REGIONAL SMART GRID DEMONSTRATION PROJECT

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REGIONAL SMART GRID
DEMONSTRATION PROJEC
T

UPDATED
APRIL

2011



1


REGIONAL
SMART GRID DEMONSTRA
TION PROJECT

Frequently Asked Questions

PULLMAN SMART GRID D
EMONSTRATION PROJECT

What is the Pullman Smart Grid Demonstration Project?

Avista has joined with
regional utilities, led by Battelle NW, to demonstrate smart grid technologies
using matching stimulus monies from the U.S. Department of Energy. Avista will contribute $14.9
million and its local par
tners an additional $4 million
to

create a smart grid in

Pullman, which includes
the following major efforts:


o

Updating and automating Avista’s distribution system throughout the Pullman area

o

A
dvanc
ed Meter Deployment (All Pullman customers within scope)

o

Smart Home Pilot (Pullman voluntary pilot customers)

What

entities are involved in the Pullman Smart Grid Demonstration Project?

Battelle NW is leading the regional Pacific Northwest smart grid demonstration project. Within this
project, Avista is leading the Pullman Smart Grid Demonstration Project. Our local cost
-
share partners
are Itron, Washington State University, Hewlett Packa
rd and Spirae. Other partners include vendors
and contractors
such as
Scope and Efacec Advanced Control Systems
, who will provide equipment,
installation

services, and more
.

Many of our Smart Grid devices incorporate
relay devices produced by
Schweitzer En
gineering Laboratories, Inc.

(SEL)

for both protection and logic control. The
r
eclosers and
switched
capacitors
are examples of those devices.
SEL remains a supportive contributor to the overall
success of the SGDP project.

What
is the goal of the
Smart G
rid Demonstration
project
?


The regional project is intended to
demonstrate smart grid technologies,
show how the electric grid
can react to sudden changes in power supply and demand, and prepare our region for the transition of
the electrical grid to a
smart grid over the next 20 years by:

o

Upgrading electrical facilities and automating the electrical distribution system to
support digital, intelligent devices and two
-
way communication between the utility and
all parts of the grid
.

o

Demonstrating technolog
ies and tools, including advanced metering, in
-
home devices,
and web tools, that can enable customers to actively monitor and manage their energy

REGIONAL SMART GRID
DEMONSTRATION PROJEC
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2011



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usage and make more informed decisions about choices that drive energy efficiency and
costs
.

What is the smart

grid?

We envision the smart grid to be
a more efficient and effective e
lectricity infrastructure that

can
help
contain costs, reduce emissions, incorporate more wind power and other types of renewable energy,
increase power grid reliability and provide gr
eater flexibility for consumers. Over the long
-
term, it
could
modernize our traditional, one
-
way power delivery system to an automated, two
-
way exchange
of information and multi
-
directional power flow.

What are the potential benefits of this project?


Syst
em improvements
can
help us reduce waste and
increas
e

efficiency

in the delivery of power.

o

Less waste from lost

power

as it moves through the transmission and distribution
system

h
elps reduce operating costs and
conserves power to help meet demand
.


Reliability/minimizing the impact of outages

o

Self
-
healing distribution technology can automatically detect and isolate an outage,
saving time and reducing outage frequency and length for customers.


Customer Energy Management

o

Two
-
way communications can enab
le customers to actively monitor and manage their
energy usage and make more informed decisions about choices that drive energy
efficiency and costs
.


Environmental benefits

o

Integrating variable renewable power, such as wind and solar

o

Distributed generatio
n enabled by multi
-
directional power flow

Will the costs of this project be included in customers’ rates?


Avista
would expect to recover the costs for this project as we would any other capital project, which
means we could ask for cost recovery through c
ustomer rates. When our costs change, Avista applies
to the state regulatory commissions for a rate change. Because we’re a regulated utility, we must go
through a detailed public process when we propose a rate change. We must demonstrate that the rate
cha
nge is justified, or it won’t be approved.

However, we believe the
potential benefits

of the project,
which include operating more efficiently

and
reducing
the frequency and duration of outages, can help offset
the initial costs of the project
.
Also,
b
ecause the project is partly funded with federal stimulus dollars it help
s us make these improvements
at a much lower cost than we otherwise could.


REGIONAL SMART GRID
DEMONSTRATION PROJEC
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UPDATED
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2011



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PULLMAN ADVANCED MET
ERS

What is
an advanced meter
?

Advanced meters
, also called “smart” meters,

are digital meters that operate via
a secure wireless
network, allowing two
-
way, real
-
time communication between the customers’ meter and the utility.

What benefits
could

customers see as a result of advanced meters?


Ultimately, the advanced meters coul
d help customers better manage their energy costs.
Advanced metering technology provides
ongoing energy

use information that Avista can
provide to customers via tools like the web portal,
which will

allow customers to actively
monitor their energy consump
tion

and make more informed decisions about choices that drive
energy efficiency and costs
.


Advanced meters
automatically report outages

at an individual
home or business
, without
c
ustomers
having

to place a call to Avista to report
the

outage. This allows

Avista to more
quickly and efficiently restore outages
.
The meters are part of a system of
automated

distribution technology,
which can also

automatically detect, report and isolate an outage,
saving time and reducing outage frequency
and length for

all

customers.


The new meters will allow Avista to remotely connect and disconnect new or discontinued
service, without having to send a service employee to the home or business. This will allow a
customer to connect service immediately, wit
hout having to wait for a service employee.

Who will receive the new meters?

About 13,000

electric and 5,
000

gas customers

in and around the city of Pullman, Wash.
and the
community of Albion, Wash.,
are having

their meters upgraded to the new, digital meters.

What is the web portal, and who will it be available to?

The advanced meter

technology

investment

will enable Avista to provide
information to customers
about their ongoing energy usage
,

through
our
secur
e website,
so customers can make more informed
decisions about how to use energy
.

Customers with advanced meters will be able to log in to their
Avista Utilities account as they can now, but
will have additional

enhanced tools to monitor and
manage their e
nergy usage
throughout

the month
,
so they can

make more informed decisions about
choices that drive energy efficiency and costs.




REGIONAL SMART GRID
DEMONSTRATION PROJEC
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2011



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When will the web portal be available to customers?

The web portal is currently

slated for fall of 2011
.

How will the new mete
rs affect customers’ bills?

Customers will still be billed about once a month for their total monthly usage, just as they always
have. However, unlike the old meters that had to be read manually, advanced meters send usage data
to Avista constantly

using
advanced communications technology
,

without
Avista
having to access a
customer’s property
. This will allow Avista to provide information to customers about their ongoing
energy use.
Sometime after the meter installations are complete, most likely in late s
ummer or early
fall,
Avista
plans to

begin
to take monthly remote reads for billing purposes.

What information will the new meters gather?

As part of the five
-
year project Avista will collect and report aggregated usage information to Battelle.

This

infor
mation
is
necessary to understand the automated response of the electrical distribution
system with respect to the demonstration project’s regional transactive signal
,

which allows for
automated response to intermittent energy sources and loads.

How is A
vista addressing security concerns?

Avista is committed to protecting our customers’ security and privacy
, and has

stringent security
measures in place to encrypt and protect customer
information. Data is transmitted via a secure
wireless network
.
Individual customer use, billing and personal information is treated as confidential,
according to our customer privacy policy.


Will Avista control or regulate customers’ power usage with the advanced meters?

No
.

Avista will not control customers’ power u
sage without the customers’ knowledge and permission.
Customers involved in a separate voluntary demand response pilot will be part of a project in which,
with customers’ permission, Avista may automatically and non
-
int
r
usively turn down end
-
use
appliances

for short periods. Customers can
opt out
of the project
or override

settings

at any time.

Are there any health
risks

related to the new meters or smart technologies?

While
we understand the concern
, Avista is confident that the advanced metering and other smart
technologies do not pose safety or health hazards to our customers. The
metering
equipment is
installed outside the home and is designed to operate
intermittently
at very low power levels
.
Th
e
metering equipment
operates at radio frequencies similar to

common household items

like
wireless

REGIONAL SMART GRID
DEMONSTRATION PROJEC
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2011



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modems

and

cell phones.
T
here are no known safety or health hazards related to radio frequencies

at
these levels
.
All equipment is

designed and

stringently tested to operate within state and federal
safety
standards
.

For more
information about radio frequencies

and electric and magnetic fields, click
o
n

t
h
e

l
i
n
k
.

Will the
advanced metering

system interfere with TV, radio, personal computers, home security
systems, garage door openers, pacemakers or other electronic equipment?

No. The
meter

operates
at
a low
-
level
of power and
radio frequency reserved for this purpose and
should
not interfere with any other equipment.


Could

the advanced
meters allow customers with alt
ernative power generation to participate in net
metering

programs
?

Yes, the

meters could be configured

for net metering in the future.