The Paths to a Smart Grid The Scouts at SDG&E

The Paths to a Smart Grid The Scouts at SDG&E
Tues 10/28 11:20-12:20 flight 1:40 Terry Mohn San Diego Gas & Electric a Sempra Energy utility

Outline SDG&E service territory Why look at smart grid
Defining a smart grid Three paths to a smart grid SDG&E projects Building a business case Keep costs down, adds reliability Consistent architecture Systems view Technology refresh Introduction of SOA leads to new business system choices How to avoid vendor lock-in and technology obsolescence Communication network is a corporate strategic investment How you too can build a regional smart grid 45 minutes + 15 minutes q/a

SDG&E Service Territory

Sempra Utilities Combined Service Areas
Largest energy utility customer base in US with over 7.6 million meters serving 29 million customers 13 counties 233 municipalities 22 million population 6.7 million residential households 325,000 small commercial & industrial customer accounts 1,600 large commercial & industrial accounts

SDG&E and SoCalGas Combined Operations Assets (billions) $11.9
Operating revenues (billions) $5.9 Employees 11,699 Service territory (sq. miles) 27,100 Gas Electric Meters (millions) Customers (millions) Pipes & wires (miles) 57,000 17,000 Throughput billion cubic feet (BCF) 18.4 billion kilowatt hours (kWh)

Electric T&D Facilities
Transmission (500kV, 230kV, 138kV & 69 kV) 1,798 miles overhead 70 miles underground 14,126 structures 17 substations 199 tie-lines Distribution (4kV & 12kV) 9,351 miles underground (60%) 6,885 miles overhead (40%) 220,362 wood poles 260 substations 952 circuits

Why Look at Smart Grid

Headlines Environment Legislation Green House Gas Energy Independence
EPACT 2005 EISA 2007

Supports the Environment
Enables renewable and clean energy Enables Vehicle to Grid interface Electric Vehicles Plug-in hybrid Electric Vehicles Reduces spinning reserves Supports alternative energy supplies (reduces dependence on foreign oil) Supports customer choice (photovoltaics)

Power Disturbance Costs

Energy Prices Forward electricity prices are a straightforward signal of anticipated price pressures this summer. The map illustrates recent key summer 2007 forward electricity and natural gas prices. In all, markets are signaling double-digit electricity price increases this summer over last, with natural gas as a clear driver. - FERC 2007 Market Oversight

Energy Demand Growth Total electricity sales are projected to increase from 3,660 billion KWhr in 2005 to 5,168 billion KWhr in 2030. The largest increase is in the commercial sector, as service industries continue to drive growth. Electricity sales are strongly affected by the rate of economic growth. DOE Report, May 2007

Federal Analysis DOE’s Modern Grid Initiative
A Vision for the Modern Grid Characteristics of the Modern Grid Technologies of the Modern Grid Benefits of the Modern Grid The Modern Grid Stakeholder Community

Power Quality Needed by Digital Society
Power starts out as a smooth "sinusoidal" waveform. Moving from the generator to the customer’s equipment, it can be affected by a variety of perturbations, causing: Harmonics Sags Spikes Sources of power quality problems: T&D disturbances Modern electrical loads Sensitive electronic loads represent an increasing portion of the total power system load Power quality will be of growing importance in the 21st century The stakes are high--power-related problems may cost U.S. companies more than $100 billion a year

GridWise Architecture
Advocacy to Modernize GridWise Alliance GridWise vision is new way to think about how we generate, distribute and use energy - using advanced communications and up-to-date information technology, GridWise will improve coordination between supply and demand, and enable a smarter, more efficient, secure and reliable electric power system. GridWise Architecture Assemble ideas & resources to ensure interoperability Leverage the GridWise interoperability framework as an organizing platform

Standards Create Markets
OpenAMI 200+ members UtilityAMI OpenHAN OpenSEC OpenENT Open AMI is a User Community affiliated with the UCA International Users Group, a non-profit organization whose members are utilities, vendors, and users of communications for utility automation. OpenAMI is represented by a Technical Subcommittee focused on OpenAMI issues, working in coordination with the UCAIUG Technical Subcommittees representing the IEC61850 and CIM users communities. The UCAIUG's UtilityAMI User Community provides the "High-Level Advanced Metering Infrastructure and Demand Response System Requirements Input & Oversight" to the OpenAMI Task Force.

Increasing Smart Grid Stakeholders
Government Federal State Local ● Policy & Regulation FERC PUC’s NERC NARUC Utilities IOU’s Publics RTO / ISO Power marketers Others EPRI Financial Firms R&D Organizations Advocacy EEI Rate Payer Groups Environmental Groups Vendors Technology Services Consumers Industrial Commercial Residential

Defining the Smart Grid

A Smart, Integrated Grid
Detects and fixes emerging problems Incorporates measurement, diagnostics and feedback Re-routes power flows Enables loads and distributed resources Incorporate advances in IT and communication technologies Detect emerging problems and fix them before they seriously impact quality of service. Incorporate extensive measurements, rapid communications, centralized advanced diagnostics, and feedback control that quickly returns the system to a stable state. Has the ability to re-route power flows, change load patterns, improve voltage profiles, and take other corrective steps, within seconds of detecting a problem. Enable loads and distributed resources to participate in operations. Use modern tools to improve design and operation with reliability, security, efficiency, and safety as fundamental values.

Elements of a Smart Grid

Characteristics Self-healing Empower and incorporate the consumer
A grid able to rapidly detect, analyze, respond and restore from perturbations. Empower and incorporate the consumer The ability to incorporate consumer equipment and behavior in the design and operation of the grid. Tolerant of attack A grid that mitigates and stands resilient to physical and cyber security attacks. Provides power quality needed by 21st century users A grid that provides a quality of power consistent with consumer and industry needs. Accommodates a wide variety of generation options A grid that accommodates a wide variety of local and regional generation technologies (including green power). Fully enables maturing electricity markets Allows competitive markets for those who want them. Optimizes assets A grid that uses IT and monitoring to continually optimize its capital assets while minimizing operations and maintenance costs.

Technologies Grid-wide integrated communications
Internet for the power grid Sensing, metering, measurement Digital two-way communication devices Enable generation connect and disconnect Enhance operator information Advanced control capabilities Computer based grid monitoring Enables dispatch of distributed resource Advance grid components Energy storage Distributed generation Decision Support Analytics to guide grid operators Semi-autonomous agent software

Characteristics and Key Technologies

Self – Healing Expected Benefits
CAIDI drops one order of magnitude, increasing business profits through the elimination of costly outages More secure grid by reducing vulnerabilities to attack Utility complaints are reduced, thus increasing customer satisfaction and utility profits. Peak shaving and accumulated reserves are new market products producing a revenue stream for Distributed Energy Resource (DER) Owners Technologies and Features Circuit to circuit ties Distributed energy resources Intelligent automated switches Advanced sensors Anticipation of disruptive events Grid reconfiguration and flow control Adaptive relaying Look-ahead simulation capability Fast isolation and sectionalization Adaptive islanding Intelligent load participation

Empower and Incorporate the Consumer
Expected Benefits NY ISO has measured benefit ratios exceeding 5:1 with their emergency Demand Response (DR) program. PJM has stated that 20,000 MW of its load is served only 1 % of the time. There is huge value of shifting this load to lower use periods. ISO New England has shown that DR programs can be very responsive, reaching committed reduction levels in less than 30 minutes. Increased investments in energy efficiency will be a longer term benefit. Various Critical Peak Pricing programs have shown peak load reductions of from 35% to over 40 %. Technologies and Features Advanced metering and communications allowing consumer interaction with grid operations New pricing regimens enabling consumer choice and planning Grid friendly appliances that can be centrally coordinated Proactive power outage management and consumer interaction Possible non-utility added-value functions (ISP, home security, etc) Enhanced information for grid operations and planning

Tolerant of Security Attack
Expected Benefits Reduction in the consequence (extent, duration, economic impact) of a given disruption Reduction in vulnerability of the grid Industry-government partnership which ensures cost-effective security goals and capabilities that complement the system Technologies and Features Address physical and cyber security during system design Cyber vulnerability has been recognized and is being addressed – needs a systems focus What is needed: Identify and protect critical sites and systems Combine deterrence, denial, response, mitigation

Provides Power Quality Needed by 21st Century Users
Expected Benefits The reduction of power quality problems will produce a proportional reduction in each loss: Risk, liability, or litigation Scrapped materials and lost productivity Consumer dissatisfaction Consumer safety Contractual, agency, or governmental requirements Lost sales or clients Bad will or lost stock value Technologies and Features No single solution; improvements are needed at each system level PQ mitigation techniques coordinated with the customer’s load sensitivity At transmission levels, Static VAR Compensators, improved shielding and Current Limiting Devices are examples of PQ mitigating technologies At distribution levels, a variety of techniques improve the quality of power delivered to the end customer. greater use of underground facilities creation of premium power quality parks redundant feeders via high-speed source transfer switches buffering equipment installed at the service entrance, to instantaneously regulate the supply voltage (dynamic voltage restorers) or provide power during momentary outages Voltage dips of less than 100 milliseconds can have the same effect on an industrial process as an outage that lasts several minutes or more. The costs at consumer facilities can be tremendous.

Accommodates a Wide Variety of Generation Options
Expected Benefits Reduces transmission demand (congestion) by siting generation closer to load Increases grid robustness and improves reliability Lowers electricity prices through improved efficiency in grid operations and improved asset utilization Reduces vulnerability to security attacks due to decentralization of generation sources Reduces need for new energy delivery and central generation facilities Positive impact on environment through expansion of wind and solar DER Positive impact on consumer power quality Technologies and Features New Rate Designs Advanced Real Time Pricing Technologies Smart Meters and Consumer Portals Smart Sensors and Control Devices Plug and Play Convenience Lower Cost DER Standard and Ubiquitous Communication Infrastructure Integrated Operation of Multiple DER Improved Operator Visualization Techniques and Training

Fully Enables Electricity Markets
Expected Benefits Significant reduction in congestion costs benefits the consumer Significant reduction in TLRs indicates improved reliability Significant reduction in industry-wide capital and operating costs benefits the utilities and consumers Incentivizes diversity of generation which aids the self-healing grid concept Technologies and Features Planning: power systems coordination and planning, load forecasting, congestion management, generation planning, financial transmission rights (FTR), etc Day Ahead: generation supply offers, demand bids, bilateral transactions, financial transactions, ancillary services, etc Real Time: supply offers, security-constrained economic dispatch, bilateral transactions, pricing, etc Post Real Time: metering, settlements, billing, etc Market Infrastructure and Support Systems: systems, business processes, market readiness, independent market monitor, FTR, state estimation, etc

Optimizes Asset Utilization
Benefits Cost reduction Increase reliability Improved capacity planning Technologies and Features Advanced sensing Collection of system and asset condition data Alarming and trending Out of specification Time to Recommended Maintenance Time to Failure Component wear models emulate actual conditions Improved capacity planning processes Cost reduction: Less maintenance being performed Less material being consumed Increase reliability: Equipment in service longer Equipment less subject to human error failures Equipment has fewer in-service failures Improved capacity planning Maintenance Elimination

Utility of Today - Process
Centralized control Heavily dependent on voice – human interactions Decisions by ad-hoc committees “Blind to problems in the field” Limited use of lean technologies Lots of Paper Manual

Utility of the Future - Process
Multiple levels of control Computer assisted decision making Sees into the customer’s systems Heavy use of lean technologies – optimal routing Limited Use of Paper Integrated processes Processes automatically linked to metrics

Utility of Today - Technology
Electro-Mechanical Heavy use of old radio technology Little automation in the distribution system Few sensors Limited automated control IT is stove-piped Point to point IT Integration GIS used for mostly mapping

Utility of the Future- Technology
Digital Advanced communication Self healing distribution system Lots of sensors Automated control Enterprise GIS SOA Web services AMI/AMR Integrated OMS/DMS/EMS Broadband where needed Enterprise Service Bus

Utility of Today - Customer Impact
Susceptible to blackouts Hard to predict restoration times Limited price signals Limited customer choice Variable load cycles Stops at the meter Large carbon generator Appointments not timely Estimated bills

Utility of the Future - Customer Impact
Fewer, shorter outages Accurate prediction of restoration times Demand response Customer choice Control beyond the meter Greater use of renewables and distributed generation Meets customer appointments Self service Accurate 1st bills

Three Paths to a Smart Grid

Vision Electric grid evolves Ubiquitous communications backbone
Operational technologies Information technologies Electric grid evolves to incorporate advances in communication systems, operational technologies and information technologies Ubiquitous communications backbone Distributed sensors New and/or automated control methodologies Real-time ratings Operational technologies Alternative system designs Distributed Energy Resources Predictive and condition based maintenance Information technologies Asset optimization Operational excellence Customer participation

Three Paths to Starting a Regional Smart Grid
Organic – business as usual Huge capital expenditures as assets retire New technologies lead to declining costs Utility of the future Spread costs across several projects Smart Meter Communication infrastructure is key Digital electric meters are also sensors

Smart Grid – It’s a Concept, Not a System
Interactive with Consumers and Markets Adaptive Optimized to make best use of resources Predictive rather than reactive to prevent emergencies Accommodates a variety of generation options Integrated merging monitoring control protection maintenance Secure from attack

Smart Meter - It’s More Than Meters, It’s Foundational
Digital Meters Data storage Calibrated Upgradeable Software Bi-directional, secure communication “near” real-time rates and energy measurement Remote connect and disconnect Home Area Network Designed for distribution automation, distributed generation, autonomous islanding Net metering for consumer generation choices Hydrogen Solar Electric vehicles New utility applications – OMS, DMS, GIS, ERP, SOA Fiber and wireless everywhere – transmission and distribution Blurring the lines between IT and Electric T&D

Smart Home - It’s Consumer Choice
Alignment with Renewable Energy, Demand Response & Energy Efficiency Goals Infrastructure, tariffs, programs & services Energy usage measurement protocol Educate customers about Pricing & the time varying nature of the cost of energy Actions that can be taken to impact usage & lower energy bills The environmental benefits of reducing energy usage & renewable energy Requires an Interactive Customer Interface for information & resources A universal platform (open architecture) Technology that utilizes smart meter / HAN

Smart Grid, Meter, Home Smart Meter / HAN PCT

SDG&E Smart Grid Projects
AMI, or Smart Meter with Smart Homes Utility of the Future, or Operational Excellence Planning for the future, or R&D

SDG&E Drivers / Challenges
Aging Infrastructure Significant investment in T&D system likely in coming years Help Achieve / Integrate policy goals Regional Energy Strategy 2030 In-region renewables Energy Efficiency/Demand Response CA Loading Order Efficiency/Demand Response Renewables & distributed generation Generation Transmission Potential Challenges Regulatory Changes Rates Data and communication standards Interconnection protocols Cost Complexity Technology Advances Aging Infrastructure Significant investment in T&D system likely in coming years Help Achieve / Integrate policy goals Regional Energy Strategy 2030 In-region renewables Energy Efficiency/Demand Response CA Loading Order Efficiency/Demand Response Renewables & distributed generation Generation Transmission Potential Challenges Regulatory Changes Rates Data and communication standards Interconnection protocols Cost Complexity Technology Advances

How is SDG&E Advancing the National Agenda?
Historically, SDG&E has been proactive in incorporating new technologies. Incorporate modern grid technologies and building blocks when available and cost effective. Laying foundational infrastructure built on standards. Conducting both state-wide and national R&D programs Universities New energy innovators Integrating grid, meter and home Developing regional energy resource center Defining a new San Diego economic industry - energy Participating in major industry consortia Working with entrepreneurs developing next generation of technologies

Elements of Our Smart Grid
Smart Home Smart Meter

SDG&E Smart Grid Developing distributed energy resources (DER) integration, enabling renewable and clean energy development. Distributed generation (DG) system can provide benefits to utility operations and customers and to introduce alternative service solutions for providing safe and reliable energy. DG systems, a subset of DER, are a wide range of electricity generating technologies solar photovoltaics small wind turbines fuel cells natural gas microturbines internal combustion engines Combined Heat and Power (CHP) Developing integration technologies to support Vehicle to Grid interfaces, grid frequency regulation (to match small differences in load and generation profile), and reduction in spinning reserves (standby resources that are required to come on line in case of an emergency). Deploying foundational advanced smart metering infrastructure

Self Healing Grid Decentralized Centralized:
Requires specific field hardware Localized communication Limited software and circuit modeling costs Pilot project: initiated energized October 2007 installed Summer 2007 energized Oct 2007 Centralized: Currently implementing on 4 pilot circuits

SDG&E Smart Meter Smart metering uses a new meter and communications system to remotely send energy use information. It also allows the utility to securely communicate with the meter and send customers information about energy usage and corresponding price information.

High Level Program Schedule
2008 2009 Launched Smart Meter Project Formed Project Management Office Established team and governance Start Develop detailed project & staff plans Initiate detailed business process workshops Prepare for pre-deployment Begin high-level communications Plan Build Institute new Business Processes Detailed system design, code, and test Pilot functionality for selected customers (pilot) Communicate more detailed information to organization Begin to train impacted groups Deploy New rates (Peak Time Rebate) Deploy Install AMI Network Infrastructure Go-Live of systems Install Electric & Gas Endpoints Manage customer experience enhancements Manage internal & external communications Continue to train impacted employees Ensure organization is aligned with new technology & process Sustain Change Provide Knowledge Transfer from Project Team to employees

Mass Deployment Completed; Organization has been trained
Project Timelines MILESTONES PHASES ACTIVITIES Project Initiated Phase 0 Oct ‘06-May ’07 Blueprint- Confirm scope, schedule, budget for Smart Meter Project Phase 1: Pre-Deployment 2H07-1H08 Phase 1: Wave 1 2H08-1H09 Project Planning- Project managers identified, project scope, plan, schedule, cost, resources Process Content/Development - Project team members identified, as-is/to-be processes mapped, gap analysis, org impact analysis, communications plan Solution Development- Confirm as-is/to-be analysis, process changes, system changes & integration, deployment planning, change readiness, detailed org plan, high-level communications, training development Begin Meter Deployment- Launch 5K pre-deployment in beginning of 2008, roll-out 1st stages of training Phase 1: Wave 2 1H Continue Meter Deployment- Mass deployment of all meters, focus on organizational alignment with new process/systems Go-live of systems- including billing/outage management/customer presentment functionalities, impacted employees are trained as meters are installed 5K Pre-deployment completed; lessons learned are used to prepare for mass deploy; Mass deployment begins Mass Deployment Completed; Organization has been trained

Smart Meters This project will impact all 1.4 million residential & business customers It’s an opportunity to redefine our relationship with customers Enhance services Improve company reputation Achieve demand response benefits Half of the benefits for Smart Meters need to be delivered by customers 100MW from residential customers 100MW from commercial customers

Operational Benefits - That Will Benefit Customers
Improved accuracy and timelines of meter reads, decreasing errors and ruling the volume of billing adjustments. Move-in/Move-out services requiring final or initial read of the meter can be performed remotely without delay for scheduling and dispatching a field visit Decline in safety incidents associated with diminution in meter reading and customer services field personnel. Allowing SDG&E to detect energy theft and tampering, meters stuck without movement and meters registering consumption use when in “off” position. Reducing the need for on-going demand response programs and avoided transmission and distribution capital expenditures. Ability for SDG&E to schedule preventive system maintenance; more accurately plan local energy infrastructure upgrades; and dispatch staff more efficiently.

Next Steps In Q108, the pre-deployment will be launched to include the installation of 5,000 meters. This will be the beginning of change as Smart Meter is rolled out. Broad communication for the Smart Meter project will begin in September Detailed communication will begin 2008 More detail of the pre-deployment (aka the 5K Pilot), customer experience information, vendor selection, and overall roll-out of project will be known and communicated. Training for employees involved in the pre-deployment will begin in early 2008. Organizational realignment for the pre-deployment will be developed Q108.

SDG&E Smart Home Designed for two-way information flow
New services could be added Require WAN high-speed communications Home area network (HAN) Open industry standards, non-proprietary, inter-operability Working with the other CA IOU’s Secure means of sending information between utility and end points (tolerant of attacks) Communications infrastructure supports long-term vision to collect: Power quality information New sensor data for smart grid, building automation designs Grid state (monitoring, automation)

Today versus Tomorrow Today PCT Demand Response In-home Display
Consumer information Gas & Water Meter Back office to Internet Tomorrow Plug-in Electric Vehicle Appliance Control Sub-metering On-site generation, and energy storage monitoring and control Energy Management Systems Information monitoring and notification set by customer as preferences

HAN Capabilities with related Device Commissioning & Program Enrollment
Control Signaling (e.g., Load Control) Consumer Specific Signaling (e.g., Meter Data Access) Public Price Signaling (e.g., CPP Event Notification)

SDG&E forward looking Research with DOE to assess how to leverage new technologies (storage, islanding, communication, SOA, cyber security) Research with CEC developing grid design for sustainable community, renewables, customer load University partnerships: Jacobs School, USD, CalIT2, SDSU wireless lab, others Implementing OMS, DMS, GIS, substation automation and communications infrastructure Developing “sustainable communities” and zero-energy homes Hopes to build San Diego into a national energy research hub

Smart Grid DER Project

Technology Refresh

Primary Program Areas Asset Management Customer Care IT Infrastructure
Field Force Real-time scheduling and dispatch (e.g. re-route on the fly) Automated work order administration to reduce paperwork Mobile data/information available at job site Asset Management Enterprise Geographic Information System Platform Outage and Distribution Management Systems (SDG&E only) with real-time monitoring Asset Management System with predictive maintenance ability Customer Care Enhanced internet self-service options Voice recognition IVR system and optimized call routing Outbound dialing to notify customers of arrival time IT Infrastructure New and upgraded network hardware to support increased voice/data communications requirements Improved software integration platform to more efficiently interface business applications Improved security features, such as encryption and authentication, to support the increase in networked devices (e.g., Mobile Data Terminals, sensors on Transmission & Distribution infrastructure, etc.)

Smart Grid and OpEx2020 FAST CBM GIS Smart OMS/DMS Meters Smart Grid
Implementation of Feeder Automation System Technology (FAST) Pilot First step towards implementation of the Smart Grid/Self-Healing concept Switches on the SDG&E electric distribution system will operate automatically Piloting two different approaches Decentralized – Uses distributed intelligence with point to point communications Centralized – Uses the SCADA Master for direct point to multi-point communications with switches in the field Smart Meter Two-way communication More control over energy use/savings Remote measuring of energy Enables automated load control devices (i.e., smart thermostats) Better customer service Lower operating costs Improved reliability, outage management Provides foundation for improved utility services for customer in the future CBM The CBM initiative will employ sensor technology and predictive algorithms to model equipment health and impending failure for SDG&E electric substations The CBM initiative will allow the asset manager to ascertain the condition of equipment remotely without human testing or intervention Why is this so important? A CBM system will reduce the reliance on the institutional knowledge that will be lost through attrition and retirement The implementation and operation of CBM is essential for both reducing costs and increasing reliability OMS/DMS The OMS/DMS initiative will identify the area and customers out of service and enable faster restoration times The OMS/DMS initiative will enable enhanced monitoring of the distribution system, resulting in controlling actions to mitigate voltage and power flow problems The OMS/DMS initiative is a key enabler to future Smart Grid applications The enhanced control of the distribution system results in increased public safety, better response to adverse events and increased operator situational awareness GIS Deliver an enterprise-wide Geographic Information System that will: Enable compliance with Department of Transportation (DOT) Gas Transmission and Distribution Pipeline Integrity requirements. DOT requires a detailed registry which includes installation information, condition, and maintenance history of our pipelines. Enable improvements in operations by providing SDG&E and SoCalGas employees web-based access to asset information (e.g. pipes, wires, transformers, poles, fleet, etc.) and connectivity on a locational basis. Provides archives for construction and maintenance history for use in multiple systems.

Integrated Timeline Drivers Dependencies
‘ ‘ ‘ ’ ’ ’ ’ ’14 ’ ‘16 Capital efficiency Reliability Field and Smart Grid require GIS O&M costs Workforce demographics Can be done now – but needs GIS down stream Cost-to-serve Customer convenience Customer adoption Mobile workforce Sensors on assets Timing is JIT based on Field Force (and Smart Grid) Future flexibility Scalable platform Enterprise solutions Required by virtually every initiative Asset Mgmt Initiatives Asset Investment Support GIS Platform GIS Data Conversion OMS / DMS Condition Based Maintenance Field Force Initiatives Supervisor Enablement Forecasting & Scheduling Dispatching & Mobile Work Management Electronic Design Customer Care Initiatives Operation Insight Analytics ICE Infrastructure & Channel ICE Self Service Care Rep of the Future Single View of the Customer Network Infrastructure WAN Mobile Key Points: Arrow show dependencies between lines. Color depict application suites: Green: GIS, Blue M&I and WMS, Yellow: Schedule/Dispatch And Red: Systems outside utility operations. Other projects NOT shown include NBC (New Business Construction) phases 2 and 3 EDW (Engineering data Warehouse) phases 2 and 3 These projects not shown because they do not work directly toward our vision, or are projects outside utility operations. Cost Assumptions: Costs are in 2005 funds Costs are based on work done in previous efforts (AMPO, Set-21 etc), but will be reevaluated during the business case phase of each project. Costs are for capital planning only. Planning for many smaller projects will have less risk and incremental benefits, but will cost more in the long run (O&M costs, supporting multiple systems etc). Schedule may change over time due to: Changing business priorities Lack of a strong business case for individual projects Resource and capital funding availability AMPO costs included overhead for AMPO program office. These costs were not removed since it is likely that breaking the projects into smaller pieces might raise the costs. COSTs do not include large scale business re-engineering, as this was not a part of the AMPO costs. If the business case determines that this is a recommended course of action for a particular project, then the costs would be re-evaluated during that business case. Note: Some projects including SDG&E gas are required to replace DPSS (Service Orders, Gas Tech Services, and Project Management). The investments made here will be leveraged for SoCalGas, and SoCalGas will participate in these projects for requirements and design. IT Infrastructure SOA Encryption & Authentication Identity & Access Mgt Enterprise Info. Analytics Smart Meter Plan Build Deploy

Building a Business Case

SDG&E Business Case Procedure
OMS/DMS Distributed Generation Grid Design Conditioned-based Maintenance

OMS / DMS - Benefits Reduction in forced outages/interruptions
Reduction in restoration time Reduced O&M due to predictive analytics and grid self healing Reduction in peak demand Increased integration of distributed generation resources and higher capacity utilization Increased security and tolerance to attacks / natural disasters Power quality, reliability, and system availability and capacity improvement due to improved power flow Increased capital investment efficiency due to tighter design limits and optimized use of grid assets Environmental benefits gained by increased asset utilization Assumes AMI and GIS are implemented prior to project completion

Distributed Generation – Benefits
Reliability – Fewer planned/forced outages, shorter outages, improved SAIDI, SAIFI, and CAIDI, minimize potential energy crisis Business Opportunity – Increased sales (gas), DG sales, DG support services, greater role in transporting energy from DG customers Capital Investment – Optimize capital investment, potential for deferral of large capital expenditures, reduced RMR costs Optimized asset utilization – Better allocation of transmission resources. Greater flexibility in allocating resources based on need (balanced power flow). Improved Customer relations/satisfaction – Provide opportunities to participate in energy generation. Revenue opportunities for customers. Customer participation in “green energy” initiative. Greater customer self-sufficiency. Savings for customer in energy costs. Greater reliability for the customer. Environment…

Grid Design – Benefits Improved Safety behavior / statistics
No FTE categories (savings are reduced public exposure, reduced crew injuries / potential exposure) Improved productivity Electric Troubleshooters Construction & Maintenance Substation maintenance Crew Dispatchers Supervisors Customer Service reps Greater system reliability (self-healing) Reliability group Technical Support Assistants Dist Ops DSOR engineers More ET&D Planning (more resources, more complex design, sensors, devices – less capital projects) Improved asset management Substation Electricians Overhead Linemen Electronic Control Techs Increased equipment availability No FTE Categories

Condition Based Maintenance - Benefits
Improved crew utilization – reduction in forced outages: 5% Avoid 14 hour rule more often, shift premiums Fewer cases of OT overall Improved asset utilization & deferred capital: 10% Realizing greater service life Slight improvement in customer satisfaction 2% As measured under PBR Customer Satisfaction performance Potential PBR reliability benefits: 5% Assumes SAIDI, SAIFI, etc. in “linear” range Avoided costs for environmental remediation: Avoidance of fines or other punitive measures Societal/economic benefits of fewer forced outages: Reduction in cost to collect condition data by manual means: 15 – 20% Assumes two crews daily “as-is” Shift from time-based to condition based maintenance should reduce overall maintenance activity (Planned) Breakers: %, LTC: 5 – 15% , Line Regs:- 5 – 15%, Substation Banks: 2.5– 5%, Batteries: 10 – 20% Reduction in unplanned maintenance work Breakers: 5 – 10%, LTC 20 – 30%, Line Regs 20 – 30%, Substation Banks 2.5 – 5%

Keep Costs Down, Adds Reliability

OMS/DMS Value Levers – Operator Productivity
60 min / day on average increased operator productivity Supporting Evidence 60 Reduced Telephone and Radio Time Operators manually direct field workers via phone/radio 50 Operators field phone calls due to lack of visibility to outage and network related data 40 No integration from SORT-OMS to enable real-time visibility to troubleshooter activities Minutes 30 Reduced Data Entry Switching plans are not suggested Checking/Review of Manually Written Switching Orders 20 Switching orders produced manually Afternoon shift re-checks orders created in the morning 10 Automated Outage Reporting Outage reporting produced/reviewed manually by operators - Other Benefits - Reduced Apprentice Training Time Apprentice training involves many disparate systems Reduced Support Staff (Outage Reporting) Support staff double checks outage reports – 2 hours per day - Other Intangible Benefits - Safety can be improved through improved outage information Improved Safety

Cash Flow – OMS / DMS

Consistent Architecture

Application Architecture
Outage Info; Work Assignments Supply Chain OMS DMS DG Status & Outage Data Material Orders Material Availability Data Commands Work Requirements Work Mgmt SCADA - D CBM Weather Work & Inspection Data Asset Profile Tasks Meters Sensors Data Historian (Pi) Schedule & Dispatch Cal ISO Status Tasks SCADA - T EMS Mobile Key Smart Grid CIS Financials Asset / Field Other Systems Other

Systems View

Systems View The “Systems View” perspective takes a holistic and objective approach to a subject, including technical, economic, regulatory, political, and societal aspects. It includes the complete recognition of the power system as one integrated machine having many interdependent parts. It recognizes that solutions can come from a wide and diverse range of sources. A “Systems View” also takes account of the full range of costs and benefits to society associated with the provision of reliable power.

Technology Foundations
Renovating Key Operating Systems Our Field Processes Technology Foundations Our Assets Work Mgmt System Planning/ Scheduling Real-time Routing Dispatching Geographic Info System Asset Mgmt System Outage Mgmt System* Condition Based Maintenance* Asset Geographic Info System – One GIS platform across the enterprise; Migrating to an industry standard data model. Asset Mgmt System – Enables long-range asset planning and forecasting Outage Mgmt System – Instantaneous pinpoint outage info and ability to take corrective action to minimize impact Conditioned Base Maintenance – Predictive maintenance. Field Force: Work Mgmt System – One MDT platform; Automation of job administration and paperwork elimination (timekeeping, work dispatch, work closure). Planning/ Scheduling – One resource management approach across work types and service territories for long term forecasting, short term planning, immediate dispatching of work; Integration of real-time crew location information (enabled by GPS) with scheduling and dispatch processes to: reduce travel time, time to emergency work and non-productive time. Real time Routing Dispatching - Customer Care: Customer Analytics – Analyze customer behavior patterns to drive on-going operational improvements. (e.g. Mine recorded quality-monitoring calls to identify better ways to handle chronic callers). By better understanding these patterns we can create alternative options and transform/improve how customer interact (e.g., self-service). Outbound Dialing – When service tech finishes at one location, the outbound dialer can indicate to the next customer that we’re on our way. Customer knows we’re coming and this decreases “can’t get in” situations. Also, increases customer satisfaction. Enhanced Self Service Options – Improve IVR and e-channels to drive self-service for automated, intelligent and personalized customer interactions. Employ speech recognition, key word recognition, (e.g. turn ons/offs), other languages, expand online bill pay, provide segmented/personalized online services. Reduces calls handled. Paper, postage and processing savings. Our Customers Customer Analytics Outbound Dialing Enhanced Self Service Options *SDG&E only

Sharing Operational Data
Current State – Data IS NOT Easily Visible Across Operational Units Future State – Easily Visible Data Across Operational Units

Asset Management Initiative
Like a puzzle, even when the information is visible – linking it together makes the difference A I S O M S / D M S G I S C B M

Geographical Information System
G I S

What is GIS GIS – Geographic Information System Definition - Computerized systems to store, record, analyze, and produce maps and geographic products based on spatial data (data with geographic reference), regardless of the source, in one central location (data repository). Data Types Data is stored as lines, points and/or polygons or a combination thereof and can be layered for viewing convenience. Data about features can also be stored as attributes such as an electric transmission tower number or the size and name of a gas line. Example You can combine the location of mobile workers, located in real-time by GPS devices, in relation to customers' homes, located by address and derived from your customer database. GIS maps this data, giving dispatchers a visual tool to plan the best routes for mobile staff or send the closest worker to a customer.

GIS Project Description
Deliver an enterprise-wide Geographic Information System that will: Enable compliance with Department of Transportation (DOT) Gas Transmission and Distribution Pipeline Integrity requirements. DOT requires a detailed registry which includes installation information, condition, and maintenance history of our pipelines. Enable improvements in operations by providing SDG&E and SoCalGas employees web-based access to asset information (e.g. pipes, wires, transformers, poles, fleet, etc.) and connectivity on a locational basis. Provides archives for construction and maintenance history for use in multiple systems.

Electric Project Mgmt*
GIS – Current State Current Applications Users Trans Engr’g & Design Enghouse Subst Engr’g & Design* Smallworld* Electric Project Mgmt* Network Engr’g & Ops ESRI* Gas Design AutoCAD Electric Digitizing* Reconciliation Paper Gas Mapping Electric As-Built Web Trans Constr & Maint Elect Distrib Ops* Land Services * Some systems are SDG&E only Mail Gas As-Built

Central user application interface
GIS – Future State Central user application interface Asset Management Demographic Engineering Emergency Preparedness Environmental Site Selection Marketing Finance Customer Service Compliance Mobile Workforce Land Management Operation Logistics

GIS Future State Centralized Data Repository
Integration of maps, databases, and image files from separate areas in a single accessible common interface by using a web application. Employees will be able to access all data from a central location at their office desktops or field data terminals.

Condition Based Maintenance - CBM

What is Condition- Based Maintenance (CBM)?
Key points The CBM initiative will employ sensor technology and predictive algorithms to model equipment health and impending failure for SDG&E electric substations The CBM initiative will allow the asset manager to ascertain the condition of equipment remotely without human testing or intervention Why is this so important? A CBM system will reduce the reliance on the institutional knowledge that will be lost through attrition and retirement The implementation and operation of CBM is essential for both reducing costs and increasing reliability * SDG&E only

Condition-Based Maintenance Current State
Timing is Everything! We had the annual maintenance scheduled for tomorrow! Did you hear? The Miguel Breaker failed last night! Inspection and Maintenance is preformed on a time-based schedule. In some cases, after we take the equipment apart we find that some maintenance may not have been necessary. Equipment may fail between inspections.

CBM – Future State Inspection and Maintenance will be performed based on measured condition and performance of equipment Just like a CAT Scan – early symptoms can be diagnosed Equipment can be repaired before failure Reliability will be improved

CBM – Work in Progress Install monitors on Transmission gas breakers
Key benefit is reduce crew time on gas breaker call out Install monitors on transformers On distribution banks monitor LTC Monitor bushing life Goal would be to obtain life extension by knowing condition or repairing before failure causes loss of unit Install back office analytics to facilitate condition based maintenance Install long term storage for data SQL server or data historian Install in substations Monitors on breakers Monitor transformers Communications from devices to control house Wireless, BPL, fiber Install communication/ gateway inside control house

Outage Management System / Distribution Mgmt System
O M S / D M S* * SDG&E only

What is OMS/DMS? Key points Why is this so important?
The OMS/DMS initiative will identify the area and customers out of service and enable faster restoration times The OMS/DMS initiative will enable enhanced monitoring of the distribution system, resulting in controlling actions to mitigate voltage and power flow problems The OMS/DMS initiative is a key enabler to future Smart Grid applications Why is this so important? The enhanced control of the distribution system results in increased public safety, better response to adverse events and increased operator situational awareness * SDG&E only

OMS/DMS Current State Future State
Imagine the improvements we can make when the intellectual ability of our engineers and operators can be harnessed to make decisions based on real time information – instead of spending time to collect information and formulate a decision. Manually Design Switching plans to resolve un-planned outages using manually maintained operating maps Select Switching Plan from automatically calculated scenarios. Uses Real Time Information from SCADA and CBM monitors

OMS/DMS* in Unplanned Outages
Detected Problem Determined Switch to Isolate Problem Problem Resolution Current Automate Alternative Analysis for Minimum Customer Impact Improved Asset Information and Dispatching of Trouble-men Fewer Customers out During Problem Resolution CBM Substation Monitors Provide Real Time Performance SAIDI Reduction: System Average Interruption Duration Index (SAIDI) Reduction Outage Detected Problem Determined Switch to Isolate Problem Problem Resolution Crew Time Savings Dist Operator Time Savings SAIDI Reduction Future * SDG&E only

Asset Investment Support
A I S

What is Asset Investment Support (AIS)?
Description The Asset Investment Support Initiative will enable fact-based, data-driven decision-making to optimize capital and expense spending on SDG&E and SoCalGas energy systems through the use of re-defined asset investment management processes and targeted decision support tools Objectives & Key Outcomes Link to financial strategy through improved decision-making on capital utilization Improved visibility and predictability of asset performance Improved transparency of logic to all stakeholders

Investment Decision Making Impacts – Future State
What Will Change? Approach to investment decision-making Asset management decision-making performed by appropriate mix of skilled personnel (engineering, finance, field experience, etc.) Link between SoCalGas and SDG&E Electric and Gas investment decision-making through the use of standard tools The Result…..Optimal financial performance with respect to capital utilization, operating margin and ROIC for SDG&E and SoCalGas Operations

How to Avoid Vendor Lock-in and Technology Obsolescence

Levels of Optimization
Management Processes Business Processes Support Processes Applications Infrastructure Hierarchy of Needs

IT + Business Partnership
Reg. Planning Integrated planning Improvement blueprint Business integration Regulatory roadmap Resource Deployment/Mgmt Process optimization Integrated work management and mobile workforce solutions Business integration Improve the Bottom Line Asset Management Maintenance practices Asset monitoring Investment planning Business integration Customer/Business Operations Outage / leakage management Business integration Enhance Customer & Regulatory Position INTEGRATION T&D Support Functions Advanced Telemetry Strategy Project office Business integration Supply Chain SCM blueprint Strategic sourcing Supply chain operations Business integration Shared Services Strategy Shared service model Business transformation outsourcing Position for Future Optimization Activity

Enterprise Architecture
A comprehensive set of principles, policies and standards used to align Information Technology (IT) assets with an organization's business processes to support the organization's overall strategy. An enterprise architecture describes and documents current and future (desired) relationships Answers basic questions like: What are the organization's business processes and how is IT enabling them?

Purpose & Process Align projects with Enterprise Architecture
Define structure and processes to improve consistency & adherence to enterprise architecture and drive business value Establish a forum to evolve our Enterprise Architecture Method to discuss and track architectural considerations early in the process resulting in a united approach to solving enterprise requirements To increase awareness, understanding and agreement of activities and initiatives that have architectural implications

Introduction of SOA Leads to New Business System Choices

SOA is About Business Agility
Adaptability & Speed Abstracts underlying technology Platform independence Common language – consistent way of communication, interoperability Loosely coupled Each service fulfills a function independently Services can combine to work together Common business meanings Requires higher level of efforts Discipline and commitment Requires time to mature and to build critical mass Availability of Business Services Plug and Play Analogy Common Transport Services need to be there

Layers of SOA Describe the makeup of SOA

Smart Meter Solution Architecture Context
MV90 Meters SDG&E Enterprise External Parties Legacy Applications Regulators Installation Applications C&I Customers Installation Vendors Regulators Installation Applications Integration Platforms MV90 Head- End Platforms EMF – (Web Services) Smart Meters AMI Head-End Platforms EDIX (SFTP/B2B) Residential and C&I Customers SOA – Business Perspective: SOA is based on the idea that if the business can be structured as a set of services available to the rest of the organization, then new business processes and/or process changes can be quickly accommodated to respond to business changes. Agility is the primary objective from a business perspective. SOA - From a technical perspective, SOA is an architectural pattern in which application and infrastructure functionality is implemented as enterprise-level, reusable services. SOA is focused on INTEGRATION. As we moved more a ‘real-time’ business environment and packaged solutions, the need for Integration will increase. Why SOA? SOA provides a secured and consistent manner to manage the integration and provides the agility needed to respond quickly to business changes. Customer Web Access ETL Operational Applications & Monitoring MDMS Applications Data Marts

Operation Technology Vision with SAP Overlay
SAP Capability Legend SAP Materials SAP Financials SAP Partner Customer Information Maintenance & Inspection Non SAP Data Maintenance Work Management MyINFO HR Graphic Design Data Repositories Work Scheduling Data Viewing (I.e. Web GIS) (Limited) SCADA GIS SynerGEE Crew Dispatching M&I WMS Planning & Analysis (Limited) XI B.I. Tools Data Warehouse Dave and Hal For each of the major business processes (e.g. Maintenance & Inspection) we are targeting one solution for both Gas & Electric Transmission and Distribution Common data repositories will allow consistent information to be available across these solutions, and one instance of each data item A common integration bus will tie these systems and the data together Interfaces to other systems outside the scope of Electric and Gas will be interfaced to (e.g. SAP Financials) There still may be different systems where it just doesn’t make sense to have the same Commercial packages system are now preferred and will not be customized. Custom needs will be met with integrated SEU-developed solutions Examples: MDT’s, M&I is moving us to a common system on a common platform, Primavera, common system for records management, SoCal Web Viewer project to view SoCalGas atlas sheets . New integration and systems will provide for new possibilities: Accurate customer counts related to electric outages Elimination of asset value reconciliation issues between systems Assign tasks only to those qualified to perform them Business Objective: Gas & Electric T&D constructs, maintains and operates facilities to maximize assets, minimize costs, and maintain safety, compliance, customer satisfaction and system integrity Automation – Provide relief from excessive paper and manual processes Optimize human resource utilization Information – Provide the right information Integration – Provide the right information at the right place and time Integration BUS OSI PI Mobile Workforce Management Timekeeping Outage Management SCADA AMI Doc Mgmt

Communication Network is a Corporate Strategic Investment

Technology Building Blocks

Utility Area Network This chart demarcates rough boundaries for network types.

Convergence IP is at the Core of all Future State Communications Architectures To take advantage of the next generation of applications, an all-IP core infrastructure is required All broadband communications technologies (BPL, DSL, HFC, FSO, 3G/4G, WiMax, etc) all leverage an IP Core Infrastructure for economies of scale and virtualized integration

The Bottom Line We recommend IP-based infrastructure for Smart Meter deployments IP-based Meters if possible – or – Meter systems that support IP to end-points There are many pros and cons, but they net out as: The biggest pros involve building on IP’s legacy as a flexible, cost-effective open systems protocol/platform. Security is a real risk that must be managed proactively. The deciding factor is lack of an opportunity to refresh – it’s either build IP now or wait years for the next chance, as the economics of meter installation do not allow us to “try and adjust”.

Summary: How You Too Can Build a Regional Smart Grid.

Smart Meter: Foundational
Future Vision: optimize use of technology to improve service to customers and operational efficiency FUTURE Smart Home Smart Grid DG; storage Self-heal; Self-sense Central Automated Operations Real-time Analytics Intelligent Dispatch TODAY Smart Meter

High Level Recommendations
Identify financial benefits and costs To the business Rate Structure Carbon Footprint Reduced Congestion Introduce Distributed Generation To society – not that easy for a utility Reliability Power Quality Environment Capital projects Research & development projects

Possible Next Steps Advanced metering infrastructure
Digital electric meters are also “SENSORS” Regional communication system Home area network Operational initiatives Outage management system/distribution management system Condition based maintenance Feeder automation system technologies Pilots of autonomous, automated switching

Questions?

Terry Mohn Technology Strategist, SDG&E
Vice Chairman, GridWise Alliance

The Paths to a Smart Grid The Scouts at SDG&E

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