Southern California Edison (SCE) has filed a positive business case in its application to the California Public Utilities Commission (CPUC) for approval of its Advanced Metering Infrastructure (AMI) deployment activities and cost recovery mechanism.
In this Phase III of the Edison SmartConnect project, SCE proposes to install approximately 5.3 million state-of-the-art “smart” meters in every household and business under 200 kW throughout its service territory over a five-year period beginning in 2008.
SCE estimates that the deployment cost will be approximately $1,967 million, including $384.2 million in O&M and $1,330.7 million in capital expenditures in the period through 2012 . However, the benefits are estimated at $2,076 million, comprising $1,235 million in operational benefits, $376 million from demand response programs and $465 million from dynamic rate offerings. This then amounts to a net benefit of $109 million over the life of the project.
SCE attributes this positive business case – which also provides a net benefit of approximately $1 billion more than previous AMI business case analysis from 2005 – to its collaborative approach with the AMI vendor community and international utility industry to spur development of AMI solutions with the additional functionality and capabilities needed to reduce costs and add benefits of a full AMI deployment.
SCE also estimates that through reliability and price responsive load control and other demand response programmes, the potential for peak demand reduction is as much as 1,000 MW.
SCE has requested that the application be approved by June 2008 to enable it to start full system deployment in January 2009. Approximately 1.4 million meters are expected to be deployed by the end of 2009, rising to 3 million by the end of 2010, 4.6 million by the end of 2011 and the full 5.3 million by the end of 2012.