7. Reasonableness and Feasibility of Technology Choices
In assessing reasonableness and feasibility we look in part to prior decisions issued by the Commission on previous utility AMI deployment proposals by other utilities. Commission Decisions (D.) 05-09-044, D.07-04-043, and D.08-09-039 assess the reasonableness and feasibility of utility AMI systems based on a set minimum functionality requirements for electric utilities.4 These criteria were designed to apply to electric AMI systems. One of these requirements, related to supporting dynamic pricing or time differentiated tariffs, is specific to electric usage and not relevant to a gas-only AMI system, and so does not apply to the evaluation of a gas AMI proposal. Similarly, the applicability of the criterion requiring AMI systems to have the ability to interface with load control communication technology is not clear. SoCalGas does not discuss in detail the potential for its proposed AMI system to interface with load control, nor the availability of load control equipment for gas devices. Still, four of the minimum functionality requirements defined in R.02-06-001 and addressed in previous proceedings on AMI proposals may provide guidance for the reasonableness of any AMI project, and it is helpful to refer to this guidance in evaluating the SoCalGas technology choices. The minimum functionality criteria that are potentially relevant to a gas AMI system are:
1. Collection of usage data at a level of detail (interval data) that supports customer understanding of hourly usage patterns and how those usage patterns relate to energy costs.
2. Customer access to personal energy usage data with sufficient flexibility to ensure that changes in customer preference of access frequency do not result in additional AMI system hardware costs.
3. Compatibility with communications protocols and applications that utilize collected data to provide customer education and energy management services, customized billing, and support improved complaint resolution.
4. Compatibility with utility system applications that promote and enhance system operating efficiency and improve service reliability, such as remote meter reading, outage management, reduction of theft and diversion, improved forecasting, workforce management, etc.5
The SoCalGas AMI proposal meets the first of these criteria by collecting hourly gas meter reads, providing the ability to support customer knowledge of hourly gas usage patterns.6 It is not clear whether the proposed SoCalGas system would meet the second of the above criteria, providing flexibility to support changes to the frequency of customer access to usage without incurring additional hardware costs. Under the SoCalGas proposal, the AMI system would transmit information to the utility approximately two to three times per day,7 and the system has been designed to allow data transmission up to four times a day.8 This may or may not allow customers to track and adjust their energy usage during a given day, though it should provide sufficient information for customers to access usage on at least a daily basis and respond to this information through changes to gas usage.9 If daily usage information is considered sufficient to meet customer needs, the SoCalGas proposal should be considered consistent with this criterion.
Based on representations by SoCalGas, it appears that the proposed SoCalGas AMI system will meet the third criterion listed above by utilizing collected data to provide customer education and energy management information, customized billing, and support improved complaint resolution. SoCalGas Exhibit 4 outlines how the proposed information technology system will collect data and utilize it to validate meter reads and support billing activities, and Exhibit 24 describes how the AMI system will provide customers with access to customer-specific usage profiles and historical usage information. SoCalGas estimates that there will be a reduction in customer contacts, including complaints, due to a reduction in meter reading errors,10 and the ability to access detailed usage data is also likely to support improved complaint resolution. While parties may disagree on whether the system collects the optimal amount of information or processes it most efficiently, it appears to meet this criterion for collecting, processing, and utilizing information to support various utility operations.
According to SoCalGas, its AMI proposal is also designed to meet the fourth criterion listed above, promoting and enhancing system operating efficiency and improving service reliability. Benefits SoCalGas attributes to AMI implementation include such "intangible" benefits as allowing more rapid detection of energy theft, and quicker detection of higher-than-usual usage allowing earlier investigation of possible problems. SoCalGas asserts that AMI implementation will improve monitoring of gas pressure and identification of high pressure problems throughout the gas system. Though parties may dispute the value and details of these benefits, the increased availability of data under the SoCalGas proposal should promote and enhance system efficiency and improve reliability, meeting this criterion.
In summary, it appears likely that the SoCalGas AMI proposal meets those functionality criteria defined by the Commission for previous (electric or dual fuel) AMI proposals that are relevant to a gas AMI system. Sections 7.1 through 7.3 evaluate features of the proposed AMI system in more detail to determine whether the SoCalGas AMI proposal is reasonable, appropriate, and technically feasible overall, as required by the questions in Section 5, above.
7.1. Communications System
SoCalGas proposes implementation of its own radio frequency (wireless) communications technologies to create a local area network (LAN) to communicate to and from an endpoint device such as a meter to a collection device, and a wide area network (WAN) to bring collected information from the higher-level connective device to the utility's data center. According to SoCalGas, "multiple technologies are available from the marketplace that can satisfy functional requirements,"11 and the company investigated options through a request for proposal process and discussions with vendors. SoCalGas does not describe a specific technology or vendor for either its LAN or its WAN, but expects to utilize a two-way radio frequency LAN system powered by batteries,12 and describes WAN options that include wireless technologies, landline telephone, and ethernet.13
SoCalGas provides a detailed discussion of its efforts to design a "hybrid" communications system for gas and electricity usage that would utilize communication systems developed by Southern California Edison Company (SCE) in the SoCalGas/SCE overlap territory.14 SoCalGas states that a hybrid system taking advantage of SCE technology is not a viable option for several reasons. Specifically, SoCalGas asserts that the SCE communications infrastructure is not designed to split meter reads for different companies, and would require several modifications in order to collect and process SoCalGas meter reads.15 In addition, SoCalGas notes that even if it used SCE communications infrastructure for some customers, it would need to develop a stand-alone system for customers outside of the SCE territory. SoCalGas argues that it would be costly to then interface and integrate those two communication and data collection solutions.16 SCE estimates that once the increased costs of interfacing two different systems and the incremental cost of any service fees SCE would require to provide access to its system are included in the hybrid analysis, the net benefits of a stand-alone gas system would exceed those of a hybrid system by approximately $121 million.
In its opening brief, DRA notes that it "disagrees with SoCalGas's assessment of the purported obstacles to hybrid development and the magnitude of associated costs," but acknowledges that integrating the two systems would be complex, and therefore does not contest the SoCalGas assertion that the option is not viable. DRA does not endorse the SoCalGas choice for communications technology, noting that SoCalGas does not yet know and so has not yet specified the details of its AMI communications technology choices. DRA notes that this lack of specificity causes uncertainty in cost estimates and makes it difficult to ensure that SoCalGas does not ultimately overpay for system components or procure duplicate functionality solutions from different vendors. Neither TURN nor UWUA specifically address the SoCalGas communications system proposal in their briefs.
Based on the information available in the record, the radio frequency communications system proposed by SoCalGas appears to be reasonable, appropriate, and technically feasible. Several different communications options, most utilizing wireless radio frequency technologies, are available in the marketplace, and appear appropriate to serve the needs of a gas-only AMI system. Parties do not dispute that these technologies are adequate to support collection of hourly interval data and have the potential for two-way communication. To ensure that SoCalGas' AMI system can interoperate with consumer-owned devices, we expect SoCalGas to select two-way communications technologies that comport with widely adopted standards and communications protocols.
The specifics of the SoCalGas AMI communication systems have not yet been finalized, and there appear to be several communication possibilities that SoCalGas has not yet investigated in detail. Combined, these factors make it difficult to determine whether SoCalGas has chosen the most reliable or cost effective options for its particular communications needs. For example, SoCalGas does not address the possibility of using the SCE communications solution throughout SoCalGas territory, which could avoid the integration costs of having two different communications systems. SoCalGas appears to assume that, even if the SCE communications system could be used in the SCE area, a completely different communications solution would be needed in non-SCE areas, requiring additional work to integrate these different systems. SoCalGas also does not provide an analysis of the costs and benefits of providing AMI only in SCE overlap areas, while leaving SoCalGas meters in the non-SCE overlap territory to be served by conventional means or through expansion of the previously approved implementation of remote automated meter reading systems. SoCalGas contends that this would divide the SoCalGas customer base into "haves" and "have-nots," and that "SoCalGas would then be required (in the interest of fairness and equity) to implement a standalone AMI system for the SoCalGas customers located in the non-SCE areas of SoCalGas territory," bringing the company back to a hybrid solution.17 This argument presupposes that customers without AMI will be at a serious disadvantage compared to customers with AMI.
Despite these shortcomings in the analysis, SoCalGas does provide a persuasive argument that a stand-alone system is preferable to a hybrid system that requires two different communication solutions. We find that the
stand-alone communications equipment contemplated by SoCalGas is reasonable and appropriate in that it will support the collection of hourly usage data and other system information, and that it is technically feasible, as it is currently available through existing vendors.
7.2. Battery Choice
SoCalGas proposes powering its AMI modules using batteries, asserting that batteries "provide a safe and cost effective power source for the gas AMI meter module's internal radio transmitter."18 SoCalGas considers the battery that powers a gas AMI meter to be "integral to the product itself and not typically replaced during the product's useful life."19 In supplemental testimony provided in response to a request by the assigned ALJ and Commissioner, SoCalGas describes the lithium thionyl chloride (Li/SoCl2) battery that the company intends to use in its gas meter modules, providing detailed information on the battery's development, testing, and expected useful life. SoCalGas bases its estimates of the useful life of the batteries to be used in its AMI modules on the use of mathematical models that account for the conditions to which the batteries will be exposed. On the basis of vendor calculations using these models, the company believes that the batteries are suitable to last for the lifetime of the proposed AMI system, with a reasonable failure rate, even when considering real-world conditions such as temperature profiles, expected power requirements, and the need to transmit information from the modules at defined intervals over the battery's life.20 SoCalGas also describes several types of testing undergone by the batteries and modules, including simulations of energy use to confirm the mathematical calculations of expected lifetime, and testing to simulate read world environmental conditions.21 SoCalGas asserts that equipment failure rates for the chosen vendor will be lower than the rates assumed in the cost effectiveness analysis, ensuring that the need to replace equipment will not exceed the estimated failure rates. SoCalGas addresses possible concerns that batteries may not be available in the event of equipment failures in the final years of its AMI system by stating its intention to contractually obligate the selected vendors to ensure that AMI gas meter modules compatible with the SoCalGas system remain available from multiple suppliers throughout the life of its AMI system, ensuring that failed equipment can be replaced.22 SoCalGas suggests the possibility that it may explore purchase of a warranty on the gas meter modules for part of the life of the system.
UWUA and DRA both question the SoCalGas estimates of battery life and potential battery failure rates. UWUA notes that the estimates provided by SoCalGas "do not reflect substantial long term field experience with the type of battery and module being proposed."23 Neither party specifically questions the appropriateness of the battery choice by SoCalGas, but both argue that SoCalGas may underestimate costs of battery and module replacement, and that the uncertainty in the batteries' performance could lead to an increase in project costs if the batteries experience higher-than-anticipated failure rates.
SoCalGas provides substantial information in support of its choice of battery technology, including descriptions of extensive analysis and testing to ensure that the chosen battery technology will meet all anticipated needs of the proposed AMI system. The fact that the chosen battery technology has been developed recently necessitates evaluation of this technology without the benefits of long term field testing of the technology. Though this does introduce uncertainty in the analysis of the chosen SoCalGas battery technology and supports claims that the technology is as yet "unproven," the same arguments can be made about any new technology or product with an expected useful life longer than its current age. This does not automatically disqualify new technologies from being adopted; instead, it necessitates thorough analysis of the potential technology and testing of new products to validate theoretical engineering and mathematical models.
In its supplemental testimony, SoCalGas describes several types of analysis and testing that support its choice of battery technology and estimates of failure rates. Based on the information in the record, the choice of battery technology to power the SoCalGas AMI system is reasonable, appropriate, and technically feasible.
7.3. Additional Elements
DRA questions the appropriateness of the functionality SoCalGas proposes for other aspects of its AMI system, including its Meter Data Management System (MDMS) and data processing solutions. Specifically, DRA suggests that SoCalGas "might be purchasing more functionality in its MDMS than it needs," and that the SoCalGas proposals may not be appropriate because they are not the result of competitive bids.24 SoCalGas justifies its choice of MDMS on several grounds, including its use of a consultant, Enspiria Consulting, for guidance, and describes the DRA concerns about possibly unneeded functionality as "short sighted."25 SoCalGas notes that it has not yet finalized its system requirements or entered into specific contracts, and therefore that current cost estimates are just that estimates.
DRA also questions the SoCalGas choice of device management, arguing that such a function could be unnecessary, depending on the choice of MDMS. SoCalGas responds that its data device management choice is supported by both the MDMS vendor and independent consultant Enspiria.26
SoCalGas provides adequate evidence that its MDMS, data processing, and device management systems are reasonable, appropriate, and technically feasible. The fact that SoCalGas has not yet finalized its system requirements makes it difficult to assess DRA's concerns about possible unneeded functionality. SoCalGas does not base its estimates on a competitive solicitation, and it acknowledges that its requirements have yet to be finalized (as was the case with the San Diego Gas & Electric Company (SDG&E) AMI case when it was approved). SoCalGas bases its preliminary technology choices on discussions with vendors and consultants, and has additional experience to draw on from the development of the SDG&E AMI system approved in 2007.27 The SDG&E AMI system was approved on the basis of similar information. The SoCalGas proposal appears to be reasonable, and should be assessed on the basis of its consistency with state energy policy objectives and customer benefits.
4 See for example, D.05-09-044 at 5.
5 February 19, 2004 Assigned Commissioner's Ruling in R.02-06-001.
6 SoCalGas Exhibit 1, p. I-4.
7 SoCalGas Exhibit 1, p. I-4.
8 SoCalGas Exhibit 2, p. II-14.
9 SoCalGas Exhibit 4, p. IV-6.
10 SoCalGas Exhibit 3, p. III-37.
11 SoCalGas Exhibit 4, p. IV-7.
12 SoCalGas Exhibit 4, pp. IV-7 and IV-8.
13 SoCalGas Exhibit 4, p. IV-8.
14 SoCalGas Exhibit 2, p. II-7.
15 SoCalGas Exhibit 2, p. II-6.
16 SoCalGas Exhibit 2, p. II-8.
17 Exhibit 2, p. II-7.
18 SoCalGas Exhibit 12, p. III-1.
19 SoCalGas Exhibit 12, p. III-1.
20 SoCalGas Exhibit 12, p. III-3.
21 SoCalGas Exhibit 23, p. III-4.
22 SoCalGas Exhibit 12, p. III-6.
23 UWUA Opening Brief, at 17.
24 DRA Opening Brief, at 37.
25 SoCalGas Exhibit 24, at 10.
26 SoCalGas Exhibit 24, at 10.
27 SoCalGas Exhibit 24, at 7.
