Michael Angemeer

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Ontarios Smart Meter Initiative A Case Study

• Michael Angemeer
• Chair, Electricity Distributors Association
  (Ontario)

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Electricity Distributors Association (EDA)

• Voice of Ontarios local distributors, the
  publicly and privately owned companies that
  safely and reliably deliver electricity to over 4
  million Ontario homes, business and public
  institutions
• Leads government/regulatory representation and
  advocacy
• Provides information and industry intelligence
  to members

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Outline of Remarks

• Ontarios Distribution Industry
• Smart Metering Initiative
• Role of Electricity Distributors in Smart Meter
  Implementation
• Government Legislation to Enable Initiative
• Where were at
• Where we need to go

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Ontarios Electricity Distribution Industry

• Employs almost 10,000 Ontarians
• Stimulates economy nearly 1 billion payroll
• Invests 1 billion in infrastructure
• 364 million to shareholders
• Close to 200 million in proxy taxes to
  government

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Ontarios Electricity Industry

• Ontario Provincial Government responsibilities
  1) jurisdiction over laws for generation and
  production of electrical energy 2) also regulate
  consumer electricity prices, generation,
  transmission, distribution
• Ontario Energy Board (provinces regulator)
  responsibilities 1) quasi-judicial tribunal that
  reports to Minister of Energy b) operates
  independently and regulates all market
  participants in electricity and natural gas

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Ontarios Electricity Industry

• Local distribution companies (LDCs) legislated in
  1998 to operate as for-profit, business
  corporations
• LDCs owned primarily by municipal governments
  (some privately and provincially owned)
• Change is operative word for industry
• Smart meters part of larger industry reform effort

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Ontarios Electricity Industry

• 90 distributors in Ontario
• Estimated gap of 24,000 MGW by 2025
• Equivalent to 80 of current capacity
• Price caps have had a negative impact
• Inability to bring new generation on-line

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Creating a Culture of Conservation in Ontario

• New pricing regimes residential/small business
• Smart meters one piece of conservation pie
• Need to create a culture of conservation
• Critical role being played by electricity
  distributors driving force behind conservation
  and demand management (CDM) activities
• 160 million already approved for CDM investment
  - additional 400 million in funding for
  distributors recently announced

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Ontarios Smart Meter Initiative

• Government target 4.5 million meters installed
  by 2010 the first 800,000 by the end of 2007
• Electricity distributors responsible for
  purchasing, owning, installing, operating, and
  maintaining smart meters
• Playing central role in implementation

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Testing the Waters Smart Meter Pilot Projects

• Preparedness key to success
• Pilot projects are allowing for greater
  efficiencies/best practices to emerge
• Examining community, climate and geographic
  influences
• Communications systems, meter functionalities,
  data standards scrutinized
• Sharing results with government and leveraging
  lessons learned for implementation

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Success Factors Smart Meter Initiative

• Distributors expertise/experience critical
• Cooperation and timely action of key players
  (government, regulators, and distributors)
• Clear and consistent understanding of
  responsibilities of each player

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Government Legislation to Enable Smart Metering

• Electricity Conservation Responsibility Act
• Empowers government re options for governance,
  ownership and regulatory structure for smart
  metering
• Details continue to be released through a series
  of regulations
• Complexities of bringing elements together is
  proving to be a challenge

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Smart Meter Initiative Where We are Today

• Advanced Metering Infrastructure (AMI)
  Specifications draft regulation has been issued
• Meter Data Management Repository (MDM/R) draft
  specifications for MDM/R functions have been
  issued
• Draft Cost Recovery regulation issued
  distributors may recover costs associated with
  acquisition of meters metering equipment
  systems technology if approved by Ontario
  Energy Board

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Smart Meter Initiative Where We are Today

• Draft Procurement regulation lays out
  responsibilities of distributors when entering
  into procurement process
• Will help ensure installation of first 800,000
  meters by the end of 2007, as per government plan
• Want to ensure economies of scale
• Vendors carefully scrutinized to meet procurement
  qualifications

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Smart Meter Initiative Where We are Today

• Permission for certain distributors to move
  forward in procurement process
• 1. Those who have had smart meter pilots
  approved by the regulator
• 2. Those who received approval from regulator in
  their 2006 rate applications.
• 3. Coalition of the provinces large
  distributors have selected 5 vendors through a
  request for pre-qualification process
• 4. Provincially owned Hydro One through RFP
  process

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Smart Meter Initiative Where We are Today

• Independent Electricity System Operator (IESO)
  agency that balances the supply of, and demand
  for, electricity in Ontario and then directs its
  flow across the province's transmission lines.
• Recently named as project managers for delivery
  of meter data management/MDM/R functionality
  (interfaces between MDM/R distributors and
  customer information systems)
• Will determine vendors to deliver MDM/R
  functionality

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Smart Meter Initiative Where We Need to Go

• Momentum is building as preparations are made for
  first phase of implementation
• Still need to work out a number of outstanding
  issues/challenges on certain fronts
• 1. Clarification and regulatory certainty on
  Smart Meter Funding
• 2. Were awaiting what MDM/R governance role
  will entail
• 3. Were in earliest stages of procurement
  process

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Smart Meter Initiative Where We are Today

• Ontarios distributors ready to implement
• 2010 target ambitious, but achievable
• Best results via partnership between
  distributors, government and regulators
• Success will position Ontario as leader in SM and
  conservation