I seem to remember Alex Rittershaus, Legislative Director on the House side (House Co-chair Golden’s office) for the Joint Committee on Telecommunications, Utilities and Energy, telling me last legislative session that the smart meter deployments were held up because DPU was hesitant to take the rap for mandating a system involving such exorbitant costs. Theoretically DPU can also be pressured. Does anyone know an investigative reporter who can get this story into the media and put pressure on both the AGO and the DPU?
And let’s not forget that from the point of view of health concerns Eversource is being totally disingenuous. It is arguing strenuously for an opt-in regime with respect to AMI meters, but the default situation is everyone getting an AMR meter, no opting of any kind, certainly no opting out. The AGO needs to be reminded that an option was supposed to be part of the basic ground rules of the grid modernization plans, and Eversource is violating that understanding.
I think we need some sort of very strong advocacy targeting the MA AGO that the utilities have put her in a terrible position…..she will take the hit for the cost, etc of this….by siding with the “clean” energy community she is on the wrong side of history. how do we do that????
———- Forwarded message ———-
From: Patricia Burke <email@example.com>
Date: Mon, Sep 18, 2017 at 6:46 PM
Subject: MA update, Attorney General for full deployment, 2/3 Utilities for Opt in approach
We have three simultaneous dockets right now for the three investor-owned utilities, each with four levels of deployment.
Note though that MA is already heavily deployed with AMR meters, so has already saved on truck rolls and cutting meter readers
here are 3 most recent Utility’s most recent replies and some useful quote – August 2017
Note AMF= Advanced Meter Functionality, a new word here, so the companies could suggest an alternative to new meters if they could still modernize the grid.
MA DPU 15-122 Eversource; 28 pages ( formerly NStar)
The AGO, CLC and Acadia principally argue that the IGMP should be rejected because it does not include a proposal for system-wide deployment of advanced metering functionality (“AMF”), notwithstanding the facts that such a measure would be enormously expensive for customers, is unsupportable by a business case analysis, and that Eversource’s opt-in time-varying rates (“TVR”) proposal will enable it to achieve 1 NECEC submitted its initial brief on July 10, 2017. 2 The Network submitted a letter in lieu of reply brief on August 8, 2017. 3 approximately 80 percent of the benefits of TVR at approximately 15 percent of the cost of a full-scale AMF deployment.
The objectives identified by the Department for grid modernization can be achieved without the AMF solution. AMF is an overwhelmingly expensive proposition that is not in the interests of the overall customer base at this time. The Company’s proposals in the GMBC in D.P.U. 17-05 and the IGMP in this docket provide a better alternative.
The Department’s prior orders do not require the electric distribution companies to present a plan for full deployment of AMF regardless of the cost, and in fact no such requirement would be reasonable or appropriate. Eversource has instead provided a reasonable and less costly alternative in its opt-in TVR proposal for customers potentially interested in taking service on time-varying rates.
Eversource’s analysis concluded than an opt-in TVR program is a better value proposition for its customers compared to an opt-out TVR program, and that an opt-out plan would punish those customers who cannot take advantage of TVR (Tr. Vol. 2 at 348)
The Company’s opt-in TVR is all about providing customers choices, because Eversource knows that is what drives customer satisfaction (Tr. Vol. 2 at 235). To the extent “customers are interested in participating in time-varying rates . . . we’re giving them that option to participate” (Tr. Vol. 2 at 235-6). Eversource recognizes that a relatively small number of customers have an interest in TVR or sufficient discretionary load to benefit from TVR, but for those who are interested the Eversource plan is designed with some of the more innovative structures in the country:
Eversource decided not to deploy 100 percent AMI meters for the opt-in TVR program because of the cost. “It’s a very expensive proposition to . . . burden that cost across all customers. But if that, again, is where the Department would want us to be . . . the costs associated with a total AMI infrastructure, then we say it’s approaching a billion dollars. It’s a very different cost proposition for total AMI” (Tr. Vol. 2 at 266).
Eversource noted that for other companies that have installed advanced metering capabilities, one of the challenges has been in increasing the customers’ knowledge of the system (Tr. Vol. 1 at 117). “This cannot be underestimated, the importance of educating our consumers, particularly if we’re looking at an opt-out program where we’re going to force them to go onto something that they do not want to be a part of. So education is vital” (Tr. Vol. 1 at 116-118).
For Eversource, “we have already gained that with the AMR [installation] . . . . 80 percent of the benefits associated with AMI we have already gained because of our AMR installation, and thankfully, with the advances of technology, with the advances of IOT, with the ability for our meters to communicate with systems like Alexa, we will soon be able to provide our customers with more information regarding their usage without changing out all these meters in a costly method” (Tr. Vol. 1 at 82- 83). The Company provided substantial information on the record about the costs and benefits associated with an opt-out TVR rate proposal, which is dependent upon full AMF deployment, and demonstrated “that would be a very costly endeavor, benefiting few customers, because we’ve already gained the benefits with AMR” (Tr. Vol. 1 at 82-83).
As Eversource noted in its initial brief, the Compact and other intervenors largely ignore the fact that advanced in-home resources are currently available to residential customers and more are coming that would make an investment by Eversource in full AMF deployment particularly ill-advised. The Company’s customers have the ability to control their energy usage with the assistance of next-generation technologies, and these options will continue to expand. Specifically, given the advancement of technology, customers that are interested in managing their usage will have the ability to do so through new phone apps and voice command devices (Tr. Vol. 1 at 168-69). In noting the possibilities, “advancements are coming fast in that. And by that time, within, you know, a ten-year horizon, who’s to say we won’t have solutions that won’t require the significant and non-cost-effective expense of advanced metering infrastructure, where we could leverage the investment that we already have in our automated metering infrastructure and leverage those signals that are coming out every 15 seconds to provide that information”
The Compact claims that customers with “medical or moral objections” to AMF are adequately protected with opt-out provisions (CLC Reply at 20), but this position ignores the potential harm to the vulnerable customer population. The Company’s TVR proposal recognizes that most residential customers do not have the discretionary load to shift (Tr. Vol. 2 at 343-44). “One of the biggest demand opportunities is central AC, and we only have a 38 percent penetration of central AC” (Tr. Vol. 2 at 343-44). In fact, there are low-income customers and customers who are dependent on electric appliances to live who could be harmed by timevarying rates. If a customer has an oxygen machine that needs to run, the Company noted the concern that TVR could give rise to a low-income “having to make a poor decision and justify sacrificing their health because of that. So we need to be cautious as we look at the impact of burdening customers and making them take in time-varying rates” (Tr. Vol. 2 at 347). “Medical equipment does not represent that discretionary use” (Tr. Vol. 2 at 347). CLC argues in its reply brief that the Company’s customers with moral or medical objections to the types of smart meters necessary to utilize TVR are “adequately protected” by an opt-out TVR approach. These claims are pure conjecture and not based on record evidence. Rather, CLC simply asserts that customers with medical needs, such as life support “likely do 22 not live alone any pay their own electric bills; these patients are probably taken care of by family members who consume electricity or they are located in hospitals or nursing homes. Customers using oxygen to some extent…can still make decisions about their usage, such as when to use a clothes dryer or whether to install load-shifting appliances” (CLC Reply at 23). CLC downplays the very real concerns regarding the most vulnerable customers (CLC Reply at 23). Nothing in CLC’s reply brief supports its contention that these vulnerable customers are adequately protected by CLC’s preferred opt-out TVR approach (CLC Reply at 21-23). The Network’s reply brief correctly notes that full AMF will be punitive for a vast majority of Eversource’s customers and that the Company is not required to deploy full AMF regardless of costs (Network Reply at 1). It also notes that opt-out TVR is less cost effective than opt-in TVR plans, such as the opt-in TVR plan proposed by the Company as part of its IGMP (Network Reply Brief at 2). The Network also argues that, if the Department approves AMF for TVR, such an approval should protect customers by being limited to an opt-in proposal
Full AMF Deployment is not Cost-Justified The Compact argues that the required functionalities of AMF for the collection of interval data in near real-time and for two-way communications “are not impossible” (CLC Reply Brief at 25), and somehow this should justify requiring Eversource to move forward with 24 full AMF deployment. This claim is another iteration of the Compact’s basic theme that the Company should be required to deploy full AMF irrespective of the $1 billion cost. The Company has made clear that “in our case we have provided [the Department] with information about the cost/benefits associated with an opt-out time-varying rate proposal, versus opt-in, and based on our system at Eversource, that would be a very costly endeavor, benefiting few customers, because we’ve already gained the benefits with AMR. Most of the benefits associated with advanced metering infrastructure come with the elimination of manual meter reading” (Tr. Vol. 1 at 82-83). A full AMF deployment and mandatory “opt-out” TVR program would not be costjustified and would in fact be punitive for the majority customers, including low income customers and those customers who are medically compromised (see Tr. Vol. 2 at 346). An opt-out program would require residential customers, most of whom do not have a substantial amount of discretionary load, to: (1) pay higher rates, since they are unable to reduce load during peak periods; and (2) pay for the enormous up-front implementation of the wide-scale, opt-out TVR structure, including meters, communications and billing systems and other ancillary systems. The Company’s overarching goal is to provide quality service to its customers and an opt-out TVR structure in no way advances that goal. While the cost of the opt-in TVR initiative are estimated at $108.2 million, costs would increase to $946 million with an opt-out TVR program, approximately eight times more costly than the Company’s opt-in proposal (see Exh. Eversource-CAH-1 at 13).
MA DPU 15-121 Fitchburg Gas and Electric Unitil 11 pages
In its reply brief, the AGO continues to argue that the Company’s GMP fails to achieve the Department’s grid modernization goals, and that the Company’s plan is not eligible for targeted cost recovery because its fails to achieve full Advanced Meter Functionality (“AMF”) within five years (see AGO’s Reply Brief at 2). As detailed in the Company’s response below, the AGO’s arguments are flawed and continue to ignore the poor net benefits of broad AMF deployment within a five year timeline. Based on the Company’s comprehensive business case analysis, the Company has presented a GMP that will make measurable progress towards the Department’s grid modernization goals under a theme of “practical grid modernization” that considers both technical and financial considerations and selects investments that provide net benefits for customers with acceptable rate impacts (Exh. FG&E-2 at 5; see also Unitil’s Initial Brief at 25-26). The Department should approve the Company’s balanced and reasonable GMP without modification.
The AGO argues that: (1) the Company’s GMP is not eligible for recovery through its Short-Term Investment Plan (“STIP”) because the GMP “does not provide for the full deployment of AMF within five years or include a business-case-supported plan to fully deploy AMF over a longer period of time;” (2) that full AMF deployment is the best path forward for grid modernization; and, (3) the Department should reject the Company’s Opt-In Plan for Time Variable Rates (“TVR”) because it has a benefit to cost ratio of less than one (AGO Reply Brief at 3-7). The AGO’s arguments should be rejected because they are both inaccurate and internally inconsistent. The AGO argues that full AMF deployment should be pursued, despite the significant cost and poor net benefits, and yet simultaneously argues that the Company’s proposal for a more modest opt-in plan should be rejected simply because it has a benefit to cost ratio of less than one. The AGO cannot have it both ways. Faced with the realities of the high costs to deploy AMF to all customers, the Company selected an opt-in plan with a scaled deployment of AMF that will make measurable progress towards grid modernization goals while balancing customer costs. The AGO incorrectly argues that the Company has not supported its AMF deployment plan with a sufficient business case analysis. In fact, the AGO has yet to acknowledge, in its initial brief or reply brief, that AMF investments have very poor net benefits if deployed for all customers (Exh. FG&E-1 at 64). The Company’s business case analysis indicated that replacing all existing smart meters to offer AMF and TVR to all customers on an opt-out basis would cost approximately $11,732,000 over the ten year GMP while providing only $3,311,000 in customer 3 benefits, resulting in a benefit to cost ratio of only 0.28 (see Exh. AG-4-6 and AG-4-27 Attachment 15). Due to the high cost of full meter replacement, the Company proposed a transitional approach that uses the existing smart meters and a new communications network to enable AMF, which will allow the Company to offer customers TVR on an opt-in basis and provide those customers who choose to participate a new smart meter that meets the full AMF/TVR criteria (Exh. FG&E-1 at 33). For those customers that do not opt-in and receive a new meter, the Company has indicated that it will start replacing existing meters with AMF meters once the FAN is installed enough to accommodate those installations, which is currently projected to begin in 2020 (Tr. at 97-98).
In its GMP, written in August 2015, the Company indicated that one of its ten substations was already experiencing reverse power flow at the substation resulting in backflow through the substation transformer and onto the system under light load and high generation conditions (Exh. FG&E-1 at 40). Two other substations were close to the point where backflow was likely at the time of writing the GMP (id.). Penetration of distributed energy resources has only increased since that time. As the Company’s witnesses explained in their rebuttal testimony, the Company now has four substations that are forecasted to experience reverse power flow through the substation transformer at light load conditions (Exh. FG&E-6 at 10).
MA DPU 15-120 National Grid; 55 pages
The largest source of benefits is from demand reductions that will result in avoided wholesale energy and capacity market costs as a result of customers being on time-varying rates (“TVRs”)and shifting their consumption from higher price periods to lower price periods. GMP at 111; Exhs. AG-3-1, part m; Attachments AG-3-31(a)-(d), tab 13, lines 437, 457.
The AG states that the Company assumed that as a result of being on time-varying rates, residential customers would achieve an 8.4% peak demand reduction (Exh. Attachment DPU-1- 12(a), Tab ‘TVR Response Model Concentric’, Row 67), and argues that this may be too optimistic an assumption. AG Br. at 32. The Company based its demand reduction assumptions in part on the results of its Smart Energy Solutions Pilot (“SES Pilot”) in Worcester, Massachusetts.
The AG asserts that AMI meters with remote disconnect switches should not be approved by the Department because of cybersecurity concerns, among other reasons. AG Reply Br. at 7. The potential of threat actors, such as malicious individuals, should not stop the progress of the GMP. While National Grid acknowledges that two-way communications with a meter presents 34 certain complexities, the Company has developed a robust cybersecurity plan to address those threats and evolve with the GMP. Tr. Vol. 2 at 197-199. The meter remote disconnect switch does not itself add any additional risk, and National Grid already has a strong and comprehensive plan to address those risks. Therefore, the Department should approve the Company’s cybersecurity and privacy proposals as filed.
The Department has acknowledged that “marketing, education and outreach are vital to ensuring that customers are well informed about and engaged in: (1) their options for managing their energy consumption; (2) the tools and technologies that will assist them; and (3) the benefits associated with reductions in consumption and/or shifting consumption away from highcost times.” D.P.U. 12-76-B at 26. The Company designed its MEO Plan with these priorities in mind. Exh. MB-WFJ-Rebuttal-1 at 6. The MEO Plan will provide critical customer education on time-varying rates, as well as on other aspects of grid modernization, to support customers’ grid modernization journey. Exh. MB-WFJ-1 Rebuttal at 5-6. Because the Department should approve one of the Company’s GMP scenarios (contrary to the arguments of a number of the intervenors), the Department also should approve the accompanying MEO plan for that scenario. GMP at 158-167; Exh. MB-WFJ-Rebuttal-3 (Confidential).
In particular, National Grid is not proposing to use the remote turn-on, remote shutoff or service limiter features in the AMI meters for any non-payment or collection activities, whether for low-income customers or for any other customer. GMP at 43. National Grid’s only proposal is to use the remote turn-on and shutoff features when customers are moving in or out of a premises. GMP at 43. This will make turn-ons and shutoffs more convenient for customers, and will also result in fewer labor and vehicle costs, creating cost savings. GMP at 43, 110.
The Company has proposed that costs for AMI meters be allocated to all customers because all customers will benefit from these meters. Installation of AMI meters, which enable demand response and time-varying rates, will result in avoided wholesale capacity market costs. GMP at 110. Lower peak demand from customers means that energy suppliers will have to pay for fewer megawatts of capacity resources in the ISO-NE capacity market, thus realizing savings for all customers, including low-income customers. Exh. NG Panel-Rebuttal-1 at 14. In addition, low-income customers – as with all other customers – can take advantage of TVRs, the proposed CLM program and the real-time usage information provided by AMI meters to save on their energy costs as well. GMP at 53-54, 110. Low-income customers thus will benefit from AMI meters, contrary to the arguments of the Low-Income Weatherization and Fuel Assistance Network (“Network”). See Network Br. at 5-10. The Department itself “fully expects that a large portion of low income customers in the Commonwealth will benefit from the time varying rates framework” that the Department adopted in D.P.U. 14-04-C. D.P.U. 14-04-C at 11-12.