Smart Grid – An Energizing Opportunity

1. Smart Grid – An Energizing Opportunity March 30, 2011 MTA Conference Mark J. Mrla, P.E. & Dean L. Mischke, P.E. Finley Engineering Company, Inc. 1

2. Agenda What is a Smart Grid Driving Factors Terms Home Networks Utility Company Options How Do We Serve The Power Industry 2

3. "I think there is a world market for maybe five computers."--Thomas Watson, chairman of IBM, 1943 "Computers in the future may weigh no more than 1.5 tons." --Popular Mechanics, forecasting the relentless march of science, 1949 "But what ... is it good for?" --Engineer at the Advanced Computing Systems Division of IBM, 1968, commenting on the microchip. "Who in their right mind would ever need more than 640k of ram!?"-- Bill Gates, 1981 3

4. What is a Smart Grid What Smart Grid is not! It is not just smart meters It is not just green energy It is not just time-of-use rate structure It is not just HVAC shedding in the summer It is not just distribution automation systems 4

5. What is a Smart Grid What Smart Grid is! A smart grid applies technologies, tools and techniques available now to bring knowledge to power – knowledge capable of making the grid work far more efficiently, reliably... Ensuring its reliability to degrees never before possible Maintaining its affordability Reinforcing our global competitiveness Fully accommodating renewable and traditional energy sources Potentially reducing our carbon footprint Introducing advancements and efficiencies yet to be envisioned 5

6. What is a Smart Grid • According to William Parks from the DOE, a Smart Grid would: • Accommodate all types of central and distributed electric generation and storage. • Provide for power quality for a range of needs by all types of consumers. • Optimize asset utilization and operating efficiency of the electric power system. • Anticipate and respond to system disturbances. • Operate resiliently to attacks and natural disasters • Enable informed participation by consumers in retail and wholesale • electricity markets. • Enable new products, services, and markets. • STATEMENT OF WILLIAM PARKS, SPECIAL ASSISTANT AND HAWAII LIAISON FOR ELECTRICITY DELIVERY AND ENERGY RELIABILITY • U.S. DEPARTMENT OF ENERGY • BEFORE THE COMMITTEE ON APPROPRIATIONS • UNITED STATES SENATE. AUGUST 24, 2009 Generation Delivery Consumer 6

7. Power Generation • Generation Smart Grid Impacts Economics Reliability Environmental Consumer Involvement Coal, Nuclear, Wind, Solar, Hydro, Geothermal, Tidal, Natural Gas, etc. (2) Delivery Transmission System (3) Consumer Distribution System Meters – Residential, Commercial, Industrial 7

8. Power Production Automobile & Electric Power System – Similar Evolutions Generation Coal, Nuclear, Wind, Solar, Hydro, Geothermal, Tidal, Natural Gas, etc. Gasoline, Diesel, Ethanol, Propane, Electric, Solar, etc. Impacts Economics Reliability Environmental Consumer Involvement Transmission System Delivery Consumer Distribution System 8

9. Think About Computers Involved with: Electric Power Plants Automobile Engines Emissions Systems Power Control Systems Temperature Control Systems Pressure Control Systems Fuel Efficiency Systems Emissions Systems Power Control Systems Temperature Control Systems Pressure Control Systems Fuel Efficiency Systems Transmission / Drivetrain Transmission / Distribution Gearbox Systems Traction Control Systems Antilock Breaking Systems Ride Control Systems Fuel Efficiency Systems Ground Fault Systems Breaker Reclosing Systems Reactive Power Control Systems Frequency Control Systems Voltage Control Systems Driver Info & Involvement Consumer Info & Involvement Fuel Efficiency Feedback Tire Pressure Feedback Traction Control Antilock Breaking System Time of Day Power Usage Appliance / Load Control Systems Time of Use Electric Rate Structure Feedback on Outage Time Estimates 9

10. Generation Driving Factors Peak Power Shaving Watts 10 Time

11. Generation Driving Factors • Prohibitive Cost to Build – $2.3B for Oak Creek New Steam Unit • Environmental Permitting – Tied up in courts (NIMBY) • Even “Green” systems are not immune • Carbon and Greenhouse Gas Regulations • Mandated Green Energy Creates problems • May not be available when needed • Does not eliminate Spinning Reserves Power Generation Coal, Nuclear, Wind, Solar, Hydro, Geothermal, Tidal, Natural Gas, etc. 11

12. Transmission Driving Factors • Prohibitive Cost to Build • $3M/mile - Madison to La Crosse • $7M/mile for 6 miles in Kenosha County • Green Power exists in low population areas • Environmental Permitting – Tied up in courts (NIMBY) • Superior to Wausau • http://www.ilbinc.com/Services/OverheadTransmission.aspx 12

13. Distribution Driving Factors • Lack of Monitoring • Power Companies do not find out a local branch is down until someone complains • The local distribution network covers a very large geographical area • Old Equipment 13 http://craigsland.com/Plot.aspx?plotID=32

14. Consumer Driving Factors • Power Company Viewpoint: • Lack of Monitoring • Power Companies do not find out a customer is down until someone complains • Unable to detect quality issues until something is damaged • Desire to find ways to encourage consumers to shift loads to off-peak • Consumer Viewpoint: • Want to manage cost • Make changes remotely 14

15. Reliability – A Central Focus Outage Management System (OMS) Supervisory Control & Data Acquisition (SCADA) Interactive Voice Response System (IVR) Meter Data Management System (MDMS) Distribution Systems Transmission Systems Customer Information System (CIS) Advanced Metering Infrastructure (AMI) Generation Systems 15

16. Reliability – A Central Focus Possible Data Communications Opportunities Outage Management System (OMS) Supervisory Control & Data Acquisition (SCADA) Interactive Voice Response System (IVR) Meter Data Management System (MDMS) Distribution Systems Transmission Systems Customer Information System (CIS) Advanced Metering Infrastructure (AMI) Generation Systems 16

17. Some Consumer-End Smart Grid Terms • PCT (programmable communicating thermostats) • IHD (in-home display) • LCM (load control module) • HAN (home area network) • PLC/BPL/DLC (power line carrier, broadband over power line, distribution line carrier) • AMI (advanced metering infrastructure)

18. Home Automation Standards Examples • ZigBee • 2.4GHz Wireless Mesh • Based on IEEE 802.15.4 (wireless communications used in home, building and industrial controls) • Z-Wave 900 MHz Wireless Mesh • 160 Manufacturers • Proprietary • Low Power • HomePlug Command and Control • Based on IEEE 1901 Broadband over Power Line Networks • 1901.2 for Home Networks for Smart Grid operates in the 500 kHz range and has a throughput of 500 kbps • Operates on lines with voltages up to 1000 V at ranges up to several kilometers

19. Consumer Communications Example • ZigBee Specification - Suite of high level communication protocols • Low cost • Low power • 2-way communications • Used typically for homes, buildings, controls/sensors • Range of 50 meters, but varies greatly • Based around IEEE 802.15.4 wireless standards

20. Consumer Communications Examples RF (towers, wireless mesh,....) Telecom Facilities (fiber, copper, wireless) PLC / BPL / DLC With a smart meter present • Home Area Network • ZigBee • Wi-Fi (802.11) Utility Office

21. HAN Communications Example With a smart meter present RF (towers, wireless mesh,....) Telecom Facilities (fiber, copper, wireless) PLC / BPL / DLC • Home Area Network (HAN) • ZigBee • Wi-Fi (802.11) Smart Meter Utility Office LCM Home Device Thermostat IHD

22. Thermostats and In-Home Displays Examples of vendors/products on the market: • ICM Controls (SimpleComfort) • Honeywell (Prestige HD Thermostats) • HAI – Home Automation, Inc. (Omnistat2) • Tendril (Set Point) • ecobee (ecobee Smart Thermostat)

23. AMI / Smart Meter System Suppliers Examples of vendors with systems on the market: • Elster - GE • Sensus - Echelon • ITRON - Silver Spring Networks • Landis+Gyr

24. UtilityCommunicationsExamples Paging Network Cell Phone Network Internet Utility Office Without a smart meter present Home Area Network LCM Home Device Thermostat / IHD

25. UtilityCommunicationsExamples RF/Wireless (towers, mesh network,....) Telecom Facilities (fiber, copper, wireless) PLC / BPL / DLC Utility Office With a smart meter present Home Area Network Smart Meter LCM Home Device Thermostat / IHD

26. CommunicationsInfrastructure Utility New Investment RF/Wireless (towers, mesh networks,....) PLC / BPL / DLC Fiber Telecom Existing Investment Fiber, Copper, Wireless Utility Office

27. What are Power Utilities Looking for in a Data Network? • Security • The system must not be capable of being hacked • Ubiquitous Coverage • The Utility typically covers a much larger service area than the communications providers • Reliability • An outage may cause significant equipment damage and may be a hazard to life • Low Cost • The system needs to cost less than their designated recovery threshold • Very Low Bit Rates • 100s of bps but from lots of devices 27

28. What are their Options? • Broadband over Power Lines (BPL) • Troublesome, low throughput, transformers, someone will figure it out • Cellular Wireless • Near universal availability, relatively expensive per node, • WiFi • Only works in urban areas, used in conjunction with BPL • Data Network Provider • Power Utilities are just now starting to investigate this option 28

29. Telecom Infrastructure • Rapid growth in consumer bandwidth requirements • Rapid replacement/upgrade of telecom infrastructure • Higher bandwidth requirements are driving increased use of fiber • With fiber, future bandwidth increase requires only new electronics • Fiber as medium for many purposes – voice, data, video, etc. • Nearly all facilities with an electric meter, also contain telecom infrastructure

30. Where Are We Now? • Technology exists in Telecommunications to service most all diversities of Smart Grid platforms. (Bandwidth requirements) • However – At what cost? • Can a Normal Business Model sustain the needed infrastructure? • Are “Our” customers on board?

31. Where Are We Now? • On the Power side of Smart Grid advancement. Extensive advancement in Electronically Mapped Distribution technologies and numerous Automatic Meter Reading installs have set the stage for upcoming Smart Grid projects. • However, at what cost? • Back to the Business Model----Sorry. • What about Distributed Generation, Wind Power etc… • How would a Federally Mandated RPS help promote Smart Grid?

32. How Do We Serve the Power Industry • Data Circuits of Old • Special equipment – Added expense • Regulated – NECA Tariffed rates • High Cost • Few circuits were deployed – Staff had little experience with the equipment • Long copper loops – Difficult to troubleshoot • When they worked, they were very stable – Special Circuits

33. How Do We Serve the Power Industry • Data Circuits Today – Broadband The Primary Circuit of Today • Data is what we do – Voice is the declining market • 90% of recent investment revolves around data • 8kFt DSL Loops • Wireless • FTTH • Redundancy is now standard in IP network designs – five 9s (351.36 seconds of outage per year)

34. How Do We Serve the Power Industry • Data Circuits Today – Broadband The Primary Circuit of Today • Data is what we do – Voice is the declining market • IPTV has been the driving factor in data network improvements • Video is watched closely • Disturbances to video circuits very noticeable • Staffing has been concentrated around IP experience/training • Traditional CO staff is extensively IP focused • IP experience is provided all the way to the house

35. How Do We Serve the Power Industry • DSL Circuits • Advantages: • Relatively Low Cost – Works on existing copper • Mature Technology – Know how to make it work • Long reach at low bandwidth – 50kbps at 18kft • Point-to-Point • Disadvantages: • Data rates hindered by noise, especially at longer distances • Less reliable than fiber services

36. How Do We Serve the Power Industry • FTTH Circuits • Advantages: • Mature Technology – Know how to make it work • Long reach at any bandwidth – 100Mbps at 40km • Point-to-Point is very secure • GPON is also secure • Very high service reliability • Disadvantages: • Very High Cost – Typically requires all new facilities

37. How Do We Serve the Power Industry VoIP, Data to remote customers • Wireless Networks • Bandwidth dependant on range • Transmitter nodes are typically fiber fed Central Office 700 MHz, Cellular, WiFi, etc.Transmitter Bidirectional Optical Node

38. How Do We Serve the Power Industry • Wireless Circuits • Advantages: • Fast to deploy • Long reach at low bandwidth • Can be low cost if the infrastructure is in place • Disadvantages: • Limited range depending on frequency, Line-of-Sight • Growth of wireless data networks has pushed up costs • Reliability can be a factor

39. How Do We Serve the Power Industry • Conclusions • Communication Company Broadband Advantages: • Gain access to a trained work force that already works in the home • The network may already exist all the way to the home • Can be low cost if the infrastructure is in place • Communication Company Broadband Disadvantages: • 100% broadband coverage does not exist today • Return on Investment for Communications Company may be limited • The need for the Power Utility to deal with a third party

40. How Do We Serve the Power Industry • Conclusions • Pick the low hanging fruit first • Look to serve the Substations • There are not very many Substations • Many local Power Utilities are not ready to collect very much information from the consumer yet • Look to serve the larger Commercial Clients • Most likely, you are already there • They can actually affect the Utility’s usage and save money • Form partnerships to create a group that can cover substantial portions of the Power Utility’s service area

41. We need Partnership Now • Our paths have now converged – Power—Telecom • Not just servicing each other as in the past. • While Technologies have, and continue to advance – Has the Level of Cooperation to package our capabilities moved at the same pace?

42. Thank You!! ? ? ? ?