Toronto Hydro-Electric System Limited EB Exhibit G1 Tab 1 Schedule 1 ORIGINAL Page 1 of 15 SMART GRID PLAN

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1 EB-00-0 Exhibit G Tab Schedule Page of 0 SMART GRID PLAN INTRODUCTION This Exhibit presents THESL s plans for development of the smart grid in keeping with the Green Energy and Green Economy Act, 00 ( GEA ), proclaimed in force on September, 00. THESL seeks cost recovery of its plans for the 0 Test Year, and provides a directional view into its plans for the period 0 to 0. THESL expects to file smart grid evidence in accordance with the Board s March, 00 Filing Requirements: Distribution System Plans Filing under Deemed Conditions of Licence, (EB-00-0), as part of its cost of service application for rates to be effective in 0. 0 THESL s smart grid development is in direct alignment with the GEA, where, smart grid means the advanced information exchange systems and equipment that when utilized together improve the flexibility, security, reliability, efficiency and safety of the integrated power system and distribution systems, particularly for the purposes of, a) Enabling the increased use of renewable energy sources and technology, including generation facilities connected to the distribution system; b) Expanding opportunities to provide demand response, price information and load control to electricity customers; c) Accommodating the use of emerging, innovative and energy-saving technologies and system control applications; or d) Supporting other objectives that may be prescribed by regulation. In addition to the GEA, THESL s smart grid plan is primarily driven by the following key activities: Ontario Smart Grid Forum industry forum for visioning Ontario s electricity system Advanced Feed-in Tariff comprehensive program expected to substantially

2 EB-00-0 Exhibit G Tab Schedule Page of increase the deployment of renewable generation in Ontario City of Toronto s Change is in the Air: Clean Air, Climate Change, and Sustainable Energy Action Plan municipal government policy that includes becoming the renewable energy capital of Canada 0 0 THESL commits to deliver on these government policy objectives for the smart grid in a proactive and prudent manner. Consistent with the GEA, THESL s smart grid has three key guiding objectives: ) Climate protection and sustainable energy Accommodate a large variety and high penetration of distributed generation and energy storage options Provide customers with programs and streamlined processes for the connection of renewable generation and conservation efforts Support the reliable connection of microgrids, community energy and virtual power plants Enable an electrified transportation infrastructure Reduce THESL s environmental footprint ) Energy security Manage risks associated with ageing and congested infrastructure Provide enhanced visibility and control throughout the network Monitor and manage power quality levels and system losses Improve efficiency and effectiveness of utility operations such as outage management Incorporate physical and cyber security measures ) Customer satisfaction Offer new and effective forms of communications to customers and enable new customer service models to provide customers with information, options and controls to manage their energy, cost and carbon footprint

3 EB-00-0 Exhibit G Tab Schedule Page of Capital Projects and Expenditures A summary of the operations and IT expenditures for smart grid development is included in Table. Table : Smart Grid Projects for 0 0 Test Project Capital ($000s) Operating ($000s) Energy Storage,00 Electric Vehicle Charging Infrastructure 00 Active Demand Response 00 Studies and Planning Exercises 00 Education and Training 0 Total Business Funding Required,00 0 THESL seeks recovery of these costs through its rate base for the Test Year. 0 CURRENT ASSESSMENT This section contains information regarding the current state of THESL s distribution system. The current configuration of THESL s distribution system presents unique challenges and opportunities to meet the requirements of the smart grid as specified in the GEA and to meet further provincial policy objectives. The following describes the main configurations of THESL s system today and key challenges of each.. kv System With the exception of the pre-amalgamation city of Toronto, THESL s service territory is served by the. kv primary distribution system through 0 transformer stations ( TS ) serviced from Hydro One transmission lines. A mix of overhead and underground, all. kv feeders are arranged to run radially from the TSs and keep feeder

4 EB-00-0 Exhibit G Tab Schedule Page of 0 0 interconnection points normally open. These feeders serve a larger number of customers as compared to other systems, as well as. kv or. kv municipal substations ( MS ). The challenge of the. kv system is an ageing infrastructure coupled with long feeders and a relatively large number of customers. Hence the. kv system contains the largest number and highest severity of worst performing feeders and feeders experiencing sustained interruptions ( FESI ) of all THESL system configurations.. kv System There are fifteen /. kv transformer stations located in the pre-amalgamation city of Toronto. The dual radial system serves most of the commercial/industrial loads of the Toronto downtown core and kv stations where each customer has two feeders connected in a normal/standby configuration. Customers with loads in excess of 0MVA are supplied with three or more dedicated feeders with pilot-wire protection. An open loop system with radial branch-offs is also employed in the. kv overhead system to serve more dispersed loads. Outside of the pre-amalgamation City of Toronto, the overhead. kv system is fed largely by. kv feeders through municipal stations. The key challenge with the. kv system is that municipal stations are typically older than 0 years with limited visibility and remote control capabilities. Feeder equipment is also largely unmonitored and lacks automation capabilities. Age, loss minimization, and equipment availability are drivers for system conversion, as well as requirements for future load growth. Nevertheless, due to relatively shorter feeders and fewer customers, reliability issues are not as severe as with the. kv system. The. kv underground residential distribution ( URD ) system is a special configuration of the. kv system with underground main loops, sub-loops and branch circuits. All single-phase and three-phase transformers are tapped off or supplied from sub-loops or branch circuits. The key challenges with the URD are complexity of the system design and protection, and age and harsh operating conditions. The system is also

5 EB-00-0 Exhibit G Tab Schedule Page of largely unmonitored other than at the station breaker. 0. kv System The. kv overhead system is fed by. kv feeders outside of the pre-amalgamation City of Toronto and by. kv feeders and municipal stations within the Toronto area. An open loop system is employed for the main feeder, while all branch-offs are radial fed. Over the years, some areas of the kv overhead system have been converted and are supplied from the. kv overhead or URD systems. The challenges with the. kv system are legacy equipment and higher system losses due to a lower voltage. The system is also largely unmonitored at the station and along the feeder. 0 Secondary Network System The secondary network is a system of interconnected secondary conductors, designed in grid or mesh configurations and supplied by a number of network units located in network vaults. A network unit consists of a network transformer with a primary grounding and disconnecting switch and a network protector. THESL currently has approximately secondary networks, the majority of which are confined to the downtown core and the Yonge Street and Bloor Street corridors. The network system is designed for first contingency condition, has the highest reliability of all system configurations, and is optimal for high density areas. The key challenges with network vaults are legacy and ageing network units, harsh vault conditions and complexity of system design, thus leading to low probability high impact outages. Further, there are no remote monitoring and control capabilities in network vaults. Through its smart grid planning efforts since 00, involvement in the Ontario Smart Grid Forum and regular participation in conferences and industry groups, THESL has been active in understanding, defining and planning for the smart grid, to deliver on the requirements of the GEA. In its 00 Cost of Service application (EB-00-0),

6 EB-00-0 Exhibit G Tab Schedule Page of 0 THESL presented its approach to smart grid development and long term plans, including a -year roadmap, with highlights as shown in Figure, below. Such plans are developed based on the company s knowledge of its system and the industry, as well as experience in previous programs such as infrastructure rebuild, conservation and demand management and advanced metering infrastructure. The initiatives in THESL s -year roadmap were selected, prioritized, and will be evaluated on, the following criteria: Necessity to deliver on government policy and ability to generate short term results; Customer needs and expectations; Technology trends and readiness; and Feasibility and capacity to execute, from both a financial and a skills availability perspective. Figure : Smart Grid Roadmap

7 EB-00-0 Exhibit G Tab Schedule Page of 0 THESL has initiated is smart grid development and demonstration through the establishment of Toronto s Smart Community, a demonstration area where prioritized initiatives can be tested, processes developed, customer acceptance understood and operating procedures created. Expected benefits will be demonstrated, measured and used to support potential full-scale deployment. Additional opportunities and potentials will also be identified for further demonstrations. Results and lessons learned will be shared with the industry in various forms such as white papers, presentations and online content. The selected demonstration area is located in North York and consists of ten feeders, two substations and over,000 customers. This area was selected due to factors such as reliability levels, equipment and smart meters installed and customer diversity. With Board approval of 00 plans, THESL has initiated its smart grid development as summarized in Tables and, below. A more complete description and progress on each project is presented following the tables.

8 EB-00-0 Exhibit G Tab Schedule Page of Table : 00 Smart Grid Projects Operations Capital Cost Operating Cost Project Description ($000s) ($000s) Feeder Automation Secondary Network Automation Transformer Smart Metering Power Line Monitoring Submersible Vault Monitoring Environmental Protection Intelligent fault recovery on,0 distribution switches Microprocessor relays and SCADA communications in the secondary network Smart meters installed on distribution transformers Monitors installed on overhead line conductors Monitors installed in submersible 0 transformer vaults Studies and demonstrations to support distributed generation and plug-in vehicles, and in 0 developing effective customer energy management programs Total Distribution Expenditures,00 0

9 EB-00-0 Exhibit G Tab Schedule Page of Table : 00 Smart Grid Projects Information Technology Project Description Capital Cost ($000s) Customer Display Integration Pilot Web Energy Portal OMS Integration Customer Portal Smart Meter Connect / Disconnect Pilot Smart Meter Outage identification pilot Network Meters Integration pilot Network Monitoring Integration pilot Integration Architecture and Design Access Network Pilot Internal Network Readiness Smart Grid Network Security Introduction of customer displays (pilot project) 00 and integration with other corporate systems Update the customer portal with additional 00 functionality to support energy management Integrate OMS information with the customer 00 portal Pilot the functionality to remotely connect / 00 disconnect smart meters Pilot the functionality to utilize smart meters for 00 the purpose of outage identification (last gasp function) Pilot the integration to new network meters 00 (transformer meters) Pilot the integration to new network monitoring 00 devices (power line monitoring devices, vault monitoring devices) Design and implement the infrastructure required in support of integrating Smart Grid hardware and applications. Deployment of a pilot wireless network in a 0 selected area of Toronto Internal Network upgrade required in support of,00 Smart Grid devices and applications Changes to the security infrastructure and, processes in support of the implementation of the smart grid. Total IT Expenditures, A description of these projects and a brief summary are presented below.

10 EB-00-0 Exhibit G Tab Schedule Page 0 of Feeder Automation THESL has installed over 00 intelligent, remote controlled switches since the 0s. Even though these switches are self-healing ready (i.e., a software algorithm can be programmed for automatic fault detection, location, sectionalisation, isolation, and restoration in the event of a fault), this functionality has not been enabled in the THESL system. Thus the realization of a self-healing grid has been identified as a key opportunity for the Smart Community demonstration area. 0 The objective is to apply the feeder automation ( FA ) scheme to new and existing intelligent switches, essentially restoring customers on healthy sections of a feeder during fault within 0 seconds of the fault occurring. The scope of this pilot includes the automation of all ten feeders in the area, which are WPFs or FESI-. 0 All switches and most communication components have been installed and software development is in progress. THESL anticipates that this demonstration will go live in October 00. Secondary Network Automation The underground secondary network has been one of the most reliable, yet is one of the oldest and most complicated systems in Toronto. Failures are uncommon, but they tend to be low-probability high-impact outages. Though the system is built with relaying in the network protectors, they are not intelligent relays and the protectors have no communication capabilities. The objective of this project is to incorporate remote monitoring and automated control into the underground secondary network, located in the former Toronto district. Scope of work includes installation of microprocessor relaying and SCADA communications to at least one network location. Sensors will also monitor the vault condition such as

11 EB-00-0 Exhibit G Tab Schedule Page of transformer loading, temperature, and flooding. This is the only 00 smart grid project that is not specifically piloted in the Smart Community area. A vendor has been engaged and design is complete. Components are expected to arrive in August and testing of one unit at 00 Commissioners and field installation are scheduled for the fall of Transformer Smart Metering The provincial mandate for installing smart meters and implementation of an Advanced Metering Infrastructure ( AMI ) was the first leap in moving towards a smart grid. Leveraging on the AMI and extending from smart meters, THESL plans to deploy smart meters on distribution transformers to enable a myriad of new services. THESL anticipates that this will be one of the most value-driven projects in the 00 smart grid portfolio. 0 This project has been identified to be a key enabler of a large penetration of distributed generation and plug-in vehicles on the distribution system, as well as improving reliability, asset management, supporting energy conservation by reducing losses, and delivering social benefits. The deferral of this project may pose a risk to the ability to connect distributed energy and missed opportunity to utilize the potential of the established AMI. Over,00 units have been successfully installed with another, units scheduled for installation by the end of 00. Communications, back end infrastructure and analytics are under development.

12 EB-00-0 Exhibit G Tab Schedule Page of Power Line Monitoring On the existing distribution system, there is no monitoring equipment installed on overhead conductor lines, except for intelligent switches used for feeder automation. The objective of this project is to enhance visibility into the operating conditions of these overhead conductors through the installation of power line monitors ( PLMs ). 0 This project has been identified to be a key enabler of a large penetration of distributed generation and plug-in vehicles on the distribution system, as well as improving reliability, asset management, and supporting energy conservation by monitoring losses. The deferral of this project may pose a risk to the ability to connect distributed energy and missed opportunity to improve reliability. Twenty-one sensor units and seven aggregators are scheduled for installation in August 00. These units are free from the vendor for testing purposes. 0 Submersible Vault Monitoring Currently, there is no monitoring equipment installed in submersible transformer vaults. The objective of this project is to enhance visibility into the operating conditions of these submersible vaults through the installation of vault monitors ( VM ). This project offers the same potential benefits as the transformer smart meter, as well as the added capability of monitoring and reporting on adverse vault conditions in real time. Deferral of this project may pose a risk to the ability to connect distributed energy and will be a missed opportunity to improve reliability and mitigate potential high risk situations in submersible vaults. The VM technology is in development for 00 with the first installations scheduled to take place in 0.

13 EB-00-0 Exhibit G Tab Schedule Page of 0 Under the smart grid vision and paradigm, there are emerging requirements that present unique challenges and opportunities to the current system, including the following: Time-of-use rates may incent customers to shift consumption patterns to off-peak times. The level of impact to system utilization is not yet fully understood, and may present capacity constraints. Customers should also be provided with information, tools and options to manage their energy usage. Large numbers of plug-in electric vehicles may cause considerable impacts to system capacity, power quality and protection and control. Vehicle charging infrastructure, grid-aware charging and overall vehicle management solutions will need to be set in place. High levels of penetration of distributed generation will result in bidirectional flow of power, may result in impacts to system capacity, power quality, and protection and control and will complicate system planning and operations. A large number of sensors and data capture devices will significantly increase the volume and frequency of data, creating the need for integrated two-way communications and systems to handle large volumes of data for full utilization of the available information to support smart grid functions. 0 This business context presents unique challenges and opportunities for THESL and calls for the immediate expediting of smart grid development to support emerging trends and policy requirements. FUTURE OUTLOOK THESL s future outlook is the full enablement of the requirements of the GEA through strategic and prudent modernization of its distribution infrastructure. To the best of THESL s ability based on current information, over the next five years THESL plans to complete a successful demonstration of its initiatives in its Smart Community and to expand the benefits of successfully proven technologies in other parts of its service area.

14 EB-00-0 Exhibit G Tab Schedule Page of 0 0 THESL will focus on technologies and programs that will assist in proactively addressing emerging requirements such as distributed generation and plug-in electric vehicles. This will involve the development of smart circuits to improve flexibility, visibility, control, reliability and safety of the system, including: Smart metering intelligence at each customer, enabling time-of-use rates, remote meter reading, supporting operational needs (e.g., event notification), and potentially interoperating with home energy management systems; Transformer smart metering monitoring of secondary systems, including transformer load monitoring, outage notification, restoration confirmation, voltage detection and loss detection. This will also improve connectivity model and phase balancing, and capture transformer temperature and vault conditions; Primary voltage sensors monitoring of primary systems, including system loading, voltage, current, faults, power quality, conductor temperature and system losses; Self-healing switching automatic fault detection, location, sectionalisation, isolation and restoration, to dramatically reduce the outage duration of nonfaulted segments of a feeder. This will also improve monitoring of major points in the feeder including voltage and current; Energy storage provision of grid support to buffer intermittent supply and demand, enhance utilisation and efficiency, relieve capacity constraints, mitigate power quality issues and potentially supply backup power; Smart vehicle charging stations intelligent charging of vehicle loads based on grid and price conditions, ability to dispatch and accommodate emerging billing requirements and potential supply of vehicle-to-grid services; Active demand response demand management solutions to enable customers to better understand and control energy usage and utilization of demand resources for grid support; Integrated communications two-way secure communication and data integration

15 EB-00-0 Exhibit G Tab Schedule Page of between grid devices, enabling both centralized and distributed grid intelligence as well as data backhaul for grid operations, analytics and decision support; Substation intelligence intelligence at transformer or municipal stations such as intelligent relays for interoperation with the bulk power system as well as downstream feeder intelligence; and Energy management system real time monitoring, control and optimization of the distribution system, utilization of available grid sensors and power flow controls, as well as supply, demand and storage resources. 0 Under this comprehensive and forward-looking approach, there exist unique opportunities to apply modern technologies for the various configurations of THESL s system, including. kv,. kv (including URD), kv and secondary network systems. Smart grid development projects are detailed in Exhibit G, Tab, Schedule and amount to $. million for the 0 Test Year.