Transcript Advanced Metering Infrastructure – AMI City of Leesburg AMI Project Paul Kalv, Leesburg Electric Director Doug Handley, Utility Consulting Services.

Advanced Metering Infrastructure –
AMI
City of Leesburg AMI Project
Paul Kalv, Leesburg Electric Director
Doug Handley, Utility Consulting Services
Overview
• Introduction
• Project Components and Investments
• Cash Flow Analysis
– Ongoing Costs compared to
– Benefits to be Realized
• Key Steps for a Successful Implementation
• Summary
Leesburg’s 2020 Vision
Leesburg will operate the best and most secure electric
grid in the country by the year 2020 by incorporating
information and control technologies that can support
four goals:
(1) Empowering consumers,
(2) Rewarding conservation and energy efficiency
(3) Improving distribution reliability and resiliency, and
(4) Expanding the use of renewable energy, distributed
generation, and advanced alternative technologies.
Introduction
Why do this Project?
– Empowers customers with information
– Enables rewards for conservation and energy
efficiency
– Enables improved distribution reliability
– Enables greater use of renewable energy,
distributed generation, and advanced
alternative technologies
– Reduces operating expenses
– Promotes a competitive advantage
– Grants fund more than half the cost
Historic ARP Demand Rates
35
Projected
30
Combined
$ per kW
25
20
15
Capacity
10
5
Transmission
0
FY 2006
FY 2007
FY 2008
FY 2009
FY 2010
FY 2011
FY 2012
FY 2013
Project Components – Overview
•
•
•
•
•
•
Program Management
Meters
Communication System
Software Solutions
Business and Operations Improvements
Home Network Devices
Project Components –
Program Management
• Includes
– Project Manager
– Technology Coach
• Benefits
– Expertise with similar large projects
– Centralized control – “one back to pat” and
“one throat to choke”
– Contract structure and management
Project Components - Meters
• Interval Reads offering rate
options for customers
• Informs customers the “when”
and “how much” energy used
• Remote account services with
fewer truck rolls
• Event Logging
Benefits to customers:
More rate options and enhanced information for
managing electricity usage and costs.
More efficient utility operations.
The new meters installed in Leesburg will be industry
standard. The existing meters are no longer offered.
Project Components –
Communication System
Project Components –
Software Solutions
• Meter Data Management (MDM) System
– Monthly vs. 15-minute = 3,000 times more reads
• Enterprise Service Bus (ESB)
– Allows multiple systems to share data
• Demand Response Management System
• Customer Web Portal
• Pre-pay Billing System
Project Components – Business and
Operations Improvements
• Business Systems will be Enhanced
– More rate plan options available to customers
– Information to customer faster and with more detail
– 2-Way communication for better energy management
• Utility operations will be More Efficient
– Fewer truck rolls for meter reads, disconnects and
reconnects
– Near real time data for outage identification and
restoration
– Better system data for facilities planning
Project Components –
Home Network Devices
• Customer access to account and usage
information to better manage energy costs
• Utility messages and price signals
• Control of appliances to save energy
Project Components –
Recap – Initial Investments
MAJOR COMPONENTS
$(000)
Meters
4,592
Communication System
646
Software Solutions
5,456
Business and Operations Improvements
1,423
Program Management Fee
1,681
Sub Total
Home Network Devices (optional)
13,798
1,240
TOTAL
15,038
Project Costs – Summary
COST AND FINANCING
$(000)
Project Costs
General Electric
City-provided components
Sub Total
12,878
2,160
15,038
DOE Grant
State Grant
Net Cost to the City of Leesburg
(7,519)
(1,240)
6,279
Net Cost to Leesburg to be debt financed,
resulting in an annual debt service expense
Cash Flow Analysis – Overview
• Cash Flow = Benefits – Ongoing Costs
• Benefits
– Only quantifiable financial benefits are counted
– Does not consider enhanced customer service and
reliability or lower future investment in facilities
• Net Present Value (NPV) of 20-year Cash Flow
– Compared to Initial Investment to determine
“payback period”
Ongoing Costs
• Debt Service
• Information systems hosting service
• City Operating expenses
Annual Debt Service Expense –
Example Calculations
ANNUAL DEBT SERVICE FOR $6.5 MILLION - $(000)
TERM
3%
5%
7%
5 Years
1,419
1,501
1,585
10 Years
762
842
925
15 Years
20 Years
544
437
626
522
714
614
Key Point:
Leesburg debt financing can be structured to allow
for flexibility and “shaping” of the repayments.
Information Systems Hosting
Systems to be Hosted
–
–
–
–
–
Network communication software
Meter data management system (MDMS)
Enterprise service bus (ESB)
Customer web portal
Pre-pay
Benefits:
– No hardware or software to purchase or maintain
– No technical expertise to hire, train and develop
– Cash flow more closely matches benefits
Information Systems Hosting Fees
YEARS
ANNUAL FEE - $(000)
1
2
3
4
0
317
950
1,584
5
6 – 20
1,631
Add 3.0%
Benefits:
Many of the risks associated with IT are outsourced.
Major component of costs are phased in over the first 5 years
and locked in for 10 years.
City Operating Expenses - Summary
• Equipment operation and maintenance
• Cyber security and data services
• Personnel
– increases – temporary (4) and permanent (2)
– reduction (1)
• Customer outreach
Estimated City Operating Expenses
YEARS
ANNUAL EXPENSES - $(000)
1
2
3
4
548
509
586
218
5
6 – 20 *
223
Add 2.0 - 2.5%
Note: Years 1 – 3 include customer outreach expenses of $218k $222k per year.
* Excludes $150k for replacement of cyber security hardware every
5 years.
Summary of Estimated Annual
Expenses - $(000)
Debt Service *
Hosting Fees
City Operating
Year 1
522
0
548
Year 2
522
317
509
Year 3
522
950
586
Year 4
522
1,584
218
Year 5
522
1,631
223
Total
1,070
1,348
2,058
2,324
2,376
* Based on assumed 20-year term and 5% interest rate.
Note: Years 6 – 20 estimated to escalate at approximately
2.3% per year.
Benefits to be Realized
• Soft Benefits
– Customer benefits, choices, rate options
– Improved outage restoration
• Financial Benefits
– Power cost reductions
– Fewer “truck rolls” for disconnect/reconnect and
re-reads
– Better revenue collection
– Reduced energy theft
Relative Financial Benefits
Cumulative
20-Year NPV
Type of Benefit
% of Total
Power Cost Reductions
$ 38,046,678
74%
Fewer Truck Rolls
$
8,537,641
17%
Better Revenue Collection
$
3,079,218
6%
Reduced Energy Theft
$
1,977,981
4%
TOTAL 20-YEAR NPV
$ 51,641,519
100%
Projected Demand Reduction (kW) by Type of Program
Residential Dynamic Pricing
Commercial Dynamic Pricing
Residential Load Control
Commercial Load Control
12,000
10,000
8,000
6,000
4,000
2,000
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Projected Demand Cost Savings by Program Type and Year
Residential Dynamic Pricing
Commercial Dynamic Pricing
Residential Load Control
Commercial Load Control
$3,500,000
$3,000,000
$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000
$-
1
2
3
4
5
6
7
8
9
10
Key Assumptions for Projected
Demand Cost Savings
• Rate of adoption (i.e. how long until full potential
is achieved)
Year
1
2
3
4
% of Potential
0
20
40
60
5
6
80 100
• Estimated % demand reduction for each type of
program
•
•
•
•
Residential Dynamic Pricing – 11.4%
Commercial Dynamic Pricing – 5.75%
Residential Load Control – 5.35% for selected months
Commercial Load Control – 1.75% for selected months
Summary of Projected Annual
Net Cash Flow - $(000)
Year 1 Year 2
Demand Savings
Other Savings
Expenses
Net Cash Flow
Net Cash Flow *
Year 3
Year 4
Year 5
0
410
870
1,384
1,957
229
657
841
1,027
1,218
1,070
1,348
2,058
2,324
2,376
841
281
377
87
799
Year 6
Year 7
Year 8
Year 9 Year 10
1,421
1,689
1,814
1,948
2,092
*Net Cash Flow for Years 11 – 20 grows from $2.1 to $4.1 million.
Project is break-even in Year 6 (NPV)
Summary of 20-Year Cumulative NPV
$(000)
Financial Benefits
51,642
Grants Received
8,759
Debt Service
6,279
Hosting Fees
21,196
Operating
18,117
TOTAL 20-YEAR NPV
14,809
Key Steps for a Successful
Implementation
•
•
•
•
Execute contract – tonight’s agenda
Dynamic Pricing programs
Personnel development
Customer outreach
Pricing Programs – Cafeteria Plan
R
I
S
K
P Budget/
Flat Bill
R
E
Flat Rate
M
I
U
M
Utility
<
TOU
CPP/
CPR
RTP
RISK
>
Customer
Illustration of Potential
Pricing Programs
[does not reflect potential actual rates for Leesburg]
Program
A Average Cost
kWh
Rate
1,000 $0.10
kWh
Rate
Bill
-
-
$100
B Large TOU
900
$0.089 100
$0.20
$100
C Medium TOU
950
$0.084
50
$0.40
$100
D CPP
1,000 $0.08
1
$20.00
$80 - $100
E CPR
1,000 $0.10
1
($20.00)
$80 - $100
Implementation Steps –
Pricing Program Goals
• Offer customers choices
– Pick the plan that’s right for you
– Opt-in or Opt-out
• Provide incentives to customers to reduce
peak demand
• Share power cost savings with customers that
cause reductions in peak demand
Implementation Steps –
Personnel Development
• Customer service
– Pricing programs
– Customer usage data and web portal
– Service disconnect/reconnect policies
•
•
•
•
Information and communication systems
Operations and system planning
Finalize communication plan (internal & outreach)
Schedule and deliver customer outreach
Implementation Steps –
Customer Outreach
• Education
– Energy conservation and load management
– New equipment capabilities and benefits
– New information system capabilities and benefits
– New program opportunities
• Town meetings to explore new rate offerings
• Market new programs
SWOT Analysis
STRENGTHS
 $8.9M Grant funding
 Proven cost reduction
strategy
OPPORTUNITIES
 Avoid increased FMPA
demand charges
 Customer control of bill
WEAKNESSES
 Participation-driven
business model
THREATS
 FMPA demand rate
structure could change
Summary
• Federal and State Grants fund over half the cost
of the AMI Project
• The AMI Project enhances Leesburg’s customer
service and system reliability
• Consumers will have the knowledge and tools to
reduce their cost of power
• GE Costs: $12,878, 119; City Costs: $919,975
• Hosting Costs (10 Years): $13,404,600
• Total 20-year NPV savings = $14.8 million
Acknowledgement & Disclaimer
This material is based upon work supported by the Department of
Energy under Award Number DE-OE0000365.
Disclaimer: This report was prepared as an account of work sponsored
by an agency of the United States Government. Neither the United
States Government nor any agency thereof, nor any of their employees,
makes any warranty, express or implied, or assumes any legal liability or
responsibility for the accuracy, completeness, or usefulness of any
information, apparatus, product, or process disclosed, or represents
that its use would not infringe privately owned rights. Reference herein
to any specific commercial product, process, or service by trade name,
trademark, manufacturer, or otherwise does not necessarily constitute
or imply its endorsement, recommendation, or favoring by the United
States Government or any agency thereof. The views and opinions of
authors expressed herein do not necessarily state or reflect those of
the United States Government or any agency thereof.