Colorado and the Smart Grid

1. Colorado and the Smart Grid Remarks of Ron Binz, Chairman Colorado Public Utilities Commission October 7, 2010 Keystone Energy Board Washington, DC

2. Caveat • I am one of three equal commissioners • My positions are my own • I am confused by many things and have not made up my mind on much at all • I don’t even agree with some of the things I say • Good advice: don’t believe everything you think

3. Outline of this presentation • Status of Boulder Smart Grid City • Commission Dockets on Smart Grid • Privacy Docket (09I-593EG) • Policy Docket (10I-099EG) • CPC&N for Boulder Smart Grid City • Colorado PUC Smart Grid Policy Statement

4. The Setting • Two regulated electric utilities; 55% of sales • State RES – 30% by 2020 for IOUs • Xcel: ~12% renewable energy level now • Utility CO2 reduction goals (-20% by 2020) • Clean Air/Clean Jobs Act case underway • Rates up due to new (fossil) generation facilities

5. Boulder, Colorado

6. Terminal  Sunshine   Leggett  NCAR 

7. Artist’s Conception!    

8. Boulder Smart Grid City Progress • Infrastructure buildout complete • 200 Miles of fiber installed • Substations automated • 46,000 premises have BPL • 25,000 AMI meters installed • 4,700 transformers monitored • Rate Structure Pilot, In-home Device Pilot Underway

9. Boulder SGC Issues -- Upside • Improved System Telemetry • Anecdotal Improved Operating Efficiency • Improved Outage Response • Improved Customer Satisfaction • 60 “Value Propositions” Being Tested • Value as Implementation Pilot

10. Boulder SGC Issues -- Downside • Cost Overruns • From $15 million to $42 million • System Architecture • Fiber backhaul capacity • Customer Education • Subject of complaints • Customer Acceptance and Adoption • Weaker than expected

11. Boulder SGC – Next Steps • PUC determination on cost recovery • Results of rate structure pilot • Results of in-home device trial • Results of “value proposition” tests • Operating efficiency • Power quality • Outage control • Additional customer education

12. Smart Grid Investigations • Smart Grid Data Privacy (Docket No. 09I-593EG) • Docket opened: August 2009 • Solicited public comments: Winter 2009-2010 • Commissioner deliberations and additional comments solicited: Summer 2010 • Notice of Proposed Rulemaking: October 2010 • Key Issues: • Protecting consumers from authorized data release • Clarification: data for billing vs. what goes beyond • Data access by third parties • Personally identifiable vs. anonymous data

13. Smart Grid Investigations • Smart Grid Policy Issues (Docket No. 10I-099EG) • Objectives: • Understand potential benefits of smart grid technologies • Provide guidance to utilities and consumers on the PUC’s preferred policy direction • Process: • Commissioner Information Meetings (CIMs) • Research/literature reviews and analyses • Review other states’ developments, policies and lessons learned

14. Smart Grid Commissioner Information Meetings • April: Smart Grid and Responding to Climate Change • June: Advanced Metering, Dynamic Pricing and Consumer Behavior • July: Smart Grid and Evolving Market Structures • August: Smart Grid and Technical Specifications

15. Docket: No. 10I-099EG

16. Defining smart grid technologies • …technologies designed to result in utility, consumer, societal, environmental and economic benefits from eight distinct value streams: • Improved operational efficiency • Improved end-use efficiency • Demand response enabled load management • Improved power quality • Reduced outages • Integration of renewable resources • Integration of electric vehicles • Improved customer services and information: near real time prices and enviro attributes

17. Selected Preliminary Findings • “…smart grid has great potential not only to provide near-term system benefits but also to support long-term public policy objectives as well.” • “…meter-supported time variable rates can benefit electric systems in terms of more efficient operations and deferring capital investments in generation. …such rates should be pursued when and only when clearly beneficial to the system.” • “…it would be most appropriate for the Commission to consider and adopt the NIST Interoperability and Cyber Security standards as they are released.

18. Other Issues Addressed in Findings • Guidance on Benefit/Cost Analyses • Smart Grid as an energy efficiency strategy • Merits of demand response enabled by Smart Grid • Merits of considering disaggregated smart grid investments • Discussion of residential rate structures • Accounting for societal benefits of Smart Grid

19. Request for Additional Comments • Dynamic prices –mandatory or optional for residential customers (or something in-between)? • Implications of targeting smart meters and rates based on customer characteristics. • What regulatory policies are needed to address SG and reduced revenues for utilities? • Issues of SG and low-income customers. • Relationship between Smart Meters and DSM

20. Request for Additional Comments • How to factor costs & benefits into smart meter implementation decisions? • SG challenges (consumer education; lost revenue): how should PUC further investigate? • Should PUC adopt the EPRI benefit/cost analysis? • How to incorporate future potential benefits in current PUC decisions. • What should be required in a SG application?

21. Request for Additional Comments • When should a SG application require a CPCN ? • SG and PHEVs: what is optimal rate design? Costs & feasibility of direct control? • SG and DG integration and storage: which technologies, standards are necessary? • Should Commission adopt NIST Interoperability & Cyber Security standards as they are released?

22. Extra Credit: Using the Colorado PUC E-filing System • Go to www.dora.state.co.us/puc • Follow links to E-filing system • Select “Search” option • Enter “Proceeding Number” • Smart Grid Privacy Case: 09I-593EG • Smart Grid Policy Case: 10I-099EG

23. Thanks for the invitation. I look forward to your questions.