Duke Energy s Utility of the Future Project: Developing A Smart Grid Regulatory Strategy Across Multi-State Jurisdictions

Transcription

1 Duke Energy s Utility of the Future Project: Developing A Smart Grid Regulatory Strategy Across Multi-State Jurisdictions Matt Smith Director Utility of the Future Will McNamara Principal Consultant 1

2 What We Will Be Covering Today: Outline Duke Energy s UoF Guiding Vision Regulatory Strategy Interoperability Issues 2

3 Who is Duke Energy? Fortune 500 Assets over $48 billion 3.9 million customers Top-tier electric utility Top 5 for U.S. generating capacity 150+ years of service Traded on NYSE as DUK Stock dividends for 80+ years 3

4 US Franchised Electric & Gas 5 states: North Carolina, South Carolina, Indiana, Ohio and Kentucky 47,000 square miles of service area ~28,000 MW 3.8 million retail electric customers 500,000 retail gas customers 4

5 Duke Energy s Utility of the Future Program Vision Statement for the Utility of the Future Project Our vision is to transform the operation of our electric power grid by creating a networked infrastructure capable of delivering and receiving information from intelligent devices distributed across our power system, automating components of the distribution system and leveraging the network for improved operational efficiencies and improved customer satisfaction. Strategy Statement for the Utility of the Future Project Our strategy is to investigate, select and deploy intelligent devices across our distribution system which will measure, protect and automate the grid, combined with a communication system linking the intelligent devices in a networked fashion, creating opportunities for system wide load response, enhanced outage management, better asset management, more efficient operations, and empowering customers to use electricity more efficiently. 5

6 Utility of the Future Implementation North Carolina NORTHCAROLINA Charlotte, NC The deployment in Charlotte will utilize a combination of meters, Echelon and GE, and other distribution devices connected with an RF mesh wireless network and digital cellular technology. Line sensors, substation equipment and capacitors will be connected to the network. A select number of customers, less than a dozen will also be asked to participate in communication to the home trials. Cost Overview Cost of pilots: $3 to 5 million Number of endpoints: 6,000 to 8,000 Timeline: Deployment of communication technology to commence in October with endpoints connected in November/December 6

7 Utility of the Future Implementation South Carolina Cost Overview SOUTHCAROLINA Greenville, SC* The deployment will test the communication architecture in a rural environment as well as connectivity to the endpoints, including meters, capacitors, transformers and line sensors. In home communication will also be tested with a small number of customers. In home battery backup and renewable generation facilitation will also be part of the deployment. Cost of pilots: $1 to 2.5 million Number of endpoints: 2,500 to 4,000 Timeline: Communication technology will be deployed in October, connecting existing distribution assets. New line sensors will also be deployed in the October/November timeframe. Meters and other endpoints will be installed, as available, in December and the first quarter of next year. 7

8 Utility of the Future Implementation Ohio OHIO Cost Overview Cost of pilots: up to $34 million Number of endpoints: 100,000 Timeline: Communication equipment and distribution devices will be installed and connected in November/December. Meters and in home devices will be installed beginning January of next year. Cincinnati, OH The Cincinnati deployment will configure GE and Echelon meters along with communication systems from Silver Spring Networks and digital cellular. Distribution assets will also be connected to the network and back office integration systems. Customers will be connected to an online portal where energy information gathered from the system can be delivered to shape energy usage. 8

9 Deployment Initiatives Include work Beyond the Meter Target ~ Two Dozen Homes Two Integrated Designs Photovoltaic plus storage Target one of our buildings? Infrastructure Functionality Remote curtailment (automated) Alert customer (voluntary) Customer override In Premise Solution Aztec or T.E.D. device Portal Account Detail Message Center Energy Efficiency UoF Concepts 9

10 Utility of the Future Will Deliver Operational Benefits Metering Automatic, remote reading Read-in/read-out for customer turnover Off cycle reads Remote disconnect/ reconnect (non-pay, move-out) Improved accuracy of billing process (billing exceptions and efficiencies) Revenue recovery and protection through improved read accuracy, less theft Load research Accident avoidance/workers Compensation Distribution Mgmt VAR mgmt ensuring Capacitor Banks are working as expected Capacitor Bank Inspection System Voltage Control Continuous Voltage Monitoring Reduction of technical losses in system due to better modeling Asset mgmt better data should help investment planning Transformer Load Mgmt monitor loads across transformers will enable longer life Conservative voltage reduction better control over the grid Outage Mgmt Outage Detection & Verification Reduced downtime Grid Modernization Digital communications & operational control Comprehensive system information available in near real time Self healing capabilities are enabled Innovation from outside the utility industry can be applied to current operations Contact Center An increase in billing calls due to remote disconnects may be offset by: Decrease in billing calls due to minimizing estimates, cancel bills, etc Reduction in outage related calls and metering related calls 10

11 UoF Vision Anticipated Benefits Category Metering Energy Efficiency Related Distribution Outage Management Call Center Substation Environmental Societal Description AMI, move in/out, connect/disconnect, billing exceptions, reduction in billing cycle, improved meter accuracy, revenue protection, load research DSM program proliferation, operational efficiencies, value of load to operations, value of energy in the market Var management, asset management, voltage control, PQ driven O&M Detection and verification, revenue impacts Reduction in overall call volume related to meters, trouble calls, change in service and billing Asset management Reduction in CO2 from reduced truck rolls Customer opportunity cost due to outages 11

12 Utility of the Future Customer Benefits Remote initiation, transfer, and termination of service Automatic disconnection and reconnection Prepaid metering Individualized pricing and additional payment conveniences Energy efficiency programs and energy savings for residential and nonresidential customers Load control initiatives Elimination of Meter Access Plan and estimated meter reads Increased power quality Increased reliability, fewer outages and reduced outage durations 12

13 We Are Building for Future Needs Deployments are designed in part to solve existing operational problems, but with an emphasis on preparing Duke for future technology development and customer requirements Manual meter reading Monthly kwh reads Automatic Meter Reading (AMR) One-way or two-way Monthly kwh reads Interval data Basic theft detection Outage/Restoration Detection Advanced Metering Infrastructure (AMI) On-demand reads Programmable load intervals Bi-directional and net metering TOU, RTP, CPP pricing options Demand response Smart Meters Solid-state platform Integrated communications Integrated disconnect switch > Remotely disconnect > Remotely connect Power quality data > Voltage readings > Current readings > Power Factor > Frequency > Detailed power outage data Remote programmable Remotely upgradeable Internal expansion port > Future functionality Utility of the Future Energy Management Services > Residential, Commercial Home area network gateway > PLC (i.e. LONWORKS) > RF (Bluetooth) Web-based applications > Demand response > Prepayment > Load control > Revenue protection > Web move in/out Distribution > Load profiling/engineering > Phase balancing > Transformer optimization > Energy forecasting > Outage and GIS > Work force management > Asset management 13

14 The Regulatory Landscape is Generally Positive for Utility AMI Cost Recovery No state has denied outright cost recovery of an AMI project, although applications are pending in several states. The most common recovery methods are trackers and building recovery into rate base. XXX - XXX XXX /// CT, 000 XXX XXX??? DC, /// MD, XXX /// /// XXX /// /// XXX AMI cost recovery permitted XXX /// 000 AMI Cost recovery pending /// = Tracker XXX = Rates 000 = Surcharge 14

15 Regulated Cost Recovery Options Options Proposed/Used in Other States: Targeted AMI/Utility of the Future Tracker Broader Distribution System Tracker (i.e., address aging infrastructure too) DSM Tracker Rate case(s) Earnings sharing mechanism Participant fees Combinations of some of the above Other Options: Deferred accounting Formula rates 15

16 Regulatory Strategy Potential Issues and Obstacles Demonstration of positive net benefits Undepreciated existing meter costs Allocation issues Commission views on smart grid technology Commission views on timely cost recovery 16

17 Utility of the Future State Regulatory Strategy Recommendations Before proceeding in any state: First, educate regulators and other stakeholders about our vision and the benefits and costs of implementing Utility of the Future Create a compelling road show that gets people excited about the possibilities and eager for initial deployments Complete the Lab and plan strategic fieldtrips with key stakeholders Second, develop regulatory proposals that are most appropriate for each jurisdiction Third, develop detailed cost/benefit analyses of Utility of the Future / aging infrastructure proposals Fourth, continue with proof of the U of F concept thru initial deployments 17

18 Interoperability Issues Issue: Duke Energy has specified separating the communication network from endpoints on the distribution system, including meters, which is a break from the industry, which is willing to purchase meters with integrated communication components. Duke s Position Integrated communications has the advantage of lowering manufacturing costs, but potentially locks Duke Energy into a system which cannot be easily upgraded, or used to network other assets without significant effort from third parties. Additionally, advances in communication technology cannot be adopted without changing out the entire smart grid infrastructure. 18

19 Interoperability Issues Issue: Peer companies in the industry are currently implementing automated metering infrastructure (AMI) as the basis for their smart grid with integrated communication systems. Companies like SCE, AEP, FPL, and Con Edison are moving forward with implementations that have integrated communications in the meter, with varying degrees of open architecture. Duke s Position Duke Energy is striving to achieve a smart grid based on open, IP based standards. Networking assets from substation to the meter and reaching into the customers premises all using one network requires open, standards based communication. 19

20 Interoperability Issues Issue: AMI offerings in the industry today closely tie network management and device management. Itron for example, provides a meter with an integrated communication device that is managed from one head end IT system. Other vendors offer similar configurations, mixing proprietary protocols, IP based protocols and emerging industry standards. Duke s Position: The primary drawback of an integrated network management and device management head end system is the inability to change the network management IT system unless the device management can also be changed. 20

21 Questions? Matt Smith, Will McNamara, Thank you! 21