October 17, Advice No Electric Tariff Filing Filed Electronically

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1 October 17, 2018 Filed Via Web Portal Mr. Mark L. Johnson, Executive Director and Secretary Washington Utilities and Transportation Commission P.O. Box Olympia, WA RE: Advice No Electric Tariff Filing Filed Electronically Dear Mr. Johnson: Puget Sound Energy ( PSE, Company ) hereby submits a new tariff schedule, electric Schedule 171, Optional Non-Communicating Meter Service. This filing, pursuant to RCW and Chapter WAC, proposes the following new electric tariff sheets: WN U-60, Tariff G - (Electric Tariff): Original Sheet No Optional Non-Communicating Meter Service Original Sheet No. 171-A - Optional Non-Communicating Meter Service (Continued) Original Sheet No. 171-B - Optional Non-Communicating Meter Service (Continued) Original Sheet No. 171-C - Optional Non-Communicating Meter Service (Continued) Original Sheet No. 171-D - Optional Non-Communicating Meter Service (Continued) The purpose of this filing is to provide a new optional non-communicating meter service for residential customers under the terms and conditions of the proposed Schedule 171. The proposed natural gas tariff sheets for a natural gas optional non-communicating meter service are also being filed concurrently under Advice No Currently, as per the tariff, the Company determines the type of meters and other equipment to be installed 1. This proposed optional meter service allows most Schedule 7, Residential Service, customers an alternative choice for a non-communicating meter instead of an Advanced Metering Infrastructure ( AMI ) meter. The proposed optional meter service is in line with the Commission s Policy on Customer Choice for Smart Meter Installation ( Commission Policy Statement ) dated April 10, 2018, under Docket U While recognizing the benefits of 1 Puget Sound Energy Tariff WN U-60, Schedule 80, Sheet No. 80-T, Section 20 Metering: The Company, in its sole judgment, shall determine the type of meters and other equipment to be installed.

2 Mr. Mark L. Johnson Page 2 October 17, 2018 Advice No grid modernization 2 and the importance of maximizing customer AMI participation 3, the Commission yet prefers that the utilities regulated by the Commission offer an opt-out option to their customers 4. For a utility that has had an Automated Meter Reading ( AMR ) platform and almost no noncommunicating meter option for nearly 20 years, any Commission-required optional meter service will increase meter reading costs, infrastructure costs, and information system costs in order to provide this optional service to a very small group of customers seeking noncommunicating meters 5. The Commission s policy statement 6 indicates that it is not likely that all of these costs could be shouldered by the small group of customers seeking non-standard meters. The financial burden would then be on the rest of PSE s ratepayers. Another potential negative impact of offering this type of optional service is that the customers with the noncommunicating meter service will have reduced availability to existing and future PSE products and services, which may also drive up complaints from that set of customers. These impacts may not be fully understood at this time; therefore, PSE proposes a regular reporting of the impacts of implementing the Commission preferred optional meter service. PSE addresses the following topics in this letter: Meter Upgrade Project; Commission s Policy on Customer Choice for Smart Meter Installation; Details about the new Schedule 171, Optional Non-Communicating Meter Service; and Electric and Natural Gas Schedules 171 reporting plan. Meter Upgrade Project PSE s meter technology is different from that used by the other Commission regulated utilities. Most 7 of PSE s meters have been on the AMR platform for almost 20 years. The AMR platform includes supporting information systems, network field equipment, meters, and natural gas modules. This platform enables automatic delivery of customer usage information to PSE in place of manual meter reading and uploading. However, the AMR network field equipment and the electric and natural gas meters that were installed years ago are nearing the end of their design life and in need of replacement. Since 2016, PSE has been in the process of exchanging its AMR network and metering equipment with Advanced Metering Infrastructure i.e., PSE s Meter Upgrade Project. This is a six-year project, scheduled to be completed in 2023, and will 2 Commission Policy Statement, paragraphs 1, 2, and 9 3 Commission Policy Statement, paragraph 10 4 Commission Policy Statement, paragraph 12 5 West Monroe Partners AMI Opt Out White Paper pdf, 6 Commission Policy Statement, paragraph 14, states specifically that any one-time fees or other up-front charges that companies seek to impose should be cost-based and mitigated to the fullest extent possible so as not to create a disincentive for customers to select their preferred options. 7 Most of PSE s non-amr meters are communicating meters with different technology than AMR

3 Mr. Mark L. Johnson Page 3 October 17, 2018 Advice No involve swapping out approximately 1.1 million electric meters and 800,000 gas meters/modules, along with the supporting infrastructure across ten counties in PSE s service territory. The Meter Upgrade Project mitigates the risk of aging metering infrastructure and provides a framework that allows PSE to modernize its grid 8 in preparation for future energy demands. PSE approaches the Meter Upgrade Project with the aim of leveraging technology to improve customer service and satisfaction and to enhance system reliability while balancing the up-front and on-going costs associated with the project. The AMI meters and modules are smart digital meters/modules equipped with the capability for two-way communication, including certain remote sensing and operating capabilities. After the deployment of key AMI network components in early 2018, PSE initiated the electric meter and natural gas meter/module change out in the second quarter of Figure 1 outlines the six-year deployment plan of the Meter Upgrade Project. Figure 1: PSE Meter Upgrade Project Schedule 8 Pursuant to WAC (3)(a), PSE s Smart Grid Technology Report contains a description of the smart grid technologies PSE has considered for integration into its system and PSE s current evaluation of such technologies. The link to the last report filed with the Commission: =161048

4 Mr. Mark L. Johnson Page 4 October 17, 2018 Advice No In Section III of the Commission Policy Statement, the Commission emphasizes the importance of timely communication with customers and the Commission staff and providing customers with individualized notices through several media. The customer communications of PSE s Meter Upgrade Project are consistent with the Commission Policy Statement and have been shared with the Commission consumer protection staff. PSE has also developed and been distributing individualized customer letters, s, phone calls, and door hangers in the Meter Upgrade Project deployment area, in addition to the information available on the PSE Meter Upgrade Project website. Commission s Policy on Customer Choice for Smart Meter Installation The proposed Schedule 171, Optional Non-Communicating Meter Service, is designed to meet the guidelines for customer choice outlined in the Commission s Policy Statement i.e., providing residential customers 9 an affordable opt-out choice 10 and not creating an unreasonable disincentive for customers to select their preferred metering options 11. Heeding the Commission s suggestion to minimize costs, the proposed Schedule 171 includes a bi-monthly service charge and the requirement of a bi-monthly-bill-cycle to eliminate the need for monthly meter reading, thereby reducing costs to customers. PSE chose bi-monthly reading and billing because this service option already exists within its billing system, avoiding the need for further expensive programing updates to allow for yet another option. Nonetheless, additional programming and related work will be required for PSE s billing and other business processes to offer this optional service. This includes ensuring that the existing customer payment plan options 12 will accommodate the new Schedule 171 charges. These payment plans are: 1) budget payment plan, 2) payment arrangements, and 3) payment assistance. Low income customers are entitled to all three payment plans with or without a non-communicating meter. Furthermore, in consideration of the potential impact on low income customer 13, PSE proposes specifically in Schedule 171 that: A Customer receiving bill assistance benefits under Schedule 129, Low Income Program, may use such benefits to pay for charges under this Schedule. While the Low Income Program has always been available to pay for any charges, PSE wanted to underscore and clarify that point in this new optional service. Proposed Schedule Optional Non-Communicating Meter Service This optional service is limited to the residential meters served under electric Schedule 7, Residential Service, in a location where the installation of PSE s AMI meter at the customer site has been scheduled or has been completed. Schedule 171 customers will have a meter without any communication capability. These meters will be read bi-monthly via PSE authorized personnel. Because these optional meters are not able to communicate with PSE automatically, 9 Commission Policy Statement, paragraph Id. Paragraph Id. Paragraph Id. Paragraph 22 states that While we decline to prescribe an opt-out specific payment plan, we encourage the companies to offer payment arrangements modeled after those set out in Commission rules. 13 Commission Policy Statement, paragraph 23

5 Mr. Mark L. Johnson Page 5 October 17, 2018 Advice No Schedule 171 customers must meet the qualifications specified in Schedule 171 and will not be eligible to participate in any current and future tariff schedule products and services and customer self-service options that require one- or two-way meter communication capabilities such as Schedule 131, Restoration Service Guarantees, Schedule 150, Net Metering, and future demand response programs. All Schedule 171 customers will be charged an on-going Additional Bi-Monthly Service Charge of $15 and, if applicable, the following charges: One-time Charge: $170 each for each electric non-communicating meter, when an AMI meter has already been installed after this Schedule 171 optional meter service is available to customers. Inaccessible Meter Charge when PSE is unable to gain access to the non-communicating meter as a result of customer continued denial of access: $25 per event. The full estimate to read and bill non-communicating meters on a bi-monthly basis is calculated to be $ The work paper containing the calculations supporting this estimate and the other charges is included with this filing as Exhibit A. In deference to the Commission s apparent willingness to allow a portion of these costs to be subsidized by non-participating customers, PSE is proposing a $15 bi-monthly charge as a reasonable middle ground. PSE s higher $25 Inaccessible Meter Charge uses the same cost estimate as its underlying basis, but is set at a higher level to incent cooperation by the customer in PSE s ability to read their meter. All the above costs include only labor related costs. They do not yet include the costs associated with: Manually uploading the meter read and one-time charge into metering and billing information systems; Performing the required billing and invoice configurations in PSE s information systems; Performing the additional tracking needed in PSE s customer information system; and Providing dedicated customer support. As mentioned earlier, PSE has been on the AMR platform for almost 20 years and only have a small manual meter reading group for the specialized natural gas commercial/industrial meters. PSE is still in the process of establishing the information systems, business procedures, and personnel needed to provide the Schedule 171 service, and will finalize these after the Commission approves this optional service. In the future, the charges approved under this filing may be updated when PSE has more information about how many and where the Schedule 171 customers are and the actual costs created by these Schedule 171 customers. PSE Proposed Electric and Natural Gas Schedules 171 Reporting Plan. PSE is committed to providing regular and relevant updates on its electric and natural gas Schedules 171 implementation with the Commission regarding the costs and impacts of providing this optional non-communicating meter service. PSE suggests annual reporting with the first report due one year after the initial tariff approval. This report would include the

6 Mr. Mark L. Johnson Page 6 October 17, 2018 Advice No following reporting elements: 1) Meter Upgrade Project update; 2) customer communications results; 3) number of customers taking Schedule 171 service, including details about their disconnection status and bill payment assistance status; 4) costs associated with the implementation of the optional service, including capital costs and operation and maintenance costs for information systems, meter networks, meter exchange, meter reading, and other related costs; 5) revenues associated with electric and natural gas Schedules 171; and 6) discussion of issues and concerns. The tariff sheets described herein reflect an issue date of October 17, 2018, and an effective date of January 1, Notice of the proposed tariff changes, as required by law and the Commission s rules and regulations, is being given to the public immediately prior to or coincident with the date of this transmittal letter, through web, telephone, and mail access in accordance with WAC (1). Posting of this proposed tariff change will be accomplished in accordance with WAC (1). No tariff change notice is required under the provisions of WAC or -195, nor required by WAC , nonetheless the Company will voluntarily carry out the notice provisions in WAC (2) (a),(b),(d). Please contact Spencer Jones (425) or Mei Cass at (425) for additional information about this filing. If you have any other questions, please contact me at (425) Sincerely, /s/ Jon Piliaris Jon Piliaris Director, Regulatory Affairs Puget Sound Energy PO Box 97034, EST07W Bellevue, WA Jon.Piliaris@pse.com cc: Lisa Gafken, Public Counsel Sheree Carson, Perkins Coie Attachments: Electric Tariff Sheets, listed above Exhibit A Work Paper

7 WN U-60 Original Sheet No. 171 PUGET SOUND ENERGY Electric Tariff G SCHEDULE 171 OPTIONAL NON-COMMUNICATING METER SERVICE (CONTINUED) SECTION 1 - AVAILABILITY: 1. Throughout the territory served by the Company, at the request of a Customer served under Schedule 7 who resides in a single-family dwelling or a multi-plex residence up to four units. For each eligible meter requested, the Company may provide Electric Service through a noncommunicating meter as a substitute for an Advanced Metering Infrastructure ( AMI ) meter. The requesting Customer must meet the requirements and responsibilities for service outlined in this tariff schedule. 2. The optional service under this Schedule will be available six months after the initial effective date of this Schedule. SECTION 2 - TERMS AND CONDITIONS: 1. The Company will initiate the process to provide non-communicating meter service after it has received the Customer s signed, written request in the form set forth in Attachment A to this Schedule, Non-Communicating Metering Service Request ( Service Request ) form. More detail regarding the timing of the Service Request is noted in Section Customer will be required to pay the ongoing administrative and operational costs associated with the manual reading of the non-communicating meter, and other fees and charges associated with the non-communicating metering service that may be assessed for each eligible meter, as noted in Section Customer may be required to pay a One-Time Charge associated with the initial installation, as specified in Section 3, which sets forth situations in which the Customer would be required to pay the One-Time Charge. The One-Time Charge is noted in Section 4 Charges. 4. Customer may request that the Company discontinue the non-communicating meter service at any time, subject to the provisions stated in Schedule 80 except that such notice must be given at the office of the Company at least three days prior to the date of such change. 5. The Company may offer non-communicating meter service through a digital, noncommunicating meter that meets applicable meter accuracy standards. (Continued on Sheet No. 171-A) Issued: October 17, 2018 Effective: January 1, 2019 Advice No.: Issued By Puget Sound Energy By: Jon Piliaris Title: Director, Regulatory Affairs

8 WN U-60 Original Sheet No. 171-A PUGET SOUND ENERGY Electric Tariff G SCHEDULE 171 OPTIONAL NON-COMMUNICATING METER SERVICE (CONTINUED) SECTION 2 - TERMS AND CONDITIONS: (Continued) 6. Customer accounts with a non-communicating meter will be billed bi-monthly, based upon actual or estimated bi-monthly reads, along with other services provided by the Company at the service address, including natural gas services. 7. The Company is under no obligation to read the meter more frequently than once every two months. 8. The Company may refuse or revoke the installation of a non-communicating meter at the Customer s Premises for reasons including but not limited to the following conditions: a. no meter reading for four consecutive calendar months due to any events occurring outside of the Company s control or when safe access is not available for the Company s personnel and standard equipment; b. current or past incidents of Customer meter tampering; c. current or past incidents of Customer impeding the Company s access to meter to obtain meter reads, perform maintenance or to disconnect meter for non-payment of Electric Service; or d. current or past incidents of service at the Premises having been disconnected for nonpayment (electric and/or natural gas accounts for communicating and/or noncommunicating meters) twice within a 12-month period. 9. The Company may temporarily (for a period of two weeks or less) replace a noncommunicating meter with a communicating AMI meter for safety concerns or operational reasons (e.g. to restore an outage). In the event such temporary replacement is required, the Company will provide the Customer a notice at the time of the replacement. (Continued on Sheet No. 171-B) Issued: October 17, 2018 Effective: January 1, 2019 Advice No.: Issued By Puget Sound Energy By: Jon Piliaris Title: Director, Regulatory Affairs

9 WN U-60 Original Sheet No. 171-B PUGET SOUND ENERGY Electric Tariff G SCHEDULE 171 OPTIONAL NON-COMMUNICATING METER SERVICE (CONTINUED) SECTION 3 - SERVICE REQUEST TIMELINE: 1. Customers who have informed the Company of their request ( Request ) to have a noncommunicating meter will be contacted by the Company with a notification ( Notification ) to submit a Service Request. At that time, a temporary hold on installing an AMI meter for these Customers will be put in place. These Customers will then have 60 calendar days after the Company s Notification to submit a fully completed and signed Service Request to the Company. If a Customer does not submit a completed and signed Service Request to the Company within the 60-calendar-day Notification period, the temporary hold on the installation of the AMI meter will expire and the Company will install an AMI meter at its own convenience. The One-Time Charge will be applied relative to a Customer Request as follows: a. For Request received by the Company prior to the effective date of this tariff schedule, One-Time Charge is not applicable. b. For Request received by the Company after the effective date of this tariff schedule and prior to the installation of an AMI meter at Customer Premises, One-Time Charge is not applicable. c. For Request made by Customers at a Point of Delivery with an AMI meter, One-Time Charge is applicable. SECTION 4 - CHARGES: 1. All payments for this optional service are in addition to other applicable Electric Service charges and Schedule 85 line extension charges. Customers taking service under this optional tariff schedule will be charged the Additional Bi-Monthly Service Charge starting from the billing cycle subsequent to the installation of the non-communicating meter. All charges are not subject to the Pro-ration rules (Schedule 80, Section 13) in this tariff. a. Additional Bi-Monthly Service Charge every two months for each eligible meter: $15 per meter. This charge is subject to review by December 31, b. One-Time Charge: $170 for each meter, if applicable. c. Additional Disconnection/Reconnection Charge: $0 per event, if applicable. d. Inaccessible Meter Charge when the Company is unable to gain access to the meter as a result of Customer continued denial of access: $25 per event, if applicable. (Continued on Sheet No. 171-C) Issued: October 17, 2018 Effective: January 1, 2019 Advice No.: Issued By Puget Sound Energy By: Jon Piliaris Title: Director, Regulatory Affairs

10 WN U-60 Original Sheet No. 171-C PUGET SOUND ENERGY Electric Tariff G SCHEDULE 171 OPTIONAL NON-COMMUNICATING METER SERVICE (CONTINUED) SECTION 5 - ADJUSTMENTS: 1. Rates and charges in this schedule are subject to adjustment by such other schedules and supplemental schedules in this tariff as may apply. SECTION 6 - SPECIAL CONDITIONS: 1. A Customer receiving bill assistance benefits under Schedule 129, Low Income Program, may use such benefits to pay for charges under this Schedule A Customer taking service under this schedule will not be eligible for the following services: a. Schedule 131, Restoration Service Guarantee; b. Any demand response service; c. Schedule 150, Net Metering; and d. Any other Schedule in this tariff, which itself states that a Customer is not eligible for that service if the Customer is also taking service under this Schedule 171. SECTION 7 - GENERAL RULES AND REGULATIONS: 1. Non-communicating meter service under this Schedule is subject to the General Rules and Provisions contained in this tariff (Schedule 80), as they may be modified from time to time, and to other schedules of the tariff that may from time to time apply to this Schedule. (Continued on Sheet No. 171-D) Issued: October 17, 2018 Effective: January 1, 2019 Advice No.: Issued By Puget Sound Energy By: Jon Piliaris Title: Director, Regulatory Affairs

11 WN U-60 Original Sheet No. 171-D PUGET SOUND ENERGY Electric Tariff G SCHEDULE 171 OPTIONAL NON-COMMUNICATING METER SERVICE (CONTINUED) ATTACHMENT A TO SCHEDULE 171, OPTIONAL NON-COMMUNICATING METER SERVICE NON-COMMUNICATING METER SERVICE REQUEST Customer Name: Customer Account No.: Address: Telephone No.: Non-communicating Meter Service Request Service Address Rate Schedule Existing Meter No CERTIFICATION I represent and warrant that I am the named, authorized person on the provided customer account. I read and understand the terms and conditions and the extra charges outlined in Schedule 171 about this optional non-communicating meter service. By signing this form, I am requesting PSE to provide the non-communicating meter service for each of the service address(es) listed above and I agree that, for each of the meter(s), my account will be assessed an on-going Additional Bi-Monthly Service Charge; and, if applicable, a One-Time Charge, an Additional Disconnection/Reconnection Charge per event, an Inaccessible Meter Charge per event, and any other future rates or charges allowed under this Schedule. Signature: Date: Please contact Puget Sound Energy at customercare@pse.com or for any questions or concerns. Issued: October 17, 2018 Effective: January 1, 2019 Advice No.: Issued By Puget Sound Energy By: Jon Piliaris Title: Director, Regulatory Affairs