1. Presentation Identifier (Title or Location), Month 00, 2008 West Virginia Smart Grid Implementation Plan Preliminary Results Steve Bossart Director, Integrated Electric Power Systems Office of Systems Analysis and Planning

2. 2 The West Virginia Smart Grid Implementation Plan is the first state-wide Smart Grid strategy in the nation! It is only the second publicly available Smart Grid strategy document.

3. 3 Smart Grid & West Virginia Connection This plan used the NETL Modern Grid Strategy (MGS) vision for the Smart Grid In June 2008, this NETL MGS vision became the Smart Grid vision for the nation Senator Byrd influenced Congress to fund the original research and vision development (2005-07) The MGS team in West Virginia has been at the center of the Smart Grid debate for the last 4 years

4. 4 Smart Grid Vision Principal Characteristics of a Smart Grid: Enable active participation by consumers Accommodate all generation and storage options Enable new products, services, and markets Optimize asset utilization and operate efficiently Provide power quality for the digital economy Operate resiliently against attack and natural disaster Anticipate & respond to system disturbances (self- heal) Powering the 21st Century Economy

5. 5 Smart Grid Vision  Enable active participation by consumers  Accommodate all generation and storage options  Enable new products, services, and markets  Provide power quality for the digital economy  Optimize asset utilization and operate efficiently  Anticipate & respond to system disturbances (self-heal)  Operate resiliently against attack and natural disaster  Integrated communications  Sensors and measurements  Advanced control methods  Advanced components  Improved interface and decision support  Reliable  Secure  Economic  Efficient  Environmentally friendly  Safe Perform in relation to the KSFs Metrics in relation to the KSFs

6. 6 West Virginia Smart Grid Implementation Plan Powering the 21st Century Economy $540K project jointly funded through Attachment H process by NETL, RDS, Allegheny Power, AEP, State of West Virginia, WVU, and DOE OE Results will describe approach and value proposition of implementing Smart Grid in West Virginia Cost & benefit analysis comparing the state of current electricity grid and future Smart Grid in West Virginia Address the role of coal in Smart Grid Support economic development in State of West Virginia Only state-wide Smart Grid implementation plan Establishes West Virginia and NETL as leader in Smart Grid Only second Smart Grid study to be published

7. 7 Implementation Plan Process

8. 8 WV Future State CharacteristicSmart Grid Description Enable active participation by consumers AMI deployment completed in specific regions DR in place with smart meters consumers active in deploying smart appliances, PHEV, DG, and home area networks activity with RTO underway to link to consumer dynamic real time rate structures in place Accommodate all generation and storage options New tariffs incent DER deployment integrated operation of multiple DER devices and microgrids on a single feeder central DER coordination at substation or higher system level Enable new products, services, and markets Access to RTO markets available in specific regions value of consumer involvement well understood, transactions occur among consumers, utilities, and RTO's in real time AMI communications infrastructure can support multiple HAN applications DR, DER and energy efficiency programs in place transmission congestion eliminated

9. 9 WV Future State (cont.) CharacteristicSmart Grid Description Optimize asset utilization and operate efficiently Regionally deployed health and condition sensors integrated with AMI and GIS to enable at least one of the following processes - system planning, condition based maintenance, outage management, system loss reduction, work management, customer service, engineering, Modeling, simulation and visualization tools enable operators to perform "what if" analyses Enterprise-wide level visualization system deployed and integrated with AMI, GIS, OMS, DA, DR, DER, work management, etc. Provide power quality for the digital economy Minimally acceptable PQ levels for all customers established PQ metrics established and performance trends tracked Advanced technology deployments include: remote PQ Sensing, static VAr compensation, power electronic PQ devices, spike and harmonic filters, and PQ parks.

10. 10 WV Future State (cont.) CharacteristicSmart Grid Description Operate resiliently against attack and natural disaster AMI penetration growing, providing tool for more rapid service restoration Service restoration faster where AMI deployed regional advanced detection, diagnosis, and autonomous corrective action in place cyber security standards are well defined and incorporated in new designs more than half of consumers have back-up power local micro-grids emerge Anticipate & respond to system disturbances (self-heal) System Integrity Protective Systems (SIPS) ensure regional reliability, adaptive relaying deployed system- wide controls installed to process extensive system real time data, including WAMS inputs, and take instantaneous actions when manual operator action would be too slow DER and DR integrated with DA and feeder backup is underway islanding services available to customers all critical system assets are monitored in real time (SCADA fully deployed)

11. 11 Smart Grid Solutions for WV SolutionDescription Advanced Metering Infrastructure (AMI) All Residential, Commercial and Industrial Customers represented by 998,317 meters IT IntegrationA CIS Upgrade to accommodate AMI and DR functionality & Outage Management Demand Response (DR)The aggregated sum of 104 MW of DR from Residential, Commercial and Industrial Customers Distribution Management System (DMS) The automated fault clearing & restoration of service, circuit monitoring and control of the Distribution System to include 707 circuits of 1107 total circuits Distributed Energy Resources (DER) 100MW of Base Generation, 800 MW of Peak Generation, 250 MW of Advanced Storage and 100 MW of Wind Resources all capable of being dispatched on demand Transmission SystemsNot used in this plan since there are transmission upgrades well underway

12. 12 Preliminary Business Case Results Still working on refining the business case, but in general terms…… NPV Cost: $1.4B - $1.7B NPV Benefits: yielding a 2:1 to 3.5:1 value The team has taken many conservative approaches to the calculation of benefits, and expect the actual results that WV will see several years from now, will be even greater.

13. 13 Benefits Utilities –Operational Metering & billing, outage & work force management, reduced energy losses, optimize asset utilization –Asset Management System planning, maintenance Consumer –Reduced business loss, information access, energy management, participate in DR programs, connection of DG and storage, participate in electricity markets, reduce transportation costs Societal –Downward pressure of electricity prices, reduced emissions, economic development, improved reliability, improved grid security, revolutionize transportation sector, reduced dependence on foreign oil

14. 14 (may extend for AEP) Implementation Plan Summary 20102011201320122014201520162017201820192020 AMI IT Integration Demand Response Distribution Mgmt System Distributed Energy Resources RD&D

15. 15 Development and Demonstration AMI Pilot – It exercises a small number of AMI meters from the chosen vendor using the Meter Data Management System (MDMS) in a minimally- integrated role. The pilot allows the utility to test the communication infrastructure, messaging, and data collection against requirements. Demand Response Pilot – A small number of load management Demand Resources are deployed and tested. The pilot allows the utility to test DR program rules, business rules for load management, economic and reliability message requests and their load management results, expected vs. actual load management results, in home device results, and participant behavioral patterns.

16. 16 Development and Demonstration (cont.) Distributed Energy Resource Pilot – The DER pilot allows the utility to test generation management (rather than load management) and occurs during a similar timeline in the overall DR and DER implementation solution schedule. Distribution Management System Pilot – With the DMS system, it is likely that several different devices and strategies will be used over time. The pilot is not anticipated to test everything, but rather provide a simple, baseline system that allows the DMS enterprise systems an opportunity for testing and experimentation.

17. 17 Conclusions There are gaps in technology, regulation, and consumer preparedness that are necessary to address to realize the benefits of the Smart Grid in WV. The five Smart Grid solutions presented working together will generate benefits to WV that far exceed the cost of implementation and operations of these solutions. The implementation of a Smart Grid in WV will take about 8 years. It is prudent to begin immediately with pilot projects for AMI, DR, DER, and DMS to reduce the risks of the larger state-wide deployment.

18. 18 How This Project Will Be Used Basis for discussion within the state –Division of Energy –Public Service Commission –Economic Development –Utilities –Consumer and environmental groups –Legislators Reference for policy change Reference for business case development in rate- making and creation of incentives for change

19. 19 Contact Information For additional information, contact Modern Grid Strategy Team http://www.netl.doe.gov/moderngrid/ 304-599-4273 x101 19