Implementation of the Boards Policies November 8 2012 Agenda 930 940 Welcome Board Staff 940 1010 Presentation Update on RRFE process role of SGWG Board Staff 1010 1045 ID: 556478
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Slide1
Development of the Smart Grid
Implementation of the Board’s Policies
November 8, 2012 Slide2
Agenda
9:30 – 9:40
Welcome
Board Staff
9:40 – 10:10
Presentation: Update on RRFE process, role of SGWG
Board Staff
10:10 – 10:45
Discussion of Smart Grid in light of October 2012, RRFE Report of the Board
All
10:45 – 11:00
BREAK
11:00 – 12:15
Discussion of Smart Grid in light of October 2012, RRFE Report of the Board (continued)
All
12:15 – 1:00
LUNCH
1:00 – 2:30
Discussion of Conceptual Framework for Regulatory Documents
All
2:30 – 2:45
BREAK
2:45 – 3:15
Discussion on cyber-security and privacy
All
3:15 – 4:30
Discussion on facilitation of customer access to meter data
All
4:30 – 4:45
Any other business
AllSlide3
First meeting of the reconvened Smart Grid Working Group
Welcome
Renewed Regulatory Framework for Electricity (RRFE) Report policies
Direction from the Board
Background to current remit
Staff’s proposed approachSlide4
Development of the Smart Grid
Board has
determined:
For
rate-setting,
no distinction between “smart grid” and more traditional
investments; and
Behind-the-meter services are a
non-utility
activity.
All other issues to be addressed in a Supplementary
Report
Smart Grid Working Group to reconvene to develop appropriate regulatory documentsSlide5
Smart Grid Working Group
Smart Grid Working Group to be reconvened for meetings in
November
SGWG previously met six times in the Spring of
2011
9 LDCs (including Hydro One (partially as transmitter))
Mix of sizes and from different organizational levels
2 consumer groups
11 technology vendors (e.g. Bell, IBM, GM, DEML,
Telvent
, Honeywell,
Energate
)
4 agenciesSlide6
Smart Grid Working Group
SGWG will be asked to advise on
:
Staff proposals on content for
regulatory documents e.g.;
recognition of benefits
Interoperability
How best to address cyber-security and
privacy; and
How best to facilitate consumer access to meter
data.Slide7
Development of the Smart Grid - Timelines
2012
November
Working Group Meetings
2013
January
Supplementary
Report of the Board
February
Smart Grid requirements integrated into Filing Requirements developed in Distribution Network Investment
Planning processSlide8
Ontario Statutory and Regulatory Context
GEGEA - new objective for the Board “to facilitate the implementation of the smart grid in Ontario”
Minister’s November 24, 2010 Directive - established 24 specific policy objectives of smart grid
Board required to provide Guidance to licensed electricity distributors and transmitters and other regulated entities whose fees and expenditures are reviewed by the Board
Includes Guidance on criteria by which licensee’s Smart Grid Plans will be evaluated
OEB consultation – January 13, 2011 letter
Phase 1 Smart Grid Working Group (SGWG)
Phase 2 Staff Discussion Paper and comments
November 8, 2011
RRFE process culminating in September 16, 2012 ReportSlide9
Minister’s Directive’s Objectives
Four types of objectives
Correspond to statutory definition of smart grid
Policy
Efficiency, customer value, co-ordination, interoperability, security, privacy, safety, economic development, environmental benefits and reliability
Customer Control
Access
, visibility, control, participation in renewable generation, customer choice and education
Power System Flexibility
Distributed renewable generation, visibility, control and automation and quality
Innovative Infrastructure
Flexibility, forward compatibility, encourage innovation and maintain pulse on innovationSlide10
Key Messages from SGWG
Board should avoid being overly prescriptive but business case requirements should be clear
E.g. demarcation between monopoly recoverable expenses and new customer “behind the meter” services
Specify the “what” not the “how”
There are varying capabilities among distributors to implement smart grid
The smart grid is a “foundation” for new benefits
E.g. connection of renewable distributed generation, demand-response opportunities, electric vehicles, storage
These benefits may not accrue to utilities that undertake the expense and/or may be long-termSlide11
Staff’s Proposed Approach
Need to bridge the high-level principles in Directive to Board’s options to respond to requirement to provide Guidance
Main distinction: rate regulation (COS/IRM) and conduct regulation (codes, license conditions)
Apply threshold (yes/no) or evaluative criteria
E.g. security, privacy –yes/no; efficiency -
evaluative
Distilled into eight key questions
Well-received by SGWGSlide12
Staff Discussion Paper
Eight key issues:
How to assess smart grid?
What smart grid benefits should the Board recognize?
How to enhance customer control
What should be the demarcation point between regulated monopoly and behind-the-meter services?
How to ensure system flexibility?
What is the appropriate level of detail in applications?
How best to ensure privacy and cyber-security?
What role should the Board play with regard to smart grid standards?Slide13
Staff’s proposed approach overview
Board has given policy direction on issues 1 and 4
Remaining issues to be addressed in supplementary report
In the context of preparing
regulatory documents to implement
Board policy
Supplementary
Report
is to be a comprehensive response to Minister’s Directive
Board decided only to address part of the Directive in the RRFE Report
Task of SGWG
is to assist staff to produce the appropriate regulatory documents
Filing Requirements, Code and/or license amendmentsSlide14
GEA
Minister’s Directive
Discussion Paper
RRFE
Two issues
Eight issues
140 cell objectives matrix
24 objectives
Definition of smart grid
New Board object
Supp
Report
Other issues
FRs, Codes
etc
Overview of ProcessSlide15
Staff’s proposed approach; focus on regulatory documents
Filing Requirements
Guidance to distributors and transmitters on what they should file in support of their rate cases
Need to be expanded to respect the Minister’s Directive
Code amendments
Become enforceable
License amendments
Become enforceableSlide16
Staff’s proposed approach; parsing the Minister’s Directive
The 24 objectives apply to all distributor rate base activities
The activity-based objectives have applicability naturally limited to the subject activities
Customer control, power system flexibility
E.g. substation improvements not required to show how they improve customer control
Adaptive infrastructure concerns innovation
Either matters that have traditionally been within scope of OEB oversight (forward compatibility) or may be addressed through pilots, demonstrations etc.
Policy objectives largely reflect traditional Board oversight with some exceptions
Co-ordination
Economic development
Environmental benefits
Cyber-securitySlide17
Spectrum of Ways of Operationalizing Directive Objectives in Rate Applications
24 objectives
Project expenditures
Evaluations
10 Policy
objectives
Other
Objectives*
Rationalized Policy
objectives
Other
Objectives*
*
As per function, e.g. no need
to evaluate customer access
a
spects of substation upgrades,
plus innovation & future compatibility
e.g. “traditional” Board criteria plus
environmental benefitsSlide18
Staff’s proposed approach: organization of SGWG meetings
This meeting: introduction to issues and approach
Second meeting: discussion of staff proposal for main categories of Filing requirements content and (if needed) preliminary code or licence amendments
Third meeting: comments on refined
Filing requirements content and (if needed) preliminary code or licence amendments