Keeping on track, on time, and on budget with smart grid projects
The 2009 American Recovery and Reinvestment Act (ARRA) issued a broad range of grants totaling $787 billion. The money was to save and create jobs, and increase investments in infrastructure, including smart grids and ‘green’ energy.

Glendale Water & Power (GWP) won a grant from the ARRA which turned out to be one of the most high profile ARRA projects in the utility industry. DNV KEMA Energy and Sustainability was a key implementation partner for GWP, and partnered with GWP from the start of the grant application process, through RFP development and execution, vendor evaluation and selection, and the first two years of implementation. GWP was one of the first utilities to receive ARRA funds for smart grid projects and its ARRA work has been wide-ranging.

In the later phases of the two year (2010 to 2012) implementation, one of the goals was to ensure GWP had arrived at the point where DNV KEMA’s services were no longer needed. As soon as this knowledge transfer was completed and GWP was able to independently carry on its wide-ranging smart grid capabilities on an ongoing basis, the utility was on its own. GWP then continued with the final phases of administering, monitoring, and demonstrating the long term benefits of its smart grid capabilities.

GWP has emerged as an ideal prototype of utility industry smart grid projects and ARRA grants, successfully managing the project and gaining step-by-step approvals to spend all of the funds as planned, on schedule and within the highly constrained and monitored milestones required of these programs.

It may sound trivial to have been able to spend all planned money in an ARRA grant project successfully, but it is no small matter. As has been highly publicized recently, it is unclear whether all recipients of ARRA grants will be able to spend the entirety of their grant funds on schedule and also complete their projects before the September 2013 deadline as planned. As a non-utility example, according to the U.S. Department of Education, although all 50 states received ARRA Title I education grants, only six of them have succeeded in using every single one of their ARRA Title I dollars as planned by January 13, 2012.

In any industry, unspent grant funds may, at minimum, represent plans that did not account for the realities of the marketplace. They could also involve the additional difficulties associated with implementing major new initiatives that involve technological as well as cultural changes, both within the implementing companies and their larger customer, contractor and stakeholder communities.

Everything old is new again: Advanced metering and deeper utility relationships with customers
Three of DNV KEMA’s core values during its 80 year history are risk reduction, listening to its customers, and being trusted by clients as objective, independent evaluators. Similarly, over its 100 years of service, GWP’s primary purpose has coalesced around similar values, as described in its Mission Statement: To be your trusted community utility.

These values and missions were reflected in the way the joint GWP/DNV KEMA team devoted much of its initial efforts to the cultural aspects of strengthening relationships with Glendale’s electric and water customers.

Everything old is new again. Closer relationships between a utility and its customers mirror the core values of the utility industry’s early history. Early on in the development of the modern electric utility industry, part of receiving electric service involved interacting with meter readers and utility sales personnel, who encouraged homeowners to buy new electric appliances directly from the utility. At the utility industry’s inception in the 1880s to early 1900s, customers paid not by the kilowatt-hour, but by the number of light bulbs in their home or office. Utility personnel would provide on-site service when light bulbs went out. As meter installations occurred and electricity use expanded from lighting to other appliances in the home, utilities sold these appliances as well. For example, in 1923, U.S. electrical utilities sold 31 to 41 percent of all electrical appliances by dollar volume and had the largest market share of heavy appliance retail sales.¹

Regulatory changes after the onset of the Great Depression led to an invisible wall between utilities and their customers, banning the sale by utilities of any equipment or services on the customer’s side of the meter.

Although municipal utilities have not entirely lost this culture of relationships with customers, they have, like other utilities, gradually tended to move away from having such close relationships with their customers. The sad truth is that by the time smart grid opportunities started to rise in prominence, our electricity-dependent modern culture had, for decades, already become habituated to taking electric utility service for granted. For many people, invisibility is almost part of the definition of the word ‘utility’ itself – something useful that stays behind the scenes and runs on its own.

Now, the deep customer involvement associated with smart grid opportunities is introducing something new to people’s minds about their utility and potentially represents a shift back to prior generation’s close relationships with its utilities. As a result, utilities need to start learning a lot more about their customers than they needed to know in the last 75 years.

Fundamentally, not only do utilities need to learn more about their customers, customers also need to learn more about their utilities, as only a deeper understanding will help motivate customers to make changes. Society cannot enjoy the important potential benefits of smart grids unless there is a huge increase in the frequency and depth of information exchanged between utilities and their end-users. This increase in the use of real-time data about customer usage and utility supply is at the heart of many of the benefits associated with advanced metering and the smart grid.

In much the same way that the introduction of electric appliances helped customers save time in getting work done around the home, the new drive for smart grids will also help customers be more efficient. Improved efficiency will help customers reduce their overall contribution to expensive peaks in electricity demand and help promote distributed energy resources such as solar and electric vehicles. Not only do these initiatives help customers save money, they also help to ensure increasingly economical and reliable electric service as well as preserve environmental resources and quality of life.

From a customer-facing perspective, the interactions are mainly between smart grids and home area networks (HANs), with advanced metering infrastructure (AMI) as the key linkage between the two.

Along with identifying key groups and how to reach them, the DNV KEMA/GWP team built a detailed matrix that represents the entire Glendale community and asks several questions about each key group:

• What impact will the project have on them – positive or negative?
• What impact will they have on our work with this project?
• If we are to engage with each of these customer segments, what info will they need?
• When will they need it?
• What modality for conveying this information is the best and how can we ensure we make it as much of a two-way conversation as possible?
   

This initial work at the front end of the project guided the team through our efforts and taught everyone how to vary communications methods for the best reach. For example, we found that our large and long-standing Armenian community generally prefers to get their information through Armenian TV, radio and church venues. Ethnic festivals are focal points for this and numerous other communities and in some cases, we reached many customers by taking a booth at community events.

We were able to gather information regarding the different needs of each of our major constituent groups. We also had strong participation of team members at town halls for the general public, as well as speaking engagements for Homeowners Associations. GWP also set up weekend booths in parks calling their outreach ‘Coffee’s in the Park’ in order to bring the concept of the smart grid into the community.

Advertising programs also helped get the message across that GWP was moving toward smart grid capabilities in order to provide benefits to our customers, and that customer participation was a key element of maximizing benefits to them and to the overall community.

Customers learned the amount of cost savings that smart grid improvements could provide them by cycling the operation of major appliances such as air conditioners, refrigerators, and pool pumps in order to smooth out peaks in electricity demand while increasing reliability and providing environmental benefits. As part of this outreach, the team also taught consumers about additional cost savings by using AMI to maximize their efficiency and keep track of their own power usage to stabilize their power bills. Positive momentum was built in anticipation of the program as customers also learned about how they would now be able to get quicker feedback about where a problem impacting electric service may have originated, with sensors that help crews know exactly where to go to restore power, making continuation of service more reliable and efficient.

Prototyping to set the stage for the full advanced metering rollout
Installation of the meters required extensive work to ensure development of good meter provisioning processes and to avoid problem areas. In this process, our team made a catalogue of use cases. The typical model for prototype installations was too labor-intensive as it involved a three person team going to a person’s home to do the meter installation and pairing it with the Home Area Network.

Instead of a screen displaying only usage data, as part of the prototype, GWP included piloting a new type of in-home display that incorporate digital picture frames inside customers’ homes, making the displayed metering information customizable alongside family slideshow photographs that can be sent from the cloud (e.g. Facebook, cellphones, email etc.). This prototyping work, which was part of the initial project roll-out, has made the in home displays more popular.

The company making the digital picture frames, Ceiva, stores pictures in the digital cloud format. This system uses the same ZigBee chip that manages communications that run from the customers’ meter to the real-time display, allowing for the incorporation of their energy information alongside their private photos on the digital frame. Provisioning the HAN and meter installation for these prototype installations involved the team engaging in one-on-one advising with the customers on how to use the frame. The lessons learned during this HAN prototyping phase were invaluable, although it is not a sustainable model for doing the tens of thousands of meter installations required. Rather, we created a new web portal to give the customer access to a wide range of services, one of which is doing HAN provisioning.

It is of vital importance to maintain security while being customer friendly. This security involves a set of criteria that requires striking a delicate balance, since it is easy if the customer interactions are not designed well on the portal for the security aspects to make it feel like an unfriendly process.

The customer will be able to configure the digital frame or any Zigbee device they wish. Each device has to be provisioned with the meter or it will not be part of the network. This integration involves a wide range of activity which requires workflow and system designs to automate customer interactions with the portal, given the impossibility of having customer service or technical personnel directly interfacing with each of GWP’s customers. The team found that there was nothing off the shelf for this type of portal and built it to allow single sign-on.

Continuing with this model, portals are being installed with different tabs to allow the customer to pay their bill and access information on a range of conservation tips, try out different rates and see what would be most beneficial based on ‘what-if’ scenarios related usage. In addition, the system will allow GWP to provision the HAN device or shut it off if the customer at that location moves, in order to prevent it from being a security risk.

The process of the build-out to full scale has been a teaching experience to deal with challenges. For example, if you have multi-family dwellings, in some cases, the meter bank is in a remote location away from the dwellings. To align each home’s Zigbee, you have to develop certain processes for pairing to the right meter with the right home’s HAN.

Trying to take Ben Franklin’s advice; how do you ‘make haste slowly’?
Achieving the benefits of these technologies involves interactions between numerous systems. In order to avoid major problems we were fortunate to have found the right balance between slow and deliberate execution of pilot elements and a desire for quick rollout of the full scale installations. The initial pilot had to be carried out in widespread fashion for our teams to have gathered all the experiences and information we needed, to then carefully reviewing and structuring the lessons learned from this ‘slow’ phase, before hastening to the full rollout.

GWP’s smart grid implementation includes smart metering and installations of advanced metering infrastructure to support all customers. Over the course of the implementation, the DNV KEMA/ GWP joint team installed smart meters for both electric and water service. The detailed plans, which were executed successfully in accordance with the original schedule, also included installation of customer Web portals, smart water communication modules, and meter data management system, as well as leak-detection systems.

Aside from making the prototyping installation phase big enough for everyone to gather a sufficiently wide range of experiences, another important part of our plan was having a major process check point with all team members and contractors before going into the full scale rollout. At a large learning session teams focused on ways to make their part of the process smarter to improve the efficiency, safety, and effectiveness of the work.

By discovering the issues between the prototype and full production phases, it became imperative to devise processes to vet all meters in the field. Meter readers, for example, photographed each meter and compared that information against the existing SQL meter database. Data accuracy went from 70 to 99.5 percent. The difference this made in the installation process was enormous. Verification of data took place in different neighborhoods and across commercial, industrial and residential customers. The resulting quality control should yield a good payback in terms of reduced costs and faster implementation times.

Realities of running the new system
The AMI system is up and running with 120,000 meters now being serviced. In parallel with its implementation, the team commenced programs for demand response and electric vehicles as well as development of key operational reporting capabilities required for managing the system.

Implementing this infrastructure within 24 months was a major accomplishment for the entire team. The project went from concept, to design and pilot, to full-scale implementation and included the installation of a dedicated WIFI. An additional set of capabilities for disaster recovery was also completed.

Management of the ‘tsunami’ of smart grid data proved to be an important area for key lessons learned. Operations still need to be optimized based on non-financial constraints, even when the extra funding from a grant award yields a larger set of options.

The threat of data overload is very real. Pulling in a more wide-ranging set of interval data with smart meters does not automatically mean a company should overload its IT systems with more frequent and more detailed metering measurements than will optimally yield a proper allocation of its resources. An important lesson learned is to not mix different firmware and software. During system upgrades, for instance, it is better to stick with one set rather than creating a hybrid environment since the resulting data loses value.

On the electric side, intervals are useful for resolving high bill complaints. Using the accumulated data, the customer can be shown a detailed breakdown of their usage to determine if, and by which side, an error has been made.

The large amount of meter data to be accommodated for backup and storage or for server activity purposes was a bit of surprise. Initial estimates for the storage area network lasting three years lasted only six months. The lesson learned here was the need to implement strict discipline for controlling the types and amounts of data collected from each meter during programming. Just because you can collect it does not mean you should collect it. Much of the data gushing in like a fire hose typically cannot be used. On top of this, storing massive quantities of data is not cheap. In a Storage Area Network, adding another terabyte is many times more than a typical utility would be willing to pay and the data volume makes it that much more difficult to find the necessary data.
 
Possessing good people with the right intelligence and data analytics tools is an essential part of the equation and in some cases a new skill set is required – simply being able to think in terms of large data – when an AMI system goes operational. How data is visualized and analyzed is much more a question of a statistical methodology as opposed to raw computation. One needs to be able to algorithmically look at a set of data and translate it into actionable information.

Bundling multiple utilities’ future AMI and smart metering projects
The level of effort and the nature of the challenges do not change much with the size of the project. The difference between one meter and one million meters is the number of servers. Aside from this fact, a small utility will have about the same amount of work to implement AMI as a much larger utility. At GWP, the job was sufficiently large to have been worthwhile in spite of these ‘fixed cost’ aspects of the work. Obviously, the larger a utility is, the greater benefits it can enjoy in terms of the ability to spread these fixed costs over a larger job, potentially driving greater efficiencies and cost savings, all other things being equal. To get around this issue, the economies of scale appear strong for bundling future projects on the basis of a consortium of utilities being served as a single customer (e.g. involving statewide municipal electric associations or rural electric cooperatives associated with one another through their statewide associations or related G&Ts).

In addition, it is interesting to consider that culturally, there are a lot of potential advantages for smaller utilities. The culture at municipal and cooperative utilities has, from their inception, tended to be more community oriented than the large investor-owned energy providers. Personnel tend to specialize less in smaller organizations and thereby develop an interesting breadth of skills that can help in the issues identification process described earlier between the prototype and full roll-out phases.

Scaling several smaller utilities together into a large project is a great opportunity to extend smart grid benefits in areas where the costs savings can be a great boost to the local economies. These projects scale very well, and the hosting option increases the prospects of collaborations between utilities for the server infrastructures involved. As a result, they could enjoy smart grid benefits more widely without having to incur the large fixed cost that is somewhat irreducible.

About the Author

Terry McDonald is president of T.S. McDonald Associates, a firm specializing in assisting utilities with design, development and execution of smart grid projects. Terry has 40 Years of professional experience as a corporate executive, management consultant, program manager, project Manager and U.S. Navy officer. He has a BA in psychology from Villanova University and Masters in applied project management and business process management from Villanova and the University of San Francisco. Terry can be contacted at Terry@tsmcdonald.com

¹ Tobey, Ronald C. Technology as Freedom: The New Deal and the Electrical Modernization of the American Home. Berkeley: University of California Press, 1996 p20