Association for Financial
Professionals
March 2012
NASHVILLE ELECTRIC SERVICE
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Introduction
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Overview of NES
Compliance/Regulation Summary
Electric Vehicles
Electric Rates
Smart Grid
Funding of Underground Utilities
NASHVILLE ELECTRIC SERVICE
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Overview of NES
NES is the 12th largest public power electric
distributor in the United States.
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Approximately 360,000 customers
1,000 employees
$1.2 Billion in annual revenues
Largest taxpayer in Metro Nashville with in-lieuof taxes of $26.3 million last year
NASHVILLE ELECTRIC SERVICE
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Overview of NES
NES’ service territory
includes nearly all of
Davidson County and
portions of six
surrounding counties; it
contains about 700
square miles.
NASHVILLE ELECTRIC SERVICE
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Overview of NES
NES has no generating capacity and purchases its
entire supply of power from the Tennessee
Valley Authority (TVA) under long-term contract.
About 80% of all electric revenue received by NES
is passed on to TVA for power costs.
NASHVILLE ELECTRIC SERVICE
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Service Area Makeup
Customers
% kWh
Sales
% Total
Operating
Revenue
Residential Customers
320,000
40.50%
42.30%
Commercial & Industrial Customers
TOTAL:
40,000
360,000
59.50%
100.00%
57.70%
100.00%
NASHVILLE ELECTRIC SERVICE
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Compliance/Regulation
TVA’s Role as Regulator
• Rates
• Use of Revenues
• Cash Reserves
Renewable Portfolio Standards
North American Reliability Corporation
NASHVILLE ELECTRIC SERVICE
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Electric Vehicles
• NES has been an integral part of the Electronic Vehicle
(EV) movement here in Middle Tennessee.
• NES is an original member of the Tennessee Governor’s
Zero Emission Vehicle Partnership with Nissan.
• We have partnered with TVA and EPRI to study the
impact of plug-in electric vehicles on the electric
distribution system.
NASHVILLE ELECTRIC SERVICE
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Rates
TVA’s New Rate Structure
• An effort to reduce peak power demand
throughout the region
• Wholesale rate options
• After extensive research and a thorough
customer impact analysis, NES selected a rate
that provides stability and helps avoid an
immediate rate increase
NASHVILLE ELECTRIC SERVICE
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Rates
TVA’s New Rate Structure - Impacts
• Need for higher cash reserves
• Confusion for our customers
– Higher rate in summer and winter when fuel costs are
higher—June through September and December
through March
– Lower rates in transition months—April, May,
October, November
• Need for better data and more control
NASHVILLE ELECTRIC SERVICE
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Smart Grid
Grant from TVA for Pilot Projects
• Advanced Voltage Management
– Voltage reduction results in a reduction in total power
– Approx. 700 meters will monitor system voltage
• Direct Load Control
– Commercial Rooftop HVAC
– Commercial and Residential Water Heaters
• Critical Peak Pricing
– Voluntary load reduction/conservation
Smart Grid Project Goals
• What Do We Hope to Accomplish?
– Install 30,000 new meters at key points in the NES
service area
– Reduce a total of 52 megawatts (MW) of peak
demand on the NES system
• 40 MW through voltage reduction
• 10 MW using direct load control devices
• 2 MW through critical peak pricing rates
Benefits of Upgraded Meters
Benefits to NES
• Accurate system information
• Improved system reliability and power quality
• Dynamically manage system load
Benefits to the Customer
• Meter readings done remotely
• Better for the environment
• Lights coming on sooner after an outage
Smart Meters
Conversion to Smart Meters
• Transition toward time of use
• Demand response
• Automatic detection of problems; enhanced ability to
correct problems
• Better prediction of energy usage
Concerns
• Privacy, particularly in light of open records
• Radio frequency
NASHVILLE ELECTRIC SERVICE
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Underground Utilities
Current Policy on Underground Utilities
• Conversion projects are funded by the
requesting party
• Allowances for new construction are revenuebased
• Conduit and excavation cost is borne by the
developer during new construction
• Underground services are provided at no
additional charge
NASHVILLE ELECTRIC SERVICE
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Underground Utilities
Converting System to Underground
• Disregarding lighting costs, customer wiring and
other utilities, NES estimates the cost to be
$7,000+ per residential customer
• Based on an estimated 320,000 residential
customers, the total cost would be $2.25 billion
NASHVILLE ELECTRIC SERVICE
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Underground Utilities
New Construction
• Distribution conductor – 13 times more
expensive
• Service conductor – 2 times more expensive
• Transformer – 1.4 times more expensive
NASHVILLE ELECTRIC SERVICE
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Music City Center
• A tunnel was built to place high-voltage transmission lines
underground downtown.
• In 2011, we completed the relocation of a downtown substation that
was required to be moved due to the construction of Nashville’s new
Convention Center.
• The new Peabody Substation was constructed with state-of-the-art
equipment and is designed to be completely enclosed upon
completion of the project.
NASHVILLE ELECTRIC SERVICE
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Partially Completed Tunnel
Architectural Rendering of Enclosed
Peabody Substation
QUESTIONS?
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