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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

NARUCJOINT MEETING: ELECTRICITY AND TELECOMMUNICATIONSBROADBAND OVER POWERLINES

naruc joint meeting electricity and telecommunications broadband over powerlines wade p malcolm p e

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

understanding utility responses to bpl february 13 2006 naruc

Understanding Utility Responses to BPLFebruary 13, 2006NARUC

Wade P. Malcolm, P.E.

Vice President

Power Delivery and Markets

introduction
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
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
  • 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
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
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
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
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
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 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
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
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
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
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
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 consumer portal
“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
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?
naruc joint meeting electricity and telecommunications broadband over powerlines walt brown

NARUCJOINT MEETING: ELECTRICITY AND TELECOMMUNICATIONSBROADBAND OVER POWERLINESWalt Brown

naruc joint meeting electricity and telecommunications broadband over powerlines steve houle

NARUCJOINT MEETING: ELECTRICITY AND TELECOMMUNICATIONSBROADBAND OVER POWERLINESSteve Houle

naruc winter meeting txu bpl initiative

NARUC Winter MeetingTXU BPL Initiative

Steve Houle

Vice President

Corporate Technology & Development

creating the 21 st century grid
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
Smart Grid Benefits - Timeline

S

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L

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T

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N

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B

L

E

E

N

A

B

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E

N

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B

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senate bill 5 key enabling bpl provisions
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
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
naruc joint meeting electricity and telecommunications broadband over powerlines gerald wyse

NARUCJOINT MEETING: ELECTRICITY AND TELECOMMUNICATIONSBROADBAND OVER POWERLINESGerald Wyse

slide29

BPL Deployment at Consumers Energy

NARUC 2006 Winter Committee Meetings

Washington, DC

February 13, 2006

electric distribution system
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
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
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
Pilot Communities
  • Grand Ledge 5350 Potential customers 574 Overhead transformers 482 Pad mount transformers 6 Customer per transformer
  • St Johns 4950 Potential Customers 482 Overhead transformers 178 Pad mount transformers 7.5 Customers per transformer

St Johns

Grand Ledge

consumers energy s objectives
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
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
naruc joint meeting electricity and telecommunications broadband over powerlines1

NARUCJOINT MEETING: ELECTRICITY AND TELECOMMUNICATIONSBROADBAND OVER POWERLINES

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