OREGON
Public Utility Commission
Northwest Environmental Business Council (NEBC)
Portland
The Promise and Real-World Challenges of
“Smart Grid.”
J. R. Gonzalez, P.E., Administrator
Safety, Reliability & Security Division
OPUC
May 27, 2009
SMART GRID DEFINITIONS
 “. . . a power system that can incorporate millions of sensors all
connected through an advanced communication and data
acquisition system. This system will provide real-time analysis by a
distributed computing system that will enable predictive rather
than reactive responses to blink-of-the-eye disruptions.” (EPRI)
 “…a term that refers to the modernization of the electric system
through the integration of new information-age technologies, new
strategic public policies, and allows for new uses of the electric grid,
both in operations and through new customer side applications,
that extract the benefits of more efficient operation, more efficient
use of grid assets, and more cost-effective expansion of the electric
grid.” (Illinois Smart Grid Initiative)
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THE SMART GRID PROMISE
 Advanced Metering
 Asset Management & Network Optimization
 Energy Efficiency & Demand Response
 Distributed Generation & Mass Scale Renewables
 Flexible Rate Structures and Ratemaking
 Support for PHEVs
 Intelligent Appliances
 Improved Cyber Security
 Others
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DOE’S FIVE FUNDAMENTAL TECHNOLOGIES
 Integrated communications, connecting components to open
architecture for real-time information and control, allowing every
part of the grid to both „talk‟ and „listen‟
 Sensing and measurement technologies, to support faster and
more accurate response such as remote monitoring, time-of-use
pricing and demand-side management
 Advanced components, to apply the latest research in
superconductivity, storage, power electronics and diagnostics
 Advanced control methods, to monitor essential components,
enabling rapid diagnosis and precise solutions appropriate to any
event
 Improved interfaces and decision support, to amplify human
decision-making, transforming grid operators and managers quite
literally into visionaries when it come to seeing into their systems
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THE CHALLENGES
 REGULATORY
 LACK OF MANDATES
 COMMUNICATION PROTOCOL STDS
 NETWORK SYSTEM UPGRADES
 RATE INCREASES
 CULTURAL SHIFT
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THE REGULATORY PARADIGM
• Safe and reliable service
• Fair and reasonable rates
• Promote development of competitive
markets for utility service
• Utilities have the opportunity to recover
prudently incurred costs and earn a
return on capital investment
• NESC vs NEC
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HISTORICALLY
Utilities have been conservative
• There has been no incentive to move out of the
comfort zone
Regulatory Bodies have also been
conservative
• Looking out for the consumer
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FORCES PROMOTING CHANGE
GHG/Reduce Carbon Footprint
Rapid increase in the demand for energy
Capacity Limitations of major T-Lines
Ageing of critical infrastructures
The need for greater efficiencies
Lack of energy corridors
Others
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CONGRESS ACTION
Congress recognized the need for
modernizing the utility industry
infrastructures, so it passed
• Energy Policy Act of 2005 (EPA 2005)

Standard 14 “time-based metering, communications”
• Energy Independence and Security Act of 2007
(EISA 2007)


Standard (16) “Consideration of Smart Grid
Investments”
Standard (17) “Smart Grid Information”
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LACK OF MADATE
PURPA stated that (section 111(a))
“each state regulatory authority . . . and each nonregulated
electric utility shall consider each standard” and then “make
a determination concerning whether or not it is appropriate
to implement such standard”
PURPA also states that
“nothing in this subsection prohibits any state regulatory
authority or nonregulated electric utility from making any
determination that it is not appropriate to implement any
such standard”
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WHAT HAS BEEN THE STATES’ RESPONSE
 California PUC directed the State’s IOUs to begin
establishing advanced metering systems, pushing new
smart-grid practices
 Texas Legislature gave the TX-PUC the go ahead to
implement “surcharge” needed to recover cost of instituting
AMI statewide. Next step – Integrate digital tools for the
smart grid.
 NY Public Service Commission put out notice asking
utilities to submit comprehensive AMI development and
deployment plans. Utilities in the state have done innovative
research on the smart grid and how it would fare in dense
urban areas.
 The above States are not the only ones to take action at one
level or another…
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WHAT ABOUT OREGON?
Regulates three electric utilities
• Portland General Electric
• Pacific Power
• Idaho Power
Regulates three natural gas utilities
• NW Natural
• Avista
• Cascade
Plus privately held telephone and water
companies
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STATE OF OREGON
 Oregon PUC in 2005 initiated Docket UM 1188 Investigation into policies affecting AMI
 Case Study - Docket UE 189
• PGE‟s AMI project requested to install two way Advanced
•
Metering Infrastructure – AMI
Docket UE 189 imposed three conditions related to smart
grid information on PGE



Information-Driven Energy Savings
Experimental Critical Peak Pricing Tariff
Direct Load Control
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CASE STUDY - PGE
 850,000 meters, two-way RF system
 Remote disconnect
 Contract installer for most meters
 Capital costs - $132.2 million
 Tariff began 6/1/08, ends 12/31/10
 Systems acceptance testing now
 Mass deployment in 2009 and 2010
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CASE STUDY - PGE
 Benefit to customers
• Estimated operational cost savings of $33 million (20year NPV)

Estimated operational savings of $18.2 million in first full year
after deployment
 Additional customer and system benefits of $37
million to $80 million (20-year NPV); requires
additional investment
• Demand response and interval data tools
• Distribution asset utilization
• Outage management
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COMMISSION ORDER 08-245
Commission Order No. 08-245 provides
prudent rate incentives for PGE’s AMI
implementation
• Provides accelerated write-off of existing system
•
metering related equipment
Provides collection of revenues to support the new
metering system as it is being installed
 There is a lag to avoid conflict with the “used and
useful” law
Another Incentive - Rulemaking removed
barriers for disconnect and customer
notification requirements
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COMMUNICATION STANDARDS
ANSI C12.19-1997 defines a set of flexible
data structures ("tables") for use in metering
products and a syntax for identifying and
describing these structures
ANSI C12.22 extends C12.18 and C12.19 to
support data network communications at the
meter.
• ANSI C12.18-1996 is designed to transport data
structures via the infrared optical port currently used
in most North American electricity revenue meters
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COMM. STANDARDS ISSUES
Inclusion of some protocol services in
C12.18 are optional
Most data tables in C12.19 are optional
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IP BASED STANDARD
IP-based Communication Standards
still resides in the horizon
Distributed Systems
Intercommunication Protocol
• DSiP is an standardization effort to solve
incompatibility issues by providing
uniform service interfaces for software and
hardware equipment rather than plain
transport of data
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NETWORK MODERNIZATION
 Ageing of Infrastructures
 Capacity Limitations
 Expensive Equipment
• Automated Switchgear
• More Flexible Distribution Networks Require Greater
Redundancies
Fusing Coordination Issues
System Protection & Control Schemes
•
•
 Retraining of Workforce
• From Linemen to IT/Computer Programmer Linemen
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OTHER SIGNIFICANT CHALLENGES
 Cultural shift – Utilities historically have been terrible score
keepers
• Level of automation – Multiply the SCADA by 1,000 +
• Data/Information – What to do with all that data? How to make proper
decisions efficiently and effectively?
• Technical/Operations/Engineering decisions have historically been made
by engineers/technical staff. What happens now?
 How will Regulators view the above?
 Management of Technology – This will be a new arena for
Electric Utilities in the US
 Rates will at the very least double. Will customers go for
that?
 Greater Vulnerability to Cyber Threat
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WHAT IS THE BOTTOM LINE?
 Most utilities will not make, large investments in
modernizing their network without proper incentives
 States want investments on infrastructure
modernization to be prudent
 States most likely will not opt for any one
communication standard
 Regulation Oversight – NESC vs NEC
• Utilities will now operate customer appliances
• Liability Issues
• Changes in the NESC and NEC
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LOOKING AHEAD – A STATE PERSPECTIVE
 Competitive Markets
 Rates Flexibility
 Greater Efficiencies
 Greater Care for the Environment
• PGE‟s AMI Project (Eliminate ~~1,500 Tons of CO2)
 Energy Emergency Response Capability
• Curtailment Program
 Holistic View – What is the purpose of automation
without having robust physical and cyber
infrastructures?
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