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Rate Design to Complement AMI Implementation in Danville, Virginia

Rate Design to Complement AMI Implementation in Danville, Virginia. Presentation by Denise Sandlin Support Services Director Danville, VA APPA 2009 Business & Finance Conference Decision-Making on Advance Metering Infrastructure (AMI) Tuesday, September 15, 8:30 – 10:00 a.m. 1.

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Rate Design to Complement AMI Implementation in Danville, Virginia

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  1. Rate Design to Complement AMI Implementation in Danville, Virginia Presentation by Denise Sandlin Support Services Director Danville, VA APPA 2009 Business & Finance Conference Decision-Making on Advance Metering Infrastructure (AMI) Tuesday, September 15, 8:30 – 10:00 a.m. 1

  2. Introducing Danville, Virginia Location-- Southside Virginia on the Virginia – North Carolina border Population-- 45,400; metro area 107,000 Size– City of Danville 44 sq. mi. Danville’s service area: 500 sq. mi. History-- Founded in 1793, incorporated in 1830, initially a tobacco & textile manufacturing center Government Structure-- Council-Manager Municipal Utilities– Publicly owned and operated Services-- Typical municipal utility services plus natural gas, electricity, and telecommunications Web Sites http://www.danvilleutilities.com http://ndanville.net http://www.danville-va.gov http://www.discoverdanville.com

  3. What is AMI? Advanced Metering Infrastructure (AMI) refers to systems that measure, collect and analyze energy usage, from advanced devices such as electricity meters, gas meters, and water meters through various communication media.

  4. Advanced Metering Infrastructure (AMI) Benefits • Two-way communication with every customer enables • Remote meter reading • Home area networks • Remote connect/disconnect service switches • More detailed data, more real time • Newer, more accurate meters • Financial Benefits • Compliance Improvements • Service Improvements • Accurate outage assumptions • Business development 4

  5. Danville’s AMI Deployment Objectives • 18 - month deployment • Replace all electric and water meters and gas registers – 81,434 • Build on our existing and planned fiber network. • Support Danville’s future Smart Grid • Provide benefits for Danville Utilities and its customers • Rate design strategies • Comply with Danville’s adopted standards covered under the Energy Act of 2005 and EISA 2007. 6

  6. Danville’s Meter Replacements

  7. City of Danville’s Meter Districts 8

  8. Adjacent County Meter Districts 9

  9. Benefits for Danville Utilities • At least 15 minute data from electric meters and hourly data from gas and water • Outage and restoration notifications for customers • Voltage monitoring for sags and surges prior to a customer complaint • Reduced misread and hi/low bills • New rate structures • Improved system planning for distribution • Tamper notification • Reduced labor costs • Remote disconnects and connects • Improved safety for employees 10

  10. Benefits for Customers • Manage their own energy usage and costs • New and improved customer service • Help stabilize rates • More accurate billing with the elimination of estimated reads and data entry errors • No need to access customer property • Improved outage response time and information • Offer new programs and services • New payment options 11

  11. AMI System Investment 12

  12. AMI SystemFinancing 13

  13. Summary of Rate Design Strategies • Reduce debt financing requirements based on one-time savings due to AMI • Reduce customer charges based on annual savings due to AMI 14

  14. AMI SystemOne-Time Savings 15

  15. AMI System Annual Savings 16

  16. Customer Charge Reduction • Customer charges due to AMI Savings • Water Customers Total Reduction is $3.00 per meter/month • Electric Customers Total Reduction is $3.20 per meter/month • Phased-in implementation: • $1.00/$1.20 as of July 1, 2009 • $1.00 as of January 1, 2010 • $1.00 as of July 1, 2010 17

  17. Benefits of Customer Charge Reduction • Visible and tangible connection • Timing coincides with benefits • [Good Faith effort to our customers] • Solidified support for AMI project from Danville Utility Commission and City Council 18

  18. Implications ofGoing Forward • Budget balancing • Funding and revenues will be lower • Need to realize AMI savings in the form of reduced costs • Data management • Special rate design – e.g. time-of-use • Customer communication • In-home displays and Internet access 19

  19. Summary • Danville is making a big leap in technology and practices • These improvements allow the utilities to capture significant cost-savings • Cost-savings will be passed on to consumers through lower customer charges and other rates (due to lower debt service) 20

  20. Comments!Questions? Denise Sandlin Support Services Director Danville Utilities 1040 Monument Street Danville, Virginia 24541 Telephone: 434-799-6581 e-mail: sandldl@ci.danville.va.us Our program report is available upon request

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