The Benefits of Implementing Distribution Automation and System Monitoring in the Open Electricity Market

Rong-Liang Chen Member of IEEE

Abstract

Shafi Sabir Senior Member of IEEE

In the new business environment rates for monopoly distribution services (wires), regulators are trying to create a balance between the dollars paid by the consumers and rate of return that the shareholders are allowed to earn. The regulator in Ontario has implemented Performance Based Regulation (PBR) to regulate the wires part of the distribution system. In PBR quality of services provided to the customers are considered as one of the performance measurement criteria. Distribution automation and system monitoring are the ways that electric utilities will be able to create innovative ideas for better customer services, improve reliability, defer capital investment and improve system operation. The authors describe the impact of deregulation of electricity utilities on electricity rates and conduct economic analysis to show the benefits of implementing distribution automation and system monitoring in the distribution system planning and operations. In the recent years more and more SCADA, IED and fiber optics are installed in the distribution systems to improve system operation, customer services and generate additional revenue. This paper also describes a planning process for implementing distribution automation. The planning process of distribution automation includes planning strategies, justification of distribution automation functional projects and identification of distribution automation projects. The paper emphasizes on the distribution automatic switching and utilization of integrated communication networks.
Key words: distribution automation, automatic switching, communication systems

I. INTRODUCTION
The recent regulatory changes have caused emergence of new issues for the utilities in managing the power system and concern in retaining the customers. As distribution utilities shift from non-profit public utilities to profit-driven business enterprises, the question how to maintain and improve service reliability while keeping electricity rates lower and protect shareholders interests becomes more difficult to answer. The trend that service reliability is going downwards is not uncommon as seen in some of the utilities. Reliability has a cost and regulators have to provide incentives to improve the system reliability. Besides the changing of the utility business, the emergence of new sensitive loads such as e-business data center, lntemet Service Provider (ISP) and industry with sensitive manufacturing process demanding uninterrupted and stringent quality of power supply. These new loads not only add on the system peak demand about 5-13%and grow fast, but also require high standard of service reliability and power quality. The evolutionary growth in microprocessor based devices and telecommunication equipment and network have brought the possibility of integrating protection, control, metering, automation and monitoring system cost effectively. This will considerably improve system reliability, quality of supply, and customer service and defer capital investment on system expansion. Distribution automation and system monitoring meet the demands and requirements in improving service reliability at a lower cost. In this paper authors will discuss the impact of deregulation on distribution utilities in Section 11. Distribution automation and system monitoring and their benefits are shown in Section 111. Communication system is an integrated part of implementing distribution automation and its functions are described in Section IV. In Section V the authors show their experience [1][2] and values in planning distribution automation, especially the

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automatic switching. Technology of distribution automation is still under development and innovations will make more benefits to utilities. Section V discusses the most beneficial DA function, automatic switching. The benefits and innovation of automatic switching are reported. One of the keys to the success of such project depends on establishing simple vision with clear goals and objectives. Proper Business Plans and effective Project Management described briefly in Section V will ensure success
11. IMPACT OF DEREGULATION ON DISTRIBUTION UTILITIES

The main impacts of deregulation on distribution utilities were the procurement of electric power, maintain and improve service reliability and better customer services. The procurement of electric power in the short-term and long-term contracts between the utilities and the power providers is an important factor to ensure lower electricity rates for customers at all times. In terms of engineering it is substantial to maintain and improve operation efficiency in the deregulatory environment to provide power to customers at acceptable reliability level and to serve the customer in better ways. Under new structure of the deregulation the wire i.e. transmission and distribution system will be regulated and generation will compete in open market. In the past regulators allowed the distributors to set the rates of electricity based on revenue requirement or cost of service plus other expenses to be recovered in rates. In the new business environment rates for monopoly distribution services, regulators are trying to create a balance between the dollar paid by the consumers and return-on-investment (R01) that the shareholders of the utility are allowed to eam [3]. There are different methods that can be considered, such as market based or incentive based. Each one of them has different merits and demerits. The regulator in Ontario at present chose a water down version of Performance Based Regulation (PBR). In PBR quality of service provided to the customers is considered as one of the performance measurement criteria. The quality of service may include improvement of system reliability, power quality, and customer services, etc. The regulator will approve just and reasonable rates for transmitting and distributing electricity. Distribution automation and system monitoring can meet the above quality of service improvement criteria and the cost justification can be aligned with the corporate objectives of system performance improvement.

111. DISTRIBUTION AUTOMATION AND SYSTEM MONITORING

1 . Distribution Automation

Distribution Automation (DA) can be defined as automatically monitoring, protecting and controlling switching operations through intelligent electronic devices to restore power service during fault by sequential events and maintain better operating conditions back to normal operations. If we add Demand Side Management (DSM) functions, such as Automatic Meter Reading (AMR)and Load Management (LM), into distribution automation, it comes a broad definition of Distribution Automation. Distribution automation can be divided into three categories, such as transformer substation, feeder, and customer premises automations. Usually the distribution automation on substation and feeder are integrated to share common monitoring and controlling equipment and devices. The DA functions on transformer substation include substation control such as bus voltage control, circulating current control, bus load balancing and overload control, and transformer protection such as bus fault isolation, and transformer isolation. The DA functions on feeder mainly include feeder automatic switching and feeder voltage/Var control. The former deals with fault identification, fault location, fault isolation and service restoration. The latter contains capacitor placement and voltage regulator control. The DA functions on the customer premise could be in a broad range covering load control, real-time price signaling, remote meter reading and billing, etc. We have to justify these functions by evaluating their benefits. These benefits are financial, operational & maintenance and customer satisfactions. The financial benefit and the expenses of operations and maintenance are quantified in dollars. The outcome of improved operational and maintenance benefits and customer satisfaction are not measurable. In order to make these types of benefits comparable we consider using customer interruption costs (CIC) to reflect these benefits, which include tangible and intangible benefits [4][5].
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2. Benefits of distribution automation a. Financial benefits 0 Deferral of capital investment (new TS, additional transformer capacity, additional feeders, reconductoring etc) 0 Increased revenue due to quick restoration Reduced operation and maintenance cost Improved utilization of system capacity Reduced system loss 0 Customer retention for improved quality of supply
b. Operational & Maintenance benefits 0 Improved reliability by reducing outage duration 0 Improved voltage control 0 Reduced man hour and man power 0 Accurate and useful planning and operational datdinformation Better fault detection and diagnostic analysis 0 Better management of system and component loading c. Customer related benefits 0 Better service reliability 0 Reduce interruption cost for customers 0 Better quality of supply
3. System Monitoring Over the years distribution system monitoring has been improved considerably because of financial benefits as well as improvement of system reliability. Monitoring system allows gathering information of the feeders, transformers [6][7], switchgears, and customer loads during normal operations as well as faulted conditions. With the advancement of sensors, high-speed communication system and the new processors with the high speed processing capability, tremendous scopes for online and offline diagnostics of system condition and equipment have emerged, which will ultimately reduce O&M cost and improve asset management. The information gathered by the monitoring system will help to integrate protection and control to improve customer service and system performance.

The monitoring system will collect a large number of valuable information, which will be processed and stored in a data storage facility, and it will be used by different applications. It is important to plan ahead for the hardware, operating system and database technology to be employed. Possibly the business information will be integrated into the same database and hence the management of the data will be an important issue to resolve. [8][9]

4. Benefits of System Monitoring Some utilities have implemented system to monitor embedded generators, transformers, cables, overhead lines and customers loads, etc. in the distribution system to achieve certain benefits such as: 0 Improve operation efficiency 0 Achieve better reliability 0 Reduce the risk of failure of equipment 0 Better information on customers load profile 0 Accurate load forecasting 0 Implement condition based maintenance 0 Less cost in meter reading 0 Reduced revenue losses due to theft of service 0 Improve outage reporting
The new information that will be made available by the monitoring system will encourage researcher to develop new algorithms and software for protection & control, distribution
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automation, diagnostics, etc. which will ultimately reduce O&M cost. The information will also be very useful for system planner, system operators and for preparing cost effective maintenance schedule. There are numerous possibilities and they will increase our productivity, improve asset management, improve distribution system availability and will help to earn customer loyalty.

IV. COMMUNICATION SYSTEM

A communication system is an integral part of the Distribution Automation and Monitoring System. In the new business environment it is becoming more important to bring information from the field devices for faster processing and making a quick decision. The wireless legacy system that most of the distribution utilities have operated at 800 and 900 MHz band and number of channel allocated for distribution automation are very limited. These legacy systems are not suitable for applications for next generation of automation and monitoring system. The legacy systems are inadequate but their services and investment will be maintained for a while and at the same time future network needs to be built ready for the next generation of automation and monitoring system.

Before utilities decide to invest for future commitment of communication network, utility should establish the necessary strategic performance and financial objectives. One of the strategic performance objectives could be to create broader or more attractive product line and superior customer services and one of the financial performance objectives could be to create a diversified revenue base. Electric utilities can cost effectively build a fiber optic network within its service area because they own the poles and ducts. Utilities could play a major role in building the future all optical networks, which will provide service to the bandwidth hungry customers. [lO][ll][ 12][13] Utilities will need small portions of the fiber capacity for its own use but the rest of the capacity can be leased to a third party or with a partnership with telecom company being able to provide bandwidth services. The utility network will be a hybrid fiber-wireless network. The wireless network will be mainly used for communicating with the field devices including meters and field crews. The future network should be a single converged voice and data network, which will integrate utilities business information system, billing, customer service, and voice and field applications. Issues related to protocols [ 14][ 151 and network management should be addressed at the planning stage of the project. Some utilities are alternatively considering internet-based technology.

V. AUTOMATIC SWITCHING BEING MOST BENEFICIAL

Automatic switching is a sequential process in restoring power supply when feeder faults occurred causing power interruption. The sequential process of power restoration includes fault identification, fault location, automatic fault isolation (sectionalization) and service restoration. All of the four functions can be accomplished by installing intelligent automatic switches equipped with some communication devices. Through the benefit analysis to the functions of distribution automation, the most beneficial function is automatic switching, which has been implemented by many utilities successfully by investing millions of dollars with a rate of retum of about 2.5 - 3 years. The benefits are due to the capability of the automatic switches that can isolate the faulted feeder section and restore power service to the unfaulted feeder sections within one minute of time starting at the time when the fault occurred. It reduces outage time from an average of 60 - 90 minutes down to less than one minute. The analysis shows that automatic switching will saved about $2.00 of customer interruption cost (CIC) per one kVA connected load. For two typical feeders of 30 kVA connected load there will be a saving of $60,000 of CIC a year. It was estimated that the customer minutes caused by customer load interruption would be reduced by about 25% for the overall system. There are also savings in operation cost such as crew fault inspection, manual operations of switching. Moreover, it mitigates the damage to the feeder equipment and extends the equipment life cycle by reducing the number of inrush current caused by closing feeder breakers to locate the fault. To maximize the benefits of automatic switching and minimize the capital costs of automatic switches it is important to determine the minimal number of automatic switches installed in the feeders and the best effective locations to install the automatic switches. This is an example that now utilities are seeking technology-based solutions to achieve greater benefits to satisfy customers.
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VI. BUSINESS PLANNING & PROJECT MANAGEMENT Distribution automation and system monitoring are major projects and require considerable investment. A proper business plan for the project is essential because it will help to make a decision in its entirety. Each organization has a general business planning and decision making process which is based on certain criteria that should be followed in developing the business plan. Some of the major items that need to be included in a business plan are as follows:
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The corporate business and financial strategies and objectives Regulatory issues Project descriptions Business and technology drivers Tangible and the intangible values and benefits Investment costs of the project O&M costs Training costs Project prioritization process in the organization Time table of the project Financial analysis including rate of return Risk analysis

One of the difficulties the business planner faces at the time of developing business plan is the methodology to be used in computing the cost-benefit ratio. Some of the methodologies used by the authors are based on customer interruption cost (CIC) [4][5],analytical hierarchy process (AHP) [ 161 and resource-allocation decisions [ 171. A proper project management process should be in place to manage such projects. The process will include planning, scheduling, allocation of resources, monitoring and controlling [ 181. The process will be designed to manage organization's resources to complete the project within time, within cost, within expected performance and customer's satisfaction. Also the risk management and scope change controlling processes should be integrated in the project management process. The implementation of distribution automation and system monitoring along with the supporting communication system go hand in hand. The strategies/business plan to implement the above systems should not consider the short term benefits only, but also the long-term benefits. Utility should also think of implementing the above systems at the same time because the individual system complements each other and the total benefits per dollar of investment will be more than if they are done separately. If quality of system performance and customer services is some of the corporate objectives to meet regulators' performance criteria then the above systems should be one of the strategic initiatives for the utility. In the new wire business environment it is important to implement the above systems for the benefits of the organization, improving customer services, generating additional revenue, providing usefd information for operating and planning decision making and better asset management etc.

V11. CONCLUSION This paper discusses the various benefits of distribution system automation and system monitoring to improve system operation, system reliability, asset management, etc. Because of the present competitive business environment and new sensitive loads customers are demanding greater reliability and quality of service. The new SCADA, IED and communication systems make it possible to integrate protection, control and monitoring together to its maximum benefits. The innovative development of automatic switching will yield more benefits to distribution utilities. Truly, distribution automation and system monitoring are the logical choice for the utilities to improve system performance, and to achieve customers and shareholders satisfactions.

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