SlideShare a Scribd company logo
1 of 60
Download to read offline
Utility of the Future series 2012


US Utility Industry and
Regulatory Landscape


     © 2012 Smarterutility.com | Not to be reproduced without permission   Page: 1
What’s In This Research
     US 
   Electric              US Utility Industry and 
   Utility
                         Regulatory Landscape

     Key
    Value                Key Utility Processes
    Steps



    Value of            How Smart Grid can Benefit?
   Smart Grid
                                                                    How can you Profit from it? 


            © 2012 Smarterutility.com | Not to be reproduced without permission       Page: 2
US Electric Utility Primer 2012
Why you should consider this report

   •   Understand US Electric Industry
   •   Regulatory Landscape
   •   Key Utility Processes
   •   How Smart Grid can Benefit the Industry
   •   Example Components




  3/28/2012   © 2012 Smarterutility.com | Not to be reproduced without permission   Page: 3
US Electric Utility 101
John Chowdhury:
• has been working in the Utility Industry for the last 23 years
• His clients includes CenterPoint, San Diego Gas & Electric, APS, 
Southern California Edison, Vectren, TXU, NIPSCO to name a few 

Objectives of SmarterUtility.com:
• Create a Federated Knowledge Repository to take 
  advantage of knowledge, regardless of where it is housed
• Support multiple channels from a single knowledge 
  repository (Country‐State‐City‐Utility‐Regulator‐Partner
  ‐Vendor‐etc.)
• Knowledge repository is based on the context and intent
• To Leverage Subject Matter Experts to improve your
  success  factors
• Adaptive Knowledge architecture that will support all your
  needs with a single repository and remain flexible to
  change as needed
• Use the Adaptive Knowledge architecture to support
  Transparency of knowledge, Cloud computing, Mobile
  presentation, and Social use of knowledge with 
  no additional changes
It’s about Success, and Knowledge Sharing

                  © 2012 Smarterutility.com | Not to be reproduced without permission   Page: 4
Contents
  • Electric utility industry overview
     – Industry structure and value chain steps
     – Market and utility types
     – Regulatory overview

  •   Overview of each value chain step
  •   Factors that incentivize electrical utilities
  •   Benefits of Smart Grid for electrical utilities
  •   Appendix



  3/28/2012   © 2012 Smarterutility.com | Not to be reproduced without permission   Page: 5
There are 3 Core Physical Elements of the Electric Utility 
Value Chain
                        Generation                                     Transmission                          Distribution

                      • Convert fuel energy into                • Transmit electricity over               • Reduce (step down’) 
Role                    electrical energy                         long distances                            voltage
                      • Increase (‘step up’)                    • Deliver electricity to                  • Deliver electricity locally 
                        voltage for efficient                     large industrial                          to commercial and 
                        transmission                              customers                                 residential customers


                      • From fuel to the high‐                  • From the high‐voltage                   • From the substation 
Start and end 
                        voltage output of the                     output of the generating                  transformer to the 
points
                        generating station*                       station to the                            customer meter
                                                                  transformer in the 
                                                                  substation*




       Fuel



* Some utilities consider the step up and step down transformer to be part of the transmission network 

                                                                                                                                       6
        3/28/2012                 © 2012 Smarterutility.com | Not to be reproduced without permission                             Page: 6
Examples of Electric Utility Assets 

          Generation                              Transmission                         Distribution

   Coal                                      Transmission 
                                             substation
                                                                                                     Distribution 
                                                                                                     wires &
                     Natural gas                                                                     Low‐voltage 
                                                                                                     transformer

                                                                                             Pad mount gear
    Nuclear

                                                765 KV transmission 
                                                lines


               Hydroelectric                      230 KV 
                                                  transmission 
                                                  lines

                                                                                                          Residential 
                                                                                                          meters

   Generation 
   transformer
                                                       Substation
   3/28/2012           © 2012 Smarterutility.com | Not to be reproduced without permission               Page: 7
In the Beginning, Utilities Were Granted Monopoly Status 
with Oversight by Regulators
Utilities                                                            Regulator
(Electric, Gas, Water, Telephone, Railroad)




   • Granted monopoly status due to economies                          • Approved capital investment plans and 
     of scale                                                            operating costs

   • Allowed recovery of reasonable and                                • Ensured excessive costs borne by 
     necessary operating costs                                           utility investors

   • Allowed reasonable return on invested                             • Required utility to support social goals
     capital




      3/28/2012       © 2012 Smarterutility.com | Not to be reproduced without permission            Page: 8
Over Time Some States Deregulated and Broke Up the 
Monopolies
  Until the late 70s                      Late 70s – mid 90s                            Mid 90s – early 00s    Early 00s ‐ today

• Utilities act as                • Oil shock leads to push for                 • Government pushes to         • Regulators attempt to 
 monopolies                        lower energy costs                             deregulate many               achieve lower prices, 
                                                                                  industries                    but several backfire
                                  • Environmental awareness 
                                   increases                                    • Some large commercial        • Deregulation stalls
                                                                                  users push for 
                                  • Generation no longer seen                     deregulation in hopes of     • Regulators attempt to 
                                   as a natural monopoly                          lower prices                  encourage  utilities to 
                                                                                                                build generation and 
                                  • Independent power                           • Some states begin to          save energy
                                   producers (IPP) emerge in                      deregulate – CA is first
                                   some states
                                                                                • Independent 
                                  • Existing utilities become                     organizations are created 
                                   hesitant to build capacity                     to oversee access to 
                                                                                  transmission & 
                                                                                  wholesale power*

                                                                                • Energy retailers are 
                                                                                  created in some states
* Independent System Operators (ISOs) and Regional Transmission Organizations (RTOs) 



       3/28/2012               © 2012 Smarterutility.com | Not to be reproduced without permission                      Page: 9
Wholesale and Retail Businesses Emerged Due to 
Deregulation
         Generation                             Transmission                          Distribution




                             Wholesale 
      Generation                                     Transmission            Distribution        Retail
                             trading


     Purchase fuel       Facilitate buying/        Transmit               Deliver             Sell power to 
                         selling of power                                                     customers and 
     and produce         between 
                                                   power over             power locally       handle billing 
     power               Generation and            long                   to customers
                         Retail players            distances




               © 2012 Smarterutility.com | Not to be reproduced without permission               Page: 10
There are 3 Types of Electric Utility Markets Across the US
                                                                                                               Regulated
                                                                                                               Un-regulated


                                         Wholesale          Trans-                                                  Example market
                       Generation                                              Distribution      Retail
Market Type                              trading            mission


    Fully
    regulated
                                                                                                                       Alabama
                                                         Fully regulated Utility




    Deregulated                                      Utility Holding Company

                       Generation
                       subsidiary         Trading                                                 Retail                   Texas
                                                              Wires / T&D Utility
                                          subsidiary                                              subsidiary
                       IPP*


    Hybrid-                                          Utility Holding Company
    regulated
                       Generation
                       subsidiary                                                                                      California
                                                               Hybrid-regulated Utility
                       IPP*
* IPP = Independent Power Producer




                           © 2012 Smarterutility.com | Not to be reproduced without permission                 Page: 11
Most States are Still Regulated
                                                                                                                                                  Regulated
                                                                                                                                                  Deregulated
                                                                                                                                                  Hybrid




                                                                                                                              • • Regulated: 34
                                                                                                                                  Regulated: 34

                                                                                                                              • • Deregulated: 16*
                                                                                                                                  Deregulated: 16*

                                                                                                                               • Hybrid: 1
                                                                                                                              • Hybrid: 1




* Includes Washington DC, 6 states are deregulated but have a rate cap or state oversight of rates (AZ, MI, NH, OH, PA, RI)
Source: USA Today Aug‐10, 2007



       3/28/2012                 © 2012 Smarterutility.com | Not to be reproduced without permission                                   Page: 12
There Are Also 3 Types of Electric Utility Companies, 
Differentiated By Ownership Type
Investor‐Owned Utilities                                   Municipally‐Owned Utilities                Cooperatives
(IOU)                                                      (Munis)                                    (Coops)




  • Publicly traded company                                • Owned by customers                      • Owned by customers
  • Electricity only                                       • Electricity only                        • Electricity only
  • One of US’s largest generators of                      • Regulated by an elected Board of        • Regulated by 10‐person elected 
    electricity (38 GW)                                      Directors                                 Board or Directors
  • US largest electricity transmission                    • 6th largest publicly owned utility      • Operates in 14 counties north and 
    system (39k miles)                                     • 3.3 GW peak capacity                      west of Austin, TX
  • States served: AK, IN, KY, LA, MI, OH,                 • Own transmission and distribution
    OK, TN, TX, VA, WV                                     • Serve Sacramento County and a 
  • Regulated according to each state’s                      portion of Placer County
    regulatory framework

• 210 IOUs in the US (7% of US utilities)                  • 2009 Munis in the US (65%)              • 883 Coops in the US (28%)
• Serve 105M customers (74% of total)                      • Serve 14% of customers                  • Serve 12% of customers
 Source: EIA, aep.com, smud.org, bluebonnetelectric.coop



      3/28/2012                © 2012 Smarterutility.com | Not to be reproduced without permission                    Page: 13
IOUs are Influenced by Several State and Federal Entities 
(CA example)
                                  Federal                                                              State



  • Reliability of interstate electricity transmission                      • Service standards and safety rules
  • Interstate electricity sales and wholesale                              • Utility rate changes
     electric rates*
                                                                            • Monitoring anti‐competitive behavior
                                                                            • Energy efficiency and conservation programs
                                                                            • Programs for low‐income households

  • National standards related to air and water 
     quality
                                                                            • State standards  related to air and water quality
                                                                            • Proposed construction


  • Reactor safety
  • Reactor licensing                                                       • Promoting energy efficiency, renewables
  • Radioactive material safety                                             • Licensing large thermal power plants


                                          These organizations are independent of the utilities
 * Also regulate interstate natural gas and oil transport and sales


       3/28/2012                 © 2012 Smarterutility.com | Not to be reproduced without permission               Page: 14
Some Utilities Offer More than Electricity
  Utilities Offering Different Services                                                                      INDICATIVE ESTIMATE;
  Count (from a sample of 213 large utilities)                                                               NOT COMPREHENSIVE


                                                                   Electricity only
                                                                                                 • 2/3 of IOUs offer 
  IOU                 52                   24     1                                                electricity only, most of 
                                                                   Electricity & Gas
                                                                                                   the rest also offer gas
                                                                   Electricity & Water
                                                                                                 • Coops are largely 
                                                                                                   designed to provide rural 
                                                                   Electricity & Gas &             electricity
 Coops                         76                 0                Water
                                                                                                 • ~1/2 of Munis offer 
                                                                                                   electricity only, while half 
                                                                                                   offer electricity and 
                                                                                                   water
Munis           30         2        26



         0       20            40        60           80     100




    3/28/2012              © 2012 Smarterutility.com | Not to be reproduced without permission                 Page: 15
Contents
    • Electric utility industry overview
    • Overview of each value chain step
       – Generation
       – Wholesale
       – Transmission and Distribution
       – Retail
    • Factors that incentivize electrical utilities
    • Benefits of Smart Grid for electrical utilities
    • Appendix



 3/28/2012   © 2012 Smarterutility.com | Not to be reproduced without permission   Page: 16
Generation: Power Plants Convert Fuel Energy into 
Electrical Energy
Chemical, atomic,  
                               Mechanical energy                                                                 Electrical energy
thermal energy




                                                     text
                                       text
                            steam                                                  Magnet
                                                            text

                                              text




               Furnace /
 Fuel          Boiler          Spinning turbine                                                                Alternating current (AC)

  • Most electricity in      • Turbine converts the                • The generator has a stationary 
    the US is produced         kinetic energy of a                   cylindrical conductor that is wrapped 
    in steam turbines          moving fluid (liquid or               with a coil (wire)
  • In a fossil‐fueled         gas) into mechanical                • The shaft has a magnet attached to it, 
    steam turbine, the         energy                                which rotates within the conductor
    fuel is burned in a      • Steam hits the blades               • When the magnet rotates, it induces 
    furnace to heat            and rotates the shaft                 an electric current in the wire
    water in a boiler to       connected to the 
    produce steam              generator




                            © 2012 Smarterutility.com | Not to be reproduced without permission                           Page: 17
Generation: Coal, Natural Gas and Nuclear Generate 90%+ 
 of US Electricity
         US Electricity generation by source, 2008                                  Generation of Other Renewables, 2008
         Percent                                                                    Percent
                                          4,110 TWh                                          123 TWh
                                  100%                                           100%                   1%
                                                       3%
                                                       6%                                               12%
                                   90%                                            90%
            Other*
                                   80%                20%                         80%
            Other Gases
                                   70%                                            70%
            Petroleum                                                                                   42%
                                   60%                21%                         60%                              Solar/PV
            Other
            Renewables                                                                                             Geothermal
                                   50%                                            50%
            Hydroelectric                                                                                          Wind
            Conventional                                                                                           Biomass
            Nuclear                40%                                            40%


            Natural Gas            30%                                            30%
                                                      49%                                               45%
            Coal                   20%                                            20%

                                   10%                                            10%

                                    0%                                             0%

                                             • Coal + Natural Gas + Nuclear generate 90%+
                                             • Coal is the dominant source, almost 50% of generation
                                             • Non‐hydroelectric renewables make up only 3%
* Includes hydro pumped storage
Source: EIA

                                  © 2012 Smarterutility.com | Not to be reproduced without permission           Page: 18
Generation: Electricity Demand Fluctuates Throughout the 
Day and Year – This Requires Energy Sources with Varying 
Levels of Flexibility
                                                                                                                      ILLUSTRATIVE
                 Daily (peak day)                                               Annual                 Maximum Peak load
                                                                 Capacity
                                                Reserve margin
• Unpredictable 
  demand               Peak load
• Sources must be 
                                                                                     • Semi‐predictable demand
  able to start                                             Cycling load             • Energy sources must be flexible to 
  quickly – or be 
                                                                                       follow changes in demand
  held in reserve
• Resulting energy                                               Demand
  cost is high

                                                                                              Minimum load
                Midnight             Noon            Midnight                 1/1                                   12/31

                                                                      • Predictable level of demand
                                            Base load                 • Addressed by very large power plants 
                                                                        that produce energy inexpensively 
                                                                        when operated continuously at high 
                                                                        utilization (…you can’t just crank them 
                                                                        up and down with demand)



        3/28/2012           © 2012 Smarterutility.com | Not to be reproduced without permission                    Page: 19
Wholesale: Facilitates Matching Demand with Supply
                Demand                                                                                   ILLUSTRATIVE
                Daily; MW


                                                                                         Supply available at a given 
                                                               Peak load 
                                                                                         time may not exactly track 
                                                                capacity                 demand.
                 Additional power may 
                                                                                         Excess power may need to 
                 need to be acquired 
                                                                                         be sold off through 
                 through wholesale markets 
                                                                                         wholesale markets
                 to meet demand                                Cycling load
                                                                 capacity



              Demand                                             Base load
              curve                                               capacity




                                                                                                   Time of Day



                       The lack of efficient storage for electricity creates the need to 
                       match demand and supply in real time



  3/28/2012        © 2012 Smarterutility.com | Not to be reproduced without permission             Page: 20
Transmission: NERC Divides the Nation’s Transmission and 
  Distribution into 3 “Interconnections”




                                                                                                           Eastern
                                                                                                       Interconnection
                   Western
               Interconnection


                                                       ERCOT
                                                                               ERCOT
                                                                          Interconnection




                       Each interconnection effectively acts as an independent grid system, with limited 
Source: FERC           power crossing between “seams” 
 Source: EIA


                                 © 2012 Smarterutility.com | Not to be reproduced without permission      Page: 21
Transmission and Distribution: Deliver Power from Power 
Plants to Customers
                                   • High voltage transmission lines transport power to distribution substations
                                   • Because transmission infrastructure impacts so many customers downstream, 
                                     transmission has been equipped with ‘smart technologies’ (sensors, automated 
                                     controls and communications) for many years




• The distribution network 
  delivers power over 
  medium‐ and low‐voltage 
  power lines
• Transformers (that look 
  like big buckets hung on 
  power poles) further 
  reduce the voltage to 
  normal household 
  electrical service
• The distribution network 
  includes the electricity 
  meter



                       © 2012 Smarterutility.com | Not to be reproduced without permission        Page: 22
Retail: Electrical Utility Customers and Consumption
                                                                                                  #       Average sales per customer (MWh/yr)



    Customers by Sector,                      Electrical Energy Sales 
    2007*                                     by Sector, 2007
    Percent, 100% = 142 M                     Percent, 100% = 3.7M GWh
                                                                                                      •    Residential customers make 
                                                                                                           up almost 90% of all 
100%            0.0%     0.6%                         0.2%           11,000                                customers. Commercial 
                   12.2%                                                                                   customers make up almost 
90%
                                                     27.4%            1,300                                all of the rest.
80%
                                                                                 Transportation
                                                                                                      •    Although Residential is the 
70%                                                                              Industrial                biggest sector by sales (in 
60%                                                                              Commercial                other words, consumption) 
                                                     35.6%                                                 at 37%, sales are more 
50%                                                                              Residential               evenly distributed across 
                     87.2%                                                                                 sectors
40%                                                                     77
30%                                                                                                   •    Net result… average sales per 
                                                                                                           customer is very low for 
20%                                                  37.1%                                                 Residential relative to 
10%                                                                     11                                 Commercial and Industrial

  0%


* The Transportation sector ‘s 750 customers constitute less than 0.1% of customers
 Source: EIA


       3/28/2012                © 2012 Smarterutility.com | Not to be reproduced without permission                       Page: 23
The U.S. is the Largest Electricity Consumer in the World
 Consumption of Electrical Energy by                                                   Share of Global
 Country, 2006 – Top 12*                                                               Consumption
 GWh
      United States                                                                            23%
                 China                                                                         15%
                                                                                                            • US is the largest consumer
                Japan                                                                            6%
                Russia                                                                           5%         • Top 10 consuming countries 
            Germany                                                                              3%           plus Australia and Mexico 
                                                                                                              consume 69% of world total
              Canada                                                                             3%
                  India                                                                          3%
               France                                                                            3%

                 Brazil                                                                          2%

       South Korea                                                                               2%

            Australia                                                                            1%

              Mexico                                                                             1%

                           0       1,000      2,000       3,000      4,000      5,000                 69%

* Australia is ranked 14 worldwide (not 11) and Mexico is 17, but they are shown here for reference
Source: EIA


         3/28/2012                © 2012 Smarterutility.com | Not to be reproduced without permission                     Page: 24
Contents

      • Electric utility industry overview
      • Overview of each value chain step
      • Factors that incentivize electrical utilities
         – Financial
         – Operational
         – Environmental
         – Typical utility behavior
      • Benefits of Smart Grid for electrical utilities
      • Appendix


 3/28/2012   © 2012 Smarterutility.com | Not to be reproduced without permission   Page: 25
New Challenges are Emerging for Utilities
                                                                                                      Italics: new challenges
                                                      Traditional 
                                                        Tension
                               Financial                                    Operational


• Providing affordable 
  electricity                                                                                • Reliability
                                New Tension                               New Tension        • Safety
• Expectation for more 
  efficient operation                                                                        • Increasingly stringent 
• New environmental                                                                            reliability metrics
  costs increasing                                  Environmental                            • Integrating 
• Generation costs                                                                             distributed and 
  increasing                                                                                   intermittent 
                                               • Likely legislation on carbon cost             generation, EVs, 
                                               • Renewable power standards and                 microgrids
                                                 energy efficiency requirements              • Maintaining power 
  IOUs have a profit                           • Growing penetration of                        grid security
  motivation, Munis and                          distributed generation 
  Coops do not                                   (especially rooftop PV)
                                               • Emergence of electric vehicles
                                                                                              Some Munis also are 
                                                                                              responsible for Police & 
                                                                                              Fire services



                       © 2012 Smarterutility.com | Not to be reproduced without permission                   Page: 26
Financial: First… How Do Utilities Earn Profits?
Munis
                •    Munis and Coops are owned by their customers, so they are not profit‐oriented
Coops


Generation      •    Generation companies earn profits through selling electricity
companies

Retail          •    Retail companies (which operate in deregulated markets) earn profits through 
companies            buying and re‐selling electricity

IOUs            •    However, (T&D) IOUs do NOT earn profits on the electricity they sell
                      • Yes, they do receive revenues for the electricity through the rates that 
                         consumers pay…
                      • But the regulators set rates so they cover utility costs to purchase and 
                         deliver that energy
                      • The rates also cover their other costs
                      • Regulators grant the companies a “fair rate of return” on the value of their 
                         assets, such as the distribution lines, transformers, meters, etc. This return, 
                         too, is reflected in the rates that utility customers pay.




    3/28/2012       © 2012 Smarterutility.com | Not to be reproduced without permission   Page: 27
Financial: Many Regulators Set IOU Revenues Based on 
Cost‐of‐Service
                                                                                            Cost‐of‐Service Calculation
 Roles
                                                                                            RR = O + T + D + r*(RB)

                                                                                            RR = utility’s revenue requirement
                                                                                            O = operating costs
                                                                                            T = taxes
                             Monopoly status and 
                             fair rate of return                                            D = depreciation allowance
    Integrated                                                       Regulator              r = fair rate of return
      utility                                                                               RB = rate base
                               Obligation to serve
                                                                                            • Generally represents the property and assets 
                                                                                               used to provide utility service
                                                              Guarantee of                  • May be based on fair value, prudent 
          Payment for 
                                                              reliable service at              investment, reproduction cost, original cost
          service
                                                              reasonable rates
                                                                                            • IOUs make profits based on the rate of return 
                                                                                                (r) and the rate base (RB), so there is an 
                                                                                                incentive for IOUs to increase the rate base.
                                                                                            •   They don’t make money on the commodity. 
                                                                                                They just recover their costs for it.
                                          Customer

 * ROE rules differ by state. Can be based on treasuries/borrowing costs, peer‐group ROEs




         3/28/2012               © 2012 Smarterutility.com | Not to be reproduced without permission                          Page: 28
Financial: What Utilities Show on Your Bill (PG&E Example)
                                                                             Back page of your bill (the fine print)




                                                                           These per‐kWh rates include amounts for 
                                                                           cost recovery and the rate of return




                                                      • As you can see, the rate includes many elements (described on 
                                                          the back page of your bill)
                                                      •   Generation and Distribution make up 81% of this bill
                                                              • Generation includes fuel and purchased power
                                                              • Both also include construction, maintenance and 
Source: pge.com                                                  financing costs

         3/28/2012   © 2012 Smarterutility.com | Not to be reproduced without permission                   Page: 29
Financial: There are Several Approaches to Billing for 
Usage        Description
   Consumption                                                                      PG&E bill excerpt
       Tiers            •      Multiple rates based on consumption
                        •      Baseline: based on average monthly usage for 
                               a given customer type 
                        •      Higher rates charge for consumption above 
                               the baseline quantity allocated
   Timing

       Time of use      •      Different rates charged for electricity used at different times during the day: higher rates 
       (TOU)                   are charged during times of greater demand
                        •      Allows the utility to better match revenues with their energy procurement costs and 
                               encourages consumers to use less during peak demand times


       Critical Peak    •      Utilities project energy demand for the following day and, if demand is expected to be 
       Pricing (CPP)           very high as on hot summer days, designate the following day as a “critical peak” day           Demand 
                                                                                                                               response (DR) 
                        •      Utilities charge higher rates on CPP days and lower rates on non‐CPP 
                                                                                                                               mechanisms
                        •      Within CPP days, there may be more than one rate in TOU pricing
                                                                                                                               The purpose is 
                                                                                                                               to reduce and 
       Real‐time        •      Rates are set “real‐time”, so they are more dynamic than TOU
                                                                                                                               shift energy 
       Pricing (RTP)    •      Based on shorter time intervals, typically minutes, not blocks of hours                         demand during 
                        •      Not yet widely adopted – requires frequent meter reads and either consumer access               peak times
                               to price signals or direct utility control of customer loads

Source: pge.com


         3/28/2012          © 2012 Smarterutility.com | Not to be reproduced without permission                           Page: 30
Financial/Environmental: Demand Response is Emerging
     States with established Demand Response Plans (as of Sept‐09)




               In CA, between the 3 IOUs, 
               there are 26 DR programs, 
               but only 3 (1 each) geared to 
               residential customers                                                           11states* have established 
                                                                                               Demand Response programs or 
                                                                                               plans

* Includes Hawaii (not shown on the map)
Source:  FERC September 2009; California Flex Your Power


       3/28/2012               © 2012 Smarterutility.com | Not to be reproduced without permission             Page: 31
Financial/Environmental: ‘Decoupling’ Profits from Energy 
Sales to Encourage Efficiency
 • Decoupling separates a utility’s revenues from its energy quantity sales to not discourage energy efficiency
 • Rates (per kWh) for the utility are adjusted up if energy sales quantity goes down (or down if they go up)
                   Revenue_old = Rate_old * Quantity_old = Rate_new * Quantity_new = Revenue_new




                                                                                                    • As of the end of 2008, 6 states 
                                                                                                          had adopted electric decoupling

                                                                                                    • Expectation is for increased 
                                                                                                          decoupling; 9 states were 
                                                                                                          pending




Source: National Resource Defence Council



         3/28/2012                  © 2012 Smarterutility.com | Not to be reproduced without permission                   Page: 32
Environmental targets: Energy Efficiency Targets
Summary                                            States with EE targets (2009)
• The primary purpose of EE is to 
  reduce overall demand and 
  secondarily to reduce peak demand
• 22 states have EE targets
• Target level, ramp up, elements (e.g., 
  demand, peak demand) differ by 
  state
• Typical programs:
      • Rebates for energy‐efficient 
         appliances and lighting
      • Loans for energy‐efficient 
         building
• Incentives and penalties also differ 
  by state. For example:
      • CO and MI have incentives to 
         exceed targets but no 
         penalties for non‐compliance
      • In CT, providers that fail to 
         meet efficiency requirements 
         must pay a per‐kWh charge to 
         the PUC



 Source:  Pew Center


       3/28/2012         © 2012 Smarterutility.com | Not to be reproduced without permission   Page: 33
Environmental targets: Renewable Portfolio Standards
•    Summary                                                    States with RPS or RPG (2009)
• A renewable portfolio standard (RPS) 
  is a state policy that requires 
  electricity providers to obtain a 
  minimum percentage of their power                        OR                                           NY: 24% by 2013
  from renewable energy resources by                       25% by 2025 (large utilities)
  a certain date                                           5%‐10% by 2025 (smaller utilities)
• 24 states and DC have RPS policies in 
  place and 5 others have nonbinding 
  renewable portfolio goals (RPG)                          CA: 33% by 2020*
• Standards can differ by type/size of 
  utility in a state                                                                                  NC
                                                                                                      12.5% by 2021 (IOUs)
• Incentives and enforcement are                                                                      10% by 2018 (co‐ops & munis)
  managed by individual states
• Relative to the US average of 3% of 
  power from RPS, these targets 
  represent a significant increase




 * From ~13% in 2008
 Source:  US Department of Energy ‐ Energy Efficiency and Renewable Energy, DSIRE and NREL; CA CPUC



        3/28/2012               © 2012 Smarterutility.com | Not to be reproduced without permission                Page: 34
Operational: Reliability has a Major Impact on Businesses
Average annual cost of interruptions by business type*
Dollars
80,000                                                                                                • Costs due to interruptions vary widely by 
60,000                                                                                                  business type
40,000
                                                                                                      • In total (not shown) electrical interruptions 
20,000
                                                                                                        cost US businesses more than $100B 
     0
                                                                                                        annually**
                    Digital                Continuous
                                            Fabrication
                   Economy                Process Mnfr
                                            & Essential
                                             Services
Average cost per business by interruption duration
Dollars                                                                                               • Even momentary interruptions can be costly
10,000
                                                                                                           • Average of $1477 per business for 1 
                                                                                                             second interruptions
  8,000                                                                                                    • For continuous manufacturing, 
  6,000                                                                                                      average 1 second interruption cost is 
  4,000                                                                                                      much higher: $12.6k on average (not 
  2,000                                                                                                      shown)
        0
                    1 second                3 minutes                   1 hour
  * Digital Economy includes companies that rely heavily on data storage, retrieval and processing (e.g., telecom, financial services, research and development); Continuous Process 
  Manufacturing includes companies that continuous feed raw materials, often at high temperatures; Fabrication and Essential Services includes other manufacturing as well as 
  utilities and transportation
  ** Conservative estimate based on CEIDS calculation of $104B‐$164B in 2001. Loss categories include: production, labor, materials, equipment damage, backup, overhead, restart, 
  other
  Source: CEIDS (Cost_of_Power_Disturbances_to_Industrial_and_Digital_Technology_Companies.pdf)



        3/28/2012                   © 2012 Smarterutility.com | Not to be reproduced without permission                                                      Page: 35
Operational: Utilities Have Reliability Metrics and 
Incentives/Penalties for Missing Them
Metrics*                                                                                                       Example (Southern CA Edison**)


 Duration‐                SAIDI                                                                                  • Benchmark: 56 minutes
 based                    • System Average Interruption Duration Index                                           • Increment: +/‐ 1 minute
                          • Average total outage time (in minutes) over a year for                               • Incentive: +/‐$2M (up to $18M)
                            each customer served
                          CAIDI
                          • Customer Average Interruption Duration Index 
                          • Average outage time (in minutes)
 Frequency‐               SAIFI                                                                                  • Benchmark: 1.07/yr
 based                    • System Average Interruption Frequency Index 
                          • Average number of interruptions for each customer                                    • Increment: +/‐0.01
                            served                                                                               • Incentive: +/‐$1M (up to $18M)

                          MAIFI                                                                                  • Benchmark: 1.26
                          • Momentary Average Interruption Frequency Index
                          • Average number of momentary interruptions for each                                   • Increment: +/‐0.01
                            customer served                                                                      • Incentive: +/‐$0.2M (up to $3.6M)
                          • Definition of ‘momentary’ differs by utility (typically                              • Threshold: 5 minutes
                            under 5 minutes)
                                                                                                                    These incentives are an alternative 
                                                                                                                    proxy for the value of reliability
* Metrics exclude planned outages. Metrics also have a duration threshold (typically 5 minutes), so interruptions shorter than the threshold 
are not counted in SAIDI, CAIDI or SAIFI.
** Targets established in 2004




        3/28/2012                 © 2012 Smarterutility.com | Not to be reproduced without permission                                           Page: 36
Contents



       •     Electric utility industry overview
       •     Overview of each value chain step
       •     Factors that motivate electrical utilities
       •     Benefits of Smart Grid for electrical utilities
       •     Appendix




 3/28/2012      © 2012 Smarterutility.com | Not to be reproduced without permission   Page: 37
There are Many Benefits to Smart Grid Solutions…
                                            Example Benefits of Smart Grid Solutions
                                            • Fewer outages
                                            • Shorter duration of outages
                    Reliability
                                            • Better power quality

                                            • More efficient operations and maintenance
                                            • Energy/Grid efficiency
                    Cost
                                            • Energy conservation
                                            • Reduced peak demand
                                            • Reduced energy demand
                    Environment             • Ability to integrate renewables
                                            • Enabling EVs

                                            • Consumer empowerment
                                            • Improved customer
                    Customer
                                              satisfaction
                                            • Lower energy bills

     … but benefits can differ between regulated and deregulated markets 



               © 2012 Smarterutility.com | Not to be reproduced without permission   Page: 38
Let’s Look at 2 Examples – First Demand Response

          Demand Response (DR)                                       Energy Efficiency (EE)

  • DR programs are designed to…
      – Shift loads from peak to off‐
          peak times
      – Reduce overall energy demand
  • DR programs use energy rates that 
    are more expensive during times of 
    higher demand
      – Time‐of‐use (TOU) billing
      – Critical peak pricing (CPP)
      – Real time pricing (RTP)
  • The action at the customer can be 
    taken by the customer or by the 
    utility using direct load control




   3/28/2012    © 2012 Smarterutility.com | Not to be reproduced without permission           Page: 39
Demand Response – Greater Benefits in Regulated 
Markets
Regulated 
                                                             Utility
market



                 Generation              Transmission               Distribution                    Customer

                 • Peak load                              • Deferred distribution             • Potentially lower 
                   reduction                                capacity expansion                  energy bill
                                                          • Can target DR at 
                                                            specific circuits


Deregulated 
                                                             Utility                                Retail
market




                 • Peak load                                                                  • Potentially lower 
                   reduction                                                                    energy bill
                                            No distribution benefits because Utility owns 
                                            the wires but Retail owns the DR program 
                                            and customer interface, so the Utility doesn’t 
                                            have full control

     3/28/2012    © 2012 Smarterutility.com | Not to be reproduced without permission              Page: 40
Now Let’s Look at Energy Efficiency

          Demand Response (DR)                                       Energy Efficiency (EE)

  • DR programs are designed to…                        • EE programs are designed to…
      – Shift loads from peak to off‐                        • Reduce overall energy demand
          peak times                                         • And in doing so, reduce peak 
      – Reduce overall energy demand                            load
  • DR programs use energy rates that                   • EE programs incentivize behavior by
    are more expensive during times of                    using rebates for efficient 
    higher demand                                         appliances or lighting as well as 
      – Time‐of‐use (TOU) billing                         loans for energy efficient 
      – Critical peak pricing (CPP)                       construction
      – Real time pricing (RTP)                         • Programs are funded through 
  • The action at the customer can be                     surcharges on customers (included 
    taken by the customer or by the                       in electricity rates)
    utility using direct load control




   3/28/2012    © 2012 Smarterutility.com | Not to be reproduced without permission           Page: 41
Energy Efficiency – Greater Benefits in Regulated 
Markets
Regulated                                                     Utility
market
(with 
decoupling)

                 Generation              Transmission               Distribution                       Customer

                 • Deferred                                                                  • Customer reduces 
                   generation                                                                  usage
                                                                                             • Utility makes same 
                                                                                               profit


Deregulated 
                                                             Utility                                   Retail
market




                                                        Challenging to implement:
                                                        Retailers compete with rates. If they sell less 
                                                        energy, they make less money.



     3/28/2012    © 2012 Smarterutility.com | Not to be reproduced without permission                 Page: 42
Appendix


            •    Recommended reading
            •    Electricity fundamentals
            •    Utility 102 starter materials
            •    Other examples




3/28/2012       © 2012 Smarterutility.com | Not to be reproduced without permission   Page: 43
Recommended Reading
•   Electric Power System Basics for the                        •    Electric Power Distribution Reliability
    Nonelectrical Professional
     – Steven W. Blume                                                • Richard E. Brown
     – ISBN: 978‐0‐470‐18580‐3
     – January 2008, Wiley‐IEEE Press
                                                                •    Distribution System Modeling and 
                                                                     Analysis
•   Understanding Today's Electricity Business
     – Authors: Bob Shively & John Ferrare                            • William H. Kersting
     – ISBN 0‐9741744‐1‐6
     – www.enerdynamics.com
                                                                •    Business Essentials for Utility 
•   From Edison to Enron: The Business of Power                      Engineers
    and What It Means for the Future of Electricity                   • Richard E. Brown
     – Author:  Richard Munson
     – ISBN: 978‐0313361869

•   Electric Power Industry in Nontechnical Language
     – Author: Denise Warkentin‐Glenn
     – ISBN‐10: 1593700679 
     – ISBN‐13: 978‐1593700676




    3/28/2012        © 2012 Smarterutility.com | Not to be reproduced without permission         Page: 44
Electricity Basics (1/2)
                  •     Current flows in one direction
Direct current 
(DC)              •     Batteries produce direct current


                  •     Current amplitude and direction change over time
Alternating       •     The electrical grid and wiring in our homes and businesses use 
current (AC)            AC. Why?...
                         • Energy can be transmitted over long distances with less 
                            line loss than with DC
                         • AC voltage can be stepped up or stepped down via 
                            transformers




                                                                                        DC


                                                                                        AC




    3/28/2012     © 2012 Smarterutility.com | Not to be reproduced without permission        Page: 45
Electricity Basics (2/2)
                   • Single‐phase electric power refers to the distribution of electric power using a system 
Single phase         in which all the voltages of the supply vary in unison
                   • Used to supply electricity to residential customers and smaller commercial customers
                   • In North America, there are generally 3 wires that come to your house, but they are 
                     all on the same phase




                   • Three‐phase electric power systems have three alternating currents (of the same 
                     frequency) which reach their peak values at different times
Three phase        • Delta between peaks is the phase difference
                   • Used to supply electricity to industrial and some commercial customers
                   • Combination of phases has the effects of giving constant power transfer over each 
                     cycle of the current




  3/28/2012    © 2012 Smarterutility.com | Not to be reproduced without permission            Page: 46
Technical losses in the electrical grid
                                                                                                                          BASED ON INDIANA 
                                                                                                                          URC EXAMPLE**
                                                                               Substation 
                                                                               transformers: 0.7%                                     % loss
    Coal: ~65%                               Transmission lines: 
    Gas CCGT: 50%                            0.5%
    Nuclear: 2%


                                                                                                         Distribution 
                                                                                                         transformers: 
                                                                                                         2.1%

                                                                                Primary 
                                                                                network:1.0%




                                                                                      Customer           Meter: 0.3%
             Substation                                                               connection: 0.3%
             transformers: 0.7%*




                                 Total: ~9% (for Nuclear) to ~70% (for Coal)

* Assumed equal to distribution substation transformer loss
** T&D losses are from the Indiana URC
Source: Indiana URC 2007; DOI USBR; NEI


          3/28/2012                © 2012 Smarterutility.com | Not to be reproduced without permission                     Page: 47
Power System Devices (1/4)
                                    Definition

             Generation /           • Generates electricity from a fuel source (potential energy) into electrical 
             power plant              energy
                                    • Fuel types include: biomass, coal, natural gas, geothermal, solar, wind
                                    • Built to a nameplate capacity rated in MW (MegaWatts)



             Trans‐                 • Transports electricity at very high voltages (usually 66‐765kV) over long 
             mission line             distances
                                    • In the US, transmission is primarily alternating current (A/C), direct 
                                      current (DC) is used in some areas


             Substation             • The location where electricity is converted from one voltage to another 
                                      via large transformers
                                    • Step down substations reduce the voltage (used to send electricity from 
                                      transmission lines to distribution lines), step up substations increases the 
                                      voltage


             High voltage           • The devices that convert or “transform” the electricity from one voltage 
             transformers             to another
                                    • Rated in k/MVA (Volt‐Amperes), which is theoretically the same as watts




 3/28/2012      © 2012 Smarterutility.com | Not to be reproduced without permission              Page: 48
Power System Devices (2/4)
                                     Definition

             Load tap                • Located inside the substations, LTCs are mechanical devices that control 
             changer                   and change the voltage being sent down the line, more granularly than 
                                       the transformer
                                     • Generally, lifetimes of load tap changers are a function of the number of 
                                       “taps” or actions taken
                                     • Some utilities will use voltage regulators or large capacitor banks to 
                                       perform the same function


             Voltage                 • Device that senses voltage on input side and raises or lowers the voltage 
             regulators                on output side to maintain a preset voltage level plus or minus a 
                                       bandwidth
                                     • Generally in substations, may also be along feeders


             Circuit                 • An automatically operated switch that opens the circuit (ie – stops power 
             breaker                   flow) when it detects an overload or short circuit in order to protect the 
                                       circuit



             Lightning               • Located in substations, and through the electric grid, lightning arrestors 
             arrestor                  protect the power system from the effects of lightning, which can cause 
                                       surges on power lines
                                     • Aka – surge arrestor

 3/28/2012       © 2012 Smarterutility.com | Not to be reproduced without permission             Page: 49
Power System Devices (3/4)
                                    Definition

             Sectional‐             • Protection device that opens a circuit, but does not have the ability to 
             izer                     interrupt a line with current on it
                                    • Requires devices on source side to interrupt current and voltage so it can 
                                      open
                                    • Replaces fuses with the advantage that it can be used multiple times 
                                      without needing to replace pieces (the fused elements)


             Fuses                  • Device located in the electric grid, on a single phase, that protects the 
                                      grid against excessive current, literally melting (thus, fuse) to open the 
                                      circuit and interrupt power flow



             Recloser               • Protection devices that opens a circuit, but can be programmed to close a 
                                      pre‐set number of times to allow a line to be re‐energized if the fault is 
                                      momentary
                                    • Has the ability to interrupt fault current


             Load break             • Used primary to isolate faults and transfer load between connecting 
             switches                 feeders or substations
                                    • Can be opened or closed to transfer sections of load from one feeder to 
                                      another 


 3/28/2012      © 2012 Smarterutility.com | Not to be reproduced without permission               Page: 50
Power System Devices (4/4)
                                     Definition


             Capacitor               • Devices that offset reactive power on a system, creating the potential to 
             banks                     reduce losses due to reactive power
                                     • Rated in kVAR (kilo Volt Ampere Reactive)



             Faulted                 • Provides visual or audio indication of fault current to identify where a 
             circuit                   fault has occurred
             indicators              • Aka – Fault Current Indicators



             Low voltage             • Converts higher distribution voltages (primary side) to lower voltages for 
             transformers              use in premises (secondary side), usually 120/240 volts in US
                                     • Most ubiquitous grid device after the meter




             Meter                   • Measures electricity consumed at the premise
                                     • More advanced meters also can measure other elements – voltage, 
                                       reactive power, etc… 




 3/28/2012       © 2012 Smarterutility.com | Not to be reproduced without permission              Page: 51
Generation: Due to This Variability, A Portfolio of 
Generation Types is Needed to Efficiently and Effectively 
Meet Demand Generation plant characteristics Typical plant types
          Load type

          Peak               • Low fixed costs                              • Combustion turbines
                             • High variable costs                          • Pumped storage hydro
                             • Quick start capability

          Cycling            • Lower variable costs relative to peak        • Oil and gas steam plants
                               capacity
                             • Lower fixed costs relative to base 
                               capacity
                             • Load following capability (i.e., ability 
                               to move quickly between varying 
                               levels of demand)

          Base               • High fixed costs                  • Coal
                             • Low variable costs                • Nuclear
                             • Reliability                       • Hydro plants
                                                                 • Combined cycles
    • Traditionally, utilities have looked at demand as uncontrollable, so they’ve needed various 
      types of supply to meet the demand.
    • With renewable energy supplies like solar, utilities face uncontrolled supply, which requires 
      active loads (e.g. electric vehicles and demand response) to balance.



                      © 2012 Smarterutility.com | Not to be reproduced without permission                Page: 52
Transmission: Role of RTOs and ISOs
   • RTOs (Regional Transmission Organizations)
        • Independent, federally regulated entities established to coordinate regional transmission in 
          a non‐discriminatory manner and ensure the safety and reliability of the electric system
        • Play a role in coordinating wholesale trading
        • Usually operate across state borders


   • ISOs (Independent System 
     Operators) play a similar 
     role to that of RTOs but 
     each typically operates 
     within a given state




Source: FERC


         3/28/2012     © 2012 Smarterutility.com | Not to be reproduced without permission   Page: 53
Distribution: Network Topology


                                                                   Commercial
                                             Feeder                & Industrial 
                                             (3 phase)              customer


750kv     33kv   Substation
                 33kv  12kv                    Transformer                              Transformer               R
 Transformer
                                                                                                             R
                                       Feeder 
                                                                                   S   Sectionalizer           Reclosers
                                       (3 phase)
                                                                                   Lateral (single phase)
                                                        Large 
                                                      Industrial
                                                                                       Transformer
                        Feeders 
                                                      customer                                       All single phase
                        (3 phase)

                                                                                            Home   Home    Home    Home    Home




                                                                                               Typically 5 homes 
                                                                                               served by each of 
                                                                                               these transformers


   3/28/2012     © 2012 Smarterutility.com | Not to be reproduced without permission                      Page: 54
Distribution: Substation Map
                                 HV line in                              HV line in                       EXAMPLE: 
                                 (33kV)                                  (33kV)                           SIMPLE LAYOUT


                  Disconnect 
                  switch


                                                     Normally 
               High‐voltage 
                                                     open
               circuit breaker

               Power 
               transformer…
      …with voltage 
      regulating load tap 
      changer at output

                      Breaker 

                    Bus                                                                 Bus

                                                     Normally 
                                                     open
    Feeder 
    breakers



                      Feeders(                                                                Feeders(
                      11kV)                                                                   11kV) 


 3/28/2012            © 2012 Smarterutility.com | Not to be reproduced without permission                Page: 55
Financial: How Utilities Recover Costs (PG&E Example)
Cost of Service            Rate
Component                  component             Rate-setting structure

 FERC/CA                   ▪   FERC/CA ISO       ▪   FERC jurisdictional transmission revenue requirements and CA ISO pass through
 ISO costs                     costs                 costs

 PGC charge                ▪   Public Goods      ▪   Recovery of costs related to Energy Efficiency and other public good components
                               Charge                (e.g., appliance and CFL rebates, customer care programs)
 DWR
 contract                  ▪   DWR Revenue       ▪   During the 2000-2001 CA Energy Crisis, the Department of Water Resources
 costs*                        Requirement           procured long term power for the utilities, which is recovered in rates



                           ▪   Energy Related    ▪   Filed twice a year, one forecast and one historical for fuel & purchased power costs
 Fuel &                        Recovery          ▪   Has a balancing account mechanism to true-up for fluctuations between forecast
 Purchased                     Account (ERRA)        and actual costs
 Power                                           ▪   If costs are >5% of forecast, automatically triggers the process for a rate increase

                                                                                                                         • Utility accounting is 
                                                                                                                           complex (!)
                                                                                                                         • Rates are adjusted over 
 Return, interest,
                           ▪   General Rate      ▪   Three year cycle, de-coupled from energy sales                        time to provide cost 
 and taxes
                               Case (GRC)        ▪   Covers all Operations & Maintenance and other opex                    recovery – and ensure 
                                                 ▪   Cost reductions/overruns within 3 year cycle flow to earnings         that cost improvements 
 Other taxes                                                                                                               flow back to rate payers
 Depreciation &
                           ▪   Cost of Capital   ▪   Filed annually                                                      • Investment cost 
 Amortization
                               (COC)             ▪   Covers the allowed ROE and capital structure                          overruns are borne by 
                                                                                                                           the utility
 Operating &               ▪   Special purpose   ▪   Created to recover costs of special one-time projects (e.g., AMI)   • The combination of low 
 Maintenance                   balancing         ▪   Generally have a fixed cap for expenditures, but under spent          reward for risk leads to 
 costs                         accounts              portions are not recovered                                            risk aversion


Source: PG&E GRC filings


                               © 2012 Smarterutility.com | Not to be reproduced without permission                           Page: 56
Financial: Measurements used for Billing
                                                                                                                            Applicable for
                                                                                                              Residential and Small Large Commercial and 
Measurement                        Description                                                                Commercial            Industrial
                               •      Based on energy consumed
 Usage
                               •      Measured in watt‐hours (Wh): a 40 watt light bulb operating for 2 
                                      hours will consume 80 Wh                                                       Yes                        Yes
                               •      Usually appears as thousands of watt‐hours (kWh)

                               •      Based on the maximum kilowatts needed at any instant over the 
 Demand charge
                                      course of the billing period                                                    No                        Yes
                               •      Measured in watts and expressed at kilowatts (kW)
                               •      The utility needs to have enough capacity available to meet 
                                      demand, so they levy an additional charge

 Power factor                  •      Power factor is a ratio between the “real power” available to the               No                        Yes
 (or VARs)                            customer (W) and the “apparent power” that the utility provides 
                                      (volts*amps or VA)                                                                   Example PF penalty
                               •      In a perfect world, the W = VA
                               •      They are not the same in the real world because some devices 
                                      (e.g., motors) create a sort of resistance (called reactance)
                               •      To overcome this reactance, the utility needs to provide more VA 
                                      for each W. The difference is called volts amps reactive (VAr)
                               •      To pay for this extra generation capacity, utilities charge based on 
                                      the power factor (W/VA) or the VAr.
                                                                                                                                   Reactive power

                                                                                                                                   Real power

Source: Detroit Edison Tariff Structure



          3/28/2012                       © 2012 Smarterutility.com | Not to be reproduced without permission                       Page: 57
Example Electricity Rates: NC IOU Example (Duke 
Energy)


                                                                                        Flat rate for distribution


      For transmission                                                                  Energy charge

                                                                                        Additional distribution fee

      For fuel purchases
                                                                                        Generation charge

                                                                                        Additional generation 
      For environmental                                                                 charges
      compliance, taxes and 
      homeland security




Source: Duke Energy




         3/28/2012         © 2012 Smarterutility.com | Not to be reproduced without permission                  Page: 58
Hope our Research was Helpful 



                                                                      If you have any questions…
                                                                          Please email or call me:
                                                                                 John Chowdhury
                                                                                   Phone: 214‐213‐6226
                                                                     John.chowdhury@smarterutility.com
                                                                          http://www.smarterutility.com.

                                                              Upload, embed, and share away!



 3/28/2012   © 2012 Smarterutility.com | Not to be reproduced without permission            Page: 59
Utility of the Future series


US Utility Industry and
Regulatory Landscape


     © 2012 Smarterutility.com | Not to be reproduced without permission      Page: 60

More Related Content

What's hot

Wind Development in Texas: History and Future Growth
Wind Development in Texas: History and Future GrowthWind Development in Texas: History and Future Growth
Wind Development in Texas: History and Future Growthaectnet
 
Webinar: Market & Customer Intelligence on Gwalior for Distribution Franchise...
Webinar: Market & Customer Intelligence on Gwalior for Distribution Franchise...Webinar: Market & Customer Intelligence on Gwalior for Distribution Franchise...
Webinar: Market & Customer Intelligence on Gwalior for Distribution Franchise...pManifold
 
The Economics of Electric Energy: IPPs, the PPA, and the Electric Power Indus...
The Economics of Electric Energy: IPPs, the PPA, and the Electric Power Indus...The Economics of Electric Energy: IPPs, the PPA, and the Electric Power Indus...
The Economics of Electric Energy: IPPs, the PPA, and the Electric Power Indus...Louie Mark Quizon
 
Group2 current scenario of deregulation in developed and developing countries
Group2 current scenario of deregulation in developed and developing countriesGroup2 current scenario of deregulation in developed and developing countries
Group2 current scenario of deregulation in developed and developing countriesPulakesh k kalita
 
Restructuring and deregulation of INDIAN POWER SECTOR
Restructuring and deregulation of INDIAN POWER SECTORRestructuring and deregulation of INDIAN POWER SECTOR
Restructuring and deregulation of INDIAN POWER SECTORANKUR MAHESHWARI
 
Utility Issues and the Site Selection Process Webinar
Utility Issues and the Site Selection Process WebinarUtility Issues and the Site Selection Process Webinar
Utility Issues and the Site Selection Process WebinarJoe Russo
 
Deregulation of electricity-background
Deregulation of electricity-backgroundDeregulation of electricity-background
Deregulation of electricity-backgroundPulakesh k kalita
 
Nord pool
Nord poolNord pool
Nord poolVIJAY S
 
Power plus distribution new
Power plus distribution newPower plus distribution new
Power plus distribution newShivansh Tyagi
 
The Experience of the Energy Regulatory Commission
The Experience of the Energy Regulatory CommissionThe Experience of the Energy Regulatory Commission
The Experience of the Energy Regulatory Commissionelectricitygovernance
 
Environmental show of the south 2014 new entrants in electricity generation
Environmental show of the south 2014 new entrants in electricity generationEnvironmental show of the south 2014 new entrants in electricity generation
Environmental show of the south 2014 new entrants in electricity generationTNenergy
 

What's hot (20)

Wesm 101 20151230
Wesm 101 20151230Wesm 101 20151230
Wesm 101 20151230
 
Wind Development in Texas: History and Future Growth
Wind Development in Texas: History and Future GrowthWind Development in Texas: History and Future Growth
Wind Development in Texas: History and Future Growth
 
Power sector in nigeria
Power sector in nigeriaPower sector in nigeria
Power sector in nigeria
 
Webinar: Market & Customer Intelligence on Gwalior for Distribution Franchise...
Webinar: Market & Customer Intelligence on Gwalior for Distribution Franchise...Webinar: Market & Customer Intelligence on Gwalior for Distribution Franchise...
Webinar: Market & Customer Intelligence on Gwalior for Distribution Franchise...
 
Power failure: Ten (10) Years of EPIRA jun 2011
Power failure: Ten (10) Years of EPIRA jun 2011Power failure: Ten (10) Years of EPIRA jun 2011
Power failure: Ten (10) Years of EPIRA jun 2011
 
The Economics of Electric Energy: IPPs, the PPA, and the Electric Power Indus...
The Economics of Electric Energy: IPPs, the PPA, and the Electric Power Indus...The Economics of Electric Energy: IPPs, the PPA, and the Electric Power Indus...
The Economics of Electric Energy: IPPs, the PPA, and the Electric Power Indus...
 
Group2 current scenario of deregulation in developed and developing countries
Group2 current scenario of deregulation in developed and developing countriesGroup2 current scenario of deregulation in developed and developing countries
Group2 current scenario of deregulation in developed and developing countries
 
Restructuring and deregulation of INDIAN POWER SECTOR
Restructuring and deregulation of INDIAN POWER SECTORRestructuring and deregulation of INDIAN POWER SECTOR
Restructuring and deregulation of INDIAN POWER SECTOR
 
Utility Issues and the Site Selection Process Webinar
Utility Issues and the Site Selection Process WebinarUtility Issues and the Site Selection Process Webinar
Utility Issues and the Site Selection Process Webinar
 
Power trading
Power tradingPower trading
Power trading
 
Restructuring and Privatization
Restructuring and PrivatizationRestructuring and Privatization
Restructuring and Privatization
 
Electricity Angsts: Were They EPIRA-Created?
Electricity Angsts: Were They EPIRA-Created?Electricity Angsts: Were They EPIRA-Created?
Electricity Angsts: Were They EPIRA-Created?
 
Deregulation of electricity-background
Deregulation of electricity-backgroundDeregulation of electricity-background
Deregulation of electricity-background
 
Nord pool
Nord poolNord pool
Nord pool
 
CAPSTONE FINAL VERSION
CAPSTONE FINAL VERSIONCAPSTONE FINAL VERSION
CAPSTONE FINAL VERSION
 
Restructuring of power grid
Restructuring of power gridRestructuring of power grid
Restructuring of power grid
 
Power plus distribution high res
Power plus distribution high resPower plus distribution high res
Power plus distribution high res
 
Power plus distribution new
Power plus distribution newPower plus distribution new
Power plus distribution new
 
The Experience of the Energy Regulatory Commission
The Experience of the Energy Regulatory CommissionThe Experience of the Energy Regulatory Commission
The Experience of the Energy Regulatory Commission
 
Environmental show of the south 2014 new entrants in electricity generation
Environmental show of the south 2014 new entrants in electricity generationEnvironmental show of the south 2014 new entrants in electricity generation
Environmental show of the south 2014 new entrants in electricity generation
 

Viewers also liked

Vertical Market Expansion into the Energy Sector
Vertical Market Expansion into the Energy SectorVertical Market Expansion into the Energy Sector
Vertical Market Expansion into the Energy SectorGary Leikin
 
Why is Texas the Model for Energy Deregulation?
Why is Texas the Model for Energy Deregulation?Why is Texas the Model for Energy Deregulation?
Why is Texas the Model for Energy Deregulation?Bounce Energy
 
2014 Retail Electric Rates in Deregulated and Regulated States
2014 Retail Electric Rates in Deregulated and Regulated States2014 Retail Electric Rates in Deregulated and Regulated States
2014 Retail Electric Rates in Deregulated and Regulated StatesAmerican Public Power Association
 
Players in the Texas Electricity Market
Players in the Texas Electricity MarketPlayers in the Texas Electricity Market
Players in the Texas Electricity MarketBounce Energy
 
Monitoring and analysis of reliaibility of electrical distribution system
Monitoring and analysis of  reliaibility of electrical distribution systemMonitoring and analysis of  reliaibility of electrical distribution system
Monitoring and analysis of reliaibility of electrical distribution systemIAEME Publication
 
Deregulated electricity markets. The role of the ISO. Processes and systems.
Deregulated electricity markets. The role of the ISO. Processes and systems.Deregulated electricity markets. The role of the ISO. Processes and systems.
Deregulated electricity markets. The role of the ISO. Processes and systems.ETRM Systems Group
 
Estimating the Value of Utility Scale Solar Technologies in California Under ...
Estimating the Value of Utility Scale Solar Technologies in California Under ...Estimating the Value of Utility Scale Solar Technologies in California Under ...
Estimating the Value of Utility Scale Solar Technologies in California Under ...Andrew Gelston
 
Jevan smith-project
Jevan smith-projectJevan smith-project
Jevan smith-projectJevan Smith
 
RELIABILITY AND IMPROVEMENT OF ELECTRIC POWER GENERATION AND DISTRIBUTION ( I...
RELIABILITY AND IMPROVEMENT OF ELECTRIC POWER GENERATION AND DISTRIBUTION ( I...RELIABILITY AND IMPROVEMENT OF ELECTRIC POWER GENERATION AND DISTRIBUTION ( I...
RELIABILITY AND IMPROVEMENT OF ELECTRIC POWER GENERATION AND DISTRIBUTION ( I...Austin Ola Oshin Zechariah
 
Regulating Electricity Market
Regulating Electricity MarketRegulating Electricity Market
Regulating Electricity MarketJustinas Pagirys
 
How Dregulation Drives Innovation
How Dregulation Drives InnovationHow Dregulation Drives Innovation
How Dregulation Drives InnovationBounce Energy
 
Transforming the utilities industry through bpo by teleperformance
Transforming the utilities industry through bpo by teleperformanceTransforming the utilities industry through bpo by teleperformance
Transforming the utilities industry through bpo by teleperformanceTeleperformance
 
Utility Value Analysis - Muntilan Subdistrict
Utility Value Analysis - Muntilan SubdistrictUtility Value Analysis - Muntilan Subdistrict
Utility Value Analysis - Muntilan Subdistrictfarah fithri
 

Viewers also liked (15)

Vertical Market Expansion into the Energy Sector
Vertical Market Expansion into the Energy SectorVertical Market Expansion into the Energy Sector
Vertical Market Expansion into the Energy Sector
 
Why is Texas the Model for Energy Deregulation?
Why is Texas the Model for Energy Deregulation?Why is Texas the Model for Energy Deregulation?
Why is Texas the Model for Energy Deregulation?
 
2014 Retail Electric Rates in Deregulated and Regulated States
2014 Retail Electric Rates in Deregulated and Regulated States2014 Retail Electric Rates in Deregulated and Regulated States
2014 Retail Electric Rates in Deregulated and Regulated States
 
Players in the Texas Electricity Market
Players in the Texas Electricity MarketPlayers in the Texas Electricity Market
Players in the Texas Electricity Market
 
Monitoring and analysis of reliaibility of electrical distribution system
Monitoring and analysis of  reliaibility of electrical distribution systemMonitoring and analysis of  reliaibility of electrical distribution system
Monitoring and analysis of reliaibility of electrical distribution system
 
Deregulated electricity markets. The role of the ISO. Processes and systems.
Deregulated electricity markets. The role of the ISO. Processes and systems.Deregulated electricity markets. The role of the ISO. Processes and systems.
Deregulated electricity markets. The role of the ISO. Processes and systems.
 
Estimating the Value of Utility Scale Solar Technologies in California Under ...
Estimating the Value of Utility Scale Solar Technologies in California Under ...Estimating the Value of Utility Scale Solar Technologies in California Under ...
Estimating the Value of Utility Scale Solar Technologies in California Under ...
 
Jevan smith-project
Jevan smith-projectJevan smith-project
Jevan smith-project
 
RELIABILITY AND IMPROVEMENT OF ELECTRIC POWER GENERATION AND DISTRIBUTION ( I...
RELIABILITY AND IMPROVEMENT OF ELECTRIC POWER GENERATION AND DISTRIBUTION ( I...RELIABILITY AND IMPROVEMENT OF ELECTRIC POWER GENERATION AND DISTRIBUTION ( I...
RELIABILITY AND IMPROVEMENT OF ELECTRIC POWER GENERATION AND DISTRIBUTION ( I...
 
Texas Electricity Deregulation
Texas Electricity DeregulationTexas Electricity Deregulation
Texas Electricity Deregulation
 
Regulating Electricity Market
Regulating Electricity MarketRegulating Electricity Market
Regulating Electricity Market
 
How Dregulation Drives Innovation
How Dregulation Drives InnovationHow Dregulation Drives Innovation
How Dregulation Drives Innovation
 
Transforming the utilities industry through bpo by teleperformance
Transforming the utilities industry through bpo by teleperformanceTransforming the utilities industry through bpo by teleperformance
Transforming the utilities industry through bpo by teleperformance
 
Power Markets & Trading in India
Power Markets & Trading in IndiaPower Markets & Trading in India
Power Markets & Trading in India
 
Utility Value Analysis - Muntilan Subdistrict
Utility Value Analysis - Muntilan SubdistrictUtility Value Analysis - Muntilan Subdistrict
Utility Value Analysis - Muntilan Subdistrict
 

Similar to Electric utility primer john chowdhury 2012 final

Grid Connections And PPAs: Tim Foster, Smartest Energy
Grid Connections And PPAs: Tim Foster, Smartest EnergyGrid Connections And PPAs: Tim Foster, Smartest Energy
Grid Connections And PPAs: Tim Foster, Smartest EnergySonia Large
 
Distributed generation.pptx
Distributed generation.pptxDistributed generation.pptx
Distributed generation.pptxSushma57624
 
Jinpan ndr presentation_march_2013
Jinpan ndr presentation_march_2013Jinpan ndr presentation_march_2013
Jinpan ndr presentation_march_2013dgiplcorponline
 
Patricio Mansilla - PPPs in Power Generation
Patricio Mansilla - PPPs in Power GenerationPatricio Mansilla - PPPs in Power Generation
Patricio Mansilla - PPPs in Power GenerationPublic-PrivatePartnership
 
Untapped Energy in Water and Utility Industries - Tor Albertersdal - Zeropex ...
Untapped Energy in Water and Utility Industries - Tor Albertersdal - Zeropex ...Untapped Energy in Water and Utility Industries - Tor Albertersdal - Zeropex ...
Untapped Energy in Water and Utility Industries - Tor Albertersdal - Zeropex ...Burton Lee
 
Energy Transformation in the United States -- Houston Conference May 2011
Energy Transformation in the United States -- Houston Conference May 2011Energy Transformation in the United States -- Houston Conference May 2011
Energy Transformation in the United States -- Houston Conference May 2011Robert H. Edwards, Jr.
 
Smart grid overview for rlc 1 26-12 rh
Smart grid overview for rlc 1 26-12 rhSmart grid overview for rlc 1 26-12 rh
Smart grid overview for rlc 1 26-12 rhRoger Hicks
 
Hannover High End Utility Metering
Hannover High End Utility MeteringHannover High End Utility Metering
Hannover High End Utility MeteringSchneider Electric
 
Renewable Energy Integration Limits
Renewable Energy Integration LimitsRenewable Energy Integration Limits
Renewable Energy Integration LimitsAnand SR
 
Sgcp12 simon-farmpower
Sgcp12 simon-farmpowerSgcp12 simon-farmpower
Sgcp12 simon-farmpowerJustin Hayward
 
DG Lecture 7 (Impact of DG Part I).pptx
DG Lecture 7 (Impact of DG Part I).pptxDG Lecture 7 (Impact of DG Part I).pptx
DG Lecture 7 (Impact of DG Part I).pptxSirajulHaq31
 
Matt Baker invVEST Smart Grid Panel
Matt Baker invVEST Smart Grid PanelMatt Baker invVEST Smart Grid Panel
Matt Baker invVEST Smart Grid PanelchandyGhosh
 
Policy & Regulatory Enablers for off-grid solar PV growth in India-Madhavan N...
Policy & Regulatory Enablers for off-grid solar PV growth in India-Madhavan N...Policy & Regulatory Enablers for off-grid solar PV growth in India-Madhavan N...
Policy & Regulatory Enablers for off-grid solar PV growth in India-Madhavan N...RESolve Energy Consultants
 

Similar to Electric utility primer john chowdhury 2012 final (20)

Grid Connections And PPAs: Tim Foster, Smartest Energy
Grid Connections And PPAs: Tim Foster, Smartest EnergyGrid Connections And PPAs: Tim Foster, Smartest Energy
Grid Connections And PPAs: Tim Foster, Smartest Energy
 
Distributed generation.pptx
Distributed generation.pptxDistributed generation.pptx
Distributed generation.pptx
 
Jinpan ndr presentation_march_2013
Jinpan ndr presentation_march_2013Jinpan ndr presentation_march_2013
Jinpan ndr presentation_march_2013
 
Home Energy Monitoring
Home Energy MonitoringHome Energy Monitoring
Home Energy Monitoring
 
Mike Montoya - SCE
Mike Montoya - SCEMike Montoya - SCE
Mike Montoya - SCE
 
Capabilities
CapabilitiesCapabilities
Capabilities
 
Patricio Mansilla - PPPs in Power Generation
Patricio Mansilla - PPPs in Power GenerationPatricio Mansilla - PPPs in Power Generation
Patricio Mansilla - PPPs in Power Generation
 
Ds31803810
Ds31803810Ds31803810
Ds31803810
 
Metering Solutions
Metering SolutionsMetering Solutions
Metering Solutions
 
Untapped Energy in Water and Utility Industries - Tor Albertersdal - Zeropex ...
Untapped Energy in Water and Utility Industries - Tor Albertersdal - Zeropex ...Untapped Energy in Water and Utility Industries - Tor Albertersdal - Zeropex ...
Untapped Energy in Water and Utility Industries - Tor Albertersdal - Zeropex ...
 
Energy Transformation in the United States -- Houston Conference May 2011
Energy Transformation in the United States -- Houston Conference May 2011Energy Transformation in the United States -- Houston Conference May 2011
Energy Transformation in the United States -- Houston Conference May 2011
 
Smart grid overview for rlc 1 26-12 rh
Smart grid overview for rlc 1 26-12 rhSmart grid overview for rlc 1 26-12 rh
Smart grid overview for rlc 1 26-12 rh
 
Hannover High End Utility Metering
Hannover High End Utility MeteringHannover High End Utility Metering
Hannover High End Utility Metering
 
Renewable Energy Integration Limits
Renewable Energy Integration LimitsRenewable Energy Integration Limits
Renewable Energy Integration Limits
 
Sgcp12 simon-farmpower
Sgcp12 simon-farmpowerSgcp12 simon-farmpower
Sgcp12 simon-farmpower
 
DG Lecture 7 (Impact of DG Part I).pptx
DG Lecture 7 (Impact of DG Part I).pptxDG Lecture 7 (Impact of DG Part I).pptx
DG Lecture 7 (Impact of DG Part I).pptx
 
Company Presentation
Company PresentationCompany Presentation
Company Presentation
 
Dept of Energy
Dept of EnergyDept of Energy
Dept of Energy
 
Matt Baker invVEST Smart Grid Panel
Matt Baker invVEST Smart Grid PanelMatt Baker invVEST Smart Grid Panel
Matt Baker invVEST Smart Grid Panel
 
Policy & Regulatory Enablers for off-grid solar PV growth in India-Madhavan N...
Policy & Regulatory Enablers for off-grid solar PV growth in India-Madhavan N...Policy & Regulatory Enablers for off-grid solar PV growth in India-Madhavan N...
Policy & Regulatory Enablers for off-grid solar PV growth in India-Madhavan N...
 

More from John Chowdhury

Why FTTx projects fails? management solution
Why FTTx projects fails?    management solutionWhy FTTx projects fails?    management solution
Why FTTx projects fails? management solutionJohn Chowdhury
 
Final Johns Tulsa University Leading through Entrepreneurship & Innovation
Final Johns Tulsa University Leading through Entrepreneurship & InnovationFinal Johns Tulsa University Leading through Entrepreneurship & Innovation
Final Johns Tulsa University Leading through Entrepreneurship & InnovationJohn Chowdhury
 
Leading an Organization Through Entrepreneurship and Innovation
Leading an Organization Through Entrepreneurship and InnovationLeading an Organization Through Entrepreneurship and Innovation
Leading an Organization Through Entrepreneurship and InnovationJohn Chowdhury
 
Feasibility of AMI and Smart Grid in Brazil - Lessons Learned - botelho chowd...
Feasibility of AMI and Smart Grid in Brazil - Lessons Learned - botelho chowd...Feasibility of AMI and Smart Grid in Brazil - Lessons Learned - botelho chowd...
Feasibility of AMI and Smart Grid in Brazil - Lessons Learned - botelho chowd...John Chowdhury
 
Independent Assessment Services - Smart Grid
Independent Assessment Services - Smart GridIndependent Assessment Services - Smart Grid
Independent Assessment Services - Smart GridJohn Chowdhury
 
Security and smart grid what you need to know john chowdhury 2012 final
Security and smart grid what you need to know   john chowdhury 2012 finalSecurity and smart grid what you need to know   john chowdhury 2012 final
Security and smart grid what you need to know john chowdhury 2012 finalJohn Chowdhury
 
Doe Oai Audit Report On Sg Program Jan 2012
Doe   Oai   Audit Report On Sg Program   Jan 2012Doe   Oai   Audit Report On Sg Program   Jan 2012
Doe Oai Audit Report On Sg Program Jan 2012John Chowdhury
 

More from John Chowdhury (7)

Why FTTx projects fails? management solution
Why FTTx projects fails?    management solutionWhy FTTx projects fails?    management solution
Why FTTx projects fails? management solution
 
Final Johns Tulsa University Leading through Entrepreneurship & Innovation
Final Johns Tulsa University Leading through Entrepreneurship & InnovationFinal Johns Tulsa University Leading through Entrepreneurship & Innovation
Final Johns Tulsa University Leading through Entrepreneurship & Innovation
 
Leading an Organization Through Entrepreneurship and Innovation
Leading an Organization Through Entrepreneurship and InnovationLeading an Organization Through Entrepreneurship and Innovation
Leading an Organization Through Entrepreneurship and Innovation
 
Feasibility of AMI and Smart Grid in Brazil - Lessons Learned - botelho chowd...
Feasibility of AMI and Smart Grid in Brazil - Lessons Learned - botelho chowd...Feasibility of AMI and Smart Grid in Brazil - Lessons Learned - botelho chowd...
Feasibility of AMI and Smart Grid in Brazil - Lessons Learned - botelho chowd...
 
Independent Assessment Services - Smart Grid
Independent Assessment Services - Smart GridIndependent Assessment Services - Smart Grid
Independent Assessment Services - Smart Grid
 
Security and smart grid what you need to know john chowdhury 2012 final
Security and smart grid what you need to know   john chowdhury 2012 finalSecurity and smart grid what you need to know   john chowdhury 2012 final
Security and smart grid what you need to know john chowdhury 2012 final
 
Doe Oai Audit Report On Sg Program Jan 2012
Doe   Oai   Audit Report On Sg Program   Jan 2012Doe   Oai   Audit Report On Sg Program   Jan 2012
Doe Oai Audit Report On Sg Program Jan 2012
 

Recently uploaded

Reframing Requirements: A Strategic Approach to Requirement Definition, with ...
Reframing Requirements: A Strategic Approach to Requirement Definition, with ...Reframing Requirements: A Strategic Approach to Requirement Definition, with ...
Reframing Requirements: A Strategic Approach to Requirement Definition, with ...Jake Truemper
 
A Case Study On SQUARE GROUP Bangladesh.pdf
A Case Study On SQUARE GROUP Bangladesh.pdfA Case Study On SQUARE GROUP Bangladesh.pdf
A Case Study On SQUARE GROUP Bangladesh.pdfmeftaul987
 
Mist Cooling & Fogging System Company in Saudi Arabia
Mist Cooling & Fogging System Company in Saudi ArabiaMist Cooling & Fogging System Company in Saudi Arabia
Mist Cooling & Fogging System Company in Saudi Arabiaopstechsanjanasingh
 
Dashboards y paneles - CP Home - Area de Operaciones
Dashboards y paneles - CP Home - Area de OperacionesDashboards y paneles - CP Home - Area de Operaciones
Dashboards y paneles - CP Home - Area de OperacionesLPI ONG
 
unfinished legacy it is a clothing brand
unfinished legacy it is a clothing brandunfinished legacy it is a clothing brand
unfinished legacy it is a clothing brandakashm530190
 
L-1 VISA Business (Plan Sample) - Plan Writers
L-1 VISA Business (Plan Sample) - Plan WritersL-1 VISA Business (Plan Sample) - Plan Writers
L-1 VISA Business (Plan Sample) - Plan WritersPlan Writers
 
Olympus 38DL Plus Ultrasonic Thickness Gauge
Olympus 38DL Plus Ultrasonic Thickness GaugeOlympus 38DL Plus Ultrasonic Thickness Gauge
Olympus 38DL Plus Ultrasonic Thickness GaugeStephenKim86
 
CORPORATE SOCIAL RESPONSIBILITY - FINAL REQUIREMENT.pdf
CORPORATE SOCIAL RESPONSIBILITY - FINAL REQUIREMENT.pdfCORPORATE SOCIAL RESPONSIBILITY - FINAL REQUIREMENT.pdf
CORPORATE SOCIAL RESPONSIBILITY - FINAL REQUIREMENT.pdfLouis Malaybalay
 
0311 National Accounts Online Giving Trends.pdf
0311 National Accounts Online Giving Trends.pdf0311 National Accounts Online Giving Trends.pdf
0311 National Accounts Online Giving Trends.pdfBloomerang
 
Wallet Pitch for startup fintech and loan
Wallet Pitch for startup fintech and loanWallet Pitch for startup fintech and loan
Wallet Pitch for startup fintech and loansujat8807
 
A Comprehensive Case Study on the IL&FS Crisis (final).pptx
A Comprehensive Case Study on the IL&FS Crisis (final).pptxA Comprehensive Case Study on the IL&FS Crisis (final).pptx
A Comprehensive Case Study on the IL&FS Crisis (final).pptxShainaMaheshwari1
 
Project Work on Consumer Behavior in Fast Food Restaurants. Their behavior to...
Project Work on Consumer Behavior in Fast Food Restaurants. Their behavior to...Project Work on Consumer Behavior in Fast Food Restaurants. Their behavior to...
Project Work on Consumer Behavior in Fast Food Restaurants. Their behavior to...BilalAhmed717
 
Unleashing the Power of Fandom: A Short Guide to Fan Business
Unleashing the Power of Fandom: A Short Guide to Fan BusinessUnleashing the Power of Fandom: A Short Guide to Fan Business
Unleashing the Power of Fandom: A Short Guide to Fan Businesstompeter3736
 
NVIDIA's overall business overview Presentation.pptx
NVIDIA's overall business overview Presentation.pptxNVIDIA's overall business overview Presentation.pptx
NVIDIA's overall business overview Presentation.pptxKrutik Rakade
 
Young Woman Entrepreneur - Kaviya Cherian
Young Woman Entrepreneur - Kaviya CherianYoung Woman Entrepreneur - Kaviya Cherian
Young Woman Entrepreneur - Kaviya CherianCDEEPANVITA
 
Business Models and Business Model Innovation
Business Models and Business Model InnovationBusiness Models and Business Model Innovation
Business Models and Business Model InnovationMichal Hron
 
Digital Marketing Training Program skills s
Digital Marketing Training Program skills sDigital Marketing Training Program skills s
Digital Marketing Training Program skills sgodxzyrox
 
CXO 2.0 Conference (Event Information Deck | Dec'24-Mar'25)
CXO 2.0 Conference (Event Information Deck | Dec'24-Mar'25)CXO 2.0 Conference (Event Information Deck | Dec'24-Mar'25)
CXO 2.0 Conference (Event Information Deck | Dec'24-Mar'25)CXO 2.0 Conference
 
Shravan Kumaran and sanjay kumaran.pdf..
Shravan Kumaran and sanjay kumaran.pdf..Shravan Kumaran and sanjay kumaran.pdf..
Shravan Kumaran and sanjay kumaran.pdf..ranjithapriya2
 

Recently uploaded (20)

Reframing Requirements: A Strategic Approach to Requirement Definition, with ...
Reframing Requirements: A Strategic Approach to Requirement Definition, with ...Reframing Requirements: A Strategic Approach to Requirement Definition, with ...
Reframing Requirements: A Strategic Approach to Requirement Definition, with ...
 
A Case Study On SQUARE GROUP Bangladesh.pdf
A Case Study On SQUARE GROUP Bangladesh.pdfA Case Study On SQUARE GROUP Bangladesh.pdf
A Case Study On SQUARE GROUP Bangladesh.pdf
 
Mist Cooling & Fogging System Company in Saudi Arabia
Mist Cooling & Fogging System Company in Saudi ArabiaMist Cooling & Fogging System Company in Saudi Arabia
Mist Cooling & Fogging System Company in Saudi Arabia
 
Dashboards y paneles - CP Home - Area de Operaciones
Dashboards y paneles - CP Home - Area de OperacionesDashboards y paneles - CP Home - Area de Operaciones
Dashboards y paneles - CP Home - Area de Operaciones
 
unfinished legacy it is a clothing brand
unfinished legacy it is a clothing brandunfinished legacy it is a clothing brand
unfinished legacy it is a clothing brand
 
L-1 VISA Business (Plan Sample) - Plan Writers
L-1 VISA Business (Plan Sample) - Plan WritersL-1 VISA Business (Plan Sample) - Plan Writers
L-1 VISA Business (Plan Sample) - Plan Writers
 
Olympus 38DL Plus Ultrasonic Thickness Gauge
Olympus 38DL Plus Ultrasonic Thickness GaugeOlympus 38DL Plus Ultrasonic Thickness Gauge
Olympus 38DL Plus Ultrasonic Thickness Gauge
 
WAM Corporate Presentation Mar 12 2024.pdf
WAM Corporate Presentation Mar 12 2024.pdfWAM Corporate Presentation Mar 12 2024.pdf
WAM Corporate Presentation Mar 12 2024.pdf
 
CORPORATE SOCIAL RESPONSIBILITY - FINAL REQUIREMENT.pdf
CORPORATE SOCIAL RESPONSIBILITY - FINAL REQUIREMENT.pdfCORPORATE SOCIAL RESPONSIBILITY - FINAL REQUIREMENT.pdf
CORPORATE SOCIAL RESPONSIBILITY - FINAL REQUIREMENT.pdf
 
0311 National Accounts Online Giving Trends.pdf
0311 National Accounts Online Giving Trends.pdf0311 National Accounts Online Giving Trends.pdf
0311 National Accounts Online Giving Trends.pdf
 
Wallet Pitch for startup fintech and loan
Wallet Pitch for startup fintech and loanWallet Pitch for startup fintech and loan
Wallet Pitch for startup fintech and loan
 
A Comprehensive Case Study on the IL&FS Crisis (final).pptx
A Comprehensive Case Study on the IL&FS Crisis (final).pptxA Comprehensive Case Study on the IL&FS Crisis (final).pptx
A Comprehensive Case Study on the IL&FS Crisis (final).pptx
 
Project Work on Consumer Behavior in Fast Food Restaurants. Their behavior to...
Project Work on Consumer Behavior in Fast Food Restaurants. Their behavior to...Project Work on Consumer Behavior in Fast Food Restaurants. Their behavior to...
Project Work on Consumer Behavior in Fast Food Restaurants. Their behavior to...
 
Unleashing the Power of Fandom: A Short Guide to Fan Business
Unleashing the Power of Fandom: A Short Guide to Fan BusinessUnleashing the Power of Fandom: A Short Guide to Fan Business
Unleashing the Power of Fandom: A Short Guide to Fan Business
 
NVIDIA's overall business overview Presentation.pptx
NVIDIA's overall business overview Presentation.pptxNVIDIA's overall business overview Presentation.pptx
NVIDIA's overall business overview Presentation.pptx
 
Young Woman Entrepreneur - Kaviya Cherian
Young Woman Entrepreneur - Kaviya CherianYoung Woman Entrepreneur - Kaviya Cherian
Young Woman Entrepreneur - Kaviya Cherian
 
Business Models and Business Model Innovation
Business Models and Business Model InnovationBusiness Models and Business Model Innovation
Business Models and Business Model Innovation
 
Digital Marketing Training Program skills s
Digital Marketing Training Program skills sDigital Marketing Training Program skills s
Digital Marketing Training Program skills s
 
CXO 2.0 Conference (Event Information Deck | Dec'24-Mar'25)
CXO 2.0 Conference (Event Information Deck | Dec'24-Mar'25)CXO 2.0 Conference (Event Information Deck | Dec'24-Mar'25)
CXO 2.0 Conference (Event Information Deck | Dec'24-Mar'25)
 
Shravan Kumaran and sanjay kumaran.pdf..
Shravan Kumaran and sanjay kumaran.pdf..Shravan Kumaran and sanjay kumaran.pdf..
Shravan Kumaran and sanjay kumaran.pdf..
 

Electric utility primer john chowdhury 2012 final

  • 1. Utility of the Future series 2012 US Utility Industry and Regulatory Landscape © 2012 Smarterutility.com | Not to be reproduced without permission Page: 1
  • 2. What’s In This Research US  Electric  US Utility Industry and  Utility Regulatory Landscape Key Value Key Utility Processes Steps Value of How Smart Grid can Benefit? Smart Grid How can you Profit from it?  © 2012 Smarterutility.com | Not to be reproduced without permission Page: 2
  • 3. US Electric Utility Primer 2012 Why you should consider this report • Understand US Electric Industry • Regulatory Landscape • Key Utility Processes • How Smart Grid can Benefit the Industry • Example Components 3/28/2012 © 2012 Smarterutility.com | Not to be reproduced without permission Page: 3
  • 4. US Electric Utility 101 John Chowdhury: • has been working in the Utility Industry for the last 23 years • His clients includes CenterPoint, San Diego Gas & Electric, APS,  Southern California Edison, Vectren, TXU, NIPSCO to name a few  Objectives of SmarterUtility.com: • Create a Federated Knowledge Repository to take  advantage of knowledge, regardless of where it is housed • Support multiple channels from a single knowledge  repository (Country‐State‐City‐Utility‐Regulator‐Partner ‐Vendor‐etc.) • Knowledge repository is based on the context and intent • To Leverage Subject Matter Experts to improve your success  factors • Adaptive Knowledge architecture that will support all your needs with a single repository and remain flexible to change as needed • Use the Adaptive Knowledge architecture to support Transparency of knowledge, Cloud computing, Mobile presentation, and Social use of knowledge with  no additional changes It’s about Success, and Knowledge Sharing © 2012 Smarterutility.com | Not to be reproduced without permission Page: 4
  • 5. Contents • Electric utility industry overview – Industry structure and value chain steps – Market and utility types – Regulatory overview • Overview of each value chain step • Factors that incentivize electrical utilities • Benefits of Smart Grid for electrical utilities • Appendix 3/28/2012 © 2012 Smarterutility.com | Not to be reproduced without permission Page: 5
  • 6. There are 3 Core Physical Elements of the Electric Utility  Value Chain Generation Transmission Distribution • Convert fuel energy into  • Transmit electricity over  • Reduce (step down’)  Role electrical energy long distances voltage • Increase (‘step up’)  • Deliver electricity to  • Deliver electricity locally  voltage for efficient  large industrial  to commercial and  transmission  customers residential customers • From fuel to the high‐ • From the high‐voltage  • From the substation  Start and end  voltage output of the  output of the generating  transformer to the  points generating station* station to the  customer meter transformer in the  substation* Fuel * Some utilities consider the step up and step down transformer to be part of the transmission network  6 3/28/2012 © 2012 Smarterutility.com | Not to be reproduced without permission Page: 6
  • 7. Examples of Electric Utility Assets  Generation Transmission Distribution Coal Transmission  substation Distribution  wires & Natural gas Low‐voltage  transformer Pad mount gear Nuclear 765 KV transmission  lines Hydroelectric 230 KV  transmission  lines Residential  meters Generation  transformer Substation 3/28/2012 © 2012 Smarterutility.com | Not to be reproduced without permission Page: 7
  • 8. In the Beginning, Utilities Were Granted Monopoly Status  with Oversight by Regulators Utilities  Regulator (Electric, Gas, Water, Telephone, Railroad) • Granted monopoly status due to economies  • Approved capital investment plans and  of scale operating costs • Allowed recovery of reasonable and  • Ensured excessive costs borne by  necessary operating costs utility investors • Allowed reasonable return on invested  • Required utility to support social goals capital 3/28/2012 © 2012 Smarterutility.com | Not to be reproduced without permission Page: 8
  • 9. Over Time Some States Deregulated and Broke Up the  Monopolies Until the late 70s Late 70s – mid 90s Mid 90s – early 00s Early 00s ‐ today • Utilities act as  • Oil shock leads to push for  • Government pushes to  • Regulators attempt to  monopolies lower energy costs deregulate many  achieve lower prices,  industries but several backfire • Environmental awareness  increases • Some large commercial  • Deregulation stalls users push for  • Generation no longer seen  deregulation in hopes of  • Regulators attempt to  as a natural monopoly lower prices encourage  utilities to  build generation and  • Independent power  • Some states begin to  save energy producers (IPP) emerge in  deregulate – CA is first some states • Independent  • Existing utilities become  organizations are created  hesitant to build capacity to oversee access to  transmission &  wholesale power* • Energy retailers are  created in some states * Independent System Operators (ISOs) and Regional Transmission Organizations (RTOs)  3/28/2012 © 2012 Smarterutility.com | Not to be reproduced without permission Page: 9
  • 10. Wholesale and Retail Businesses Emerged Due to  Deregulation Generation Transmission Distribution Wholesale  Generation Transmission Distribution Retail trading Purchase fuel  Facilitate buying/  Transmit  Deliver  Sell power to  selling of power  customers and  and produce  between  power over  power locally  handle billing  power Generation and  long  to customers Retail players distances © 2012 Smarterutility.com | Not to be reproduced without permission Page: 10
  • 11. There are 3 Types of Electric Utility Markets Across the US Regulated Un-regulated Wholesale Trans- Example market Generation Distribution Retail Market Type trading mission Fully regulated Alabama Fully regulated Utility Deregulated Utility Holding Company Generation subsidiary Trading Retail Texas Wires / T&D Utility subsidiary subsidiary IPP* Hybrid- Utility Holding Company regulated Generation subsidiary California Hybrid-regulated Utility IPP* * IPP = Independent Power Producer © 2012 Smarterutility.com | Not to be reproduced without permission Page: 11
  • 12. Most States are Still Regulated Regulated Deregulated Hybrid • • Regulated: 34 Regulated: 34 • • Deregulated: 16* Deregulated: 16* • Hybrid: 1 • Hybrid: 1 * Includes Washington DC, 6 states are deregulated but have a rate cap or state oversight of rates (AZ, MI, NH, OH, PA, RI) Source: USA Today Aug‐10, 2007 3/28/2012 © 2012 Smarterutility.com | Not to be reproduced without permission Page: 12
  • 13. There Are Also 3 Types of Electric Utility Companies,  Differentiated By Ownership Type Investor‐Owned Utilities Municipally‐Owned Utilities Cooperatives (IOU) (Munis) (Coops) • Publicly traded company • Owned by customers • Owned by customers • Electricity only • Electricity only • Electricity only • One of US’s largest generators of  • Regulated by an elected Board of  • Regulated by 10‐person elected  electricity (38 GW) Directors Board or Directors • US largest electricity transmission  • 6th largest publicly owned utility • Operates in 14 counties north and  system (39k miles) • 3.3 GW peak capacity west of Austin, TX • States served: AK, IN, KY, LA, MI, OH,  • Own transmission and distribution OK, TN, TX, VA, WV • Serve Sacramento County and a  • Regulated according to each state’s  portion of Placer County regulatory framework • 210 IOUs in the US (7% of US utilities) • 2009 Munis in the US (65%) • 883 Coops in the US (28%) • Serve 105M customers (74% of total) • Serve 14% of customers • Serve 12% of customers Source: EIA, aep.com, smud.org, bluebonnetelectric.coop 3/28/2012 © 2012 Smarterutility.com | Not to be reproduced without permission Page: 13
  • 14. IOUs are Influenced by Several State and Federal Entities  (CA example) Federal State • Reliability of interstate electricity transmission • Service standards and safety rules • Interstate electricity sales and wholesale  • Utility rate changes electric rates* • Monitoring anti‐competitive behavior • Energy efficiency and conservation programs • Programs for low‐income households • National standards related to air and water  quality • State standards  related to air and water quality • Proposed construction • Reactor safety • Reactor licensing • Promoting energy efficiency, renewables • Radioactive material safety • Licensing large thermal power plants These organizations are independent of the utilities * Also regulate interstate natural gas and oil transport and sales 3/28/2012 © 2012 Smarterutility.com | Not to be reproduced without permission Page: 14
  • 15. Some Utilities Offer More than Electricity Utilities Offering Different Services INDICATIVE ESTIMATE; Count (from a sample of 213 large utilities) NOT COMPREHENSIVE Electricity only • 2/3 of IOUs offer  IOU 52 24 1 electricity only, most of  Electricity & Gas the rest also offer gas Electricity & Water • Coops are largely  designed to provide rural  Electricity & Gas & electricity Coops 76 0 Water • ~1/2 of Munis offer  electricity only, while half  offer electricity and  water Munis 30 2 26 0 20 40 60 80 100 3/28/2012 © 2012 Smarterutility.com | Not to be reproduced without permission Page: 15
  • 16. Contents • Electric utility industry overview • Overview of each value chain step – Generation – Wholesale – Transmission and Distribution – Retail • Factors that incentivize electrical utilities • Benefits of Smart Grid for electrical utilities • Appendix 3/28/2012 © 2012 Smarterutility.com | Not to be reproduced without permission Page: 16
  • 17. Generation: Power Plants Convert Fuel Energy into  Electrical Energy Chemical, atomic,   Mechanical energy Electrical energy thermal energy text text steam Magnet text text Furnace / Fuel Boiler Spinning turbine Alternating current (AC) • Most electricity in  • Turbine converts the  • The generator has a stationary  the US is produced  kinetic energy of a  cylindrical conductor that is wrapped  in steam turbines moving fluid (liquid or  with a coil (wire) • In a fossil‐fueled  gas) into mechanical  • The shaft has a magnet attached to it,  steam turbine, the  energy which rotates within the conductor fuel is burned in a  • Steam hits the blades  • When the magnet rotates, it induces  furnace to heat  and rotates the shaft  an electric current in the wire water in a boiler to  connected to the  produce steam generator © 2012 Smarterutility.com | Not to be reproduced without permission Page: 17
  • 18. Generation: Coal, Natural Gas and Nuclear Generate 90%+  of US Electricity US Electricity generation by source, 2008 Generation of Other Renewables, 2008 Percent Percent 4,110 TWh 123 TWh 100% 100% 1% 3% 6% 12% 90% 90% Other* 80% 20% 80% Other Gases 70% 70% Petroleum 42% 60% 21% 60% Solar/PV Other Renewables Geothermal 50% 50% Hydroelectric Wind Conventional Biomass Nuclear 40% 40% Natural Gas 30% 30% 49% 45% Coal 20% 20% 10% 10% 0% 0% • Coal + Natural Gas + Nuclear generate 90%+ • Coal is the dominant source, almost 50% of generation • Non‐hydroelectric renewables make up only 3% * Includes hydro pumped storage Source: EIA © 2012 Smarterutility.com | Not to be reproduced without permission Page: 18
  • 19. Generation: Electricity Demand Fluctuates Throughout the  Day and Year – This Requires Energy Sources with Varying  Levels of Flexibility ILLUSTRATIVE Daily (peak day) Annual Maximum Peak load Capacity Reserve margin • Unpredictable  demand Peak load • Sources must be  • Semi‐predictable demand able to start  Cycling load • Energy sources must be flexible to  quickly – or be  follow changes in demand held in reserve • Resulting energy  Demand cost is high Minimum load Midnight Noon Midnight 1/1 12/31 • Predictable level of demand Base load • Addressed by very large power plants  that produce energy inexpensively  when operated continuously at high  utilization (…you can’t just crank them  up and down with demand) 3/28/2012 © 2012 Smarterutility.com | Not to be reproduced without permission Page: 19
  • 20. Wholesale: Facilitates Matching Demand with Supply Demand ILLUSTRATIVE Daily; MW Supply available at a given  Peak load  time may not exactly track  capacity demand. Additional power may  Excess power may need to  need to be acquired  be sold off through  through wholesale markets  wholesale markets to meet demand Cycling load capacity Demand Base load curve capacity Time of Day The lack of efficient storage for electricity creates the need to  match demand and supply in real time 3/28/2012 © 2012 Smarterutility.com | Not to be reproduced without permission Page: 20
  • 21. Transmission: NERC Divides the Nation’s Transmission and  Distribution into 3 “Interconnections” Eastern Interconnection Western Interconnection ERCOT ERCOT Interconnection Each interconnection effectively acts as an independent grid system, with limited  Source: FERC power crossing between “seams”  Source: EIA © 2012 Smarterutility.com | Not to be reproduced without permission Page: 21
  • 22. Transmission and Distribution: Deliver Power from Power  Plants to Customers • High voltage transmission lines transport power to distribution substations • Because transmission infrastructure impacts so many customers downstream,  transmission has been equipped with ‘smart technologies’ (sensors, automated  controls and communications) for many years • The distribution network  delivers power over  medium‐ and low‐voltage  power lines • Transformers (that look  like big buckets hung on  power poles) further  reduce the voltage to  normal household  electrical service • The distribution network  includes the electricity  meter © 2012 Smarterutility.com | Not to be reproduced without permission Page: 22
  • 23. Retail: Electrical Utility Customers and Consumption # Average sales per customer (MWh/yr) Customers by Sector, Electrical Energy Sales  2007* by Sector, 2007 Percent, 100% = 142 M Percent, 100% = 3.7M GWh • Residential customers make  up almost 90% of all  100% 0.0% 0.6% 0.2% 11,000 customers. Commercial  12.2% customers make up almost  90% 27.4% 1,300 all of the rest. 80% Transportation • Although Residential is the  70% Industrial biggest sector by sales (in  60% Commercial other words, consumption)  35.6% at 37%, sales are more  50% Residential evenly distributed across  87.2% sectors 40% 77 30% • Net result… average sales per  customer is very low for  20% 37.1% Residential relative to  10% 11 Commercial and Industrial 0% * The Transportation sector ‘s 750 customers constitute less than 0.1% of customers Source: EIA 3/28/2012 © 2012 Smarterutility.com | Not to be reproduced without permission Page: 23
  • 24. The U.S. is the Largest Electricity Consumer in the World Consumption of Electrical Energy by  Share of Global Country, 2006 – Top 12* Consumption GWh United States 23% China 15% • US is the largest consumer Japan 6% Russia 5% • Top 10 consuming countries  Germany 3% plus Australia and Mexico  consume 69% of world total Canada 3% India 3% France 3% Brazil 2% South Korea 2% Australia 1% Mexico 1% 0 1,000 2,000 3,000 4,000 5,000 69% * Australia is ranked 14 worldwide (not 11) and Mexico is 17, but they are shown here for reference Source: EIA 3/28/2012 © 2012 Smarterutility.com | Not to be reproduced without permission Page: 24
  • 25. Contents • Electric utility industry overview • Overview of each value chain step • Factors that incentivize electrical utilities – Financial – Operational – Environmental – Typical utility behavior • Benefits of Smart Grid for electrical utilities • Appendix 3/28/2012 © 2012 Smarterutility.com | Not to be reproduced without permission Page: 25
  • 26. New Challenges are Emerging for Utilities Italics: new challenges Traditional  Tension Financial Operational • Providing affordable  electricity • Reliability New Tension New Tension • Safety • Expectation for more  efficient operation • Increasingly stringent  • New environmental  reliability metrics costs increasing Environmental • Integrating  • Generation costs  distributed and  increasing intermittent  • Likely legislation on carbon cost generation, EVs,  • Renewable power standards and  microgrids energy efficiency requirements • Maintaining power  IOUs have a profit  • Growing penetration of  grid security motivation, Munis and  distributed generation  Coops do not (especially rooftop PV) • Emergence of electric vehicles Some Munis also are  responsible for Police &  Fire services © 2012 Smarterutility.com | Not to be reproduced without permission Page: 26
  • 27. Financial: First… How Do Utilities Earn Profits? Munis • Munis and Coops are owned by their customers, so they are not profit‐oriented Coops Generation  • Generation companies earn profits through selling electricity companies Retail  • Retail companies (which operate in deregulated markets) earn profits through  companies buying and re‐selling electricity IOUs • However, (T&D) IOUs do NOT earn profits on the electricity they sell • Yes, they do receive revenues for the electricity through the rates that  consumers pay… • But the regulators set rates so they cover utility costs to purchase and  deliver that energy • The rates also cover their other costs • Regulators grant the companies a “fair rate of return” on the value of their  assets, such as the distribution lines, transformers, meters, etc. This return,  too, is reflected in the rates that utility customers pay. 3/28/2012 © 2012 Smarterutility.com | Not to be reproduced without permission Page: 27
  • 28. Financial: Many Regulators Set IOU Revenues Based on  Cost‐of‐Service Cost‐of‐Service Calculation Roles RR = O + T + D + r*(RB) RR = utility’s revenue requirement O = operating costs T = taxes Monopoly status and  fair rate of return D = depreciation allowance Integrated  Regulator r = fair rate of return utility RB = rate base Obligation to serve • Generally represents the property and assets  used to provide utility service Guarantee of  • May be based on fair value, prudent  Payment for  reliable service at  investment, reproduction cost, original cost service reasonable rates • IOUs make profits based on the rate of return  (r) and the rate base (RB), so there is an  incentive for IOUs to increase the rate base. • They don’t make money on the commodity.  They just recover their costs for it. Customer * ROE rules differ by state. Can be based on treasuries/borrowing costs, peer‐group ROEs 3/28/2012 © 2012 Smarterutility.com | Not to be reproduced without permission Page: 28
  • 29. Financial: What Utilities Show on Your Bill (PG&E Example) Back page of your bill (the fine print) These per‐kWh rates include amounts for  cost recovery and the rate of return • As you can see, the rate includes many elements (described on  the back page of your bill) • Generation and Distribution make up 81% of this bill • Generation includes fuel and purchased power • Both also include construction, maintenance and  Source: pge.com financing costs 3/28/2012 © 2012 Smarterutility.com | Not to be reproduced without permission Page: 29
  • 30. Financial: There are Several Approaches to Billing for  Usage Description Consumption PG&E bill excerpt Tiers • Multiple rates based on consumption • Baseline: based on average monthly usage for  a given customer type  • Higher rates charge for consumption above  the baseline quantity allocated Timing Time of use  • Different rates charged for electricity used at different times during the day: higher rates  (TOU) are charged during times of greater demand • Allows the utility to better match revenues with their energy procurement costs and  encourages consumers to use less during peak demand times Critical Peak  • Utilities project energy demand for the following day and, if demand is expected to be  Pricing (CPP) very high as on hot summer days, designate the following day as a “critical peak” day Demand  response (DR)  • Utilities charge higher rates on CPP days and lower rates on non‐CPP  mechanisms • Within CPP days, there may be more than one rate in TOU pricing The purpose is  to reduce and  Real‐time  • Rates are set “real‐time”, so they are more dynamic than TOU shift energy  Pricing (RTP) • Based on shorter time intervals, typically minutes, not blocks of hours demand during  • Not yet widely adopted – requires frequent meter reads and either consumer access  peak times to price signals or direct utility control of customer loads Source: pge.com 3/28/2012 © 2012 Smarterutility.com | Not to be reproduced without permission Page: 30
  • 31. Financial/Environmental: Demand Response is Emerging States with established Demand Response Plans (as of Sept‐09) In CA, between the 3 IOUs,  there are 26 DR programs,  but only 3 (1 each) geared to  residential customers 11states* have established  Demand Response programs or  plans * Includes Hawaii (not shown on the map) Source:  FERC September 2009; California Flex Your Power 3/28/2012 © 2012 Smarterutility.com | Not to be reproduced without permission Page: 31
  • 32. Financial/Environmental: ‘Decoupling’ Profits from Energy  Sales to Encourage Efficiency • Decoupling separates a utility’s revenues from its energy quantity sales to not discourage energy efficiency • Rates (per kWh) for the utility are adjusted up if energy sales quantity goes down (or down if they go up) Revenue_old = Rate_old * Quantity_old = Rate_new * Quantity_new = Revenue_new • As of the end of 2008, 6 states  had adopted electric decoupling • Expectation is for increased  decoupling; 9 states were  pending Source: National Resource Defence Council 3/28/2012 © 2012 Smarterutility.com | Not to be reproduced without permission Page: 32
  • 33. Environmental targets: Energy Efficiency Targets Summary States with EE targets (2009) • The primary purpose of EE is to  reduce overall demand and  secondarily to reduce peak demand • 22 states have EE targets • Target level, ramp up, elements (e.g.,  demand, peak demand) differ by  state • Typical programs: • Rebates for energy‐efficient  appliances and lighting • Loans for energy‐efficient  building • Incentives and penalties also differ  by state. For example: • CO and MI have incentives to  exceed targets but no  penalties for non‐compliance • In CT, providers that fail to  meet efficiency requirements  must pay a per‐kWh charge to  the PUC Source:  Pew Center 3/28/2012 © 2012 Smarterutility.com | Not to be reproduced without permission Page: 33
  • 34. Environmental targets: Renewable Portfolio Standards • Summary States with RPS or RPG (2009) • A renewable portfolio standard (RPS)  is a state policy that requires  electricity providers to obtain a  minimum percentage of their power  OR NY: 24% by 2013 from renewable energy resources by  25% by 2025 (large utilities) a certain date 5%‐10% by 2025 (smaller utilities) • 24 states and DC have RPS policies in  place and 5 others have nonbinding  renewable portfolio goals (RPG) CA: 33% by 2020* • Standards can differ by type/size of  utility in a state NC 12.5% by 2021 (IOUs) • Incentives and enforcement are  10% by 2018 (co‐ops & munis) managed by individual states • Relative to the US average of 3% of  power from RPS, these targets  represent a significant increase * From ~13% in 2008 Source:  US Department of Energy ‐ Energy Efficiency and Renewable Energy, DSIRE and NREL; CA CPUC 3/28/2012 © 2012 Smarterutility.com | Not to be reproduced without permission Page: 34
  • 35. Operational: Reliability has a Major Impact on Businesses Average annual cost of interruptions by business type* Dollars 80,000 • Costs due to interruptions vary widely by  60,000 business type 40,000 • In total (not shown) electrical interruptions  20,000 cost US businesses more than $100B  0 annually** Digital Continuous Fabrication Economy Process Mnfr & Essential Services Average cost per business by interruption duration Dollars • Even momentary interruptions can be costly 10,000 • Average of $1477 per business for 1  second interruptions 8,000 • For continuous manufacturing,  6,000 average 1 second interruption cost is  4,000 much higher: $12.6k on average (not  2,000 shown) 0 1 second 3 minutes 1 hour * Digital Economy includes companies that rely heavily on data storage, retrieval and processing (e.g., telecom, financial services, research and development); Continuous Process  Manufacturing includes companies that continuous feed raw materials, often at high temperatures; Fabrication and Essential Services includes other manufacturing as well as  utilities and transportation ** Conservative estimate based on CEIDS calculation of $104B‐$164B in 2001. Loss categories include: production, labor, materials, equipment damage, backup, overhead, restart,  other Source: CEIDS (Cost_of_Power_Disturbances_to_Industrial_and_Digital_Technology_Companies.pdf) 3/28/2012 © 2012 Smarterutility.com | Not to be reproduced without permission Page: 35
  • 36. Operational: Utilities Have Reliability Metrics and  Incentives/Penalties for Missing Them Metrics* Example (Southern CA Edison**) Duration‐ SAIDI • Benchmark: 56 minutes based • System Average Interruption Duration Index   • Increment: +/‐ 1 minute • Average total outage time (in minutes) over a year for  • Incentive: +/‐$2M (up to $18M) each customer served CAIDI • Customer Average Interruption Duration Index  • Average outage time (in minutes) Frequency‐ SAIFI • Benchmark: 1.07/yr based • System Average Interruption Frequency Index  • Average number of interruptions for each customer  • Increment: +/‐0.01 served • Incentive: +/‐$1M (up to $18M) MAIFI • Benchmark: 1.26 • Momentary Average Interruption Frequency Index • Average number of momentary interruptions for each  • Increment: +/‐0.01 customer served • Incentive: +/‐$0.2M (up to $3.6M) • Definition of ‘momentary’ differs by utility (typically  • Threshold: 5 minutes under 5 minutes) These incentives are an alternative  proxy for the value of reliability * Metrics exclude planned outages. Metrics also have a duration threshold (typically 5 minutes), so interruptions shorter than the threshold  are not counted in SAIDI, CAIDI or SAIFI. ** Targets established in 2004 3/28/2012 © 2012 Smarterutility.com | Not to be reproduced without permission Page: 36
  • 37. Contents • Electric utility industry overview • Overview of each value chain step • Factors that motivate electrical utilities • Benefits of Smart Grid for electrical utilities • Appendix 3/28/2012 © 2012 Smarterutility.com | Not to be reproduced without permission Page: 37
  • 38. There are Many Benefits to Smart Grid Solutions… Example Benefits of Smart Grid Solutions • Fewer outages • Shorter duration of outages Reliability • Better power quality • More efficient operations and maintenance • Energy/Grid efficiency Cost • Energy conservation • Reduced peak demand • Reduced energy demand Environment • Ability to integrate renewables • Enabling EVs • Consumer empowerment • Improved customer Customer satisfaction • Lower energy bills … but benefits can differ between regulated and deregulated markets  © 2012 Smarterutility.com | Not to be reproduced without permission Page: 38
  • 39. Let’s Look at 2 Examples – First Demand Response Demand Response (DR) Energy Efficiency (EE) • DR programs are designed to… – Shift loads from peak to off‐ peak times – Reduce overall energy demand • DR programs use energy rates that  are more expensive during times of  higher demand – Time‐of‐use (TOU) billing – Critical peak pricing (CPP) – Real time pricing (RTP) • The action at the customer can be  taken by the customer or by the  utility using direct load control 3/28/2012 © 2012 Smarterutility.com | Not to be reproduced without permission Page: 39
  • 40. Demand Response – Greater Benefits in Regulated  Markets Regulated  Utility market Generation Transmission Distribution Customer • Peak load  • Deferred distribution  • Potentially lower  reduction capacity expansion energy bill • Can target DR at  specific circuits Deregulated  Utility Retail market • Peak load  • Potentially lower  reduction energy bill No distribution benefits because Utility owns  the wires but Retail owns the DR program  and customer interface, so the Utility doesn’t  have full control 3/28/2012 © 2012 Smarterutility.com | Not to be reproduced without permission Page: 40
  • 41. Now Let’s Look at Energy Efficiency Demand Response (DR) Energy Efficiency (EE) • DR programs are designed to… • EE programs are designed to… – Shift loads from peak to off‐ • Reduce overall energy demand peak times • And in doing so, reduce peak  – Reduce overall energy demand load • DR programs use energy rates that  • EE programs incentivize behavior by are more expensive during times of  using rebates for efficient  higher demand appliances or lighting as well as  – Time‐of‐use (TOU) billing loans for energy efficient  – Critical peak pricing (CPP) construction – Real time pricing (RTP) • Programs are funded through  • The action at the customer can be  surcharges on customers (included  taken by the customer or by the  in electricity rates) utility using direct load control 3/28/2012 © 2012 Smarterutility.com | Not to be reproduced without permission Page: 41
  • 42. Energy Efficiency – Greater Benefits in Regulated  Markets Regulated  Utility market (with  decoupling) Generation Transmission Distribution Customer • Deferred  • Customer reduces  generation usage • Utility makes same  profit Deregulated  Utility Retail market Challenging to implement: Retailers compete with rates. If they sell less  energy, they make less money. 3/28/2012 © 2012 Smarterutility.com | Not to be reproduced without permission Page: 42
  • 43. Appendix • Recommended reading • Electricity fundamentals • Utility 102 starter materials • Other examples 3/28/2012 © 2012 Smarterutility.com | Not to be reproduced without permission Page: 43
  • 44. Recommended Reading • Electric Power System Basics for the  • Electric Power Distribution Reliability Nonelectrical Professional – Steven W. Blume • Richard E. Brown – ISBN: 978‐0‐470‐18580‐3 – January 2008, Wiley‐IEEE Press • Distribution System Modeling and  Analysis • Understanding Today's Electricity Business – Authors: Bob Shively & John Ferrare • William H. Kersting – ISBN 0‐9741744‐1‐6 – www.enerdynamics.com • Business Essentials for Utility  • From Edison to Enron: The Business of Power  Engineers and What It Means for the Future of Electricity  • Richard E. Brown – Author:  Richard Munson – ISBN: 978‐0313361869 • Electric Power Industry in Nontechnical Language – Author: Denise Warkentin‐Glenn – ISBN‐10: 1593700679  – ISBN‐13: 978‐1593700676 3/28/2012 © 2012 Smarterutility.com | Not to be reproduced without permission Page: 44
  • 45. Electricity Basics (1/2) • Current flows in one direction Direct current  (DC) • Batteries produce direct current • Current amplitude and direction change over time Alternating  • The electrical grid and wiring in our homes and businesses use  current (AC) AC. Why?... • Energy can be transmitted over long distances with less  line loss than with DC • AC voltage can be stepped up or stepped down via  transformers DC AC 3/28/2012 © 2012 Smarterutility.com | Not to be reproduced without permission Page: 45
  • 46. Electricity Basics (2/2) • Single‐phase electric power refers to the distribution of electric power using a system  Single phase in which all the voltages of the supply vary in unison • Used to supply electricity to residential customers and smaller commercial customers • In North America, there are generally 3 wires that come to your house, but they are  all on the same phase • Three‐phase electric power systems have three alternating currents (of the same  frequency) which reach their peak values at different times Three phase • Delta between peaks is the phase difference • Used to supply electricity to industrial and some commercial customers • Combination of phases has the effects of giving constant power transfer over each  cycle of the current 3/28/2012 © 2012 Smarterutility.com | Not to be reproduced without permission Page: 46
  • 47. Technical losses in the electrical grid BASED ON INDIANA  URC EXAMPLE** Substation  transformers: 0.7% % loss Coal: ~65% Transmission lines:  Gas CCGT: 50% 0.5% Nuclear: 2% Distribution  transformers:  2.1% Primary  network:1.0% Customer  Meter: 0.3% Substation  connection: 0.3% transformers: 0.7%* Total: ~9% (for Nuclear) to ~70% (for Coal) * Assumed equal to distribution substation transformer loss ** T&D losses are from the Indiana URC Source: Indiana URC 2007; DOI USBR; NEI 3/28/2012 © 2012 Smarterutility.com | Not to be reproduced without permission Page: 47
  • 48. Power System Devices (1/4) Definition Generation /  • Generates electricity from a fuel source (potential energy) into electrical  power plant energy • Fuel types include: biomass, coal, natural gas, geothermal, solar, wind • Built to a nameplate capacity rated in MW (MegaWatts) Trans‐ • Transports electricity at very high voltages (usually 66‐765kV) over long  mission line distances • In the US, transmission is primarily alternating current (A/C), direct  current (DC) is used in some areas Substation • The location where electricity is converted from one voltage to another  via large transformers • Step down substations reduce the voltage (used to send electricity from  transmission lines to distribution lines), step up substations increases the  voltage High voltage  • The devices that convert or “transform” the electricity from one voltage  transformers to another • Rated in k/MVA (Volt‐Amperes), which is theoretically the same as watts 3/28/2012 © 2012 Smarterutility.com | Not to be reproduced without permission Page: 48
  • 49. Power System Devices (2/4) Definition Load tap  • Located inside the substations, LTCs are mechanical devices that control  changer and change the voltage being sent down the line, more granularly than  the transformer • Generally, lifetimes of load tap changers are a function of the number of  “taps” or actions taken • Some utilities will use voltage regulators or large capacitor banks to  perform the same function Voltage  • Device that senses voltage on input side and raises or lowers the voltage  regulators on output side to maintain a preset voltage level plus or minus a  bandwidth • Generally in substations, may also be along feeders Circuit  • An automatically operated switch that opens the circuit (ie – stops power  breaker flow) when it detects an overload or short circuit in order to protect the  circuit Lightning  • Located in substations, and through the electric grid, lightning arrestors  arrestor protect the power system from the effects of lightning, which can cause  surges on power lines • Aka – surge arrestor 3/28/2012 © 2012 Smarterutility.com | Not to be reproduced without permission Page: 49
  • 50. Power System Devices (3/4) Definition Sectional‐ • Protection device that opens a circuit, but does not have the ability to  izer interrupt a line with current on it • Requires devices on source side to interrupt current and voltage so it can  open • Replaces fuses with the advantage that it can be used multiple times  without needing to replace pieces (the fused elements) Fuses • Device located in the electric grid, on a single phase, that protects the  grid against excessive current, literally melting (thus, fuse) to open the  circuit and interrupt power flow Recloser • Protection devices that opens a circuit, but can be programmed to close a  pre‐set number of times to allow a line to be re‐energized if the fault is  momentary • Has the ability to interrupt fault current Load break  • Used primary to isolate faults and transfer load between connecting  switches feeders or substations • Can be opened or closed to transfer sections of load from one feeder to  another  3/28/2012 © 2012 Smarterutility.com | Not to be reproduced without permission Page: 50
  • 51. Power System Devices (4/4) Definition Capacitor  • Devices that offset reactive power on a system, creating the potential to  banks reduce losses due to reactive power • Rated in kVAR (kilo Volt Ampere Reactive) Faulted  • Provides visual or audio indication of fault current to identify where a  circuit  fault has occurred indicators • Aka – Fault Current Indicators Low voltage  • Converts higher distribution voltages (primary side) to lower voltages for  transformers use in premises (secondary side), usually 120/240 volts in US • Most ubiquitous grid device after the meter Meter • Measures electricity consumed at the premise • More advanced meters also can measure other elements – voltage,  reactive power, etc…  3/28/2012 © 2012 Smarterutility.com | Not to be reproduced without permission Page: 51
  • 52. Generation: Due to This Variability, A Portfolio of  Generation Types is Needed to Efficiently and Effectively  Meet Demand Generation plant characteristics Typical plant types Load type Peak • Low fixed costs • Combustion turbines • High variable costs • Pumped storage hydro • Quick start capability Cycling • Lower variable costs relative to peak  • Oil and gas steam plants capacity • Lower fixed costs relative to base  capacity • Load following capability (i.e., ability  to move quickly between varying  levels of demand) Base • High fixed costs • Coal • Low variable costs • Nuclear • Reliability • Hydro plants • Combined cycles • Traditionally, utilities have looked at demand as uncontrollable, so they’ve needed various  types of supply to meet the demand. • With renewable energy supplies like solar, utilities face uncontrolled supply, which requires  active loads (e.g. electric vehicles and demand response) to balance. © 2012 Smarterutility.com | Not to be reproduced without permission Page: 52
  • 53. Transmission: Role of RTOs and ISOs • RTOs (Regional Transmission Organizations) • Independent, federally regulated entities established to coordinate regional transmission in  a non‐discriminatory manner and ensure the safety and reliability of the electric system • Play a role in coordinating wholesale trading • Usually operate across state borders • ISOs (Independent System  Operators) play a similar  role to that of RTOs but  each typically operates  within a given state Source: FERC 3/28/2012 © 2012 Smarterutility.com | Not to be reproduced without permission Page: 53
  • 54. Distribution: Network Topology Commercial Feeder  & Industrial  (3 phase) customer 750kv 33kv Substation 33kv  12kv Transformer Transformer R Transformer R Feeder  S Sectionalizer Reclosers (3 phase) Lateral (single phase) Large  Industrial Transformer Feeders  customer All single phase (3 phase) Home Home Home Home Home Typically 5 homes  served by each of  these transformers 3/28/2012 © 2012 Smarterutility.com | Not to be reproduced without permission Page: 54
  • 55. Distribution: Substation Map HV line in  HV line in  EXAMPLE:  (33kV) (33kV) SIMPLE LAYOUT Disconnect  switch Normally  High‐voltage  open circuit breaker Power  transformer… …with voltage  regulating load tap  changer at output Breaker  Bus Bus Normally  open Feeder  breakers Feeders( Feeders( 11kV)  11kV)  3/28/2012 © 2012 Smarterutility.com | Not to be reproduced without permission Page: 55
  • 56. Financial: How Utilities Recover Costs (PG&E Example) Cost of Service Rate Component component Rate-setting structure FERC/CA ▪ FERC/CA ISO ▪ FERC jurisdictional transmission revenue requirements and CA ISO pass through ISO costs costs costs PGC charge ▪ Public Goods ▪ Recovery of costs related to Energy Efficiency and other public good components Charge (e.g., appliance and CFL rebates, customer care programs) DWR contract ▪ DWR Revenue ▪ During the 2000-2001 CA Energy Crisis, the Department of Water Resources costs* Requirement procured long term power for the utilities, which is recovered in rates ▪ Energy Related ▪ Filed twice a year, one forecast and one historical for fuel & purchased power costs Fuel & Recovery ▪ Has a balancing account mechanism to true-up for fluctuations between forecast Purchased Account (ERRA) and actual costs Power ▪ If costs are >5% of forecast, automatically triggers the process for a rate increase • Utility accounting is  complex (!) • Rates are adjusted over  Return, interest, ▪ General Rate ▪ Three year cycle, de-coupled from energy sales time to provide cost  and taxes Case (GRC) ▪ Covers all Operations & Maintenance and other opex recovery – and ensure  ▪ Cost reductions/overruns within 3 year cycle flow to earnings that cost improvements  Other taxes flow back to rate payers Depreciation & ▪ Cost of Capital ▪ Filed annually • Investment cost  Amortization (COC) ▪ Covers the allowed ROE and capital structure overruns are borne by  the utility Operating & ▪ Special purpose ▪ Created to recover costs of special one-time projects (e.g., AMI) • The combination of low  Maintenance balancing ▪ Generally have a fixed cap for expenditures, but under spent reward for risk leads to  costs accounts portions are not recovered risk aversion Source: PG&E GRC filings © 2012 Smarterutility.com | Not to be reproduced without permission Page: 56
  • 57. Financial: Measurements used for Billing Applicable for Residential and Small Large Commercial and  Measurement Description Commercial Industrial • Based on energy consumed Usage • Measured in watt‐hours (Wh): a 40 watt light bulb operating for 2  hours will consume 80 Wh Yes Yes • Usually appears as thousands of watt‐hours (kWh) • Based on the maximum kilowatts needed at any instant over the  Demand charge course of the billing period No Yes • Measured in watts and expressed at kilowatts (kW) • The utility needs to have enough capacity available to meet  demand, so they levy an additional charge Power factor • Power factor is a ratio between the “real power” available to the  No Yes (or VARs) customer (W) and the “apparent power” that the utility provides  (volts*amps or VA) Example PF penalty • In a perfect world, the W = VA • They are not the same in the real world because some devices  (e.g., motors) create a sort of resistance (called reactance) • To overcome this reactance, the utility needs to provide more VA  for each W. The difference is called volts amps reactive (VAr) • To pay for this extra generation capacity, utilities charge based on  the power factor (W/VA) or the VAr. Reactive power Real power Source: Detroit Edison Tariff Structure 3/28/2012 © 2012 Smarterutility.com | Not to be reproduced without permission Page: 57
  • 58. Example Electricity Rates: NC IOU Example (Duke  Energy) Flat rate for distribution For transmission Energy charge Additional distribution fee For fuel purchases Generation charge Additional generation  For environmental  charges compliance, taxes and  homeland security Source: Duke Energy 3/28/2012 © 2012 Smarterutility.com | Not to be reproduced without permission Page: 58
  • 59. Hope our Research was Helpful  If you have any questions… Please email or call me: John Chowdhury Phone: 214‐213‐6226 John.chowdhury@smarterutility.com http://www.smarterutility.com. Upload, embed, and share away! 3/28/2012 © 2012 Smarterutility.com | Not to be reproduced without permission Page: 59
  • 60. Utility of the Future series US Utility Industry and Regulatory Landscape © 2012 Smarterutility.com | Not to be reproduced without permission Page: 60