1. Advanced Metering Infrastructure: The Business Case for San Diego Gas & Electric
Ed Fong
Director, AMI
                                                               
11/23/2018
Ed Fong, SDG&E AMI

2. SDG&E’s AMI Proposal
File application with California Public Utilities Commission on March 15, 2005 requesting authorization to deploy AMI for all customers
Covers 1.4 million electric and 900,000 gas customers by 2010
Planning and analysis horizon from

3. Background on SDG&E Integrated electric & gas distribution utility
1.3 million electric, 820,000 gas customers
Covers all of San Diego County and most of South Orange County for electric
Subsidiary of Sempra Energy
Only California electric utility to remain financially sound during energy crisis of

4. SDG&E Service Territory

5. Impetus for AMI SDG&E long-time proponent
Energy crisis filed “real-time energy metering” RTEM application with California Public Utilities Commission (CPUC), A
Authorization for RTEM for 5,000 customers (>100 kW) in May 2001
Support for state funded advanced meters in 2001, AB 29X
First CA utility to have default 3 period TOU rates for commercial & industrial customers in late 1980’s
First utility to propose and hourly pricing option (HPO)

6. Impetus for AMI
Energy crisis initiated great interest in demand response
Advocates at the CPUC, California Energy Commission (CEC) and Governor’s office for dynamic pricing
Proceeding established in June 2002, R , to investigate and develop framework for AMI, demand response and dynamic rates
President of CPUC, Mr. Peevey, is assigned Commissioner to this proceeding
Proceeding has led to extensive Statewide Pricing Program (SPP) covering Summer ’03 and ’04 involving some 3,000 customers

7. What is AMI? Advanced Metering Infrastructure
Solid state interval meter
Two-way communications integrated with meter
Supporting telecommunications network
Traffic management systems
Meter data base management systems
Customer Information and Billing systems integration
Application of dynamic rates
Data presentation to customer
Customer services field
Enabling appliance control technologies
Other supporting in-home customer technologies

8. AMI Technology Architecture
Wide Area Network
CDMA RF
Fiber
BPL
Local Area Network
RNC
Axispath
Relay
Transceiver
Electric Meter
MV-90
ODS
Gas Meter
CISCO/IDS/PBS
Water Meter
SDG&E
Bill

9. Why the BIG Push and Interest?
Demand response impacts and benefits
Statewide Pricing Pilot (SPP) results
Reduces peak demand, avoid marginal generation
Overall peak day conservation effect
Customer acceptance of time-differentiated rates
Customer benefits- direct bill
Market benefits
Technology advancements
Micro-processing
Telecommunications (public and private networks)

10. SDG&E’s Application Highlights
Request authorization for full deployment of AMI
Recovery of new net AMI capital investment
Recovery undepreciated meter assets
Full deployment: treats all customers equally & logistically more efficient
Plan for full deployment with off-ramps after 1st phase
Expedited authorization of pre-deployment costs of $50 million
Commission decision by June 30, 2005
Design, development and testing
Software systems development
10,000 customer beta test in 2006

11. SDG&E’s Application Highlights
Positive net present value of $46 million over period from operational and demand response benefits
Operational benefits from meter reading, customer services field, reduced theft, demand response program administration
T&D benefits from deferred capital projects
Avoided peak generation capacity from demand response
Energy use reductions from demand response
Difficult to quantify environmental, reliability, market efficiency benefits
Key policy positions
Reform of AB 1X required for default dynamic rate structures for right price signal and demand response benefits
Emphasis on customer education/communications- intelligent decision making
AMI technology is not AMR, but requires integration of many components development and testing
Off ramps to mitigate risks for SDG&E and customers

12. Significant AMI Benefits
Operational benefits
O&M cost savings & avoidance
Meter reading, customer Services field
Demand response prog. mgt
Capital reductions, avoidance, deferrals
Electromechanical meter replacements
T&D capacity deferrals
Demand response
Avoided generation capacity
Energy savings
Environmental
CO2 emission reductions
Reliability- avoid rolling blackouts, value of service

13. Significant AMI Costs 3 major phases Capital O&M
Design, development, testing & planning
Deployment & installation
Ongoing operations & maintenance
Capital
AMI meter, gas module, communications equip & installation
IT systems development (e.g., meter data systems mgt, meter inventory, etc.)
O&M
Customer education, communications
Measurement data operations
AMI equipment maintenance
Gas module battery replacements
Telecommunications

14. Evaluated Two Preferred Deployment Scenarios
Full deployment
All 1.4 million electric, 600,000 gas customers
Complete by year end 2009
Begins with partial deployment with Inland climate zone customers
Proceed if off-ramps not triggered
Partial deployment
Inland climate zone
600,000 electric and 400,000 gas
All commercial & industrial customers >20 kW (20,000)
Complete by year end 2008

15. Net Present Value Societal Perspective
Present Value of AMI Societal Costs and Benefits
($ millions)
Present Value ( ) 1 2 3 4
Cost
Operational Benefits
Demand Response Benefits
Net PV
Full Deployment $ $ $ $
Partial Deployment $ $ $ $
77% of demand response benefits from 40% of customers
Reduction in special voluntary demand response programs contribute to large portion of operational benefits

16. Undiscounted Costs & Operational Benefits
(includes overheads and inflations)
($ millions)
Full Deployment
Development & Installation
On-going
Total
Costs
Capital $ $ $
O&M + Other $ $ $
Operational Benefits $ $ $ $ $ $
Partial Deployment
Development & Installation
On-going
Total
Costs
Capital $ $ $
O&M + Other $ $ $
Operational Benefits $ $ $ $ $ $

17. Costs Categories O&M Capital Communication System Facilities
AMI Project Management
Billing
Customer Contact Center
Claims
Communication System
Load Control Technology
Facilities
Gas & Electric Meters / Gas Modules & installation (Gas & Electric) HR
Information Technology
Load Research
Mass Markets / Major Markets
Meter Reading
Communication System
Facilities
Gas & Electric Meters / Gas Modules & installation (Gas & Electric)
Information Technology
Transmission & Distribution

18. Operational Benefits Categories
Capital Benefits
O&M Benefits
Avoided Load Research Programs / Projects
Customer Service Field
Demand Response
Avoided / Deferred G&E Meters & Labor and other E&G Mtr Savings
IT for Meter Reading
Meter Reading
Mtr-Elec-Residual
Mtr-Gas-Residual
Transmission & Distribution
Avoided Load Research Programs / Projects
Billing
Customer Contact Center
Customer Service Field
Claims
Dem Resp Prog Mgt
Avoided / Deferred G&E Meters & Labor and other E&G Mtr Savings
Meter Reading
Transmission & Distribution

19. Demand Response Assumptions
Concurrent implementation of dynamic rates
Legislative constraint from 2001 energy crisis created AB 1X
SDG&E assumes CPP price structure similar to SPP
15 CPP days called
Demand elasticities from SPP
Constant elasticity of substitution
Daily price elasticity
Demand response is sustainable
$85 kW year for avoided generation capacity
Customer opt-out rate 20% or less

20. Statewide Pricing Pilot (SPP)
Funded by CPUC for $19 million for
3,000 customers (PG&E, SCE, SDG&E)
1,950 treatment customers w/dynamic rates
1,050 control group customers
SDG&E 300 residential customers on various dynamic rates and 200 residential in various control groups
Summer ’03 & ’04 impact analysis by Charles Rivers Associates (CRA)
Average demand residential customer reduction during critical peak days ~ 14.4%
Average reduction in warmer climate zones ~ 16%
Commercial customer reductions are less

21. SPP – Summer Event Day Impact CPP-F, 8/27/03
Nbr of customers = 42; This simple aggregation of load data for customers in sample is not necessarily representative of the population at large - Results for population at large cannot be calculated without appropriate weighting and statistical adjustment of sample. Baseline = prior 10 day average usage for sample customers (includes weekdays, does not include holidays or prior event days)

22. SPP – Summer Event Day Impact CPP-V, 8/27/03
Nbr of customers = 110; This simple aggregation of load data for customers in sample is not necessarily representative of the population at large - Results for population at large cannot be calculated without appropriate weighting and statistical adjustment of sample. Baseline = prior 10 day average usage for sample customers (includes weekdays, does not include holidays or prior event days)

23. Demand Response Benefits (Full Deployment)
2010 First Full-Year Demand Response Impact
$ Millions (Nominal)
Peak MW Forecast
MW Reduction
Capacity Avoided
Energy Bills
Full Deployment
Residential
1151
176
$18.5
$1.1
Small C&I (<20 kW)
409 26
2.7
0.3
Medium1 C&I (20-99 kW)
415 42
4.4
0.2
Medium2 C&I ( kW)
338 44
4.6
Total
2938
360
$37.9
$2.3

24. Present Value of Demand Response Benefits
2004 $
($ Millions)
Capacity
Energy
Total
Full Deployment
Residential $ $ $
Small C&I (<20 kW)
16.9
2.4
19.3
Medium1 C&I (20-99 kW)
28.3
1.6
29.9
Medium2 C&I ( kW)
29.7
1.4
31.1
Large C&I (>300 kW)
51.2
3.1
54.4
Total PV Full Deploy $ $ $