6. Functionality and Implementability

6.1 Functionality

6.1.1 SDG&E's Application

As noted above, the May 9, 2005 Ruling in this proceeding stated:

First, we must be able to make an affirmative finding that the proposed systems meet the functionality criteria set forth in the Joint Assigned Commissioner and Administrative Law Judge's Ruling Providing Guidance for the AMI Business Case Analysis issued February 19, 2004 in R.02-06-001.

The cited February 19, 2004 Ruling (pp. 3-4) stated that the proposed systems must support the following six functions:

· Implementation of the following price responsive tariffs for:

o Residential and small commercial customers (200 kW) on an
opt out basis:

_ Two or three period TOU rates with ability to change TOU period length;

_ Critical peak pricing with fixed (day-ahead) notification;

_ Critical peak pricing with variable or hourly notification; and

_ Flat/inverted tier rates.


o Large customers (200 kW to 1 MW) on an opt out basis:

_ Critical peak pricing with fixed or variable notification;

_ Time-of-use; and

_ Two part hourly real-time pricing.


o Very large customers (over 1 MW) on an opt out basis:

_ Two part hourly real-time pricing;

_ Critical peak pricing with fixed or variable notification; and

_ Time-of-use pricing.

· 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.

· 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.

· Compatible with applications that utilize collected data to provide customer education and energy management information, customized billing, and support improved complaint resolution.

· Compatible 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.

· Capable of interfacing with load control communication technology.

SDG&E's claims its AMI technology solution will at a minimum:

· Be a technology independent, next generation solution supporting:

o Open architecture;

o Fully upgradeable;

o Scalability;

o Flexibility; and

o A complete end-to-end solution.


· Be fully integrated with existing operational infrastructures.


· Be able to support additional functionality at a later date without the need for significant additional systems hardware.

SDG&E states that it pursued a benefits-driven approach to AMI to ensure fulfillment of the six policy goals, realization of DR and operational benefits, while providing the lowest total cost of ownership. DRA agrees with this benefits-driven approach. UCAN asserts that SDG&E did not comply with the specific guidelines established by the Commission for an advanced meter deployment.

SDG&E maintains that the AMI technology in its proposal is ready and available today, supports the Smart Grid, supports open architecture to the extent possible, and is fully upgradeable and scalable. SDG&E claims that, in developing its AMI proposal, SDG&E rigorously assessed the AMI marketplace, seeking systems capable of fulfilling the six Commission policy goals (or functional requirements) required by the February 19, 2004 Ruling.

While listing its expectations for how the Project will develop, SDG&E did not specifically discuss within this record how the proposed technology in its AMI Project would accomplish meeting the Commission's functionality goals, because SDG&E had not (and has not yet to date) selected a technology. SDG&E asserts that the technologies it evaluated based on RFP responses could meet the functionality goals. SDG&E also states that technology is available from the marketplace that can deliver the functional criteria set forth by the Commission Ruling. However, SDG&E witness Pruschki said he could not discuss specific technologies because SDG&E was field testing multiple technologies.¹³

In SDG&E's application and supporting testimony, SDG&E provides no particulars as to how its Project currently meets the Commission's functionality criteria. Nor can it do so. Unlike PG&E in its AMI application, SDG&E has not selected technologies, has not selected vendors, and has not signed contracts with vendors. Based on the specifications in SDG&E's RFP, it is likely that SDG&E's proposal can, over time, meet the functionality criteria in the February 19, 2004 Ruling.¹⁴ However, we cannot conclude that SDG&E's proposal is capable of meeting the detailed functionality criteria required to be met at this time. In order to come to that conclusion, we would need to review specific signed vendor contracts to ensure that SDG&E's RFP specifications would in fact be implemented.

6.1.2 Functionality and the Settlement

While the Settlement provides no new information to ensure that the functionality criteria will be met, the Settlement does require SDG&E to revise its RFPs to require that all vendor bids include a HAN communication system and seek proposals to install the HAN and remote connect/disconnect capabilities. According to the May 9, 2005 Ruling, we could reject the Settlement because, like SDG&E's proposal, it does not meet the functionality criteria at this time. However, we will not reject the Settlement simply due to temporary functionality concerns. SDG&E has demonstrated that, while definitive evidence of compliance is missing at this time, SDG&E's RFPs contain both a clear objective and detailed requirements which would likely lead to meeting the functionality criteria when vendor contracts are signed. Further, the additional functionality requirements in the Settlement, as well as the Settlement's formation of the TAP to review functionality implementation, increase our confidence that our functionality criteria ultimately will be met.

In order to ensure our functionality criteria are met, we must review SDG&E's RFP contracts. DRA and UCAN agree to support expedited review and approval by the Commission of SDG&E's AMI Contract Advice Letter filings consistent with the provisions of the Settlement.¹⁵ Testimony of the Settling Parties confirms that such Advice Letter filings are consistent with the Settlement.¹⁶ Therefore, our approval is conditioned upon SDG&E filing its technology contracts stemming from its RFPs as Advice Letters, and subsequent Commission certification that the contracts met the functionality criteria.

6.2 Implementability

As noted above, the May 9, 2005 Ruling in this proceeding stated:

Third, we must make an affirmative finding that SDG&E has a serious plan for accomplishing the task of integrating the AMI investment into its operating systems to ensure that the expected benefits in the areas of customer service, billing, outage management, and operations and maintenance accrue.

SDG&E did not specifically address this criterion. However, as we have discussed above in Section 3.1, SDG&E does have a clear plan for implementing its AMI Project. The plan involves identifying vendors based on its RFPs, negotiating contracts with selected vendors, and performing the needed work between 2007 and 2010. No party questions SDG&E's ability or plan to implement its proposal. We find that SDG&E's proposal contains the implementability criterion in the May 9, 2005 Ruling.

The Settlement is consistent with SDG&E's application with regard to implementability, and expands upon the application through the formation of the TAP to ensure appropriate technological advancement. We find the Settlement meets the Commission's implementability criterion.

¹³ Exhibit 31, p. PP-2-3.

¹⁴ For example, Section 2.1.2 of Appendix D of SDG&E's RFP for Functional and Technical Requirements, regarding AMI technology, cites as an objective: "To adhere to the CEC 6 Policy Goals." (This refers to the functionality criteria outlined above.)

¹⁵ Ex. 63 (Settlement Agreement), Attachment A, p. 2.

¹⁶ 8 RT 927-930.