeding frenzy.

Carol Stimmel, a smart grid researcher at E Source, noted that now, “PG&E is in the difficult position of having to defend their smart meter deployment plans, improve the image of the meters themselves, and rebuild trust with the consumer.”

Due to modern communication channels, utilities in other parts of the country saw similar challenges develop in their own deployment operations within weeks.

Where there had not been any real issues with deployments before, in some cases, customers were suddenly refusing smart meter installations.

Despite the fact that these are different utilities, utilizing different technologies, with varying functional requirements and deployment strategies—to the consumer, they all look the same. They are both “Smart Grid” and they are both being instigated by the utility, which means the results could very well be the same for them.

Utilities with new or upcoming deployments must learn these lessons as well, or face similar pushback from their customers. Though easy for a utility to believe their deployment will be different, smart meter unease and anger is showing up across California, Alabama, Texas, Colorado and many other states, so it is important to message properly from the outset, and give customers the appropriate messages about what to expect as the utility shifts over to smart metering.

WHAT SHOULD UTILITIES DO?

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Transforming the Electrical Grid Addressing Transformation Strategies to Implementing A Smart Grid

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h i s i s a gr e at t i m e to b e a s s oci at e d w i t h

the utility industry – and, we are all associated with it. The regulatory and technological changes that are currently taking place will produce more consumer friendly changes in the next ten years than the industry has experienced in the previous fifty years. Recent regulatory initiatives as well as technological advances have positioned the utility consumer for a more meaningful and engaged relationship with their energy provider.

Consider some guiding direction that was offered

by Federal Energy Regulatory Commission (FERC) Chairman Jon Wellinghoff last summer:

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“Changes in how we produce, deliver and consume electricity will require ‘smarter’ bulk power systems with secure, reliable communication capabilities to deliver long-term savings for consumers.”

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That announcement came with FERC’s policy to accelerate the development of the Smart Grid and to help usher in changes that would empower consumers to better manage their energy consumption. By providing focus to “activities that give consumers the tools they need to control electricity costs,” FERC is helping to establish a regulatory framework conducive to the empowered consumer.

FERC is not alone in those efforts. Later in 2009, the Department of Energy (DOE), announced a smart grid stimulus package as a part of the American Recovery and Reinvestment Act of 2009 (ARRA). That stimulus package had over $1 billion targeted for the empowered consumer. In fact, the DOE announcement stated:

“These investments will create the infrastructure and expand access to smart meters and customer systems so that + THOUGHT LEADERSHIP

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consumers will be able to access dynamic pricing information and have the ability to save money by programming smart appliances and equipment to run when rates are lowest. This will help reduce energy bills for everyone by helping drive down “peak demand” and limiting the need for “standby” power plants – the most expensive power generation there is.”

FERC and the DOE efforts to promote a more engaged relationship between consumers and utilities have been joined by many state regulators as well. In July, 2009, the National Association of Regulatory Utility Commissioners formerly adopted ten principles to “guide the deployment of the smart grid.” Many of the principles address issues such as cyber security, cost recovery and open standards to promote interoperability. Importantly, though, principle number three squarely addresses the consumer benefits:

“Smart grid standards and policies should seek to achieve maximum consumer, reliability and environmental benefits and to provide opportunities for innovation, consistent with providing utility service to consumers at fair, just and reasonable rates.”

Clearly, the regulatory support for the empowered consumer has never been greater. And, this is good news for everyone who is interested in better understanding their energy consumption, saving money on their energy bills and reducing their carbon footprint.

Across the country, each utility is deploying smart grid solutions that are appropriate to its regulatory framework, customer base and business interests.

Some are moving quickly and have made substantial progress and others are moving more cautiously. Many have started with the deployment of smart meters,

consuming power will allow both the utility and the consumer to make informed choices about the provisioning and utilization of that power. It is a significant undertaking that calls for a clear vision, technological savvy and a commitment to all segments of the utility industry, regardless of how far along a particular utility may be with its total smart grid deployment.

Tendril, from Boulder, Colorado is one of those visionary companies that has a clear vision and is working to “facilitate a dialog between consumers and suppliers through an energy ecosystem that connects in-home devices (like thermostats) to the utility back office.” The Tendril platform will allow consumers to better understand their energy consumption and make informed choices about it. Similarly, the Tendril platform will allow utilities to forge a deeper and more meaningful relationship with their customers and deploy conservation programs tailored to individual customer needs. In short, the Tendril platform is the communication link between utilities and consumers. See Figure 1.

The Tendril Grid provides significant benefits to utilities and consumers. For utilities, there are

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while others are starting with increased automation on the distribution system and still others are beginning on the generation side with increased integration of renewables such as wind or solar power. Without a doubt, though, all are looking at new technologies, particularly those that help to improve the relationship with customers. Regardless of their starting position, though, all utilities seem to have a common area of focus in their overall plans – the eventual assimilation of detailed consumption information.

Industry thought leaders have long recognized that to enable the vision promulgated by regulators, there must be advances in communication and technology that is at the nexus between the utility’s meter and the customer and their appliances. Solutions such as these have been referred to as “Home Area Networks,” or HAN for short, but “Home Energy Management Systems” (HEMS) may be a more accurate description. HEMS solutions record, preserve and present information about individual consumption and allow it to be shared with consumers and utilities in a manner that is beneficial to both.

The enablement of real-time information exchange between a utility and the devices on the grid that are

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operational and regulatory benefits such as: •

track their actual energy use. Real-time, or near real-time, information supports energy management decisions and actions far more effectively than after-the-fact billing. Today, customer-focused energy management is hindered by limited access to information.”

Improved systems performance associated with decreased peak load demand

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Increased customer engagement

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Lower operating costs and improved margin per kWh

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Demand response through consumer price signals and customer response

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Load control and load management

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Time of use rates

Increased visibility and engagement are the largest benefits for consumers. With this solution, consumers are able to have real-time access to pricing signals and their consumption. If desired, they can modify their consumption patterns and influence their energy costs. For those customers who have a strong desire to minimize their carbon footprint, this solution provides them with the additional benefit of providing specific and meaningful measures to their conservation efforts.

Benefits to consumers were a key consideration to the U.S. Department of Commerce’s (DOC) efforts to provide meaningful standards for evolving smart grid solutions. Through the National Institute of Standards and Technology (NIST), the DOC released the first version of the “Framework and Roadmap for Smart Grid Interoperability Standards.” In doing so, they commented on the opportunities that will be available to consumers:

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Interoperability with existing metering infrastructure. The Tendril platform will allow utilities to leverage existing automated meter

“Attempts to encourage consumers of electricity to conserve energy are greatly assisted when consumers have means to + THOUGHT LEADERSHIP

It is important to note that Tendril delivers an industry leading, open standards-based, secure and scalable platform that is helpful to utilities seeking to deliver smart grid solutions – particularly those that help achieve more knowledge about how energy is consumed. The secure and customer centric software provides utilities with the ability to test and deliver functional smart grid solutions without having to redesign or reengineer operational processes or their technical infrastructure. It seamlessly attaches to the data streams that are created by appliances within the consumer’s residence and assists’ both utilities and consumers with demand response, direct load control, energy efficiency and both fixed and variable pricing. See Figure 2 .

The seamless integration is accomplished through Tendril’s use of open standards and application programming interfaces (APIs). It can operate virtually on any communications framework and utilizes industry leading security infrastructure. See Figure 2.

This open architecture provides significant benefits when deploying the solution. These include:

reading (AMR) solutions and still capture demand response benefits associated with home energy management systems. This is

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a terrific interim step for those utilities that have not fully transition to a smart meter, or advanced metering infrastructure (AMI).

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Interoperability with many smart meter networks. This allows utilities to deploy applications and enable home energy management systems with virtually any standards based smart meter configuration.

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Confidence in scalability and security. As the customer base grows and as security threats evolve, utilities can take comfort in Tendrils ability to evolve and meet market demands.

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Ease of implementation. Tendril provides turn-key implementations and customer support. This allows utilities the opportunity for a low-cost and

BROADBAND

Figure 2

understanding usage patterns as they occur, utilities and consumers will be empowered to make more informed choices about the provisioning and utilization of energy. In turn, this will enable both utilities and consumers to achieve greater efficiency and financial savings.

Utilities and consumers seeking to capture these opportunities must look to a solution that is secure, scalable, easy to implement and easily assimilated with existing or new technology and business processes. The Tendril solution meets those needs and provides significant benefits to utilities and consumers looking to learn more about consumption and leverage that information for savings through behavioral changes.

low-impact trial implementation cycle.

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will provide opportunities for additional sales and services.

Advancements in technology and regulatory thinking, as well as changes in consumer’s expectations, have created a ‘perfect storm’ of opportunity.

Real-time information about energy consumption is at the very core of that opportunity. By better

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Progressive interconnection ©©

Transmission facility certificate standards reflect changes to system

By Ann Warren

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In the past, state law standards for obtaining

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certificates of public convenience and necessity to site transmission facilities focused on whether such new Grid operations facilities were necessary for supplying The next two articles discuss two power to customers in one state. By issues of increasing importance focusing the certificate standards on the in the changing landscape of electricity transmission. Ann energy needs of the consumers in only Warren provides an overview of one state, state lawmakers failed to recogrevised state certificates of nize that siting and constructing new public convenience. Kate Rowland transmission lines is often necessary to notes the dissention regarding improve the interconnected transmission the American Clean Energy Leadership Act. system that extends beyond the borders of each individual state.

In more recent times, lawmakers in several states have revised state certificate standards to recognize that the siting and construction of new transmission facilities is necessary for more than just the provision of energy to consumers in their states.

An analysis of the revised certificate standards in three states highlights this emerging trend that acknowledges the interconnected nature of individual transmission systems.

Ohio’s regional plans

The legal standard in Ohio for obtaining a certificate of public convenience and necessity for transmission lines focuses both on regional plans for expansion of the electric power grid, and on the economy and reliability of the overall electric system, thus: “In the case of an electric transmission line or generating facility, that the facility is consistent with regional plans for expansion of the electric power grid of the electric systems

serving this state and interconnected utility systems and that the facility will serve the interests of electric system economy and reliability.”

This standard is one of the most progressive among other state standards (and one of the earliest to become effective prior to 1990) because it requires that new transmission lines must meet regional (not just state) plans for expansion of the interconnected utility systems and must also meet economic and reliability standards for the overall electric system both within and outside of Ohio.

Out-of-state benefits?

The legal standard in Kansas for obtaining a certificate of public convenience and necessity for transmission facilities centers on regional plans for expansion of the electric power grid: “The commission shall make its decision with respect to the necessity for and the reasonableness of the location of the proposed electric transmission line, taking into consideration the benefit to both consumers in Kansas and consumers outside the state and economic development benefits in Kansas.”

This standard was approved in 2003 and is also forward-looking in comparison with other state standards because even though it still takes into consideration the benefits to Kansas consumers and benefits to the economic development of Kansas, it also considers the benefits to consumers outside Kansas state borders as well.

market that operates efficiently, is equitable to all customers, and is the least cost means of satisfying those objectives.”

This standard became effective in 2007 and is also a pioneering standard as compared with other state standards because it requires that the proposed transmission facility must foster the development of an effectively competitive electricity market, which is not limited to just the market in the state of Illinois but presumably refers to the entire electricity market in the United States.

Future revisions possible

Although these three states have revised their certificate standards to reflect the interconnected nature of the nation’s transmission systems, there is certainly room in the future to accommodate additional revised certificate standards to reflect many improvements to the grid that are currently under way in various states.

First, revised standards could address the need to site transmission facilities in order to deliver energy to meet renewable portfolio standards in states sharing cross-border facilities. Second, revised standards could also emphasize the need to site facilities in order to deliver renewable energy from one state to load centers in another state. Finally, revised standards could take account of upgrades to the transmission system that stretch across state lines such as upgrades to install smart grid technologies and upgrades to install extra highvoltage transmission lines.

If these trends continue, obtaining certificates for the siting and construction of new transmission facilities, especially for facilities that impact more than one state, could be made significantly easier under such revised certificate standards, which place importance on upgrades to the transmission system not just in one state but to interconnected transmission systems across the country.

Ann Warren is an associate with Foley & Lardner LLP in its Washington, D.C., office.

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Transmission disconnect ©©

American Clean Energy Leadership Act draws flak over language

By Kate Rowland

Illinois’ competitive market Think of the American Clean Energy Leadership Act

of 2009 (S. 1462) as a fence. Then think of the words ‘measurable benefits’ as the barbed wire strung at the top of that fence.

This is an argument over language, with groups lining up at the fence to debate the barbed wire. Electric utilities, transmission companies, cooperatives, environmental groups, industrial and commercial customers and more are speaking up, debating the current change in language adopted by the Senate Committee on Energy and Natural Resources. Here’s a taste of what two different groups had to say in their letters to the Senate.

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The legal standard in Illinois for obtaining a certificate of public convenience and necessity for transmission facilities considers the development of a competitive electricity market as a whole. It states: “…that the proposed construction will promote the development of an effectively competitive electricity

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G R I D (U N) LO C K Language limits FERC

Back in November, a group of 62 electric generation transmission companies, municipal utilities, electric cooperatives, environmental groups and other stakeholders, including the Working group for Investment in Reliable Economic electric Systems (or WIRES) Coalition weighed in on S. 1462 in a letter to the Honorable Harry Reid, U.S. Senate majority leader, and the Honorable Mitch McConnell, Senate minority leader. In it, they objected to a measure in the Act that the group felt would severely restrict how the Federal Energy Regulatory Commission determines who pays for new high-priority transmission facilities.

“We are writing to express our serious concerns with certain language in the electric transmission cost allocation provisions contained in [section] 121 of S. 1462…as reported by the Senate Energy and Natural Resources Committee. As currently drafted, we believe that the bill’s proposed addition of [section] 216(i)(1)(B) of the Federal Power Act, will prevent This language threatens development of much needed high voltage transmission facilities to to hamstring FERC by meet a multitude of customer needs, as it will prohibit the Federal limiting its current Energy Regulatory Commission (FERC) from adopting a cost flexibility under the ‘just allocation methodology that is fair and workable.” and reasonable’ standard The group’s letter noted that “an amendment adopted during in the allocation of Committee consideration of S. 1462 would unduly limit the flexibility of transmission costs.

FERC to craft a workable policy.

This Amendment would prevent FERC from allocating transmission costs to any region or sub region unless the Commission can demonstrate that the costs are ‘reasonably proportionate’ to the ‘measureable economic and reliability benefits.’ This language threatens to hamstring FERC by limiting its current flexibility under the ‘just and reasonable’ standard in the allocation of transmission costs.”

The group of 62 who signed the letter argued that the costs of transmission upgrades should be shared by all those who benefit. “Our concern is that the requirement for FERC to ‘measure’ benefits (as used in the amendment) will, at best, result in time-consuming, protracted cost-benefit analyses that will trigger endless litigation and prevent consistent, predictable cost allocation—a requirements for entities to make needed transmission investments.”

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Language allocates costs based on measurable benefits

On February 9, the same day the U.S. Senate Committee on Energy and Natural Resources had a hearing scheduled specifically to examine financial transmission rights and other electricity market mechanisms, a group of 27 electricity utilities (including investor-owned, government-owned, irrigation district and rural cooperatives), industrial and commercial customers and a solar energy company sent their own letter to Senators Reid and McConnell.

“As you are aware,” their letter began, “the American Clean Energy Leadership Act of 2009 (S. 1462) as passed by the Senate Energy and Natural

Resources Committee included provisions impacting both inter-regional transmission planning and transmission system expansion cost allocation.

We are writing to make clear our support for congressional direction on these issues within comprehensive energy legislation, but with certain qualifications on the specifics.”

Their letter went on to note: “We are concerned that the current language of S. 1462 will impose a top-down interconnection-wide plan that would fail to meet local and regional needs and would ultimately undermine the goals of legislation.”

However, this group had a slightly different view of the cost-allocation issue. “On cost allocation,” the letter said, “we support the language in S. 1462 that allocates costs based on measurable benefits.”

They explained: “With respect to cost allocation, while our organizations strongly support the development of renewable and other clean energy sources, we believe that national policy should not be biased toward building remote generation resources connected to population centers with long, multistate transmission lines.

“Since some regions will find better, less costly ways of getting to the cleaner energy future we desire, including distributed renewable resources at or near the consuming customer,

“It is critical that transmission cost allocation policy place the cost of transmission on the parties that create the need for the new investments, rather

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on-shore and off-shore wind closer to the load centers of the East Coast, carbonfree nuclear and hydro generation, as well as demand-side management and increased efficiency, deference should be provided to consensus regional cost allocation solutions developed through open and collaborative process.”

The group posits the following argument: “Decisions about when and where to build new resources involve market choices by resource developers and customers. The only way to ensure that these decisions are made in a cost-effective manner is to provide price signals that show the true economic implications of these decisions…It is therefore critical that transmission cost allocation policy place the costs of transmission on the parties (generation and/ or load) that create the need for the new investments, rather than socializing transmission cost across a broad area.”

Senate committee postpones hearing

It’s clearly an issue that won’t be resolved quickly. In the meantime, the Senate Committee on Energy and Natural Resources hearing that was scheduled to take place on Feb. 9 was postponed “to a later date”. It was to hear testimony from FERC Chairman Jon Wellinghoff; Commodity Futures Trading Commission Chairman Gary Gensler; Vince Duane of PJM Interconnection; Elizabeth Moler, representing the Edison Electric Institute and The Electric Power Supply Association; and Michael Henderson, representing the Arkansas rural electric cooperatives.

With this kind of passionate argument being espoused in the industry, sooner would definitely be better than later.

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END OF THE LINE V ISION

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Utilities not yet inundated in data ©©

Anticipated problems haven’t yet emerged

By Warren Causey Conventional wisdom around the smart grid and

advanced metering infrastructure (AMI) is that utilities are going to be inundated in data. Some observers have posited that all these data might swamp utilities and represent a major problem for the near-term future. Somewhat surprisingly, however, so far that does not seem to be a major problem.

“We’ve got about 20 to 30 percent of Learning Lessons our smart meters deployed and we’re not AMI isn’t overwhelming utilities seeing an impact yet in terms of storage,” with data, Warren Causey says Dennis Gribble, vice president and discovers as he looks deeper into CIO at Idaho Power, Boise. “Smart grid the issue. But Elizabeth McGowan in general may have a bit of effect on our learns that demand response data data centers, but primarily because to can guide industrial consumers into even deeper energy savings. deal with it, we’re having to migrate our customer information system (CIS) off an IBM mainframe and will be going to a client-server system. That will require more servers and have somewhat of an impact, but it depends on the type of platform we go to. But as far as AMI is concerned, we’re not seeing it as big an issue as we originally thought.”

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Different evolutionary stages

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Different utilities are in different stages of a constant evolution with regard to information technology and housing the server banks required to deal with it. A server farm within a data center requires a lot of cooling, which implies adequate air conditioning. Modern techniques include raising the floor of data centers so the wiring can run beneath that floor, as well as cooling vents which are applied both above and below the servers.

Chattanooga Power Board (CPB) in Tennessee, which also is in the midst of an AMI deployment, rebuilt its data center a couple of years ago, with a raised floor, to accommodate a growing server farm. That system is working well and actually is more efficient and less expensive than an older center it replaced, said Dave Johnson, CPB’s vice president and CIO. Small pieces of data

One of the major reasons utilities don’t seem overly concerned about AMI data is that meter readings returned

by AMI actually are relatively small pieces of data for each reading. With storage capabilities of servers growing

exponentially year by year, more and more data can be stored on individual servers. Many servers now have storage capacity approaching older mainframes. And, with “server virtualization” even more space is available.

Virtualization allows utilities to use excess space on servers that otherwise house programs and other data. The days when one server was required for each different program or function are in the past.

“We aren’t at a volume (of meter reads) where it’s driving any problems yet,” said Dave Harkness, CIO at Xcel Energy, which has significant AMI deployments. “A lot of the vendor community was thumping that drum a few years ago, but I’ve never really been afraid of the data. Most of the data we’re getting is relatively small. Will we need more storage? Yes, but there are solutions to handle that. It’s nothing we’re freaking out about.

“There are other industries out there who handle far much more data than we ever will,” Harkness continued. “Look at credit card companies handling billions of transactions and telecommunications vendors handling all those calls every day. Smart grid and AMI will involve bigger datasets than we’ve handled before, but most of the data we’re getting is relatively small.”

Data centers do require a lot of electricity, not only at utilities, but at any other type of company. That electricity, however, is a necessary usage to keep today’s technological world and utilities functioning. Most utilities operate two complete mirror-image data centers, one for main functions and another isolated for backup. This backup data center is required in the event of power outages and usually has standby local generation. That way the utility can continue to operate during an emergency that involves loss of power.

Drawing more power

Warren Causey frequently writes about smart grid issues.

STRATEGY

REALITY

A recipe for energy efficiency ©©

DR an essential ingredient

By Elizabeth McGowan To the undiscerning palate, cheese is either white

or yellow, and beer comes in two colors—light and dark.

But that simplistic approach to eating and drinking is antithetical to the professionals at Cabot Creamery Cooperative and Harpoon Brewery. When you’ve toiled so diligently to perfect just the right flavor and broaden Participating in demand brand loyalty, you’re understandably reluctant to compromise on quality. response forces our Both New England companies have discovered that they can mainoperations folks to be tain the highest of product standards while participating in demand creative. We have to be response programs via a third-party, end-to-end demand response sure product quality provider. And, they’re both so hooked on those energy savings that they are does not suffer; that’s using demand response technology to automate other efficiencies. in the DNA around here.

In the Northeast, most demand response requests come during streaks of 90-plus degree summer days. As enrollees in the program, the creamery and brewery were outfitted with metering equipment and energy management software, are notified about demand response events via phone and e-mail messages and are paid for complying.

“We’ve never been big pontificators on how great we are on the green side,” explained Warren Dibble, chief financial officer and self-appointed “electricity guru” at Harpoon. “But demand response is certainly a good program. It saves us money and by conserving energy we’re doing the right thing.”

Learning to track hourly electricity data so accurately has prompted the microbrewery to explore the possibility of incorporating on-site cogeneration/ combined heat and power technology.

Over at Cabot, money earned from the demand response program is pooled into a fund designated for efficiency projects. For instance, a traffic study in the climate-controlled room where cheese is aged led to a retrofit of traditional lighting with occupancy sensors.

“The benefit we receive monetarily would be wiped out if we had even one vat of cheese that had to be thrown out,” said Jed Davis, who was promoted to Cabot’s new position of sustainability director in spring 2008. “Participating in demand response forces our operations folks to be creative. We have to be sure

“

”

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Some utility industry vendors have raised the issue of the electricity requirements as data centers grow to house more servers to deal with growing amounts of data. While there is little doubt there will be more servers and thus more electricity used, this is one area where there will be limits on conservation. Modern servers are more efficient, but they still draw power.

According to a Feb. 16, 2007, presentation by Jonathan G. Koomey, Ph.D., of Lawrence Berkeley National Laboratory and Stanford University, data centers use roughly 1.2 percent of all electricity used in the United States.

Worldwide, that estimate is 0.8 percent.

However, with modern design, more efficient power supplies and other improvements, that percentage is not likely to go up appreciably, and in fact may be coming down per data center, some experts say.

Smart grid will generate more data, but utilities don’t seem overly concerned with dealing with it. And, as electric utilities, they’re well aware of their usage and ways to conserve electrical usage.

Crunching all the data for smart grid and the intelligent utility of the future, as Gribble put it, actually seems to be less of a problem than anticipated.

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END OF THE LINE product quality does not suffer; that’s in the DNA around here. But the fact that we can do something to help the greater good—amen and hallelujah.”

Sustaining the cheddar

Cabot, which has operated in Vermont since 1919, churns out a full spectrum of cheese, yogurt, sour cream, cottage cheese and butter. Owned by dairy farm families, the cooperative now manages five facilities with a total footprint of 450,000 square feet in three states.

When it signed up for the demand response program in late 2006, Cabot was slated to save 750,000 kilowatts during demand response events at its signature campus in Cabot, Vt. However, the cooperative was rewarded with a 2007 achievement award from its regional electric grid operator, ISO New England, for bumping that up to 1 megawatt.

Refrigeration units and ice-making machinery are the main sources of energy reductions.

Davis expects that total to grow fivefold—to 5 megawatts—shortly when sister creameries in Middlebury, Vt., West Springfield, Mass., Chateaugay, N.Y. and a distribution center in Montpelier are fully on board.

“We would never do anything to jeopardize our quality,” Davis emphasized. “Certain parts of the process of making the world’s best cheddar are basically sacrosanct, or extremely inflexible.”

However, maintenance manager Randy Swartz is the king of coordinating Cabot’s seamless reply to curtailing energy use during a demand response event.

Capitalizing on flexibility is fundamental.

For instance, pasteurizing batches can be halted without harming the final result and creating yogurt, sour cream and other cultured products isn’t on a strict time line. While they incubate for several hours, many elements of the manufacturing line can be shut down without repercussions.

Cabot’s success with demand response has spurred bolder actions. In addition to installing occupancy sensors in the cheese-aging room, the cooperative charges its forklift batteries off peak and continues to upgrade all of its facilities—including its distribution center built in 2004 as a state-of-the-art green building.

“Conservation becomes affordable when you have a fund to jump-start it,” Davis said. “We’re saving money and the planet at the same time. What could be better?”

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Keeping the beer chilled

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Harpoon, recognized for specialty craft beers such as Harpoon IPA, Munich Dark and UFO Hefeweizen, signed up for demand response more than two years ago. During a typical summer conservation request from ISO New England the brewery’s two locations— Boston, Mass., and Windsor, Vt.—can shed about 250 kilowatts by operating on 30 to 40 percent of its usual need.

“Chilling and fermenting are generally off limits because of quality control,” explained Dibble, adding that lights and heating/air conditioning can be

adjusted and bottling and kegging tasks can be shifted to off peak.

“We can cater our response to where we are in the process,” he said.

Payments from the demand response aggregator go toward raw materials such as the glass bottles, hops, barley, wheat and flavoring agents required to churn out 136,000 barrels of beer annually.

“This makes you realize how you’re using electricity,” Dibble said, adding that he can monitor exactly how much energy grain millers and other vital pieces of equipment are using. “I’m still getting my head around the entire subject. As we grow to a larger scale, it opens up lots of different possibilities to ponder,” he said.

One idea germinating is the concept of cogeneration/combined heat and power. While generating electricity with traditional fuels, Harpoon could warm water with the captured excess heat. Heated water, the lifeblood of any brewery, is essential in the brewhouse where malt is mashed and for cleaning and sanitizing tanks and other equipment.

If cogeneration technology takes a gigantic leap forward, one day the brewery might be able to “digest” its spent grain—which is now feed for cows—and turn it into power and heat.

In the meantime, Dibble is pleased with demand response’s efficiency rewards.

During a recent emergency event, caused when a major regional transmission line failed, Harpoon’s Boston brewery pitched in by halving its energy use.

“I remember it was hot and dark,” he said with a laugh.

“But the beer was cold.”

Reporter Elizabeth McGowan writes about energy and environment issues from Washington, D.C.

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4D V ISION

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GIS repositioned ©©

E.ON U.S. expands its GIS usage

By Mike Breslin Over the past 20 years, geographic information

systems (GIS) and global positioning systems (GPS) have merged into geospatial technologies that offer powerful tools to cope with an increasingly complex grid.

Every day, more sophisticated mapping programs are being loaded into ruggedized laptops and hitting the streets, helping field personnel work smarter, faster and safer. Utilities are using these Mobile Success solutions to map and manage transmisMike Breslin learns from E.ON U.S. sion and distribution assets, respond to how the company successfully outages and service requests, collect field expanded its geospatial asset data, track vehicles, and schedule and management software out of dispatch workers. the office and into the field.

Despite the slow economy, utilities are continuing to invest in technologies that make operations more efficient. GIS is a top industry priority, not only to increase field worker productivity, but also as a critical enabler for smart grid operations.

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Usage increasing rapidly

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Industry experts estimate that only about 25 to 30 percent of U.S. utility field crews are currently equipped with mobile digital mapping. It is growing rapidly, however, both in the number of utilities automated and the spread of use within a given utility. GIS varies greatly in cost and capabilities, ranging from simple mapping programs that make it easier for field crews to navigate territories to sophisticated drill-down data resources that can click up the most detailed technical data.

E.ON U.S., which owns and operates Louisville Gas and Electric, as well as Kentucky Utilities, is a good example of how back-office geospatial asset management software was extended into the field. In April 2007, the companies went live with mobile devices for gas and electric operations to bring geospatial asset management technology down to vehicles.

The company’s back-office solution also went mobile with a separate facility inspection and maintenance program. To date, a total of 450 mobile devices have been deployed.

“We are in the process of pushing it out to another 250 users in distribution operations. We hope that within the next 12 to 18 months all of our field people will have it,” said Jason Jones, E.ON’s IT project lead. “It’s definitely been a success story that everyone is behind.”

The transition to mobile was eased by the fact that they had installed back-office GIS in the late 1990s, and they later selected a compatible software

program for mobile. “The conversion process was not difficult because we already had our maps and data on the back-office system. We just had to extract it into the mobile format,” Jones explained. “We spent much more time upfront defining what was needed in the field. We didn’t want them carrying around information they didn’t need, data that would cause problems and confusion. The lure of our GIS is that it is simple and easy to use.”

E.ON U.S. buys regular laptops, Panasonic Toughbooks and Xplore Tablet PCs. Units communicate via an internal WiFi network, or access it through a secure VPN cellular connection.

Transition easier than most

E.ON U.S.’s transition from back office to mobile was easier than most. Up to 70 percent of the cost of a new GIS system can be in data conversions. For many utilities the costs can be lower if maps have already been scanned to digital formats such as AutoCAD. The main competitor to GIS is still paper maps. “They used to get a map book printed once a year or every two years. The second it’s printed it’s out of date. Now we actually provide automatic digital updates to maps on a daily basis,” said Jones.

An E.ON mobile screen shows the entire distribution network from substation to the customer. Since front-line people have to contact customers for access to buildings, or during gas emergencies, customer names and phone numbers are on the mobile units. “We don’t have solid data on increases in productivity, but we get a lot of positive feedback from the field. They are able to locate a facility without having to call back and the dispatcher does not have to spend

it for storm damage assessment to be able to feed back into our work planning organization that handles resources during a major outage,” Jones said.

Saving grace during storm outage

Even without mobile outage information, the mobile GIS software proved valuable during a massive ice storm that knocked out power to the western part of Kentucky in January 2009. “Everything was down; all power, cellular communications and our distribution system was damaged. Even our internal network was down and we could not connect from Louisville or Lexington to our operations centers in the western part of the state. One of the saving graces was that everybody had the most up-to-date maps in their trucks,” Jones noted.

Jones also reported that mobile GIS has changed their entire business process for regulatory inspections. “We have been able to make sure we are maintaining compliance and report more easily. The data is absolutely more accurate. The fewer times you enter data, the fewer systems you transfer it, the less data error you produce, and that was our goal.”

As the grid grows more intelligent, mobile GIS can provide unparalleled situational awareness, showing graphically exactly what is happening in a service territory to everyone in the organization in a near real-time model. Armed with accurate, current maps and data and knowing how and where to find things increases workforce productivity every day and can be critical in coordinating crews during emergencies.

Mike Breslin is a freelance writer and novelist based in New Jersey.

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time directing someone to a trouble call,” said Jones.

With GPS integration, field personnel can see their exact position on a map and watch as they navigate to a location, or they can use a search function to locate a structure. There are no audio turn-by-turn directions, but E.ON U.S. is evaluating a new routing for that function. “The neat thing is that it just doesn’t route you to an address, it actually routes to facilities, such as to a pole that may be located in a pasture,” Jones said.

Their retail organization already uses mobile dispatching for short-cycle work such as turn-ons, turn-offs and meter reading. Other work is assigned by paper, or by radio. Over the next few years the plan is to have all mobile work dispatched digitally and integrated into the mobile computers. Currently, mobile does not show outages, but may in the future. “We are also evaluating

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C O N N E C T IO N S V ISION

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Talking about secret stuff ©©

A thorny debate still to be had?

By Phil Carson

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The juxtaposition was hard to miss: a front-page

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article in The New York Times on a subject typically treated in hushed tones in windowless rooms.

“Survey finds growing fear of cyberattacks” (Jan. 28, 2010, NYT) Of course, surveys are malleable tools and fears can be based on fact or perception. But the salient details of this survey drew my attention and, likely, others’, as it was conducted by the credible Center for Strategic and International Studies, commissioned by McAfee, maker of anti-virus software, and the respondents were chief information officers (CIOs).

The report focused on cyberattacks on critical infrastructure, which includes a full spectrum of advanced industries, all of which need to address this challenge. So this threat and the need to meet Getting there it is hardly unique to the electric utility Phil Carson joined the Intelligent industry, which has taken myriad steps.

Utility team in January, and has Still, the new survey had disturbing been adding to the smart grid insights generated by CIOs. discourse on a daily basis in his role as editor-in-chief of Eighty percent of the respondents our Intelligent Utility Daily.

(600 IT executives in 14 countries, 100 Here, he shares his thoughts in the United States) said they work in on two popular Connections organizations that depend on systems topics, cyber security and using Internet Protocol and the report communications. concluded that that presented “troubling vulnerabilities.” Half the respondents said they’d already been the subject of sophisticated attacks, which they “believed” were made by foreign governments. The United States was named as one of the most vulnerable countries and as the likeliest source of attacks. (I’m not implying that those two perceptions are linked, just joining them in one sentence.)

Forty percent of respondents said they expected a major cyber security incident lasting more than a day and resulting in the death(s) and/or failure of a company within the coming year. Fully 80 percent had this expectation for the next five years.

The respondents in this survey, as CIOs, would appear to be in a position to know about measures taken and ongoing cyber security incidents.

Despite progress within the electric utility industry with the North American Electric Reliability Corporation’s (NERC) Critical Infrastructure Protection (CIP) standards, however, headlines still are being generated that make me wonder if we’re satisfied with our strategy and now merely in the execution phase. Or does the issue remain thorny? A few recent headlines: “Organizing cyber security efforts remains key challenge” (Jan. 27, 2010, NextGov)

“Debate heats up over cyber security regulations for electric utilities” (Oct. 27, 2009, NextGov) This week’s news and the headlines above are not necessarily surprising to readers of Intelligent Utility magazine.

Our Nov/Dec 2009 issue carried a report on offensive and defensive strategies in the nitty gritty of cyber security. And a webcast earlier in January, moderated by H. Christine Richards, vice president, Intelligent Utility Division, and editor-in-chief, Intelligent Utility magazine, delved into the topic. The one specific statement I remember from the webcast came from a participant who said that, obviously, he couldn’t get into any specifics.

Not that I could have followed a specific conversation without getting mired in the, well, specifics.

In a complex world, one would like to hope that smart people in a position to understand the risks and affect outcomes are diligently working to meet such challenges. Has that happened in the electric utility industry and it’s just invisible to outside observers? Or does this remain as big a challenge as the new survey makes it appear?

Disruptions to the electrical grid can happen for a lot of reasons—see the 2003 Northeast blackout and the California energy crisis of 2000 to 2001. Have we sufficiently addressed the myriad and still-debated causes of those two debacles? Those were not cyber security events, obviously, but the outcomes were the dreams of cyberattackers.

The actual record of cyberattacks on U.S. utilities and how they were dealt with remains a closed book of tightly guarded secrets. Recognizing that specifics are out of the question, I’d appreciate it if readers would share their thoughts on “how to think about” cyber security for the electric utility industry.

Phil Carson is editor-in-chief of Intelligent Utility Daily.

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Why the smart grid is inevitable ©©

ZigBee Alliance chair Bob Heile explains

By Phil Carson A lot of what ZigBee Alliance chairman Bob Heile

has to say sails over my head, only partially retrievable with a magic mental net. At one point in our conversation last week, my notes began resembling hieroglyphics.

That’s OK, he’s trained as a physicist and has decades of experience in wireless data communications and I’m a biologist-turned-journalist. (Talk about the “main disconnect”!)

my-backyard sentiments and demands of the Clean Air Act will constrain new generation to lag behind demand.

Paying the real cost

“We can’t build new power plants fast enough, even without the transportation sector going electric,” Heile said. “We’ll have to pay the real cost of electricity and that means that consumers will have to get smart about how they use it.”

“Take the tree-hugging out of it,” Heile added. “Do we just get around to [the smart grid] when we can, to avoid rolling blackouts? I hope not. That seems like a remote scenario right now, but it isn’t. It’s going to happen. The coastal areas with large populations are going to be in deep trouble.”

Ubiquitous ZigBee

Heile nonetheless can discourse on the nitty gritty in plain language. Last Friday, after a week-long marathon of ZigBee Alliance meetings in Denver, and before dashing to the airport, Heile sat down with me for a chat.

Heile noted that what follows is strictly his own personal opinion, albeit one steeped in deep involvement in technologies now finding a home in smart grid applications. Sure he’s an evangelist for ZigBee, an open, global standard for lowpower, wireless networks for monitoring and control products. Initially, ZigBee appears to answer the needs of in-building networks of sensors that will enable homeowners and commercial and industrial building operators to understand and act on their electric energy usage. And Heile thinks ZigBee will become ubiquitous in other applications.

Smart grid inevitable

How much pain?

“The question is not whether it happens, but ‘how much pain will we experience?’”

American consumers are going to have to live with the interactive nature of the smart grid and the overwhelming fact that power generation will never keep up with future demand, Heile told me. Even if utilities pursued new power generation by every means, American attitudes towards nuclear power, not-in-

whether it happens, but ‘how much pain will we experience?’

”

Solutions needed

The United States has a good opportunity in this regard, however, because our infrastructure is so old and broken that we need solutions, Heile added. We can pull it together, he insisted.

“The market will experience a lot of misinformation, a lot of confusion, for the next year or so, before it settles down,” Heile predicted.

But more than a dozen large utilities were in attendance at the ZigBee Alliance meeting last week to understand more about ZigBee’s role in the smart grid and to keep up to speed. For Heile, that in itself is a convincing argument for the smart grid’s inevitability.

Phil Carson is editor-in-chief of Intelligent Utility Daily.

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Near the end of a firehose-intensity review of how ZigBee is becoming critical to many smart grid applications, however, I pressed Heile on whether the smart grid as we’re envisioning it today really is inevitable. After all, we hear pushback all day long on the topic.

“Yes,” Heile said, “but not for green reasons, like global warming. Some of those topics have been used as drivers for the smart grid.

“The smart grid is inevitable for practical reasons. Good hybrid electric vehicles will be a major component of transportation going forward, due to the price of oil and the fact that fuel cells are not mature. Read the tea leaves— electric vehicles (EVs) are going to become a big driver of the smart grid.

“The question is not

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OUT THE DOOR V ISION

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M2M revolution ©©

Iowa cooperative replaces man with machine in the field

By John R. Johnson Technology continues to take a stronger foothold

within the utility industry, especially in the meter interrogation area, where the long hours of labor once required to read and maintain meters, are being replaced by machine-to-machine (M2M) devices that take seconds to perform the same work.

Utilities of all sizes and shapes are embracing various M2M technologies, from large gas and electric providers in heavily populated regions of the country serving millions of customers, to small electric cooperatives in rural locations with hundreds of miles between customers.

Isolation requires unique solution

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Central Iowa Power Cooperative (CIPCO) fits the latter definition. The power generation and transmission coop supplies power to its members over a 300-mile territory, spanning Iowa from the Rural Connections eastern banks of the Mississippi River to John Johnson’s article looks at Shenandoah in the southwest corner of the ways in which CIPCO uses the state. The 13 rural electric coops that wireless technology to save CIPCO serves combine to power 370,000 significant road time and labor residential customers and 7,000 industrial hours in meter reads. accounts. While CIPCO’s customer base is no longer comprised of mostly rural farms, many of its customers are still located in isolated parts of Iowa.

With a region so large, and customers few and far between, it became essential for CIPCO to do away with an outdated system requiring significant labor hours to maintain. Prior to the digital upgrade, CIPCO workers drove to each substation, often located in out-of-the-way areas, and used handheld readers and analog phone devices to collect power usage data from meters that, in turn, was used for billing purposes and to anticipate future power generation needs.

A single employee could only cover about 12 meters per day because of the great distances between substations.

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of reading meters needed to be replaced. After testing solutions from four technology providers in the field for several months, CIPCO opted for a fix that provides remote monitoring and two-way communication for unmanned applications. The new solution provides extensive remote management, configuration and troubleshooting capabilities, allowing CIPCO to control its network of wireless gateways from a central location.

The probing process with handhelds usually took CIPCO about four days to complete, down sharply from the seven to 10 days it took when the company still captured data on magnetic tape. However, with the wireless process, CIPCO can capture the majority of the data it needs in less than an hour. Since CIPCO supplies cooperatives with energy, rather than actual households or businesses, it only needs to interrogate about 800 meters each month. Typically, there are still a handful of meters that require personal attention each month, but labor and cost savings are still significant.

For example, Chaon estimated that the cost to obtain a single meter read using the old probing method was about $30 per meter. Now, the only cost involved is the monthly $10 charge for cellular service. Under the new digital wireless system, if CIPCO needs to troubleshoot a potential problem meter, it can request daily readings if necessary. As long as CIPCO doesn’t go over its one megabyte data transfer limit, it can ping meters as often as necessary with no additional cost.

Embracing new technology essential

“Before, when we were probing the meters, it required a man in a truck and by the time he climbed out of the truck and read the meter, it was at least a 20-minute process,” said Don Chaon, manager of data systems for CIPCO. “Then it would require at least another 20 minutes to drive to the next meter.

When [our operator] is performing that task, he is usually in one of our transmission substations, so you can’t just send anyone on that job. If you touch the wrong thing, you don’t get a second chance. So the solution took a person out of a potentially dangerous environment.”

In a way, CIPCO was forced to embrace new technology because of the retirement of analog support by cellular providers, meaning the probing method

Diversifying responsibilities

Taking expensive and highly skilled employees out of the metering picture has also helped CIPCO to gain labor management efficiencies at its corporate office in Cedar Rapids by allowing employees to diversify their responsibilities. “Our culture here is that the meter collection function came under IT (data systems), and it has freed up

employees so we can do lot of cross training that we didn’t have time for before, so we are a more solid group,” said Chaon. “Our meter technicians have a host of other responsibilities so now we generally don’t need them to spend that much time with us” during the metering process.

Chaon said that the new system has improved billing, load research, capital planning and power quality. He added that, conservatively, the utility expects a return on its investment in about 18 months.

Next, CIPCO hopes to take advantage of the efforts of its coop partners, who are putting in new substation communication infrastructure in preparation for installing AMI systems. Once that is in place, Chaon anticipates being able to forego the cellular wireless system and tap into each coop’s network through a secure Internet connection. A few of the coops have already installed those systems.

“We’re very happy with our wireless solution,” Chaon said, “but we can piggyback onto our coops’ system for their AMI to read our meters, and we’re doing that with a number of our cooperatives now.”

John R. Johnson is a Boston-based freelance writer specializing in energy, technology and business management topics.

Photo by Brian Cook

Winter of ice From Florida to Washington state, it’s been one icy

winter, wreaking havoc with electric transmission and distribution lines across the country. In Shelby County, Tennessee, January went out like a lion, dumping ice, sleet and snow, downing power lines and poles, limbs and trees, and causing approximately 30,000 Memphis Light, Gas & Water (MLGW) customers to lose power. Brian Cook took this photo of ice encrustations as MLGW crews worked around the clock to restore power by the end of the weekend.

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