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NARUC JOINT MEETING: ELECTRICITY AND TELECOMMUNICATIONS BROADBAND OVER POWERLINES. NARUC JOINT MEETING: ELECTRICITY AND TELECOMMUNICATIONS BROADBAND OVER POWERLINES Wade P. Malcolm, P.E. Understanding Utility Responses to BPL February 13, 2006 NARUC. Wade P. Malcolm, P.E. Vice President

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NARUC JOINT MEETING: ELECTRICITY AND TELECOMMUNICATIONS BROADBAND OVER POWERLINES

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NARUCJOINT MEETING: ELECTRICITY AND TELECOMMUNICATIONSBROADBAND OVER POWERLINES


NARUCJOINT MEETING: ELECTRICITY AND TELECOMMUNICATIONSBROADBAND OVER POWERLINESWade P. Malcolm, P.E.


Understanding Utility Responses to BPLFebruary 13, 2006NARUC

Wade P. Malcolm, P.E.

Vice President

Power Delivery and Markets


Introduction

  • Broadband over powerline (BPL) technologies offer new opportunities for electric utilities to leverage their infrastructure for

    • Commercial broadband communication services

    • Utility applications

      • outage detection and management,

      • automated meter reading (AMR)

      • demand response programs


Background

  • BPL experience

    • Utility pilot programs

    • Deployments of commercial BPL services

  • State and federal regulators have encouraged expanding reach of broadband

  • Pace of utility BPL adoption slower than hoped

  • Regulators question how to encourage BPL deployments


Regulatory Interest in BPL

  • Regulatory interest in BPL has primarily been driven by three factors:

    • The desire for a “third wire” – a broadband alternative to cable and DSL providers that could introduce additional competition into the market;

    • The potential for BPL to extend broadband service to rural areas that are currently underserved; and

    • The potential for BPL to enable a more flexible, self-healing power grid that would be more robust in the face of either natural or man-made disasters, including terrorist attacks


Objectives and Approach

  • National Association of Regulatory Utility Commissions (NARUC) asked EPRI to help better understand utility responses to BPL

  • EPRI conducted

    • literature search

    • interviews with utilities

      • some who have embraced BPL

      • some not


Key Questions

  • Why some utilities embrace BPL while others are uninterested – even in the same regulatory environment?

  • Why some utilities focus primarily on internal applications of BPL (i.e., smart grid) and others view it primarily in terms of offering broadband communications services?

  • Do the benefits of BPL for internal utility applications in fact outweigh the costs?


Key References Cited

  • Clark Gellings and Karen George, Broadband Over Powerline 2004: Technology and Prospects. An EPRI white paper, 2004

  • Karen George, BPL Market Update and Teleconference Highlights. A Primen Customer Insights Perspective (CI-PP-10), 2004

  • Consumer Portal Telecommunications Technology Assessment (DRAFT, v2). EPRI, 2005

  • BPL coverage in mainstream and industry press

  • BPL providers websites


Utilities Interviewed

  • Cinergy--Greg Wolf, VP, Cinergy Ventures

    • Largest commercial BPL deployment

  • Consumers Energy--Gerry Wyse, Manager of Distribution Planning and Performance

    • Commercial broadband pilot

  • South Central Indiana REMC--Kevin Sump, CEO

    • Commercial broadband deployment

  • Con Edison—Tim Frost, Director of Corporate Planning

    • BPL viewed as utility application

  • Central Hudson Gas & Electric —John Chrysler, R&D Administrator

    • Study led to conclusion not to pursue BPL

  • First Energy —EileenBuzzelli,Managing Director, New Products

    • Measured approach for piloting BPL


Characteristics of Enthusiastic BPL Utilities

  • Municipal utility status

    • They face fewer regulatory uncertainties

    • There is only one set of stakeholders– the municipality’s ratepayers/taxpayers/citizens

  • Geographically compact service territories that make deployments more cost-effective

  • Existing fiber networks that the utility can leverage such as those of Cinergy and PPL

  • Significant potential for broadband service growth

  • A successful history of offering services other than commodity electric power


Commercial Services vs. Utility Applications

Commercial service

  • Strategic commitment to new services and technology investments by senior management

  • Unregulated subsidiary to pursue new opportunities

  • BPL service providers partnering with utilities and assuming risk

    Utility application

  • To stay close to their core business and “what they know”


Cost-Effectiveness of BPL for Utility Applications

  • High deployment cost

  • BPL ranked eighth of nine technologies for wide-area networks (WANs) in IntelliGrid architecture

  • Low marks on standardization and use of object modeling (tied to lack of technical maturity)


Utility Applications Criteria

  • Level of standardization

  • Ease of obtaining and using the technology

  • Current level of adoption

  • Degree of users’ group support

  • Security

  • Manageability

  • Scalability

  • Use of object modeling

  • Use of self-description or meta-data

  • Applicability to the power industry

  • Applicability to consumer services


Other Concerns With BPL

  • Lack of electrical current (power outage) disrupts some advanced IntelliGrid functions that wide-area networks would be intended to enable

    • Load shedding in an emergency situation with a finer degree of control than is currently possible,

    • Load redistribution by using demand response customers as a “fast reserve,”

    • Monitoring and controlling distributed generation at a customer’s site

  • Alternative technologies such as WiMAX, radio frequency, paging, or wireless communications could still be active in case of a power outage


Why Some Utilities Are Moving Slowly on BPL Deployment

  • Risk aversion

    • Smaller utility: Don’t have resources to risk being on “bleeding edge” of technology deployment

    • Larger utility: “Careful pilots, careful implementation”

    • Business models not proven

  • Questions remain about technology

    • Quality compared with other broadband technologies

    • Live up to hype? “Show me what it can do”

    • Scaling issues

    • Integration with meters a problem


Conclusions

  • Regulatory matters are not a strong driver to BPL responses

  • Strong drivers:

    • Management approach to new business opportunities and risk; CEO philosophy

    • Technical characteristics of BPL

    • Business considerations

      • ROI

      • Risk tolerance

        Responses are driven by individual company attitudes and business performance measures


The Grid of the Future: IntelliGrid


“A combination of hardware and software that enables two-way communication between energy service organizations and equipment within the consumers’ premises.”

The Consumer Portal


Technical Issues

  • Some Remain:

    • Standardization

    • Compatibility with new classes of assets

    • Radiated Noise?

  • One Approach:

    • Interest Group forming to address long term technical issues

  • Interested?

    • Contact [email protected]


NARUCJOINT MEETING: ELECTRICITY AND TELECOMMUNICATIONSBROADBAND OVER POWERLINESWalt Brown


NARUCJOINT MEETING: ELECTRICITY AND TELECOMMUNICATIONSBROADBAND OVER POWERLINESSteve Houle


NARUC Winter MeetingTXU BPL Initiative

Steve Houle

Vice President

Corporate Technology & Development


Creating The 21st Century Grid

Digital protection and control

Transmission superconductivity

Advanced substation equipment monitoring and video security

Digital fault analysis; self-healing grid

Automated Meter Reading

Broadband over Powerlines


Smart Grid Benefits - Timeline

S

O

L

U

T

I

O

N

S

O

L

U

T

I

O

N

E

N

A

B

L

E

E

N

A

B

L

E

E

N

A

B

L

E


Senate Bill 5 – Key Enabling BPL Provisions

  • It is in the public interest to encourage the deployment of BPL

  • A utility may choose to implement BPL, but is not required to do so.

  • Municipality shall not have jurisdiction over the BPL system, services, construction, operation, or maintenance. Texas BPL policies should provide regulatory certainty and remove barriers to entry.

  • No additional fees, franchises, or easements required for BPL system

  • BPL services to utilities are eligible expenses in rate cases

  • CATV pole attachment rate is just & reasonable


BPL Utility Services Benefits

  • Advanced Metering

    • Reduced meter reading and field service O&M

    • Automated disconnect (reconnect)

    • Outage restoration verification

  • Network Monitoring

    • Improved system operational responsiveness

    • Reduced reactive transformer maintenance costs

    • Improved outage information

  • Substation Automation Services

    • Enhanced communications and control of substations

    • Enables additional substation monitoring technologies

    • Reduced leased circuits for substation communications


NARUCJOINT MEETING: ELECTRICITY AND TELECOMMUNICATIONSBROADBAND OVER POWERLINESGerald Wyse


BPL Deployment at Consumers Energy

NARUC 2006 Winter Committee Meetings

Washington, DC

February 13, 2006


Electric Distribution System

  • 1,730,000 Customers

  • 29,768 Square mile service territory

  • 925 General Distribution Substations

  • 59,000 Miles of distribution primary lines

  • 545,000 Distribution transformers

  • 20,000+ New customers annually


Business Model Selection

  • Of all the business models being considered by utilities, the Landlord approach was chosen and a commercial market pilot approved.

  • Low risk approach

  • Leverages the core competencies of the utility

  • Avoids affiliate transaction issues

  • Can be done within the existing regulatory environment


General Terms of the Agreement

  • The Shpigler Group receives the right to provide BPL Service to two communities and will market under Lighthouse Broadband (A total of 10,000 customer passed) - 1st community – Grand Ledge- 2nd community – St. Johns

  • Deployment is a Market Pilot - No Investment on Consumer Energy’s part- No Commitment for further deployment- Mutual sharing of information to determine post pilot direction


Pilot Communities

  • Grand Ledge5350 Potential customers 574 Overhead transformers 482 Pad mount transformers 6 Customer per transformer

  • St Johns4950 Potential Customers 482 Overhead transformers 178 Pad mount transformers 7.5 Customers per transformer

St Johns

Grand Ledge


Consumers Energy’s Objectives

  • Evaluate low risk Landlord Strategy for BPL

  • Determine Utility Application potential

  • Determine implications and potential for statewide deployment

  • Evaluate BPL as an Economic Development tool for more competitive broadband options in Michigan communities


Current Status

  • Grand Ledge Commercial Deployment- Network up and running - Continuing with deployment

  • St Johns Commercial Deployment- Permit process proceeding - Meetings recently held with City Officials and 911 Personnel- 2006 Deployment


NARUCJOINT MEETING: ELECTRICITY AND TELECOMMUNICATIONSBROADBAND OVER POWERLINES


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