An Overview of the Smart Grid David K. Owens Chair, AABE Legislative Issues and Public Policy Committee AABE Smart Grid Working Group Webinar September 7, 2011

What is the Smart Grid? An advanced, telecommunication / electric grid with sensors and smart devices linking all aspects of the grid, from generator to consumer, and delivering enhanced operational capabilities that:  Provide CONSUMERS with the information and tools necessary to be responsive to electricity grid conditions (including price and reliability) through the use of electric devices and new services (from smart thermostats to PHEV)  Ensure EFFICIENT use of the electric grid (optimizing current assets while integrating emerging technologies such as renewables and storage devices)  Enhance RELIABILITY (protecting the grid from cyber and natural attacks, increasing power quality and promoting early detection and self correcting grid “self-healing” ) 2

Smart Grid … Sensing and Measurement Advanced Sensors Remote Monitoring of Expensive Equipment (e.g. Transformers) Smart Meters 3

Smart Grid … Integrated Communications Examples: Powerline Broadband over Powerline (BPL) Cellular Radio Frequency (RF) Satellite 4

Smart Grid … Advanced Control 5

Smart Meter Platform and Home Area Network Technologies will take EE and DR to New Levels HAN communication SmartMeter communication …Giving customers the tools and the know-how to be smarter energy consumers 6

Why Do We Need A Smarter Grid? (Grid Modernization)  Utilities are facing major challenges:  Infrastructure investment needs--$1.5-2 Trillion  Climate change other environmental issues  Energy independence  Cyber-security  A smarter grid will enable utilities to :  Empower customers to control and optimize their energy usage  Rely on greater amounts of distributed generation—wind, solar, etc.  Use electricity as a fuel for vehicles  Enhance the reliability and efficiency of the power grid  Provide the framework and foundation for future economic growth 7

Transformational Technology  Game Changing Technology that Will Transform the Industry  New Customer Relationships  Greater and Better Customer Energy Control  New Businesses / Strategic Partnerships  New Market Participants 8

A New Kind of Utility/Customer Engagement  Use of advanced customer service channels to deliver customer benefits, choice and control  Shift from reactive issue resolution to proactive information transfer  Information push versus pull customer service model 9

Smart Meter Map Details  27 million smart meters installed as of September 1,  The map captures smart meter installations and planned deployments by IOUs, large public power utilities, and some coops.  65 million smart meters projected to be deployed by  54% of U.S. households 10

Smart Grid Implementation Challenges  There is tremendous and growing pushback from customers and regulators to the smart meter. It focuses on  Accuracy of meters  Health concerns: Radio Frequency Exposure  Who decides whether a meter should be installed?  Cost of installation  Access to information: privacy intrusion  Impact “at risk” customers  Dynamic pricing  Customers are not seeing immediate benefits 11