March 2012 Lunch Presentation Slides - NES - (AFP) - Nashville

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NASHVILLE ELECTRIC SERVICE |


Association for Financial
Professionals

March 2012

NASHVILLE ELECTRIC SERVICE |

Introduction


Overview of NES


Compliance/Regulation Summary


Electric Vehicles


Electric Rates


Smart Grid


Funding of Underground Utilities


NASHVILLE ELECTRIC SERVICE |

Overview of NES

NES is the 12
th

largest public power electric
distributor in the United States.


Approximately 360,000 customers


1,000 employees


$1.2 Billion in annual revenues


Largest taxpayer in Metro Nashville with in
-
lieu
-
of taxes of $26.3 million last year

NASHVILLE ELECTRIC SERVICE |

Overview of NES

NES’ service territory
includes nearly all of
Davidson County and
portions of six
surrounding counties; it
contains about 700
square miles.

NASHVILLE ELECTRIC SERVICE |

Overview of NES

NES has no generating capacity and purchases its
entire supply of power from the Tennessee
Valley Authority (TVA) under long
-
term contract.


About 80% of all electric revenue received by NES
is passed on to TVA for power costs.


NASHVILLE ELECTRIC SERVICE |

Customers
% kWh
Sales
% Total
Operating
Revenue
Residential Customers
320,000
40.50%
42.30%
Commercial & Industrial Customers
40,000
59.50%
57.70%
TOTAL:
360,000
100.00%
100.00%
Service Area Makeup
NASHVILLE ELECTRIC SERVICE |

Compliance/Regulation

TVA’s Role as Regulator


Rates


Use of Revenues


Cash Reserves

Renewable Portfolio Standards

North American Reliability Corporation


Electric Vehicles

NASHVILLE ELECTRIC SERVICE |


NES has been an integral part of the Electronic Vehicle
(EV) movement here in Middle Tennessee.


NES is an original member of the Tennessee Governor’s
Zero Emission Vehicle Partnership with Nissan.


We have partnered with TVA and EPRI to study the
impact of plug
-
in electric vehicles on the electric
distribution system.



NASHVILLE ELECTRIC SERVICE |

Rates

TVA’s New Rate Structure


An effort to reduce peak power demand
throughout the region


Wholesale rate options


After extensive research and a thorough
customer impact analysis, NES selected a rate
that provides stability and helps avoid an
immediate rate increase


NASHVILLE ELECTRIC SERVICE |

Rates

TVA’s New Rate Structure
-

Impacts


Need for higher cash reserves


Confusion for our customers


Higher rate in summer and winter when fuel costs are
higher

June through September and December
through March


Lower rates in transition months

April, May,
October, November


Need for better data and more control


Grant from TVA for Pilot Projects


Advanced Voltage Management


Voltage reduction results in a reduction in total power


Approx. 700 meters will monitor system voltage


Direct Load Control


Commercial Rooftop HVAC


Commercial and Residential Water Heaters


Critical Peak Pricing


Voluntary load reduction/conservation



Smart Grid


What Do We Hope to Accomplish?


Install
30,000

new meters at key points in the NES
service area


Reduce a total of
52 megawatts
(MW) of peak
demand on the NES system


40 MW
through voltage reduction


10 MW
using direct load control devices


2 MW
through critical peak pricing rates


Smart Grid Project Goals




Benefits to NES


Accurate system information


Improved system reliability and power quality


Dynamically manage system load

Benefits to
the Customer


Meter readings done remotely


Better for the environment


Lights coming on sooner after an outage




Benefits of Upgraded Meters

NASHVILLE ELECTRIC SERVICE |

Smart Meters

Conversion to Smart Meters


Transition toward time of use


Demand response


Automatic detection of problems; enhanced ability to
correct problems


Better prediction of energy usage

Concerns


Privacy, particularly in light of open records


Radio frequency


NASHVILLE ELECTRIC SERVICE |

Underground Utilities

Current Policy on Underground Utilities


Conversion projects are funded by the
requesting party


Allowances for new construction are revenue
-
based


Conduit and excavation cost is borne by the
developer during new construction


Underground services are provided at no
additional charge


NASHVILLE ELECTRIC SERVICE |

Underground Utilities

Converting System to Underground


Disregarding lighting costs, customer wiring and
other utilities, NES estimates the cost to be
$7,000+ per residential customer


Based on an estimated 320,000 residential
customers, the total cost would be $2.25 billion


NASHVILLE ELECTRIC SERVICE |

Underground Utilities

New Construction


Distribution conductor


13 times more
expensive


Service conductor


2 times more expensive


Transformer


1.4 times more expensive


Music City Center


A

tunnel

was

built

to

place

high
-
voltage

transmission

lines

underground

downtown
.


In

2011
,

we

completed

the

relocation

of

a

downtown

substation

that

was

required

to

be

moved

due

to

the

construction

of

Nashville’s

new

Convention

Center
.



The

new

Peabody

Substation

was

constructed

with

state
-
of
-
the
-
art

equipment

and

is

designed

to

be

completely

enclosed

upon

completion

of

the

project
.




NASHVILLE ELECTRIC SERVICE |

Partially Completed Tunnel

Architectural Rendering of Enclosed
Peabody Substation

QUESTIONS?

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