Settlement Party Briefing February 15, 2006

1 © Copyright 2006, Southern California Edison

Settlement Party BriefingFebruary 15, 2006

Advanced Metering Infrastructure Phase I Summary & Status

www.sce.com/ami

AMI Program 2© Copyright 2006, Southern California Edison

SCE AMI Directional Cost/Benefit (August 2005)

A/C Load Control

PriceResponse

Capital

(Meters, Network,

IT)

Costs Benefits

O&M

MeterReading

Cust Svc

Operations

A/C Load Control

PriceResponse

Capital

(Meters, Network,

IT)

SCE ProposalAMI

Benefits

O&M

MeterReading

Cust Svc

Operations

SCE Aug., 2005 Supplemental Testimony supporting Phase I

A/C Load Control

PriceResponse

Capital

(Meters, Network,

IT)

Costs Benefits

O&M

MeterReading

Cust Svc

Operations

A/C Load Control

PriceResponse

Capital

(Meters, Network,

IT)

SCE ProposalAMI

Benefits

O&M

MeterReading

Cust Svc

Operations

SCE Aug., 2005 Supplemental Testimony supporting Phase I

Address fundamental cost drivers for last business case Telecom network coverage, performance,

reliability and system management Meter failures and life-cycle performance Interoperability & system security End-to-end data management

Re-evaluate Aug 1st added functionality Interface to A/C load control thru PCT Remote service turn on/off

Identify additional uses for system based on tangible customer and business value

Develop new conceptual estimate of overall business case


SCE AIM system seeks to leverage a 2-way communications infrastructure with 5 million intelligent devices on our distribution network for our customers directly and our operations.

Conceptual AIM System

Illustrative Example


AMI Phase I

AMI Program will use a multi-phased approach to development and deployment of a next generation advanced metering infrastructure over a 7 ½ year timeframe.

Business Process

Design &Proof of Concept

Beta Development

& Pilot

Business

DeploymentPre Deployment

Meter Trade & Feasibility Studies

Conceptual Processes & Systems Reqs

Business Process

AIM Requirements,

“Design”& Proof of Concept

Beta Product

Field Pilot

Business Case in Chief

Full

Activities


Cost/Benefit Analyses

12/2005 6/2007 12/2008 12/2009 5/2013

Business Process

Design &Proof of Concept

Beta Development

& Pilot

Business

Application


Conceptual Processes & Systems Reqs

Business Process

AIM Requirements,“Design” &

Proof of Concept

Beta Product

Field Pilot


Cost/Benefit Analyses

Phase II18 Mos.

Phase I18 Mos.

Phase III B42 mos.

Phase III A12 Mos.

Phase II18 Mos.

Phase I18 Mos.

Phase III B42 mos.

Phase III A12 Mos.

Phase II18 Mos.

Phase I18 Mos.

Phase III B42 mos.

Phase III A12 Mos.

Phase II18 Mos.

Phase I18 Mos.

Phase III B42 mos.

Phase III A12 Mos.

Final Business CaseDesign & System Dev


Utility Driven Meter Development Challenges

Achieve the right balance among Marketability, Functionality and Openness

Develop a specification that is supported by multiple meter and communications vendors and is commercially viable in the NA utility market

FunctionalityOpenness

Engage other utilities & vendors in development process to generate interest and feedback

Leverage OpenAMI, Intelligrid, Gridwise, CEC PCT, ANSI & other standards and reference design initiatives

Durable open design that will support a solid positive business case that provides customer value

Marketability


Phase I Program Scope

Business & FunctionalRequirements

Reference Architecture

Trade-off Analysis

Preliminary Business Case & Regulatory Application

Vendor Engagement

Technology Evaluation

Vendor Product Bench Testing

RegulatoryStakeholder Engagement

Technology Advisory Board

Industry Standards

Utility Collaboration

Cost/Benefit Analysis

External Engagement System Design Technology Development


AMI Phase I Summary Schedule

Oct-05 Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07

System Requirements, Architecture & DesignDefine AMI Requirements

AIM Conceptual Architecture Reference Design

Cost/Benefit AnalysisPreliminary Dynamic C/B Model Development

Preliminary Cost/Benefit AnalysisFeasibility and Trade-Off Analysis

Final Business Case

Vendor & Technology AssessmentVendor Communication & Collaboration

Component/Feasibility Technology TrialsRFI Part I - Conceptual Feature Set

Monitor Vendor's Alpha Product Development RFI Part II - Business Requirements

Beta Product Testing at SCEAMI System RFP

Utility & Industry EngagementUtility Outreach

Technology Advisory BoardExternal Communications

Tentative Phase II Regulatory PreparationApplication for Phase II

Motion to schedule Phase II HearingsPre-Hearing Conference

Possible Settlement Discussions


AMI Program Status (through Jan 31 2006)

Accomplishments Launched AMI Program formally on Nov. 7th CPUC Approval (5-0) on Dec.1st Began requirements workshops (75% complete) Screening RFI for AMI Technology released to vendors worldwide

Results back on Dec. 16th exceeded SCE’s expectation in terms of vendor interest and activity on next generation development including alignment with SCE

AMI products should be available in 2006 for bench testing Technology Advisory Board launched, 3rd meeting held Feb.2 Initiated formation of a utility consortium regarding AMI product standards – initial list represents US and

international utilities representing over 75 million meters

Key Milestones Date StatusPhase I Kick-off Nov 2005

CPUC Phase I Approval Dec 2005

AMI Technology Vendor Screen Q1 2006

Business & Functional Requirements Q2 2006

Conceptual System Architecture Q2 2006

AMI Technology Evaluation Q2 2006

Conceptual Feasibility Q3 2006

Phase II Regulatory Application Q4 2006

Beta Product Selection Q1 2007

Preliminary Business Case Q2 2007

Has Been Met Expect to Meet Undetermined At Risk Not Met


AMI System Design


SCE Brainstorming

System Design: Business Use Cases (Scenarios)

---Distribution operator locates outage using AMI data and restores service

Multiple clients use the AMI system to read data from devices at customer site

Meter reading for gas & water utilities

Utility upgrades AMI system to address future requirements

--Customer provides distributed generation

Customer uses pre-payment services

Utility detects tampering or theft at customer site

Utility maintains the AMI system over its entire life-cycle

-Utility procures energy and settles wholesale transactions using data from the AMI system

Distribution operators optimize network based on data collected by the AMI system

Customer reads recent energy usage and cost at site

Utility remotely limits or connects/ disconnects customer

Utility installs, provision and configure the AMI system

AMI system recovers after power outage, communications or equipment failure

Real-time operations curtails (or limits) load for economic dispatch (ES&M)

Distribution operator curtails customer load for grid management

Customer reduces demand in response to pricing event

Multiple clients read demand and energy data automatically from customer premises

Installation & Maintenance

Field Services / System Recovery

Energy Procurement

DeliveryCustomer Interface

Billing & Customer Service

---Distribution operator locates outage using AMI data and restores service

Multiple clients use the AMI system to read data from devices at customer site

Utility upgrades AMI system to address future requirements

--Customer provides distributed generation

Customer uses pre-payment services

Utility detects tampering or theft at customer site

Utility maintains the AMI system over its entire life-cycle

-Utility procures energy and settles wholesale transactions using data from the AMI system

Distribution operators optimize network based on data collected by the AMI system

Customer reads recent energy usage and cost at site

Utility remotely limits or connects/ disconnects customer

Utility installs, provision and configure the AMI system

AMI system recovers after power outage, communications or equipment failure

Real-time operations curtails (or limits) load for economic dispatch (ES&M)

Distribution operator curtails customer load for grid management

Customer reduces demand in response to pricing event

Multiple clients read demand and energy data automatically from customer premises

Installation & Maintenance

Field Services / System Recovery

Energy Procurement

DeliveryCustomer Interface

Billing & Customer Service


AMI System Design Overview

Conduct 40 AMI workshops

Develop 18 use cases

Generate functional requirements

Generate non-functional requirements

Use Case analysis

Prioritize requirements

Develop high-level patterns

Develop Component Architecture

Map requirements to components

Iteratively refine component architecture

Develop catalog of standards and technologies

Develop Logical (4+1) Architecture

Develop high-level integration architecture

Test architecture against use cases

Publish Platform Independent Model

Map technologies and standards to components

Develop subsystem cost thresholds

Determine trade-off criteria

Select standards and technologies for estimation

Prepare cost estimates & benefits

Describe subsystem boundaries and performance limits

Refine to level of detail required to communicate with vendor community

Develop Platform Specific Model

Prepare next cost estimates & benefits

Business Need

Conducted several innovation sessions to identify potential business value

Studied recent utility experience in creating value from AMI systems

Consultant input on value from AMI systems

AMI System scope is the meter and related communications


System Design: Process for Developing Requirements

Affirmed / Appended

Cost Tradeoff Candidates

Action Items

Work Shop Minutes

Non -Functional

Requirements/ Criteria

Prior Cost Tradeoff

Items

OpenAMI Requirements

Requirements Teams Billing and Customer Service Customer Interface Energy Delivery Energy Procurement Field Services / System Recovery Meter Installation and Maintenance

Intelligrid , Open AMI , Use Case , SCE BRainstorming

Narratives merged , Refined

Cost Tradeoff Teams Field Services Demand Response Energy Procurement Call Center Billing IT Job Skill Training Customer Account Management Marketing & Communications Meter Services Procurement

Megalead , Facillitator tune to SCE Terminology ,

approach

Prior Requirements

Work Products

Department to

Requirement & Cost Tradeoff

Coorelation

18 Use Cases

Wo r

ksho

p P

repa

ratio

n

Workshop Execution

Functional Requirements

Workshop Agenda

Cost Tradeoff Workshops

# TBD

Post Workshop Execution

Workshops : 1-2 scenarios in agenda scope depending

on complexity 4 hours per workshop

T&D

Tariffs & Programs


Business Need Functional Requirement Functional Attribute Technical Requirements

Remote Service Turn-

on/turn-off Remote Controllable

Premise Level Switch

•Switch adjustable to service (e.g., 200/100A)•Remotely Programmable•On-board and remotely triggerable•Component hardware housed under the meter cover

•Dimensions•Weight•Performance rating•Temperature rating•Latching speed•Shielding requirements

Feature Benefits

BenefitValues

•Field Services•Call Center•Credit/Payment•Customer

•$$•$$•$$$•Satisfaction

Requirements Determination & Evaluation

Costs

$ Component$ System$ Ongoing O&M

$ Total

Trade-offAnalysis

AMI Program 8 Confidential

• Extend SCE’s data and controls network to 5 million nodes (WAN)

• Leverage sensor technologies for customers and utility distribution (LAN/HAN)

• Expand meter metrics and analytics beyond the revenue cycle to distribution power characteristics and operational information

• Create a durable design to match 15–20 year lifecycle based on interoperability and open standards

• Enable CPUC price response requirements

• Interface with load control technologies like CEC’s PCT

• Integrate programmable turn on/turn-off switch

• Interface with home information, automation & control technology

AMI Meter Design Objectives

Metrology & Intelligence Telecom

Open Design& Standards

Demand Management

Metrology & Intelligence Telecom

Open Design& Standards

Demand Management

Labor savings, Reduced UFE &

Improved Customer Service


AMI Technology Assessment


Technology Assessment/Procurement Plan

Goal:Competitive commercial products available from at least three meter and three communication vendors that meet SCE’s minimum requirements for performance and price by the end of Phase I

Objectives: Proactively engage in a close collaborative

process with selected vendors with the most promising products in development

Rationalize the number of vendors that SCE wants to engage on product development

In recognition of long procurement cycle (3-4 years), provide on-ramp for promising products and off ramp for non-performing products

Ensure level playing field for relevant vendor information such as requirements, architecture and future procurements

Identify Potential Vendors Worldwide

Initial Candidate Vendor Screen

Candidate Vendor Due Diligence

Beta Product Testing

Vendor Development Screen

Beta Product Selection

Business Requirements Gap Analysis

Jan 06


Candidate Vendor Identification

• Metrology• PQ Metrics• Remote Disconnect• MCU / Memory

GE (I-210)Landis+Gyr (Focus, S4e)

*ITRON (Centron / Sentinel)*Elster (Rex / Alpha 3)*Echelon (NES meter)*Sensus (Icon)

• Local Area Network• Wide Area Network Interface• Home Area Network Interface (HAN)

Partial List of Suppliers

Software

Meter Communications

LoadSwitches

Smart T-stat

CarrierHoneywellJohnson ControlsInvensysEtc…

IntermaticLevitonRAM Ind.Baco ControlsSCE’s LS supplierInvensys

“Open”

BayardUSCLEtc…

In-HomeDisplayDevices

In-HomeDisplayDevices

AmronCannonCellNetItronHuntDCSIEchelon

ComvergeTrilliant/NertecSensusSilver SpringsSmartSynchElsterPowerOneData

BPL?CurrentMitsubishiMotorolaOther…..

Technology Market Structure(representative vendor list)

132 Solicitations Sent• 57% North American Firms• 43% International

32 Qualified Responses Received















Technology Assessment Focus


SCE AMI Technology Assessment ApproachLevel 1

(Alignment)Level 3

(Lab Testing)

Level 2(Validation)

L1 Key Criteria: - Functional Capabilities - Product Timing - Commercial availability - 3 X 3 Interoperability - 2-way - Reliability & Availability - Security - Serviceability - HAN Capabilities - WAN Options - Target price range - MTTF- Other

L2 Key Criteria: - Design Development - Production Capabilities - Financial Condition - Processes: Business / Development Manufacturing (NPI) - Supply Chain - Small Requirements Gaps - Other

L3 Key Criteria: - Successful Lab Test - Added functionality - Flexibility - Commercial Terms - Other

Level 4

(Field Test)Level 5

(Full Deployment)

ID “Next Gen” development

Due Diligence Reviews

Product Availability & Testing

Q1-’06 Q2-’06

Q4-’06

Phase IIPhase III


Initial RFI Observations – Significant Market Developments

32 Responses received All are working on “Next Generation” technology 17 indicated an integrated HAN in development 12 indicated development of integrated disconnect Most communications in development are 2-way

and RF peer-to-peer networks Most are incorporating remote software upgrade

capability Vast majority of vendors expect to commercial

product by year-end 2006 for test

Cost Coverage AvailabilityReady for prime time

LoadControl

Elster

Itron

AtosCellNet

Comverge

DCSI

$ $ $ $

$ $ $

$ $ $

4 point rating scale6/30/2004 – Internal Use Only (pgk)

AMI RFI Top Contenders Comparison

85%

90%econ

80%

100%

100%

Developed RF transceiveralong with protocol for DLC(CCU4) - ready for integration

Will support a range of Future load control Devices – not yet available

2-way DLC exists (200 Amp disconnect avail).Customer has LED visualFor operation status

The full 2-way capabilityof the network facilitates.Willing to explore development w/ 3rd party.

$ $

$ $

stat

ed

2-way to meter (RF Mesh)

2-way to collector (CCU4)

2-way to meter

Limited 2-way to meter (PLC)

2-way to meter (RF Mesh)

HVAC DLCSet back T-stat

2004 2006 17 Responses received Very little new product development No Home Area Network capabilities Very limited load control interface No integrated disconnects Not remotely programmable / upgradeable Predominately 1-way fixed RF communications Very limited interoperability

California & Ontario are no longer alone in AMI – Texas, New York and others are pursuing it

Several AMI procurements are currently on the street or in evaluation – (e.g., SDG&E, Portland G&E, Nstar, LIPA, TXU)

Market is moving to a more sophisticated AMI product based utility needs and underlying component technology capabilities


External Engagement


External Engagement

Utility Consortium

Organized within the existing international standards body, UCA® International Users Group. UCA® is the parent organization to OpenAMI

OpenAMI charter has a role defined for an utility advisory board to provide feedback related to utility needs and application of reference design work products

Focus of group is on expedited review and adoption of existing standards/reference design work from OpenAMI, and various related group (EEI, IEEE, ANSI, Intelligrid, and Gridwise)

Proposed charter jointly developed by UCA® and SCE (reviewed by Law) Potential charter members represent over 75 million meters worldwide:

• SDG&E - AEP - FPL• PG&E - ConEd - NationalGrid• EdF - TXU - LIPA• DTE - HydroOne - Exelon• Xcel Energy - PacificCorp - BCHydro• Alliant - Hawaiian Electric - Entergy

Technology Advisory Board Objective is to leverage existing reference design and standards efforts for SCE Membership:

• Carnegie Mellon University: Dr. R. Tongia AMI technology & policy & Asia insights• CEC PEIR/Lawrence Berkeley Labs: D. Watson CEC demand response research• OpenAMI: R. Bell AMI reference design effort• Intelligrid/EPRI: J. Hughes Utility systems interoperability & security• Gridwise Architecture Council: S. Widergren DOE smart grid reference architecture• IEC/EDF: R. Schomberg International standards & European insights

Documents

Settlement Party Briefing February 15, 2006