ALJ/DMG/hl2 Mailed 4/16/2007
Decision 07-04-043 April 12, 2007
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Application of San Diego Gas & Electric Company (U-902-E) for Adoption of an Advanced Metering Infrastructure Deployment Scenario and Associated Cost Recovery and Rate Design. |
Application 05-03-015 (Filed March 15, 2005) |
(See Appendix B for a list of appearances.)
OPINION APPROVING SETTLEMENT ON SAN DIEGO GAS & ELECTRIC COMPANY'S ADVANCED METERING INFRASTRUCTURE PROJECT
TABLE OF CONTENTS
Title Page
OPINION APPROVING SETTLEMENT ON SAN DIEGO GAS &
ELECTRIC COMPANY'S ADVANCED METERING INFRASTRUCTURE PROJECT 2
1. Summary 2
2. Background 3
3. Litigation Positions of Parties 9
4. Settlement Agreement 13
5. Burden of Proof 16
6. Functionality and Implementability 16
7. Cost Effectiveness - SDG&E's Application 21
7.1 Comparison Exhibit 22
7.2 Financial Modeling Methodology 25
7.2.1 Discount Rate and Present Value Method 25
7.2.2 Timeframe of Analysis: 17 Years 25
7.3 Project Costs 32
7.3.1 RFP Specifications 32
7.3.2 Meter and Communications Systems 35
7.3.3 Risk Sharing 38
7.3.4 Adopted Cost Estimate 38
7.4 Operational Benefits 39
7.4.1 Meter Reading Benefits 40
7.4.2 Other Operational Benefits 41
7.5 DR Impacts and Benefits 43
7.5.1 Residential Customers 44
7.5.2 Small and Medium Commercial and Industrial
Customers 54
7.5.3 Large Commercial and Industrial Customers 56
7.6 Avoided Capacity Cost 57
7.7 Benefits from Avoided DR Program Costs 64
7.8 Information Feedback Systems Benefits 70
7.9 Non-Quantifiable and Newly Quantifiable Benefits 70
7.9.1 Implementation of Time Differentiated Rates 71
7.9.2 Improved Public Safety 72
7.9.3 Environmental 72
7.9.4 Enabling Technologies Advancements/Deployments 73
7.9.5 Smart Grid 74
8. SDG&E's AMI Application is Not Cost-Effective 74
9. Alternative AMI Program Options 76
10. Analysis of the Settlement Agreement 84
10.1 Cost-Effectiveness of the Settlement Agreement 84
10.2 Reasonableness of the Settlement Agreement 86
10.2.1 Does the Settlement Agreement Include Sufficient Information to Determine its Overall Reasonableness? 86
10.2.2 Is the Settlement Agreement Reasonable in Light of the
Whole Record? 87
10.2.3 Is the Settlement Agreement Consistent With the Law? 88
10.2.4 Is the Settlement Agreement in the Public Interest? 88
11. Comments on Proposed Decision 89
12. Assignment of Proceeding 89
Findings of Fact 89
Conclusions of Law 93
ORDER 95
APPENDIX A - Settlement Agreement
APPENDIX B - List of Appearances
OPINION APPROVING SETTLEMENT ON SAN DIEGO GAS & ELECTRIC COMPANY'S ADVANCED METERING INFRASTRUCTURE PROJECT
1. Summary
This decision approves a settlement among San Diego Gas & Electric Company (SDG&E), the Division of Ratepayer Advocates (DRA) and Utility Consumers' Action Network (UCAN) to allow $572 million for SDG&E's proposed Advanced Metering Infrastructure (AMI) Project from 2007 through 2011. We find that there are between $40 million and $51 million in net benefits for the Settlement Agreement.
In this decision, we analyze the Settlement Agreement in light of the litigation positions of the parties in order to consider its reasonableness. We find the Settlement Agreement to be reasonable in light of the whole record, consistent with the law, and in the public interest.
This decision is part of our effort to transform California's investor-owned utility distribution network into an intelligent, integrated network enabled by modern information and control system technologies. SDG&E's deployment is scheduled to begin in mid-2008. From 2008 through 2010, SDG&E will install approximately 1.4 million new, AMI-enabled, solid state electric meters and 900,000 AMI enabled gas modules that can, among other things, measure energy usage on a time-differentiated basis. The deployment will improve customer service by providing customer premise endpoint information, assist in gas leak and electric systems outage detection, transform the meter reading process and provide real near-term usage information to customers. AMI will also support such technological advances as in-house messaging displays and smart thermostat controls.
