Smart Grid APPA Annual Meeting

1. Smart Grid APPA Annual Meeting Kiah Harris Burns & McDonnell June 15, 2009

2. Agenda • What is Smart Grid? • What is available today? • What projects are municipal utilities considering? • What is required for Smart Grid development? • Open for q/a. 2

3. Smart Grid • Concept of the Smart Grid crystallized in the 2003 blackout: • Lack of knowledge about system conditions among operators • Goal was to make the transmission system more secure by collecting more data faster to provide better status of the system to operators • Take many decisions out of operator realm and move to computer controls • Expanded in the 2007 Energy Independence and Security Act to include: • Customer centric features like load management • Integration of renewable and traditional distributed generation • Distribution system optimization • Numerous other considerations to make the system more efficient and avoid additional investment 3

4. From the 2007 Energy Independence and Security Act It is the policy of the United States to support the modernization of the Nation’s electricity transmission and distribution system and to achieve each of the following, which together characterize a Smart Grid: -Increased use of digital information and controls technology -Dynamic optimization of grid operations and resources -Deployment and integration of distributed resources, including renewable -Development and incorporation of demand response, demand-side resources, and energy-efficiency resources -Deployment and integration of ‘‘smart’’ technologies (real-time, automated, interactive technologies that optimize the physical operation of appliances and consumer devices) for metering, communications concerning grid operations and status, and distribution automation -Deployment and integration of advanced electricity storage and peak-shaving technologies -Provision to consumers of timely information and control options -Development of standards 4

5. So, Smart Grid is • Advanced technology to move information across sectors and control equipment • Computers • Monitors and sensors • Control devices • Extensive data management system that allows use of data across enterprise • Expanded two way communication system between utility operations, system facilities, customers • Network Security 5

6. Supply Chain is Changing From serial… To circular… 6

7. Advancing Technology is the Enabler for Smart Generation Smart Transmission Smart Distribution Utilities can advance Smart Grid to any or all of these areas… Smart Customers 7

8. Smart Generation will use Load and Distributed Generation More Extensively • One considered benefit of the Smart Grid will be to advance load control for expanded use for generation control and reserves. • Growth projections of 200GW over next 20 years • Can use load to reduce quantity of reserves • Can manipulate load to effectively work with non-dispatchable renewable resources, like wind and solar. (more effective with storage capabilities) • Use distributed generation to: • Manage feeder loading during peaks • Reduce system losses, outage times • Create micro-grids during outages 8

9. The Smart Transmission System will be More Closely Monitored • Transmission systems are already highly monitored via SCADA • Two major areas for transmission systems: • New devices allow faster recognition of conditions-Synchro Phasor project (time coordinated across interconnect) • Advanced asset management for lines and substation equipment • Provide faster real time information to control centers about status of system • Provide predictive maintenance with real time analysis • Allow better use of investment through use of probabilistic analysis • Allow better flow control over transmission system for use in preemptive control concept through rerouting or redistribution of loads to avoid problems 9

10. Work with customer systems to minimize peak loads, reduce losses, extend investments in feeders Allow more system switching so that smallest portion of affected systems is isolated during disturbances Provide enhanced monitoring of substations and feeders Provide enhanced work order management Move away from customer call-in for outage notification Use distributed automation to enhance feeder switching which will reduce outage times and allow micro-grid development Provide opportunities for additional services to municipal entities The Smart Distribution System will 10

11. Mirco-Grid Possibilities • Use of Distributed Automation and distributed generation during outages can create Micro-Grids to keep the lights on for some of the customers Requires managing loads, isolation from main grid 11

12. Other Uses of Smart Grid for Distribution • With AMI, remote connect and disconnect can be used • Better customer service with increased sensing on the system • Voltage reduction for load control can be better optimized • Load research and bill inquiries • Work order integration and more accurate deployment of work force • Assist with other municipal services 12

13. Smart Customers will Participate in Consumption Decisions • Three aspects to Customer • Rates aligned with costs • Two way communications between utility and customer for information transfer • Technology at end use location to gather data on end use, allow better control and to use information from utility • Goal is to inform customers so that they adjust consumption to reduce cost of supply • Customers are key to energy efficiency enhancements • Purchasers of buildings and renovations • Purchasers of appliances • Users of electricity • Without energy efficiency, rates will be increasing rapidly with costs of new resources, fuel and emissions 13

14. The Smart Grid is an Enabler Technology • The Smart Grid will be a key enabler in the Customer transformation • Enable dynamic pricing • Integration with “Intelligent” building systems for automated energy response • New view of operational “value” vs cost • As advanced technology becomes more affordable, new service offerings will come about • Pricing differential allows new evaluation of investment in storage, distributed generation and load management 14

15. Dynamic Pricing Winter Day in MISO 15

16. Dynamic Pricing(continued) Summer Day in MISO Typical energy rate seen by customer 16

17. The Smart Customer will • Require education on transformation to smart grid • See technology and software evolve at building and home network level, appliances • Use dynamic pricing to: • Optimize usage and minimize bills • Make more educated conservation and demand side management investments • Add distributed generation that makes sense and allow utility to control • Provide load control opportunities for the utility 17

18. Communications and Network Security will be a Major Aspect 18

19. Smart Grid will Produce A Lot of Data • Produced by • AMI/AMR meters • Smart Devices (appliances, asset management) • Produced by Distributed Generation • Wind turbines and solar panels • Combined heat and power • Backup units • Huge amount of information to be collected, processed, validated, corrected, etc. on an hourly or sooner basis • Requires a data management system to be able to use enterprise wide 19

20. What is Available Today? • Devices to allow customers to understand their consumption and cost • Programmable thermostats • Internet (now for cost data from utility, developing the usage capability) • Third party additions to AMR systems • Advanced metering infrastructure • In-home displays • Devices to automatically bring back customer usage data over short intervals • AMR, AMI • Remote connect and disconnect through meter • Automatic outage notification through meter

21. What is Available Today? • End use customer facility management systems: • Building energy management systems for commercial buildings • Early deployment of home management systems • Distributed Automation systems to allow: • Feeder sectionalizing and capacitor switching • Voltage monitoring and controls • Distributed generation integration • Asset management • Real time transformer gas analysis

22. Projects Municipal Utilities are Pursuing Include… • Advanced Metering Infrastructure • Two way communications • Meter data management system • Enterprise wide data availability • Distribution Automation • Capacitor switching • Feeder sectionalizing switching • Communications • Substation SCADA • Conversion of electro-mechanical relays to computer units • Addition of remote terminal units to monitor facilities and system parameters • Communications • Enterprise wide customer information systems 22

23. Creating a Smart Grid • Determine what your objective is for the SG: • Increase customer service? • Allow customers freedom to purchase based on dynamic pricing? • Improve distribution/transmission system operations? • Identify what you need to achieve the objective: • Advanced metering infrastructure/two way communications? • Internet based? • Distribution automation? • What do I already have that advances the cause and what more do I need? Pilot project to verify approach? • How will I manage: • Security? • Data? • Where can I start now to achieve part of the objective and where will I need to prepare a longer term roll out? • AMI • Communications • Enterprise wide data management 23

24. Stimulus Money • Energy Independence and Security Act of 2007 • Section 1306 authorized the Smart Grid Investment Grant Program • Modified by the American Recovery and Reinvestment Act of 2009 • 50% matching grant (grant size of $500,000 to $200 million) • Two major types of Smart Grid projects • Projects that advance the digital upgrades of the grid • Projects that deploy Phasor Measurement Units (PMUs) • Most public power utilities will go for the digital upgrade type projects • Will require ongoing monitoring and reporting to DOE once a quarter • Final requirements out mid June. Currently have a Notice of Intent 24

25. Wrap UP The Smart Grid will use advanced digital devices to enhance the speed at which data is collected and the quality of information on all aspects of the system. SG can affect all areas of operations to enhance operations, minimize investment and improve customer service. SG interface with customers can be a major component. Providing time varying pricing to all smart customers for them to make decisions on usage is critical piece for load adjustments. 25

26. Wrap UP SG for the smart customer requires significant education. SG requires extensive communications on the system and to and from customers. Security has to be considered. SG entails dealing with a significant amount of data that needs to be turned into information quickly. The SG installation will take years to fully realize. As technology changes, new opportunities will be created. Stimulus money can be applied for to support SG projects. Need to wind up with more than an expensive meter reading system. 26

27. Questions?? Contact info for Kiah: kharris@burnsmcd.com 27