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Settlement Party Briefing February 15, 2006

Settlement Party Briefing February 15, 2006. A dvanced M etering I nfrastructure Phase I Summary & Status. www.sce.com/ami. SCE AMI Directional Cost/Benefit (August 2005). Address fundamental cost drivers for last business case

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Settlement Party Briefing February 15, 2006

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  1. Settlement Party Briefing February 15, 2006 Advanced Metering Infrastructure Phase I Summary & Status www.sce.com/ami

  2. SCE AMI Directional Cost/Benefit (August 2005) • 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 AMI Program

  3. Conceptual AIM System 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. Illustrative Example AMI Program

  4. 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. Phase I Phase I Phase I Phase I Phase II Phase II Phase II Phase II Phase III A Phase III A Phase III A Phase III A Phase III B Phase III B Phase III B Phase III B 18 Mos. 18 Mos. 18 Mos. 18 Mos. 18 Mos. 18 Mos. 18 Mos. 18 Mos. 12 Mos. 12 Mos. 12 Mos. 12 Mos. 42 mos. 42 mos. 42 mos. 42 mos. 12/2005 6/2007 12/2008 12/2009 5/2013 Business Business Business Beta Beta AIM Requirements, Beta Product AIM Requirements, Beta Product Design & Design & Case in Chief Development Development “Design” & Proof of Concept Proof of Concept Field Pilot Field Pilot “ Design ” & Proof of Concept & Pilot & Pilot Application Proof of Concept Full Deployment Meter Trade & Meter Trade & Meter Trade & Meter Trade & Business Process Business Process Business Process Business Process Feasibility Studies Pre Deployment Feasibility Studies Feasibility Studies Feasibility Studies Design & System Dev Cost/Benefit Analyses Activities Conceptual Processes Conceptual Processes Final Business Case Cost/Benefit Analyses & Systems & Systems Reqs Reqs AMI Program

  5. 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 Leverage OpenAMI, Intelligrid, Gridwise, CEC PCT, ANSI & other standards and reference design initiatives Engage other utilities & vendors in development process to generate interest and feedback Openness Functionality Durable open design that will support a solid positive business case that provides customer value AMI Program

  6. Phase I Program Scope External Engagement System Design Technology Development Business & Functional Requirements Regulatory Stakeholder Engagement Technology Advisory Board Industry Standards Utility Collaboration Vendor Engagement Technology Evaluation Vendor Product Bench Testing Reference Architecture Trade-off Analysis Cost/Benefit Analysis Preliminary Business Case & Regulatory Application AMI Program

  7. Oct-05 Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 System Requirements, Architecture & Design Define AMI Requirements AIM Conceptual Architecture Reference Design Cost/Benefit Analysis Preliminary Dynamic C/B Model Development Preliminary Cost/Benefit Analysis Feasibility and Trade-Off Analysis Final Business Case Vendor & Technology Assessment Vendor Communication & Collaboration Component/Feasibility Technology Trials RFI Part I - Conceptual Feature Set Monitor Vendor's Alpha Product Development RFI Part II - Business Requirements Beta Product Testing at SCE AMI System RFP Utility & Industry Engagement Utility Outreach Technology Advisory Board External Communications Tentative Phase II Regulatory Preparation Application for Phase II Motion to schedule Phase II Hearings Pre-Hearing Conference Possible Settlement Discussions AMI Phase I Summary Schedule AMI Program

  8. Key Milestones Date Status Phase 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 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 AMI Program

  9. AMI System Design AMI Program

  10. Billing & Billing & Customer Customer Delivery Delivery Energy Energy Field Services Field Services Installation & Installation & Customer Customer Interface Interface Procurement Procurement / System / System Maintenance Maintenance Service Service Recovery Recovery Multiple clients read Multiple clients read Customer reduces Customer reduces Distribution Distribution Real Real - - time time AMI system AMI system Utility installs, Utility installs, demand and energy demand and energy demand in demand in operator curtails operator curtails operations operations recovers after recovers after provision and provision and data automatically data automatically response to response to customer load customer load curtails (or limits) curtails (or limits) power outage, power outage, configure the AMI configure the AMI from customer from customer pricing event pricing event for grid for grid load for load for communications communications system system premises premises management management economic economic or equipment or equipment dispatch (ES&M) dispatch (ES&M) failure failure Utility remotely limits Utility remotely limits Customer reads Customer reads Distribution Distribution Utility procures Utility procures Utility maintains Utility maintains or connects/ or connects/ recent energy recent energy operators operators energy and energy and the AMI system the AMI system - - disconnects disconnects usage and cost at usage and cost at optimize network optimize network settles wholesale settles wholesale over its entire life over its entire life - - customer customer site site based on data based on data transactions transactions cycle cycle collected by the collected by the using data from using data from AMI system AMI system the AMI system the AMI system Utility detects Utility detects Customer uses Customer uses Customer Customer Utility upgrades Utility upgrades tampering or theft at tampering or theft at pre pre - - payment payment provides provides AMI system to AMI system to - - - - customer site customer site services services distributed distributed address future address future generation generation requirements requirements Multiple clients Multiple clients Distribution Distribution Meter reading for use the AMI use the AMI operator locates operator locates - - - - - - gas & water utilities system to read system to read outage using outage using data from devices data from devices AMI data and AMI data and at customer site at customer site restores service restores service System Design: Business Use Cases (Scenarios) SCE Brainstorming AMI Program

  11. AMI System Design Overview Business Need • 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 • 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 • Conduct 40 AMI workshops • Develop 18 use cases • Generate functional requirements • Generate non-functional requirements • Use Case analysis • Prioritize requirements • Map technologies and standards to components • Develop subsystem cost thresholds • Determine trade-off criteria • Select standards and technologies for estimation • Prepare cost estimates & benefits • 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 AMI Program

  12. Cost Tradeoff Teams · Field Services · Demand Response · Energy Procurement Intelligrid , Open AMI , · Call Center Use Case , SCE · BRainstorming · Billing n o i t · IT a r a · Job Skill Training Requirements Teams p e · r Billing and Customer Service · Customer Account Management P p · Customer Interface · Marketing & Communications o h Narratives · Energy Delivery s · Meter Services k r merged , Refined · o Energy Procurement · Procurement W · Field Services / System Recovery · · Meter Installation and Maintenance 18 Use Cases Workshops : · 1 - 2 scenarios in agenda scope depending Cost Tradeoff Megalead , on complexity Workshops · 4 hours per workshop Facillitator tune to # TBD SCE Terminology , approach Workshop Agenda Prior Department Requirements Functional to Work Requirements Requirement Products Work Shop & Cost Minutes Tradeoff OpenAMI Non - Action Coorelation Requirements Functional Items Requirements / Criteria Prior Cost Affirmed / Tradeoff Appended Items Cost Tradeoff Candidates Workshop Execution Post Workshop Execution System Design: Process for Developing Requirements Tariffs & Programs T&D AMI Program

  13. Requirements Determination & Evaluation Business Need Functional Requirement Functional Attribute Technical Requirements Remote Service Turn-on/turn-off • 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 Remote Controllable Premise Level Switch Labor savings, Reduced UFE & Improved Customer Service Feature Benefits Benefit Values Costs $ Component $ System $ Ongoing O&M $ Total • Field Services • Call Center • Credit/Payment • Customer • $$ • $$ • $$$ • Satisfaction Trade-off Analysis AMI Program

  14. AMI Technology Assessment AMI Program

  15. Identify Potential Vendors Worldwide Initial Candidate Vendor Screen Candidate Vendor Due Diligence Vendor Development Screen Business Requirements Gap Analysis Beta Product Testing Beta Product Selection 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 Jan 06 AMI Program

  16. Candidate Vendor Identification Technology Market Structure (representative vendor list) Technology Assessment Focus • 132 Solicitations Sent • 57% North American Firms • 43% International • 32 Qualified Responses Received AMI Program

  17. SCE AMI Technology Assessment Approach Level 1 (Alignment) Level 2 (Validation) ID “Next Gen” development Level 3 (Lab Testing) Due Diligence Reviews Level 4 (Field Test) Q1-’06 Q2-’06 Product Availability & Testing Level 5 (Full Deployment) 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 Q4-’06 Phase II L2 Key Criteria: - Design Development - Production Capabilities - Financial Condition - Processes: Business / Development Manufacturing (NPI) - Supply Chain - Small Requirements Gaps - Other Phase III L3 Key Criteria: - Successful Lab Test - Added functionality - Flexibility - Commercial Terms - Other AMI Program

  18. Initial RFI Observations – Significant Market Developments 2004 2006 • 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 • 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 AMI Program

  19. External Engagement AMI Program

  20. 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 AMI Program

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