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HomeMy WebLinkAbout19 AMI Meter Opt-Out WorkshopAgendaItem#19,TRUCKEEDONNERPublicUtilityDistrictWORKSHOPTo:BoardofDirectorsFrom:JoeHorvathDate:June05,2019Subject:ProposedElectricAMIMeterOpt-OutProgram1.WHYTHISMATTERISBEFORETHEBOARDThisworkshopitemprovidestheBoardwithadiscussionofaproposedopt-outprogramthatwouldallowresidentialcustomerstorequestandpayfortheservicetohaveanon-radioequippedelectricmeterinlieuofanAMImeter.2.HISTORYStartingin1996,theDistrictbegananAutomaticMeterReading(AMR)electricmeterreplacementprojecttochangeelectromechanicaltypemeterstoradio-equippedmeters.Districtpersonnelmustdrivebyeveryelectricmetertoobtainmonthlyenergyusageinformation.TheAMRsystemhasreachedtheendofitsusefullife.InanticipationoftheneedtoreplacetheAMRsystem,staffbeganpro-activelystudyingAMRreplacementoptionsbeginningin2014.StaffinvestigatedthelatestAdvancedMeteringInfrastructure(AMI)metersystemsforsuitabilitytoDistrictneeds.Staff’sconclusionwasthatAMIsystemsareamaturetechnology,andasignificantupdatetoolderAMRtechnology.AnAMIsystemwouldprovidetheDistrictwithanumberofimportantfunctionsthatwerenotpreviouslypossibleorhadtobeperlormedmanuallycomparedtotheolderAMRsystem.ThebenefitsofAMItocustomersandtheDistrictareverysignificantandincludedirectandindirectcomponentsthatwillreducecostsandincreaseoperatingefficiencies.InApril2017,theBoardapprovedaPhase1projecttoinstall300ItronmetersusingTantalusSystems(Tantalus)AMImetertechnology.TheTantalussystemoffering,includingtheuseofItronmeters,metandexceededtheDistrict’soverallpedormanceexpectations.OnNovember15,2017,theBoardapprovedaPhase2electricmeterreplacementprojecttofullydeploytheTantalusAMIsystemthroughouttheDistrict.DeploymentofAMImetersbeganinApril2018,andisscheduledtobecompletebytheendof2019.SomecustomershavecomeforwardatrecentBoardmeetingstomakepubliccommentrequestinganopt-outoptiontotheDistrict’sAMIelectricmeterreplacementprogram.Themajorityofthosewhohaveraisedconcernsandarticulatedreasonsforrequestinganopt-outoptioncitedmedicalconcernsrelatedtoREemissions.Manyof thosewhoexpressedconcerns,alsoexpressedsupportforpayingfortheelectricmeteropt-outservice.OnApril3,2019,aworkshopwaspresentedtotheBoardtoreviewtheelectricmeterreplacementproject,includingadiscussionofapossibleopt-outprograminresponsetocustomerconcerns.Underanopt-outoption,staffproposedtheuseofastandardelectronic-stylemeter,butwithoutabuilt-inradiocommunicationsmodule.Anyformofanopt-outprogramwouldrequirestafftomanuallyreadmetersandmanuallyenterthisinformationintotheDistrict’sbillingsystem.Thecosttoperformthisserviceshouldbebornebythosecustomerswhochoosetoparticipateinanopt-outprogram.ConsistentwithpreviousBoardpolicy,Districtprogramsshouldnotcreateacost-shiftbetweencustomerclasses.Staffhadestimatedthatthemonthlycosttoreadmeterswillrangefrom$40to$80.StaffproposedtoconsultwithHDRConsultants(HDR),anindependentthird-partconsultingfirm,tofurtheranalyzethecoststomanuallyreadmeters.HDRhasperformedseveralcostofservicestudiesfortheDistrict’sWaterandElectricutilitiesformanyyears,andarewell-acquaintedwithDistrictoperationsandthecoststoprovideservicestocustomers.Opt-outprogramcostswouldincludethefollowingitems:up-frontcoststodevelopandadministertheprogram;metercosts;stafflabortoreadmeters;vehicleusagecharges;andstafflabortoenterinformationintothebillingsystem.TheBoarddirectedstafftoanalyzeprogramscostsanddeveloptheprograminsufficientdetailtoprovidetheBoardwithaproposedprogramforreviewandpossibleapprovalatafuturemeeting.3.NEWINFORMATIONHDRper[ormedacostofservicestudyfortheproposedopt-outprogram.ThisstudyisincludedasAttachment1.Thegoalofacostofservicestudyistoestablishfairandequitableratesandcharges.Customersaregenerallygroupedinhomogenouscustomergroupswithuniquecustomercharacteristicssothatratesandchargesreflecttheiractualcostsasreasonablypossible.Opt-outcustomersareuniquebecausethecosttomanuallyreadtheirmetersisfarmoreexpensivethancustomerswithAMImeters.Opt-outprogramcostsgenerallyincludethefollowingitems:up-frontcoststodevelopandadministertheprogram;metercostsforanon-radioequippedunit;stafflabortoreadmeters,vehicleusagecharges;andstafflabortomanuallyenterinformationintothebillingsystem.Duetothehighercoststoserveopt-outcustomers,aseparatecustomerclasswascreatedtoprotectnonopt-outcustomersfromanycostshiftimpacts.TheHDRcostofservicestudyassumedthatnomorethan0.5%ofDistrictcustomers(about65)wouldelecttoopt-out,consistentwithopt-outratesatotherpublicutilities.Thesecustomersweresubtractedfromtheresidentialcustomerclassforthecostofserviceanalysis.TheresultsoftheHDRcostofservicestudydemonstratetheneedforamonthlychargeof$50.Thisaccuratelyreflectsthecosttomanuallyreadmetersonamonthlybasisfortheopt-outcustomerclass.However,theDistrictdoeshaveacurrentmiscellaneousfeeforMeter-ElectricandWater-SrecialReadof$30.While staffbelievesthisfeemaybeoutdated,itisrecommendedthattheopt-outprogramstartwiththisexistingfeeamount.But,givenHDR’scalculationof$50,itisalsorecommendedthatthisfeebereviewedafteractualcostsareknown.ThismonthlychargetoreadthemeterwouldbeinadditiontothenormalcustomerchargethatallDistrictcustomersarebilledeachmonth.Inaddition,HDRidentifiedothercoststheDistrictwillincurthatareassociatedwithenrollingcustomersintheopt-outprogram.Setupcostsincludeadministrativetimetoentercustomerinformationintothebillingandmappingsystemsandthemetercostforanon-radioequippedunit.TheDistrictwillalsoincurcostsforacustomerwhoelectstostopparticipatingintheopt-outprogram.ExitcostswouldincludeadministrativetimetomodifycustomerinformationinthebillingandmappingsystemsandthelaborcosttochangeoutthemetertoanAMImeter.Metercostswouldnotbechargeduponexitingtheprogram,becausetheDistrictalreadyplannedforanAMImeterforallcustomers.TheproposedElectricMeterAMIOpt-OutProgramcostsaresummarizedbelow:DescriptionICostSetupandExitFeeAdministrativeCostsJ$38MeterCost_____$36MeterChangeoutLabor-ExitFee$84TotalSetupandExitFee$158-1-MontlyChargetoReadMeter$30TheDistrictiscommittedtoreadingnon-radioequippedmetersonamonthlybasis.Becauseofourseverewinters,andotherseasonaluse,loadscanvarydramaticallymonthtomonthbutespeciallyinwintermonthsandholidayperiods.Readingmetersonanon-monthlybasiscreatesadditionalworkforstafftoestimatebillsandrespondtocustomerconcernsforhighusagewhenactualreadingsarefinallyknown.Electricmetersaretrulyrevenuemetersor‘cashregisters’fortheDistrict.Thereforeitisstronglyrecommendedtocontinuetoreadmetersonamonthlybasis.TheDistrictisextendingaprivilegetoourcustomerstoparticipateintheopt-outprogram.PerexistingDistrictCode,itisthecustomer’sresponsibilitytokeepthemeterlocationaccessibleatalltimesformeterformeterreading,testing,inspection,andmeterconnectsanddisconnects.Itisespeciallycriticalforopt-outcustomerstokeepmetersaccessibleatalltimesformeterreadingpurposes.Staffproposesthatanopt-outcustomerwouldautomaticallyberevertedbacktoanAMImeterifDistrictpersonnelwereunabletomanuallyreadthemetertwiceinany12monthperiodduetosnow/iceaccumulations,lockedgates,fences,dogs,otherobstructionsorimpedimentstoaccessorpersonnelsafety.I_.L.i1._.I__I_.:..i_.__II_.:L.._..L:___...........__._.ii.. 6L.O‘ieqooQuO‘IAoIddJ8BSApOEeA!1oeeewooeqflOMw6odM8Ueq‘p.ioeqAqpeAoJddi.T3eesejae3uu!p]oW]6OJdinQ-idQ-61.O‘iieqoopuW]bOJdno-jdopesodoideqoIAoJddVeqisso-6I.O‘17Jeqwede6u!JeHo!Iqnd3flpUOQ-6I.O‘17ieqwede6UUeH3qn6u!npeqooUO!J8p!SUOQ-6I-O‘LI.Aintq6uo)WJ6OJdino-dopesodoideqSSfl3S!p04doqs]o-6I-O‘98Uflt:eflpeq3S6U!MOIIOeqo6U!p]O33eqPIflOMWJ6OJdin-dQIV’JVJeef\3!JP8Ipesodoideqouo!ldopEeqpeIISU!eqII!MieiewIvJvupupe6iqoeqII!Meexeeq‘ifl330siueeeseqOAUueqjAiedodeqseoAeiueieq.iod!qsJeuMoewoqU!e6uqopopedquowAuU!eo!M1.ieieweqpeioequnIeUUosIed1!-U!awi6oideqxeosisenbeiJewOSfl3eq:sinooo6U!MOIIOeqoeuosseiunpeoueeqoenuuooII!MAeq‘w6oideqU!peoiue3UQieAeq6U!JflpeW!1AUIloJUeU3SJWOSflQUeWIIOJU•wi6o]deqwoipepnoxeAIIeoHoedseisesei.iosUeiUosespUSTUflO336ULIejew-ejed!3!idoIAoJddPJOIPUIUqoOpeeuPIflOMUeJOMsiewoisnoAIUOSJWOSfl3I!1Uep!seJopepw!SIWJ6OJdeq:SS12QJeWOSflQieeweqosooeqUOpesqsooIU0!1!PPUeeqPIflOM‘sieiew)j]OM1UsI-W]OdJOSSIQsqonssedAieiewI!1Uep!seJieqieiewI!6!Pooss‘sW]OdedAI!1Uep!seJPJPUjSOSO3eqjsepnloU!eednieeq:SOQieeocs:ieejpeoe6iqAqUOL,AJ991.$:eed1!X3PUdnie:w6odiv’ivJee1’j3!JToeIpesodoideq.io6U!MoIIoeqsesodod‘MwwnsuUUo!1Jep!SUO3U2Me!AeJJoeqOq6noiqeqiiw’UMOiodneepepuewwooeAUVe3!AJeseqep!AoJdossooinioeqTSU!6‘pepeeU-sio‘AII3!po!JedpeinieepeeeieqII!MseespUese6JqQsiewoisnomoowi6oidjno-doU6uueoL1!Mpe1!3ossssoo6U!NoJspuewwooes‘UO!1!ppuwi6oidino-idopesododeqwoipepnoxeAII3!!3edseqosi(sesei!NSe!)seseiiosiweiUosesspuewwooeioswbodino-idopesodoideqwoipepnoxeAIIo!!oedseqSTUflO336UueeweULflSUWWO38]‘suoseieseqJO::IsesodndiooiweqoidAII!3eUseeqPIflOMs6U!peJpess!wAUVsenAAII11UOW.io1UflO3301AjesseoeueqPIflOM!seseioUPIflOM91S03UO!1JTS!U!WpPU6U!pe]ieeeiew.iedoo$01O9I.$noq6U!SO3siewosnono-do.iopei!nbeieqPIflOMeewpedd!nbeO!pJ-UOUI!oeds‘S]jUODUI6UUe1eWeUJOpesneqoiU!-1I!nqeqsqeewIVMUAJeAse!1!1UnbeU‘peAe3eJ‘pe]eAep6Upes6eJ10eiadioieieweinbesuoirnnus(seiJeirna]OIDU‘DUIM‘jios’)6uueiew;eri 4.FISCALIMPACTTheDistricthasplannedforanelectricmeterreplacementprogramthroughtheFinancialMasterPlan.ThecostoftheprojectisfundedfromtheElectricCapitalReserveFund.Thecosttomanuallyreadmetersshouldbebornebythosecustomerswhochoosetoparticipateinanopt-outprogram.Opt-outprogramcostsshouldbecostneutraltotheDistrictandnon-participatingcustomers,consistentwithpreviousBoardpolicy.ProposedcostsfortheOpt-OutProgram:SetupandExitFee:$158MonthlyChargetoReadMeter:$305.RECOMMENDATIONProvideinputanddirectiontostaff.,,ziiJoeHorvathMichaelD.HolleyElectricUtilityDirectorGeneralManager Attachement1TechnicalMemorandumTo:JoeHorvath,TruckeeDonnerPUDFrom:KevinLorentzen,HDRDate:May8,2019Subject:ElectricMeterOpt-OutProgramCosts1.0PurposeAdvancedMeteringInfrastructure(AMI)isasystemthatconnectsindividualcustomermeterstotheutility’senterprisesoftwaresothattheutilitycanmonitorelectricalusagerealtime,bettermanageelectricalresources,andmoreefficientlydetectandfindelectricaloutages.AMIalsoprovidestheutilitytheabilitytoremotelyreadcustomermetersforbillingpurposes,withouthavingtodrivebyinavehicle,whichreducesmeterreadingcostsandprovidesenvironmentalbenefits.AMImetersemitradiofrequency(RE)tocreateameshnetworkthatenablesdatatobetransmittedtotheutility.TruckeeDonnerPublicUtilityDistrict(District)hasbeenintheprocessofinstallingAMImeterssinceApril,2018withcompletionscheduledfortheendof2019.RecentlysomecustomershaveexpressedconcerntotheDistrictwithpossiblehealthimpactsoftheradiofrequency(RE)thatAMImeterstransmitandreceive.ThisdocumentdoesnotaddressifanAMImeterdoesordoesnothavehealthimpactsorotherpurporteddeleteriouscustomerimpacts.ThismemorandumcompilescostsrequiredtoservethenewAMIOpt-OutcustomerssincetheirelectricusagemustbeobtainedandrecordedmanuallybyDistrictpersonnel.TheseidentifiedcostsformeterreadingarethenusedinacostofserviceframeworkestablishingequitableratesthatcoverthecostsfortheOpt-OutclasstoensurethatotherclassesofservicedonotsubsidizetheOpt-Outclass.2.0EstimatedCostsThekeyadvantageforimplementingAMIistoefficientlyconducttasksthathadpreviouslybeenmoretimeconsumingandorlaborintensive.Manualmeterreadingisinefficient,andpronetoreadingerrors.ThisisparticularlytruefortheDistrict’sserviceareaconsideringthelargeaccumulationsofsnowfallwhichcanmakereadingmeterschallengingorevendangerous.Inadditiontothelaborhoursformanualmeterreading,theDistrictincursvehicleoperating&maintenancecostsandincreasedriskfromvehicleaccidents.Addingthisclassofserviceisexpectedtoresultinadditionalcustomerserviceandbillingcosts.Meterreadingcostswereestimatedwithassumptionsinvolvingmultiplevariablesincludingserviceareas,factoringinreadingtime,traveltime,additionaltimeforinclementweather,andtransportationcosts.EstablishedmeterreadingcostswerefirstdevelopedonamonthlybasisTruckeeDonnerPublicUtilityDistrictAMIOpt-OutCostAnalysis andthenmulfipliedby12consistentwiththeDistrict’spracticeofmonthlyreads.Theestimatedmeterreadingcostsassumedanaverageof39minutesforroundtriptraveltoreadonemeterwithanadditional4minutesaddedforeachmeterreadinthesameneighborhood.Thecalculatedtimeisthenmultipliedbyreadingcostsof$1II.38perhourwhichincludeslabor,benefits,andoverheadcosts.Animportantpartofthemeterreadingcostsestimateisthatthereisarecognitionofcostsavingsifmorethanonemeterisreadinthesameneighborhood.Duetothesameneighborhoodfactortheoverallcostsperreadfallsasmorecustomermetersarereadperneighborhood.AssuminganevendistributionofOpt-Outcustomerstherangeofpercustomercostsrangefrom$65/monthforI0customersto$40/monthforI00customers.TheAMIsystemislargelyautomatedandmanualreadsrequiredadditionaltimetoprocessbillsduetotheneedformanualprocessing.AsaresultcustomerservicepersonnelspendingadditionaltimetoprocessandproduceOpt-Outmonthlybills.Thefullyburdenedcostperhourofthebillingsupervisoris$90.64perhour.Estimating5minutesperbill,Opt-Outcustomersincuradditionalcostsofapproximately$7.60perbillpercustomer.AgainthesecostsarespecificallyattributabletotheOpt-Outcustomersandshouldbeassignedtothemalone.3.0CostofServiceAnalysisThereasoncostofservicestudiesareconductedistoestablishfairandequitableratesandcharges.Itwouldbeimpossibletoestablishratesandchargesforeachindividualcustomersocustomersaregenerallygroupedinhomogenouscustomergroupswithuniquecustomercharacteristicssothattoeachcustomertheratesandchargesreflectactualcostsasaccuratelyaspossible.Asdemonstratedintheprevioussectionofthismemorandum,Opt-OutcustomersareuniquesincemanualmeterreadingcostsarefarmoretimeconsumingandcostlythanothercustomerswithAMImeters.Customerselectingtoopt-outgenerateahighercostofservice.AseparatecustomerclasswascreatedtoprotectnonOpt-Outcustomersfromanycostshiftimpacts.AmechanismwithinthecostofserviceframeworktodealwithcoststhatbenefitonlyoneparticularcustomeristheprocessofDirectAssignmentofcosts.Opt-Outcustomerwereassumedtobeanaverageresidentialcustomersduetothelackofinformationrelatedtospecificcustomercharacteristicsonwhichacostsofserviceisbased.Itisestimatedthatnomorethan0.5%ofDistrictcustomers(65)wouldelecttoopt-out.Thesecustomersweresubtractedfromtheresidentialcustomerclassforthecostofserviceanalysis.Theresultsofthecostofservicestudyshowaneedforanincreaseofmonthlychargesofabout$50isnecessarytorecovertheadditionalcoststoservicetheOpt-Outcustomerclass.TheadditionalcoststoserveOpt-Outcustomersvariesbycustomer,notelectricalusage,whichiswhytheadditionalcoststoserviceOpt-OutcustomersimpactsthecustomerchargeandnottheEnergycharge.TableIshowsthedifferencebetweenthepermanentResidentialrateandtheOpt-Outcustomerclassandtheimpacttothecustomercharge.Itisadvisabletolistthedifferenceasaseparateopt-outchargelineitemforcustomerbillingpurposes.TruckeeDonnerPublicUtilityDistrict-AMIOpt-OutMeterAnalysis2 TableIDifferencePermanentOpt-Out.BetweenOpt-OutResidentsRatePermanentRateandnon-Opt-OutCustomerCharge$16.18$66.34$50.16EnergyCharge$/kWh$0132$0132$00004.0InWalOpt-OutSetupandExitCostsAsmentionedpreviously,thereareadditionalcoststheDistrictwillincurthatareassociatedwithsettingupcustomerswithNon-AMImetersaswellascustomersexitingtheOpt-Outcustomerclass.Itisadvisablethatthesecostsberecoveredbythecustomerresponsible.Thisissimilartothetypeofchargeasaregularinstallationchargewherethechargeisintendedtorecoverthelaborandmaterialstoinstalltheaveragemeter.Toestablishthesefeesaveragecostsareestimatedsinceitisunrealistictochargethecustomertheactualcost.TheDistrictanticipatestheneedforinstallationofastandarddigitalmeterwithoutaradiomoduleforOpt-Outcustomers.Table2providestheestimatedcoststoinstallastandarddigitalmeter.Table2StandardOpt-OutInstallationOpt-OutExitChargeAccountSetup/ExitCosts$37.77$37.77MeterInstallationCosts83.5483.54MeterCosts35.720.00TotalCosts$157.03$122.315.0ConclusionsThefundamentalsofratemakingprescribethatthecostofacommodityshouldequalthecostofitsproduction.Thecostsofserviceanalysisistheprocessofsettingratesamongcustomerclassesatalevelthatreflectstheequitablecoststoprovidethatservice.ThereisasignificantimpacttotheoverallcostforcustomerswhochoosetoOpt-OutoftheAMImeterprogram.ThesecostsarecausedbythecustomerswhoOpt-Outandtheadditionalcostsshouldbebornebythosecustomersthroughincreasedchargesorfeesasprovidedinthismemo.Animportantconsiderationisthattheanalysisisbasedonbestestimatesavailableatthetimeofthewritingofthistechnicalmemorandum.TheDistrictshouldrevisitthecostsandtheresultingratesinthefuturesothattheycanbeadjustedtoreflectactualcosts.TruckeeDonnerPublicUtilityDistrict-AMIOpt-OutMeterAnalysis3