HomeMy WebLinkAbout20090612Disposition of Removed Meters.pdf?tIDA""POR~RECEiVE
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An IDACORP Company
DONOVAN E. WALKER
Corporate Counsel
June 12, 2009
VIA HAND DELIVERY
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
P.O. Box 83720
Boise, Idaho 83720-0074
Re: Case No. IPC-E-08-16
Advanced Metering Infrastructure ("AMI' Technology
Compliance - Order No. 30726 - Meter Report
Dear Ms. Jewell:
Enclosed for filing please find an original and seven (7) copies of Idaho Power
Company's Compliance Report on Disposition of Removed Meters in the above matter.
DEW:csb
Enclosures
P.O. Box 70 (83707)
1221 W. Idaho St.
Boise, 10 83702
DONOVAN E. WALKER (ISB No. 5921)
BARTON L. KLINE (ISB No. 1526)
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707
Tel: 208-388-5317
Fax: 208-388-6936
dwalkercæidahopower.com
bklinecæidahopower.com
RECEIV
2009 JUNl 2 PH I: 29
IDAHO PUe,qç "U'
UTILITIES COMMiSSlu¡"
Attorneys for Idaho Power Company
Street Address for Express Mail:
1221 West Idaho Street
Boise, Idaho 83702
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
On August 4, 2008, Idaho Power Company ("Idaho Powet' or "Company") filed
an Application seeking the issuance of a Certificate of Public Convenience and
Necessity, authorizing it to move forward with a three-year, system wide AMI
implementation plan. On February 12, 2009, the Idaho Public Utilties Commission
("Commission") issued its Order granting the Company's request. Order No. 30726.
The Commission also ordered the Company to "submit a report containing a detailed
evaluation of the types of measures considered and/or utilzed by the Company in order
to facilitate the resale, recycle or prudent disposal of its existing metering equipment."
IDAHO POWER COMPANY'S COMPLIANCE REPORT ON DISPOSTIION OF REMOVED METERS - 1
Id., at 10. Idaho Power respectfully submits this report in compliance with the
Commission's prior order.
II. BACKGROUND
Idaho Power has approximately 440,000 meters in service across its system.
The meters are made up of two types: (1) electromechanical meters (approximately 80
percent) and (2) solid-state meters (approximately 20 percent). Electromechanical
meters have dials, gears, and moving parts. They are the "oldest" type of meter
technology. Solid-state meters have no moving parts, are read by a digital readout, and
have self-diagnostic functions. They are a much "newet' technology than
electromechanical meters. The Company's last purchase of electromechanical meters
was in 2002. Since 2003, only solid-state meters have been purchased, except for AMI
meters.
All new meters come with certified test results from the manufacturer. Pursuant
to the Company's standard operating procedure, it tests a minimum of 4 percent of a
particular model's shipment to verify the manufacturets test results before the new
meters are initially placed into service. All meters (100 percent) are inspected and
tested prior to being returned to service. Any meter that does not meet specific
accuracy requirements wil not be returned to service. Meters that continue to function
properly and pass the Company's testing procedures wil remain in, or be placed back
into, service. In-service meter testing is divided into three categories: (1) demand, (2)
transformer rated, and (3) non-demand meters. In-service non-demand meters are
subject to annual "statistical sample testing programs." Depending on the results of the
annual statistical sample tests, the Company may pursue additional testing
IDAHO POWER COMPANY'S COMPLIANCE REPORT ON DISPOSTIION OF REMOVED METERS - 2
requirements for that meter model, meter model removal programs, and/or meter
retirement programs. Demand and transformer rated meters are subject to "periodic
testing schedules." The schedule for testing is determined by the meter make and
modeL. The current schedules are 12 years for electromechanical and 16 years for
solid-state meters. A third category for in-service meter testing is for industrial meters.
Industrial meters are on a four-year test schedule, or as specified by a specific contract.
These meters are installed for customers with greater than 1 megawatt ("MW") of
demand, cogeneration over 1 MW, special contract customers, and utility
interconnection points. Industrial meters are not part of the current AMI deployment.
The Company has active meters on its system that were first put into service as
far back as 1947. Roughly 115,000 meters, or approximately 25 percent of the total
meters on the system, are pre;.1978 meters. Approximately 290,000 meters, about 66
percent of the total meters on the system, were installed prior to 1998 and are more
than 10 years old. The chart included as Attachment NO.1 shows all non-AMI meters
by purchase year that are stil in service on Idaho Power's system.
II. AMI DEPLOYMENT STATUS
The AMI deployment has been moving along at a rapid pace and on schedule.
Through the month of May 2009, a total of 18 substations have been completed with the
required AMI upgrades, 52,790 meters served by those substations have been
exchanged, and the Company is currently averaging about 750 meter exchanges per
day. Returns and failure rates have been at or below the expected and acceptable
levels. Finally, approximately 35,200 meters, or 75 routes, have been moved from
manual to remote meter reading (year to date).
IDAHO POWER COMPANY'S COMPLIANCE REPORT ON DISPOSTIION OF REMOVED METERS - 3
iv. CURRENT PLAN FOR NON-AMI METERS
The AMI deployment wil replace 99 percent of the meters on Idaho Powets
system with AMI meters. The Company's current plan for the disposition of its non-AMI
meters is: (1) to recycle all electromechanical meters, (2) to reuse all of the solid-state
meters that it possibly can to replace inventory (in lieu of buying new, non-AMI meters),
and to deploy elsewhere on the system where needed, (3) to evaluate the periodic sale
of groups of solid-state meters not needed for reuse on the system and sell them if the
price is better than recycling, and (4) to recycle the solid-state meters that cannot be
sold. After careful consideration and investigation of how to obtain the best value for
the removed meters that AMI wil replace, the Company determined that a carefully
managed program for the reuse of the meters on its own system was the most effective.
There is very little, if any value to be obtained from the resale of used meters. Beyond
the reuse and sale of used meters, recycling wil allow some recovery of investment for
those meters that cannot be reused or sold.
Because the old electromechanical meters essentially have no resale value they
wil all be recycled. There are approximately 345,000+ old mechanical meters on the
system. The Company wil receive $0.10 per pound for recycling meters. The
cardboard boxes and shipping materials accompanying the new AMI meters will also be
recycled with the old non-AMI meters. The Company wil reuse approximately 20,000 of
the solid-state meters to support new business and maintenance in non-AMI areas in
2009 and 2010. Additionally, solid-state meters will be reused to upgrade all of the
meters that make up the 1 percent of the system that wil not currently be upgraded to
AMI. There are approximately 91,000+ solid-state meters on the system. Because
IDAHO POWER COMPANY'S COMPLIANCE REPORT ON DISPOSTIION OF REMOVED METERS - 4
there may occasionally be demand for the purchase of used solid-state meters, the
remaining solid-state meters wil be evaluated for sale as the deployment moves
forward. If the solid-state meters cannot be sold in an economical manner, they wil be
recycled.
v. MEASURES CONSIDERED AND/OR UTILIZED
The Company attempts to maximize the value it receives both for itself and for its
customers from all utilty equipment that is removed from service. Idaho Powets
Investment Recovery department specializes in recovering as much value for these
items as possible; for example, to name a few, such things as company vehicles,
equipment, metals, wire, poles, tools, and meters.
In anticipation of the AMI deployment, the Company over the last several years
has carefully managed its inventory of meters in an attempt to minimize the amount of
new non-AMI meters it must purchase. The Company's inventory of meters has
dramatically ramped down in preparation for the AMI deployment. The chart included
as Attachment No. 2 shows the amounts of non-AMI meters that have been reused
and/or reduced inventories of new non-AMI purchases since the AMI pilot program
began in 2004. Additionally, in 2009 the Company has thus far returned approximately
4,500 non-AMI solid-state meters to service or stock as a result of the AMI deployment.
These returns have met all of the Company's internal non-AMI meter needs to date, and
no new non-AMI meters have been purchased in 2009. Prior to and during the
deployment, inventories that would normally be stocked with the purchase of new non-
AMI meters have been maintained with solid-state meters that were removed during
AMI deployment, and ultimately placed back into service elsewhere on the system.
IDAHO POWER COMPANY'S COMPLIANCE REPORT ON DISPOSTIION OF REMOVED METERS - 5
The Company evaluated and investigated the possibilty of sellng the meters on
the "market" and/or to other utilities. Investment Recovery has made at least four
different attempts at offering used meters for sale, all of which have been unsuccessfuL.
Unfortunately, there is very little interest or demand for what the Company has to selL.
There are several problems, or considerations, that devalue the sale of used
meters. One problem is that overall demand for non-AMI meters is down everyhere.
This is partially attributable to economics and partially attributable to AMI deployments.
While demand for non-AMI meters is down, demand for AMI is up. This compounds the
decreasing demand for non-AMI meters as more and more flood the market with the
increasing number of AMI deployments across the country. A large meter wholesaler
that Idaho Power has done business with in the past informed the Company that it is
seeing used meters in volumes around 2,000,000 per month.
Another related problem is that all of the meters that Idaho Power has to dispose
of are used meters. There are some utilties that have large inventories of unused non-
AMI meters for sale because of their own AMI deployments. Because Idaho Power did
a very good job managing its inventory and re-using non-AMI meters rather than buying
new ones it has no "new-in-the-box" meters to offer for sale. There is virtually no
demand whatsoever for the used mechanical meters, especially when buyers for these
types of meters have access to "new-in-the-box" solid-state meters to purchase on the
used market, and even then there is little demand.
Another consideration is that the Company's meters have the Company's name,
and in some cases, the logo engraved on the metets nameplate. This nameplate is
manufactured into the meter and also contains the make, model, serial number, and
IDAHO POWER COMPANY'S COMPLIANCE REPORT ON DISPOSTIION OF REMOVED METERS - 6
other identifying attributes for that particular meter that cannot be removed. This in itself
somewhat devalues the used meter to start with and, additionally, has legal issues
involving trademark and liability to contend with.
Additionally, wholesalers are interested in large lots of meters of the same type,
make, and model - and they want them immediately, not at some future date or spread
out over three years. Because of the varied nature of the year, make, and model of
meters throughout Idaho Power's system, and the logistical deployment of AMI and the
accompanying removal of old meters, it is difficult for the Company to offer its used
meters in the manner required by those in the market to purchase them. The AMI
deployment takes place based upon the initial need to have the communications and
other AMI equipment set up at the substation. Then meter exchanges take place along
each meter reading route served by that particular AMI-converted substation. The AMI
installation, and accompanying removal of old meters, then goes route by route in order
to enable remote meter reading along the entire route formerly served by manual meter
readers. This is the most cost-effective way to deploy, as it enables the cost savings
associated with remote meter reads to take effect as soon as possible. Because of this
method of deployment, the Company gets a cross-section of many different meter
types, models, and ages, spanning from 1947 to the present, as they install along any
given meter reading route. This deployment method adds an additional complication,
and cost, to the resale of the used non-AMI meters as the Company must sort and store
meters by meter type and modeL.
Because the solid-state meters are a much newer technology, occasionally there
may be a better demand for these meters, even on the used market. For this reason,
IDAHO POWER COMPANY'S COMPLIANCE REPORT ON DISPOSTIION OF REMOVED METERS - 7
the Company has determined that as it accumulates groups of removed solid-state
meters that it wil not need to reuse elsewhere on its own system, that it wil periodically
check the market and offer them for sale prior to recycling. Utilties and wholesalers do
not buy meters one-by-one, they buy in lots, typically a "truckload." A truckload is
approximately 3,000 to 4,000 meters. Consequently, the Company must sort the meter
models into pallets, and store them until there is a "truckload" of pallets available, and
then offer them for sale. Because there is not unlimited and free storage, if it is not
economical to sell the "lots" at that point, they wil then be recycled. Although the
Company has not currently found a wiling buyer for the used meters, it will continue to
make a good faith effort to do so prior to recycling.
VI. CONCLUSION
The Company's non-AMI meters have a great deal of value to the Company as
long as they are in service and operating properly on the system. Once they are
removed from service, they have very little, if any, value on the secondary market.
Idaho Power has been very diligent and prudent in the management of its metering
system. Through the years it has successfully coordinated the addition of new meters
and technology while at the same time keeping costs low and maximizing the value and
use of old meters that still function properly. Prior to the deployment of AMI, the
Company managed a system of nearly 500,000 meters, almost a quarter of which date
back to 1947 through 1978, with 2/3 of the total meters being at a minimum 10 years old
or more.
Because of the nature of Idaho Powets system and the considerations
discussed above, the Company wil first reuse all the meters that it can within its own
IDAHO POWER COMPANY'S COMPLIANCE REPORT ON DISPOSTIION OF REMOVED METERS - 8
system. Secondly, it wil sell those that it can and recycle what cannot be sold or
reused. The Company has successfully reinserted non-AMI meters that have been
displaced by AMI installations into its meter inventory since 2004, when Phase 1 AMI
deployment, the AMI pilot program, was initiated. The Company has made numerous
offers and continues to make periodic offers for the sale of its used meters. The
Company has also contracted for the recycling of those meters that it cannot reuse or
sell, and wil recover $0.1 O/pound from the recycled meters. This multipart approach to
the disposal of the Company's non-AMI meters continues Idaho Powets long tradition
of the prudent and vigilant management of its metering system.
DATED at Boise, Idaho, this 12th day of June 2009.
DONOVAN E. W LKER
Attorney for Idaho Power Company
IDAHO POWER COMPANY'S COMPLIANCE REPORT ON DISPOSTIION OF REMOVED METERS - 9
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 12th day of June 2009 I served a true and
correct copy of IDAHO POWER COMPANY'S COMPLIANCE REPORT ON
DISPOSTIION OF REMOVED METERS upon the following named parties by the
method indicated below, and addressed to the following:
Commission Staff
Neil Price, Esq.
Deputy Attorney General
Idaho Public Utilities Commission
472 West Washington
P.O. Box 83720
Boise, Idaho 83720-0074
--Hand Delivered
U.S. Mail
_ Overnight Mail
FAX
-- Email neil.pricecæpuc.idaho.gov
Kroger Co.
Michael L. Kurtz
Kurt J. Boehm
BOEHM, KURTZ & LOWRY
36 East Seventh Street, Suite 1510
Cincinnati, Ohio 45202
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FAX
L- Email mkurtcæBKLlawfrm.com
kboehmcæBKLlawfirm .com
Kevin Higgins
Energy Strategies, LLC
Parkside Towers
215 South State Street, Suite 200
Salt Lake City, Utah 84111
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FAX
-- Email khigginscæenergystrat.com
IDAHO POWER COMPANY'S COMPLIANCE REPORT ON DISPOSTIION OF REMOVED METERS - 10
BEFORE THE
IDAHO PUBLIC UTiliTIES COMMISSION
CASE NO. IPC-E-08-16
IDAHO POWER COMPANY
ATTACHME'NT NO.1
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BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-08-16
IDAHO POWER COMPANY
ATTACHMENT NO.2
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