Professional Documents
Culture Documents
TR-111683
EPRI Manager
Harry W. Ng
EPRI 3412 Hillview Avenue, Palo Alto, California 94304 PO Box 10412, Palo Alto, California 94303 USA
800.313.3774 650.855.2121 askepri@epri.com www.epri.com
DISCLAIMER OF WARRANTIES AND LIMITATION OF LIABILITIES
THIS REPORT WAS PREPARED BY THE ORGANIZATION(S) NAMED BELOW AS AN ACCOUNT OF WORK
SPONSORED OR COSPONSORED BY THE ELECTRIC POWER RESEARCH INSTITUTE, INC. (EPRI).
NEITHER EPRI, ANY MEMBER OF EPRI, ANY COSPONSOR, THE ORGANIZATION(S) NAMED BELOW, NOR
ANY PERSON ACTING ON BEHALF OF ANY OF THEM:
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RESPECT TO THE USE OF ANY INFORMATION, APPARATUS, METHOD, PROCESS, OR SIMILAR ITEM
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OF THE POSSIBILITY OF SUCH DAMAGES) RESULTING FROM YOUR SELECTION OR USE OF THIS
REPORT OR ANY INFORMATION, APPARATUS, METHOD, PROCESS, OR SIMILAR ITEM DISCLOSED IN
THIS REPORT.
ORDERING INFORMATION
Requests for copies of this report should be directed to the EPRI Distribution Center, 207 Coggins Drive, P.O. Box
23205, Pleasant Hill, CA 94523, (925) 934-4212.
Electric Power Research Institute and EPRI are registered service marks of the Electric Power Research Institute, Inc.
EPRI. POWERING PROGRESS is a service mark of the Electric Power Research Institute, Inc.
Principal Investigators:
E. Wetmore
H. Vela
Assisted by:
J. Burke, ABB as Project Integrator
J. Kelley, Frontline Technologies
D. Divan, Soft Switch Technologies
W. Marek, Center for Management of Professional Work
J. Hughes, Paragon Consulting
C. Feinstein, Santa Clara University
EPRI Manager:
H. Ng
Assisted by:
L. Carmichael, EPRI
S. Chapel, EPRI
V. Longo, EPRI
S. Okonek, EPRI
The report is a corporate document that should be cited in the literature in the
following manner:
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REPORT SUMMARY
Deregulation, rapid technological advance, and vastly increased customer choice will
challenge the traditional design of electric distribution systems. The EPRI Distribution
Systems Redesign Project has developed two conceptual designs to help distribution
companies (DISCos) understand the possible needs of the distribution system of the
future (5 to 15 years).
Background
As deregulation looms, the environment in which the electric utility industry does
business is undergoing rapid change. This change is the biggest event to occur since the
industry was created. It is even possible that vertically integrated utilities that produce
and distribute electricity will be replaced with separate companies specializing in the
generation, transmission, and distribution of electricity. What is certain is that meeting
the needs of the new environment will provide an opportunity, or a demand, to
redesign the distribution system. Before significant investments are made, however, the
industry must decide how to position themselves for the future. This study was
undertaken to identify business visions and conceptual designs for possible future
distribution companies.
Objective
To develop conceptual designs that will allow DISCos to plan for the future.
Approach
The project team first identified plausible types of future DISCos. In parallel, the team
held conferences with leaders from industry to gather visions of various technology
areas that will be important in the future. With guidance from the advisory
committeeconsisting of many members of the Distribution Business Councilthe
team identified six pure types of DISCos (business visions) and defined the services
they would provide. The team then selected two business visions that incorporated the
broadest array of technologies to refine into conceptual designs.
Results
A total of six different DISCos were identified as possible pure business visions. The
actual distribution companies of the future are not likely to mirror any one of the
business visions exactly, but they will likely be a blend of the visions. Two of the six
visions were then selected for development into a conceptual design: Service DISCo,
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and Multiple Utilities Manager (MUM). While these visions are not necessarily the
most likely future scenarios, they are reasonable visions that most comprehensively
cover a variety of technologies that will be needed by the DISCo of the future.
Service DISCo has the primary goal of increasing revenue by offering a variety of
products and services to customer segments willing to pay premiums for added service
levels. MUM has the primary goal of becoming the low cost supplier for a range of
products such as electricity, gas, water, and basic telecommunication services, reducing
costs through exceptionally skillful asset management and high utilization of
infrastructure.
The report provides conceptual designs for the future distribution system, including
the risks, challenges, and the benefits and technologies available in the next 5 to 15
years that meet these performance requirements. The designs also outline a migration
path to the new DISCo. Two important general conclusions emerged from the design
work undertaken in this project: any future distribution system will be extremely
complex and communication will play a major role in the operation of the new
distribution system.
EPRI Perspective
The electric distribution system and company of the future will look very different than
the utility company of today. Competition will drive change, just as it has in the
deregulated telecommunication industry. This report will help DISCos plan for the
future and take the actions required now to position themselves in the new
environment. The reader may not agree with all views of the future reflected in this
reportin fact, the participants in the project had many spirited debatesbut the study
was intended to be provocative and, most of all, thought provoking. A natural next step
might be to create a conceptual design for a DISCo based on a specific utilitys vision of
the future and its present distribution system.
TR-111683
Interest Categories
Reliability
Advanced planning and operations
Reliability assessment
High quality delivery service
Keywords
Distribution planning
Distribution
Future distribution
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EXECUTIVE SUMMARY
Introduction
Todays environment in the utility industry has created opportunities for many of its
associated stakeholders. The pressures of customer choice, a pro-market regulatory
environment, and technological advances have already led to significant change in the
electric utility industry. Although the distribution sector is still primarily part of the
traditional regulatory mindset, the aforementioned drivers will lead to opportunity in
the distribution sector as well. These newly formed distribution companies (DISCos)
can respond to the new environment with a number of business strategies, or visions,
all of which will have implications for the industrys stakeholders.
To reap the benefits of the changes in tomorrows electric distribution sector, however,
two of these stakeholdersutilities and suppliers of utility R&D servicesneed to
make certain strategic decisions today. Utilities need to start thinking about the
business strategy that is the most appropriate for their company in the future. Once the
utility has determined its DISCo strategy, that utility will have to decide what
distribution system capabilities will be required and what technologies and assets will
be needed to enable those capabilities. As a result of the changing needs of these
utilities, suppliers of utility R&D, like EPRI, need to make decisions about their R&D
portfolios to ensure that the future needs of utilities are met.
The scope of the electric distribution system for this project was defined by the flow of
energy products. The front end of the system starts at the distribution substation where
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the voltage is stepped down from the transmission level voltage. For the back end,
assets beyond the meter are considered if they have upstream impact on distribution
assets.
Business Visions
To better relate technology to a business context, it was determined that the conceptual
designs for the redesigned distribution system would be driven by business visions,
instead of being driven solely by technology concepts. It is important to understand
that the business visions were developed first, and that these business visions then
drove the development of the conceptual designs. For example, the performance
requirements that a DISCo must meet in order to pursue a particular business vision
dictate what technologies are integrated into the conceptual designs.
A variety of business visions were evaluated, and based upon Advisor input, it was
decided to develop conceptual designs for two specific visions: the Service DISCo and
the Multiple Utilities Manager. While these visions are not necessarily the most likely
future scenarios, they are reasonable visions that most comprehensively cover a variety
of technologies that will be needed by the DISCo of the future. For example, a
Commodity WiresCo visiona DISCo that only offers basic electric distribution
servicesis another reasonable vision that we initially evaluated, but it provided
minimal opportunity to cover a broad technology set and therefore is not included in
this report.
A summary of the two visions that drive the development of the conceptual designs are
described below:
Service DISCo: The primary goal for the Service DISCo is to increase revenue by
offering a variety of products and services to customer segments willing to pay
premiums for added service levels. Importantly, the Service DISCo is willing to
invest to support its vision (i.e., a low cost focus is not necessarily a requirement in
this vision).
To facilitate a high level of service beyond the meter, the Service DISCos
relationship with the retail segment of the utility business is important in this vision.
Although the link to the RetailCo needs to be strong, the RetailCo does not have to
be owned by the Service DISCo, as alliances can be formed.
Multiple Utilities Manager (MUM): The primary goal of the MUM is to become the
low cost player for convergence products. The MUM will reduce costs through
exceptionally skillful asset management and high utilization of its infrastructure.
The MUM chooses a few basic products (e.g., electricity, gas, water, and basic
telecommunication services) and seeks to improve margins through excellence in
operations and management of the distribution system.
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The service levels in this business vision are adequate to provide a basic level of
satisfaction to customers. Unlike the Service DISCo, the MUM does not seek to
expand its offering of products and services through a high level of differentiation.
Support of higher service levels requires the use of assets that are not necessarily
core assets. Core assets, in this case, are those that the MUM is most capable of
leveraging. Because implementation of these non-core assets is a distraction from
management of core operations, the MUM chooses not to increase service levels and
chooses instead to keep cost levels at a minimum.
One more point needs to be noted, and understood by the reader. Each business vision
was based upon a number of assumptions. In reality, these visions will not evolve
exactly as envisioned: each state will have its own, unique set of regulatory changes;
certain technologies will advance more rapidly than others; and unforeseen
circumstances will arise. An absolute pure play of these visions is unlikely.
However, these business visions are plausible representations of the future, and they
enable the development of conceptual designs that allow stakeholders to anticipate
and proactively plan forthe future. Strategies need to continually evolve, and
companies cannot wait for all the questions to be answered before they develop their
strategy.
Conceptual Designs
As stated earlier, the primary objective of the Distribution Systems Redesign Project is
to develop conceptual designs for the selected business visionsService DISCo and
Multiple Utilities Managerthat will allow stakeholders to plan for the future by
investing in their current distribution assets and work processes. This section
comprises the bulk of this report, translating the business visions into conceptual
designs for the DISCo of the future.
In the conceptual designs, the features and benefits of distribution technologies are
thought of in terms of the specific distribution business visions. The performance
requirements that a DISCo must meet in order to pursue a particular vision dictate the
technologies (and resulting benefits) that are integrated into the conceptual design. The
following areas are discussed in this section:
System Assets
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System Costs
Migration Path
Customers
Regulators
Appendix
Multiple Utilities Manager of Today: To support the development of the MUM business
vision, several utilitiesdomestic and internationalthat are currently operating some
form of a multiple utility system were interviewed. These interviews provide some
insights into the realities of today.
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The Distribution Cost Structure Analysis: The analysis preceded the redesign project, but
due to the importance of its findings, a summary of this analysis is included. This cost
structure analysis highlights where utilities are currently spending their distribution
dollars, and in turn, sets the stage for the distribution redesign project from a cost
perspective by identifying where cost-based improvement opportunities exist.
Next Steps
This report completes the first phase of the Distribution Systems Redesign Project. This
phase was extremely challenging and thought provoking, with a wide variety of
opinions contributing to the development of this report. Through Tailored
Collaboration, Phase II could move past the conceptual design of a distribution
system, into a technical design.
In Phase II, one conceptual design would be tailored to a specific utilitys future
distribution business. This would entail the following primary steps:
Refining the utilitys distribution vision and strategy based upon the agreed upon
vision (Service DISCo or Multiple Utilities Manager).
Outlining the specific migration stagebased upon the availability and cost of
technology during the entire period under considerationand determining the
necessary capital investment and benefits for the specific migration stages.
Developing a detailed technical plan for the initial migration stages and outlining
the implementation plan.
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CONTENTS
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A APPENDIX..........................................................................................................................A-1
TECHNICAL SPECIALIST COMMENTS ............................................................................ A-2
DISTRIBUTED RESOURCESTECHNICAL SPECIALIST COMMENTS ...................... A-2
Introduction ................................................................................................................. A-2
New Technology Description....................................................................................... A-3
Embedded and Discarded Technologies .................................................................... A-3
Work Processes .......................................................................................................... A-4
System Cost Analysis.................................................................................................. A-5
Risks and Challenges.................................................................................................. A-6
Key Benefits ................................................................................................................ A-7
Migration Path ............................................................................................................. A-7
POWER ELECTRONICSTECHNICAL SPECIALIST COMMENTS ................................. A-9
Introduction ..................................................................................................................... A-9
Multiple Utilities Manager ............................................................................................ A-9
New Technology Description..................................................................................... A-10
TWO-WAY COMMUNICATIONSTECHNICAL SPECIALIST COMMENTS ................... A-37
Two-Way Communication ArchitectureOverview ....................................................... A-37
Products and Services Discussion ................................................................................ A-50
Overview ................................................................................................................... A-50
CONSTRUCTIONTECHNICAL SPECIALIST COMMENTS .......................................... A-59
New Technology Description......................................................................................... A-59
STAKEHOLDER INTERVIEWS ........................................................................................ A-66
MULTIPLE UTILITIES MANAGER OF TODAY................................................................. A-75
Breadth of Utility Operations ......................................................................................... A-75
Benefits ......................................................................................................................... A-76
Complications................................................................................................................ A-78
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LIST OF FIGURES
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Figure 5-1 Percentage of Companies using Indices (48 Companies Responded)................. 5-3
Figure 5-2 Duration of a Momentary Outage ......................................................................... 5-4
Figure 5-3 Reported Cause of Outages................................................................................. 5-5
Figure 5-4 Outage Caused .................................................................................................... 5-6
Figure 5-5 Map of Distribution Lines Highlighted to Identify Location of Voltage Sags.......... 5-6
Figure 5-6 Sags to Industrial Customers................................................................................ 5-7
Figure 5-7 System Losses ................................................................................................... 5-10
Figure 5-8 Distribution System Losses Might Be Reduced with Addition of DR................... 5-11
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LIST OF TABLES
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Integrator's Comments
The following is an analysis of materials created for EPRI reflecting possible changes to
the environment we call the Distribution System. It is based on the assumptions that
there are two mentalities: the Commodity World, where low cost positioning is
prevalentand the Market World, where service differentiation is prevalent. The
Service DISCo is more linked to the Market World and leverages services to maintain a
strong contact with the customer. The Multiple Utilities Manager, on the other hand,
has ties to both worlds.
Utilities must become the Low Cost Provider of Choice to survive and they must
do this by creating cost effective operations, strong customer orientation, and
flexibility to the changing environment
Specialist Comments1
Distributed Resources
1
Specialist comments are greatly edited in some cases. Complete comments are included in the
Appendix.
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Power Electronics
It is anticipated that the issues of quality power delivery to the customer are not truly
part of the MUM's area of concern, unless the quality falls outside the bounds of what is
specified in the contract. If the customer desires higher power quality than the
minimum specified, he will need to invest in (possibly with the utility's or a PQ
consultant's guidance) power quality devices, which will give him the level of quality
he needs. As such, the MUM needs to have familiarity, but does not need to be a
provider in this area. (It is anticipated that in actual life, for select customers, the MUM
may need to do more, and in effect move closer to a Service DISCo in some aspects of
their business).
Communications
From a communications perspective, the electric distribution system of the future seeks
to develop communication and application inter-operability with dozens of devices
connected to a variety of communication media. It should be noted that the
fundamental technology components listed below are representations of a class of
technologies. There could, for instance, be literally dozens of manufactures each with a
number of product lines for each of these categories. The manufacturer can offer
different levels of functionality at appropriate price points to meet the consumer's task
and financial resources.
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Construction
Construction technologies and methods will be available and will be a cost effective
way for the DISCo owner to maintain and construct his outside plant at the best
possible price. In 15 to 20 years a radical departure from the construction methods of
today, such as pole line construction and excavation for underground, is unlikely. The
processes mentioned are advances in these specific areas that will be more refined.
Further, these technologies and methods will benefit the MUMs operation because
they are low-cost, effective methods. The difference between the MUMs operation and
the Service DISCos operation is that the MUM will probably use more contracted
maintenance help rather than their own employees. Contracted labor is used because
the firm is only paying for the services that are needed and the contractors they call are
geared for on-call maintenance and have the skilled people to respond at a moments
notice. The contractors hourly rates reflect these types of services that they provide and
the MUM operator will know how to program these rates in their yearly operating
budgets. Now you have a situation where the MUM does not have to have that large
work force to maintain their facilities and outside plant and only pays for the services
that are needed. To the low-cost MUM this is a win-win situation. Most DISCos have
long-term labor agreements that restrict this type of operation.
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BUSINESS VISION DISCUSSION
Strategic Thrusts
The main goal in the Service DISCo is revenue growth through the offering of new
products and services to customer segments willing to pay premiums for added service
levels. This vision is premised on the assumption that margins on commodity
electricity will be low, and consequently, value-added services and additional products
will be required to increase profitability. It is also important to note that the Service
DISCo is willing to invest to support its vision (i.e., a low cost position is not necessarily
a requirement in this vision).
A key thrust in Service DISCos vision is its relationship with the retail segment of the
utility business. To fully understand the requirements of its customers, a strong retail
segment is required by the DISCo. Moreover, the DISCo needs a strong link with the
2
RetailCo to further capture customer information and to facilitate a high level of
service beyond the meter. Although the link to the RetailCo needs to be strong, the
RetailCo does not have to be owned by the Service DISCo; looser alliances can be
formed. Another key thrust for the Service DISCo is the requirement for partnerships
to support value-added service to customers. These partners could be providers of
alternative products, financial partners (services to customers), or technology suppliers.
The key drivers for the scope of Service DISCos vision are requirements for close
relationships with the customer and control of the customer interface. Service DISCos
will be involved in ownership of the meter. If the regulators do not allow direct
ownership, the Service DISCo will still look to partner with meter technology
providers. The regulatory model that is most similar to the one in this vision is the UK
2
RetailCo (a.k.a. Energy Service Provider): A deregulated business providing energy services and a variety of
other value-added customer services that may be moved economically through marketing channels. These
companies will create value by aggregating large numbers of customers, utilizing economies of scale, applying
financial and risk management capabilities, and developing innovative products and services. Their relationship
with the DISCo will also be critical.
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Business Vision Discussion
REC model, where regulatory returns are combined with unregulated returns in the
retail environment beyond the meter.
The value chain elements that will receive the most emphasis in this business vision are
the sales, marketing, and customer service functions. The sales and marketing
functions are critical in supporting the profitability model for the businessaccess to
new customer segments through growth. The customer service function is important to
build customer loyalty that will command premium prices and to collect valuable
market information that will assist in differentiating products and services.
Products / Services
The Service DISCo will offer a differentiated, but targeted portfolio to those customer
segments that are willing to pay for value-added products and services. The Service
DISCo will seek to enhance the value of energy offerings through the use of
downstream assets. In addition, the Service DISCo will become a conduit of
information for deploying other technologies such as remote monitoring and two-way
customer communication.
Three types of products and services will be offered by the Service DISCo. The first
type of product/service can be described as value-added electricity. The value added
to the electricity could be through use of equipment (e.g., power quality) or through
use of information to facilitate automated services. The second type of product/service
is pricing flexibility. The aforementioned information could also be used to drive
advanced billing, financial options, and price indexing. The third type of
product/service is driven by field operation. Example products in this category are
home security products and appliance services. It is important to note that the products
and services in this third category may have less impact on core distribution
technologies than other types of products, and therefore, are not extensively covered in
our work.
Assets in the Service DISCo are configured around the customer. In other words,
technologies are included in the system specifically to support a particular customer
need. Todays systems are generally reactive, whereas the Service DISCo is proactive in
nature. In order to make this conversion, a significant amount of investment will be
required.
Several hard assets / technologies embedded within the Service DISCo include:
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Business Vision Discussion
Advanced underground cable technologies are used in the Service DISCo. Because
of the close relationship with customers, brand image is critical to the Service
DISCo. Increased use of underground assets enhances the companys image in this
vision.
Performance Requirements
The Service DISCo needs to maintain strong performance. Reliability needs to be high
to command high margins on services and to maintain brand loyalty. For the same
reasons, customer service performance also needs to be high. To maintain public
image, environmental and safety standards are high for the Service DISCo. Power
quality requirements are also high, especially among large customers in C&I segments.
Strategic Thrusts
The goal of the Multiple Utilities Manager (MUM) is to become the low cost player for
convergence products. The main thrust in the MUM is cost management through
exceptionally skillful asset management and high utilization. The MUM chooses a few
basic products (e.g., electricity, gas, water, and basic telecommunication services) and
seeks to improve margins through excellence in operations and management of the
distribution system.
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Business Vision Discussion
The service levels in this business vision are adequate to provide a basic level of
satisfaction to customers. Unlike the Service DISCo, the MUM does not seek to expand
its offering of products and services through a high level of differentiation. Support of
higher service levels requires the use of assets that are not necessarily core assets.
Core assets, in this case, are those that the MUM is most capable of leveraging. Because
implementation of these non-core assets is a distraction from management of core
operations, the MUM chooses not to increase service levels and chooses instead to keep
cost levels down.
Although service levels are relatively low when compared to the Service DISCo, the
MUM needs to maintain fairly high power quality and reliability. Requirements for
high power quality and reliability are not driven by customer needs, as in the Service
DISCo. Instead, the driver is in low cost operations which is facilitated when the
system is running smoothly. Because of the desire to keep the system running well,
strength in field operations on the core distribution assets is also required.
The MUM is a transporter of energy and other products that utilize synergistic assets.
The MUM is not a retailer, as products are sold through other organizations. The link
to the customer interface does not need to be strong. The MUM seeks excellence in
power delivery asset management and in system operations. The MUM aspires to be
strong in power marketing, but more from the purchasing side (low-cost interests)
rather than the end customer interface.
Because of the upstream emphasis, in the MUM does not necessarily need to own the
meter. The customer may not even know the level of involvement of the MUM
primary attention in this vision from the customer standpoint is still on the retail entity.
Returns to the MUM in this vision are regulateda high level of similarity to todays
environment.
Products / Services
The MUM offers a basic portfolio of products with limited service levels. The products
to be considered here are electricity, gas, water, and basic telecommunications services.
The service elements of the MUM offering are in bundling of products to retailers. The
MUM may offer a sophisticated meter to measure usage of all products, but it is not the
core service. The MUM may have some back office assets to support basic services to
the retailer, although the MUM may opt to outsource the back office in favor of assets
that leverage more vital areas.
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Business Vision Discussion
Unlike the Service DISCo, the MUM does not leverage technology in a broad set of
areas. Instead, the MUM chooses to target a few key areas with technology investment.
The degree to which these investments are stressed depends on the specific ownership
structure of the MUM.
The utility will use distribution automation as a low cost driver. Of particular
interest are the distribution automation systems that can be used across product
types.
Performance Requirements
Performance requirements for the MUM are not as strong as that of the Service DISCo.
Requirements for reliability and power quality are moderate. They are needed to
support low cost internal operations, but they are not required specifically for
customers. Customer service is moderate because of the weak link to end customers.
Environmental standards are at a threshold level. In other words, legal requirements
are met, but public perception is not a driver of this vision. The one performance
standard that is high is safety, driven by the need for excellence in asset management
and operations.
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Business Vision Discussion
Integrators Commentary:
"I got on an airplane today where my ticket could be cancelled at no penalty to the
airline. I had not eaten lunch and assumed it would be a great treat to receive a box
lunch since I assumed a bag of peanuts would be my main course. I sat in the back of
the airplane and contemplated my triumph. I had paid only $203 where just 5 years
ago I had paid $900 for the same trip. I sat back and realized that in a de-regulated
industry, barriers to entry go down, prices go down, and levels of service go down. I
told myself I could always fly first class if I was willing to pay the price. With this
thought I began to write this report and remembered how this same airline had treated
me only 5 years earlier."
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2
DESCRIPTION OF ASSETS
The traditional distribution system (and there are many varieties) is characterized on
the premise that it is RADIAL. Because it is radial, virtually all intelligence to control
voltage level (drop), overcurrent protection, ampacities of lines and cables, and
reliability are based on the relative distance of the load from the substation. This
philosophy has resulted in simple, low cost methodologies to achieve certain goals,
some of which are mandated by electrical standards which have evolved for 50 years.
The variety of equipment deployed in the current distribution system is shown in
Figure 2-1:
Figure 2-1
Traditional Distribution System
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Description of Assets
Typical load characteristics seen on a distribution system are illustrated in Figure 2-2.
As can be seen, maximum loadings are generally much less than component capability
in order to allow backfeeds for emergency condition. Transformers, likewise, are
usually very conservatively rated. Unbalances due to single phase taps, short circuit
levels, voltage drop, etc. are all controlled based on system configuration and on the
premise that distance from the substation plays an important role in what equipment is
utilized and what protective levels are set. Electrons in this system flow from the
substation to the customer.
Figure 2-2
Typical Load Character
The system of the future is nothing like what we are used to. The biggest single change
in this system is that the system is NO LONGER RADIAL and things become far more
complicated (a distribution engineers dream or nightmare depending on your
perspective). Electron flow will be in all directions. This system will be characterized
by the need for communications and smart devices. Voltage can no longer be assumed
to be lower the farther away you get from the substation. Likewise, short circuit levels
cannot be assumed to decrease as you electrically travel out from the substational.
Cable ampacities may actually have to get larger in remote areas to accommodate
distribution storage and generation (DSGs), and electric vehicles (EVs). Some of the
changes in assets that will likely occur are as follows:
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Description of Assets
Monitoring Substations will have to monitor virtually all power quality parameters
in order to ensure compliance with performance based rates. Customers will have PQ
monitoring built into their meters as well. Transformer will be loaded more heavily
and this will necessitate monitoring to insure no unusual loss of life. Other equipment
deemed critical will also be considered for monitoring.
Reclosers Reclosers must become bi-directional since electrons will flow in both
directions and settings must accommodate different settings to reflect this. In some
cases, reclosers will be adapted to act as sectionlizers (counting devices) to maximize
reliability capability. Communications will be necessary to allow flexibility for ever
changing configurations.
Capacitors All capacitors will be switched and have communications since the
standard parameters of control will be useless.
Regulation - Regulation at the substation will no longer use LTC since the technique
becomes invalid in this new environment. Monitoring of system parameters (volts and
amps) will become crucial and communications between regulating devices will
become necessary since the system changes due to DSGs and other devices.
Meters - Meters will become smart and programmable. Some will have the capability
to calculate reliability indices, power quality parameters, time-of-use, flicker, rates, etc.
Some will monitor other utilities and home security functions.
Electric Vehicles - Electric vehicles will have a major impact in how transformer,
cables, and protective devices are specified. All traditional approaches will be out the
window.
Interfaces The interfaces to DSGs, custom power devices, EVs, etc. will all be critical.
For example, what is the impact on a microturbine when the utility recloser goes
through its operations of opening and closing. The microturbines is a small devices
spinning in excess of 90,000 rpm with very little capability to store this energy during
these dead periods.
Harmonics Harmonics have not really been a problem in the traditional utility
environment. The introduction of many of the harmonic producing devices creates a
system similar to an industrial environment where resonant conditions can be a major
concern.
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Safety The industry is going to have to address the impact of these devices, not only
on the safety of those that own and operate them, but on utility personnel working on a
completely foreign design, some of which they may have little knowledge or control.
Directional Recloser
Distribution 3 Main
Substation R
1 Meter
M -PQ
-Time of use
-Security
Switched -Gas
Capacitor -Water
Distributed
Microturbine Regulator (With Communication) Generation
(Photovoltaics)
REG
Batteries
Custom Gas
Power DC Bus
Turbine
Device
Industrial
Power Quality Park
R Directional Recloser
Distribution Substation
Electric
Vehicles
Figure 2-3
Distribution System of the Future
The information shown below illustrates the results of survey data submitted by
participating utilities (the Advisors). The integrator agrees with the perceptions
obtained in this excellent analysis. The question presented to the integrator in this task
is how are the schematics of the two business visionsService DISCo and Multiple
Utilities Managerdifferent? The answer is difficult since most of the responses show
strong requirements for the Service DISCo and moderate requirements for the MUM.
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Table 2-1
High Level Performance Requirements
The following table shows that member utilities gave the most weight to feasibility for
selection concepts, and least to system performance.
Table 2-2
Criteria Rating
Feasibility X 0 0 0 3
Financial 14 X 0 0 6
Benefits
Customer 14 14 X 2 0
Satisfaction
System 14 14 12 X 10
Performance
External 11 8 14 4 X
Stakeholders
TOTAL 53 36 26 6 19
POINTS
In the next table, performance requirements for Service DISCos and MUMs are
illustrated, demonstrating that the performance requirements for the Service DISCo are
stronger than that of the MUM.
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Table 2-3
Performance Requirements
It is the integrators opinion that the Service DISCo would have stronger performance
requirements. The Service DISCo differentiates itself from the MUM by meeting the
performance demands of the customer with the internal resources whereas the MUM
allows these special requirements to be met by others.
Table 2-4 below illustrates the distribution assets of the two visions. As can be seen, the
MUM is interested primarily in the hard assets or wires, while the Service DISCo has
major interests in all areas. (Analysis only considered electric power distribution
attributes.)
Table 2-4
Distribution Asset Attributes
Distribution Asset
Attributes Service DISCo Multiple Utilities Manager
Hard Assets Certain Asset Attribute Certain Asset Attribute
(wires, etc.) (likely >70% usage) (likely >70% usage)
Smart Grid Certain Asset Attribute Possible Asset Attribute
(likely >70% usage) (likely >30% usage)
Network Design Certain Asset Attribute Possible Asset Attribute
(likely >70% usage) (likely >30% usage)
Investment in Underground Certain Asset Attribute Possible Asset Attribute
(above mandate) (likely >70% usage) (likely >30% usage)
Soft Assets (e.g. Certain Asset Attribute Possible Asset Attribute
management systems) (likely >70% usage) (likely >30% usage)
Control of Customer Certain Asset Attribute Possible Asset Attribute
Interface (likely >70% usage) (likely >30% usage)
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The relative importance of advance technologies between the two visions was even
more difficult to assess, as shown in Table 2-5. Again the Integrator agrees with the
assessment of the respondents, i.e. Service DISCos are more concerned than MUMs.
The question is What does medium concern mean? and how do I, as a utility, create a
structure or environment to deal with medium concerns for distribution automation.
And, if I have high concern for distribution automation, does that imply that I must
do it to adhere to the business vision? Or just that I must be more concerned?
Table 2-5
Importance of Advanced Technologies
The result of mapping the redesign concepts (technologies)3 to the two business visions
is shown in the next table. As can be seen, there is really no clear-cut line of
demarcation. In 3 out of 4 areas the Service DISCo has a strong requirement, whereas
the MUMs requirements differ.
3
Based on Advisor input, these technical areas were selected as most critical, and correspondingly are integrated
into the conceptual designs for the Service DISCo and the MUM. A complete copy of each technical section write-
up is included in the Appendix.
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Table 2-6
Mapping of Redesign Concepts
If we assume that the MUM strives to be the low cost player on convergent products,
then the core assets are minimized. It is also assumed the MUM does not sell power or
energy services. The following is an attempt to predict the asset concerns of the MUM.
Figure 2-4
MUM Schematic
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The product flow (assets) in the past was that engineering would start the process of
defining the assets as shown below:
Engineering
Case
Engineering
and Service
Quality
Standards
Budget Minimize
Planning
(Load Growth
etc.)
Best Budget
that Meets
Standards
Figure 2-5
Historical Product Flow
In the new MUM environment, where low cost is the driver, the scenario is different, as
is shown below:
Budget
Defined
Service
Standards
Managing
Process
Best Plan
That Meets
Budget
Figure 2-6
MUM Product Flow
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A brief review of the way the MUM will address the new technologies and services is
shown below:
Table 2-7
MUM Technologies and Services
MUM
Technologies Services
Superconducting Cable No
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Directional Recloser
Distribution 3 Main
Substation R
1 Meter
M -PQ
-Time of use
-Security
Switched -Gas
Capacitor -Water
Distributed
Microturbine Regulator (With Communication) Generation
(Photovoltaics)
REG
5 kV - 35kV
Batteries
Custom Gas
Power DC Bus
Turbine
Device
277/480 AC
+/- 100V
+/- 100V DC
Industrial Smart
Power Quality Park Transformer
R Directional Recloser
+/- 10kV DC
Distribution Substation
DC Superconductivity Cable
120/240 Electric
Vehicles
AMR Residence
Urban Load
Figure 2-7
Service DISCo Schematic
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A brief review of the way the Service DISCo will approach technologies and services in
the environment is as follows:
Table 2-8
Service DISCo Technologies and Services
Service DISCo
Technologies Services
Specialist Comments
Distributed Resources
Service DISCo
Under this vision, there are incentives to develop power quality / reliability enhancing
DR for application on the customer side of meter. The extent of penetration of DR
assets depends on the evolution of the technologies with respect to performance and
costs. In general, to meet individual customer needs for power quality / reliability, it
may be less expensive to apply DR technologies locally rather than to provide the same
level of service for all customers through some more centralized technology.
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Under this vision, there are incentives to develop decentralized utility services,
managed by one company. These incentives are driven by economics rather than
technical capabilities. Distributed generation can provide locally sited locally
controlled supply. Where it is economically more efficient to use local generation for
providing energy service, there will be a strong incentive to develop the technology.
Again, the extent of the penetration of DR assets depends on the evolution of the
technologies with respect to performance and costs.
Construction
Cable Installation: Cable installation technologies emerging today will reduce the cost
to install cables in the future. Developments like guided boring developed in the 70s
and early 80s are now emerging as successful, commercially deployed equipment.
With further development, boring has the potential to be less costly than open
trenching. In many cases, this is already a reality in situations where surface
restoration is costly or where open trenching is not allowed.
Cable Removal: The cable in underground conduits are routinely abandoned in place
when the cable can not be removed from the conduit. The conduit space is an
extremely valuable commodity as space is used up by other utilities. The lodged cable
is hydraulically vibrated out of the surrounding conduit even if the cables are lodged in
by years of dirt and corrosion.
Ground Penetrating Radar: Systems have been developed that penetrate the ground
surface using radar technology that can locate underground utilities and obstacles. The
GPR makes use of advances in antenna design and digital signal processing to produce
an easy to interpret 3D map of what is in the ground. GPR can also help describe the
soil type and conditions. They are pushcart mounted, normally with two wheels, that
project radar signals into the ground.
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High Speed Narrow Trenching: High speed trenching machines (OCC135 Vermeer)
using a narrow wheel type cutter, wheel cutting widths as small a 3.5, that cut through
concrete, asphalt and rock without any precutting of the surfaces and the trencher can
cut to depths of 48. These trenching machines trench at a speed of 10 to 15 ft per
minute. Most machines have self loading units that attach to the trenching machines
that load the trench spoil directly into waiting dump trucks.
Slurry Backfill: This is usually a mixture of cement mixed with sand and water and
delivered to a job site in a transit mixer truck (cement mixer truck) as a flowable
material, the same way that ready mix cement is delivered. The lean cement mix helps
the set-up and usually eliminates the problem of trench compaction. The material is
porous and does not set up a moisture barrier at the trench location. Some cement
companies are using fly ash (ash from burnt coal material that would come from a coal-
fired powerplant) mixed with sand, cement & water to make up a flowable slurry
backfill material. This material works well with the narrow rock wheel trenching
machines.
Power Electronics
Several new technical innovations are presented below. These are segmented into
several categories by dominant impact in one of several areas.
Power Flow Control: Power electronics can improve power flow control. Use of
switched capacitors (electromechanical and thyristor switched) is fairly common. New
techniques, based on power electronics, that have been proposed include Custom
Power devices, Dstatcon, Thyristor Based Phase Shift Controllers, Thyristor Based
Voltage Regulators, Series Active Compensators, Dynamic Voltage Restorer, Fault
Current Limiters, large storage devices, harmonic current flow control, active filters,
etc. These devices are targeted at the 2-200 MW level, and are in varied stages of
development and availability.
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Smart Grids and Distributed Generation Systems: Service DISCos, in particular, will
benefit by customizing the grid and interface to the customer: Firstly, this will provide
a higher level of service and differentiation for the Service DISCos. Secondly, by
increasing customer dependence on special equipment and services, the Service DISCo
will increase the barrier against the customer seeking alternative competitive vendors.
Alternate Frequency Systems: Efforts have been made in the past, both in the US and
in Japan, to propose the use of higher frequencies for distribution within industrial
plants. Frequencies of 400-500 Hertz seem to be most common, although a 20 kHz ac
bus has been proposed in the past for the US space station. The higher frequency
allows a simple bidirectional frequency converter interface between the smart grid and
the utility, as well as between the loads and the smart grid. It has been proposed that
the higher frequency transformers and simpler converters required would realize more
economical plants. This concept once again, has higher potential use for the Service
DISCo than for the MUM.
Communications
The distribution systems of the future, specifically the Service DISCo and the MUM,
will contain new smart equipment. This equipment will contain microprocessors and
data storage. Such new distribution systems will require integrated communication
systems in order to provide monitoring, control, and coordination of this new utility
and customer equipment. EPRI has developed the Utility Communications
Architecture (UCA) for this purpose. The UCA provides interconnectivity among
various equipments and interoperability among various databases and
microprocessors. The UCA contains open protocols and uses national and international
standards that are publicly available. It is openly available to electric, gas, and water
utilities and their vendors. The UCA integrates all operational systems including
control centers, transmission, distribution, meters, and customer systems and will be
extended in the future to include plants and corporate systems.
Service DISCo
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integrates with all of the entities that are serving the restructured environment. This
standardized communications manages the distribution environment including
monitoring operating parameters, and managing the distributed generation and
resources deployed on the system. In addition, the Service DISCo communication
system integrates with equipment deployed within customer facilities and, as
necessary, with equipment owned and operated by the customer. This environment is
enabled through the maturity of the information technology (IT) industry and by the
levels of distributed computing standardization for established utility specific devices.
This maturity is manifest through open infrastructures, such as the UCA, that meet all
of the international specifications for equipment interoperability and interworkability
including information security and management. These environments have yielded a
variety of IT tools that enhance the information systems already deployed. The concept
of the Service DISCo has, through communications, redefined the delivery of electrons
to a customer "service entrance." The Service DISCo provides a visible and specific
function to the customer. For instance, instead of providing three phase service to an
industrial customer, the Service DISCo now has the ability to provide premium power
to specified circuits within their facility.
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3
HIGH LEVEL DESIGN CONSIDERATIONS
DC has a long history, and interest in it being used again by utilities has been
increasing with the development of energy storage devices such as SMES and batteries
and renewable energy sources such as photovoltaics, fuel cells and wind which
naturally supply DC. Present system designs using AC mean that these devices must
interface via a converter to the system. With a DC distribution system, it would be
possible to interconnect these devices directly without the interfacing converter, or
power conditioning system. Also, connecting an AC generator or motor to a DC system
offers the possibility to design the machine to operate at higher (or lower) and more
optimal AC frequency to improve the efficiency, size and cost of the equipment.
No EMF
Customer is independent
Fast control of reactive power and voltage, reducing the need for local generation or
SVC to provide voltage support
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High Level Design Considerations
Limited ratings
Cost of components
Harmonic generation
Source impedance
Difficult to interrupt
Many of the good characteristics associated with DC occur only for very long lines
The driving force to many for a DC system is the possible proliferation of DSGs that
are naturally DC as well as a number of Custom Power devices that are also naturally
DC. An example of a distribution system showing some of these devices can be seen in
Figure 3-1. A large drawback to this design is that the interconnection back into the AC
system is complicated and expensive mainly due to the conversion of DC back to AC.
A DC bus where these types of devices are interconnected makes a certain amount of
sense since it takes advantage of the positive characteristics of these devices, greatly
reduces cost, and provides a large degree of isolation from the AC grid should this be
desired.
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Hospital with
Diesel
Generator
& UPS
DISTRIBUTION
SUBSTATION
Farm with
Wind Turbine
Feeder 15kW
breakers
Computer
Factory with
facility
Fuel Cell
with S M E S
2MW 1.5MW
Utility
Photovoltaic
Site
3MW
+ Batteries
Figure 3-1
Potential Sites for DC Distribution System
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13.8 kV AC
AC MAIN
DISTRIBUTION AC
INVERTER LOADS
PANEL
DC BUS +100V
DC BUS -100V
ENERGY PHOTO
FUEL DC
STORAGE VOLTAIC
CELL LOADS
DEVICE ARRAY
Figure 3-2
Schematic of DC Distribution System
+ 10kV A
Neutr, 2
-10kV 3 4 AC
B Main
Distribution
Panel
120 V
Neutr.
120V
Fuel Cell
6
D Photo
E
AC Bus voltaic
C F 7 DC Bus
5 +10kV Energy
Grid Neutr. storage
Connection -10kV device
Power converter
Inverter
Figure 3-3
DC Distribution System
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4
NEW TECHNOLOGY DIMENSION
Dispersed generation, storage, or custom power devices can be owned either by the
utility or the customer. One of the difficulties when assessing distributed generation is
that the characteristics and ratings of these devices vary significantly. Cases have been
made that the use of DSGs will allow equipment deferment, relieve generation, relieve
transmission and reduce losses. While this may be true in some cases, in others its
very questionable due to the characteristics of the devices. A brief overview of some of
these characteristics is as follows:
Cost of 5.5 cents per kWh have been pledged by Enron by the end of the decade
Installed costs of many pilot projects seem to normally exceed over $10,000 per kW
for residential applications (4 to 8 kW)
Enron reports it will build a solar facility of 100 MW. This is more than 10 times the
size of any other facility. Other utilities are investigating facilities of approximately
10 MW
Costs have declined from 20 cents/kWh to about 5 cents per kWh for the larger
wind installations
Installation costs are about 1000 to 2000 dollars per peak kW installed
Ratings for residential units are up to about 10 kW and for utility owned site they
range from 2 MW to 41 MW
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Advantage is that more energy reaches the customer. For example for every 10
joules of gas, about 4.5 joules of this will be converted to electricity and the other 5.5
will go into space heating, water heating, etc.
Reliability of some types of fuel cells is good (2500 hours between forced outages).
Other types are not as far along
High efficiency
Cost is very high, exceeding $3500/kW. This compares with reciprocating engines
costing under $500/kW
Extensive add-ons for fuel preparation, stack preheating, power conditioning, steam
generation, air compression, etc. are needed.
Problem is that fuel pressure ratios must be up to 30:1 and at least 250 psig. Few
companies maintain line pressures above 125psig and most gas pressure fuel
supplies are only 25 psig
4.2.1 Introduction
Utility engineers throughout the country are finding that knowledge of just their power
system is inadequate when working in the area of power quality. More and more,
utility customers who are experiencing power-related problems for sensitive loads are
depending on the utility for solutions, even when the only solution is on the customers
premises. For this reason, it is important that the utility distribution engineer become
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Power-line conditioners mean different things to different people. The term power-line
conditioner can be applied to any device that protects against one or more of the
following power problems:
Overvoltages and undervoltages
Sags
Outages
Surges
Harmonics
There are some power disturbances, which exist all the time but do not cause any
malfunction or component stress on computers or similar delicate electronic equipment.
For example, there is always some harmonic distortion on the power line sinewave,
and there are occasional transients. These distortions generally cause no harm.
The price range of power line conditioners can vary from $25 to well over $10,000, and
the buyer cannot always be sure what is being purchased for that price. Generally,
complete specifications are not always available for the product and if an attribute is
not described on the packaging of the device, it will more than likely not have that
capability. A line conditioner should solve most power quality problems, and its
specifications should cover each type of disturbance listed above. This section will
briefly discuss the advantages and disadvantages of the more commonly applied
devices.
Surge suppressers are devices, which conduct electricity when the voltage exceeds a
limit. The device does not really suppress the surge (like a filter) but rather diverts it
(usually to ground). Figure 4-1 shows the effect of the surge suppresser known as an
MOV (Metal Oxide Varistor).
The amount of energy these suppressers can absorb is directly related to their size. If
the device is overstressed, it will self-destruct; thus it is very important that the energy
level of the transient for a particular location be known. For example, suppressers at
the panelboard will be much larger than those generally found in wall receptacles or on
electronic devices.
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CLAMPING
VOLTAGE
LINE
MOV
NEUTRAL
GROUND
Figure 4-1
MOV Clamping of Transient Voltage
The best surge suppression on the DISCos primary distribution system is not adequate
for the protection of a customers sensitive equipment. Voltage transients coming from
the utility system, as well as those (over 90%) generated internally, can only be
mitigated on the secondary at the customers premises (see Figure 4-2). This power
conditioning is cheap and, in the opinion of many, mandatory for good performance.
Figure 4-2
Surge Supression
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The transformer leakage impedance limits the short circuit current, which is good.
This impedance however, can become a severe limitation when it involves start-up
currents of a motor and other electronic equipment.
If more than one device is on the transformer, start-up of one can cause the magnetic
field to collapse. This can result in the misoperation of the other(s).
Since the circuit (essentially a tank circuit) stores energy, it has some ability to ride
through certain minor disturbances.
If a tank circuit loses power, then it must replace this power. Because of this, a one-
cycle outage can look like a multi-cycle voltage sag, which may have a greater effect
on the proper performance of the equipment.
Devices are heavy, noisy, and cause output transients that can greatly interact with
computers.
In Out
Wp Ws
Figure 4-3
Elements of ferroresonant regulation using a transformer
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Figure 4-4 shows how an isolation transformer was used to break the ground loop in
order to eliminate common-mode problems (this is now prohibited by Federal law).
These types of problems are reduced because a common-mode pulse cannot develop a
magnetic field in the core of the transformer; yet the common-mode, high frequency
impulses can still pass through to the secondary because of the transformer coupling
capacitance. Common-mode attenuation capabilities can be substantially improved in
an isolation transformer by using electrostatic Faraday shielding around the windings.
The shields effectively adds bypass capacitance which routes high frequencies to
ground.
Line Line
IN OUT
Neutral Neutral
Common Mode
Disturbances
Ground
E
Dedicated
E
Quality Ground
Power Line
Ground
Figure 4-4
Isolation Transformer
Can cause severe power loss that causes clipping of the sinewave peaks that are
above nominal rating.
Can saturate during transients and distort the next few cycles.
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While power line conditioning can, in most peoples minds, refer to anything from a
simple surge arrester to a complex UPS system, a power line conditioner generally
brings to mind a device which provides several functions, including impulse
attenuation, filtering, voltage regulation, and isolation. In truth, some line conditioners
do provide these functions, and some do notso be careful. Two of the more common
types of line conditioners are described as follows:
Motor-generators can shield the load from impulses and from voltage sags and
surges. For power line voltage changes of 20% or more, voltage to the load is
maintained at nominal. A useful feature of the motor-generator is its ability to
bridge severe short-term sags or outages. The momentum of the rotating elements
permits the motor-generator to span outages of up to 0.3 seconds (approximately).
This time span is mainly limited by the drop in frequency (speed) as energy is
removed. The period can be extended by adding inertia via a flywheel as shown in
Figure 4-5. Through the combined use of variable-speed, constant frequency or
quick-starting engine generator techniques and flywheel inertia, it is now practical
to extend the time an outage can be spanned so that it is long enough to protect
against the common problem of clearing and reclosure caused by feeder faults.
Costs, however, are considerably higher with this system than with conventional
motor-generators.
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MOTOR ALTERNATOR
OPTIONAL FLYWHEEL FOR
INCREASED INERTIA
Figure 4-5
Motor generator with flywheel
The problems with motor-generators are mostly on the output or load side. High
generator output impedance can cause substantial voltage dips in response to sudden
load changes, such as those resulting from large motor starting current. And in
addition, response to load changes can be sluggish. Also the drive motor may overheat
under long-term brownout or low-line voltage conditions unless it is oversized. Motor
generator efficiency is, as a rule, relatively low, so that electrical energy costs over its
lifetime may be substantial. Heat dissipation, weight and bulk, and the potential for
audible nose are factors which must be considered in motor generator installation.
Essentially silent machines are available at extra cost. In many cases, bearings must be
inspected and periodically replaced and/or lubricated particularly when flywheels are
used. Reliability potential, however, is very high.
As can be seen (Figure 4-6), all the systems contain a battery. The inverter preferred
system is essentially the standard configuration for critical equipment because it
provides full isolation and power conditioning. The line preferred system (standby)
receives its normal flow of power from the DISCo and relies on a cycle transfer
switch to isolate utility system disturbances. This type of system is obviously not as
effective as the inverter preferred system and is generally used for small, low-cost
computer systems where operation is not as highly critical.
Line interactive systems, like line preferred systems, have found application in the
smaller, less critical sensitive equipment systems. They too change mode of operation
upon power failure. They can provide somewhat more power conditioning that the
line preferred system, but are inherently the least reliable of the three systems.
Normally, power flows through the single-throw static switch and the inductor to the
sensitive equipment load and to the converter which, in this mode, acts as a battery
charger. By various techniques, the voltage to the sensitive equipment can be
conditioned similarly to the fast response or ferroresonant regulators. Upon failure of
the line, the static switch is opened and the function of the converter is changed to that
of an inverter delivering power to the sensitive equipment, resulting in less than a
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Static
Rectifier Inverter Switch
Line
Preferred
Static
Rectifier Inverter Switch
Inverter
Preferred
Battery
Line
Interactive
Inverter
Charger
Battery
Figure 4-6
UPS Configurations
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Relative costs and characteristics of the various mitigating equipment are shown below
in the following table:
Table 4-1
Relative Cost and Characteristics of PQ, Service Interruption Equipment
Energy Cost $5,300 per $5,300 per $6,000 per $3,500 per $700 per
year plus year year year year
generator
exercising
costs
300 kVA Installation $1,200 per $700-$800 $250 per kVA $200 per kVA $25-$100 per
and kVA per kVA kVA
equipment
cost
Maintenance $15,000 per $10,000 per Less than Less than N/A
cost year year $1000 per $1000 per
year year
Operating 89% 89% 88% 90% 98%
Efficiency
Energy Cost $12,000 per $12,000 per $14,000 per $12,000per $3,000 per
year plus year year year year
generator
exercising
costs
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Custom power devices are defined as devices using power electronics (rated above
1000V) which are used to attain better power quality and reliability. Some of these
devices are still in the experimental stages or early stages of production and have yet to
be proven in large scale installation at utilities. The application of these devices, and
their effectiveness is not well established at this time. The following is a brief summary
of what they are and what they are supposed to do:
Micro-
System Sensing Circuit Opto-Trigger
Processor
Solid State
Capacitors System
Switch
Figure 4-7
Schematic of AVC
Features of AVC
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4.3.2 Batteries
Bypass Breaker
SELECTOR
Control Status
SYSTEM CONTROL,
POWER CONDITIONING
Figure 4-8
One-line Diagram of Battery Storage Device
Capabilities
Operations
In normal system conditions all current passes through the inline ESP
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SOURCE 1 SOURCE 2
LOAD
SOURCE 1 SOURCE 2
TRANSFER TIME
< 4 mSEC
LOAD
Figure 4-9
Static Switch Transfer Sequence-Single Phase Diagram
Table 4-2
Ratings of Solid State Transfer Switch
800A 208V
1000A or
1200A 480V
or
1600A
600V
2000A
3000A
4000A
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Table 4-3
Ratings of Medium Voltage Transfer Swtich
c) What is it:
outages
momentary interruptions
d) What it isn't:
Failure free
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SOURCE 1 SOURCE 2
NC NC
Input CB Input CB
Bypass NO NO Bypass
CB CB
Interlocked Interlocked
NC Output CB
LOAD
Figure 4-10
Bypass Scheme
Low loss
Safe
Commercially available
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Solid State
3 MOV 3 MOV
Arresters Bypass
Arresters
AC Filter
DC to DC
Inverter & DC to AC
Energy Converter
Storage
DC Link
Capacitor
Figure 4-11
DVR Schematic
2 to 10 MVA
460 to 34.5kV
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Fault
Vs
Vs Vd
Vd
Figure 4-12
DVR Voltage Injection to Counter Voltage Sag
c) Characteristics of DVR
Connected in series
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ZN0 Arrester
Current Fault
Limiting SCR Switch Current
Reactor
SBNR SBNR
GTO Switch
M
Figure 4-13
Schematic of Typical SSB
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Applications of SSB
Load
Load
STATCON
Current Limiter
Soft Starter
Load M
Bus Tie
Figure 4-14
Uses for SSB
Characteristics of SSB
Can be current limiting and subcycle
Cannot conduct high surge currents
Series devices
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Old Design
Figure 4-15
Series Capacitor (Old Design)
Problems
Ferroresonance
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Figure 4-16
Series Capacitor (New Design)
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Figure 4-17
Conceptual Illustration of SMES
Advantages of SMES
Rapid response
Rapid recycling
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Figure 4-18
SMES Block Diagram
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Carryover time:
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Figure 4-19
Application of SSVR
Purpose of SSVR
-Y Transformer Voltage
Figure 4-20
SSVR Operation
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4.3.9 Cost
Table 4-4
Estimated Cost of Operating Various Customer Power Devices
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Table 4-5
Estimated Total Cost to Operate Various Customer Power Devices
4.3.11 Conclusions
1. The cost numbers obtained are from manufacturers' publications and can be
significantly different (lower) than the cost of an actual installation.
2. Devices have vastly different capabilities in terms of sag magnitude and duration.
For certain devices, cost per kVA changes dramatically with size.
ANSI C84.1-1989 American National Standard for Electric Power Systems and
Equipment Voltage Ratings (60 Hertz)
Establishes nominal voltage ratings and operating tolerances for 60 Hz electric
power systems from 100 V through 230 kV.
IEEE Std. 493-1990 IEEE Recommended Practice for Design of Reliable Industrial and
Commercial Power System (IEEE Gold Book).
Chapter 9 deals specifically with voltage sag analysis and methods of reporting
sag characteristics graphically and statistically.
IEEE Std. 519-1992 IEEE Recommended Practices and Requirements for Harmonic
Control in Electric Power Systems.
Provides guidelines and limits for current and voltage distortion levels on
transmission and distribution circuits.
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IEEE Std. 1100-1992 IEEE Recommended Practice for Powering and Grounding
Sensitive Electronic Equipment (IEEE Emerald Book).
IEEE Std. 1159-1995 IEEE Recommended Practice for Monitoring Electric Power
Quality
This is the recommended practice for the monitoring of single-phase and
polyphase AC power systems.
IEEE Std. 1250-1995 IEEE Guide for Service to Equipment Sensitive to Momentary
Voltage Disturbances.
This guide was developed out of an increasing awareness of the incompatibility
of modern electronic equipment with a normal power system environment.
IEEE P1366 Trial Use Guide for Electric Power Distribution Reliability Indices.
This guide, presently under ballot, is to identify useful distribution reliability
indices and factors that affect their calculation.
Specialist Comments
Distributed Resources
Service DISCo
Over time, with increased penetration of DR, and deterioration of aging conventional
assets, it is reasonable to expect that an increasing proportion of capacity needs will be
met by DR assets. EPRI's DR Strategic Market Assessment (C. Clark 1995, TR-106055)
suggested that, under certain conditions, most additional capacity requirements would
be met by DR investments. This is perhaps an extremely optimistic forecast. Initially
DR will be providing selective reliability improvements and enhanced PQ.
Construction
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Rather than open cutting trenching methods of today in replacing existing buried
cables in residential and commercial areas, directional drilling (ground conditions
permitting) will be used.
Cable installations, for smaller diameter cables (up to 1"), can be pushed or blown
into the conduit rather than pulled.
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5
SYSTEM PERFORMANCE ATTRIBUTES
5.1 Introduction
The purpose of this section is to define some of the performance parameters for the
"new distribution system" in the areas of reliability, power quality and losses.
There are two methods of calculating reliability indices in the US. The majority of
companies calculate indices on the number of customers per outage and the duration of
the outage. There is another group that calculates indices based on the amount of load
that is lost. They do not keep track of the actual load that is lost, but rather use the peak
load value of any given section in calculating their indices. The companies that base
their reliability indices on lost load are doing so as a precursor to the customer based
index system. At present, their databases are not as extensive as the other companies.
Indices that have been defined by various groups such as the IEEE (Institute of
Electronics and Electrical Engineers), EEI (Edison Electric Institute), EPRI (Electric
Power Research Institute), and CEA (Canadian Electric Association) are as follows:
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These indices are based on the peak connected load during an interruption rather than
on the number of customers interrupted. The companies that are using this system
plan to upgrade their systems to customer based indices when their customer
information systems track the number of customers interrupted. Typical numbers for
customer based indices are as follows:
Table 5-1
Typical numbers for customer based indices
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A survey of utility distribution reliability practices throughout the United States was
conducted in the early 90s. Among the most pertinent findings are that the most
commonly used indices are ASAI, SAIFI, SAIDI, and CAIDI as shown in Figure 5-1.
OTHER (22.9%)
ASAI (64.58%) No Index
ATPII (6.25%)
SAIFI2 (8.33%)
SAIFI (77.08%)
CAIDI (70.83%)
CMPII (4.17%)
CAIFI (6.25%)
SAIFI1 (6.25%)
SAIDI (83.33%)
Figure 5-1
Percentage of Companies using Indices (48 Companies Responded)
Average Customer Minutes Outage Per Year This is the average cumulative amount
of time a given customer would expect to be without service in a one year period (CMO
or SAIDI). A typical value for SAIDI is about 100 minutes.
Average Duration of a Given Outage Some outages can be very short, other quite
long. This number is simply the average duration (CAIDI). A typical number for
CAIDI is about 80 minutes.
Average Annual Number of Outages This is the average number of times a given
customer can expect an outage in a year (SAIFI). The average customer in the US can
expect to see about 1.25 outages per year (SAIFI = 1.25).
Availability of Service This is the ratio of the total number of customer hours that
service was available to the total customer hours demanded (ASAI). Although rarely
used in discussion of distribution reliability, it is generally calculated for comparison to
other parts of the utility system.
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Another important survey finding was that most utilities do not classify an interruption
as an outage until its duration exceeds about 5 minutes (see Figure 5-2). This of
course means that temporary faults and their associated breaker or recessing operations
are not considered outages.
14
Number of Companies Reporting Durations
12
10
8
6
4
2
0
5 Min 3 Min 2 Min 1 Min
Maximum Duration
Figure 5-2
Duration of a Momentary Outage
It is very difficult to generalize on the causes of outages since they are somewhat
particular to the geography of the region and the practice of the utility. It is easy to
assume, for example, that utilities in high lightning areas will see a large number of
outages caused by lightning. This, however, may not be true since many of these same
utilities use overvoltage protection practices which greatly mitigate the effects of
lighting. Figure 5-3 illustrates results from a study by the integrator. As can be seen, a
large percentage of outages cannot be identified. The most commonly reported causes
of outages are lightning and tree contact. One utility in this same study reported that
virtually all their outages were animal related.
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Causes of Fault
Fuses
Animals
Maintenance
Supply
Overload
Errors
Customer Equip
Unknown
Trees
Lightning
Equipment Failure
Accident
Planned
Stroms
0 20 40 60 80 100
% of Companies Reporting
Figure 5-3
Reported Cause of Outages
No longer is the industry just concerned with outages which are defined as
interruptions lasting 5 minutes or more. Since some customers see outages for utility
system disturbances lasting only microseconds, one of the major trends in reliability is
the concern for momentary interruptions and even sags when discussing the reliability
of customer service.
Momentaries are the result of reclosing, whether it is the result of breakers with
reclosing relays or feeder reclosures. The purpose of this reclosing is to re-energize
temporary faults (lightening, trees, etc.) to save the fuse and allow the system to return
to normal with no customers experiencing an outage (defined as an interruption of 5
minutes or more). The problem with reclosing is that all customers connected to the
same feeder experience a momentary interruption as was described earlier. Blocking
the instantaneous reduces momentaries but decreases reliability since some customers
now experience an outage, causing a situation difficult to explain to the power
commission.
Studies indicate that momentaries to the customer loads are caused by both the utility
and the industrial system to an almost equal degree. Since momentaries are so
important to certain customer loads, many utilities now keep record of their
performance in this area. Figure 5-4, shown below, illustrates that the total number of
outages to an industrial load is about 10 per year with half of them being caused by
internal problems and the rest the result of utility operation.
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UTILITY CAUSED
50% UTILITY CAUSED
INDUSTRIAL CAUSED
INDUSTRIAL
CAUSED
50%
Figure 5-4
Outage Caused
Sags which are caused by faults and motor starting are very common. The DISCo is
also concerned with these since it is generally only the severe sags caused by faults as
opposed to the lesser sags caused by motor starts that causes the customer problems.
Many utilities are now providing their customers with expected sag profiles which
provides the customer with both the expected frequency and severity of the sags
annually. By knowing the areas of the system causing the most severe sags to the
customer (see Figure 5-5), it is sometimes possible to make system changes to reduce
these occurrences.
Figure 5-5
Map of Distribution Lines Highlighted to Identify Location of Voltage Sags
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Sags are defined by standards as being voltages less than 90% of normal. Usually,
voltage sags have to be below 60% or 70% before they cause a problem to most
customers. Industry data shows that the industrial causes most of their own sags.
Figure 5-6 indicates the utility contributes to less than 10% of all sags experienced by
the industrial customer.
Industrial
Caused Industrial Caused
92%
Utility Caused
Utility Caused
8%
Figure 5-6
Sags to Industrial Customers
The IEEE, as well as other standards making bodies, will continue to create guides and
standards addressing:
Reliability Indices
Sags
Momentaries
Harmonics
Flicker
Voltage Drop
Surges
Swells
Etc.
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It is conceivable that as budgets are cut, the pressure on standards making groups will
be to actually reduce the traditional levels of power quality and reliability that we are
accustomed to. This is particularly true if the customer is given a choice of rates based
on reliability.
It is also possible that sensitive industrial loads will become less sensitive. If the lowest
cost solution to problems resulting in outages is to make minor adjustments in the
equipment itself as opposed to modifying the entire power delivery system then in a
de-regulated environment where the customer will probably pay for the solution, the
lowest cost alternative will prevail. In order to help expedite some of these changes to
sensitive equipment, the DISCo should provide guidance on the actual characteristics of
their system which this equipment should be designed to. Some preliminary
suggestions are to have proper operation for the following:
The reduction of budgets will reduce the overall reliability of the system. It is
conceivable that as budgets are slashed, residential customers will suffer most. They
are not considered as profitable a load as industrial and commercial loads and are less
sensitive to outages and other PQ problems.
As overall system reliability is reduced, the DISCo find themselves in the unenviable
position of having increasing demands for reliability placed on them by their largest
customer who have sensitive equipment. With the newfound ability of these customers
to obtain power from others or even produce the power themselves, it becomes
imperative for the DISCo to devise rates and policies acceptable to their customers to
maintain long term loyalty.
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To obtain capital to satisfy the needs of their larger clients, DISCo will be forced to
increase the loading limits of various equipment after careful consideration as to the
effect on short term and long term reliability. Understandably, these new loading
conditions may prematurely fail some equipment as well as prevent emergency
measures traditionally used to re-route power. The overall effect is more outages
lasting longer in duration for the majority of customers.
As capital for projects becomes tighter, it is anticipated that system design expenditures
for new loads will be minimized resulting in lower reliability and availability, unless
the customer is willing to foot the bill for additional system improvements. Monies
for upkeep and maintenance of the existing system will now need to be prioritized to
determine who gets what? for the reduced budget.
The DISCo must work SMARTER. Smarter means spending money on new equipment
wisely and using engineering as a tool to increasing reliability of the entire system (old
and new) at minimal cost. Some examples of items to be considered are:
Theyre not coming, theyre already here!!!! As traditional levels of system reliability
become more and more difficult to obtain due to reduced budgets, customers who need
more reliability will pay for it. Considering the fact that they paid for service, there
will no doubt be more penalties to organizations who dont meet their promises. There
are already utilities who pay large penalties to important industrial loads for both
outages and sags. The utilities accept these penalty clauses in order to obtain long term
contracts with these large industrial customers.
The problem with performance based indices is that it is sometimes difficult to supply
varying degrees of reliability to adjacent load having completely different
requirements. One possibility is the application of interruptible rates. Customers
opting for the lowest rates would either allow the utility to drop them from the system,
without notification, or to cut back a prearranged amount on request during peak load
conditions. This, of course, would look like an outage to the customer involved. The
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advent of custom power devices also provides a little more flexibility to the DISCo
toward providing different degrees of service.
5.8 Losses
It is estimated that the typical integrated utility sees about 10% of its generated power
consumed by losses. Over 50% of these losses typically occur on the distribution
system. The reduction of even a fraction of these losses in the distribution system can
result in enormous savings to utilities since these losses have a ripple effect right up to
the generator (see Figure 5-7).
Figure 5-7
System Losses
The rapid increase in the cost of both energy and capital, as well as the difficulties
utilities are experiencing in siting new generation, is causing utility management to
assess the effects of system losses both in the operation and planning of electric
systems. Utilities are also receiving varying degrees of pressure from their regulating
commission to improve their loss management techniques. All of these reasons have
increased their interest in this subject. The nature of distribution system losses,
techniques on how to measure them, and program requirements to minimize their cost
constitute a major concern for today's competitive environment.
While utilities are aware that losses do occur and results in large loss of revenue, it is
not obvious where they occur. Depending on individual practices, i.e., feeder length,
wire size, voltage levels, loading practices, etc., losses for one utility may be different
than for another. For example, that utility #1 may have most of its losses in the
distribution transformer, where utility #2 sees most of their losses in the secondaries
and services. This is due to the fact that utility #1 has short feeders and short
secondaries whereas utility #2 has lines covering three quarters of one state.
Recognizing these differences allows both these utilities to concentrate their resources
in the proper areas to minimize these losses.
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SUBSTATION
FEEDER
DSG
One Day
Figure 5-8
Distribution System Losses Might Be Reduced with the Addition of DR
Losses will become a much more difficult item to address in the new utility
environment. On the one hand, utilities are being forced to reduce spending, and on
the other, they are more concerned than ever with the cost of losses. Some utilities are
considering pushing their equipment much harder which increase losses and others are
considering reducing wire sizes, etc., to minimize new investment. It is conceivable
that this area will have to be totally reassessed in this new environment.
Another complexity to the situation is the fact that DSG's look very promising for the
future and one of the advantages of dispersed generation is that they reduce system
losses, as shown in Figure 5-8. The real advantage of the DSG at a remote feeder
location is that it may also free up enough system capacity to allow the DISCo to
postpone or even cancel otherwise needed system upgrades.
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6
REVIEW OF PRODUCTS AND SERVICES
The following is a summary review of the products and services that should be
considered for the Service DISCo and the Multiple Utilities Manager. For this summary
it is assumed that a Service DISCo is an aggressive entity whose goal is to increase
revenue by offering services, charging premiums for these services and whose
philosophy is to venture beyond the traditional metering point. The Multiple Utilities
Manager, on the other hand, is a transporter of energy and not a retailer. Its mission is
to provide an adequate level of service at lowest cost. This distribution company will
have a weak link to the customer and will not provide anything to the customer that
can be provided more cheaply to the customer by others. They will use things such as
automation only when it is decided to be a low cost driver.
6.1.1 Products:
Automation - Automation will be used to better serve customers. This may mean
better reliability to comply with performance based rates, better operational
effectiveness to restore outages, time-of-day rates to reduce energy costs, automatic
metering and billing, security systems, etc., since the communications system would
be in place.
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6.1.2 Services:
Power Quality Audits The DISCo will provide these customers with power that
meets their specific power quality requirements. This means the ability to anticipate
power quality concerns such as outages, momentaries, sags, swells, etc., suggest
means of mitigation (arresters, custom power devices, UPS, etc.) and set up
performance based contracts.
Demand Side Management - DSM programs will be provided and the DISCo will
provide all installation, maintenance and information services offered.
6.2.1 Products:
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Power Electronics Power Electronics will become important for major loads that
are sensitive to traditional disturbances. Customers insisting on better power
quality will either provide their own mitigation or pay the DISCo for additional
system requirements. These may also be provided by a third party.
Superconducting Cables These will only be used if they show clear economic
advantages over the alternatives and reliability is proven. It is not anticipated that
this technology will serve more than a few niche areas in the next ten years due to
cost.
6.2.2 Services:
Engineering In-house staff reductions and use of outside firms for traditional
engineering services will be the desire. Staffing to accommodate the new product
areas described above will be required and could in fact increase overall staffing
depending on product implementation. Areas such as communications,
automation, power quality, power electronics will all require in-house staff but
major projects will be farmed out.
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Outage Restoration Alliances with other utilities, and contracts with private firms
will allow vast staff reductions. Additionally, contracts can be structured that will
allow the utility to use contractors during non-office hours at regular rates.
Specialist Comments
Distributed Resources
In general, there is so-called "market-pull" effect such that prices would tend to
decrease as DR penetrations increase. This effect should be far greater under the
Service DISCo vision. See attached tables (in the appendix) that: 1) describe current
cost, performance and service attributes of existing DR technologies and; 2)
qualitatively describe future cost and performance attributes of the technologies. The
lower values in the cost ranges reflect the price effects of the anticipated market-pull
plus assumed technological breakthroughs for some technologies.
Communications
This section contains the much abbreviated comments from the communications
specialists. A more detailed explanation of these products and services can be found in
the appendix.
The following is a list of generic business services and products that require integrated
communications and distributed computing technologies. Such integrated
communications and databases are required to provide the information flow to
managers for better and faster decision making. This, in turn, gives the utility the
competitive edge.
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7
WORK PROCESSES
The purpose of this section is to discuss changes to the existing distribution system,
personnel requirements, main tasks, equipment required, etc. Previous sections have
dealt with the new technologies, the products associated with them, and the services
required by the Service DISCo and the Multiple Utilities Manager. This section deals
with some of the fundamental system changes that need to be anticipated to
accommodate these changes and technologies. The areas selected as contributing to the
fundamental changes which could occur in work processes are in the areas of:
Distributed Resources
DC
Communications
Metering
Electric Vehicles
Power Quality
In the de-regulated environment, the consensus of opinion is that the area holding the
most potential for change is in generation and storage technologies. The advantages of
distributed resources is that they are modular, can be used where needed, and can
delay costly system infrastructure changes. In addition, claims are made that DR will
reduce energy costs and increase reliability. These devices have been around for many
years, but a large proliferation of them will have a major impact on how utility
distribution systems operate. Figure 2-1, shown earlier, illustrates the fact that these
devices essentially change a radial system to a looped configuration, greatly
complicating traditional protection schemes. To accommodate such a system the
following changes in system components and the manpower to operate them must
occur:
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b. System Interface Modules - The interface to the utility has always been a
concern. The application of devices like microturbines is not trivial when it
comes to the interface. This device spins at greater than 90,000 rpm and has little
capability to absorb energy when disconnected from the distribution system
during reclosing operations.
The introduction of direct current will require a wide range of changes to traditional
utility work process. Low voltage DC buses will more than likely be localized while
HVDC Light can be used for long distance transmission problems. Some of the more
important considerations are as follows:
b. Switching - Switching is difficult and costly for DC and this technology needs
significant development to allow widespread use of DC.
Multi-terminal systems
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Industrial Parks
Congested Areas
Rural Customers
Table 7-1
Status of MVDC
7.3 Communications
Utilities will continue to see major changes in communications technologies and will
require experts and consultants to stay on top of this rapidly changing area. Some of
the traditional and emerging methods being used are as follows:
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Radio 900 Mhz dominates, cheap for one way communications and getting
cheaper for two way
Satellite expensive but getting cheaper and good coverage for rural areas
Cellular - good for voice, difficult for data transmission, not effective for rural
application
Packet Radio - sends and receives data fast and dependable and at low cost
Large utilities may use a combination of the above communcation technologies. Such
combination systems would be selected for optimum performance and least cost.
7.4 Metering
Metering is changing rapidly and utilities must take an active role in its transformation,
both in terms of equipment purchases and the technical expertise, to stay abreast of
developments. Metering at the residential, commercial and industrial levels are all
undergoing rapid development. Some areas utilities should be considering are:
Power Quality Meters already have the ability to monitor customer power
quality in terms of sags, swells, harmonics, interruptions, etc.
Reliability Indices Customers will be able to know the exact indices they are
paying for (SAIDI, CAIDI, SAIFI, etc.). New indices to measure sags (SARFI) are
now being considered and most utilities agree that mandatory minimums are
coming. Performance based rates will also drive these developments.
Voltage Flicker Flicker meters are coming. The adoption of the IEC
Flickermeter standards appear very possible.
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Work Processes
Automatic Meter Reading (AMR) Radio, telephone, power line carrier (PLC),
and the Internet are already available for AMR and monitoring PQ.
Electric vehicles have been around a long time and many of the problems associated
with them (range, cost, and size) are still far from solved. While they do not seem to
pose a major threat to the traditional auto industry, they do appear to be on their way
as a result of government mandates concerning the environment. The impact of the
electric vehicle cannot be underestimated since this load and potential generator is a
major kw device. Homes owning electric vehicles may need major equipment
upgrades to accommodate their operation.
With the advent of de-regulation and the accompanying cost cutting provided by
utilities in an effort to reduce rates, it only makes sense that reliability will deteriorate
on a total system basis. On the other hand, utilities must fight to maintain their large
profitable loads. In many instances, these loads are very sensitive and require even
better power quality than is traditional. It would seem inevitable then that utilities
must develop techniques, equipment and expertise to address the differentiated needs
of their various customers. This means they must specify, purchase, and maintain all
varieties of power quality (UPS, etc.) and Custom Power (static switches, DVR, etc.) to
attain the required levels of power quality. With the advent of performance based
rates, this function will be that much more important for the future.
Specialists Comments
Service DISCo
The impact on work processes will be significant only for the service DISCo scenario,
where there is potentially large penetration of DR assets. DR will generate the need for
a new skill set at the distribution level. New functions will include:
environmental (air, water, noise, sight, etc.) impact management and compliance
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Even under low penetrations of local generation, the DISCo will still be responsible for
such functions as fuel purchasing, generation plant maintenance and reliability and
power quality control.
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8
SYSTEM COSTS
Distributed Resources
In general, there is so-called market-pull effect such that prices would tend to
decrease as DR penetrations increase. This effect should be far greater under the
Service DISCo vision. See attached tables that 1) describe current cost, performance
and service attributes of existing DR technologies and; 2) qualitatively describe future
cost and performance attributes of the technologies. The lower values in the cost ranges
reflect the price effects of the anticipated market-pull plus assumed technological
breakthroughs for some technologies.
In the discussion of work processes, we pointed out that there is a need for enhanced
skill sets to apply DR successfully. This makes the distribution company more labor
intensive. We estimate that labor requirements could increase as much as ten to fifty
percent under the Service DISCo vision just to meet the needs associated with
distributed generation.
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Table 8-1
Assessment of Present DR Cost
* This is the cost for a battery that has one hour of storage. The range reflects
that there are different kinds of batteries available for various applications.
Table 8-2
Assessment of Future DR Cost
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System Costs
Construction
Some of the costs associated with existing and now technologies are:
Table 8-3
Assessment of Present and Future Construction Cost
Present Future
($/ft) ($/ft)
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9
RISKS AND CHALLENGES
The question of risk in this section has a lot to do with the regulatory environment. It
must be noted that the regulators do not know where this is all going. Every regulator
has a different compass. It used to be that the regulators role in a regulated industry
was relatively simple. They were to ensure that the regulated industry did not abuse
what market power they had. In a completely competitive environment the role is
actually simple also..allow competition. The present role of the regulator in the
present world is very complex since he sees of hybrid situation. For example,
competition is allowed in some markets but not in others, regulated companies must be
allowed flexibility to change their rates to compete, and regulated industries carry the
additional burden of reporting requirements while some of their competition does not.
Finally, the courts have limited the ability of the regulators to permit limited
competition.
The following is a review of the risks and challenges involved with the new
technologies. Each of these technologies could have regulatory, technical and customer
implications which the DISCo needs to be aware of.
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these customers are the utilities most profitable clients, so the loss of them could
have a potentially major effect on the wires company.
Customers Some customers will want the lowest rates and accept the lowest
quality and reliabilitysome will want the highest quality and reliability. Most
will want something in between the two extremes. Large customers, desiring the
lowest energy costs, have been courted for years by companies selling combined
cycle gas turbines. This will continue as prices on these units drops to even more
competitive values. Likewise, customers desiring reliability will continue to
purchase backup diesel generators. Microturbines, solar, fuel cells, etc., are really
not proven to have either economic advantage or reliability, so it is the integrators
opinion that these technologies will continue to attract niche customers where their
advantages can be utilized (remote areas, green power localities, etc.). Distributed
resources could be a major player in markets where time-of-use provides major
energy savings. It is conceivable for the DISCo, where new construction is difficult
and costly, or where electrical characteristics are already marginal (voltage drop,
reliability etc.), distributed resource economics may save major dollars and be the
largest cost expenditure in the construction budget.
Technical - The following is a brief summary of some of the technical risks and
challenges associated with a sampling of some of the new technologies:
Microturbines
1. Safety Rotate in excess of 90,000 rpm and high gas pressure
2. Noise - OK for industrial environment but noisy for residential areas
3. Gas - High pressure gas requirements are over 100 times that of gas pressure
in a typical home.
4. Utility Interface Utility practice of reclosing could be a problem since
turbine energy must be absorbed during this period.
Solar
1. Cost of solar panel is cheap but interface is not
2. DC inverters produce harmonics
3. Not efficient in certain areas and only efficient when in direct sunlight (no
trees)
4. Inverters are expensive
5. Require energy storage to achieve reliability
Batteries
1. Expensive
2. High maintenance
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9.2 DC DISCo
The DC DISCo offers some major opportunities as discussed in previous sections of the
report. Some of the challenges that must be addressed are as follows:
Customers The customer runs the risk of having to utilize unproven technologies.
Historically, no one wants to be first, so research sponsored parks will probably be
the rule for a while, with critical loads provided with both AC and DC.
Technical Utilization equipment is not yet available for low voltage DC levels.
Voltage regulation is still an issue since low cost transformation is not as easy as it is
with AC. Switching is much more difficult and expensive with DC, so this technical
challenge must be addressed. Finally, standards will have to be created to address
this technology, and this can take years.
Low voltage DC was, of course, used many years ago in the Edison Direct Current
Network. This system was noted for its high degree of continuity, but there were
several disadvantages as reported below:
1. The low voltage of this system necessitates a large investment for feeders and
substations and in already congested areas, this is an impossible situation.
2. The heat given off by the low voltage direct current caused a serious rise in
temperature with the result that the normal carrying capacity of the cables had to
be reduced.
4. High maintenance costs and conversion losses made the Edison system the most
expensive.
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The impact of EVs on the utility system cannot be underestimated since these loads are
potentially very large. The following are issues that should be addressed, since EVs
may be mandated.
Technical - The EV is a major, harmonic producing, load (or generator) never before
seen on a distribution system. The impact of this platform could completely alter
system design should this technology become substantial. The EV, if adopted as a
generator or load to any significant degree, will have more impact than the air
conditioning load in terms of system design considerations.
9.4 Communications
Customer Communication with the customer will create issues of who owns the
data and what are they allowed to do with the data. This could be a major legal
issue. If the customer owns the meter things may get even more complicated.
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Power quality will remain a major issue in the industry. Previous sections of the report
have listed some of the important characteristics of many of the devices presently
available. Some of the potential risks and challenges in this area are as follows:
Regulatory The biggest issue here is performance based rates. If the regulatory
commission mandates or allows rates based on system performance the areas
associated with power quality will take on major importance. Issues as to who pays
for the equipment, who maintains it, and who is liable will become paramount.
Technical The major risk in this area is in providing mitigation devices that dont
perform adquately due to improper application. Development of some custom
power technologies are in its early stages, but there are some custom power devices
that are being offered commercially. Technological advances for cost reductions
does not appear to be imminent in many supporting technologies which improve
power quality and system design improvements to prevent the problems from
occurring (e.g. DC, or more conventional techniques) may be found to be a better
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approach than mitigation after the fact. De-sensitizing the equipment itself may
negate the need for much of this. Cost effectiveness of custom power devices is not
black or white. Each case must be studied and its alternatives considered.
9.6 Construction
With the aging of much of the infrastructure and the conclusion of the Distribution Cost
Structure Study that construction is the area of largest expenditures, the need for low
cost construction techniques is a major consideration in the future. If these techniques
can also improve reliability the utilities would have a major incentive to fund research
in this area. Some of the risks and challenges to be considered in this areas are as
follows:
Customer Construction practices which are greatly simplified can mean the
customer may want to do it themselves or contract third parties. This has both
advantages and disadvantages from the utilities point of view. Untested new
construction practices runs the risk of unforeseen outages to the customer.
Specialist Comments
Distributed Resources
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There are technical risks, especially with flywheels and microturbines because of their
required large angular velocities, that have both safety and economic implications.
Fuel cell stack life is another technical uncertainty that affects the economic
performance of that technology. Siting risk, which entails safety and environmental
(including esthetics) hazards, is present for all DR technologies and is especially
problematical for engines and microturbines.
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KEY BENEFITS
The following is a list of the key benefits associated with the new technologies, both
from a financial and non-financial point of view. Material utilized for this section is
from White Papers Presented in Two Concept Panel Meetings, which was developed
at the start of this project for the Advisors. EPRI, and the integrator, may not
necessarily agree with claims made in these papers, but the advantages indicated by
the various authors are included for the reader to form their own opinion.
10.2 DC DISCo
Customer independence and assurance of service continuity
Customer facility and grid need not be designed for peak load
No EMF
Separate asynchronous link
Supports high degree of dispersed generation and storage
Cables may be place close to other utilities
Customer independence and isolation
No eddy currents meaning less resistive loss
Time is right to replace cables
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10.6 Communications
Low cost metering
Enables automation
Can be sold for future services
Customer contact
Lower cost.time-of-day rates and energy retailers
Capital improvement of capacity
Control of local generation
Management of energy consumption
Monitoring of customer sites
Information services including weather, load status, temperature, rates, etc.
Allows customer blocks for buying leverage
10.7 Convergence/Partnership
Retain higher percentage of customers
New revenues
More rapid buildup of information
Improved efficiency
Enhanced communication infrastructure
Partnership brings enormous opportunity
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Key Benefits
Service DISCo
The key benefits are (1) increased economic efficiencies in meeting demand for
improved and diverse services and (2) the resulting enhanced financial performance of
the distribution company. Another benefit is the reduced dependence on the bulk
generation market and thus the reduced exposure to potentially volatile electricity spot
prices. Specifically, local generation may reduce the effective demand on the
transmission system, thus avoiding the effect of regional transmission constraints on
local spot prices. This permits the distribution company to be relatively unaffected by
very high prices in periods of high demand, such as summer peak days.
The key benefit provided by DR is reduced distribution costs. As in the Service DISCo
vision, DR penetration reduces the exposure to the potentially volatile electricity spot
market, resulting from swings in demand and regional transmission constraints.
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MIGRATION PATH
There will undoubtedly be a wide variety of paths a utility will use to get to a new
system since there will be a wide variety of new systems. The previous sections
provide insights into many of the issues utilities must address when pursuing either
vision. Some thoughts related to specific directions a utility might follow for the two
visions is outlined below:
Meters
2. Create technical awareness of needs in the industry (PQ, etc) and influence meter
development and standards
Distributed Generation
DC DISCo
3. Go carefully
Communications
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Electric Vehicles
Automation
1. Perform automation studies that determine the true cost/benefit of the various
functions associated with automation
3. Create standards
Construction
Software
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Manpower Reduction
3. Form alliances with other utilities, and private services to reduce crew size
Metering
Automation
Power Quality
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SUMMARY OF STAKEHOLDER INTERVIEWS
It is necessary to note that these are the opinions of the individuals that were
interviewed, and not necessarily the opinion of EPRI. We merely wanted to capture the
full spectrum of opinions about the business visions.
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APPENDIX
STAKEHOLDER INTERVIEWS............................................................................................A-67
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Appendix
During the initial stages of EPRIs Distribution Systems Redesign Project a wide variety
of technologies were considered for further evaluation. Based upon Advisor input, the
following four key technical areas were selected as most critical, and correspondingly
are integrated into the conceptual designs for the Service DISCo and the Multiple
Utilities Manager:
Distributed Resources
Two-Way Communications
Construction
Each technical section is developed in the context of the selected business visions,
discussing how these technologies can be utilized by a DISCo to pursue a particular
vision. While portions of these comments are integrated into the conceptual designs, a
complete copy of each technical section is included here for additional support.
It should be noted that the conceptual design, at times, varies from original comments
made by the technical specialists included in the appendix. Due to the subjectivism of
this topic, there are a variety of opinions, and we believe this strengthens the overall
report.
Introduction
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respect to investment and operating costs, general economic conditions, local load
characteristics, and, as applicable, regulatory and market conditions.
Service DISCo
Under this vision, there are incentives to develop power quality / reliability enhancing
DR for application on the customer side of meter. The extent of the penetration of DR
assets depends on the evolution of the technologies with respect to performance and
costs (discussed later in this document). In general, to meet individual customer needs
for power quality / reliability, it may be less expensive to apply DR technologies
locally rather than provide the same level of service for all customers through some
more centralized technology.
Under this vision, there are incentives to develop decentralized utility services,
managed by one company. These incentives are driven by economics rather than
technical capabilities. Distributed generation can provide locally sited locally
controlled supply. Where it is economically more efficient to use local generation for
providing energy service, there will be a strong incentive to develop the technology.
Again, the extent of the penetration of DR assets depends on the evolution of the
technologies with respect to performance and costs.
The overall conclusion for both visions is that the evolution of the technologies is not
likely to be strongly vision-driven. Instead, there is a threshold effect with respect to
economic performance. If the economic performance of a technology is competitive (or
even close enough to competitive), then the evolution of the visions will naturally drive
the development of that technology. If the economic performance is not competitive,
then the visions will not drive the technology, regardless of the engineering
performance characteristics of that technology. Because the benefits provided by the
technology are not sufficient to overcome the lack of economic performance, such a
technology will not be applied.
Service DISCo
Over time with increased penetration of DR, and deterioration of aging conventional
assets, it is reasonable to expect that an increasing proportion of capacity needs will be
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met by DR assets. EPRIs DR Strategic Market Assessment (C. Clark 1995, TR-106055)
suggested that, under certain conditions, almost all additional capacity requirements
would be met by DR investments. This is perhaps an extremely optimistic forecast.
Initially, DR will provide selective reliability improvements and enhanced PQ.
Work Processes
Service DISCo
The impact on work processes will be significant only for the Service DISCo, where
there is potentially large penetration of DR assets. DR will generate the need for a new
skill set at the distribution level. New functions will include:
environmental (air, water, noise, sight, etc.) impact management and compliance
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Even under low penetrations of local generation, the utility will still be responsible for
such functions as fuel purchasing, generation plant maintenance and reliability and
power quality control.
System Costs
In general, there is so-called market-pull effect such that prices would tend to
decrease as DR penetrations increase. This effect should be far greater under the
Service DISCo vision. See attached tables that 1) describe current cost, performance
and service attributes of existing DR technologies and; 2) qualitatively describe future
cost and performance attributes of the technologies. The lower values in the cost ranges
reflect the price effects of the anticipated market-pull plus assumed technological
breakthroughs for some technologies.
In the discussion of work processes, we pointed out that there is a need for enhanced
skill sets to apply DR successfully. This makes the distribution company more labor
intensive. We estimate that labor requirements could increase as much as ten to fifty
percent under the Service DISCo vision just to meet the needs associated with
distributed generation.
Table 1
Assessment of Current DR System Costs
* This is the cost for a battery that has one hour of storage. The range reflects
that there are different kinds of batteries available for various applications.
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We have categorized operating costs as low, medium and high. These are relative to
current operating costs of conventional power plants (a range of 2 to 5 cents per kWh).
Storage devices are in the high operating cost range because of turn-around efficiencies.
The capital cost assessments include the full cost of an operating power plant but not
the cost of such things fuel delivery and fuel storage systems.
Table 2
Assessment of Future DR Capital Costs
The information in Table 2 is provided as a forecast of the possible future capital costs
for the five distributed technologies. For the high cost, less technically mature
technologies, (solar, fuel cells and flywheels), achieving the low scenario requires
significant technical advances. The high scenario is based on the assumption that
technical advances do not occur. Achieving the low end of the range in the high
scenario requires increased manufacturing volume and fabrication improvements. The
demand-pull effect associated with the Service DISCo vision would put downward
pressure on costs independent of the technical advances. This impacts all technologies.
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There are technical risks, especially with flywheels and microturbines because of their
required large angular velocities, which have both safety and economic implications.
Fuel cell stack life is another technical uncertainty that affects the economic
performance of that technology. Siting risk, which entails safety and environmental
(including esthetics) hazards, is present for all DR technologies and is especially
problematical for engines and microturbines.
Key Benefits
Service DISCo
The key benefits are (1) increased economic efficiencies in meeting demand for
improved and diverse services and (2) the resulting enhanced financial performance of
the distribution company. Another benefit is the reduced dependence on the bulk
generation market and thus the reduced exposure to potentially volatile electricity spot
prices. Specifically, local generation may reduce the effective demand on the
transmission system, thus avoiding the effect of regional transmission constraints on
local spot prices. This permits the distribution company to be relatively unaffected by
very high prices in periods of high demand, such as summer peak days.
The key benefit provided by DR is reduced distribution costs. As in the Service DISCo
vision, DR penetration reduces the exposure to the potentially volatile electricity spot
market, resulting from swings in demand and regional transmission constraints
Migration Path
Service DISCo
For DR to support the service DISCo vision, current high prices of the technologies
must be reduced to the range of $100-$300 per kW (1998). This will require bringing
some technologies, such as fuel cells and photovoltaic generation, down in cost by at
least an order of magnitude. Some of the reduction can come through manufacturing
efficiency due to greater volumes and fabrication innovation. However, analyses have
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shown that manufacturing improvements alone will not be sufficient to achieve this
required reduction. Technology innovation is almost surely required see the cost
assessments in Table 2.
One current technology that looks promising is local generation (engines and
microturbines). Conventional reciprocating engine technology is well-developed and
thus unlikely to experience a significant reduction in price with increased penetration.
In addition, local generation faces siting uncertainty because of potential air quality,
noise, and visual problems. Further, microturbines operate at very high angular
velocities. It is not yet known whether such operations are safe and reliable in the long
term. Therefore, the path to acceptance for even the most well-developed technologies
is uncertain.
There will be relatively little demand-pull for DR technologies under this vision
(compared with the Service DISCo vision). Indeed, the cost reductions will therefore be
less, but most of the installations will be high-value niche applications that require
smaller cost reductions to be economically competitive. For example, the solar market
is currently growing, despite the large capital costs of the technology. The market of
solar is likely to continue to grow, but the applications are mainly remote power
generation and storage needs that cannot otherwise be cost-effectively served by
conventional wires technologies.
The migration path is one of the aspects of the analysis of distributed resources. In
order to forecast the role of DR in the evolution of the distribution company, it is
essential to understand the costs of the technologies and the way those costs are likely
to change. The tables described in Task 5 describe our assessments of the appropriate
costs
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Introduction
This model focuses the utility on the supply of the lowest cost power to their customers.
It is felt that primarily larger (industrial or multiple consumers in a cooperative
arrangement for instance a new housing subdivision) customers will be interested in
such an arrangement. Lowest cost of delivery is accomplished by many different
approaches, such as sharing rights of way, servicing and billing with several services
including electricity, water, telephone and television. The use of standardized
components in the entire power generation and delivery chain is important. The ability
to trade electricity futures as a way of ensuring that electricity is available at a given
rate will be an important part of a MUMs competencies. Finally, the ability to
arbitrage the cost of electricity over daily cycles could have a huge impact on the ability
of the MUM to make a profit.
It is anticipated that the issues of quality power delivery to the customer are not truly
part of the MUMs area of concern, unless the quality falls outside the bounds of what
is specified in the contract. If the customer desires higher power quality than the
minimum specified, he will need to invest in (possibly with the utilitys or a PQ
consultants guidance) power quality devices, which will give him the level of quality
he needs. As such, the MUM needs to have familiarity, but does not need to be a
provider in this area. (It is anticipated that in actual life, for select customers, the MUM
may need to do more, and in effect move closer to a Service DISCo in some aspects of
their business).
A bigger need, although with a lower degree of relevance, concerns the need for the
MUM to provide a minimum level of service to his customer. For instance, it is not
clear whether a large local storage unit is within the realm of what a MUM would need.
This would allow them to purchase power when it was cheap and to supply it when it
was more expensive and needed. Several large storage systems (350 MVA) based on
compressed air have been operational for several years and have shown good potential.
Arbitrage, in my opinion, is a key component of low cost energy provision. Larger
SMES systems have also been proposed for this type of use, but have not gotten beyond
a detailed design stage.
It is thus seen that power electronics plays a moderate role in MUMs, as has been
presented earlier.
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Service DISCo
The Service DISCo seeks to gain competitive advantage by forming a close relationship
with the customer and providing services that go beyond the mere provision of energy.
For instance, improved power quality, energy audits, providing monitoring and
maintenance of all electricity supply, cogeneration and back-up power equipment and
services, financing for meeting a customers power quality and service enhancement
needs, and generally working in partnership to realize higher levels of productivity.
Power electronics will play an increasingly important role in this universe. For
instance, on the utility side, if the customer desires a premium power service, then the
utility would install the PQ enhancing equipment on its side of the meter, and would
bill the customer appropriately. Alternately, the utility could finance or help with
locating, specifying and commissioning the equipment on the customer side of the
meter. Several new possibilities exist for the utility in this universe. Some of these
possibilities that are enabled by advances in power conversion technology are
discussed briefly here.
Each new technical innovation is first described briefly along with a circuit schematic
and intended function. The status of the technology is discussed briefly along with its
possible use by a MUM or Service DISCo. Those technologies or assets which will be
discarded, or otherwise impacted by the new technology, are also defined. Work
processes that need to be developed as a result will be defined where possible. System
costs will be described where available. Risks and challenges to realizing the promise
of this technology will also be briefly outlined. Finally key benefits and a migration
path to widespread use of the new technology will be covered. Once the basic
information is generated, a table will be developed to represent the most pertinent data
in a succinct format.
Several new technical innovations have been presented here. These are segmented into
several categories by dominant impact in one of several areas. These categories include
Power Flow Control, Power Quality, Smart Grid and Distributed Generation Systems.
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development and availability (detailed discussion for each device is included later
in this document).
Statcon
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Alternate solutions which use a reduced amount of energy storage, and operate
interactively with the ac line even during sag conditions tend to be more cost
effective, but are somewhat more restricted in the types of events that they can
protect against. These solutions include the Dynamic Voltage Restorer (DVR)
from Westinghouse (now Siemens), the Sipcon from Siemens, and the SSVR from
GE. Devices such as the Statcom have also been used to provide voltage support
through VAR compensation, but with rather limited usefulness in customer side
applications. These solutions have ranged from $250-$400 per kVA (without
energy storage) at the 2-10 MVA level for medium-voltage installations on the
utility side of the meter. A new solution has recently been introduced by Soft
Switching Technologies for use on the customer side of the meter. Rated at 2 to
2000 kVA, the Dynamic Sag Corrector (DSC) product is targeted for use in 480
volt applications. This product offers deep sag protection and optional
momentary outage protection at a new and unprecedented price level of $100-
$150 per kVA. At this price point, the economics of providing sag mitigation to
customers are dramatically changed.
Existing solutions for voltage sags tend to be rather limited in their efficacy.
These include surge suppressors, CVTs, servo stabilizers, and UPS. Of these
devices, surge suppressors are ubiquitous in their application, primarily because
they protect equipment from physical damage, and because they are small and
low-cost. However, they do not protect against voltage sags, the dominant
power quality issue that the Service DISCo will have to solve. Of the other
solutions, only UPS provides adequate protection, but at $500-$1000/ kVA they
are too expensive to be widely applied.
As other power quality regulations, such as harmonic limits and conducted EMC
become more widely applied, there will be other opportunities for the utility to
provide meaningful support to the customer to identify problems, to recommend
and then possibly supply the equipment for mitigating the problem.
Dynamic Voltage Restorer (DVR)
Dynamic Sag Corrector (DSC)
Shunt Active Filters
Hybrid Shunt Active Filters (HSAF)
Series Active Filters
Dominant Harmonic Active Filters (DHAF)
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DC Distribution Systems
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The remainder of this Power Electronics section includes detailed discussion about
specific technologies.
Service DISCo: most likely user of active filters. See description below
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The US Navy is also moving toward a zonal electrical distribution system architecture
(ZEDS), wherein dc power is distributed across the various zones in a ship. All loads
are interfaced with the dc bus using a power converter. Further, fast protection at each
zonal boundary can isolate sections of the ship when the section is damaged. In the
case of power quality parks or smart grid implementations, an important consideration
concerns the dc nature of most storage and alternate energy distributed generation
media under active consideration. It is felt that using an intermediate dc bus as the
distribution means will minimize overall system cost. Finally, several aircraft also still
use a dc bus for internal power distribution. The dc bus is rated at 270 volts normally,
although some specific small aircraft exist with 24 volt systems. Although the
Department of Defense is ostensibly making a move toward Commercial Off The Shelf
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(COTS) products, this is not likely any time soon, and any volume advantages will
possibly remain unrealized in the short term.
In recent years, some companies including ABB, have introduced a format for dc
distribution which they call HVDC Light. This technology uses voltage source
inverters and rectifiers to realize medium voltage dc systems which operate at lower
power levels than traditional HVDC systems, and are thus useful in captive smart
grid applications.
Important issues to be considered with dc systems are cost and safety. In industrial
environments, existing assets of distributing ac power would continue to be used,
except for new facilities. Without some level of redundancy, reliability levels would
become compromised. Further, unless the design could be based on some high volume
components, cost would tend to be higher than for conventional 60 hertz systems. In
such a case, other justification for the dc distribution would be required. Fault
management without isolation between the various dc load points becomes an
important issue. Isolation is possible, but requires dc/dc converters at each interface
point adding substantial cost and complexity. Of most concern are line to line faults
and low-cost methods for arc suppression, and line to ground faults and the operation
of sensitive enough GFI breakers to guarantee human safety. If isolation exists for each
customer, then fault issues are more manageable within a specific customers facility.
Issues of discarded and embedded technologies loom large here. Except for new green
field plants, the existing infrastructure would pose a cost barrier. Training of service
and installation staff is an issue. DC systems are well known, so regulatory barriers are
not likely to be insurmountable. Cost, safety, system availability, system reliability,
and equipment availability are all important issues that need to be addressed before a
dc smart grid would become widely applied.
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Work Processes
Service DISCo:
More or less labor: Converter station equipment will be modular and fully factory-
tested for simple installation. However, power electronics require a controlled
temperature environment. Hence, installation often requires a new building with
air conditioning equipment.
Different Skills: Electronics sub-modules will be field-replaceable, requiring basic
electronics knowledge. Self-monitoring and diagnostics software should reduce the
need for trouble-shooting skills.
Different equipment needs: The two-way communications link will provide status
to the central controller. Only basic electronics and electrical equipment are needed
for changing field-replaceable modules.
Maintenance changes: Inspection should be mostly unnecessary. Status will be
monitored by communications link. Inspection of moving parts (cooling fans, etc.),
and cleaning of cooling fins may be scheduled.
Risks and Challenges
Service DISCo:
Regulatory risk: moderate
Technical risk: low-moderate. HVDC Light converter stations are commercially
available.
Customer risk: Cost, safety, system availability, system reliability, and equipment
availability are all important issues that need to be addressed before a dc smart grid
would become widely applied.
Key Benefits
Service DISCo:
In situations where a large number of variable speed motor drives are applied in a
critical process, it makes sense to have a common dc bus, possibly with a large battery
bank, to provide ride-through capability to the process. The interconnected system
makes optimal use of regenerated and system inertial energy and minimizes the battery
requirement. Cost savings are realized by using a single large rectifier for all the
drives.
Distributed generation (DGS) or energy storage (ESS) along a common DC bus may
simplify and reduce the cost of the power conversion interface for the DSG or ESS
Other possible benefits were listed in the ABB Preliminary Draft document:
Distribution Systems Redesign Project ETI Report No. 98-0140-75 dated May 7, 1998.
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Power electronics plays an important part of the interface in many of the newer storage
and generation technologies. In particular, fuel cells, wind energy, PV, batteries, SMES
and flywheels, all require power converters to perform the basic power conversion and
utility interface function. This gives the ability to realize compact and more efficient
systems, with fast controls. Key issues that remain are cost and line interface. As DGS
systems become more prevalent, the issues of islanding and protection of utility
personnel become of paramount importance. No low-cost, fail-safe, anti-islanding
scheme exists for massively distributed DGS systems. The success of DGS depends on
solving this problem.
Another important point to realize is the role that this DGS can play. For some systems,
such as flywheels, battery storage, and micro-SMES a true back-up power option can be
provided, much like a UPS. However, for fuel cells and microturbines, the start-up or
load change response is so slow that load transients cannot be effectively handled
without local battery type of storage with significant impact on system cost. This
implies that such DGS systems can only be scheduled and cannot be used to provide
uninterrupted power to the customers load, unless significant storage is present.
Finally, for alternate energy systems such as PV and wind, once again energy
availability is not guaranteed, and the economics of the application can only be based
on energy cost and on no other considerations stemming from the provision of
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premium power to the customer. It should be noted that for fuel cells and other DGS
systems requiring natural gas, ownership of the gas lines at the customers facility has a
big possible impact on the cost effectiveness of this approach.
For MUMs, the concept of DGS has some important possible impact. Primarily, if the
utility provides gas and electricity service to the customer, then by locating a co-gen or
DGS unit at the customers site, the utility can choose the most economical means of
providing electricity locally. The utility also has the ability, if it is a utility owned
resource, to dispatch the DGS unit and to perform peak shaving or to use a lower cost
resource. Also, as cost of electricity is the primary driver for the MUM, providing local
storage can also help control the costs to the utility, and hence provide some level of
protection from wide electricity price fluctuations.
Key Benefits
Service DISCo
DGS are being pursued by many major utilities as a means of deriving competitive
advantage. The primary objective of locating distributed generation and/or storage
within a service Discos scope, is the possibility of arbitrage on the price of electricity,
and more importantly providing a higher level of service guarantee to a specific
customer, with spill-over benefit to other customers. As the Service DISCo has no
direct control over the performance or price of the energy supplier, having storage will
allow them to choose the rates at which they charge and discharge the storage unit.
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Series connected active converters that have been proposed include a variety of active
filters, as well as devices such as the dynamic voltage restorer (DVR). All these devices
are connected to the line in series through a transformer, and can inject fundamental or
harmonic voltages in the line. The DVR type of device, for instance, can inject a series
voltage to compensate for line voltage sags. The DVR can also, in principle, provide
additional series impedance to limit the fault currents in the system. The DVR
recirculates energy between the phases or uses stored energy to provide the voltage
boost for single line to ground or line to line faults. In the case of a symmetrical fault,
the level of protection is limited by the amount of stored energy. The DVR is available
at ratings of 2 to 10 MW at medium voltage levels with several installations in the field.
The solution is rather expensive (at $400-$800/kVA) due to the energy storage and the
fault handling requirements on a medium voltage bus. The ability of the DVR to limit
fault currents also places challenges on the fault coordination, rating and cost of the
system.
Vr + V - Vs
Energy Vdc
Energy
Savings
Storage
The DVR is installed on the utility side of the meter, in series with the line feeding an
industrial customer with sensitive equipment.
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Work Processes
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Migration Path
Service DISCo:
The DVR would be sited near a particular customer after the Service DISCo has
identified that customers equipment sensitivity to voltage sags. The DVR would be
sold (directly, or through premium power pricing) to medium-size industrial
customers or cooperatives of smaller customers.
Static Switch
Regulator
& Storage Module
Load
Unprotected Protected
Input Output
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The DSC is a compact and low cost device ($100-$150/kVA), which significantly lowers
the cost of providing sag correction. It can be used by Service Discos to build a better
relationship with the customer, either by using the DSC as a low cost customer
retention device or by making the solution available to the customer on reasonable
terms. The DSC can also be a component of a smart grid by providing selective
voltage support to important and sensitive loads. The DSC is in early stages of
introduction, with extensive field trials scheduled in the near term.
Work Processes
Service DISCo:
The DSC is provided to the end-use customer, for installation on the customer side of
the meter. No skill, labor, equipment, or maintenance is required by the DISCo beyond
distribution of the product to the user. This is analogous to the distribution of set-top
converter boxes by cable television companies. At higher kVA rating sizes, the DISCo
may choose to provide installation services for industrial customers.
System Costs
Service DISCo:
Cost information: $100-$150/kVA from Soft Switching Technologies.
Service DISCo:
Regulatory risk: Low. Devices will be UL or ETL tested and approved. The
solution is cost-effective in todays regulatory environment.
Technical risk: Low. Pre-production units have been fully tested. Extensive field
trials are scheduled in the near term.
Customer risk: Low. The DSC will provide protection against the majority of end-
user power quality problems, without the lifetime restrictions imposed by a UPS
battery.
Economic risk: Low. The performance of the DSC will be extensively proven in
field trials.
Key Benefits
Service DISCo:
The DSC compensates for deep voltage sags down to 50% of nominal voltage for
several seconds, and also can compensate for even deeper sags for up to 10 cycles. Sag
and momentary outage protection are the only primary function of the DSC.
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Migration Path
Service DISCo:
The development of a distribution channel for the DSC is required. This channel may
be already present if the Service DISCo also provides telecom or cable service. The
Service DISCo may elect to install a larger DSC on the utility side of the meter for
premium power pricing or as a customer retention tool in, e.g., apartment buildings or
for industrial customers. The first step for the DISCo is identifying those customers
who would most benefit from voltage sag mitigation, or those larger customers most
open to the DISCos competitors.
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Statcon
The Statcon would improve the quality of power on the grid, providing similar
improvements as the SVC. However, the cost of the solution is still very high, and its
limited power rating limits its usefulness in higher rating distribution systems. The
Statcon is available from a few vendors, but has not been widely commercially applied.
Work Processes
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Migration Path
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Service DISCo:
See below
TSC FC TCR
The SVC could be used by both the MUM and the Service DISCo. This would replace
switched capacitors used on the system presently, and could also replace some voltage
regulators. This solution is available from several vendors, but is not yet widely
applied, primarily due to higher cost.
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The SVC is mainly deployed for VAR support near industrial customers,
Work Processes
Customer risk: The benefit of the SVC may be marginal for many customers in
terms of increased productivity.
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Key Benefits
Migration Path
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V
Vr + quad - Vs
9 3 1
The TCPS is mainly targeted at MUMs, with less usefulness to a Service Disco.
The TCPS would improve power flow control and line utilization, and provide voltage
regulation. It could also improve line behavior under fault conditions.
The TCPS has been built and installed in at least one commercial installation as a
demonstration project. As far as we are aware, this is not extensively used yet.
Work Processes
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TSSC TCSC
The TSSC can increase capacity of transmission lines, and can also control power flow
along parallel lines. It is primarily useful to MUMs, with limited applicability to
Service Discos. Application is at medium (12 kV) to high voltage.
The issue of fault management is an important one, as the TSSC is a series connected
device with active power semiconductor devices riding directly on the high voltage
lines. These TSSC devices are now commercially available, but are not yet widely
applied.
Work Processes
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Migration Path
Service DISCo:
Lower power versions could provide voltage and harmonic support near customer.
See description below
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Vr + V - Vs
Vdc
The solution is rather expensive, due to the need for two converters and two coupling
transformers. Managing faults, particularly for the series converter, is very daunting
when the UPFC is used on high voltage transmission systems with high fault currents.
Several units have been installed at demonstration sites.
Work Processes
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Service DISCo:
Lower power versions could provide voltage and harmonic support near customer
facilities.
Migration Path
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From a communications perspective, the electric distribution system of the future seeks
to develop communication and application inter-operability with dozens of devices
connected to a variety of communication media. It should be noted that the
fundamental technology components listed below are representations of a class of
technologies. There could, for instance, be literally dozens of manufacturers, each with
a number of product lines for each of these categories. The manufacturer can offer
different levels of functionality at appropriate price points for to meet the consumer's
task and financial resources.
It is important to note that the CPG, IED and DGCI are very similar in both architecture
and functionality. That is, they each carry out four tasks. First, they interface (attached
to, or embedded in) the hardware (distribution and customer premise). Second, they
monitor or control performance parameters of the hardware. Third, they are able to
transmit information about the hardware to a Wide Area Network (WAN) for remote
monitoring, communication and interface. Fourth, they are able to receive remote
instructions to modify the operating standards of the equipment.
Each of these four component tasks are effectively developed and integrated if and only
if there are open standards and communication protocols that allows each of these
devices to interact. Hence, the fourth component in the communication architecture of
a future distribution system is 'Open Standards'. In the absence of open standards,
separate 'communication translators' will be required for the CPG, IED, and DGCI. The
lack of open standards is certainly not 'fatal' to the development of or implementation
of a future distribution system. The lack of open standards does, however, translate
into more costs and time before the benefits of a future distribution system are realized.
out by the device. Manufacturers will do well to ensure open communication interfaces
are available so that different vendor equipment to inter-operate and inter-work. It is
these interfaces or 'boundaries' that must be designed, managed, and maintained before
a distribution system of the future can be realized.
Service DISCo
The Service DISCo network communications system is based on a fully integrated
distributed computing environment that spans the Service DISCo enterprise, and
integrates with all of the entities that are serving the restructured environment. This
standardized communications manages the distribution environment including
monitoring operating parameters, and managing the distributed generation and
resources deployed on the system. In addition, the Service DISCo communication
system integrates with equipment deployed within customer facilities and, as
necessary, with equipment owned and operated by the customer. This environment is
enabled through the maturity of the information technology (IT) industry and by the
levels of distributed computing standardization for established utility specific devices.
This maturity is manifest through open infrastructures that meet all of the international
specifications for equipment interoperability and interworkability including
information security and management. These environments have yielded a variety of
IT tools that enhance the information systems already deployed. The concept of the
Service DISCo has, through communications, redefined the delivery of electrons to a
customer service entrance. The Service DISCo provides a visible and specific
function to the customer. For instance, instead of providing three-phase service to an
industrial customer, the Service DISCo now has the ability to provide premium power
to specified circuits within their facility.
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Technology #1
Much of the new technical innovation envisioned for the future distribution system is
based on the integration of many of the generic categories of technologies that exist
today in addition to those required for the future. This technology is predominantly
based on standardized approaches to distributed computing based collaborative
development work with the vendor community, standards organizations, and
refinement of the standards based on real-world implementation experience. This, in
turn, creates a common or shared infrastructure for distributed information
processing. This technical innovation is more of a logical or conceptual construct than
an individual piece of equipment. Standard open system communication protocol is a
key enabling technology. The open communication protocol represents a 'class' of
technologies, not a specific protocol itself. A weak approximation of open
communication protocol is the Internet. However, the Internet does not stand as a good
example of the technically rigorous level of distributed computing infrastructure
needed for the distribution system.
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Technology #1
Standard Open System Communication Protocols
(continued)
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Technology #1
Standard Open System Communication Protocols
(continued)
Technology #2
The Customer Premise Gateway (CPG) is a generic name for a device that includes the
hardware, and software that integrates communications between the utility and the
customer's facility. The CPG is not a single technology but the effective integration of
several including wide-area communications, building communications and the
necessary resources to support the internetworking function including network
management and security. This device serves several functions in the future utility
since it serves as a key enabling technology for the provisioning of the future
distribution companys service. In the product and services scenarios considered
herein this device enables the Service DISCo to consider the end-use loads as the sink
for energy. That is, the traditional service entrance is no longer the "end point" on the
distribution grid. The end-use loads may become the new end point of the energy
distribution function within the Service DISCo scenario.
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The discussion also illustrates the roles this device could play within the MUM
scenario. The physical device(s) is/are deployed at or near the service entrance at the
customer's facility. For the Service DISCo the CPG will serve to support the automation
of the distribution system since it can be considered the effective endpoint of the
energy distribution network of the future. Most important, however, is the notion that
the CPG will enable industry restructuring functions now in development through
State and Federal Regulatory bodies.
Service DISCo Multiple Utilities Manager Common
Technology Device to internetwork the The meter and/or customer
Description DISCo and the customer premise gateway will not be N/A
Premise based equipment / owned / operated by the
loads interface to the DISCo
premise gateway Consequently, under the
Manages the MUM scenario the CPG
communications between technology becomes a non-
the customer and DISCo event.
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Technology #2
Customer Premise Gateway (CPG)
(continued)
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Technology #3
The Intelligent Electronic Device (IED) is used to communicate with and control
equipment within the distribution system. This device is a generic representation of
many similar devices used to monitor and control distribution functions. This device
implements the communications and applications necessary to effectively integrate the
utility equipment under the DISCo's jurisdiction. Generic functions with this device
include implementing any necessary network administration/management, security
and control functions, this device also integrates with the overall system manager and
integrator that oversees industry functions. This equipment is used within substations
and in the 'field'. This means that it will have substantial computing resources
available and should not be considered a constrained environment. It will be
necessary for this equipment to communicate as necessary over the required standards,
so its design and implementation is dependent also on the standards that emerge for
the future utility. The master station also runs required database applications to store
and archive the system operation as required and will need to conform to the data
management standards of the future distribution system.
Service DISCo Multiple Utilities Manager Common
Technology An intelligent electronic
Description See 'Common' Description See 'Common' Description device that monitors, stores,
and reports performance
parameters of distribution
system equipment.
Programmable, monitoring
control, protection or data
processing device with
communication capabilities.
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Technology #3
Intelligent Electronic Device (IED)
(continued)
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Technology #3
Intelligent Electronic Device (IED)
(continued)
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Technology #4
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Technology #4
Distributed Generation Communication Interface (DGCI)
(continued)
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Technology #4
Distributed Generation Communication Interface (DGCI)
(continued)
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Overview
This is intended to provide context to some of the generic business services and
products that become enabled through the application of the future distribution system
communication and distributed computing environments envisioned.
The future utility system will have the capability of remotely reading meters and
managing a network of remote revenue meters that are read by a variety of energy
service providers serving any given energy utility customer base. Core functions of this
service includes the capability of remotely reading energy and demand readings at 15
minute intervals for any given customer base.
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the following meter types should be considered within this fundamental concept:
polyphase, bi-directional flow, load survey, instrument transformer based metering,
metering functions specific to electric vehicle charging, compensating meters, non-
intrusive load monitoring, non-revenue qualified meter readings.
Gas submetering of individual loads within industrial facilities is also a service that
could be provided through either the customers in-building network or independent
communications.
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The ability to monitor individual circuits and loads within a customers facility opens
the opportunity for additional value added services. Submetering could also open the
opportunity to serve the customer by end-use service function (i.e., space cooling, space
heating, hot water, lighting, etc.) and the potential to bill for the actual end-use function
provided. Metering services within a customers facility could also be revenue
qualified and enable commercial and industrial customers to more accurately account
for energy in their production process, or services functions. For instance, it would be
possible for customers that have large facilities that are used for specified periods by
other companies to correctly bill for energy usage of their facilities. This scenario also
includes submetering for rental space or for meeting other customer needs. Topics
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Building Services
Building services encompass a variety of functions to ensure the proper installation and
operation of major building subsystems. Most small to medium sized commercial and
residential buildings are weather driven loads that have substantial impact on the
energy systems supplying power to them. Buildings however also offer opportunities
for thermal storage and other methods to shape utility loads and are therefore a
potential service opportunity for the Service DISCo.
Building Commissioning methods ensure that the systems are installed correctly
during initial construction or building retrofit activities. The following functions could
also be supported in whole or in part through customer communications:
Design support
Regulatory conformance
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Commissioning
Design support
Regulatory conformance
Commissioning
Design support
Diagnostics
Load Control
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Diagnostics
Photovoltaic Monitoring
Regional Data
Local Data
Micro Data
Health monitoring
Other monitoring
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Maintenance Agreements
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Super Conducting Cables: It is reasonable to assume that super conducting cables will
be available in the near future that will function in the distribution voltage range.
Along with the newer placement technologies the types of cables that are going to be
produced will affect the reliability and distribution of any system whether it is
overhead or underground, new or existing. Existing underground systems that have
direct buried cables, cable in conduit systems (CIC), or conduit structure systems that
will be easily renewed super conducting cables. With sizes being a maximum of 1 it
will be practicable and possible to change out existing systems. When the construction
of the newer cables start, it will be imperative that the construction of these cables
include a fiber optic cable extruded into the sheath of the newly power cable.
The placement of these newly developed cables will not follow the standard
construction practices of today. The cable in existing underground CIC will be the
hydraulically vibrated out of the surrounding conduit and even if the cables are lodged
in by years of dirt and corrosion these vibrating units will be able to dislodge and
remove existing cables that are lodged in CIC systems. Directional drilling will be the
construction method of choice for placing new conduits in existing outside
underground systems that have been direct buried. The cable placement will be
accomplished by pushing or blowing the cables into the conduits verses the pulling
methods that are a standard of today. Costs of pushing cables verses pulling cables
today in the aforementioned projects are under $1 per foot, which includes a pickup
truck, generator, simple cable pushing devise and 2 men (to push cables) and $3 to $5
per foot to pull cables into smaller conduits using the standard line trucks, pulling
winches, equipment and a 4 to 5 man crew.
Cable Installation methods by pushing and blowing vs. pulling: Tools have been
developed and distributed by Trenchless Technology Products of Glendale, Arizona.
The cable pusher is an innovative, light-weight, electrically belt driven tool that pushes
cable into conduits without the need of placing pull ropes or fish lines. The machine
can accommodate cable diameters of 1 to 3. The electrical machine has a push
strength of 700 lbs. maximum and pushes at a speed of 30 ft./minute. It is powered by
115 volts on a 25amp circuit. The portable field power is 4000-watt generator. This
machine can also be powered hydraulics or pneumatic.
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Ground penetrating radar: Systems have been developed that penetrate the ground
surface using radar technology that can located underground utilities and obstacles.
They can also help describe the soil type and conditions. They are small pushcart
types, normally with two wheels, that project radar waves into the ground. Some of
technology that is being used today these are focused on underground mapping.
High speed narrow trenching: High speed trenching machines (OCC135 Vermeer)
using a narrow wheel type cutter, wheel cutting widths as small a 3.5, that cut through
concrete, asphalt and rock without any precutting of the surfaces and the trencher can
cut to depths of 48. These trenching machines trench at a speed of 10 to 15 ft per
minute. Most machines have self loading units that attach to the trenching machines
that load the trench spoil directly into waiting dump trucks.
Slurry backfill: This is usually a mixture of cement mixed with sand & water and
delivered to a job site in a transit mixer truck (cement mixer truck) as a flowable
material, the same way that ready mix cement is delivered. The lean cement mix helps
the set-up and usually eliminates the problem of trench compaction. The material is
porous and does not set up a moisture barrier at the trench location. Some cement
companies are using fly ash (ash from burnt coal material that would come from a coal-
fired powerhouse) mixed with sand, cement & water to make up a flowable slurry
backfill material. This material works well with the narrow rock wheel trenching
machines.
Joint trench: Multiple companies sharing in the architectural design, engineering, fiscal
participation, costs, space and responsibilities of the utility trenches.
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unlikely. The processes mentioned are advances in these specific areas that will be
more refined.
Further, these technologies and methods will be beneficial to the MUMs operation
because they are low-cost, effective methods. The difference between the MUMs
operation vs. the Service DISCos operation is that the MUM will probably use more
contracted maintenance help rather than their own employees. Contracted labor is
used because the firm is only paying for the services that are needed and the
contractors they call are geared for on-call maintenance and have the skilled people to
respond at a moments notice. The contractors hourly rates reflect these types of
services that they provide and the MUM operator will know how to program these
rates in their yearly operating budgets. Now you have a situation where the MUM does
not have to have that large work force to maintain their facilities and outside plant and
only pays for the services that are needed. To the low-cost MUM this is a win-win
situation. Most DISCos have long-term labor agreements that restrict this type of
operation.
Service DISCo
What technology/asset is replaced (discarded)? When we look into future electrical
systems, lets assume that the conduits of todays outside plant are the embedded
architecture that will continue to exist. The cables that are handling the currents of
today will be replaced with the newly developed super conducting cables of tomorrow
handling currents for primary and secondary distributions. With the sizes of the
conduits that exist in todays outside plant designs, it is practical to assume that the
future cables, being smaller in diameter, will take up less space and therefore will be
easily installed into the existing conduits. We refer to the new technologies developed
today on removal and installation of power cables.
Cable installations, for smaller diameter cables ( up to 1), can be pushed or blown
rather than pulled. This technology is in the market place today and is extremely
cost effective (EPRI developed technology).
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Rather than use the standard open cutting methods of today in replacing existing
direct buried cables in existing residential and commercial areas, directional drill,
where practical (ground conditions permitting), will be used instead of standard
trenching methods. Tomorrows technology will be that the operator will sit on the
directional drill machine, have a predetermined drill path that has be researched by
GPR (ground penetration radar), and drill to this predetermined path from the
operators seat. Pot-holing utilities will not be necessary and the risk of accidentally
striking another utility or and underground structure will be minimized.
Production rates will increase because the locating technology of today will be
replaced by locating technology that pre-engineers the drill path that gives correct
aysmith and inclination positions. The operator will simply drill to the engineered
drill path positions. All locating will be done by above ground positioned sensors
that receive signals from the underground sonde positioned on the front of the drill
bit head and transmit that signal to the operator on the machine. This allows the
operator to see exactly what is going on with every movement of the drill and allow
the operator to make the necessary corrections to keep on the engineered drill path.
When the drill completes the drilling operation the recorded drill path will be able
to be downloaded onto a disc and used for as-built drawings. Using GP (global
positioning) technology coupled with the locators of today as-built accuracy
position is to the centimeter.
Distribution Systems: Use of super-conducting cables in rural areas for primary and
secondary distribution could be placed by plowing, eliminating the standard pole
line construction methods. Plowing is not a new technology, but it is the most cost-
effective technology that will compete with the cost of pole line construction. This
type of construction method would eliminate the use of poles, thus being more
environmentally sensitive to the use of wood.
Work Process
Automation and control systems of today are already being installed to operate and
control generation, switching and monitoring units of equipment. Today, fewer
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people are being used in the traditional blue-collar jobs and more electrical, electronic,
computer literate types are replacing the traditional operator to monitor and operate
these systems. The change is happening rapidly, and there is a definite need in the
industry to have a more technical, electronic and computer based labor type employee.
The traditional labor type jobs will be minimized. Traditional labor type jobs will not
go away completely, but the typical type of person that is the electrician, operator,
laborer etc. will have to be multiple-skilled and able to function within the technology
that today is the black box concept and tomorrow will be normal operating procedure.
The electrician of today has to understand automation and the technical functions of
how individual controls communicate with each other, where yesterday this was the
function of the communication company. The excavator operator or directional drill
operator of tomorrow will have to understand how the PC thats controlling the
functions of his or her piece of heavy equipment
System Costs
Directional Drilling:
Future replacement costs, because of advances in the technology and the where labor
and equipment cost are going to, will increase, but the amount of labor to operate the
equipment will lower. We should see a slight increase to $14.00 to $17.00 per foot.
In the future, placing smaller diameter super conducting cables direct buried will be
$8.00 to $11.00 per foot.
Todays costs for pushing electrical cables 1 in diameter and less in size
Future costs should be about the same. This technology will advance and the cable
sizes and weights will reduce.
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Cost in the market today range from $ 8.00 to $12.00 per foot
Vacuum trenching for open cut method in downtown or congested areas, used for
inspecting and pot-holing existing utilities and excavations for spot utility repairs
Vacuum excavation for trenching is a newly developed technology and there is not
good cost information at this time.
Today $20.00 to $35.00 per pot hole $2.15 to $3.75 per cubic foot
Future $15.00 to $20.00 per pot hole $1.60 to $2.15 per cubic foot
In the future the equipment will get better and the cost of the equipment should lower.
Labor will increase but it is the equipment that is doing the work. This should become
a one-man operation.
If we are looking at a project that would typically remove the existing overhead
construction and place it in an improved commercial , business or residential (concrete
sidewalks and asphalt streets) the costs for this type of trenching is usually shared
between the electric, gas, telephone, cable television and street light companies.
The typical new building developments and housing developments will be developed
and engineered (pre-planned) for a joint trench application. One engineering and
development source will handle this type of project, whether it is the Service DISCo or
MUM or a private entity. It has become common practice for the developer to include
the joint trench project in their development costs. The trenching that is involved in
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this type of work is in native soil and backfilled with screened native soil or select
import around the cables and conduits. The trench configuration is usually two tiered
with the primary and secondary cables on the bottom and the gas, telephone, CATV
and street lighting located in the upper section. The gas lines are usually plastic and
are placed so the location of the gas line is at the backside of the concrete sidewalk
covering the joint trench.
This is covered as joint trench application because power cables, plastic gas lines,
telephone cables and CATV lines could be placed at the same time. This is not common
practice, but this can be done. With the horsepower and weight of todays machines
the type of footage that is stated above can be accomplished. It is typical to rip
agricultural land @ the rate of 7300 feet per hour @ 7 deep using a 735 hp machine.
Production for cable plowing and installation would be 3,300 feet per hour @ 7 deep
and installing the multiple utilities in plowable soil.
Typical plow pricing for single cable installations not using the types of machines as
stated above are:
A cost estimate was developed that fits into the above stated price ranges for plowing
cable today. The problem is not getting the number of utilities in one plow shoot, but
the amount of ripping to depth that needs to be accomplished. The direct costs that
range from $0.46 per foot to $0.77 per foot. These are only estimated costs but are
verified by the work that is being done in the agricultural fields of Central California
Valley.
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STAKEHOLDER INTERVIEWS
Customers Comments
Service DISCo Multiple Utility Common to Both
Manager Visions
Positive Comments: Positive Comments: General Comments:
From the customer If this option reduces costs, Many customers have been
perspective, the Service the customer will be pleased. left out of the decision
DISCo was a popular option. making process (large
Negative Comments:
Customers will evaluate industrial customers made
Do not see this as a likely
electricity purchases based the decisions, not the mid-
candidate (not many
on value, not only on price. size guy).
companies are capable of
Is electricity a commodity? this). Large industrial and
Not really, but the onus will residential customers get the
Minimal benefit for
be on the utility to prove that benefits
customers, unless it reduces
it is not a commodity. The costs. No incentive for the utility of
Service DISCo appears able today to invest for reliability.
Concerned that management
to do this. Commodity WiresCo is a
has the expertise for all
Customers will drive the systems, or operational reasonable vision to choose
market place. The Service experience to provide (understands that this vision
DISCo appears well multiple utility services. would not cover the
positioned to meet this technologies in the level of
Concerned that technology
demand. detail that we want, and
might be too diverse for cross
Expect reliability as a therefore out of the scope of
training of personnel.
customer. this project).
General Comments: Expect the DISCo to be the
If reliability becomes an The MUM needs to ensure
issue, customers will look for supplier of last resort, now
reliability. and in the future.
companies that will provide
reliable power.
The Service DISCo will make
money through serving the
ESP (e.g., connects and
disconnects, outage
restoration).
Small ESPs may want more
services than other ESPs
(e.g., billing, call centers,
meter reading, etc.).
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Regulators Comments
Service DISCo Multiple Utility Common to Both
Manager Visions
Positive Comments: Positive Comments: Positive Comments:
As long the Service DISCo Already know how to This is an extremely valuable
does not sell the power and regulate this type of business. exercise.
work for the ESP, this is a Like the idea of a MUM Good phase 1, but another
vital exercise that shows (economies of scale; not anti- phase should further
what the distribution system competitive). evaluate regulatory
needs to operate. implications.
Negative Comments:
Negative Comments: Regulation will exponentially Would like to see follow-up
Regulators are naturally increase if utilities pursue the on one of the less leveraged
suspicious when regulated MUM vision. scenarios (e.g., Commodity
companies work in WiresCo vision).
deregulated areas. Separation between regulated
and unregulated operations Regulation is not set in
Competition should not be will become more complex stone, and EPRI and the
the main objective of the (i.e., separation of utilities can still affect the
utility and the regulators will competitive functions and regulatory process.
be suspicious if the utility monopoly functions).
ever tries to enter new Negative Comments:
competitive areas. More burdensome for Good start, but the DISCo is
regulators. the driver of this, there are
Concerned with expertise other options.
and cash flowing from General Comments:
regulated company to Not impossible, but tough to General comments:
deregulated company (cross- implement. Laws may not have caught
subsidization). Data communication could up to reality (e.g., liability
become an issue (cannot issues), but eventually
Regulated business could not
share all customer data). regulation will catch up.
be leveraged to the benefit of
the deregulated entity (e.g., The FERC will play a very
regulated business cannot minor role, if any, in
recommend that the regulating the distribution
customer uses certain types system of the future.
of products or services, such The FERC would become
as a type of photovoltaic involved if the market was
system) set up in a way that the retail
Not comfortable with the customer was paying
utility pursuing separately for the
entrepreneurial type transmission service (direct
activities. to the industrial customer).
The onus will be on the If reliability decreases
utility to prove that they are significantly, the regulators
not being anti-competitive. will step in.
Regulators want a separation
of infrastructure and
services. This is inconsistent
with the Service DISCo
vision.
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Other Comments
Service DISCo Multiple Utility Common to Both
Manager Visions
General Comments:
Liability litigationnow that
were in a competitive
market place, how do we
determine who is responsible
and how do we structure
ourselves so were covered?
This will be an issue with the
Service DISCo.
Need to be concerned about
the failures of ancillary
products and services
(liability for utility), even if
the ESP is directly
responsible for these
products and services.
Product liability will become
more important if pursuing
this vision.
Management structure needs
to indoctrinate its
employeesparticularly
sales and marketingabout
what it can do when it sells
its products.
The Service DISCo will need
to establish proper product
design precautionary stages
(prevent product defects
from being sold).
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To support the development of the Multiple Utility Manager (MUM) business vision,
several domestic and international utilities that are currently operating some form of a
multiple utilities system were interviewed. These interviews provide valuable insights
into the realities of today, highlighting the benefits realizedand not realizedtoday.
While the intent of Distribution Systems Redesign Project is to conceptually design two
electric distribution systems of the future, and therefore we did not want to limit
ourselves by focusing on the realities of today, these interviews helped us think about
needs of the MUM in the future. This information refined the development of the MUM
conceptual design, it was not the basis for the MUM conceptual design.
It should also be noted that a complete evaluation of the multiple utilities of today was
not performed. Rather, the desire is to pass along some interesting information that
was gathered in the course of completing the objectives of this project. This
information is categorized into the following sections:
Benefits
Complications
In the U.S., the most common type of investor owned multiple utility is comprised of
gas and electric operations. Of the 54 investor-owned electric utilities classified as
combination companies, 36 companies provide only electric and gas service, and 51
provide electric, gas, and some other utility service.4 Electric co-ops and municipals are
also not strangers to the multiple utility world, and they are more heavily involved
with external telecommunication services than investor-owned electric utilities.
4
Edison Electric Institute, Catalogue of Investor-Owned Electric Utilities, 1997.
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In Europe, the multiple utility concept is more common than in the U.S., largely due to
deregulation. Table 1 lists several examples of European multiple utilities and
summarizes the breadth of their utility operations.
Table 1
Examples of European Multiple Utilities
Source: Presentation by Dr. Clive Elphick, Multi-Utilities The Way Ahead?, Group Strategic Planning Director
for United Utilities, June 1998; interviews.
It was not evident that any utilities operate a completely coordinated multiple utility
system as envisioned by MUM strategy, but utilities are actively pursuing this vision.
If the MUM business vision proves to be successful, however, it is fair to say that we
are in the infancy stage of multiple utilities.
Benefits
In the course of our interviews we noted a wide range of benefits that are currently
realized by electric utilitiesfrom minimal or no operational benefit to significant
operational benefits. It was evident that there is tremendous opportunity to realize
additional benefits, assuming electric utilities are willing and able to change and the
appropriate technology exists.
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With the passage of the federal Telecommunications Act of 1996, U.S. electric utilities
are more commonly entering the business of providing ancillary telecommunication
services. Other examples noted include using low voltage distribution lines and
electric meter for transferring telecommunication data, common maintenance bases for
all utility services, common equipment, and joint trenches for all utility services.
Some multiple utilities use joint construction crews at time of installation. However,
another multiple utility used to use joint construction crews, but experienced
problems and is now moving back to separate construction crews.
When possible, many electric utility crews perform standard maintenance for other
utility systems. For example, Energis appoints the National Grid to perform all
maintenance and repair work to the Energis Network (telecommunication).
One interviewee stated that electric utilities already have competencies that are
needed for the telecommunication business. They already have strong knowledge
about telecommunications through internal communication, and they have strong
5
Morgan Stanley, Analysts Report for Energis, March 2, 1998.
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Joint Ownership: Through joint ownership, utilities realize economies of scale. For
example, some utilities consolidated administrative functions into one corporate office
or obtained more efficient procurement through volume purchases. While this was the
most common benefit we noted in the interviews, this is not an operational benefit and is
correspondingly not within the scope of Distribution Systems Redesign Project.
Complications
Specific Skills: In spite of owning and operating multiple utility systems, many
utilities use separate construction and maintenance crews for each type of utility
operation. This is an area that the interviewees wanted to improve upon and would
welcome technological improvements.
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By Steve Okonek
A Distribution Cost Structure Analysis was conducted during the first half of 1997 as a
precursor to the Distribution Redesign project. This work was based on the belief that
as the traditional vertically-integrated utility business structure broke up through
deregulation, distribution companies (DISCos) would face increasing pressure to better
understand their costs in order to generate sufficient returns attracting investors to their
stand-alone business. Depending on the regulatory scenario, distribution companies
might well find their primary customers being multiple power vendors and retail
energy companies (RETAILCos or ESCos). Assuming monopoly protection remains
for the distribution business, these entities will still drive distribution companies to
have a better understanding of their cost structure.
The projects objectives were to identify the costs for the key processes within the
distribution business, identify and characterize the cost drivers and provide an
analytical base for various distribution R&D planning exercises. Additionally, a better
understanding of these costs and their drivers would be important to the redesign
effort as it could help predict the areas where technology could play a major role in
responding these changing business needs. Public information on distribution costs is
not nearly as readily available at the same level of detail as for transmission or
generation. What data is available typically represents FERC-driven accounting
classifications such as internal labor, materials/supplies, contracted efforts, capital asset
base and equipment.
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Figure A-1
On-site ProcessCost Structures
Construction
5. Service Problem Problem Dispatching (fault
Restoration notification evaluation crews clearing/restorati
on)
Tree trimming
6. Tree Trimming Planning
operations
Inspection
Prepare designs,
7. Road and Receive request
drawings and
Scheduling Switching Construction
Bridge Relo issue work
orders
Figure A-2
Work PlanCosts Structure
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The scope of the analysis was limited to include equipment at distribution voltages
<69kV, both overhead and underground distribution feeders, and all departments
involved in distribution planning, construction and O&M activities. It did not include
meter installation, meter reading, billing, general customer service, street lighting, or
transmission substations. As a result, the scope of the study represents typically
between 70-80% of the entire annual distribution budget which averaged $140-million
for the participants. The results represent a one-year snapshot of each distribution
utility and do not show trending over time.
The project team visited each of the participating utilities for one week to analyze
accounting and work practice data as well as conduct interviews with distribution
personnel covering all aspects of the business. The study represents the most in-depth
assessment of specific distribution businesses ever undertaken by EPRIs Distribution
Business Area. Over 300 company employees from the five companies were
interviewed during the course of the project. The data model was then populated and
short return visits were subsequently made to fill in gaps and verify accuracy.
Five utilities participated in the project via EPRIs Tailored Collaboration program:
Duke Power, Duquesne Light, Omaha Public Utility District, Public Service Electric &
Gas, and San Diego Gas & Electric. All were members of both the Distribution Systems
and Underground Distribution Infrastructure targets. This sampling provided
examples of companies with an aging urban underground infrastructure as well as
companies with suburban growth. All had significant amounts of underground
distribution along with overhead distribution. Some of the participants already had
cost data easily identifiable by activity. Considerable effort was necessary at others to
translate accounting data into activity based numbers. Additionally, some activities
were easily traceable such as Tree Trimming where a large portion of expenditures is
clearly identified subcontracting effort. Substation Maintenance, on the other hand,
was more difficult to separate given each utilitys unique division of effort between
transmission and distribution.
Mean data from the total costs covering all participants show the importance of New
Customer Hook-Ups, New Construction, and Substation Maintenance which together
accounted for 63% of distribution spending. (See Figure A-3) While the relative size of
the Customer Hook-Up number was large due to considerable activity during the test
year at two utilities, its weighting against the other six activities was clear. As the
seven activities were broken down into their respective subactivities, the importance of
Construction and associated Maintenance/Repair expenditures predominates. It is
clear from the study results that improvements in construction technologies represents
the biggest improvement opportunity for containing distribution cost followed by
technology-based improvements to O&M.
The Distribution Cost Structure methodology represents one way of looking at how the
distribution company spends its resources and identifying where the most promising
opportunities lie for high impact improvements via technology or improved work
practices. It aims to improve a distribution companys knowledge of the cause and
effect relationships between costs and their sources.
Proprietary reports were published for each study participant. A report summarizing
the methodology, average percentage findings, and general improvement opportunities
Distribution Cost StructureMethodology and Generic Data (EPRI TR-109178, February,
1998), is available to other investors in EPRIs Distribution Systems and Underground
Distribution Infrastructure targets.
13.2%
Substation
Maintenance
New Customer
Hook-Ups 34.3%
New
Construction
16.1% Service
Restoration
9.9%
Figure A-3
Costs Structure Analysis
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