5. Choice of Technologies
As indicated, there are three principal elements to PG&E's Upgrade request - the HAN gateway device, the integrated load limiting connect/disconnect switch and the advanced solid state meter. The devices are described below. DRA supports the deployment of these particular devices, as long as it is cost effective to do so.
5.1. HAN Gateway Device
The HAN gateway device will enable two-way communications directly into a customer's home. A key feature of the new communications technology will be to give customers near real-time access to their energy usage data. PG&E envisions this technology will enable it to send time and price indicators to the customer's meter, giving the customer the opportunity to participate in demand response, time of use (TOU), and other energy management initiatives. PG&E provides the following support for deployment of the HAN device:
· The emerging home area network technology is integral to the future of energy usage, conservation and management. In the future, appliances and other energy using devices will be more intelligent than they are today. To take advantage of this intelligence, the appliances will need to receive a signal regarding the price and availability of electricity. The HAN gateway device would provide the capability to transmit the information from the meter to these smart appliances, energy management systems and other energy using devices. The HAN gateway device that PG&E would deploy is the bridge between PG&E's network and the customer's home area network. The gateway device will facilitate customers' management of their energy usage via their connection to PG&E's network and the information that will travel among the devices in the residence, the customer's meter and PG&E.
· The HAN gateway device will position PG&E with a platform that has the potential to communicate with programmable communicating thermostats that are expected by PG&E to be required by the California Energy Commission (CEC) through Title 24 in all new and selected existing premises beginning in 2012.
· The HAN gateway device in combination with the solid state meter and AMI will enable PG&E to better respond to load reduction directives issued by the California Independent System Operator (ISO). This is because PG&E will be able to confirm the fact that key energy using devices have responded and will aid in the quantification of the amount of demand response achieved. This capability would support the minimization of the discount factor that is currently applied to some demand response programs when PG&E files its resource adequacy plans. Timely and affirmative verification of load reduction will lead to better forecasting, increased understanding of program performance and a reduction in resource procurement.
CCSF argues that the Commission should not approve PG&E's Upgrade to the extent PG&E would install HAN gateway devices in all of its electric meters. According to CCSF, the technology PG&E seeks to deploy is not yet commercially available, and PG&E cannot guarantee when its chosen endpoints will be available for deployment at all, let alone in sufficient quantities for PG&E to deploy nearly five million meters on a timely basis. CCSF adds that the industry has still not set standards for HAN connectivity, and it is very possible that PG&E will deploy five million devices that do not meet the eventual standards and will require upgrading again in a few years.
CCSF also states that the HAN system need not be included in the meter, but instead could be separate from the meter. According to CCSF, deployment in this manner, rather than through the endpoints, would insure that the costs of acquiring a HAN network are appropriately allocated to those customers who would chose to purchase such a network because they are likely to benefit from HAN products and services.
Finally, CCSF states that San Francisco residents are not likely to be among those who would benefit from HAN technology for two reasons. First, there is a larger percentage of renters and persons living in multiple dwellings in San Francisco than there is in the rest of the State of California. According to CCSF, these types of customers generally use less energy than other residential customers, and might not want to incur the expense to purchase HAN-enabled appliances. Second, because of its climate, San Francisco residents are less likely to have central air conditioners, which would be one of the primary sources of reduced electrical use.
Regarding CCSF's first argument, PG&E states that CCSF ignores the fact that the Commission has already found that the time is ripe for SDG&E to deploy HAN devices4 and the Commission has issued a proposed decision5 that would authorize SCE to deploy HAN devices. According to PG&E, in order to promote statewide consistency for this developing industry, the timing is excellent for PG&E to work with SDG&E and SCE and to deploy devices with consistent standards. PG&E adds that CCSF's argument also ignores the work proposed by PG&E in the Upgrade to shape the development of this burgeoning industry and to ensure that there is a statewide open standard for HAN communication systems that is secure, upgradeable and extensible.
Regarding CCSF's second argument on the merits of a stand-alone HAN device, PG&E asserts that it lacks evidentiary support, in that CCSF's argument finds its source in the study of SmartMeters conducted by CCSF that was excluded from the record of this proceeding.6 According to PG&E, while the administrative law judge clarified that "[m]uch of the information in the contemplated study as it relates to the testimony submitted in this proceeding can be provided by the City to the Commission through the briefing process," there is no testimony submitted in this proceeding on the value of stand-alone HAN devices; and CCSF's argument is thus substantively and procedurally improper and must be rejected.
Regarding the third argument, PG&E states that CCSF ignores the fact that renters have financial incentives to reduce their energy costs, just as owners do. PG&E believes that all customers, whether they are renters or owners, deserve the opportunity to use HAN devices to reduce their energy consumption and that it is good public policy to promote such reductions.
This is an appropriate time to authorize deployment of HAN gateway devices for PG&E. PG&E's request to do so is reasonable. We have already authorized such deployment for both SDG&E and SCE, and to do for PG&E would ensure statewide consistency as long as their efforts are coordinated. We feel such consistency is important in providing a basis on which the HAN technology can efficiently develop and for providing a large market force that can be influential in developing appropriate standards. Also, as part of this decision, we authorize funds for PG&E to continue to work with the other utilities is California and throughout the United States to establish standards for HAN technology and applications. In authorizing deployment of HAN devices for PG&E at this time, we feel reasonably assured that the utility will be able incorporate this evolving technology in its meter deployment plan.
We are unable to judge the merits of a stand-alone HAN gateway device. As indicated by PG&E, there is no evidentiary record in this proceeding regarding such a device, since this issue was raised by CCSF in its opening brief that was filed on August 29, 2008. The proper time to have raised this issue was June 30, 2008 when intervenor testimony was due. That would have allowed time for discovery and rebuttal testimony and provided the opportunity for cross-examination by other parties during evidentiary hearings. That being said, if a customer has no need for the HAN gateway in the meter, and if a stand-alone HAN system is available, we see no reason why that customer should not have the opportunity to purchase and use such a system separately from the HAN gateway provided by PG&E through its meter. The important point is that all customers should have the opportunity to use HAN devices to reduce their energy consumption, and it is good public policy to promote such reductions. However, for that same reason, customers should have the opportunity to use the HAN gateway through PG&E's meter, and we feel the most cost effective way to provide that access, over the long term, would be through PG&E's meter deployment plan rather than through random retrofits.7
To facilitate the HAN concept, PGE should work with the other major California energy utilities to strive for statewide, easily understandable information and other resources, as appropriate, to increase consumer awareness of commercially available HAN technologies and HAN-enabled benefits and to promote the adoption of such HAN technologies by consumers in order to facilitate their ability to understand their energy consumption and costs and to optimally utilize their discretionary options.
5.2. Load Limiting Switches
PG&E explains that when it developed its original AMI application in 2005 (A.05-06-028), the most cost-effective option for remote meter "turn-on/turn-off" was to add a "connect/disconnect collar" mounted separately and in conjunction with the electromechanical meter. Thus, PG&E's original project included adding a connect/disconnect collar to 600,000 electromechanical meters. Because of advances in solid state meter and load limiting switch technology, as well as decreases in the relative costs of the components, PG&E now proposes to install integrated load limiting switches for all of PG&E's residential and single phase, 200-amp, self-contained meter customers. PG&E provides the following support for deployment of the integrated load limiting switch:
· It is important to provide all residential electric customers with a load limiting switch, not just the 600,000 envisioned in the original AMI Application, so that the PG&E's customers, the utility and the state of California (State) can benefit from the increased functionality provided by the new switches. The new load limiting switches provide significantly more functionality compared to the collar associated with the electromechanical meters. That is because the switch built into the collar was designed as an on/off toggle, was not integrated into the metrology of the meter and, therefore, provides no real opportunities for load limiting and energy management programs. On the other hand, the load limiting ability of the new switch is created by the joining of a programmable connect/disconnect switch with an intelligent solid state meter and integrating these components with the two-way communications capability delivered by PG&E's AMI system. The switch will enable the development of different options that will allow customers and PG&E to control not just whether the power is on or off, but how much power can be used at any given time, and this combination of technologies results in adjustable load limiting capabilities around which a variety of programs and/or rate offerings can be designed to take advantage of this flexible energy service control tool.
· The increased functionality of the load limiting switch will also help PG&E and the State in designing and implementing improved demand response programs that will reduce overall energy usage, will reduce load on the system and will improve overall reliability of the system. The presence of load limiting switches could help the ISO and PG&E to provide area-wide and system-wide relief during peak usage periods without completely shutting down critical systems. This view is corroborated by the Federal Energy Regulatory Commission (FERC) in their 2007 Assessment of Demand Response and Advanced Metering report which states, "remote connect/disconnect may also be valuable for its ability to avoid extended outages and overloading of transformers at critical peak by allowing grid operators to disconnect customers where lines are stressed. The ability to ensure less energy is used by PG&E's customers in capacity or infrastructure constrained areas will lead to fewer customer outages, fewer required distribution assets and less generation.
CCSF states that PG&E appears to be putting forth the ability to limit load to essential services through the endpoints as a means of "keeping the lights on" to some degree, rather than incur rolling brown or black outs, and this explanation would appear to include the belief that this feature will curtail the use of video games and other non-essential electrical uses. CCSF argues that these load-limiting switches reduce loads indiscriminately, and it would be incumbent on PG&E's customers to choose how they will use the reduced amount of electricity that PG&E would make available. According to CCSF, customers, especially small customers, with little in the way of non-essential load, still would have paid the price for instituting measures to control loads used by higher energy users.
CCSF also states that there is no evidence in the record that the software required to effectively manage these load limiting switches is presently available, or even that it is expected to be available any time soon.
It is CCSF's position that, since it appears that PG&E's remote connect/disconnect switch is an investment that PG&E has only proven to have operational value when used with delinquent customers, there is no reason that the Commission should authorize PG&E to install this functionality on all residential meters.
In response, PG&E states that CCSF ignores the evidence provided by PG&E that explains the variety of benefits available from these devices. First, the devices provide PG&E with the ability to remotely connect or disconnect customers. Second, the devices provide PG&E and state officials a platform upon which to design new rate options for customers. Third, the devices would give greater control to the ISO and PG&E to provide area-wide and system-wide relief during peak usage periods without completely shutting down critical systems. This should result in fewer, or shorter, outages. PG&E adds that the operational benefits from the first category alone amounts to over $150 million (PVRR), an amount that has not been challenged.
We agree with PG&E that the increased functionality and the potential uses of the integrated load limiting connect/disconnect switches justifies providing all electric residential customers with such switches. This functionality could be used to implement certain demand response programs and to provide area-wide and system-wide relief during peak usage periods. Such opportunities are in the public interest and are not available under PG&E's original AMI program. Also, the integrated load limiting connect/disconnect switch provides significant incremental operational benefits related to field technician labor savings for connect/disconnect services.
Finally, we note that CCSF raised the issue regarding the availability of the software required to effectively manage the load limiting switches in its opening brief. We also note that CCSF does not provide any reason why it believes that the necessary software does not exist or will not exist soon. This issue should have been raised in prepared testimony so that an evidentiary record could be developed through rebuttal testimony and evidentiary hearings. In its testimony, PG&E has acknowledged that modifications and interface changes will be required to create new credit/collection templates, start/stop algorithms, and partial load limiting functionality8 and has included such costs in its information technology system integration chapter.9 While nothing is certain, PG&E is taking reasonable steps to ensure the effective operation of the integrated load limiting connect/disconnect switches.
5.3. Advanced Solid State Meter
In PG&E's original AMI Application, PG&E proposed deployment of electromechanical electric meters for the majority of its residential electric service customers. The remainder of the residential as well as all commercial customers would receive solid state meters. According to PG&E, for deployment to date, this meter mix has worked as intended and, accordingly, has met the objectives of PG&E's original AMI Application. In the current application, PG&E proposes a transition in this mixture to the deployment of solid state ubiquitously. PG&E states that the solid state meter will be the platform for the intelligent, integrated metering solution that will enable PG&E to provide a number of new capabilities including a HAN gateway device (enabling price signals, load control and near real time data for residential electric customers) and load limiting disconnect switches. All of these things, and potentially more features in the future, are possible because of the increased processing power, memory storage, programmability, and upgradeability provided by the solid state meter platform. PG&E provides the following support for deployment of the advanced solid state meter:
· As PG&E and other utilities demonstrate the need for, and interest in, advanced metering technology to support their advanced infrastructure projects, the industry's vision has expanded, the functionality of the new meters has increased and the prices for solid state meters and other integrated components have decreased. The current generation of solid state meters is programmable, have additional data storage capacity and possess processing capabilities that will expand both the usefulness and the reliability of the meter. Unlike electromechanical meters, current generation solid state meters are the only meters that have the native capability to support communication with HAN and the integrated load limiting switch.
· As a result of the advanced processing capabilities and the memory built into the solid state meter, as well as the communications provided by PG&E's AMI communications network, PG&E will be able to upgrade meter functionality remotely by communicating changes to a combination of both the software and the firmware inside the solid state meters, thus taking advantage of how these devices are designed. The capability to upgrade the meter (as well as the AMI and HAN devices) gives PG&E greater flexibility to respond to changes in technologies and marketplace developments and helps to "future-proof" these technologies.
· The increased memory at the meter device will provide a platform for more reliable data integrity. The increased reliability results from the ability to store more data at the meter device, data that can be specifically identified with the residence before it is centralized with other information in PG&E's databases. Because some historic usage data will also reside at the meter device, PG&E anticipates that this will provide an alternate source of data to resolve various customer billing issues.
· Additionally, because of the increased memory at the meter device, PG&E will be able to collect greater amounts of usage data which could support valuable research studies. Such studies could provide useful information to PG&E in support of a variety of operations and maintenance procedures and could be used to develop studies that PG&E anticipates would be valuable to the ISO, other agencies and the State as they work to manage distribution grids and electricity consumption.
No party disputes the technological merits of the advanced solid state meter or PG&E's decision to deploy it ubiquitously as part of the Upgrade. PG&E's decision to do so is reasonable.
5.4. Network Technologies
As part of its original AMI proposal in A.05-06-028,
PG&E selected Distribution Control Systems, Inc. (DCSI) to provide a Power Line Carrier technology for electric meters and Hexagram, Inc. to provide a fixed network system with radio frequency communication channels owned by PG&E for gas meters. These selections followed a detailed Request for Proposal (RFP) and evaluation process. PG&E's testimony showed that the DCSI system has been deployed by a number of other utilities (none as large as PG&E) to provide a sufficient demonstration of the technology's reliability and functionality. The technology provides two-way communications to each customer's meter. The technology also allows other functions including direct polling to the meter by PG&E which can assist in completing customer service related requests; and it has the potential for direct communication with in-home devices like thermostats and load control switches."10
PG&E indicates that it is evaluating the possible implementation of an enhanced communication network, which would be implemented without seeking any additional costs for that network in this application, and would provide greater benefits than the power-line-carrier technology discussed in A.05-06-028.
While DCSI employs a power line carrier technology, Hexagram's technology is radio frequency (RF) based. DRA understands that PG&E is considering a Silver Springs Networks RF technology to replace the DCSI power line technology for electric customers. DRA does not believe that two separate and overlapping RF networks, one for gas and a separate network for electric are well advised. DRA states that a single RF system by various vendors, including Aclara11 RF or Silver Springs RF is capable of doing both. DRA is indifferent to the choice of Aclara RF versus Silver Spring RF, provided that the costs of the change and the additional costs of operating and maintaining two RF systems are not borne by ratepayers. According to DRA, a single RF system serving both the gas and electric metering requirements in all but the deep rural areas was the obvious choice from the outset of the PG&E project.
In response, PG&E states that DRA provides no evidence to support the contention that a single RF network is better than dual networks for gas and electric and also contradicts its own prior position on this issue.
PG&E states that the Upgrade seeks no funding for its network technologies, and the costs of managing its networks - including the change to a RF mesh network for electric - will be handled as part of the funding provided in the original AMI case. PG&E also states that despite DRA's opinion in the original AMI case that, "[m]ixed technology systems, tailored to the applications and as proposed by a number of highly competent firms, would ordinarily be a more attractive choice than stretching the capabilities of a single communications technology" and that the choice would ultimately come down to an economic one, DRA now contradicts its former position and attempts to assert that a single technology for the network is always a better choice. PG&E also adds that DRA's witness testified during the hearings that he did not perform any economic analysis comparing PG&E's proposed dual network infrastructure. Therefore, PG&E argues that DRA has no basis for making these claims.
DRA has not made a functional distinction between traditional RF based networks such as Aclara RF and RF Mesh based networks used by Silver Spring Networks. By treating the Aclara RF and Silver Spring Networks technology as fungible, PG&E indicates that DRA ignores the key differences in functionality between the two technologies, namely that an RF Mesh system does not have the same economic disadvantages as RF-based systems in rural areas, because it is not limited to moving data from a meter to a data collection unit in a single fixed path and therefore requires a less costly data collection unit infrastructure. PG&E also states that Silver Spring Networks does not have a proven and established product for gas meters and therefore it would not be advisable to use this technology for the gas meters.
In its Upgrade request, PG&E is not requesting additional funds for either its electric or gas networks, and we will not authorize any such increases in this decision. We recognize that certain technologies have evolved over the course of PG&E's SmartMeter project making them more cost-effective to employ, and we expect PG&E to manage the project in a way such that the more cost-effective approaches can be merged into the deployment plans. For this reason, we will not impose conditions regarding the specific type of communications network or types of networks that PG&E should employ for its electric and gas AMI systems. We only require that whatever PG&E chooses to do, the selected network(s) must provide the necessary functions in the most reasonable cost-effective manner.
4 D.07-04-043.
5 A final decision, D.08-09-039, was issued, and authorizes SCE's deployment of HAN devices.
6 In an oral ruling, the administrative law judge denied the request of CCSF to leave the record open for the purpose of considering an upcoming study on PG&E's SmartMeter Program that would be conducted by certain departments within CCSF. See 5 RT 779-781.
7 Evidence in this proceeding indicates that the incremental costs of installing a HAN gateway device after the meter and disconnect switch have already been installed is nearly nine times the cost of the HAN gateway device. For example, see Exhibit 8WC, the eighth page (unnumbered) of the Appendix 10-1 workpapers.
8 In this proceeding, PG&E has not proposed to implement any of the load limiting capabilities of these switches, but rather only the connect/disconnect capability.
9 See Exhibit 3, Chapter 4, pp. 4-5 through 4-6.
10 D.06-07-027, pp. 18-19.
11 Aclara was formerly known as Hexagram.
