Risky thinking: a good game plan for the Smart Grid

By Eric Murray, SVP Sales & Business Development, Tantalus Systems Corp.

Global domination isn’t a term typically used within the utility sector, but those considering AMI may want to break out their Risk board to see how a conquest strategy can apply to their own deployment and, ultimately, serve as a launching pad for full Smart Grid functionality.

The stakes aren’t quite the same. Utilities don’t have to worry about the purple army’s mounting presence in the northern territory of Yakustk. What a couple of hours of game play offers, though, is a lesson in how surgical deployment of advanced metering, demand response and distribution automation can help a utility conquer long-standing issues without breaking the bank.  Throughout history, logistics has broken the back of every failed campaign – taking a measured approach to the Smart Grid will ensure you won’t fall prey to over-extending your resources and underwhelming your results.

Consider the game board to be your service territory. Consider your opponents’ armies to be “problem” areas, namely end-of-line locations, new subdivisions, areas with high customer turnover, those with power quality hiccups.

As pieces come into play, it’s plain to see where the greatest threats and opportunities exist and, consequently, easier to map out a strategy on how to eliminate problems one by one… and ultimately rule the board.

TUNet is an end-to-end Smart Grid communications network; a powerful Wide Area Network (WAN) can reach out to target areas of highest impact first, and a fully functioning Local Area Network (LAN) provides a variety of applications to meet specific utility needs. The following case studies show how two utilities have used a surgical deployment strategy to accelerate the success of their smart metering programs and lay the foundation for future advanced applications. 

Chatham-Kent Hydro – the bellwether of Ontario’s Smart Metering initiative
C-K Hydro – a 35,000 customer electric utility located in southern Ontario – began investigating AMR long before the term “smart” meters was coined, and was ahead of the curve when the province announced that time-of-use consumption reporting would be mandatory by 2010.
What set the utility apart was its desire to go beyond the letter of the provincial initiative, and embrace the spirit in which it was intended. C-K Hydro’s advanced metering team laid out additional benchmarks that would guide the selection of the technology and implementation of the program. Among these were to:

Strive to minimize total cost of the Smart Metering by:

• re-using existing electromechanical meters where practical
• avoiding recurring public network costs not controlled by the utility
• simplifying the deployment and operating processes
• ensuring the system could also manage water and gas
• Support real-time applications like critical peak pricing and customer signaling
• Integrate data into billing, CIS/CRM, and meter data management applications in order to assess the impact of TOU billing on customer segments
• Implement a single system capable of managing all customers (rural, urban, C&I, meter panels, basement reads) independent of distribution network
• Validate support for future applications such as remote disconnect, load control, and distributed generation
• Seek opportunities to partner with other utilities/suppliers for economies of scale and shared knowledge & infrastructure
• Pursue non-proprietary technology to maximize future flexibility and relevance
• Investigate ways to present consumption data to customers and understand how awareness and education really impact conservation efforts

Although not requirements of the provincial mandate, Chatham-Kent considered these to be essential components of the Smart Grid, and that a two-way, real time communications network was necessary to support advanced features and applications.

In the fall of 2004, C-K Hydro commissioned a Tantalus Utility Network (TUNet®) to serve as its communications backbone. A wireless system proved to be the most cost effective solution and afforded deployment flexibility so it could pursue a surgical deployment strategy.
RF makes the leap from the Napoleonic to the Atomic age. In Risk, an army can only attack an opponent bordering its territory. That’s a grueling march if your forces are clustered in Peru but your aim is to invade central Europe. With TUNet, the RF signal is like an intercontinental missile that allows a utility to set its sight on anything within radio range.

Smart meters could be installed anywhere within Chatham-Kent’s 2400 sq. km (925 sq. mile) service area, enabling the utility to target customers of greatest need or highest return such as commercial zones, and hard-to-read locations.

Chatham-Kent is situated between Lake Huron and Lake Erie. It is an old Ontario town characterized by sturdy brick houses, many of which have electric meters installed in the basement. Initially, it believed that the RF signal would not pierce these thick exteriors.

Hugh Bridgen, who led C-K Hydro’s smart meter team, was impressed with the strength of the TUNet LAN signal.

“Exceptions are not the rule,” he says, “but in one example TUNet communicates from an apartment building basement through a rebar-reinforced concrete wall and a dirt-filled planter to a meter across the street. Furthermore, the building consists of 12 units. Although cross talk between devices prevents some RF systems from working in similar environments, TUNet-enabled meters can be located in high density locations without creating a Tower of Babel.”

In 2006, C-K Hydro acquired a neighboring utility in a fast-growing municipality. By adding a second 220 MHz antenna and Tantalus base station, it doubled the broadcast range at minimal cost. As a bonus, the expanded coverage enabled the utility to share the AMI infrastructure with a smaller, isolated community and spread costs over a larger customer base.

The project team recognized early on the importance of choosing versatile technology. Beyond collecting the required time-of-use data, it was imperative that the system support load control, outage management, and interface with the provincial meter data management system.
Web presentment was another driver that the utility believed was essential in order to get customers on side. Easy access to household usage profiles gives customers the ability to play an active role in energy management.

Bridgen adds: “Graphic representation of TOU (Time of Use) consumption enables customers to pinpoint periods when they draw a heavy load. Seeing consumption data in an at-a-glance format allows families to investigate their own cause-and-effect conservation experiments.”
“We’re seeing genuine excitement for Smart Metering. Net reductions on electric heat bills alone top 6% per participating customer, with some households achieving 18% savings.”

In July 2006, Chatham-Kent Hydro set a milestone by becoming one of the first Ontario utilities to agree to a full-scale smart metering roll out. To date, approximately 35,000 meters are installed, communicating, and interfacing with its core billing and operating systems. The cost of full implementation is projected to be half the Ontario Energy Board’s estimated cost for an implementation of this size.

Others are taking notice. The Utility Planning Network named C-K Hydro winner of its 2005/2006 Best Metering Data Integration Initiative contest for its success in helping customers become more astute energy users. In spring 2007, Chartwell, Inc. honored the utility with a Best Practices Award for Metering, citing the innovation, depth of business case and results it has achieved through its smart metering program.
C-K Hydro’s next big step is to implement a demand response component.

The southern Ontario LDC faces a typical situation during hot summer days when air conditioners, fridges and other cooling appliances run full out. Compounding the challenge for CKE and other Ontario utilities, the provincial government has decided to shut down all coal generation which makes up 25% of base load generation. Even with new renewable energy plants and additional gas fired generation C-K Hydro will be challenged to keep the lights on and will have to take decisive action to satisfy customer needs.

To help curb this situation, it plans on expanding its peaksaver program, which incorporates Tantalus’ load switching modules and may also involve Tantalus’ new smart thermostats, a feature rich, highly customizable DR device for load control and customer signaling. 

Peaksaver asks customers to give the utility authority to temporarily shut off or reduce power to specific direct load appliances such as a central air conditioner or pool pump, during peak times when demand threatens to outstrip supply.

Bridgen says that when it comes to load control programs, one size does not fit all.

TUNet enables the utility to create distinct flavors of DR programs. For example, one homeowner may choose to participate in every load control event, whereas his neighbor might prefer a weekend or weekday-only program. The programmable thermostat allows a utility can set cycling lengths and intervals so homeowners can choose a program that fits their budget and lifestyle.

“You can’t bully, coerce or goad consumers into signing up for a load control program,” he concludes. “What works is education, incentives, and simplicity. The real value of smart metering is in getting consumers and utilities working together to reduce consumption. The closer we get to this situation, the closer we are to realizing the benefits of a Smart Grid.”

Newport Utilities – optimizing electric & water AMI
Newport Utilities is a community-owned utility in eastern Tennessee, about an hour’s drive out of Knoxville, that distributes electricity and water to approximately 20,000 accounts in town and throughout a service area that stretches along the Great Smoky Mountain foothills.

Newport’s unofficial motto is “what needs to be done, gets done.” However, getting everything done had become more challenging in recent years, says Lee Baker, Newport’s long-standing general manager.

Like many utilities, Newport had to address rising customer expectations, growing costs from its distributed operating activities, and increasingly complex market conditions while dealing with a dwindling workforce.

“Our options were to shrink space and time or to look at technologies that would allow us to do more with less,” reflects Baker.

Although it used drive-by AMR on some far-flung routes, Baker and his team concluded that it was time to investigate a fully automated, multi-commodity AMI system

In 2005, Newport began looking closely at PLC (Powerline Carrier) and RF systems. Even during the assessment stage, Newport wasn’t convinced that anything was sufficiently mature or functionally rich enough to fit the bill.

“New technology sounds great but what value does it really offer?” he questions. “Some technology is just a new gadget designed to do a job that can be done equally well without the added expense. We needed to be convinced that the solution would allow the company to do a more efficient, accurate and productive job at a lower cost.”

At Newport, those overarching goals were sorted into a list of specific features and benefits it required from an AMI system:

Provide AMR for electric and water meters:

• Improve accuracy & timeliness of information
• Eliminate on-demand manual reads

Offer two-way communications to support:

• Outage reporting
• Status validation of events
• Remote disconnect / reconnect
• Automatic read-in and read-out procedures

Improve customer service:

• Real-time access to customer data for prompt support and query resolution
• Minimize intrusiveness to customer

Support engineering analysis:

• Simple application interfaces

Communications platform for future applications:

• Load Control
• Time-of-Use billing in support of Energy Policy Act directives
• Future Energy Bill needs

Minimize costs:

• Total service area coverage
• Support meters from multiple manufacturers
• Easy installation

Newport determined that TUNet was best fit for the challenge, due in part to its support for electricity and water metering, reliability, quick response time and ability to interface with other applications.

Baker particularly liked the idea of pacing the deployment in order to capture high return / high need customers first.

Newport is located in a ruggedly scenic corner of eastern Tennessee. But that also means remote reads are expensive, and often involve a lengthy drive along treacherous roads. 

“By eliminating trips to set up a new account or to re-check a meter, we can immediately recoup costs and use staff time more prudently. Focusing on remote customers first became our deployment strategy.”

Here, Newport lifted a page from neighboring utilities which use TUNet for electric metering. But it added its own twist by applying the approach to a simultaneous electric and water deployment. This enabled Newport to target any of its 20,000 electric accounts or 10,000 customers who receive water service.

To date, Newport has deployed 8500 electric meters and 5000 water meters. All data is transmitted over TUNet. Newport set the parameters so that electric meters report hourly and water meters report daily.

Baker reports that the project is ahead of schedule. The original plan called for a four-year step up to full deployment, but early results encouraged Newport to accelerate the process.

“We’re modernizing on several fronts including outage management, CIS, and a MultiSpeak compliant billing application. Consolidating water and electric metering on a single AMI network is the spearhead, but now that we have the data, we can use it in a variety of backend and customer-facing ways because of TUNet’s simple yet effective application interface.”

The utility is looking forward to launching a web portal that gives customers easy access to consumption data and the convenience to pay bills online.

“Web presentation gives customers the ability to better understand their bill through graphic representation of consumption habits. This is the difference between gadgets and tools. These technologies combine to ultimately provide customers with a higher level of information and service which they can use to lower their bills and reduce consumption.”

What works for customers also works on the balance sheet. Baker expects the system to pay for itself within seven years and result in $15 million in savings within 20 years.

This is achieved through many different ways. Newport’s reading costs have come down to just $0.056 per meter, per month (a nickel each month) for both electric and water. Even minor items such as reducing the number of phone lines add up to thousands of dollars in savings over time. Furthermore, the utility estimates that it has already saved 45-staff days in labor resulting from automated meter reading and reduced site visits.

It also uses TUNet to monitor and control infrastructure devices and, as a result, can detect and often correct problems with reclosers, transformers or regulators before they impact customer service and power delivery.

Whereas some would argue that automation distances the utility from its customers, Baker sees it as a way to pull them together.

“Simple things such as error free meter readings, no delays for move ins & outs, our ability to know about an outage before a customer calls has bolstered confidence in the company and the way we carry out our business.”

Risk free approach to full Smart Grid functionality
The Smart Grid is not simply about technology. It’s about the opportunities that the technology unlocks.

In the future – and probably sooner than anybody anticipated – all North American utilities will implement smart metering and the communications network needed to support it.

Some will take a minimal approach and select a system that meets only the basic requirements of whatever regulatory mandate is in effect, whether it be the EPA 2005, the Ontario Smart Metering initiative or whatever jurisdictional requirement is in effect.

Some, like Newport and Chatham-Kent, have taken a more visionary approach and adopted a system that accommodates existing and future requirements, and is capable of supporting the economic, environmental and social priorities that utilities and energy consumers are all driving toward.

An army may travel on its stomach, but it can only hope to be successful if a trustworthy communications network in place.

For utilities, this means establishing the communications network capable of coordinating the massive amounts of data that is involved in smart metering and being able to integrate it with the applications that drive the Smart Grid.

As is seen in these case studies, each utility has its own way to win the war by winning individual battles. Solution specific installation enables a utility to take the risk out of AMI implementation, fast track high-value service rollouts, and deploy advanced metering at its own pace.