An Overview of California Smart Meter Policy & Deployment ...web.stanford.edu/group/peec/cgi-bin/docs/behavior/...– Already in place for large commercial & industrial customers 4

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An Overview of California Smart Meter Policy & Deployment

Aloke Gupta Energy Analyst

California Public Utilities Commission (CPUC)September 4, 2008

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• California Smart Metering Overview

• Cost / Benefits

• Goals / Objectives

• Challenges in Affecting Customer Behavior

Smart Meters (aka Advance Metering Infrastructure - AMI)

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Smart Meter Deployments Now in Progress

Utility Shares of California’s Electricity Consumption (2006)

Source: California Energy Commision

• In 2003, CPUC ordered that all electric customers should have advanced (smart) meters– Applicable to three major Investor-Owned Utilities (IOUs) – Represent about ~68% of consumption

• Today, residential smart meter deployments in progress by all three IOUs– Already in place for large commercial & industrial customers

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•Website•Billing•Outage Mgmt.•Load Control

Smart Meter System / Network Overview

Smart Meters

DataCollectionUnit (DCU)

Network MgtSystem

DataManagementSystem

“LAN” (Proprietary 900 MHz Fixed Wireless) “WAN” / Backend (Standard)

Presenter

Presentation Notes

ARE THERE ANY QUESTIONS ABOUT what we mean by AMI? The main components of an AMI system are New or modified meters, New communication networks, and A new data management system The most visible component of the system is ADVANCED METERS which are required to measure and store customer energy usage at hourly or finer intervals As shown here, an AMI module can be added to an existing meter to provide this capability The next component is the communication network between meters and neighborhood Data Collection Unit (DCU), and between DCU and new data management system at the utility data center This new equipment must connect and interface seamlessly with the existing IT systems, which provide Billing Outage management And website hosting The website provides the critical energy usage and price feedback to consumers which can enable the DSM benefits of AMI systems

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Smart Meter

IOU DataSystem

WebsitePath 2: HAN(2-way, real-time)

Path 1: Internet (1-way, next day)

Meter Communication Network

Home Area Network (HAN) = Zigbee (a communication protocol)

Two Methods to Provide Usage Feedback

Presenter

Presentation Notes

PG&E’s adopted system will offer hourly usage feedback, to customers who have internet access, on a next day basis, as shown in path 1 above, This feedback can help identify when and how they can conserve energy. A key to positive business cases after PG&E’s original one is shown by path 2 below, which illustrates a more direct and immediate feedback, using a Home Area Network, or HAN

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Provide two- way communication with utilityProvide customers with flexible access to usage data and prices• Understand usage patterns & their relationship to energy costs

Track interval (e.g., hourly) usage data: measure, store, transmitImplement price responsive tariffs (dynamic pricing):• Time of use, critical peak pricing, real-time prices

Enable dynamic pricing & feedback

Enhance operating efficiencies and savings• Auto meter reading, outage management, improved forecasting, theft reduction

Support billing, customer support, outage managementInterface with Direct Load Control communication technology

Increase system efficiency

Smart Meter: Minimum Functionality Required

Presenter

Presentation Notes

Minimum performance requirements for AMI systems were defined by the Commission in 2004 and Can be classified into two groups as shown here The first block shows features which enable Price responsive DR, which was one of the PUC’s main motivations for promoting AMI However The second block shows the operational savings and service improvements which could provide even greater motivation for the IOUs Each AMI application to date has met all of these minimum requirements, Feb. 19, 2004 ACR in R.02-06-001

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• Cost / Benefits




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California Advanced Metering Synopsis (Residential, Small Commercial)

Pacific Gas & Pacific Gas & ElectricElectric

San Diego Gas & San Diego Gas & ElectricElectric

Southern Southern California EdisonCalifornia Edison

# of Electric Meters 5.1M 1.4M 5.3M

# of Gas Meters 4.2M 0.9M Gas Utility may connect to AMI

Costs Approved $1.7B in July 2006

$0.6B in April 2007 -

Costs Pending Approval $0.6B to upgrade - $1.7B

Deployment Schedule 2006 to 2012 2008 to 2011 2009 to 2012

Note: “interval meters” for large customers >200kW already in place

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AMI Business Case Summary

15%

59% 69%

14%

44%

26% 17%

0%

41%14% 14%

86%

0%

20%

40%

60%

80%

100%

Base Upgrade SCE SDG&E

EnergyConservation

DemandResponse

Operational

PG&E

AMI Benefits

Benefit/ Cost Ratio

1.08 1.06 1.02

$652

$1,967

$3,197

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

PG&E SCE SDG&E

(PVRR = Present Value

Revenue Requirement)

AMI Costs (PVRR)

(2005) (2007) (2006)

Base$2,258

Upgrade$939

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• Cost / Benefits



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Maximize potential societal benefitsOperational Savings leading to bill savingsImproved Reliability / Service Environmental benefits

Encourage Energy Conservation (Efficiency)

Maximize Demand ResponseParticularly price responsive demand response

CPUC Regulatory Objectives behind AMI

Presenter

Presentation Notes

As discussed by Bruce We would not approve any AMI projects in CA without these other benefits Cost savings for automated meter reading, more efficient outage detection and repair Due to feedback on energy usage Reduced air pollution, CO2, NOx, and Sox Less time without power Costs will be realized, meter readers will be layed off, but DR and conservation benefits are more difficult to achieve Make sure customers are charged for a new meter every 5 years

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California’s Electricity Supply / Demand

Source: California Energy Commission

Electricity Consumption by Sector (2006)

Electricity Generation

~ Equiv Four Avg Power Plants

13One Year = 8760 Hours

California Hits Its Peak for Very Few Hours of the Year

Source: California ISO

Presenter

Presentation Notes

25% pead demand for less than 10% hours. Load Duration Curve: provides the amount of hours where the statewide system met or exceeded a given level of demand. Peak demand requires the IOUs to procure enough generating capacity and build/maintain enough transmission capacity to meet the maximum amount of demand that occurs, even if that peak occurs for only a brief moment of time. The incremental cost of peak generating transmission capacity, thus tends to be extremely expensive relative to baseload capacity since the number of kWH over which those costs can be spread are relatively few. The cost is also high from an environmental standpoint as peaking facilities typically have higher heat rates than baseload facilities. As a result, the emissions, both GHG and other, tend to be dramatically higher per unit output. More generally, maintaining system reliability is more costly if the capacity used to ensure that reliability is only utilized for a short period of time. Peaky load profiles clearly creates a situation in which a greater proportion of available capacity lies idle for a longer period of time. The high economic and environmental costs of this capacity provides the fundamental policy case for pursuing demand response inasmuch as demand response avoids the need to build and operating expensive and environmentally problematic peaking and reliability units.

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Demand Side Rationale• To enable conservation & demand response,

desirable for customers to be aware of:– How much electricity is consumed, for what uses?– How much does it cost?– When does it cost more or less?

• With Smart Meters, provide customers with opportunities to reduce and / or shift their electricity consumption– optimize net benefits

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• Cost / Benefits




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AB1X Price Constraints• For residential sector, retail electricity prices

capped for up to 130% baseline consumption– Cap extends to circa ~2020– Fixed tier pricing

• Currently, the lowest tier prices are below cost of producing & distributing electricity

• Barrier to providing price signal to customers

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“The Last Yard!” (Inside the Home)

WebsiteBillingOutage Mgmt.Load Control

DataCollectionUnit (DCU)

Network MgtSystem

DataManagementSystem

• Utility deployment of Smart Metering system only extends up to the meter at the house


• No provision for In – Home Display (IHD) devices to provide real-time feedback

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• No provision for In – Home Display (IHD) devices to provide real-time feedback

• Up to third party vendors to market Zigbee-based solutions to consumers

• What will consumers respond to?– Display / device technology?– Information to display?– Control / programmable functions?– Cost of device?– Energy Management services?

“The Last Yard!” (Inside the Home)

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• Cost / Benefits



• The Bigger Picture

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Smart Grid in California• Digital• Advanced Communications• Sensors & Automation• Predictive & Self-Healing

Clean Generation & Renewables

Transmission

Distribution

Customer

Advanced Metering (AMI), Demand Response, and Distributed Resources

Substation Automation

Distribution Automation

Distribution Circuit of the Future

• Smart Meters • Integrated (Distrib. Gen, Storage, PHEV)• Interactive, Real-time info• Standardized & Evolving

Transmission Data Collection and Automation

Figure Source: Southern California Edison Company

21Data and graphs for the Sacramento area are provided by Prof. Andrew A. Frank, University of Calif.-Davis and CTO of Efficient Drivetrains Inc.

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Base load (MWh) Peak Power (MWh) V2G Power (MWh)

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Base load (MWh) Peak Power (MWh)

Energy available for the grid (V2G) 0 Mwh Consumption without V2G 35300 Mwh Total Base load before 24960 Mwh Total Peak Power before 10340 Mwh Energy use for recharging vehicles 4 Mwh Consumption with V2G 37068 Mwh Total Base load after 34560 Mwh Total Peak Power after 2508 Mwh Nb of vehicles 125000 # Consumption increase 5.01 % Base load increase 38.46 % Peak Power decrease 75.74 %

Night Load Without PHEV

Peak Without PHEV

Night Load With 20%PHEV

V2H/G

Example of What Smart Grid Can Achieve: 20% Penetration of PHEV Can Balance the Electric Grid

(Vehicle to Home/Grid)

Presenter

Presentation Notes

Represents energy storage that allows the grid to fully utilize renewable energy resources Lowers electricity costs Increases generation efficiency Reduces the need for additional distribution capacity Displaces fuel

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California Smart Meter Policy & Deployment

Thank You

Aloke GuptaCalifornia Public Utilities Commission

Email: [email protected]: 415.703.5239

mailto:[email protected]

Documents

An Overview of California Smart Meter Policy & Deployment ...web.stanford.edu/group/peec/cgi-bin/docs/behavior/...– Already in place for large commercial & industrial customers 4