D.P.U. 12-76-A                                                                                                                            draft

Investigation by the MA DPU on its own Motion into Modernization of the Electric Grid

NStar/WMECo Comment

Link to DPU:  http://www.env.state.ma.us/dpu/docs/electric/12-76/12-76-Comments-7986.pdf


Link to above document with quotes below highlighted in yellow.


–i 2  The principle outcome of the [DPU 12-76-A], however, is a mandate for the [NStar/WMECo] to initiate the accelerated implementation of a particular technology choice, Advanced Metering Infrastructure (“[‘smart’ meters/infrastructure]”).
–i 2 The [DPU]’s decision to without due consideration of key issues such as the immense cost attached to the technology choice; whether customers are willing and able to pay the price of this technology choice; whether the functionality provided by the technology choice will be utilized by customers or is even sought by customers;
–ii 1 …given the relatively small incremental benefit afforded by [‘smart’ meters/infrastructure]; and whether other issues such as market alternatives, time-varying rates, and cyber-security should be resolved before there can (NOT) be any rational determination that this technology is a good choice for customers.
–ii 1 The [‘smart’ meters/infrastructure] technology choice is made although there is no evidence that this is a good choice for customers.
–ii1 Conversely, there is ample evidence that this [‘smart’ meters/infrastructure] technology choice will be unduly costly for customers and that the objectives of grid modernization are achievable with technologies and strategies that rank substantially higher in terms of cost-effectiveness.
–ii 1 For customers who will pay the price of this system, there is no rational basis for this technology choice.
–ii 2 Rather than furthering grid-modernization objectives, the [DPU]’s mandate to implement [‘smart’ meters/infrastructure] creates an intractable obstacle to grid modernization.
–ii 2 [DPU 12-76-A] also denies the option of targeted cost recovery for any grid modernization initiatives other than [‘smart’ meters/infrastructure].
Page 2, 2 However, there is no rational basis for the implementation of [‘smart’ meters/infrastructure].
Page 2, 2 achievement of the [DPU]’s four grid-modernization objectives does not require the implementation of [‘smart’ meters/ infrastructure], despite the [DPU]’s suggestion that it does. 
Page 2, 2 [NStar suggest the DPU] modify the [DPU 12-76-A] to eliminate the requirement to implement [‘smart’ meters/infrastructure] as part of the required Grid Modification Plans 
Page 3/4, 2/1 The [DPU’s assertion]  that advanced metering functionality is a “basic technology platform for grid modernization that must be in place before all of the benefits of grid modernization can be fully realized [has] the effect of mandating the accelerated implementation of [‘smart’ meters/infrastructure] on the faulty basis that the benefits of grid modernization cannot be achieved without its implementation.
Page 4 2 An [‘smart’ meters/infrastructure] is not a “basic technology platform” for grid modernization and is not needed to realize “all of the benefits of grid modernization.” 
Page 4 2 [smart] Meters do not reduce the number of outages;
Page 4 2 [smart] metering systems are not the only option for optimizing demand or reducing system and customer costs; and
Page 4 2 [smart] metering systems are not necessary to integrate distributed resources or to improve workforce and asset management.
Page 4 2 Therefore, it is not correct that advanced metering functionality is a “basic technology platform” that must be in place before all of the benefits of grid modernization can be fully realized,
Page 5 1 it is clear that the [NStar/WMECo] would be able to identify and implement a suite of non-meter technologies and processes, in addition to those already implemented, in order to advance the [DPU]’s grid-modernization objectives without the implementation of an advanced metering system.
Page 5 2 Industry study conducted by entities such as the Electric Power Research Institute shows that the electric distribution grid will require substantial investment to be positioned for the integration of distributed energy resources.  Therefore, grid-modernization efforts have to be closely coordinated with policies that are encouraging the growth of distributed energy resources. Finite capital resources available for grid modernization should be aimed at this integration effort before any additional monies are expended on metering capabilities that provide limited and/or speculative incremental benefits over current metering technology.
Page 6 2 Accordingly, not only is there a flaw in the [DPU]’s premise that an advanced metering system is a “basic technology platform” for grid modernization, but also the implementation of a costly, advanced metering system is at odds with policies designed to promote the growth of distributed energy resources.
Page 6 2 immense, near-term investments in advanced metering systems should not be mandated without (1) methodical, valid analysis of the associated costs and benefits; and (2) the development of a plan to solve the detrimental impact of cost-shifting driven by the pervasive installation of distributed energy resources.
Page 6 3 There Is No Rational Basis for [DPU]-Mandated Implementation of [‘smart’ meters/infrastructure]
Page 6/7 3/1 Throughout the [DPU Grid Modernization Working Group meetings], [NStar/WMECo] consistently raised the concern that the costs associated with [‘smart’ meters/infrastructure] are currently astronomical, while the incremental benefits for customers are small in comparison. 
Page 7 1 There are better technologies in which to invest customer funds for the achievement of grid-modernization objectives. The decision to implement [‘smart’ meters/infrastructure] goes against the best business judgment of the [NStar/WMECo] and cannot be rationally cost justified in terms of a net benefit for the overall customer base that will pay for the investment over the long term. 
Page 7 2 mandated implementation of [‘smart’ meters/infrastructure] is not a prerogative within the [DPU]’s discretion
Page 7 3 there is no cost justification that can support the implementation of [‘smart’ meters/infrastructure]
Page 8 1 [NStar/WMECo] estimates, conservatively, that the price tag for an [‘smart’ meters/infrastructure] rollout, including the recovery of existing investment on the [NStar/WMECo]’ books would likely approach, and possibly exceed, $1 billion…all of which is to be borne by customers 
Page 9 2 Similarly, without resolution of the [DPU]’s investigation into cyber-security, it is not possible for the [NStar/WMECo] to develop a suitable [Plan]. 
Page 9 2 [‘smart’ meters/infrastructure] introduces a brand new portal into the [NStar/WMECo]’ information systems, significantly increasing the cyber-security risk.
Page 9 2 the only mandatory standard for electric distribution company cyber-security [DOES NOT APPLY] to the electric distribution systems and metering infrastructure 
Page 10 2 large scale deployment [of DPU proposed price structure will] most likely, will result in the expenditure of significant funds by customers for, at best, minimal benefits.
Page 10 3 there is no evidence that customers are willing to pay for the limited incremental functionality gained through implementation of [‘smart’ meters/infrastructure]. In fact, there is evidence to the contrary.
Page 10 3 33 percent associate smart metering with complaints of meter inaccuracy, higher customer bills, invasion of privacy and health concerns.
Page 11 1 Many customers have a deep aversion to technology that links them to the “grid” in a way that they perceive as an invasion of their privacy and/or detrimental to their health.
Page 11 2 Customers value price and reliability above all else and the implementation of [‘smart’ meters/infrastructure] serves neither of these objectives.
Page 11 3 Moreover, the [DPU] should also consider the results and experiences of recent and ongoing pilots before blindly moving forward with an [‘smart’ meters/infrastructure] mandate.
Page 11 3 Smart metering pilot programs across the country have produced similar results in terms of showing a lack of customer interest.
P11/12 3/1 Roll-outs of [‘smart’ meters/infrastructure] require careful consideration of the different implementation challenges, including customer perception about bills, security and health-related issues
P12 2 Fifth, in mandating [‘smart’ meters/infrastructure], the [DPU] has failed to consider the role that competitive markets should play in grid modernization and the costs that competitive market providers and other market participants have already invested in grid modernization efforts
P12 3 Last, but not least, there is little confidence that the incremental benefits of moving to an [‘smart’ meters/infrastructure] platform will be sufficient to warrant the cost.
  the  incremental benefit of [‘smart’ meters/infrastructure] is largely limited to the communications element, which can be addressed in other ways without incurring the cost of the meter. 
Page 13 1 it is also unclear whether the incremental benefits, if any, would begin accruing to customers prior to the implemented AMI platform being rendered obsolete. In any event, the cost remains unjustified by the benefits.
P 16 3 Additional study and analysis is needed to assure that there is a solid business case for this colossal investment; yet, the [DPU] is mandating implementation within three years,
P17 3  the cost-recovery opportunity appears to be directly contingent upon the implementation of [‘smart’ meters/infrastructure]
P17 3 the [DPU]  has linked its cost-recovery option to theimplementation of [‘smart’ meters/infrastructure], the [DPU]  has in effect created a recovery mechanism for the most expensive grid-modernization technology with the least certain benefits,
P18 2 the grid-modernization initiatives contained in the [NStar/WMECo]’ [plans]s will be forced to compete for funds with more traditional capital investments necessary to maintain the safety and reliability of the [NStar/WMECo]’ distribution systems.
Appendix A, #3 an Advanced Metering System is not a “basic technology platform” for grid modernization and is not needed to realize “all of the benefits of grid modernization.”
Appendix A, #4 If industry-wide figures are used, emphasis should be placed on using information that represents actual deployments rather than estimated deployments.



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