AMI Business Case Benefit Overview

189 Pages·2015·6.23 MB·English

Advanced Metering Infrastructure

Business Plan
October 15, 2015
October 15, 2015

Consolidated Edison Company of New York, Inc. (“Con Edison” or “the Company”) presents here
its AMI Business Plan (“the Plan”). As stipulated in the Joint Proposal in Case 15-E-0050, the Plan
includes a benefit cost analysis (“BCA”) for the proposed AMI investment.
Several technical presentations were made to Staff and other interested parties in 2015 regarding
the Company’s AMI Business Plan, pursuant to AMI collaborative process in the Joint Proposal.
During the presentations, Staff and interested parties provided feedback and suggestions that are
discussed or have been addressed in the attached Plan. Several interested parties also expressed
their strong support for full-scale implementation of AMI.

Thomas Magee, General Manager
James Prettitore, Director

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Table of Contents
1. Introduction ............................................................................................................................. 1
1.1 U.S. Smart Meter Overview ................................................................................................. 2
1.2 AMI System Overview ......................................................................................................... 3
1.3 Implementation Plan Overview ........................................................................................... 4
2. Customer Benefits ................................................................................................................... 6
2.1 Customer Benefits: Empowering Technology and Enhanced Customer Experience .......... 7
2.2 Customer Benefits: Enhancing Customer Service ............................................................. 10
2.3 Customer Benefits: Improving the Environment .............................................................. 11
3. Reforming the Energy Vision Benefits ................................................................................... 14
3.1 Third Party Access to Data/Green Button Connect ........................................................... 17
3.2 Leveraging the Value of the AMI Network ........................................................................ 18
4. Implementation Plan ............................................................................................................. 21
4.1 Selection and Procurement of Technology and Services .................................................. 21
4.2 Integration and Deployment Planning .............................................................................. 23
4.3 Deployment Sequence ...................................................................................................... 24
4.4 Change Management ........................................................................................................ 27
4.5 Organizational Change Management ................................................................................ 34
4.6 Labor Plan .......................................................................................................................... 35
4.7 Cybersecurity Plan ............................................................................................................. 35
4.8 Benchmarking of Peer Utilities .......................................................................................... 38
5. Benefit Cost Analysis (BCA) ................................................................................................... 40
5.1 BCA Evaluation Approach .................................................................................................. 43
5.2 BCA Benefits ...................................................................................................................... 45
5.3 Other Benefits: Cost Reduction Benefits .......................................................................... 45
5.4 Customer and Company Benefits ...................................................................................... 48
5.5 Customer Service and Operations Benefits ....................................................................... 50
5.6 Benefits Summary ............................................................................................................. 51
5.7 BCA Costs ........................................................................................................................... 53
5.8 Cost Model Assumptions and Limitations ......................................................................... 54
5.9 Cost Structure Assumptions .............................................................................................. 54
5.10 BCA Results ........................................................................................................................ 57
6. Conclusion ............................................................................................................................. 63
Appendix A. AMI System Requirements........................................................................................ 64
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Appendix B. Definition of Terms ................................................................................................... 68
Appendix C. List of Abbreviations .................................................................................................. 69
Appendix D. Nexant Study ............................................................................................................. 71
Appendix E. Benchmark............................................................................................................... 119
Appendix F. Con Edison Advanced Metering Infrastructure Update .......................................... 159

Con Edison AMI Business Plan ii
1. Introduction
Con Edison is pursuing its Advanced Metering Infrastructure (AMI) smart meter initiative to
empower its customers with control, choice and convenience. This initiative comes at a time
when New York State is seeking to rethink and improve its energy future. The Con Edison AMI
smart meter initiative is integral to this effort and, indeed, provides the foundation for such
innovation and change. Additionally, it will help support the broader State goal of an 80%
reduction in carbon emissions by 2050.1
In this document, Con Edison presents in detail the many benefits to its customers of such
technology and then describes its proposed plan to implement AMI for all customers over six
years, including the change management that will be necessary to effectuate a smooth transition
to AMI adoption. Lastly, the Company presents for the Commission’s review its detailed benefit
cost analysis and the results of such analysis. The appendices contain supporting documentation
referenced in the Plan.
The AMI smart meter initiative will fundamentally transform Con Edison’s
relationship with its customers by helping them become active energy consumers.
The initiative will provide customers with the information necessary to help
manage their energy usage, control costs and help the environment. Con Edison’s
AMI smart meter initiative is essential for enabling the enhanced customer
features that will turn this vision into reality.
Why now? This is the optimal time for Con Edison to implement smart meter
technology because of the convergence of three primary drivers:
 Reforming the Energy Vision (REV): Under the “Reforming the Energy
Vision” (REV) strategy, the New York Public Service Commission is actively
spurring clean energy innovation, bringing new investments into the State
and improving consumer choice and affordability. The Con Edison AMI
smart meter initiative will help meet the REV objectives of providing
products, technology, and incentives for customers to actively participate
in energy markets, control energy use, and take control of their monthly
bill. AMI directly enables future engagement with the Company’s customers, a primary
goal of the REV initiative. With the appropriate data systems and web presentment in
place, customers will have the opportunity to leverage the interval meter data made
available by AMI to evaluate their energy consumption and make informed energy
decisions.
 Digital Customer Experience (DCX): Con Edison’s DCX initiative seeks to leverage state of
the art digital technologies to enhance customer engagement and communication. The
Company aims to deliver an enhanced customer experience which meets the customer
needs of today and is flexible enough to anticipate and meet the needs of tomorrow.
With a “customer first” guiding principle, DCX sets the Company’s direction while the AMI
system provides the platform that helps bring it to life.

1 New York State Reforming the Energy Vision (REV);
http://www3.dps.ny.gov/W/PSCWeb.nsf/All/CC4F2EFA3A23551585257DEA007DCFE2?OpenDocument
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 AMI Technology Maturity and Market Competition: AMI technology has evolved rapidly
over the past several years, making this an opportune time to embark on this project.
Building on the success of other large global AMI projects, Con Edison will have the benefit
of deploying a cutting edge AMI technology platform. Currently, the market is delivering
new and exciting opportunities to engage all customers in meaningful and substantial
ways. This industry maturity also means that the Company will realize the benefits of the
most advanced communications infrastructure deployed at a very competitive price. Risk
will also be limited due to the incorporation of advanced technology coupled with lessons
learned from similar utilities who have already deployed AMI.
The valuable information provided by AMI will help customers make smarter decisions about
distributed energy resources that fit their needs and values. Usage patterns may indicate that a
customer would benefit by replacing an aging refrigerator or installing a battery or solar array.
When integrated into the digital energy marketplace contemplated under the REV, such data will
become invaluable to both customers and distributed energy resource providers as they bundle
various products and services together to meet unique customer needs and provide solutions at
scale.
The communications backbone implemented with AMI will also provide a critical, cybersecure link
between grid operators and distributed energy resources. This communication link may also
allow operators to dispatch and control certain resources as distributed energy resource markets
develop.
1.1 U.S. Smart Meter Overview
According to the Edison Foundation Institute for Electric Innovation (IEI), as of July 2014, more
than 50 million smart meters had been deployed in the U.S., covering 43 percent of U.S. homes.
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Figure 1.1 shows the extent of smart meter deployments by state that are either completed,
underway, or planned by 2015.
Figure 1-1 Expected Smart Meter Deployments by State by 20152

In order to understand lessons learned by other utilities and leverage that insight for the benefit
of the Con Edison AMI project, Con Edison benchmarked with six peer utilities of similar size,
scope and with similar urban topology. Since many peer investor-owned utilities have already
implemented AMI, Con Edison is in a strong position to leverage those lessons learned for the
benefit of its customers. The full benchmark report can be found in Appendix E.

1.2 AMI System Overview
AMI systems provide granular energy usage information to utilities and customers. The AMI
project is hardware intensive and involves replacement of meters or modules at every endpoint.
An AMI system has three major components: (1) smart meters (and associated communication
modules), (2) a communication network, and (3) AMI back office information technology (IT)

2 Institute for Electric Innovation; September 2014. Map does not include automatic meter reading installations.
Source: http://www.edisonfoundation.net/iei/Documents/IEI_SmartMeterUpdate_0914.pdf
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systems to manage the two way communications enabled by AMI. An overview of AMI System
components is shown in Figure 1-2.
Figure 1-2 AMI Overview

1.3 Implementation Plan Overview
Con Edison’s AMI project is comprised of the following major phases which are also shown in
Figure 1-3:
1) Implementation Planning Effort
2) Communications and IT Work
3) Implementation
Figure 1-3 High Level Implementation Plan Schedule

In 2015, the Company conducted a detailed planning effort for the AMI project which positions it
to begin the AMI system implementation in 2016. Preparation included completing the detailed
Benefit Cost Analysis (BCA) (presented in Section 5 of this document), selecting the AMI system
equipment, software, and services that will be needed as part of the AMI project, and developing
the AMI Implementation Plan. Beginning in 2016, the back-office IT infrastructure will be
designed, configured, tested, and brought online to support the meter deployment. This initial
infrastructure development requires approximately 12-15 months and is needed before the first
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meters can be installed. This infrastructure will provide the foundation upon which advanced
capabilities can be developed to support customer enhancement and operational improvements.
Once all the new infrastructure systems are in place and tested, the Company’s focus will shift
from the internal architecture to deploying assets in the field. The assets consist mainly of
communications devices, electric meters, and gas modules. The Company is targeting a five year
period to complete the deployment of the communications infrastructure and more than 4.7
million electric meters and gas modules. Business transformation activities as well as customer
and stakeholder engagement will continue during the field deployment work. Several options for
deployment sequencing across the service territory were evaluated as part of this 2015 planning
effort. Details of the three phases and considerations are included in section 4 of this report.
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2. Customer Benefits

Figure 2-1 Customer Benefits of Smart Meter
To meet the objective of enhancing customer control, choice and convenience, the AMI project
will provide customer-empowering technology, enhanced service to customers and numerous
environmental benefits. These benefits will be translated into specific features, programs and
service offerings, which will continue to evolve over time.
The Company plans to develop various customer products and services that only become possible
with the two way connectivity and granular usage information provided by smart meters.
Although cost control is a significant driver for most customers, it is important to note that Con
Edison customers will also greatly benefit from the convenience of eliminating indoor meter reads
and associated estimated bills. National research also shows that the potential for carbon
reduction and other environmental benefits enabled by smart meters is highly valued by
customers, as detailed below.
The Smart Grid Consumer Collaborative (SGCC) has conducted national research, which details
the benefits that are important to the consumers. The summary findings are shown below in
Table 1.3

3 SGCC Consumer Pulse Wave 5. Con Edison is an SGCC member.
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