Texas Smart Grid Deployment Update

1. Texas Smart Grid Deployment Update Christine Wright Public Utility Commission of Texas June 24, 2010

2. Overview & Contents • State of the Market • Policy Overview • Meter Testing • Deployment • Customer Access to Data • Smart Grid 1.0 Market Readiness • Emerging Issues & Challenges • Appendices 2010 National Town Meeting on Demand Response & Smart Grid  June 23-24, 2010  Washington DC

3. Market Structure Four electric scenarios in Texas • Municipal Electric Company (ex. Austin Energy, CPS Energy) • Cooperative (ex. Bluebonnet Electric, PedernalesElectric) • Fully-Integrated Investor-Owned Utility (ex. Entergy, SWEPCO). Investor Owned Utilities exist only outside of ERCOT. • Competitive Market within ERCOT: • Retail Electric Providers (REPs) and interact with end-use customers to sell electricity. REPs are largely unregulated except for certification and disclosure requirements. • Transmission and distribution utilities (TDUs) operate the wires portion of the business and are fully regulated by the PUC. • Electric generation is largely unregulated except for market power issues. • The PUC has limited authority over Municipal Electric Companies and Co-Ops. • The PUC regulates Investor-Owned Utilities(IOUs). PUC sets retail rates for integrated utilities and delivery rates for Transmission and Distribution Utilities. 2010 National Town Meeting on Demand Response & Smart Grid  June 23-24, 2010  Washington DC

4. State of the Market • Competitive Renewable Energy Zones (CREZ) • Wind Generation • Build out of EHV transmission in SPP • Energy Efficiency • Smart Grid Activities • Low Retail Electricity Prices • Robust Resource Margins • Lower C02 Emissions 2010 National Town Meeting on Demand Response & Smart Grid  June 23-24, 2010  Washington DC

5. Texas Smart Grid Policy • 2005 Passage of HB 2129 • 2007 AMI Rule Adopted • 2007 Passage of HB 3693 • 2008 AMI Deployment Begins • 2008 Implementation Project Begins • 2009 15-Minute Settlement Begins • 2010 PHEV Project/Rulemaking Initiated 2010 National Town Meeting on Demand Response & Smart Grid  June 23-24, 2010  Washington DC

6. Independent Testing • In response to complaints from customers that smart meters were over-charging, the PUC signed a contract with Navigant Consulting, Inc. on March 16, 2010 to evaluate Smart Meter accuracy for Oncor, CenterPoint Energy, and AEP Texas. • The Commission also waived re-read fees for customers concerned about the accuracy of the smart meters. Study components include: • Review historic customer usage. • Analyze customer complaints. • Evaluate utility smart meter processes, procedures and controls involving system hardware and software. • Track the accuracy of information transmitted from a smart meter to its final destination (meter-to-bill). • Sample customer (conventional meter) usage to compare information and identify any inconsistencies with customer accounts that have smart meters. • Side-by-Side testing. 2010 National Town Meeting on Demand Response & Smart Grid  June 23-24, 2010  Washington DC

7. Smart Meter Deployment 2010 National Town Meeting on Demand Response & Smart Grid  June 23-24, 2010  Washington DC

8. Access to Data • Customers Own their Data • Customers can authorize a 3rd Party other than their REP to have their data • TDUs read meters and send meter data to ERCOT. • ERCOT prepares “settlement” of meter data and sends to the REP • REP bills the customer. 2010 National Town Meeting on Demand Response & Smart Grid  June 23-24, 2010  Washington DC

9. Access to Data SECTION 7.  Section 39.107, Utilities Code All meter data, including all data generated, provided, or otherwise made available, by advanced meters and meter information networks, shall belong to a customer, including data used to calculate charges for service, historical load data, and any other proprietary customer information. A customer may authorize its data to be provided to one or more retail electric providers under rules and charges established by the commission. 2010 National Town Meeting on Demand Response & Smart Grid  June 23-24, 2010  Washington DC

10. Smart Meter Texas 2010 National Town Meeting on Demand Response & Smart Grid  June 23-24, 2010  Washington DC

11. Smart Grid 1.0 – Market Readiness Update • This Smart Grid 1.0 (AMS Deployment) – Market Readiness Update provides an overview of the market participants’ progress toward operating in a Smart Grid 1.0 (AMS Deployment) environment. • Completion of Smart Grid 1.0 (AMS Deployment) will maintain the state’s commitment to following open standards as opposed to proprietary protocols, maintain ongoing review of data security, and enable REPs to offer innovative products to customers to facilitate competitive market opportunities. • Smart Grid 1.0 (AMS Deployment) is the foundation for which the remaining components of the Smart Grid in Texas will be developed. This is defined as: • (1) meeting the minimum requirements contained in the Advanced Metering rule • (2) meeting the requirements of the Final Orders issued in each AMS Deployment and Surcharge Request proceeding, and • (3) meeting the minimum requirements developed by the Advanced Metering Implementation Team for Phase 1. 2010 National Town Meeting on Demand Response & Smart Grid  June 23-24, 2010  Washington DC

12. Emerging Issues & Challenges • Meter Tampering • Oncor & CenterPoint 500 HAN Device Commitment • Low Income Program – Distribution of HAN Devices • HAN Functionality incorporated into www.smartmetertexas.com • ZigFestTX events • Selection of a HAN “Czar” 2010 National Town Meeting on Demand Response & Smart Grid  June 23-24, 2010  Washington DC

13. More Information Christine Wright Public Utility Commission, Competitive Markets Division christine.wright@puc.state.tx.us Ph: 512.936.7376 Advanced Metering Implementation Project http://www.puc.state.tx.us/electric/projects/34610/34610.cfm HB 2129 www.capitol.state.tx.us/BillLookup/Text.aspx?LegSess=79R&Bill=HB2129 Utility Smart Meter Deployment - Monthly Status Reports http://www.puc.state.tx.us/interchange/index.cfm AEP - Project No. 37907 CenterPoint Energy – Project No. 36699 Oncor Electric Delivery – Project No. 36157 2010 National Town Meeting on Demand Response & Smart Grid  June 23-24, 2010  Washington DC

14. Appendices 2010 National Town Meeting on Demand Response & Smart Grid June 23-24 2010 Washington DC

15. Advanced Metering Rule Deployment of AMS is voluntary • Includes requirements for: • Mandatory AMS capabilities including open standards (ANSI C12.19 & C12.22 or equivalent) • Communications with Home Area Network (HAN) • Data Access • Deployment Information • Cost Recovery (surcharge) 2010 National Town Meeting on Demand Response & Smart Grid  June 23-24, 2010  Washington DC

16. ARRA Recipients in TX 2010 National Town Meeting on Demand Response & Smart Grid  June 23-24, 2010  Washington DC

17. Energy Efficiency The commission is currently in the process of amending the current energy efficiency goals: • Increases standards from 20% to 30% of the electric utility's annual growth in demand of residential and commercial customers by program year 2012, • Requires 40% annual growth in demand by program year 2013, • Requires 50% annual growth in demand by program year 2014, • Updates the cost effectiveness standard by adjusting the avoided cost of capacity and the avoided cost of energy; • Increases the performance bonus for an electric utility that exceeds its goal. • The rule should be in place to allow utilities and service providers to implement for the 2011 calendar year. 2010 National Town Meeting on Demand Response & Smart Grid  June 23-24, 2010  Washington DC

18. 2010 National Town Meeting on Demand Response & Smart Grid  June 23-24, 2010  Washington DC