AEPs gridSMART Project Ohio Roll Out Strategy PUCO Staff Workshop

1
AEPs gridSMART ProjectOhio Roll Out
StrategyPUCO Staff Workshop
December 13, 2007
2
Agenda

• gridSMART Capabilities and Requirements Recap
• AEP Ohios Proposed Deployment Strategy
• Cost/Benefit Analysis
• AEP Ohio AMI Summary
• AEP Ohio Distribution Grid Management Overview
• gridSMART Next Steps

3
Distribution Operations of the Future
AEP Ohio believes that utilities must begin
preparing their businesses for a future state
that integrates many technologies not present
today, and requires a more advanced state of
monitoring, communications control.
Utility Operations Customer Premise

• Smart End-Use Devices
• In-home monitoring
• Smart Thermostats
• Pool Pumps
• HVAC Systems

Customer Portal/Meter
Advanced Monitoring, Communications Control
PHEV
Distribution Operations

• Dynamic Systems Control
• Outage Management
• Remote Monitoring Control of Distribution
  Assets
• Data Management

Distributed Generation Storage
Adapted from EPRI source image
4
gridSMART Capabilities Requirements

• Advanced Meter Infrastructure (AMI) Network
• Two way communications network with sufficient
  bandwidth to support AMI and future gridSMART
  applications
• Remote connect/disconnect on all residential
  meters
• Downloadable firmware in each meter
• ANSI standard data tables
• Revenue protection advanced reporting
• Communication path to a Home Area Network (HAN)
• Standard protocols used and supported
• Minimum of 128-bit AES encryption
• Radio must have upgradeable firmware
• All meter tables are extractable
• Distribution Operations
• Monitor and control of AEPs distribution
  equipment such as switches, reclosers, faulted
  circuit indicators, capacitor banks, etc.
• Outage and restoration reporting
• Momentary outages on all meters
• Circuit reporting on exceptions
• Voltage sag monitoring and steady state voltage
  alerts on all feeders

5
gridSMART Capabilities Requirements

• Distribution Automation
• Interface with SCADA systems
• Automated circuit reconfiguration
• Distributed and central control automation
  schemes
• Information Technology Systems
• Service Oriented Architecture
• Compatible with AEPs legacy systems
• Expandable and scalable
• Customer Web Portal
• Meter Data Management System
• Distribution Management System
• Telecommunications Network
• Supports IP, SCADA, and meter-based protocols
• Common communications infrastructure for both AMI
  and DA
• Capable of prioritizing data transmissions

6
gridSMART-enabled Customer Service Offerings

• Customer Choice, Customer Control, and Customer
  Service
• Time of use rates
• Real time pricing/critical peak pricing
• Direct load control
• New and improved self service options
• Account maintenance
• Start/Stop service
• Remittance date selection with electronic bill
  presentment and payment
• Outage reporting and restoration notification
• Prepay metering
• Energy usage analysis

7
AEP Ohio
8
AEP Ohio

• AEP Ohio is comprised of three legal entities
• Columbus Southern Power
• Ohio Power
• Wheeling Power (WV)
• AEP Ohio operations are managed by seven district
  offices
• Columbus
• Canton
• Newark
• Chillicothe
• Athens
• Ohio Valley
• Western Ohio

9
AEP Ohio - Proposed Deployment Strategy

• Overall Plan
• District by district roll out over a seven year
  period
• Capability for 100 remote reconnect/disconnect
  on all residential meters (200 amp and below)
• Capability for 100 interval data recording
• Deployment of Web Portal
• Deployment of Distribution Management System
• Deployment of Meter Data Management System
• Distribution automation projects to follow the
  same district deployment path
• SCADA at all distribution stations
• Automated switches and reclosers for Urban, Large
  Rural and Medium Rural circuits
• Small Rural circuits would not be automated at
  this time
• Automated capacitor banks for monitoring and
  control

10
AEP Ohio - Proposed Deployment Strategy

• Post-deployment Areas of Focus
• Home Area Network Equipment
• Smart thermostats
• Load controllers
• In-home displays
• Customer Information System Replacement/Augmentati
  on
• AEPs core CIS to be extended by the addition of
  integrated components
• Future pricing models will require new billing
  capabilities
• Effective Financial Modeling Will Require New
  Thinking
• McKinsey Model will be used to assist the PUCO
  for cost/benefit order of magnitude and utility
  comparison purposes
• Results will be based on 20 YR net present value,
  which may not be appropriate for all investments
• More appropriate models should be used for
  regulatory recovery
• Need to determine how to value the benefits yet
  to be uncovered
• Distribution grid management and analytics
• Reliability improvements
• TD efficiency gains

11
AEP Ohio Proposed Deployment Strategy

• District Plans
• Columbus District 583,160 customers over the
  first three years
• Canton District 189,957 customers in Year 4
• Newark District 150,318 customers in Year 5
• Chillicothe District 120,786 customers in Year
  5
• Athens District 143,403 customers in Year 6
• Ohio Valley District 129,350 customers in Year
  6
• Western Ohio District 185,836 customers in Year
  7

12
AEP Ohio AMI Summary

• Estimated Initial Costs Based on RF Deployment
• Meters 1,505,414
• Capital - 472 million
• OM - 4 million
• Estimated Deployment Costs
• Year 1 - Columbus - 61M Capital, 500K OM
• Year 2 Columbus - 61M Capital, 500K OM
• Year 3 Columbus - 61M Capital, 500K OM
• Year 4 Canton - 60M Capital, 500K OM
• Year 5 Newark Chillicothe - 85M Capital,
  750K OM
• Year 6 Athens Ohio Valley - 84M Capital,
  750K OM
• Year 7 Western Ohio - 60M Capital, 500K OM
• District capital investment per meter cost ranges
  from 299 - 348
• Note Costs are indicative based on vendor
  estimates

13
AEP Ohio AMI Initial Investment
OM (4M)
Capital Investment (472M)
4
5
18
33
39
373
4
Meters
Install
Telecom
OM
IT
Labor
Other
14
AEP Ohio AMI Benefits
Note Benefits are based on current activity
levels and best estimates at this time
15
AEP Ohio AMI - McKinsey Model
Seven Year Deployment Period, Meters 1,505,414
Results 20 YR NPV (153.5M) Benefits Cover
55 of Investment
16
AEP Ohio Columbus District AMI - McKinsey
Model
Three Year Deployment Period, Meters 613,385
Customer Density Matters !!!
Results 20 YR NPV (61.1M) Benefits Cover
69 of Investment
17
AEP Ohio Distribution Grid Management Overview

• Estimated Initial Costs
• SCADA Installations and Upgrades 78 million
• Switches and Reclosers - 100 - 200 million
• Capacitors - 9 million
• Engineering - 3 million
• OM - 3 million

Columbus District would be the recommended area
to begin deployment
Note Costs are indicative based on vendor
estimates
18
AEP Ohio Distribution Grid Management Overview

• Benefits
• Operating Cost Benefits
• Improved safety
• Less field trips
• Reduced fuel and vehicle expenses
• Reduced restoration expenses
• Capital avoidance due to proactive maintenance
• Reliability Improvements
• Reduced customer outage minutes - What is the
  value?
• Varying levels of automated system
  reconfiguration during disruptions
• Real time knowledge of system performance
• TD System Efficiency
• Improved volt/var management
• Reduced losses on the distribution system caused
  by our design practices and how we operate the
  system
• Improved capital investment decisions based on
  system intelligence

Distribution technology system design, costs and
benefits are still being refined we dont know
what we dont know
19
AMIs Initial Capital Outlay Is A Foundation for
the Future
Capital Build-Up
Incremental Value Capture
Illustrative Scenario

• Incremental investments
• Communications bandwidth
• Business development capital

Extended Utility Roles

• Incremental utility-side capital
• Programmatic, customer-facing and physical device
  management systems

Demand Response
Expected Value

• Incremental field capital and knowledge-based
  applications
• Sensors device controllers
• Distribution operations and automation
• Information management

Distribution Grid Management
AMI

• Initial capital outlay
• Meter functionality
• Communications infrastructure
• Head-end and legacy systems modifications

Incremental Capital Commitment
20
gridSMART Recommended Next Steps

• City Scale gridSMART Initial Phase
• AEP Ohio will continue technology evaluations,
  make initial selection(s), and secure pricing in
  2008
• AEP Ohio recommends continued dialogue followed
  by filings that will lead to regulatory approval
  to install both AMI and distribution automation
  technology with implementation beginning by early
  2009
• Evaluate results and determine appropriate pace
  of future deployments
• PUCO approves cost recovery for AMI
  implementation for all of AEP Ohio which will
  result in all meters being converted to AMI by
  2015
• Development and regulatory approval of new demand
  response and tariff offerings in conjunction with
  the AMI deployment

21
gridSMART Implementation Will Be Determined By
Regulators

• Return of and on all investment
• Appropriate depreciation schedules for technology
  investments
• Recovery of costs, net of utility benefits
  realized
• Customer and Societal Benefits provide additional
  value that are not captured by the utility

22
(No Transcript)