Project Manager Jacqueline Hernandez / Orlando Hernandez Hyperion Project Number N/A
Status of Project In progress Estimated Start Date 12/1/2015 Estimated Completion Date 12/31/2020 Work Plan Category Regulatory
Work Description:
On July 17, 2015 the Public Service Commission (PSC) issued its Order Establishing a Community Distributed Generation Program and Making Other Findings (Order) in Case 15-E-0082 establishing a Community Distributed Generation (CDG) program in New York. The Order requires the Company to implement a new billing procedure involving remote net metering arrangements with a DG project sponsor/host and at least 10 subscribers, with a primary objective of distributing the net metering credits from a CDG facility on a monthly basis in accordance with a CDG project sponsor’s instructions.
Project hosts, also known as project sponsors, are responsible for building, owning and operating the generation facility, coordinating the project’s operation with the Company, and supervising and fostering cooperation among the subscribers. There is a series of steps that hosts must take in order to apply for CDG service. First, they must submit an application for interconnection. Then, hosts must certify to the Company that all program criteria are satisfied, that they have sufficient creditworthiness for each project they propose to develop, and that they can satisfy all obligations assumed with respect to project members.
Once approved for CDG service, the host is responsible for providing the Company a subscriber information list – including each subscriber’s account information and percentage share of the generation facility’s output beyond usage at the host meter – at least 60 days prior to the host’s first bill. The host must also provide the Company with changes to the subscriber list or allocation percentages within a specified timeframe each month. The host is not required in any month to allocate 100% of its generation output beyond usage at the host meter to subscribers; therefore, the host may bank any percentage of subscriber allocations less than 100% as excess generation. This excess generation is stored in a virtual bank associated with the host account, and can be allocated to subscribers in any month, provided the sponsor has given the Company instructions for allocation in the required timeframe. Annually, the host is required to provide the Company with instructions for allocating any remaining excess generation to subscribers.
Project subscribers own or contract with a CDG sponsor for a percentage share of the generation facility’s output beyond usage at the host meter. Subscribers must take a percentage that amounts to a minimum of 1,000 kWh annually and cannot take a percentage that is more than their historic annual consumption (or a forecast of consumption if no historical data exists). If any subscribers are sized in excess of a demand of 25 kW, then those subscribers collectively are limited to an aggregated distribution of generation constituting no more than a 40% share of the CDG facility output.
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The Company is responsible for interconnecting the generation facility, and facilitating the account administration and billing aspects of a CDG program. The Company’s primary billing objective is to calculate and apply net metering credits from a CDG facility to subscriber accounts on a monthly basis in accordance with the project sponsor’s allocation instructions. Additional administrative functions performed by the Company include: enrolling CDG projects in the program, managing the initial and annual self-certification of developers, providing subscriber historical usage information upon request, updating subscriber lists and changes to allocation percentages on a monthly basis, providing billing and customer care support to project hosts and subscribers, and maintaining a virtual bank of excess generation that is distributed to subscribers based on host instructions.
The CDG program will be rolled out in two phases. During Phase 1, participation is limited to two types of projects: (1) generation located in areas called “Community DG Opportunity Zones” where projects will bolster grid reliability or provide other locational benefits, and (2) projects that promote low-income customer participation. Phase 1 is from October 26, 2015 until April 30, 2016. Program eligibility expands to each utility’s entire service territory in Phase 2, beginning on May 1, 2016.
Per the Order, the Company established its CDG program on October 26, 2015. On that date the Company filed tariff changes and documentation of CDG procedural requirements. As part of its business process development efforts for the CDG program, the Company analyzed the requirements of the program to determine if there was an existing Company system or process capable of performing CDG credit calculations and other program administration functions in line with Commission requirements.
From this analysis the Company concluded that the best course of action to fulfill Commission requirements was to procure a new software solution to manage the business processes for the CDG program in an automated fashion.
The Company has selected a customizable software solution developed by a software Company with experience in administration of CDG programs. This software solution includes four modules:
Project enrollment module to establish CDG project profiles.
Subscriber enrollment module to establish subscriber profiles, and link them with project profiles.
Billing module to calculate and disperse credits, and maintain a virtual bank for each CDG project.
Customer service module, which includes a customer interface allowing customers and hosts to see CDG program activity such as generation production and CDG credit history.
The Company is spending $662,000 in 2015 and 2016 to license and customize this CDG software solution.
Additionally, one human resource is needed to support the program and its associated customer care as participation expands in Phase 2 of the program. This human resource will serve as a liaison to sponsors and subscribers throughout the project(s) lifecycle from project development to billing.
Justification Summary:
The CDG program is closely aligned with many of the core principles of the Reforming the Energy Vision (REV) proceeding, and its implementation is designed to further progress toward REV goals.
Nonetheless, it represents a fundamental deviation from the traditional net metering framework mandated in statute and will result in a significant expansion of remote net metering. CDG removes the restriction of a single customer relationship under remote net metering, which presents even greater complexity and challenges for utilities administering the program.
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Due to unique characteristics, data components and associated calculations, CDG cannot be incorporated into the Company’s Customer Information System (CIS) or other existing Company systems. An in-house solution given existing system platforms and the timeline as required by the Order is not feasible. Finally, manual processing and billing of accounts in the CDG program would be highly inefficient due to the complexity and fluidity of the data and the number of human resources that would be required to manage such a manual process.
Given the complexity of multi-customer remote net metering arrangements and the Commission’s expectations that CDG projects will proliferate as the REV proceeding moves forward, it is essential that the Company procure an automated solution to manage the business processes and dedicate a human resource to administer and support this program effectively. Utilizing a customized software application would allow efficient and effective administration of the entire program, including project registration, aggregating on-bill credits, tracking production credits, providing billing support, and customer support for all facilities connected under the CDG program.
Supplemental Information:
Alternatives: In lieu of a customized software solution, manual processes would need to be utilized to meet the requirements of the Order. Development of an in-house system was also considered, but such a system would not meet the Commission’s timeline for implementation of this program.
Risk of No Action: Without an established billing and customer service solution, the Company would be required to manually manage the billing/credit process through spreadsheets and labor.
Manual processes put billing accuracy and timeliness at risk, and could not be sustained with increased participation in a program as complex as CDG. Also, relying on manual processes would make it difficult to comply with the time-sensitive administrative requirements laid out in the Order. For example, the Company has a short window of time to act on monthly changes to allocation percentages for subscribers. The Company’s ability to meet these regulatory requirements would be at risk if it relied on manual processes.
Non-financial Benefits: The proposed software will enable efficient and effective implementation and ongoing administration of the entire CDG program and avoids the pitfalls of manual program administration. It also allows the Company to provide a satisfying experience for customers that want to be more active participants in the modern electric grid, as envisioned in the REV proceeding.
Summary of Financial Benefits (if applicable) and Costs: N/A
Technical Evaluation/Analysis: Not currently available.
Project Relationships (if applicable): REV proceeding
Basis for Estimate: Initial billing integration proposal from the vendor.
Total Funding Level ($000):
Historical Spend
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Actual 2011 Actual 2012 Actual 2013 Actual 2014 Historic Year
(Historical EOE breakout will only be completed for Steam projects/programs of $500 thousand or more and, for all other organizations, projects/programs of $1million or more.)
EOE Actual 2011 Actual 2012 Actual 2013 Actual 2014 Historic Year
Request by Elements of Expense
EOE 2016 2017 2018 2019 2020
1
EXHIBIT___(CO-21) PAGE 1 OF 1
Community Distributed Generation Worksheet ($000s)
O&M O&M Change 2017 (RY1)
O&M Change 2018 (RY2)
O&M Change 2019 (RY3) Customized Software
Application $220 $55 $0
Labor $117 $0 $0
Total $337 $55 $0
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Project/Program Title Field Operations Technical Support Services Project Manager Salvatore Pannitti
Hyperion Project Number N/A Status of Project In Progress Estimated Start Date Ongoing Estimated Completion Date Ongoing
Work Plan Category Operationally Required
Work Description:
The Company utilizes both software and hardware to manage its field operations activities, including Cycle Meter Reading, Non-routine field work and Collections activities, and Revenue Protection. To keep these assets up-to-date and ensure ongoing vendor support, the Company has entered into maintenance contracts with its vendors. Assets covered under these maintenance contracts include:
Cycle meter reading
o Work management software o Handheld devices
o Automated Meter Reading (AMR) mobile collectors o AMR belt clip radios
Non-routine field work and collections o Work management software o Handheld devices
o Wireless printing devices
Revenue protection o GPS equipment
o Theft detection software
Maintenance for the hardware listed above consists of repair or replacement of broken or malfunctioning devices and installation of replacement equipment where applicable. With respect to software,
maintenance includes application support and access to new software releases. The software maintenance contracts also include provisions for vendor support services, providing the Company the ability to call upon the vendor to expeditiously investigate and fix any issues in the event a system problem occurs that impairs the Company’s ability to perform field work.
The Company is experiencing an increase in cost for its maintenance contracts for the following group of assets covered by technical support services.
Cycle Meter Reading – work management software used to manage routes as well as handheld devices used by Customer Field Representatives to record readings, Automated Meter Reading (“AMR”) mobile data collectors for drive-by meter reading, and AMR belt clip radios for AMR maintenance.
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Non-Routine Work and Collections Activities – work management software used to generate routes based on geographical rules and priorities, handheld devices that receive and transmit work orders wirelessly, and wireless printing devices used for printing payment receipts for customers who make payments to Field Collectors.
Revenue Protection – software that assists in identification of energy theft using advanced energy usage analytics and GPS equipment used to monitor the locations of employees in the field and information for the routing of work.
Annual cost increases have been on the order of two to three percent and are a common characteristic of vendor maintenance contracts. This range can be much higher for maintenance of hardware equipment that is reaching end of life, due to the increased cost of parts that are in limited supply. As the Company adds incremental functionality to its software, it must also begin paying for maintenance on the new components in addition to the existing contract charges.