smud report final 120618 - vermontlaw.edu€¦ · professional education and issue development; and...

SMUD’s SmartSacramento:A Clean Technology Pioneer

InstituteforEnergyandtheEnvironmentVermontLawSchool

TheInstituteforEnergyandtheEnvironment(IEE)isanationalandinternationalresourceforenergylawandpolicy.Theinstituteoffersafullcoursecurriculumandacertificateofconcentrationduringtheacademicyearandthroughits

EnergySummerseminars;distributesscholarly,technical,andpracticalpublications;providesforumsandconferencesforprofessionaleducationandissuedevelopment;andservesasacenterforgraduateresearchonenergyissues,withanenvironmentalawareness.

Theinstitute’sresearchteamisselectedfromtopstudentsintheenergyandenvironmentalprogramsatVermontLawSchool.IEEstudentresearchersworkonsomeofthemostpressingenergyconcernstheworldfacestoday,includingenergyself‐reliance,thesmartgrid,energysecurityandjustice,carbonsequestration,andrenewableenergysources.MoreinformationaboutIEEcanbefoundatwww.vermontlaw.edu/energy

SmartGridCaseStudySeries–Case3

June2012

TABLE OF CONTENTS

SmartGridProjectOverview.......................................................................................................................................................................................1

TheSmartGridCaseStudiesSeries.....................................................................................................................................................................1

ProjectFocus2012andBeyond............................................................................................................................................................................1

Introduction........................................................................................................................................................................................................................2

BackgroundontheSacramentoMunicipalUtilityDistrict(SMUD)......................................................................................................3

OverviewofSMUD’sSmartGridPrograms...........................................................................................................................................................6

Consumer‐OwnedPerspective...............................................................................................................................................................................6

OrganizationofPrograms........................................................................................................................................................................................8

ProgramManagementandDevelopment.........................................................................................................................................................9

EstimatedCosts..........................................................................................................................................................................................................10

SMUD’sSmartGridRoadmap:SevenKeyProjects.........................................................................................................................................11

SmartMetersandAdvancedMeteringInfrastructure(AMI)................................................................................................................11

ConsumerBehaviorStudyandDynamicPricing........................................................................................................................................14

DemandResponse/EnergyEfficiency..............................................................................................................................................................16

Distributionsystemimprovementsandautomation................................................................................................................................17

PHEV/BEVInfrastructureandIntegration....................................................................................................................................................21

CustomerApplications............................................................................................................................................................................................22

CyberSecurity.............................................................................................................................................................................................................24

ImplementationChallenges.......................................................................................................................................................................................25

ConclusionsandLessonsLearned..........................................................................................................................................................................31

FocusingonStrategicPlanningandStrongCommunicationwithCustomers...............................................................................31

ExpertiseandLeadershipinCleanEnergyTechnologyLeadstoSuccessinSmartGridImplementation.......................32

California’sCleanEnergyLeadershipandClearPolicieshavebeenSupportive..........................................................................33

USDepartmentofEnergyAcknowledgmentandDisclaimer.....................................................................................................................34

1

Institute for Energy and the Environment

OurSmartGridCaseStudySeriesIncludes:

CentralVermontPublicService(Vermont) CommonwealthEdison(Illinois) PecanStreetProject(Texas) SacramentoMunicipalUtilityDistrict

(California) SaltRiverProject(Arizona) SanDiegoGasandElectric(California)

SMART GRID PROJECT OVERVIEW

TheUnitedStateselectrictransmissionanddistributionsystemisonthevergeofatransformationtoasmartelectricgrid.Atthecenterofthisevolutionistheintroductionofnewtechnologyatthecustomermeteraswellasthedistributionandtransmissionsystemlevel.Unsurprisingly,theintroductionofthisnewtechnologyhaspresentednewlegal,policy,andregulatorychallengesforstateandfederalregulators.ThefederalgovernmenthasaddedadditionalmomentumtothistechnologicalevolutionbymakingasmartelectricgridacentralcomponentoftheUScleanenergyagendaandawarding$3.4billionin

smartgridinvestmentgrantstoutilitiesandotherentitiesaspartoftheAmericanRecoveryandReinvestmentAct.

THE SMART GRID CASE STUDIES SERIES

VermontLawSchool’sInstituteforEnergyandtheEnvironmentSmartGridProjectwasinitiatedin2010throughjointfundingoftheUnitedStatesDepartmentofEnergy,withthesupportofVermontCongressmanPeterWelch,andVermontLawSchool.Utilizingcasestudyanalysisofsmartgridprogramimplementation,theresearchprojectisexaminingthequestion:whatlegal,regulatory,andotherpolicychangescanbestensurethatSmartGridimplementationintheU.S.improvesreliability,enhancesconsumervalue,andmeetsourcleanenergygoals?

PROJECT FOCUS 2012 AND BEYOND

FERCChairmanJohnWellinghoffhasnotedthatclimatechangeandasmartelectricgridarebothkeyissuesfortheenergyindustryandthefederalgovernment,butrarelyarethesetwoissueslinkedinpolicydebates.ThefocusoftheInstituteforEnergyandEnvironment’sSmartGridProjectistohelpbetterdefinethisimportantlink,andtopromotesmartpoliciesthatbenefitboththeclimateandtheelectricgrid.ResearchsuchasthatconductedbyPacificNorthwestNationalLaboratory(PNNL)andtheElectricPowerResearchInstitutehaveidentifiedthatasmartergridislikelytobeasignificantlygreenergrid,whichcouldleadtosignificantreductionsinbothenergyusageandcarbonemissions.PNNL’sresearchsuggeststhataSmartGridcanleadtoa12%reductionincarbonemissionsaloneby2030.Buildingonourcasestudyresearchduringthesecondphaseofourproject,weareproducinguptofiveSmartGridpolicyreports.Thesereportswillexaminebestpractices,lessonslearned,andpolicyissuesrelatedto:

LegalandregulatorychallengestoSmartGridimplementation,includingcustomerdataprivacy; Integrationofelectricvehiclesintothegrid; Superchargingefficiencyandexpandingdemandresponse; Integrationofcleandistributedgenerationandstorage;and Distributionoptimizationandconservationvoltagereduction.

MoreabouttheInstitute’sSmartGridProjectisavailableat:www.vermontlaw.edu/smartgrid

2


INTRODUCTION

Thefederalgovernment

allocated$4.5billioninfederal

economicstimulusfundsforSmartGrid

developmentthoughtheAmerican

RecoveryandReinvestmentAct(ARRA).TheSmartGridisanelectricalgridinwhichinformation

aboutbehavioranduseofelectricityontheconsumerandsupplierlevelisorganizedtopromote

morereliableandefficientservices.TheEnergyIndependenceandSecurityActdefinestheSmart

Gridasthe“modernizationofthenation’selectricitytransmissionanddistributionsystemto

maintainareliableandsecureelectricityinfrastructurethatcanmeetfuturedemandgrowth.”1In

addition,theSmartGridhasbeenadoptedasawaytoprotecttheenvironmentbyincreasing

energyefficiencyandlimitingclimatechange.TheSmartGrid’stechnologicalimprovementsare

expectedtoreduceenergyconsumption,averttheneedtobuildmorepowerplants,andcreatea

morereliableandsecureelectricityinfrastructuretomeetfutureenergygrowth.

TheSacramentoMunicipalUtilityDistrict(SMUD)isoneofanumberofutilitiesdeveloping

aSmartGridprogram.In2009,SMUDreceived$127.5millionfromtheDepartmentofEnergyto

supportitsSmartGridefforts.SMUDhasbeenapplyingthisgranttoits$308millionSmartGrid

investment,“SmartSacramento®,”2whichincludesajointventurewithcommunitypartnerswho

aretheCaliforniaStateUniversityatSacramento,theStateDepartmentofGeneralServices,the

CountyofSacramento,theSacramentoCityUnifiedSchoolDistrict,ElkGroveUnifiedSchool

1TitleXIIIoftheEnergyIndependenceandSecurityActof2007(EISA)

2®AservicemarkofSacramentoMunicipalUtilityDistrict.

3


District,andtheLosRiosCommunityCollegeDistrict.ThispaperpresentsacasestudyofSMUD’s

SmartGridprograms,namely“SmartSacramento.”TheSmartSacramentoprojectencourages

customerstobepartoftheenergysolution.Itinvolvesenhancedtechnologyinfrastructure,

AdvancedMeteringInfrastructure(AMI),distributionautomation,demandresponse,customer

applicationssuchaswebaccesstoenergyusageandanalysis,aconsumerbehavior(pricing)

study,cybersecurity,andpartnerprojects.Thesevariousprojectsstartedin2009andare

projectedtobecompletedby2014.However,theSmartSacramentoprojectisjustoneofSMUD’s

initiativesthatleveragesSmartGrid,energyefficiency,andcleantechnologyefforts.3

BACKGROUND ON THE SACRAMENTO MUNICIPAL UTILITY DISTRICT (SMUD)

SMUDisacommunity‐owned,not‐for‐profitelectricutilitythathasprovidedpublicpower

throughoutSacramentosince1946.4IthasanelectedBoardofDirectors(Board)thatdoesnot

reporttoacitycouncilandisownedbyitscustomers.TheBoardhasexclusivelegalauthorityto

establishtheratesandrulesforelectricitycustomerswithinitsserviceterritory.5

3WhilethetitleofthiscasestudyreferencesSMUD’sSmartSacramentoanumberofSMUD’srelatedSmartGridandcleanenergyinitiativesarediscussedthroughoutthereport.

4SacramentoCountyresidentsoriginallyvotedtoestablishSMUDin1923asacustomer‐ownedutility,butduetolegalcontroversywithPacificGas&ElectricCompanyofSanFrancisco,itdidnotstartprovidingpowerfortwodecades.Additionally,itneededtobuildanorganizationofengineers,electricians,managersandofficeworkerstotakeoverSacramento’soldelectricsystembeforesupplyingelectricitytoSacramentocustomers.www.smud.org/en/about/Pages/history‐1940s.aspx,lastvisitedJune15,2011.

5http://www.smud.org/en/about/documents/reports‐pdfs/draft‐time‐based‐electricity‐and‐smart‐grid.pdf

4


SMUDisthesixthlargestcommunity‐ownedelectricutilityintheUnitedStates(U.S.)and

secondlargestinCalifornia.Itemploys2,036people.6SMUDcurrentlyserves529,695residential

customersand68,510businesscustomersinaserviceareawithatotalpopulationofabout1.4

million.SMUDencompassesa900‐squaremileserviceterritoryinSacramento,PlacerandYolo

Counties.

SMUDgenerateselectricityusingadiversearrayofsources.SMUDownsa500megawatt

(MW)naturalgascombinedcyclepowerplantandthreenaturalgasfiredco‐generationfacilities

thatmakeupapproximately50%(2010)ofitstotalproduction.SMUDrunsitshydroelectric

plantsforprovidingpeakdemand,whichmakeupabout14%(2010)ofitsgeneration.In

addition,SMUDhasactivelysupportedrenewableenergyanddistributedgenerationdevelopment

6SMUD’scompanyprofile,SMUDwebsite,https://www.smud.org/en/about‐smud/company‐information/company‐profile.htm,lastvisitedJanuary20,2012

SMUD’s Service Territory Source: SMUD

5


toserveitscustomersaspartofitsgoaltoreduceitsgreenhousegasemissionsto10%ofits1990

levelby2050.7

SMUDpromotesrenewableenergyandenergyefficiency.8Ithaspioneeredgreen

technologyanditsenergyefficiencyandrenewableenergyprogramsarerecognizednationallyfor

theirleadershipandinnovation.In2008,SMUDadoptedagoaltoprocure33%renewablepower

by2020beforeitwasmandatoryforallCaliforniaelectricutilities.9SMUDwasalsotheonlylarge

utilitythatmettheprevious20%renewablegoalby2010usingeligibleresourcesunderthe

currentCaliforniaEnergyCommissionRenewablePortfolioStandardsEligibilityGuidebook.Ithas

102MWofwind‐poweredfacilitiesand35MWofphotovoltaicgeneratingfacilities.These

renewableenergysourcesgeneratealmost3%(2010)ofSMUD’senergyoutputwiththe

remainingrenewableenergysuppliedbyPowerPurchaseAgreements.Thus,SMUD’stotalenergy

fromrenewableenergysourcesin2010wasapproximately24%.10

SMUD’spoliciesfocusonservingthecommunity.Forexample,itsvisionisto“empowerits

customerswithsolutionsandoptionsthatincreaseenergyefficiency,protecttheenvironment,

7TimothyN.Tutt,SMUD’sGovernmentAffairsRepresentative,presentingSMUD’scommentsregardingimplementingtheproposedgoalof12,000MWofcleanlocaldistributedgeneration(DG)usingSmartGridsolutionstotheCaliforniaEnergyCommission,July20,2011;http://www.energy.ca.gov/2011_energypolicy/documents/2011‐06‐22_workshop/comments/SMUD_comments_TN‐61471.pdf,lastvisitedAugust10,2011

8SMUD’senergyefficiencyprogramshavealreadyresultedincustomersavingsofmorethan$550millionoverthelast35years.

9SMUDcommentson“RenewablePowerinCalifornia:StatusandIssues,”October5,2011,http://www.energy.ca.gov/2011_energypolicy/documents/2011‐09‐14_workshop/comments/SMUD_Comments_on_Draft_Renewable_Power_in_California_TN‐62550.pdf,lastvisitedJanuary18th,2012

10Id.

6


reduceglobalwarmingandlowerthecosttoserveitsregion.”11SMUDprovidesitscustomers

withinformationandotherusefultoolstokeepdowntheirelectricitybills.Italsosets

competitiverates,whicharetypicallybelowneighboringutilityrates.

OVERVIEW OF SMUD’S SMART GRIDPROGRAMS

SMUDistransitioningtoaSmartGridinordertogivecustomersmoreflexibilityandchoice

intheirelectricityusewhilealsomeetingtheorganization’senvironmentalgoals.SMUDreceived

a$127.5millionSmartGridInvestmentGrant(SGIG)fromtheDepartmentofEnergythrough

ARRAtoadvanceSmartGridimplementation.Theawardisoneofthe10largestinthenation.

ThecontractwassignedonApril23,2010,andhasatotalbudgetof$307,697,792.Hence,SMUD

ischargedwithimplementingalmost$308millionworthofprojects.Thisamountwas63%ofthe

SGIGmoneyallottedtoallCaliforniaelectricutilities.SMUD’sinitialphaseoftheSmartGrid

program,focusedoninstallingafunctionalAMI(e.g.SmartMeters),isexpectedtobefully

deployedbytheendofthefirstquarterof2012.Therestoftheprojectsareprojectedtobe

completedby2014.

CONSUMER‐OWNED PERSPECTIVE

SMUDisconsideredoneofthemostprogressiveofthemid‐sizedutilitiesintheU.S.12

becauseofitsfocusonpromotingrenewableenergyandenergyefficiency,andondevelopingthe

SmartGrid.“Energyefficiencyisthemostcost‐effectivewayforSMUDandSacramentotomove

11http://www.smud.org/en/about/Pages/index.aspx;http://www.smartgridnews.com/artman/publish/Video‐Education‐and‐Information/Smart‐grid‐implementation‐at‐SMUD‐3304.htmlNovember23,2010presentation

12Many“cleantechnology”websiteshavehighlightedSMUD’sfocusoncleantechnology,suchasPikeResearch,CleanTechMarketIntelligence,http://www.pikeresearch.com/blog/articles/will‐utilities‐such‐as‐smud‐develop‐microgrid‐models‐for‐the‐developing‐world,lastaccessed,June30,2011

7


beyondcarbon.”13SMUDexpectstobethefirstutilitytomeetthestate’scleanpowermandate,

whilealsoexceedingCalifornia’senergyefficiencymandate.SMUDexpectsthatitsSmartGrid

programwillimprovethegridandhelpmeetthecleanpowerandenergyefficiencygoals.

SMUDplanstousemultiplestrategiessimultaneouslytoachievethesegoals.Itisinstalling

smartmeters;focusingonconsumerbehaviorthroughpricingprograms,surveys,focusgroups

andcommunicationwithcustomers;andautomatingportionsofitsdistributionsystem.In

addition,itisimprovingtechnologicalinfrastructurebyinstallingastate‐of‐the‐artdemand

responsemanagementsystem,implementinginnovativedemandresponseprogramswhich

leveragethenewSmartGridinfrastructure,conductingresearchanddevelopmentthrough

severalpilotprograms,andaddressingcybersecurityissues.SMUDisfocusedonsupportingits

smart‐gridinitiativesthroughimplementingacomprehensivecustomerrelationshipmanagement

systemthatintegratesdirectlywithitsbillingsystem.

SMUDdevelopeditsSmartGridprogramsbasedonavisionofaregionalsolutionthatwill

integratesmartmetersandhomeareanetworkswithupstream,automateddistribution

operations.ToimprovesystemreliabilityandefficiencySMUDplanstooptimizedistribution

systemoperations.Further,itwillenableitscustomerstofullyparticipateintheelectricity

marketplacethroughdynamicpricinganddemandresponseprograms.14

13SMUD’s2008AnnualReport

14JimParks’PresentationtotheCPUCSmartGridWorkshop;March18,2010;“SmartGridImplementationattheSacramentoMunicipalUtilityDistrict;”http://www.cpuc.ca.gov/NR/rdonlyres/D25C3103‐D534‐4F19‐B267‐823FD40C9C20/0/CPUCWorkshop31810SMUDParks2.pdf

8


ORGANIZATION OF PROGRAMS

ThroughitsSmartGridprogram,SMUDplanstoreducegreenhousegasemissionsto10%

of1990levelsby2050.15Itwillachievethisobjectivebyassuringareliable,diversepowersupply

throughitsSmartGridprograms.SMUD’sfundedSmartGridprojectsinclude:

1)AMIandsmartmeters

2)Consumerbehaviorstudyanddynamicpricing

3)Demandresponsemanagementsystemandprograms

4)Distributionsystemimprovementsandautomation

5)TechnologyInfrastructure

6)CustomerApplications(partnerprojects)

7)CyberSecurity

SMUDreceivedothergrantspromotingtheSmartGridthroughARRA,including“Smart

GridDemonstrations—StorageforGridSupport.”Thisinitiativeawardsasub‐granttoPremium

Powerfortwobatterysystemstodemonstratetheintegrationofphotovoltaics(PV)andenergy

storageintoSmartGridapplications.16Inaddition,SMUDplanstodevelopinfrastructure

standardsforpluginhybridelectricvehicles(PHEVs)thatchargeoff‐peakandfeedelectricity

backtothegridduringpeakperiods.SMUDwillalsotesttheeffectivenessofbatterystorageand

powermanagementproducts.Anotherproject,the“PVandEnergyStorageforSmartGrids,”

developstoolsmodelingadistributionsystemintoSmartGridapplications.SMUDisdeveloping

itsSmartGridthroughvariousapproachesandhasreceivedfundingandothersupporttoplan

andimplementrelatedinitiatives.

15Id.

16SMUDandtheAmericanRecoveryandReinvestmentActof2009,http://www.smud.org/en/about/grants/Pages/default.aspx,lastvisitedJune20,2011

9


TheSmartGridresearchanddevelopment(R&D)budgetis$42.9million,bringingthetotal

SmartGridbudgettoover$350million.AdditionalR&Dprojectsincludeamicro‐grid

demonstration,residentialinformationandcontrolspilot,smartcontrolsinmultifamilyprojects,

anddairydigesters.TheR&Ddemonstrationswilltestthecapabilities,costs,andbenefitsof

emergingtechnologiesandwilllaythefoundationforfutureSmartGriddeployments.

PROGRAM MANAGEMENT AND DEVELOPMENT

In2008,SMUD’sBoardofDirectorsresolvedtoadoptaSmartGridpolicy.Thestaffneeded

theapprovaloftheBoardpriortoinvestinginnewtechnology.SMUDrecognizedtheimportance

ofworkingwithitscustomersandpartneringwithlocalorganizations.17

SMUDhaspartneredwithsixpublicagenciesinitsserviceterritorytoimplementaportion

oftheSmartGridgrantassub‐recipients.ThesepartnersincludeLosRiosCommunityCollege

District(LRCCD),theCaliforniaDepartmentofGeneralServices(DGS),SacramentoCityUnified

SchoolDistrict,theCountyofSacramento,ElkGroveUnifiedSchoolDistrict,andCaliforniaState

UniversityatSacramento(CSUS).Energymanagementsystemswillbeinstalledorupdatedwith

advancedcontrols,thecapabilitytomonitorelectricityuse,theabilitytoidentifybuildingsthat

useexcessiveenergy,andtheabilitytoreducepeakloads.Thesepartnerswillenableenergy

managementsystemstorespondtoautomateddemandresponse(AutoDR)eventstoreducepeak

loads.Inadditiontoitsformalsub‐recipients,SMUDmetwithequipmentandsoftwarevendorsto

assesstheavailabletechnology,andtotestequipmentinordertodeterminewhichequipmentto

deploy.

17JimParksI4EnergyPresentation,November2010;http://www.youtube.com/watch?v=RyKVm078cJ4&feature=player_embedded,lastvisitedJuly20,2011

10


SMUD’sSmartGridprogramanditspartnershipsaremanagedbyaSmartGridmanager

whoimplementsSMUD’splanwiththefocusonARRAprojectsthrough2014.Themanagerwill

developastrategicplantoguidetheprogrambeyond2014.Amajorfocusoftheplaniscustomer

communicationsandcustomerexperiencebefore,during,andaftertheimplementationofSmart

Grid.SMUDwillusebrochures,media,anonlinepresence,andpresentations;itwillassignstaff

specificallytoaddresscustomerconcernsaboutsmartmeters.

Moreover,SMUDhasalsocollaboratedwiththeElectricPowerResearchInstitute(EPRI)

onits“SmartSacramento”demonstrationproject.Thetwohaveworkedtogetheron

demonstrationsandahost‐siteprojectintegratingdistributedgenerationandSmartGrid

development.18Finally,CaliforniaandSMUD’spioneeringleadershipincleantechnology

positionedSMUDparticularlywelltobeasuccessfulleaderinSmartGridtechnology.

ESTIMATED COSTS

SMUDestimatesthatitwillcost$307.7milliontoimplementalloftheprojectsinvolvedinits

SmartSacramentoprogram.19Thisfigureincludesnotonlyinvestmentintechnology,butalso

accompanyingbehavioralandconsumerstudies.20InadditiontotheARRAfundingallottedto

SMUDbytheDepartmentofEnergytodevelopvariousSmartGridsolutionsinSacramento,SMUD

18InAugust2011,SMUDhasbecomethe12thhostsiteprojectinEPRI’ssmartgriddemonstrationinitiative.

19JimParks’PresentationtotheCPUCSmartGridWorkshop;March18,2010;“SmartGridImplementationattheSacramentoMunicipalUtilityDistrict;”http://www.cpuc.ca.gov/NR/rdonlyres/D25C3103‐D534‐4F19‐B267‐823FD40C9C20/0/CPUCWorkshop31810SMUDParks2.pdf

20CommunicationwithSMUD’sSmartGridCoreTeam;April1,2011

11


receivedan$19.2millioninARRAandCaliforniaEnergyCommissiongrantstopartiallyfund

$42.9millioninSmartGrid‐relatedresearchanddevelopdemonstrationprojects.21

SMUD’S SMART GRID ROADMAP: SEVENKEY PROJECTS

SMART METERS AND ADVANCED METERING INFRASTRUCTURE (AMI)

Initially,SMUDfocusedoninstallingAdvancedMeteringInfrastructure(AMI),primarily

smartmeters.SMUDidentifiedsmartmetersasthefirststeptowardaSmartGrid,connecting

SMUDtoitscustomersbyintegratingthedeliveryandconsumptionofelectricityusingtwo‐way

wirelesscommunications.22Smartmeterscollectandstoreacustomer’selectricityusagedataat

regularintervals.Thecustomer’sdataisthensecurelytransmittedtoalocalcollectionpoint.The

collectionpointsecurelytransmitsthedatatoSMUD.SMUDthenusestheinformationtobillthe

customerandprovideenergyusagedataonline.Thetwo‐waycommunicationbetweena

customer’shomeandtheutilityenablesSMUDtoexplorepricingthatvariesbyseasonandtimeof

day.23

InstallingAMIwillsignificantlyimproveSMUD’sknowledgeofcircuit‐specificconditions.

ThesmartmeterswillreduceSMUD’soperatingcostsandimprovereliability.Becausecustomers

21CommunicationwithSMUD’sSmartGridCoreTeam,February14,2012,updatingthedatafrompublishedpresentationbyTimothyN.Tutt,SMUD’sGovernmentAffairsRepresentative,commentingonSMUD’simplementationoftheproposedgoalof12,000MWofcleanlocaldistributedgeneration(DG)usingSmartGridsolutionstotheCaliforniaEnergyCommission,July20,2011;http://www.energy.ca.gov/2011_energypolicy/documents/2011‐06‐22_workshop/comments/SMUD_comments_TN‐61471.pdf,lastvisitedAugust10,2011

22PublicUtilityRegulatoryPoliciesActof1978asAmendedbytheEnergyIndependenceandSecurityActof2007:StaffReportandProposedBoardDeterminationontheInformationonTime‐BasedElectricityPricesandSourcesofPowerStandardSmartGridInformation;

23SMUD’sGeneralManager’sReportandRecommendationonRatesandServices:SmartSacramento®PricingPilot,April7,2011,Volume2;https://www.smud.org/en/about‐smud/company‐information/document‐library/documents/GMRateReport‐Vol2‐04‐07‐11.pdf

12


willbeabletoseetheirusagebyhouronline,customerswillbeeasilyinformedandcapableof

makingdecisionsbasedonthecostsoftheirenergyconsumption.SMUDfocusesonthepotential

ofcustomerdataandinformationtoempowercustomerstomakechoicesaboutconsumption.

ThisSmartGridprojectcoincideswellwithSMUD’scommunity‐basedstructureandmission.

SMUDmakesacompellingbusinesscaseforAMIbecausemorethan$9,000,000annually

priortoAMIwasspentonmeterreading.Byinstallingmetersthatcancommunicatewirelessly,

SMUDanticipatessignificantfinancialsavings.Inaddition,SMUDpredictsotherbenefitsfrom

AMI.AMIenablestime‐differentiatedratesandcriticalpeakpricingopportunitiesandmakes

demandresponsepossiblethroughautomaticorremotecontrolofappliancesandequipment.

AMIfacilitatesloadinginformationandautomationalongtheentiresupplychain.

SMUD’simplementationofAMIcallsfortheinstallationofapproximately615,000new

smartmetersforallcustomersbythefirstquarterof2012.24Todate,SMUDhasinstalled

610,000.25SMUDcompleteda78,000meterpilotprojectin2010,installingselectedSilverSpring

Networks,Inc.andLandis+Gyrmeters.

AsofJanuary2012,approximately98%ofthecustomermetershadbeenreplacedwith

smartmeters.Theremaining2%areexpectedtobereplacedbyMarch2012.SMUD’s

communicationnetworkis100%complete.SMUD’srolloutofitswirelesssmartmetertechnology

24JaspalDeol,P.E,Manager,TransmissionandDistributionSubstationDesign,Construction,andMaintenance,

SmartSacramento®presentation,March23,2011;http://www.usea.org/Programs/EUPP/SouthCentralAsiaTDWorkshop/DAY3PRESENTATIONS‐DISTRIBUTION/5_‐_SMUD_SmartSacramento_March_2011.pdf

25AsofJanuary31,2012;JaspalDeol,P.E.Manager,TransmissionandDistributionSubstationDesign,Construction,

andMaintenance,SmartSacramento®presentation,March23,2011;http://www.usea.org/Programs/EUPP/SouthCentralAsiaTDWorkshop/DAY3PRESENTATIONS‐DISTRIBUTION/5_‐_SMUD_SmartSacramento_March_2011.pdf

13


receivedlittlecriticism,generatingveryfewcustomercomplaints,allofwhichSMUDrespondedto

quickly.Importantly,morethan95%ofcustomersweresatisfiedwiththeinstallationasof

Decemberof2011.26

AsSMUDdevelopsitssystem,customerswillbeabletogoonlineandseedetailed

informationabouttheirenergyuse,managedemandresponseevents,andmakeadjustmentsas

desiredusingtheircellphoneorcomputer.SMUDsendseachcustomeraletterandbrochure

beforethesmartmeterisinstalledsothatthecustomerunderstandsthechange.Toavoidadding

burdensomeresponsibilitytothecustomer,SMUDdoesnotrequirecustomerstodoanything,

exceptremovebarrierstoaccess,socustomersneednotbehomeforthemeterinstallation.The

meterprogrammingandback‐officefeaturescanbeusedremotelythroughwireless

communicationtechnologies.

SMUDistrainingitsemployeesandboardmemberstobeavailabletocustomersforsmart

meterpresentations.SinceOctober2009,SMUDhasgiven116customerpresentationsand71

internalemployeepresentations.27SMUDpresentstocitycouncilsandcountyboardsof

supervisors,individualelectedofficialsandtheirstaff,communityplanningcouncils,socialcivic

clubs,chambersofcommerce,andneighborhoodassociations.SMUDismakingabigeffortto

ensurethatcustomerservice,transparency,andunderstandingareprioritiesinitsSmartGrid

program.

SMUD’sBoardadoptedapolicytoallowsmartmeteropt‐outsforthosefewcustomers

(lessthan0.4%)whohaveexpressedconcernaboutthepossibleprivacyandhealthissues

26 Id.

27 Id.

14


associatedwithinstallingwirelessAMIdevicesontheirhomes.SMUDchargesafeetocustomers

whooptoutsoitcanrecovertheincrementalcostsrelatedtooptingoutlikemeterreading.SMUD

doesnotwantitscustomerstosubsidizethealternativemeteringsolutionfortheopt‐out

customers.Customerswhoopt‐outmaynotrealizethemanybenefitsofsmartmetersliketimeof

userateoptionsandcustomerprogramsthatareavailableonlytocustomerswhohavewireless

smartmeters.28

CONSUMER BEHAVIOR STUDY AND DYNAMIC PRICING

SMUDisacustomer‐ownedpublicutility.Itspoliciesfocusonservingthecommunity,

settingcompetitiveratesbelowpublishedrates,andeducatingitscustomersabouthowtokeep

downtheirelectricitybills.“MaintainingcompetitiveratesisacorevalueofSMUD.”29In

respondingtocustomerneeds,SMUDisprovidingcustomereducationandnewtoolstomanage

energyusageinformationwhilemakingusagemoretransparentandgivingcustomersmore

control.Alongtheselines,SMUDispartneringwithcustomerstomakethempartoftheenergy

solutionbyhelpingthemreducepeakload,andimproveenergyefficiency.

SMUDhasbudgetedabout$13millionforaConsumerBehaviorStudy;thefinalcostwill

dependontheultimatescopeofthestudy.Thisstudywillevaluatetheimpactsoftime‐based

rates,enablingtechnologies,andrecruitmenttreatmentsonenergyconsumptionandpeak

28Id.

29DraftStaffReportandProposedBoardDeterminationontheRateDesignModificationstoPromoteEnergyEfficiencyInvestmentsStandard;https://www.smud.org/en/about‐smud/company‐information/document‐library/documents/draft‐rate‐design‐mod‐EE‐invest‐standard.pdf,lastvisitedJanuary20,2012

15


demand.30ThestudywilltakeplacefromJune2012throughSeptember2013,withinterim

evaluationreportinginApril2013andfinalevaluationreportinginJanuary2014.Itusesthe

samemethodologyasthe2009ResidentialSummerSolutionsStudy,whichtestedtheuseof

dynamicpricingandcommunicatingthermostatsinthesmallcommercialsector.The2009study

showed20%energysavingsandbillsavingsof25%.31Thiscustomerbehaviorstudywillbeused

to“developstrategiesforratedesign,provideinformationonreal‐timeusedisplay,measure

satisfactionbydemographics,andmeasurevaluefortheconsumerandSMUD.”32Sevenrandomly

chosengroupsofresidentialcustomerswereofferedoneofsevenequipmentandrate

configurationtreatments.SMUDwillusetheresultsofthisstudy,consistingofasampleframeof

approximately57,000residentialcustomers,33tostatisticallymeasurethecapabilityofthe

equipmentandrateconfigurationstoreduceelectricityuse,reducepeakdemand,anddetermine

thelikelihoodofparticipationbydemographic.

SMUDcurrentlyusesatwo‐tierresidentialratestructuredesignedtoencourage

conservationbasedonits“incliningblockrates,”34whichincreaseasusageincreases.Themore

Kilowatt‐hoursused,thehighertherate.Theratesvarybyseasonsaswell.Layeredontopof

30ConsumerBehaviorStudy,SacramentoMunicipalUtilityDistrict,SmartSacramento®,U.S.DepartmentofEnergy,April2011;http://www.smartgrid.gov/sites/default/files/pdfs/cbs/smud‐cbs‐description‐final_0.pdf

31KarenHerter,SMUD’sResidentialSummerSolutionsStudy;8/26/2011,http://eetd‐seminars.lbl.gov/seminar/smud%E2%80%99s‐residential‐summer‐solutions‐study,lastvisitedJanuary20th,2012

32JaspalDeol,P.E,Manager,TransmissionandDistributionSubstationDesign,Construction,andMaintenance,March23,2011;http://www.usea.org/Programs/EUPP/SouthCentralAsiaTDWorkshop/DAY3PRESENTATIONS‐DISTRIBUTION/5_‐_SMUD_SmartSacramento_March_2011.pdf

33ConsumerBehaviorStudy,SacramentoMunicipalUtilityDistrict,SmartSacramento®,U.S.DepartmentofEnergy,April2011;http://www.smartgrid.gov/sites/default/files/pdfs/cbs/smud‐cbs‐description‐final_0.pdf

34DraftStaffReportandProposedBoardDeterminationontheRateDesignModificationstoPromoteEnergyEfficiencyInvestmentsStandard;https://www.smud.org/en/about‐smud/company‐information/document‐library/documents/draft‐rate‐design‐mod‐EE‐invest‐standard.pdf,lastvisitedJanuary20,2012

16


theserates,SMUDaddsaRateStabilizationFundsurchargeofabout1/4‐centperkilowatt‐hour

thatisappliedduringlowhydroyears.SMUD’sratesaredesignedtoachievegoalsrangingfrom

linkingthemarginalcostofwhenenergyisusedtorates,reducinguseduringpeaktimes,and

encouragingenergyefficiencyandconservation.SMUD’sratesaredesignedto“offerflexibility

andoptionstocustomers,besimpleandeasytounderstand,meetneedsofcustomerswithfixed

lowincomesandseveremedicalconditions,andequitablyallocatecostsacrosscustomer

classes.”35

DEMAND RESPONSE/ENERGY EFFICIENCY

SMUDisdevelopingdemandresponseresourcestomeetitsintegratedresourceplanning

goalsandtofulfillresourceprocurementandoperationalrequirements.SMUDhasallotted$15

milliontodemandresponseoverathree‐yearperiodandapproximately$35millionperyearto

energyefficiency.ItwillinstallaDemandResponseManagementSystemtoserveasthecommon

platformforalldemandresponseactivities.Thenewsystemwillsupportbothprice‐basedand

incentive‐baseddemandresponseprograms.ItwillintegratewithmanyofSMUD’sotherbusiness

systemssuchasAMI,CustomerInformationSystem,MeterDataManagementSystem,Geographic

InformationSystem(GIS),andenergyoperationscenter.AspartoftheDOEgrant,SMUDwill

installupto1,800HomeAreaNetwork(HAN)devicesandencouragehomesandbusinessesto

participateindirectloadmanagementprograms.TheCustomerApplicationscomponentof

SmartSacramentowillequipapproximately900homeswithHAN.36

35Id.

36CommunicationwithSMUD’sSmartGridCoreTeam,April5,2012.

17


SMUDwillexpanditscurrentdemandresponseportfolio,whichconsistsofprogramsthat

haveprovidedasmuchas8%peakloadreductioncapability.37Itwillalsointegratenew

renewableresourcesandhelpmanagelargerpercentagesofdistributedgeneration.SMUD

believesthatofferingcustomersavarietyofdemandresponseprogramsandautomatingdemand

responsewillprovidecustomerswithtoolstomanagetheirbills,reducesystempeak,and

respondtodynamicpricing.

SMUDwilldesignanddeliverprogramsformediumandlargecommercialcustomersto

automaticallyrespondusingOpenADRcommunicationprotocolstiedtotheirenergy

managementsystems.Theseprogramswouldincludebothprice‐basedandincentive‐based

offerings.SMUDwouldprovidemediumandlargecommercialcustomerswithtechnical

assistancetomodifytheirtechnologysoitcanautomaticallyrespondtosignalsfromSMUDto

reduceload.SMUDisalsointegratingdemandresponseandenergyefficiencybyconnecting

automateddemandresponsetechnologyandOpenADRtoenergyefficiencyprogramsfor

commercialcustomerenergymanagementsystemsandadvancedlightingtechnologies.

DISTRIBUTION SYSTEM IMPROVEMENTS AND AUTOMATION

SMUDwillinstallautomatedcontrolsthroughoutthedistributionsystemtoimprove

systemefficiency,reduceoperationsandmaintenancecosts,andimprovereliabilitybyreducing


18


thedurationofoutagesby20‐25%.38InSMUD’scommentstotheCaliforniaEnergyCommission,

TimothyTutt,SMUD’sGovernmentAffairsRepresentative,stated:“Theprimarymissionforour

distributionsystemiskeepingthelightsonforourcustomersinamannerthatleadstheindustry

insafety,reliabilityandcustomerservice.”39

SMUDplanstospend$58.2millionondistributionautomation.Itwillupgradeaging

infrastructurebyreplacingelectro‐mechanicalrelayswithdigitalrelaysatmanymediumvoltage

substations.SMUDplanstouseSmartGridtechnologyinitsdistributionsystemtoenable

advancedoperationsmanagementforvoltoptimization,conservationvoltagereduction,and

automatedsectionalizationandrestoration.SMUDwillbeabletorestorepowermuchmore

quicklyintheeventofanoutagebecauseautomatedswitchingwillallowittooptimizeits

distributionnetworkandenhanceoperatingcapability.40Automatingdistributionwillalsoexpand

SMUD’ssupervisorycontrolanddataacquisition(SCADA)system.41

SMUDplanstoinstallSCADAat40substationsandinstallautomatedlinedeviceswithtwo‐

waycommunicationon18%,or109,distributioncircuits.SMUDwillautomate44%,or24,of

38JaspalDeol,P.E,Manager,TransmissionandDistributionSubstationDesign,Construction,andMaintenance,March23,2011;http://www.usea.org/Programs/EUPP/SouthCentralAsiaTDWorkshop/DAY3PRESENTATIONS‐DISTRIBUTION/5_‐_SMUD_SmartSacramento_March_2011.pdf


40SMUDandtheSmartgridvideo;http://www.smud.org/en/video/Pages/cc_tabbed.html?bclid=769701255&bctid=930929496001,lastvisitedAugust10,20111


19


Smart Grid technology allows more efficient management of distribution system voltage both maintaining reliability and saving energy.

SMUD’ssub‐transmissioncircuits.42SMUDwillinstallintelligentswitchingandmonitoring

equipmentandawirelesscommunicationsystem.

Inthenearterm,SMUDexpectstoimplementanadvancedoperatingsystemin18%ofits

serviceterritorythatwillsectionalizeandrestorepowertocustomersafteranoutage,optimize

distributioncircuitvoltagetoenableenergysavingsandreducelosses.Thedesiredresults

includeincreasedsystemefficiency,improvedpowerfactor,reductionofsystemlosses,reduction

ofenergyconsumption,anddecreasedfrequencyanddurationofoutages.43

SMUD’sconservation

voltagereduction(CVR)and

volt/varoptimization(VVO)

strategieswillbedeployedin

ordertomakethegridmore

energyefficient.SMUD

completedtestingoftheirCVR

andVVOstrategiesinthe

summerof2011.Although

energysavingswilldifferby

circuitbasedonvarioustypesofloads,thetestingresultswereverypromising.SMUD’sinitial

testingincludedtwosubstationsindifferentgeographicalareasandthethreecircuitsconnected

toeachofthetwosubstations.TestingofCVRandVVOonthefeedersassociatedwiththefirst

42Id.

43Id.

20


substationyieldedanaverageof2.5%demandreduction,anaveragedemandreductionof315kW

atpeak(between4:30to6:30pm)andminimizedlinelossesbymaintainingpowerfactorat

approximately.95leading.Thesecondsubstationandassociatedfeedersyieldedanaverageof

1%demandreduction,anaveragedemandreductionof150kWatpeak(between4:30to6:30

pm)andminimizedlinelossesbymaintainingpowerfactoratapproximately.95leading.SMUDis

currentlyundergoingvigorouslabtestingoftheirautomatedsectionalizationandrestoration

controllogicpriorto“turningon”theautomatedcontrollogicontheirdistributionsystem.

SMUDhasinvestedinitssoftwareinfrastructureaswell.ItinstalledtheEnterpriseService

Bussoftwareplatformtoreducethecostofcommunicationsbetweensystemsbyreducingthe

number,size,andcomplexityofinterfacesbetweensystems.Thenewplatformwillultimately

improvethespeedofservicetothecustomer.SMUDiscurrentlyupgradingitsexistingOutage

ManagementSystemtoincludeWebMethodsfunctionality,easetheintegrationwithother

systems,andenableSCADAintegrationthroughanICCPgateway.SMUDwilltietogetherthe

upgradedoutagemanagementsystemwiththeirAMIsystemforoutagereportingfromsmart

meters.Oncesmartmetersareusedtoreportsystemoutagestodistributionsystemoperators,

SMUDwillintroduceautomated,proactiveoutagecommunicationwiththeircustomers.SMUD

willnotifycustomersofoutagesthatareaffectingtheirservice,provideestimatedrestoration

timesandconfirmrestorationofservice.

SMUDalsoinstalledCustomerRelationshipManagementSystemsoftwaretoprovide

customerrepresentativesareal‐timeviewofenergyusage.Thissoftwareintegratesacustomer

servicecallcenterwithSMUD’sback‐officebillingsystem.

21


PHEV/BEV INFRASTRUCTURE AND INTEGRATION

SMUDiscommittedtoexamining

customerapplicationsforanelectricvehicle

infrastructure.Itisdedicatingaportionof

itsSmartGridresourcestopluginhybrid

electricvehicles(PHEV)andbatteryelectric

vehicles(BEV),togetherknownasPlug‐InElectricVehicles(PEVs).ThepurposeofSMUD'sSmart

GridSmartChargingPilotProgramistooffertime‐basedratestoPEVdriversinordertolearn

howbesttoencourageoff‐peakcharging.Duringthefirstyearofthepilotproject,twoormore

time‐of‐useexperimentalrateswillbeofferedto180residentialPEVdrivers.Upto60ofthe

driverswillbeofferedtwo‐waycommunicatingElectricVehicleSupplyEquipment(EVSE)that

willbeusedtogivethema“managedcharging”option.Aspartofthepartnerprograms,upto25

two‐waycommunicatingsmartchargingstationswillbeinstalledontheCSUSandCosumnes

RiverCollegecampuses.SMUDwillincentivizecustomerstochargetheirbatteriesduringoff‐

peakperiodsbyusingpricesignals.SMUDisconductingappliedresearchthatinthefuturemay

allowforVehicletoGrid(V2G)electricitysalesandhomeenergystoragedemonstrationprojects.

ItisalsoworkingonaprojectwiththeCaliforniaEnergyCommissiontotesttheimpactsof

electricvehiclesonthegrid.Inthefuture,SMUDmaybeabletopaycustomerstofeedpower

fromtheirEVsintothegridtosupportreliability,whileensuringthatthebatterychargewillnot

fallbelowapre‐specifiedlevel.

Becauseelectricvehicleownerstendtoclusterincertainareas,SMUDplanstotestthe

impactsofmultipleelectricvehiclesonasingledistributiontransformer.Itwillmodelthis

22


scenariousingmultipleEVbatterysystemsonatransformerinatestbedsetting.SMUDisalso

usingaloadsimulatortosimulatereactiveandresistivevariableloads.Itwillapplytothemost

commontransformers(25kVA,50kVAand75kVA)inthesystem.SMUDwillmount

transformersattheHedgeSubstationwhereitstrainingfacilityislocated.44

SMUDhasalsotestedandusedalternativefuelvehicles.Ithasexploredthepracticaluses

ofelectricvehicles(EVs)andispurchasingandtestingEVsindailyoperationstoadvancethe

technology,suchastheChevroletVolt.45Tofurtherencourageoff‐peakchargingthatwillimprove

overallsystemefficiency,SMUDoffersanEVtime‐of‐useratethatprovidespoweratamuchlower

rateduringthenight.46

Finally,SMUDhasdevelopedtoolstohelpcustomerswithplug‐inEVs.SMUDhasanEV

webpagewithacostcalculatortoassistpotentialEVbuyersintheirdecisionprocess,asection

withFrequentlyAskedQuestionsaboutEVsandchargingthevehicle,andhasin‐housestaffready

toanswercustomerquestions.

CUSTOMER APPLICATIONS

SMUD is partnering with six public agencies to implement part of its Smart Grid grant from

DOE. Of the estimated $308 million for SMUD’s “SmartSacramento,” SMUD’s sub-recipients are

44JaspalDeol,P.E.Manager,TransmissionandDistributionSubstationDesign,Construction,andMaintenance,

SmartSacramento®presentation,March23,2011;http://www.usea.org/Programs/EUPP/SouthCentralAsiaTDWorkshop/DAY3PRESENTATIONS‐DISTRIBUTION/5_‐_SMUD_SmartSacramento_March_2011.pdf

45SMUDhasreceivedfundingfromthefederalgovernmentandothersourcestoadvancetransportationthroughvehicleelectrificationandtoadvanceSMUD’sstrategytoacceleratethetransitiontoelectricvehicles.“OurStimulusGrants,”https://www.smud.org/en/about‐smud/company‐information/grants.htm,lastvisitedJanuary18th,2012

46SMUDleadinglocalPlug‐InElectricVehicleWave:SMUDtestsChevyVoltsandhelpscustomersgetpluggedintoo,November15,2011,https://www.smud.org/en/about‐smud/news‐media/news‐releases/2011‐11‐15.htm,lastvisitedJanuary22,2012

23


contributing approximately $18.3 million for $36.6 million worth of projects. The ARRA grant covers

50% of the cost for sub-recipient projects.

Eachsub‐recipientwillinstallorupdateenergymanagementsystemsonitscampusto

monitorelectricityuse,identifybuildingsthatuseexcessiveenergy,saveenergy,andreducepeak

loads.Forexample,advancedcontrolsandsub‐meteringwillbeinstalledonall57buildingsonthe

CSUScampus.Smartelectricvehiclechargingstationswillbeinstalledonsomesub‐recipient

campuses.LindaHafar,directorofUtilitiesandFacilityServicesatCSUSannouncedthat16

electriccarchargingstationswouldbeconstructed;and,thegrantwouldalsosupportanew

energymanagementsystemtobettercontrolbuildingheatingandcoolingsystems.47

SMUD’spartnershipwithCSUShasincludeddevelopingasharedvisionandinvesting

resourcesforCSUS’snewCaliforniaSmartGridInterpretiveCenter,alivinglaboratoryto

showcasetheuseofSmartGridtechnologies.SMUDandCSUSwilldevelopcourseworkeducate

studentsaboutenergyefficiency.TheywillalsoupgradetheCSUSdistributionsystemtoincrease

campusgridreliability.

SMUDhasdevelopedother“customerapplications,”includingservicesforresidentialand

commercialcustomersthateducate,inform,andenablethemtoaccessandusetheinformation

availablethroughtheSmartGridtobettermanagetheirenergyuse.48Initiativesincludepilot

projectstoenablecustomerstomanagetheirbills,reducepeakdemand,andincreaseenergy

efficiency.Pilotofferingscombinetechnologyanddynamicpricingatvaryinglevelsofcustomer

47SacramentoState,SacramentoMunicipalUtilityDistrictFormalizeEnergyPartnership,USFedNews,June9,2011

48JaspalDeol,P.E.Manager,TransmissionandDistributionSubstationDesign,Construction,andMaintenance,SmartSacramentopresentation,March23,2011;http://www.usea.org/Programs/EUPP/SouthCentralAsiaTDWorkshop/DAY3PRESENTATIONS‐DISTRIBUTION/5_‐_SMUD_SmartSacramento_March_2011.pdf

24


commitment,equipmentcost,andSMUDinvolvementinenergymanagement.Technologies

includesmartthermostats,in‐homedisplays,smartappliances,onlineintervalusagegraphs,and

energymanagementsystems.49Commercialapplicationsincluderebatesforinstallingadvanced,

controllablelightingsystems;updatingthecommercialenergyinformationandtoolssoftware

package;andinstallingenergymanagementsystemsforbuildings.

SMUDispartneringwithalocaldeveloperona42‐homesubdivisiontocreatea

SmartGrid‐enabled,net‐zeroenergydevelopmentintheheartofdowntownSacramentowhich

includesphotovoltaicsystems,energystorage,controllableappliances,homeenergymanagement

systems,andenergyefficiency.

CYBER SECURITY

Inadditiontothegoalofimprovingreliability,incorporatinginformationtechnologyinto

theelectricindustrythroughtheSmartGridmaymaketheelectricgridmorevulnerabletoattacks

andlossofservice.SMUDhasallotted$3.3million50intotalprojectcoststocybersecurity.

AlthoughtheSmartGridhasmanypurportedbenefits,theFederalGovernmentandgeneralpublic

havehigh‐levelsecurityconcernsaboutanincreasinglycomplexandvulnerablegrid.

Anoftennotedadditionalriskisthepotentialtocompromisedataconfidentiality,suchas

breachofcustomerprivacy.SMUDhasassureditscustomersthattheirenergyuseinformation

willremainconfidentialandsafe.SMUDisusingDOE’sapprovedCyberSecurityplan.51Itwill

49CommunicationwithSMUD’sSmartGridCoreTeam,April5,2012.

50SomeSMUDpresentationssuggest$5.3million.

51JaspalDeol,P.E.Manager,TransmissionandDistributionSubstationDesign,Construction,andMaintenance,SmartSacramentopresentation,March23,2011;http://www.usea.org/Programs/EUPP/SouthCentralAsiaTDWorkshop/DAY3PRESENTATIONS‐DISTRIBUTION/5_‐_SMUD_SmartSacramento_March_2011.pdf

25


performongoingcybersecurityassessments.SMUDwillalsoinstalltoolsthatwilldetect

intrusions,anditwillinstallvulnerabilitymanagementtoolstomaintainasecurecomputer

system.ThesmartmeterswilltransmitcustomerenergyuseinformationtoSMUD’ssecure

servers,runbythesamewirelessnetworkandsametypesofsecurityastheDepartmentof

Defenseandtheonlinebankingindustry.52

ThegoalofSMUD’scybersecurityinitiativeistoenactsecurityprogramsandprocedures

thatconformtoandexceedgovernment‐mandatedstandards.Itwillcontinueitscurrentbest

practiceswithandincreasetheleveloffundingforthoseprogramstosupportSmartGrid

initiatives.SMUDhasimplementeda“holisticandrobustcybersecurityprogram”53toprotect

confidentiality,integrityandinformationrelatedtocustomerdata.Also,SMUDplanson

implementingthecyber‐securityprotocolsneededforsystemsecurity.SMUDwillfocusonthe

technicalandcommunicationsinfrastructurenecessarytooptimizeitssystemandcybersecurity

protocolsoverthenextfewyears.

IMPLEMENTATION CHALLENGES

DespiteSMUD’ssuccessinreceivingfundingforitsSmartGridprograms54andevenwithits

strongreputationsupportingenergyefficiency,renewableenergyprograms,andlocalgeneration,

transformingtheoldelectricgridtoasmartoneisanintensive,complexprocess.SMUDhas

investedsignificanttimeandresourcesintodevelopingshort,medium,andlong‐termplansfor

52SMUD’sSmartMetersFrequentlyAskedQuestions;http://www.smud.org/en/smartmeter/pages/smartmeter‐faq.aspx;lastaccessedJune30,2011

53StaffReportandProposedBoardDeterminationontheInformationonTime‐BasedElectricityPricesandSourcesofPowerStandardSmartGridInformation;http://www.smud.org/en/about/Documents/reports‐pdfs/draft‐time‐based‐electricity‐and‐smart‐grid.pdf,lastaccessedJuly15,2011

54SMUDreceivedoneofthetoptenlargestgrantsinthecountry.

26


buildingtheSmartGrid,howeveractuallyimplementingthenecessarychangeswillbe

challenging.Inan“I4Energy”seminar,JimParks,theSMUDProgramManagerforEnergy

EfficiencyandCustomerR&D,talkedaboutSMUD’scurrentsuccessinputtingtogetherthe

prescriptivepiecesofaSmartGrid,buthenotedthatpartsofthesystemdonotcurrently

communicatewitheachotherandmaynotforafewyears.Hesuggestedthattheultimategoalis

tomanageandlinktheentiresystem.HealsoofferedthatthefundingSMUDhasreceivedisnot

enoughtofullyimplementSmartGridthroughoutitsentireserviceterritory,soitisfocusingona

fewareasfornow.55

SMUDisstillinthenascentstagesofitsSmartGridbuildout.AsofMarch2012,the

SmartSacramentoprojectwasstillintheprocessofbeingimplemented,withapproximately55%

oftheprojectcompleted.AlthoughSMUDdoesnothavetoprovethatproposedbenefitsarereal

toregulators,asacustomer‐ownedelectricutility,SMUD’sBoardofDirectorsandcustomers

shouldunderstandthevalueofthesystem.Additionally,SMUDisaffectedbyCaliforniastate

policydecisionsgenerally.56Moreover,althoughSMUDhasalwaysbeencloselyalliedwithits

consumers,someSMUDcustomersmayfindtheadjustmenttoanewsystemdifficultormayfeel

waryaboutprivacyandsecurityconcerns.Onlyafewcustomershaveexpressedconcernabout

keepingtheirpersonalinformationconfidential.

InitscommunicationplanforAMI,SMUDanticipatedcustomerconcernsoverhighbills.

Therefore,whenquestionsarose,SMUDsimplyfollowedtheprocessessetforthintheplan.57


56CommunicationwithSMUD’sSmartGridCoreTeam,April5,2012


27


Evenfromthebeginning,SMUDhasreceivedveryfewcustomercommentsonthisconcern.58In

fact,sincetheearlystages,SMUD’scustomershavegenerallyprovidedpositivefeedbackaboutthe

SmartGrid;howeversomehaveexpressedconcernsaboutdifferentratestructures,especially

timeofuserates.

SMUDrecognizesthatitfaceschallengestotheirSmartGridprogramthatpresent

implementationissues.SMUDsuggeststhatthemostpressingchallengeswillbebasedonthe

amount,size,location,andvoltagelevelsoftheinterconnectedresources;thecapabilitiesofthose

resourcesfordispatchandcommunication(andsimilarSmartGridcapabilities);andtheabilityof

thegridtoacceptgenerationatmultipledistributedsitesandflowpowerasneededinthe

oppositedirectionasinitiallydesigned.59Althoughtheyhavenotfullyimplementedtheir

program,SMUDhasconcludedinitsfirstfewyearsthatmoreresearchanddevelopmentisneeded

andthatitwilltake10‐20yearstobuildoutitsSmartGrid.60

IntermittentresourcesplayasignificantchallengeinSMUD’smanagementofthegrid.For

example,SMUDanticipatesthatitscurrent35MWofsolarcapacityand102MWofwindwill

increaseto160MWofsolarand250MWofwindinthenextthreeyears.61Forexample,oneof

SMUD’slargestcapitalinvestmentsistheSolanoWindproject,whichconsistsof55260‐foot‐high



60http://www.usea.org/Programs/EUPP/SouthCentralAsiaTDWorkshop/DAY3PRESENTATIONS‐DISTRIBUTION/5_‐_SMUD_SmartSacramento_March_2011.pdf


28


turbinesthatwillgenerateapproximately128MWtopowerenoughelectricitytolight38,000

homes.62

SomePVresourcescannotbefullyintegratedintotheSmartGriduntilthereissufficient

two‐waycommunicationandcontrolcapabilitybetweentheutilityandPVinverters.63Erik

Krause,ProductDevelopmentManagerforSMUD,suggeststhatutilitiescangatherinformationby

installingseparatemeterstomeasureproductionatthePVsystems.64Integrationbetweenthe

invertersandsmartmeterscouldeliminatetheneedforasecondmeter,butarenotrequiredto

gatherdata.Asthepercentageoftotalgenerationthatisrenewablerises,SMUD’sabilityto

provideinfrastructure,capacity(V2G,storageplants)andeffective“smart”demand‐response

managementwillbecritical.SMUDisidentifyingkeyresearchanddevelopmentquestionsrelated

toissuesliketheintegrationofintermittentresources,andnotinghowtheSmartGridcanplaya

role.Intermittentresourcesrequireextensiveplanningtocoordinateeffectively.However,SMUD

62RickDaysog,SMUDsellingwindenergyprojecttogainstimulusfunds,SacramentoBee,SectionB,pg.6,September13,2011

63MarkRawson,SMUDPVandSmartGridPilotatAnatolia,http://www1.eere.energy.gov/solar/pdfs/highpenforum1‐14_rawson_smud.pdf,lastvisitedJuly20,2011

64CommunicationwithErikKrause,SMUD’sProjectDevelopmentManager,January31,2012

29


doesnotcurrentlyhavethemeanstomanagethisincreasingresource.

SMUDisalsoexaminingstoragetosupportitsplantoincreaserenewableenergysupplies

by2050.Itisperformingdemonstrationprojects,suchastheAnatoliaSolarSmartCommunity

withLennarHomes,toquantifythecostandbenefitsofstoragedeploymentanddistributedsolar

generation.Inthatproject,SMUDequippedmorethan270homeswithbatterystoragetiedtothe

solargridtoseeiffirmrenewableswouldreducepeakloadandimprovereliability.This

demonstrationmonitoredinvertersusingAMIcommunicationfromsmartmetertoinverter.In

addition,SMUDhasreceivedfederalstimulusfundingforPVandenergystorage.Ithasalready

installed14oftheplanned17PVsystems;anditisdevelopingtoolstomodeladistribution

systemwhiledemonstratingPVintegrationandenergystorageintoSmartGridapplications.65

SMUDalsonotesthatmanyofthesoftwareandtechnologypackagesareverynewsoitis

difficulttodetermineoverallproductreliability,accuracyandwhethertheproductswillbe

supportedlong‐term.ThedelayedreleaseoftheZigBeeSEP2.0interoperabilitystandardis

anothertechnologyissuefacingallutilitieswithdemandresponseimplementationsusingZigBee

HANdevices.ThisdelayisalsoimpactingSMUD’sabilitytosupportEVSEandPVinverter

communicationandcontroloverAMInetworks.66Furtherdemonstrationprojectsandpilotsare

neededtoassesstheviabilityofnewproducts.SMUDiscurrentlytakingadvantageofItron

technologyformeterdatamanagement.SMUDmayeventuallyimplementdistribution

managementsoftware,butanticipatesthatimplementationisthreetofiveyearsoutbecausethe

softwareispremature,lacksstandardization,andcyber‐securityconcernspersist.

65“OurStimulusGrants,”https://www.smud.org/en/about‐smud/company‐information/grants.htm,lastvisitedJanuary20th2012


30


SMUDisawareofthetechnicalchallengesthatcomewiththeadditionofsignificant

percentagesofdistributedgeneration.Forexample,meetingtherequisitestandardsforsolar

poweronapartiallycloudydaymaybechallenging.However,SMUDsuggeststhatBalancing

Authorityperformancerequirementsshouldbefurtherevaluatedtoavoidthisproblem.Itwill

taketimeandexperiencewiththenewgridinfrastructurebeforeoperatorsunderstandhowbest

tointegratedistributedgenerationonacircuit‐bycircuitbasisandaddressthepotentialfortwo‐

waypowerflow.

Importantly,SMUDplanstoimplementtheSmartGridonlyafternecessaryresearchhas

beendoneonthecumulativeimpactstothegrid.Forexample,ithasnoplanstoacquire

widespreadadoptionofcommunicationtechnologyformonitoringandcontrolofallsystems

beforereceivingtheresultsofitsresearchprojects.AlthoughSMUDisinstallingtechnology,itis

intheexploratoryphaseofSmartGrid.BasedontheresultsobtainedfromtheSmartSacramento

projectpilotsandotherresearchanddevelopmentprojectsandpilots,SMUDwillevaluatethe

resultsandmakedecisionsabouthowtobestproceedforhighestbenefitsforitscustomers.67

Moreover,SMUD’ssmartmeterdeploymentplancalledforinitiallyinstalling78,000smart

meters,andthenpausedtemporarilytoperformaseriesofperformancetestsonthemetersand

communicationsystemtoensurefullsystemfunctionalityandtohelpminimizepublicconcerns.68

OnlywhenSMUDwassatisfiedwiththeresultsdidthedeploymentcontinue,withupto65,000

installationspermonth,untilbeingcompletedinthefirstquarterof2012.Asprogramsare

implementedandlessonsarelearned,plansmustbereevaluated.

67CommunicationwithSMUD’sSmartGridCoreTeam,March23,2012

68SMUDhasnothadanypublicopinionissuesotherthanwithaverysmallpercentageofcustomers~0.45%whohaveaskednottoreceiveameter.AccordingtocommunicationwithSMUD’sSmartGridCoreTeam;January31,2012.

31


CONCLUSIONS AND LESSONS LEARNED

SMUDhasthebasicresourcesandinfrastructuretoimplementasuccessfulSmartGrid

programforitscustomers.Ithasinvestedalotoftime,money,andexpertisetoplanforathriving

andfunctionalSmartGridthatwillcompletelymodernizeandtransformtheelectricgridasitis

currentlyknown.

FOCUSING ON STRATEGICPLANNING AND STRONG COMMUNICATION WITH CUSTOMERS

Earlyonintheprocess,SMUDhasfocusedintensivelyonitsplananditscommunicationwith

customers.Afterall,SMUDisacustomer‐ownedandcustomer‐basedutility.AsMichael

Gianunzio,SMUD’sChiefLegislative&RegulatoryAffairsOfficer,expressed:“Wehavebeenvery

carefulanddeliberativeinourcommunicationswithcustomers.Wehavesometimetogobefore

studieswillbeunderwaythatevaluatethebehavioralaspectsofthiskindofthing;lotsof

groundworkandcontractsandstrategiesneedtobedevelopedwellinadvance.Itwillbeyears,I

amsure,beforewehaveacompletepictureofhowsuccessfulthiscanbe.”69SMUD’sSmartGrid

programisinthefullimplementationstagerightnow.SMUDwillstarttoevaluatetheprojectsin

late2012andwilldevelopaSmartGridroadmapthatidentifiesthenextsteps.Demonstration

projectsthatshowstrongpotentialwillbeconsideredforbroaderscaledeploymentinthefuture.

Additionaldemonstrationprojectswillalsobeidentified.

Despiteafewconcerns,customersrespondedpositivelytoSMUD’sSmartGridprogram,

understandingtheperceivedbenefits,suchasSMUD’sabilitytoprovidefutureoutageinformation

andcreatenewprogramsforenergyefficiency.Givenitscustomers’acceptanceofthechangesso

69EmailcommunicationwithMichaelGianunzio,November15,2010

32


far,whenSMUDmovesdeeperintotheimplementationphasesofitsprogram,itislikelytobe

successful.

Initsearlystagesofimplementation,SMUDhasmadethetransitiontoaSmartGrid

relativelyeasyforitscustomers.SMUDdoesnotrequirecustomerstobehomeforthesmart

metertobeinstalled.Theyalsoprovidecustomerswithadequateinformationaboutthe

technology,thejustificationfortheshift,andtheexpectedbenefits.SMUDinvitesandencourages

volunteerstoparticipateasearlyadopters.SMUDdemonstrateshowaSmartGridprovidesthe

customerwithgreaterunderstandingandcontroloftheirelectricservices.

WhileitistooearlytoanalyzelessonslearnedortosuggestthatSMUDhasbeensuccessful

inmakinganimpactonitscleanenergygoalsandimprovingsystemreliability,itappearsthatit

hasenhancedcustomervalue.Attheveryleast,itscustomerswereinformedastheyreceived

theirsmartmetersandinvitedtotakeadvantageoftheincreasedaccessibilityoftheirelectric

information.

EXPERTISE AND LEADERSHIP IN CLEAN ENERGY TECHNOLOGY LEADS TO SUCCESS IN SMART GRID IMPLEMENTATION

SMUD’spioneeringleadershipincleantechnologies,includingenergyefficiency,renewable

energy,andstorage,positionitwelltobeasuccessfulleaderinSmartGridtechnology.Moreover,

SMUD’splanisatleastdesignedtoenablemorerenewableenergy,higherlevelsofenergy

efficiencyandbetterintegrationofdistributedresources.Hence,SMUD’sstrategicandadvanced

planningoffersagreatopportunityforSMUDtobealeaderintheSmartGridmovement,asitisin

renewableenergyandcustomerservices.SMUD’spioneeringleadershipandexpertiseinclean

technology,includingenergyefficiency,renewables,andstorage,haspositioneditwelltobea

successfulleaderinimplementingtheSmartGrid.

33


CALIFORNIA’S CLEAN ENERGY LEADERSHIP AND CLEAR POLICIESHAVE BEEN SUPPORTIVE

TheStateofCaliforniahasbeenrecognizedforitsinnovativeandforward‐thinkingenergy

policiessupportingcleantechnology.California’sinvestmentinrenewableenergy,energy

efficiency,andenhancedstoragecapacityhelpsnotonlytosupportitspublicutilitiesand

independentserviceoperators,butalsotheconsumer‐ownedutilities,suchasSMUD.

Consequently,CaliforniaandSMUD’spioneeringleadershipincleantechnologyhaspositioned

SMUDparticularlywelltobeasuccessfulleaderinSmartGridtechnology.

AlthoughtheCaliforniaPublicUtilitiesCommissiondoesnotregulateSMUD—SMUD

reportstoaBoardofDirectors—itbenefitsfromoperatingwithinastatethatsupportsinvesting

incleantechnologyandrecognizestheneedforinfrastructureinvestment.California’slegislation

directlyandindirectlydrivessomeofSMUD’spriorities,asSMUDstrivestobeanindustryleader

andagoodneighbortothecustomersthatownitandtheenvironmentthatsurrounditby

empoweringitscustomerswithsolutionsandoptionsthatincreaseenergyefficiency,protectthe

environment,reduceglobalwarming,andlowerthecostoftoservewithinitsregion.

34


US DEPARTMENT OF ENERGY ACKNOWLEDGMENT AND DISCLAIMER

Acknowledgment:"ThismaterialisbaseduponworksupportedbytheDepartmentofEnergyunderAwardNumberDE‐OE0000446."

Disclaimer:"ThisreportwaspreparedasanaccountofworksponsoredbyanagencyoftheUnitedStatesGovernment.NeithertheUnitedStatesGovernmentnoranyagencythereof,noranyoftheiremployees,makesanywarranty,expressorimplied,orassumesanylegalliabilityorresponsibilityfortheaccuracy,completeness,orusefulnessofanyinformation,apparatus,product,orprocessdisclosed,orrepresentsthatitsusewouldnotinfringeprivatelyownedrights.Referencehereintoanyspecificcommercialproduct,process,orservicebytradename,trademark,manufacturer,orotherwisedoesnotnecessarilyconstituteorimplyitsendorsement,recommendation,orfavoringbytheUnitedStatesGovernmentoranyagencythereof.TheviewsandopinionsofauthorsexpressedhereindonotnecessarilystateorreflectthoseoftheUnitedStatesGovernmentoranyagencythereof."

For further information contact: Institute for Energy and the Environment Vermont Law School PO Box 96 South Royalton, VT 05068 www.vermontlaw.edu/smartgrid 802-831-1054

About the authors:

Allie Silverman, JD/MELP 2012, was a member of the VLS Smart Grid Project team and the lead researcher for the SMUD case study. Allie can be reached at: [email protected].

Kevin B. Jones, PhD, is the Smart Grid Project Leader at the Institute for Energy and the Environment. He can be reached at: [email protected].