Idaho Power’s Implementation to Secure Its Energy Future
by Mark Heintzelman, Idaho Power Co., Ray King, Microsoft, and Sharelynn Moore, Itron
Driven by government regulations and investments–and even customers–utilities’ smart grid and meter discussions are evolving from long-term aspirations to necessities as many take steps to implement more advanced metering systems. Technologies today are more affordable and, if implemented correctly, enable capabilities far beyond automated meter reading to improve utility workers’ decision-making and give customers more choices.
As a result, every North American utility bigger than a breadbox is in some stage of considering or planning its metering infrastructure overhaul. Many utilities, including Idaho Power Co. (IPC), have already started their advanced metering infrastructure (AMI) and meter data management (MDM) system implementations. And U.S. federal stimulus money has enabled many projects to move from concept to reality.
Information is the big advantage. AMI creates petabytes of data as multiple systems and millions of meters report their unique information as Electric Power Research Institute shows in Figure 1. Each hour or more, a company reads meters for its 250,000 customers producing valuable data from 6 million reads every day. When AMI also includes MDM and advanced analysis capabilities, utilities can integrate varying data types from multiple sources and organize it to improve decision-making and develop advanced pricing programs.
Utilities are anxious to realize the benefits and new capabilities that AMI and MDM allow. Implementations are complex, and it is essential that teams carefully consider and manage the implementation process before they begin. There is a temptation to jump into implementation without thoroughly planning. Guidance from proven implementation methods is a crucial part of managing scope, business objectives and schedule expectations to ensure projects remain on track, on budget and are completed successfully. IPC is an example that follows implementation best practices.
Idaho Power’s AMI-MDM Vision
In 2004, the Idaho Public Utilities Commission (IPUC) tasked IPC, a more than 90-year-old company with almost half a million customers in southern Idaho, to pilot AMI. The pilot, for which the commission also approved funding, was intended to help avoid additional generation on energy-watch days. Since then, IPC has taken a leadership role with its AMI and MDM implementations.
IPC’s customers have always enjoyed some of the lowest electric rates in the United States. To meet increasing demands and improve customer service, the company is focusing on continuing to build an electrical system that ensures future generations enjoy the same. The IPUC has expressed its desire to expand rate offerings based on time-of-day usage as soon as possible. IPC will be ready for the expansion in 2010 with meters and back-office technology to support the mandate and increasing demand.
IPC has deployed Itron Enterprise Edition Meter Data Management (IEE MDM), which is built on Microsoft SQL Server technologies. The new system will help IPC take advantage of more frequent and higher-quality data feeds that will improve the company’s decision-making abilities. This MDM solution will provide a scalable enterprise platform that hosts integrated applications including customer care, load research, demand response, complex billing and distribution asset optimization.
The move to AMI and MDM will enable IPC to use dynamic time- and price-variant energy pricing based on hourly consumption data to create advanced pricing programs. It will be able to raise its rates during peak-usage times so that rates can remain lower in general. Today, IPC spreads energy price spikes over the entire year and bases price adjustments partly on last year’s costs. As a result, no timely price signaling or direct motivation to conserve during peak-cost periods exists.
Figure 2: IPC’s remote service area, varied terrain and irrigation service locations provided some unique challenges to deploying a system that will retrieve hourly energy data from all service points.
IPC’s new MDM system will enable IPC to analyze hourly data that will also improve the company’s direct load control during prolonged, hot summers.
While coincident agricultural irrigation and residential air conditioning lead the summer peak load, residential air conditioning is causing the peak to increase faster than the base load.
The MDM system will also manage meter-based data from its existing smart metering system. It will provide a single solution for receiving, storing and validating hourly–or the utility’s chosen interval–load and monthly consumption data, as well as analytic tools to support energy management applications. The MDM system will also use IPC’s existing communication infrastructure.
When complete, IPC’s infrastructure will allow workers access to many data types and sources. Microsoft SQL Server presents high-quality data in a way that is tailored to each employee’s specific job function.
This gives workers the ability to access, use and share data and analysis via the secure company communications network to make better and faster energy-delivery and -use decisions as illustrated in Figure 3.
While customer service and billing calculations were the highest priorities, IPC eyed the future. Its AMI and MDM systems already enable IPC to remotely read meters resulting in reduced vehicle use, lowered operational costs and improved monitoring, reporting and power restoration. It also enables engineering studies, environmental benefits and enhanced demand-side management. Analysis will help IPC deploy the right transformers when needed. Customer satisfaction has also improved from fewer billing errors and customer complaints along with new data availability that advanced metering provides.
Idaho Power’s Phased AMI-MDM Implementation
IPC’s AMI and MDM deployment has been in progress for about three years and is just more than one-third complete. Following proven implementation methods, the company diligently completed all testing and analysis first rather than rushing to deploy meters. With meter deployments about 33 percent complete, the company is now fully in the deployment phase.
In phase I, completed in 2004 to 2007, IPC demonstrated AMI and MDM capabilities and completed its business case for the Idaho PUC. It tested hourly data collection from 27,000 endpoints and piloted time-variant rates based on hourly meter data. Time-variant tests included dynamic rates such as announcing critical peak rates a day ahead.
Phase II is the deployment phase. The goal is to install the infrastructure to 99 percent of the IPC electrical distribution system from 2008 to 2011. IPC started this phase by selecting its technology providers and completing the regulatory filing. During this phase, IPC will complete construction in more than 140 substations and integrate its outage management system into the overall AMI-MDM system. Finally, it will deploy about 150,000 smart meters per year and its MDM system companywide on a three-year schedule. At publishing date, the deployment is on schedule and budget.
Cost recovery for the $70 million project began during Phase II. IPC expects to save 99 percent of its meter-reading costs and 90 percent of its customer movement costs, totaling $7 million annually. It also estimates to reduce more than $360,000 each year of outage scoping and restoration confirmation costs.
During the 2012 Phase III, Idaho Power anticipates a large-scale time-of-use rate program expansion and to use MDM to integrate the AMI data with its distribution operations and maintenance to improve and expand demand-side management.
Implementation Advice: Plan First and Remain Focused
Today’s AMI and MDM implementations can range from a few hundred to millions of meters, with each utility having unique needs. No matter the project scale, a practical, phased approach with well-established scope and schedule promises a smoother project and better results.
Avoid the temptation to implement first and plan as you go. Focusing on business processes first and following a phased implementation approach produces better outcomes. It is smart to start deployments slowly while focusing on defining the MDM system rules and integration to capture the greatest value early.
Set an overall project vision and document the most critical goals first to help avoid distractions later. Implementation teams often encounter internal and external factors such as price fluctuations or major requirement changes. No matter what, remain focused on achieving the most critical goals. With a good foundational platform, companies can add capabilities and capture new benefits over time.
Be prepared for massive amounts of data. Valuable voltage, load, energy use and outage data, for example, can improve billing accuracy and aid in decision-making. Considering that missing as little as one hour per day of energy usage data can be costly, it is critical to capture, analyze and use all data.
With a solid plan and a phased, focused implementation, utilities will have a smoother experience that opens doors to even more benefits.
The Larger Possibilities of AMI and MDM
The shift to AMI and MDM has tremendous benefits for consumers and utilities alike because a utility or consumer cannot act on what isn’t measured. AMI and MDM combined have two-way monitoring capabilities that connect with consumer home energy management systems and utilities’ existing systems. IPC envisions using data analysis and sharing information to potentially influence its own and consumers’ behavior. By analyzing customer usage patterns, the company can assess potential rate structures, for example, and provide consumers more choices.
By diligently planning and using proven implementation methods, IPC has already realized some of the data analysis potential with its new pricing programs and cost savings. Whether AMI and MDM implementations are just starting or already in progress, setting and remaining focused on critical goals and following a phased implementation is guaranteed to produce a smoother project and better results. These utilities will be equipped with quality data and the ability to make the decisions that will prepare them for the certain changes the future will bring.
Mark Heintzelman is AMI project manager for Idaho Power Co. and responsible for managing its AMI and MDM implementations. E-mail him at firstname.lastname@example.org.
Ray King is solutions director of Microsoft’s energy industry team. He brings more than 25 years of business and technology experience in the energy space. E-mail him at email@example.com.
Sharelynn Moore is director of product marketing at Itron and responsible for strategic marketing for the company’s enterprise software solutions. E-mail her at firstname.lastname@example.org.