Public Power - June 2008 - (Page 57)

Publsmart gridhas been atfor more thanofa ic power the forefront the journey decade. The Bonneville Power Administration and New York Power Authority were pioneers in key technologies to enhance wide-area management of the grid. Long Island Power Authority contributed to the early work on the Electric Power Research Institute’s Intelligrid and remains a leader in integrated communications. Austin Energy in Texas and Salt River Project in Phoenix have taken an aggressive plunge into the fast-paced world of advanced metering infrastructure (AMI), while many others, including California’s Silicon Valley Power and Los Angeles Department of Water and Power are carefully easing their way in. One common refrain among those who work closely with smart grid development is that the range and value of future benefits continues to grow. In time, operations will be more efficient, power flow will be more controllable, outages will be shorter, and response times faster. Customers will be more engaged and more satisfied. Business processes will be streamlined and integrated. Load growth will be better managed, and capital budgeting more efficient. Organizational silos will meld together. The key to these benefits can be summed up in one word: “integration,” made possible by building intelligence into the entire power system and allowing information to flow to all parts of the organization. “We now have a communications network that can lock together formerly disparate functions, including operations, planning and maintenance,” said Michael Hervey, the Long Island Power Authority’s executive director of transmission and distribution. “The immediate payback for LIPA is that it allows us to do much smarter capital budgeting. The longer-term payback will come from having our IT infrastructure in place to move forward with smart grid implementation further downstream.” Although LIPA has not made the wholesale jump into AMI yet, the utility is concentrating on AMI pilots, watching the topsy-turvy market for smart meter shakeout, and preparing the utility to support AMI when the time is right, said Hervey. “A www.APPAnet.org lot of people are hitting this AMI market at the same time. We want to take advantage of the improvements in cost and capability over time. Those companies investing in the short term are taking a calculated risk. When we install the meters, we want to put the hardware in just once, and be sure that any upgrades can be programmed remotely.” AMI implementation today would run between $140 and $240 per customer, including communication and back office IT. For LIPA, this would mean an investment of more than $200 million. “To put this into perspective, it would be roughly equivalent to our annual capital budget of $260 million,” said Hervey. Hervey believes widespread smart grid deployment throughout the United States will take 10 years. However, he recognizes that “in New York, with public policy supporting energy efficiency, the move will be less than 10 years.” LIPA has prepared itself to move quickly to meet policy objectives as they emerge. “Two-way communications combined with AMI will give us the ability to implement new rate structures, including critical peak pricing and time-of-use rates. Further out in time, we envision new technologies and capabilities being built on top of our AMI investment.” With better load management, LIPA will be able to defer capital expenditures for power plant construction for years. Investing in smart grid technology to reduce long-term generation investment has become a major driving force. “Necessity is the mother of invention,” said Larry Owens, division manager of customer services and marketing for Silicon Valley Power, which serves the city of Santa Clara, Calif. “Power is consumed faster than we can build power plants in the United States. So the necessity, as I see it, is to get into the customer space and understand it. Technology innovation is following this need.” Through the development of a five-year AMI program, Silicon Valley Power is moving slowly and deliberately away from two-way communications and smart meters for its 51,000 electric customers. “There are a lot of mergers and acquisitions going on in advanced metering and we are seeing proto- cols change every two to three years. We hand specs to a vendor and they tell us ‘we’re working on it.’ Things are just too fluid. We are testing a dozen or so meters and looking for the ones that work best in our high-tech neighborhoods where wi-fi is used ubiquitously and interference problems abound.” Sending a point-to-point communication signal from the lamp post in front of a customer’s house to the meter in the back can mean fighting through the homeowner’s wifi “noise,” thus creating its own interference inside the home, said Owens. He likes the new “mesh technologies” supported by ZigBee and others, allowing the signal to move around the neighborhood (the mesh) until it finds a clear pathway to the meter. In terms of SVP’s five-year timetable, Owens plans to spend more time on upfront planning and investigation, while back-loading the actual purchase of meters. “I’d rather put something in that has a life of at least 10 years. So we’ll take our time,” he said. “We find it exciting to be slightly behind the curve, in order to see what others are trying and what they are succeeding with.” Owens watches the Pacific Gas and Electric Co. and Southern California Edison, in particular, pointing out that SVP is in less of hurry than other utilities because of the unique nature of its load—it is essentially flat year- round. Located at the southern end of the San Francisco Bay, the temperature is moderate and air conditioning is not a factor. Furthermore, 90 percent of its revenue comes from large commercial clients like Intel, Applied Materials and Owens Corning, all of whose power demand is 24/7. “As a result, our capacity factor is over 70 percent, and we have little need for demand response,” he said. Things are also moving at a deliberate pace in Los Angeles, where LADWP has installed only 7,000 smart meters for its large commercial and industrial accounts. The utility plans to expand the installation to medium-sized and critical-life customers over the next five years at a rate of 5,000 new meters per year. In Texas, Austin Energy has been aggressively building out the smart grid for four JUNE 2008 57 http://www.APPAnet.org

Table of Contents Feed for the Digital Edition of Public Power - June 2008

Public Power - June 2008 Contents Perspective 10 Questions Finding Common Ground on Climate Change Solutions A Patchwork Approach to Renewable Energy Whose Grid Is It Anyway? The Little Utility That Could Benchmarking Customer Service Can Prairie Hay Power Your Town? Storming the Control Room Investing in the Smart Grid Coming of Age: Superconducting Cables Community Broadband Economic Development Customer Service Human Resources For Governing Boards Safety Parting Shot

Public Power - June 2008

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