The Sm art Meter I nitiative in Ontario Michael Angem eer, Chair, Electricity Distributors Association ( EDA)
Electricity Distributors Association ( EDA) • Voice of Ontario ’ s local electricity distributors, the publicly and privately ow ned com panies that safely and reliably deliver electricity to over 4 m illion Ontario hom es, business and public institutions. • Leads government/ regulatory representation & advocacy • Facilitates industry networking • Provides information and “ industry intelligence ” to members I ncorporating
Outline of Rem arks � Onta rio ’ s Distrib utio n I ndustry � Sma rt Me te ring I nitia tive � Ro le o f Distrib uto rs in Sma rt Me te rs � E na b ling L e g isla tio n � Mo ving fo rwa rd I ncorporating
Ontario ’ s Electricity Distribution I ndustry • Employs almost 10,000 Ontarians • Stimulates economy - $.5 billion payroll • $1 billion infrastructure investment • $250 million to shareholders • $150 million in proxy taxes to government I ncorporating
Ontario ’ s Electricity I ndustry • Ontario (government) responsibilities: • generation facilities • regulates consumer electricity prices • regulates generation, transmission and distribution. • Ontario Energy Board (province ’ s regulator) • independently from government • OEB regulates all market participants I ncorporating
Ontario ’ s Electricity I ndustry • Local distribution companies (LDC) legislated in 1998 to operate as for - profit, business corporations • LDCs owned primarily by municipal governments (some privately and provincially owned) • “ Change ” is operative word • Smart meters part of larger industry reform effort I ncorporating
Ontario ’ s Electricity I ndustry • 90 LDC ’ s in Ontario • Estimated gap of 24,000 MGW by 2025 • Equivalent to 80% of current capacity • Price caps had negative impact • Inability to bring new generation on line I ncorporating
Creating a Culture of Conservation in Ontario • New pricing regimes – residential/ small business • Critical role of Electricity distributors • Smart meters one piece of conservation pie • Need to create culture of conservation • $160 million investment by Distributors • LDC ’ s driving force behind conservation & demand management I ncorporating
Ontario ’ s Sm art Meter I nitiative • Government target: 4.5 million meters ( 2010) • 800,000 installed by 2007 • Consumers able to respond to price signals and manage costs • Price plan adjusted bi - annually by the regulator I ncorporating
Ontario ’ s Sm art Meter I nitiative Distributors responsible for: • Purchasing • Owning • Installing • Operating • Maintaining • Playing central role in implementation I ncorporating
Ontario ’ s Sm art Meter I nitiative: Pilot Projects • Preparedness key to success • Distributors working closely on solutions • Allows for greater efficiencies/ best practices • Test technologies • Apply vigorous performance measures I ncorporating
Ontario ’ s Sm art Meter I nitiative: Pilot Projects • Pilot projects to examine community, climate & geographical influences • Communication systems, meter functionalities, data standards scrutinized • Results with government • Leverage ‘ lessons learned ’ for implementation I ncorporating
Ontario ’ s Sm art Meter I nitiative: Success Factors 1. Distributor expertise/ experience critical 2. Cooperation & timely action of key players • (government, regulators and distributors) 3. Clear and consistent understanding of responsibilities I ncorporating
Ontario ’ s Sm art Meter I nitiative: Legislation • Electricity Conservation Responsibility Act • Empowers government on options for governance, ownership and regulatory structure • Many details remain to be formulated • Additional legislation to follow I ncorporating
Ontario ’ s Sm art Meter I nitiative: Cost Recovery • Estimated capital cost = Approx. $1 billion • Cost recovery central consideration • Legislation will enable cost recovery I ncorporating
Ontario ’ s Sm art Meter I nitiative: Cost Recovery • More regulatory certainty critical for distributors • Cost recovery will reduce credit risk • Reduced credit burden could lower borrowing costs I ncorporating
Sm art Meter I nitiative: Sm art Meter Entity ( SME) • Specs. released but critical decisions outstanding • Legislation authorizes the Smart Meter Entity (SME) to collect information and manage data • Real time access for distributors an issue • SME role, structure, and boundaries need clarification I ncorporating
Sm art Meter I nitiative: Key I ssues Needing Clarification 1. Basic design of a smart meter system/ data pathway 2. Who controls/ own communication assets and functions 3. Responsibilities of the SME I ncorporating
Ontario ’ s Sm art Meter I nitiative – Moving Forw ard • Ontario ’ s distributors ready to implement • Legislation is a step forward • 2010 target ambitious but achievable • Best results via partnership amongst distributors, government & regulators • Success will position Ontario as leader in SM and conservation I ncorporating
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