Prepared by Schneider Engineering, Ltd. |

ADVANCED METERING INFRASTRUCTURE

PLANNING DISCUSSION

Presentation Goal

Continue the conversation regarding advanced meteringfor the City’s electric and water utilities.

Our presentation will address the following areas:

o Review of AMI implementation in Texas / ERCOT

o Discussions of the need / benefits of possible pilotproject(s)

o AMI features, benefits and costs – whatfunctionality will consumers and CS Utilities realize?

o Discussion and recommendations on how toproceed

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Quick Review of AMI

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What is Advanced Metering

Infrastructure?

Electronic meters with high-speed / two-way communications

Various technologies / systems in the “advanced metering” industry

Distinctions are related to the type of communication network utilized

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Review of AMI adoption and implementation by utilities in Texas

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Current AMI Status - Texas

Investor-Owned Utilities (IOU)

Drivers

•2005: HB-2129 – “…PUCT shall establish a non-bypassable surcharge for IOUs to use to recover reasonable and necessary costs incurred in deploying advanced metering and meter information networks…”

•2007: HB-3693 – “…it is the intent of the legislature that …advanced meter information networks be deployed as rapidly as possible to allow IOU customers to better manage energy use and control costs and to facilitate demand response initiatives.”

Legislation

• 2009: PUCT approves non-bypassablesurcharge fees to pay for IOU advanced meter deployment.

• IOU customers will pay those monthly fees from 2009 through 2020

Regulation

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1. IOUs have installed over 6 million AMI meters in Texas

2. CenterPoint Energy received a Smart Grid stimulus grant from DOE which covered approximately 50% of their AMI project implementation costs

3. SE is working to confirm end of surcharge timeframe

Current AMI Status – Texas

Investor-Owned Utilities (IOUs)

Numbers

Number of AMI Meters1

Deployment Complete

Residential Surcharge

Surcharge Timeframe

CenterPoint 2.3 M 2012 $3.05 2011 – 20142

Oncor 3.0 M 2012 $2.19 2011 – 2020

AEP TCC 809 K 2013 $2.26 2011 – TBD3

AEP TNC 193 K 2013 $2.35 2011 – TBD3

TNMP 200 K 2016 $3.40 2011 – TBD3

Current AMI Status - Texas

Public PowerSituation

Municipal Owned Utilities (MOUs) and Electric Cooperatives

Local Control (no mandates)

Cooperative segment were early adopters

AMR/PLC (due to rural profile and associated meter reading costs)

Drivers for AMI adoption / implementation

• Linked to attainment of strategic goals

• Failing 1st Generation AMR system

• Operational and Customer Service benefits

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City / Utility Total Meters Number of AMImeters deployed

Deployment Schedule

San Antonio (CPS Energy) 740,000 electric

Pilot program 40,000 in 2011

Started mid-2014Full deployment

by 2018 (RF Mesh)

Austin (Austin Energy)

435,000 electric Full deployment 2004-2011

Bryan (BTU) 52,000 electric Full deployment 2012 (P2P)

Denton (DME) 48,500 electric 44,000 to dateComplete late-

2014

New Braunfels(NBU)

31,000 electric29,500 water 0 Initial study only

Georgetown (GUS)

23,000 electric 23,000 water

Full deploymentCompleted

recently (RF Mesh)

Current AMI in Texas

Public Power

Deployment

Is there any need to pilot AMI?

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To Pilotor

Not to Pilot?

Leading AMI manufactures all have operational systems that can be observed (nearby)

The various types of AMI (difference communication technologies) are proven / mature technologies

Pilots require significant communication, software / IT costs– whether it is 1,000 or 100,000 meters

At this point – AMI Pilot projects are expensive and risky – and not necessary

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AMI in College Station

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Key Business Case Factors / Considerations

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• Electric Meters: 10-15 years life

• Meters have…more electronics…more plastic

• Water Meters: Several variables / assumptions

• Battery life impacted by number of reads per day / per month

• Some manufacturers have 20 year accuracy guarantee and 10 year battery life guarantee—(prorated in years 10-20)

Expected life of new “AMI

Electric and Water Meter”

• Elimination of manual meter reading

• No more trips to connect /disconnect accounts (electric only)

• Increased efficiency related to customer service and operations

• Reduction in water losses (leak detection)

Savings Drivers

• Need additional IT, communications and meter /system techniciansOffsets to Savings

What will AMI in CS likely consist of?

What will it do?

Likely to select a Radio-Frequency based AMI system

• Point-to-Point or Mesh

• Backhaul with fiber, cellular or microwave

Meter Data Management System

• Manage all the interval data

• Robust interactive consumer portal with graphs, charts, alerts

Eliminate manual meter reading

• Current annual cost is $372K

• No need to go on consumer’s premise

Remote connect / disconnect feature on electric meters

• Current annual cost for manual service $73K

Potential for utility to integrate AMI information and functionality

• Reduce outage times / improve outage notifications

• Support demand response / conservation voltage reduction

• Improve system operations and planning

• Provide data for Load/System Studies and Transformer Loading Studies

• Enable new rate design(s)

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Initial Project Costs - Estimate

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AMI Component / Item Quantity Unit Cost Total Cost Comments

Communication System

(materials and installation)

(Shared)

1 system $350K - $750K Depends on type of RF system

selected

Software / IT / MDM (Shared) Initial Setup $750K- $900K Upfront costs

Electric Meters 40,000 $100 - $140 $4M - $5.6MDepends on type of RF system

selected

Electric Meter Installation 40,000 $15 $600K

Water Meters 8,250 $60 $495K

25% of system has AMI compatible

meters installed – just need a new

registers

24,750 $140 $3.465M

Water Meter Installation

8,250 $30 $247.5K

24,750 $60 $1.485M

Total $11,392,500 – $13,542,500

Project Costs -Initial and Ongoing

Initial Costs

• $11.4 M - $13.6 M

Ongoing Costs

• Additional FTEs

• $100K - $200K in annual licensing / maintenance fees

Does this estimate square with IOU monthly charges ($2-3 per month on electric meters) ?

• Yes. Counting both electric and water accounts – a $2.50 per meter per month charge equals $2.19M / year for CS

• Recovery at this rate over 6 years equals $13.14M

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Will Expected Savings Offset

Costs?

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• Savings related to the elimination of manual meter reading and trip costs for electric connects / disconnects equals approximately $.50/meter/month

• These savings partially offset by additional O&M costs for AMI system (meter and communications technicians)

• Hard to quantify / monetize:

• Customer service benefits

• Operational benefits (loss reduction, conservation voltage reduction and demand response)

• Reliability benefits (reduction in outage times)

• Water leakage reduction benefits

• A detailed Business Case / Planning Study can get at some of this granular savings detail

Hard to see how.

Maybe over the

life of the system..?

Where to go from here?

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Current Situation

No current statutory or regulatory mandate for College Station to have AMI metering system

Current process / manual meter reading system is functional

Other significant capital projects in the queue (ERP upgrade is scheduled thru 2015)

Currently have a placeholder for an AMI system in the FY19 budget

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RecommendedActions

For a project of this size, complexity and magnitude A formal study is needed

• Link to core strategies for reliability, affordability, safety and customer service

• Determine (nail down) options, costs and benefits

• Specify system type and functionality

• Determine overall schedule

• Plan for RFPs / AMI system selection and MDM system

• Develop installation Plan (and RFP)

• Plan for integration with IT, OMS, SCADA (other “Smart Utility” systems)

• Start Study in FY17

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Summary

The City of College Station Utilities is in a good position related to eventual implementation of AMI

for both the electric and water utilities

1. There is no mandate -- (it’s on your terms)

2. Time to evaluate, plan and “get it right”

3. Study, plan and engineer system in advance

4. Learn from the experience of other utilities

5. Monitor status of other CIP projects to ensure resources and funds available to take on AMI when time comes

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Questions / Discussion

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