The Paths to a Smart Grid The Scouts at SDG&E

1. The Paths to a Smart Grid The Scouts at SDG&E Terry Mohn San Diego Gas & Electric a Sempra Energy utility

2. Outline SDG&E service territory Why look at smart grid • Defining a smart grid • Three paths to a smart grid SDG&E projects • Building a business case • Keep costs down, adds reliability • Consistent architecture • Systems view • Technology refresh • Introduction of SOA leads to new business system choices • How to avoid vendor lock-in and technology obsolescence • Communication network is a corporate strategic investment How you too can build a regional smart grid

3. SDG&E Service Territory

4. Sempra Utilities • Combined Service Areas • Largest energy utility customer base in US with over 7.6 million meters serving 29 million customers • 13 counties • 233 municipalities • 22 million population • 6.7 million residential households • 325,000 small commercial &industrial customer accounts • 1,600 large commercial &industrial accounts

5. Why Look at Smart Grid

6. Supports the Environment Enables renewable and clean energy Enables Vehicle to Grid interface Electric Vehicles Plug-in hybrid Electric Vehicles Reduces spinning reserves Supports alternative energy supplies (reduces dependence on foreign oil) Supports customer choice (photovoltaics)

7. Energy Prices Forward electricity prices are a straightforward signal of anticipated price pressures this summer. The map illustrates recent key summer 2007 forward electricity and natural gas prices. In all, markets are signaling double-digit electricity price increases this summer over last, with natural gas as a clear driver. - FERC 2007 Market Oversight

8. Energy Demand Growth Total electricity sales are projected to increase from 3,660 billion KWhr in 2005 to 5,168 billion KWhr in 2030. The largest increase is in the commercial sector, as service industries continue to drive growth. Electricity sales are strongly affected by the rate of economic growth. DOE Report, May 2007

9. Defining the Smart Grid

10. A Smart, Integrated Grid • Detects and fixes emerging problems • Incorporates measurement, diagnostics and feedback • Re-routes power flows • Enables loads and distributed resources • Incorporate advances in IT and communication technologies

11. Characteristics • Self-healing • A grid able to rapidly detect, analyze, respond and restore from perturbations. • Empower and incorporate the consumer • The ability to incorporate consumer equipment and behavior in the design and operation of the grid. • Tolerant of attack • A grid that mitigates and stands resilient to physical and cyber security attacks. • Provides power quality needed by 21st century users • A grid that provides a quality of power consistent with consumer and industry needs. • Accommodates a wide variety of generation options • A grid that accommodates a wide variety of local and regional generation technologies (including green power). • Fully enables maturing electricity markets • Allows competitive markets for those who want them. • Optimizes assets • A grid that uses IT and monitoring to continually optimize its capital assets while minimizing operations and maintenance costs.

12. Technologies • Grid-wide integrated communications • Internet for the power grid • Sensing, metering, measurement • Digital two-way communication devices • Enable generation connect and disconnect • Enhance operator information • Advanced control capabilities • Computer based grid monitoring • Enables dispatch of distributed resource • Advance grid components • Energy storage • Distributed generation • Decision Support • Analytics to guide grid operators • Semi-autonomous agent software

13. Three Paths to a Smart Grid

14. Three Paths to Starting a Regional Smart Grid Organic – business as usual Huge capital expenditures as assets retire New technologies lead to declining costs Utility of the future Spread costs across several projects Smart Meter Communication infrastructure is key Digital electric meters are also sensors

15. Smart Grid – It’s a Concept, Not a System Interactive with Consumers and Markets Adaptive Optimized to make best use of resources Predictive rather than reactive to prevent emergencies Accommodates a variety of generation options Integrated merging monitoring control protection maintenance Secure from attack

16. Smart Meter - It’s More Than Meters, It’s Foundational • Digital Meters • Data storage • Calibrated • Upgradeable Software • Bi-directional, secure communication • “near” real-time rates and energy measurement • Remote connect and disconnect • Home Area Network • Designed for distribution automation, distributed generation, autonomous islanding • Net metering for consumer generation choices • Hydrogen • Solar • Electric vehicles • New utility applications – OMS, DMS, GIS, ERP, SOA • Fiber and wireless everywhere – transmission and distribution • Blurring the lines between IT and Electric T&D

17. Smart Home - It’s Consumer Choice • Alignment with Renewable Energy, Demand Response & Energy Efficiency Goals • Infrastructure, tariffs, programs & services • Energy usage measurement protocol • Educate customers about • Pricing & the time varying nature of the cost of energy • Actions that can be taken to impact usage & lower energy bills • The environmental benefits of reducing energy usage & renewable energy • Requires an Interactive Customer Interface for information & resources • A universal platform (open architecture) • Technology that utilizes smart meter / HAN

18. SDG&E Smart Grid Projects • AMI, or Smart Meter with Smart Homes • Utility of the Future, or Operational Excellence • Planning for the future, or R&D

19. Elements of Our Smart Grid Smart Grid Smart Home Smart Meter

20. SDG&E Smart Grid • Developing distributed energy resources (DER) integration, enabling renewable and clean energy development. Distributed generation (DG) system can provide benefits to utility operations and customers and to introduce alternative service solutions for providing safe and reliable energy. • DG systems, a subset of DER, are a wide range of electricity generating technologies • solar photovoltaics • small wind turbines • fuel cells • natural gas microturbines • internal combustion engines • Combined Heat and Power (CHP) • Developing integration technologies to support Vehicle to Grid interfaces, grid frequency regulation (to match small differences in load and generation profile), and reduction in spinning reserves (standby resources that are required to come on line in case of an emergency). • Deploying foundational advanced smart metering infrastructure

21. Smart metering uses a new meter and communications system to remotely send energy use information. It also allows the utility to securely communicate with the meter and send customers information about energy usage and corresponding price information. SDG&E Smart Meter

22. SDG&E Smart Home Designed for two-way information flow New services could be added Require WAN high-speed communications Home area network (HAN) Open industry standards, non-proprietary, inter-operability Working with the other CA IOU’s Secure means of sending information between utility and end points (tolerant of attacks) Communications infrastructure supports long-term vision to collect: Power quality information New sensor data for smart grid, building automation designs Grid state (monitoring, automation)

23. Technology Refresh

24. Primary Program Areas • Field Force • Real-time scheduling and dispatch (e.g. re-route on the fly) • Automated work order administration to reduce paperwork • Mobile data/information available at job site • Asset Management • Enterprise Geographic Information System Platform • Outage and Distribution Management Systems (SDG&E only) with real-time monitoring • Asset Management System with predictive maintenance ability • Customer Care • Enhanced internet self-service options • Voice recognition IVR system and optimized call routing • Outbound dialing to notify customers of arrival time • IT Infrastructure • New and upgraded network hardware to support increased voice/data communications requirements • Improved software integration platform to more efficiently interface business applications • Improved security features, such as encryption and authentication, to support the increase in networked devices (e.g., Mobile Data Terminals, sensors on Transmission & Distribution infrastructure, etc.)

25. Smart Grid and OpEx2020 Smart Grid OpEx 2020 FAST CBM GIS Smart Meters OMS/DMS

26. Building a Business Case

27. SDG&E Business Case Procedure OMS/DMS Distributed Generation Grid Design Conditioned-based Maintenance

28. OMS / DMS - Benefits • Reduction in forced outages/interruptions • Reduction in restoration time • Reduced O&M due to predictive analytics and grid self healing • Reduction in peak demand • Increased integration of distributed generation resources and higher capacity utilization • Increased security and tolerance to attacks / natural disasters • Power quality, reliability, and system availability and capacity improvement due to improved power flow • Increased capital investment efficiency due to tighter design limits and optimized use of grid assets • Environmental benefits gained by increased asset utilization • Assumes AMI and GIS are implemented prior to project completion

29. Keep Costs Down, Adds Reliability

30. OMS/DMS Value Levers – Operator Productivity Supporting Evidence 60 min / day on average increased operator productivity 60 Reduced Telephone and Radio Time • Operators manually direct field workers via phone/radio 50 • Operators field phone calls due to lack of visibility to outage and network related data • No integration from SORT-OMS to enable real-time visibility to troubleshooter activities 40 Minutes 30 • Switching plans are not suggested Reduced Data Entry Checking/Review of Manually Written Switching Orders 20 • Switching orders produced manually • Afternoon shift re-checks orders created in the morning 10 • Outage reporting produced/reviewed manually by operators Automated Outage Reporting - Other Benefits - • Apprentice training involves many disparate systems Reduced Apprentice Training Time • Support staff double checks outage reports – 2 hours per day Reduced Support Staff (Outage Reporting) - Other Intangible Benefits - • Safety can be improved through improved outage information Improved Safety

31. Cash Flow – OMS / DMS

32. Consistent Architecture

33. Application Architecture Outage Info; Work Assignments Supply Chain OMS DMS DG Status & Outage Data Material Orders Material Availability Data Commands Work Requirements Work Mgmt SCADA - D CBM Weather Work & Inspection Data Asset Profile Tasks Meters Sensors Data Historian (Pi) Schedule & Dispatch Cal ISO Status Tasks SCADA - T EMS Mobile Key Smart Grid CIS Financials Asset / Field Other Systems Other

34. Systems View

35. Systems View • The “Systems View” perspective takes a holistic and objective approach to a subject, including technical, economic, regulatory, political, and societal aspects. • It includes the complete recognition of the power system as one integrated machine having many interdependent parts. • It recognizes that solutions can come from a wide and diverse range of sources. • A “Systems View” also takes account of the full range of costs and benefits to society associated with the provision of reliable power.

36. Sharing Operational Data • Current State – Data IS NOT Easily Visible Across Operational Units • Future State – Easily Visible Data Across Operational Units

37. Like a puzzle, even when the information is visible – linking it together makes the difference Asset Management Initiative A I S G I S O M S / D M S C B M

38. How to Avoid Vendor Lock-in and Technology Obsolescence

39. Enterprise Architecture A comprehensive set of principles, policies and standards used to align Information Technology (IT) assets with an organization's business processes to support the organization's overall strategy. An enterprise architecture describes and documents current and future (desired) relationships Answers basic questions like: What are the organization's business processes and how is IT enabling them?

40. Purpose & Process Align projects with Enterprise Architecture Define structure and processes to improve consistency & adherence to enterprise architecture and drive business value Establish a forum to evolve our Enterprise Architecture Method to discuss and track architectural considerations early in the process resulting in a united approach to solving enterprise requirements To increase awareness, understanding and agreement of activities and initiatives that have architectural implications

41. Introduction of SOA Leads to New Business System Choices

42. SOA is About Business Agility Adaptability & Speed Abstracts underlying technology Platform independence Common language – consistent way of communication, interoperability Loosely coupled Each service fulfills a function independently Services can combine to work together Common business meanings Requires higher level of efforts Discipline and commitment Requires time to mature and to build critical mass Availability of Business Services

43. Smart Meter Solution Architecture Context Legacy Applications Installation Applications Installation Applications Regulators Regulators Operational Applications & Monitoring SDG&E Enterprise MV90 Meters External Parties C&I Customers Installation Vendors Integration Platforms MV90 Head- End Platforms EMF – (Web Services) Smart Meters EDIX (SFTP/B2B) AMI Head-End Platforms Residential and C&I Customers Customer Web Access ETL Data MDMS Applications Marts

44. Operation Technology Vision with SAP Overlay SAP Capability Legend SAP Materials SAP Financials SAP Partner Customer Information Maintenance & Inspection Non SAP Data Maintenance Work Management MyINFO HR Graphic Design Data Repositories Work Scheduling Data Viewing (I.e. Web GIS) (Limited) SCADA GIS SynerGEE Crew Dispatching M&I WMS Planning & Analysis (Limited) XI B.I. Tools Data Warehouse Integration BUS OSI PI Mobile Workforce Management Timekeeping Outage Management SCADA AMI Doc Mgmt

45. Communication Network is a Corporate Strategic Investment

46. Utility Area Network

47. Convergence

48. Summary: How You Too Can Build a Regional Smart Grid.

49. Smart Meter: Foundational Future Vision: optimize use of technology to improve service to customers and operational efficiency FUTURE Smart Home Smart Grid DG; storage Self-heal; Self-sense Central Automated Operations Real-time Analytics Intelligent Dispatch TODAY Smart Meter

50. High Level Recommendations Identify financial benefits and costs To the business Rate Structure Carbon Footprint Reduced Congestion Introduce Distributed Generation To society – not that easy for a utility Reliability Power Quality Environment Capital projects Research & development projects