Victorian AMI Program Stephen Thomson, AMI Program Director Principal Consultant Marchment Hill Consulting
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1 Victorian AMI Program Stephen Thomson, AMI Program Director Principal Consultant Marchment Hill Consulting 21 January 2009
2 Victorian AMI Program Phases 2006 Jul 2007 May Establishment Phase Involved industry and consumer representatives. Led by Government. Defined the major milestones and objectives for the deployment and operation of AMI in Victoria. Defined the Functional Specification for AMI Meters and Service Level Specification for AMI Services. Development Phase Led by Industry Steering Committee. Developed detailed Business Requirements Definition Operating Model. Developed detailed Implementation Plan for deployment and operation of AMI. Program manages initial deployment and commencement of operations. Establishes business as usual processes for completion of Program. Deployment Phase This last phase will run for approximately 3 ½ years as the full population of AMI Meters is deployed across Victoria. Ongoing coordination of cross industry issues and reporting against Program milestones. Interface between Victorian Program and a National Smart Meter Program identify and manage inconsistencies. NSSC Presentation Victorian AMI Program: 21 January
3 AMI Program Governance in relation to National governing bodies Focus: Consistency and Stability of National Electricity Market across all jurisdictions Focus: Delivery of Victorian AMI Program within legislated timeframe Focus: Establishment of national legislative, regulatory and technical framework for AMI Council of Australian Governments Australian Energy Market Commission Victorian Minister for Energy and Resources` Ministerial Council on Energy Victorian Department of Primary Industries Commonwealth Department of Resources, Energy & Tourism Information Exchange Committee / NEMMCO AMI Industry Steering Committee National Stakeholder Steering Committee AMI Program Director (Stephen Thomson, MHC) National Smart Meter Program Office AMI Program Manager (Grant Cushion, MHC) AMI Program Office (MHC) NEM Reference Groups AMI Program Working Groups National Smart Meter Program s NSSC Presentation Victorian AMI Program: 21 January
4 AMI Industry Steering Committee Composition Independent Chairman (non-voting) Executives from industry including 5 x Distribution Business Owners 3 x Incumbent Retailers 2 x 2 nd Tier Retailers Consumer Representative Observers (non-voting) DRET, DPI, ESC, ESV, ENA Role Govern the development and deployment phases of the program. Ensure work within scope is being delivered efficiently and effectively Recommend changes to scope NSSC Presentation Victorian AMI Program: 21 January
5 Victorian Government AMI Policy That all residential and small business electricity consumers across Victoria have access to the benefits of smart meters and the full capabilities that AMI enable. A. Consumer benefits: Increase options for consumers to better manage their energy use and understand greenhouse emissions; B. Energy Market benefits: Encourage new and innovative products and prices, enable improvements to consumer service, competition and wholesale trading; C.Distributor benefits: Deliver operational efficiencies, improve network management and utilisation, defer augmentations and optimise investment. Source: AMI Stakeholder Forum, Richard Bolt, Secretary, DPI, 7 December 2007 NSSC Presentation Victorian AMI Program: 21 January
6 Victorian AMI Program Principles Deliver core AMI Services of Half-hourly interval data, Remote reading of meters, Remote energisation, Remote de-energisation. Current service levels will apply, with the specific exception that meter data is to be provided on a daily basis from January Avoid changes to national rules and procedures. Enable use of interval meter data for NEM settlements and billing related to small consumers, in addition to enabling the collection of meter data remotely, remote energisation and de-energisation, but with minimal changes to NEM enforceable instruments. Allow participants to transition to new arrangements progressively. Meter Exchange procedure changes are required to meet AMI Mass Rollout timescales and targets. Deploy AMI technology that is compliant with the Functional Specification on expectation that other AMI Services will be enabled through the National Smart Meter Program. Distributors may progressively enable the AMI Services as coverage of their AMI communications systems allow. Some functionality in the AMI meters is dependent on communications. AMI Meters will be deployed ahead of the new communications networks. NSSC Presentation Victorian AMI Program: 21 January
7 Victorian AMI Program Scope and Objective The Victorian AMI Program requires replacement of 2.6 million accumulation electricity meters with AMI Meters over a four year period at a cost of approximately AU$1.5 billion. This will require up to 4,000 meter replacements per day across 5 Distribution Businesses and the establishment of entirely new communications systems for each of the Distribution Businesses to establish two way communications between the Distribution Business and the AMI Meter. The objective of the AMI Program is to ensure that the cross industry activities associated with making the minimum AMI functionality available and enabling the minimum AMI services : are achieved within the timeframes; establish regulatory and process frameworks that allow AMI Services to be efficiently accessed by Retailers; establish the AMI Services as quickly as possible; are delivered efficiently; and are managed such that adverse customer impacts, both during the Program and as a consequence of the outcomes of the Program, are minimised. NSSC Presentation Victorian AMI Program: 21 January
8 Major Milestones & Dependencies Victorian Business Requirements Business Requirements Definition Reference Group and Regulatory AMI Technology Functional & Service Level Specifications Functional Accreditation (including Metrology Procedures and SLRs) NEMMCO Market Systems (including NEM Procedures) NEMMCO Participant Systems DB s & RB s First draft T 5 problem det. Victorian Gap Analysis BRM complete 15 May 11 Jul 08 Process Type 5 problem determination & Gap Analysis complete 11 Jul 08 Established 8 May 08 Model NEM procedure CR (Meter Exchange Efficiency & essential changes) available for development by NEMMCO B.A.U 25 Jul 08 Change Requests Draft Func. Spec. Meter Exchange CR 25 Jul Minister Approves Recommended Option 2 Sep 08 Gazetted CROIC 14 Aug Type 5 Process Model Draft cmpl. 1 Aug 08 Draft Functional Specification complete 29 Jul 08 ISC Endorse Plan, Type 5 Model, F/SL Specs Aug & Sep 08 Oct Nov Dec Jan Feb Mar Apr Apr May May Jun Jun Jul Jul Aug Aug Sep Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Draft ESC MPR Determination 30 Sep 08 Draft Exclusivity Derogation 26 Sep 08 ISC endorse Type 5 Process Model 2 Sep 08 DPI publish Functional Specification 30 Sep 08 DPI publish Functional Specification 30 Sep 08 Final ESC MPR Determination Dec 08 Initial Discussions and develop Draft NEM Procedures (B.A.U) Draft ESC Determination 30 Sep 08 Submit Draft Enforceable Instruments to ESC for Consultation 30 Sep 08 ISC Endorse Plan, Type 5 Model, F/SL Specs Aug & Sep 08 Review System Requirements ISC Endorse Mechanism for Testing Obligations Jan/Feb 09 Detailed Drafting & Consultation ESC Final Enforceable Instruments Approved by ESC Mar 09 Final Determination Meter Exchange Efficiency NEM Procedure Published May 09 Accreditation Final Determination requirements Draft Enforceable Procedures Enforceable Procedures defined available for initial Consultation published Oct 08 4 Feb Jun 2009 Develop Draft Discussions Consultation (NEMMCO B.A.U) Enforceable Procedures Draft NEM Procedures available for initial Consultation 13 Jan 2009 Final Enforceable Instruments Approved by ESC Mar 09 Draft Determination Final Determination Meter Exchange Meter Exchange Efficiency Published Efficiency Published 18 Mar May 2009 Develop Draft Consultation Determination (B.A.U) Start Type 5 Accreditation 25 Sep 2009 Meter Exchange Release into Production 16 Nov 09 Participant Type 5 Accreditation Meter Exchange Efficiency (Meter Exchange Efficiency effective date) released into Pre-Production 16 Nov 09 5 Oct 09 Test and Develop changes to NEMMCO Market Systems Implement First Systems Ready Sep 09 Participants Develop Type 5 capability -14 months NEMMCO Production Release Type 5 Accreditation Complete ` 17 Mar 2010 Latest Date Participant Build Ready for Testing 31 Jan 2010 Key: Plan Build Implement Industry Milestone External Milestone Major Workstream Milestone Victorian Election 27 Nov 2010 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Start Daily remote collection of previous calendar day s energy data 1 Jan 2012 Derogation Concludes & Victorian AMI Mass Rollout Complete 31 Dec 2013 Q4 Industry Testing Testing Victorian AMI Rollout DB s Testing Working Group Established May Industry Testing Strategy and High Level Plan recommended to ISC 29 Aug 08 Test Strategy Cross Industry Testing Scope Assessment Oct 08 Test Plan Finalise Contracts / Board Approval AMI Technology Procurement (earliest) Dec 2008 Mechanism for Testing Obligations Resolved Jan/Feb 09 Meter Exchange Eff Release Volume Conditions Defined Jan 09 The timing of commencement of the AMI Technology Deployment will be determined by the availability of the AMI meters and agreements between Distributors and Retailers regarding market capability to process meter exchanges efficiently The start date of the Victorian AMI Rollout is not mandated and is dependant on the Meter Exchange Efficiency Production Release and will be determined by the implementation strategies of each Distribution Business. Industry Testing Plan Complete Mar 09 Test Development Industry Test Development Complete July 09 Test Design / Materials, Test Environment Requirements, Test Infrastructure 14 month lead time for meter delivery 1 Start Test Cycle Execution (Meter Exchange Efficiency) Oct 09 Regression Testing July Sep 2009 Testing AMI Technology Deployment as Type 6 OR Type 5 2 Test Cycle Execution Complete (Meter Exchange and Regression) Apr 2010 Post Meter Exchange EfficiencyTesting Dec Apr 2010 Receipt of AMI Technology (latest) 31 Jan Jun % Meters Installed Victorian AMI Rollout 31 Dec 2010 Min 10% Meters Installed All installed meters operating as remotely read Type 5 meters OR Manually read Type 6 OR Manually Read Type 5 1 Jan 2012 Start Daily remote collection of previous calendar day s energy data 30 Jun % Meters Installed 30 Jun % Meters Installed 31 Dec % Meters Installed, Rollout complete 30 Jun % Meters Installed Daily remote collection of the previous calendar day s energy data Victorian Consumer Education & Communications Consumer Communications Develop short-term Comms Materials e.g. FAQs Consumer Communications Established May 2008 Communications FAQs Complete 26 Aug 2008 Respond to Consumer Enquiries Communications Execution Phase 1 (Pre-rollout, Gen Communications Strategy and Plan Communications Communications Strategy Complete Plan Complete Nov 2008 Mar 2009 Tactical Communications materials ready for rollout Jun 2009 Conduct and Maintain Consistent Consumer Reponses to General Enquiries Review Consumer Response and Revise Communications May 2010 Revised Tactical Communications materials Communications Execution Phase 2 (Rollout, Tactical Messages and General NSSC Presentation Victorian AMI Program: 21 January ready for rollout Jun 2010
9 AMI Program Status Workstream Challenges Achievements Current Activities/Issues Victorian Business Requirements Achieving a consistent understanding of the processes to ensure end to end processes work effectively when allowed in market. Drafted Operating Model for all AMI deployment and services. Developed Option 8A Process Model and Problem Determination and Gap Analysis. Developing detailed cross business process documentation. Identifying potential for market process disruption prior to deployment of MEE. Business Process AMI Technology Functional and Service Level Specifications Delivering a comprehensive specification for all AMI Services and the meters when a number of the AMI Services are national. Resolved focus of Victorian AMI Program on Core AMI Services. Approval of changes to Specifications in September. Meter procurement commenced. Detailed design of participant systems commenced. Need to manage potential differences between national and Victorian specifications. Functionality Working Group Accreditation Setting standards for essential metrology process requirements based on assumption of Victorian Derogation approval. Submitted Victorian jurisdictional metrology material for approval. Submitted metrology related Change Request which has been supported by MRG. Monitoring progress of MRG consultation. Regulatory Working Group Worked with MRG to develop additional changes. NSSC Presentation Victorian AMI Program: 21 January
10 AMI Program Status (ii) Workstream Challenges Achievements Current Activities/Issues Market Systems Providing reliable/firm scope for NEMMCO to use as a baseline for design. Established a cooperative management approach between the AMI Program Office and NEMMCO. NEMMCO is responsible for delivery of changes related to its systems and, whilst managing this project internally, is also reporting through the AMI Program Office. NEMMCO internal project Participants Systems Providing reliable/firm scope for participants to use as a baseline for design. Achieved agreement on revised scope of AMI Program and then approval of revised Specifications. AMI Program Office will shortly commence reporting on the status of this workstream. Planning & Delivery Industry Testing Establishing a testing regime that is appropriate to the risks for the Program in the absence of any obligation for testing. Established Industry Testing Strategy. Gained IEC/RMEC support for NEMMCO to coordinate Victorian AMI Program testing, subject to ability to recover costs. Developing Test Plan. Recruiting Testing resources. (NEMMCO seeking internal approval to engage Testing resources directly). Testing Victorian AMI Rollout Establishing certainty for cost recovery of AMI investments. Revised OIC released in November Meter procurement commenced. Planning & Delivery Consumer Communication and Education Agreeing responsibility for various consumer related communications. Established AMI Program Communications Strategy. Developing AMI Program Communications Plan. Consumer Communications Working Group NSSC Presentation Victorian AMI Program: 21 January
11 AMI Program Lessons Detailed analysis of end to end processes involved in AMI Services is essential. Detailed analysis of the end to end processes involved in AMI Services uncovered unanticipated cross industry dependencies and inconsistencies between the understanding of how the processes would work held within businesses, and within groups within individual businesses. Completion of this analysis significantly reduced the risk of major interruption or failure of key market processes customer transfer, settlement and customer billing. The analysis also provided the detail necessary for individual businesses to enable them to quantify the cost of their investments. Investment in AMI is dependent on regulatory certainty (scope, allocation of responsibility and cost recovery). Private ownership and independent Board governance drives risk based decision making. Distribution businesses cannot commit to the significant expenditures associated with an AMI Program implementation until there is clarity around their individual responsibilities (functionally and performance wise) and certainty that they will be able to recover their reasonable costs. Retail businesses cannot commit to significant expenditures associated with an AMI Program implementation until there is clarity around their individual responsibilities (functionally and performance wise) and they are confident that the costs that they will incur (including anticipated changes in distribution tariffs) can be recovered in the competitive retail market (with or without retail price regulation). With strong independent governance and facilitation, Industry is able to work cooperatively to establish and deliver solutions to implement government policy including resolution of complex cross industry issues. The independent Chairman of the AMI ISC and Program Office establish a governance and facilitation practices that have allowed consideration and resolution of complex issues, including reaching agreement on compromises developed to achieve the program objectives. NSSC Presentation Victorian AMI Program: 21 January
12 AMI Program Lessons (ii) The cross industry issues are complex and take a long time to resolve. Issues arise when process steps are changed due to new functionality or requirements and/or changes in allocation of responsibility. All businesses implement the requirements differently and argue so as to minimise the impact on their implementation. The Victorian Government s decision, subsequently also adopted by the MCE, to require that the implementation of AMI meters be a Distribution Business responsibility has not been accepted by all retailers. Change creates opportunity for capture of additional revenue and margin, at someone else s expense. Agreement to a solution generally requires consent from all impacted stakeholders in the NEM and, for AMI, will also involve non-nem participants. AMI meters need to survive for the full term of their anticipated asset life The business case for AMI is heavily dependent on the costs of the meters and the costs of meter installation large scale replacement of the meters, or components of the AMI metering installations, in the future will have a negative impact on the realisation of the benefits This is a risk for the Victorian AMI Program which has required investment in meters of a certain specification prior to the completion of the National Smart Meter Program. Changes to the specification applicable to meters part way through the Victorian meter rollout will be problematic for the Victorian Distribution Businesses: What would be expected for the meters that have already been deployed if they are not compliant with the national minimum requirements? Distribution Businesses could be required to renegotiate meter supply contracts which have been entered into for long terms and large volumes based on the original specification. NSSC Presentation Victorian AMI Program: 21 January
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