Development of the Smart Grid

1. Development of the Smart Grid Implementation of the Board’s Policies November 20, 2012

2. First meeting of the reconvened Smart Grid Working Group • Welcome • Brief Recap of First Meeting • Board Staff’s proposed approach – Straw Man

3. Agenda

4. Spectrum of Ways of Operationalizing Directive Objectives in Rate Applications e.g. “traditional” Board criteria plus environmental benefits 10 Policy objectives Other Objectives* Other Objectives* Rationalized Policy objectives 24 objectives Evaluations *As per function, e.g. no need to evaluate customer access aspects of substation upgrades, plus innovation & future compatibility Project expenditures

5. Board Staff Straw Man – points of emphasis • A discussion document • Is the mapping of the Minister’s Directive to the proposed categories understandable? • Are the suggested expectations reasonable? • Focus on guidance to industry on what the Board expects and how it will evaluate applications • Not all objectives apply all of the time • “as appropriate” • SGWG feedback will be valuable to the Board in writing its Supplementary Report

6. Board Staff Straw Man Categories • Directive Objectives grouped into five categories • Energy Services and Education for Customers • Network Optimization and Long-term View of Investments • Innovation • Economic development • Cybersecurity and privacy

7. Board Staff Straw Man – Energy Services and Education for Customers • Expectations • Maintain current situation – Retail Settlement Code requirements • Add requirement for a mechanism to facilitate real-time data access • What sort of mechanism? • Customer Education • Cost-benefit calculations in support of initiatives • Performance measures

8. Board Staff Straw Man – Network Optimization and Long term View of Investments • Expectations • DG and more complex loads likely to require feeder segmentation and more switching • Which lead to greater visibility and control (and, perhaps) automation in control rooms • This improved visibility will assist IESO dispatch • Also controlled VAR support • Operational efficiencies may be expected due to more and better data to support maintenance • Enhanced outage management • Co-ordination will strengthen applications

9. Board Staff Straw Man - Innovation • Discussion points • How to evaluate investments that incorporate innovation while balancing risks? • Expectations • Where applicable, utilities should consider innovation in planning investments • Options • Continue to maintain existing deferral accounts for pilots and demonstrations • Include demonstrations and pilots in capital plans

10. Board Staff Straw Man – Economic Development • Expectations • Without compromising cost-effective, prudent, long-term investment show consideration of economic development opportunities • Network expansion to support growth • Local procurement • Examples • Applications may address economic development • Evidence of broad economic benefits may be required

11. Board Staff Straw Man – Cyber-security and Privacy • Expectations • Take an “end-to-end’ view of networks • Meet suitable standards, e.g. NIST • Continue to meet existing privacy standards • Examples • Code requirements or license conditions • Perhaps formal adoption of Privacy-by-Design • Record keeping and reporting requirements to ensure auditable records