20080805Heintzelman Direct.pdf

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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF IDAHO POWER COMPANY FOR )
A CERTIFICATE OF PUBLIC )
CONVENIENCE AND NECESSITY TO )
INSTALL ADVANCED METERING .)
INFRASTRUCTURE ("AMI") TECHNOLOGY )
THROUGHOUT ITS SERVICE TERRITORY )
)
CASE NO. IPC-E-08-16
IDAHO POWER COMPANY
DIRECT TESTIMONY
OF
MAK C. HEINTZELMA
1 Q.Please state your name and business address.
2 A.My name is Mark C. Heintzelman and my
3 business address is 1221 West Idaho Street, Boise, Idaho.
4 Q.By whom are you employed and in what
5 capacity?
6 A.I am employed by Idaho Power Company (" the
7 Company") as Delivery Services Leader in the Metering area.
8 Q.Please describe your educational and
9 relevant professional background.
10 A.I received electronics training in the
11 United States Air Force at Keesler Air Force Base in 1976
12 and avionics systems training at Nellis Air Force Base in
13 1977. I attended Boise State University and completed its
14 Utility Lineman program in 1982. I started working for
15 Idaho Power in the Boise Metering Department in 1982. I
16 have held positions with Idaho Power as a JourneYman
17 Meterman, Metering Engineering Specialist, JourneYman Relay
18 Technician, Meter Shop Forman, Corporate Metering Support
19 Leader, and I am currently the Advanced Metering
20 Infrastructure ("AMI") Implementation Proj ect Leader.
21 I have completed courses in Industrial Electronics
22 and the International Organization of Standards ("ISO")
23 Quality Management System Implementation, and I have been
24 certified as a Quality Systems Auditor.
HEINTZELMA, DI 1
Idaho Power Company
1 I am a longtime member of the Automated Meter
2 Reading Association ("AMRA") (recently changed to
3 Utilimetrics, the Alliance for Advanced Metering & Data
4 Management) and I serve on the advisory committee for the
5 Western Energy Institute's Northwest Meter School. I have
6 been an instructor for the Western Energy Institute's Relay
7 School and Northwest Meter School. I have given technical
8 presentations on advanced metering and meter data
9 management at national conferences of AMRA, the Itron &
10 TWACS User's conferences, and the Seattle Meter School.
11 Q.What is the scope of your testimony in this
12 proceeding?
13 A.My testimony will describe how the Company
14 chose the Two-Way Automated Communication System ("TWACS")
15 for its AMI technology; the Company's plan for deploying
16 AMI technology throughout its system; how the system works,
17 generally; some of the functionality and expected benefits
18 from this AMI system; as well as a description of the
19 contracts the Company has entered into with its AMI
20 vendors.
21 Q.Could you please describe how Idaho Power
22 selected the TWACS power line carrier technology from
23 Aclara Power-Line Systems Inc. ("Aclara") for the system-
24 wide deploYment of AMI technology?
HEINTZELMA, DI 2
Idaho Power Company
1 A.The Company's experience with the TWACS
2 system goes back to 1998, when it deployed a pilot program
3 consisting of 1,000 meters in the Idaho City area. The
4 purpose of this program was to evaluate the system's
5 ability to read meters in remote locations and determine
6 the feasibility of deploying what was then Automated Meter
7 Reading ("AMR") to reduce operating costs by automating the
8 monthly meter reading process in low customer density
9 areas.
10 In 2004, Idaho Power deployed the TWACS technology
11 in the Emmett and McCall areas in conjunction with the
12 Phase One Implementation Plan filed with the Commission in
13 Case No. IPC-E-02-12. The Company also utilized this
14 technology in its Energy Watch and Time-of-Day pilot
15 programs for the Emmett Valley. With these programs the
16 Company was able to evaluate the system's ability to gather
17 hourly energy use data from all endpoints in support of
18 dynamic time-of-use ("TOU") rate applications and evaluate
19 the system's functionality related to direct load control
20 through an air conditioner cycling program.
21 In November 2007, pursuant to the Company's August
22 31, 2007, AMI Implementation Plan filed in Case No. IPC-E-
23 06-01, the Company formed a cross-functional team made up
24 of Idaho Power employees with the assistance of a strategic
HEINTZELMA, DI 3
Idaho Power Company
1 sourcing consultant, and led by the Company's Procurement
2 Department professionals, to evaluate and assess the
3 possible AMI solutions and ultimately to select vendors and
4 successfully negotiate contracts for the deploYment of the
5 AMI technology. This approach is part of the Company's
6 Strategic Sourcing Process. The team is made up of
7 employees with expertise in procurement/purchasing,
8 pricing/regulatory, meter support, finance, and other
9 subject matter experts. In 2008, the team issued a Request
10 for Information ("RFI") to thirteen of the industry's
11 leading AMI technology providers, including Aclara, for a
12 system-wide deploYment. The RFI requested specific
13 information related to deploYment scale, system
14 functionali ty, and technology. The responses were
15 evaluated against our system and functional requirements by
16 a Strategic Sourcing team assembled for the AMI proj ect,
17 with an emphasis on specific demonstrated functionality at
18 scale. The RFI evaluation reduced the field of thirteen
19 AMI technology providers down to two.
20 The Company then issued a Request for Proposals
21 ("RFP") to the two remaining technology providers, one of
22 which was Aclara. The analysis of the proposals was
23 performed by the same cross-functional Idaho Power team,
24 again with the assistance of a strategic sourcing
HEINTZELM, DI 4
Idaho Power Company
1 consultant. The proposals were evaluated against our
2 functional requirements, financial requirements, and our
3 physical electrical system requirements. The team
4 concluded that the Aclara TWACS power line carrier system
5 was the best match to our requirements and provided the
6 best value to Idaho Power and its customers. Aclara's
7 proposed solution demonstrated superior system performance
8 at scale, the functional capability to retrieve hourly data
9 at scale, and the proven ability to deliver successful
10 system performance economically in low customer density
11 applications.
12 Q.What is the Company's approach for
13 deploYment of AMI technology on a system-wide basis?
14 A.The Company's approach could be described in
15 three parts, or Phases, Phase I is the determination of
16 system capabilities as well as selection and evaluation of
17 the appropriate AMI technology. Phase II is the actual
18 deploYment of the selected technology infrastructure, which
19 would be the Company's three-year deploYment plan. This
20 plan was described in the August 31, 2007, Advanced
21 Metering Infrastructure Implementation Plan filed with the
22 Commission in Case No. IPC-E-06-01, and is the subject of
23 this filing. Once the Phase II AMI deploYment is
24 completed, the Company will have a two-way communications
HEINTZELM, DI 5
Idaho Power Company
1 system infrastructure in place with the potential to
2 provide additional functionality and benefit. The
3 additional functionality and systems implementation, as
4 well as the additional benefit quantification of various
5 programs and uses, would be Phase III of the AMI
6 implementation.
7 Q.Could you please describe Idaho Power's
8 proposed AMI implementation, or Phase II?
9 A.Idaho Power proposes to install AMI
10 throughout its service territory in a systematic, three-
11 year deploYment schedule starting in January 2009
12 continuously through the end of 2011, with some
13 preparations being implemented in late 2008. The schedule
14 would start with the Company's Capital Region (Boise,
15 Meridian, Eagle, Kuna, etc.) in 2009, move to the Canyon
16 and Payette Regions (Nampa, Caldwell, Payette, Ontario,
17 etc.) in 2010, and finish with the Southern and Eastern
18 Regions (Twin Falls, Hailey, Jerome, Pocatello, Salmon,
19 etc.).
20 In 2009, the Company will install the remaining
21 substation infrastructure in Ada County and begin
22 installation substation infrastructure in Canyon County.
23 Idaho Power plans to complete meter deploYments in Ada and
24 Boise Counties in 2009. In 2010, the Company will complete
HEINTZELM, DI 6
Idaho Power Company
1 substation infrastructure deploYment and meter
2 installations in our service territory west of Boise and in
3 the Mountain Home Area and begin the installation of the
4 substation infrastructure in the Pocatello area. In 2011,
5 the Company will complete the AMI system installation in
6 the eastern half of its service territory from the
7 Pocatello area east through the Twin Falls area connecting
8 back to the Mountain Home area. The actual meter exchanges
9 will take place on a carefully planned schedule that would
10 generally follow meter reading routes, and progreas route
11 by route and substation by substation to install the
12 required hardware throughout the system.
13 Q.Does the proposed deploYment cover the
14 Company's entire service territory?
15 A.Yes. The deploYment covers the entire
16 service territory, and reaches approximately 99 percent of
17 the Company's customers. There are approximately 4,000
18 customers, who. make up approximately 1 percent of total
19 customers, whose electrical service comes from Idaho
20 Power's 53 smallest distribution substations. These
21 customers are typically in the most remote edges of our
22 service terri tory and are largely low or seasonal energy
23 users. The TWACS technology will work in these locations
24 but hhe station infrastructure cost per customer is very
HEINTZELM, DI 7
Idaho Power Company
1 high and is not offset by the benefits that would be
2 achieved through AMI at this time. The Company proposes to
3 re-evaluate this situation at the completion of the Phase
4 II deploYment. At that time, a determination regarding
5 whether AMI is appropriate for those remaining customers
6 and what AMI technology would be most cost effective for
7 deploYment can be made. The locations of the 1 percent of
8 customers that will not be covered is illustrated on the
9 map provided as Attachment No. 1 to the Application in this
10 case.
11 Q.What functionality and benefits will the AMI
12 System provide?
13 A.As the technology is deployed area by area,
14 we will implement the system to replace our monthly meter
15 reading and customer movement meter reading process. This
16 will begin to provide benefits in the first year of
17 deploYment by reducing operational and maintenance costs.
18 As each annual deploYment is completed, additional
19 functionality will be implemented in the succeeding year.
20 We are planning to implement outage management
21 functionality and hourly data collection at that time as
22 well. The benefits of outage management integration will
23 begin to be realized almost immediately. Achieving the
24 full benefit from hourly data collection will likely
HEINTZELMA, DI 8
Idaho Power Company
1 require more time and the implementation of time variant
2 rates at a significant scale. Additional back office
3 systems and rate structures will need to be in place before
4 significant benefit could be realized.
5 Q.Could you generally describe the AMI system
6 being implemented by Idaho Power and how it works?
7 A.The TWACS AMI system uses the electrical
8 distribution system as the path for two-way communications
9 between the TWACS substation communications equipment and
10 the endpoint communications modules installed internally in
11 the customers' electric meters or load control devices.
12 The software for the AMI System is hosted on the Idaho
13 Power network. It consists of proprietary software
14 applications, a hardware operating system, backup and test
15 applications, communications applications and servers, and
16 database applications and servers. The software
17 application will be connected to the substation control
18 equipment through our existing internal network or through
19 the phone system.
20 The substation control equipment will be installed
21 in our existing distribution substations. A typical
22 installation would consist of a phone line with frame relay
23 service, a phone protection package, a control receiver
24 unit to provide the connection between software system and
HEINTZELMA, DI 9
Idaho Power Company
l the station equipment and to control the operation of the
2 station equipment, an outbound modulation unit to convert
3 the data request to be transmitted across the electrical
4 distribution system, a modulation transformer unit to
5 inj ect the signal on the distribution system, and inbound
6 pickup units to retrieve the data back from the endpoint
7 communications modules.
8 The only equipment required on the electrical
9 distribution system are the endpoint communications
10 modules. The communications are modulated on the
11 electricity flowing on the system and, therefore, no
12 additional equipment is required between the substation and
13 endpoints. Because of the unique method used by the TWACS
14 system to modulate the electrical sine wave the signal
15 requires no further modulation amplification and remains
16 intact to the end of the electrical distribution system.
17 Please see Exhibit No. 2 to my testimony for a diagram of
18 this process. Idaho Power sees this feature as an
19 extremely valuable attribute of the system. As we add new
20 customers, the only equipment required to expand the
21 existing communications system will be a communications
22 module in the electric meter or end device.
23 Q.Could you give a brief description of how
24 the AMI two-way automated communications system works?
HEINTZELMA, DI 10
Idaho Power Company
1 A.Yes. Please refer to Exhibit No.3 to my
2 testimony for a simplified diagram of how the system is
3 connected. Once the components of the system are
4 installed, communications take place starting with the
5 software initiating communications commands, typically on a
6 predetermined schedule. The commands are processed through
7 a communications server and sent out through our internal
8 network or through a phone service provider to the
9 appropriate distribution substation. At the substation,
10 the communications command is received by the TWACS station
11 equipment and sent out on the electrical distribution
12 system. Each endpoint communications module (located in
13 the meter) is uniquely identifiable and responds to
14 requests for data only when specifically addressed by the
15 system. When a communications module is addressed by the
16 system, it will respond to the request by delivering the
17 data requested in a predetermined format. There are
18 typically data retrieval schedules for daily meter reads,
19 predetermined blocks of hourly energy use data, and monthly
20 billing reads. Once the substation control equipment has
21 the information back from the individual communications
22 modules, the data will automatically be sent back over the
23 phone or network system to the TWACS network software. The
24 data is then validated and moved to the system database.
HEINTZELMA, DIll
Idaho Power Company
1 The TWACS system has built in features to continually
2 optimize the communications process, and in cases where you
3 are retrieving hourly energy use information, it is best
4 not to interfere with the systems automatic operations by
5 making frequent direct unscheduled data requests from
6 individual communications modules. Direct unscheduled
7 communications will be limited to troubleshooting and
8 necessary maintenance communications. This will allow the
9 system to optimize communications and data retrieval
10 performance.
11 Q.Could you describe the contracts that the
12 Company has entered into for the AMI implementation?
13 A.Because of the evolving and developing
14 nature of the AMI technology, there is not one single
15 source vendor that can provide all of the necessary
16 components required for an AMI deploYment. Idaho Power has
17 executed four contracts with separate vendor companies that
18 each provide a distinct product and/or service that is
19 required to complete the supply chain necessary to install
20 AMI.
21 The contracted vendors (collectively, "AMI vendors")
22 are:(1) Aclara Power-Line Systems Inc., formerly known as
23 Distribution Control Systems Inc. ("DSCI"), to provide
24 their Two-Way Automated Communication System (called
HEINTZELMA, DI 12
Idaho Power Company
1 "TWACS~") which uses power line carrier communication
2 technology, and primarily includes the AMI modules that are
3 installed in the meters, software, substation control
4 equipment, as well as support service, proj ect management,
5 and training; (2) Landis+Gyr Inc. ("Landis+Gyr"), to
6 provide the residential meters, including the integration
7 of TWACS~ modules from Aclara into Landis+Gyr meters,
8 providing electronic certified meter test results with each
9 shipment, support services to manage the meter module
10 integration and delivery, and meter/module failure analysis
11 and resolution; (3) General Electric Company ("GE"), to
12 provide the commercial meters, including integration of
13 TWACS~ modules into GE meters, providing electronic
14 certified meter test results with each shipment, support
15 services to manage the meter module integration and
16 delivery, and meter/module failure analysis and resolution;
17 and (4) Tru-Check, Inc. ("Tru-Check"), to provide meter
18 exchange services (remove and replace) and plan the
19 logistics to provide material management, proj ect
20 management, exchange order management, meter exchange
21 resource management, and other services necessary to
22 exchange meters on schedule in years 2008 - 2011.
23 Q.Could you describe how the Supply Chain
24 works for the AMI deploYment?
HEINTZELM, DI 13
Idaho Power Company
1 A.The process essentially starts with Aclara,
2 who will provide the necessary system software and
3 substation control equipment directly to Idaho Power, with
4 the exception of some Information Technology hardware
5 (servers) and the substation modulation transformers.
6 Idaho Power will purchase servers and transformers directly
7 from our preferred suppliers for those products.
8 Substation Control Equipment has an approximate 22 -week
9 lead time.
10 The AMI communications modules, from Aclara, will be
11 installed internally by the meter manufacturers into new
12 solid-state electrical meters. These modules will be
13 shipped from Aclara's manufacturing facilities directly to
14 Landis+Gyr and GE, the meter manufacturers. At the time of
15 meter manufacture, the meter providers will integrate the
16 TWACS communications module into the electric meters. The
17 meter manufacturers will then ship the AMI equipped meter
18 as a unit to Idaho Power's contracted meter exchange
19 service provider, Tru-Check. The AMI modules are ordered
20 with a 17-week lead time, and meters are ordered with a 13-
21 week lead time.
22 Tru-Check will physically receive the meter
23 shipments on a predetermined schedule. Upon receipt, they
24 will notify Idaho Power and segregate the shipment until
HEINTZELMA, DI 14
Idaho Power Company
1 validated and released for use by Idaho Power. Tru-Check
2 will both uninstall the old meter and install the AMI
3 equipped meter on a meter exchange route established by
4 Idaho Power and TruCheck a minimum of 120 days in advance
5 of the meter exchange. Tru-Check will be responsible for
6 receipt, handling, and storage of meters and materials;
7 removal and return of old meters; installation and
8 verification of new meters; and the validation of data from
9 the new meters.
10 Q.Could you describe the pricing and terms
11 that were negotiated with the AMI vendors?
12 A.The specific pricing and terms of the
13 contracts are deemed highly sensitive, confidential
14 commercial information by the AMI vendors. As such, the
15 following information is provided in general terms.
16 Additional details are available to the Commission and
17 Commission Staff as confidential information pursuant to a
18 signed Protective Agreement.
19 Idaho Power was able to obtain fixed unit pricing
20 from all AMI vendors to cover at least the duration of the
21 three-year deployment. For Aclara, pricing for modules is
22 fixed for a period of five years. For Landis+Gyr, pricing
23 for residential meters is fixed for a period of five years.
24 For GE, pricing for commercial meters is fixed for a period
HEINTZELMA, DI 15
Idaho Power Company
1 of three years. For Tru-Check, pricing is fixed by region
2 and paid only for each metered service point in which a
3 "Successful Meter Exchange" is performed. A Successful
4 Meter Exchange is defined as completing all of the
5 following: contractor's receipt of new meter and
6 associated materials as well as the subsequent storage and
7 handling of the materials up to meter installation; removal
8 of the existing meter and its return to Idaho Power without
9 damage; installation and operation verification of new
10 meter; accurate reading and recording of applicable meter
11 reading data of both existing and new meter; and the
12 completion of meter data transfer to Idaho Power and
13 successful validation test.
14 Three year warranties are provided on all equipment
15 from Aclara, Landi s +Gyr , and GE. All pricing is unit
16 pricing, essentially limiting the Company's exposure to the
17 approximate four-month lead times on orders. All contracts
18 also contain termination provisions whereby Idaho Power may
19 terminate the contracts if regulatory approval is not
20 received from the Commission.
21 The Company was able to successfully take advantage
22 of its Strategic Sourcing Process and negotiate favorable
23 terms and pricing for this AMI implementation. Pricing in
24 most instances was negotiated lower than initial
HEINTZELMA, DI 16
Idaho Power Company
1 proj ections and expectations. The Company is confident
2 that the process has resulted in a favorable environment
3 that will lead to the successful implementation of AMI
4 throughout its system.
5 Q.Does this conclude your testimony?
6 A.Yes, it does.
HEINTZELM, DI 17
Idaho Power Company
BEFORE THE
IDAHO PUBLIC UTiliTIES COMMISSION
CASE NO. IPC-E-08-16
IDAHO POWER COMPANY
HEINTZELMAN, 01
TESTIMONY
EXHIBIT NO.2
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Case No. IPC-E-08-16
M. Heintzelman, IPC
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BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-08-16
IDAHO POWER COMPANY
HEINTZELMAN, 01
TESTIMONY
EXHIBIT NO.3
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Case No. IPC-E-08-16
M. Heintzelman, IPC
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