Larry OwensThe City of Santa Clara lies at the heart of Silicon Valley, and Silicon Valley Power serves some of the world’s most hi-tech customers. Smart Energy International met up with Larry Owens, Divisional Manager, Customer Relations & Communication, Silicon Valley Power.

Please start by telling us about yourself.
Larry Owens: I earned a degree in environmental studies from a local university, and so my interests turned towards energy resource management and energy efficiency. It has been really wonderful here at the City of Santa Clara’s municipal electric utility because we are very conscious about the environment. I’ve been here for 14 years; before that I worked in hospitality, owned my own business and worked for another city helping with their energy efficiency projects.

And please give a brief history of the utility.

LO: In 1896 electricity came to Santa Clara in the form of a generator and 22 arc lamps in town. They were privately owned, but the town council decided they could supply power better and cheaper, so they bought out the private company. Ever since then we have had our own electric utility. Over the decades we have gone from generating our own power to buying 100% of our power on the market to returning, in the 1970s, to generating some of our own power. We required a lot of renewable resources in the 1970s and 1980s, after the first oil embargo, and this has changed our thinking about how we source our power.

Of course there was incredible growth in the Silicon Valley during that time – Apollo space program, the transistor, the microchip, everything was just exploding here! So acquiring resources was a challenge. Our response was to acquire a great deal of geothermal, small hydro and large hydro in the mix, but at that time very little wind – we only added wind in the last few years.

We serve the Who’s Who of the high tech sector: Intel, Sun Microsystems and many more have their global headquarters here. We grew up with the high-tech manufacturer and space industry, and now we’re moving into the information, internet, nanotechnology and biotechnology industries – all power sensitive and power hungry. Now we are seeing a ground swell of clean energy start-ups like Miasole and several of our large silicon manufacturers are growing a photovoltaic arm of their main business.

Silicon Valley Power has a diverse power mix. We both own completely and co-own power generation facilities, and we buy power solely and in partnership with others. We also own transmission assets to bring that power home. We are very well resourced, and our diverse portfolio gives us lots of stability in the market. Right now our system average rate is the lowest in California, and our reliability is easily in the top 2-3% in the nation.

About a third of our resource is right here in town, a 147 MW natural gas power plant, built in the last couple of years. Our total load is about 480 MW over 19 square miles, so we have a very high density load.

What are some of the key challenges your utility faces?
LO: The economic cycle of the valley certainly affects us. We’ve had dotcom booms and dotcom busts, we’ve had internet bandwidth explosions that run through data centers in our valley. Growth tends to come in spurts, so we have to manage this type of boom-bust cycle that happens fairly regularly.

Give us an overview of your utility’s metering operations and projects that are underway.
LO: We started a meter program with our top 50 customers – about 300 meters. We gather load profile data on them to support our understanding about how they use power, so we can buy power intelligently. It also plays into our demand response programs. In 2001, California went through a series of rolling blackouts, but because we had load profiling we were able to put a unique program together for our customers. So rather than being turned off involuntarily through rolling black outs, our customers suggested that we call them and they will provide load reductions on a preplanned basis. With a series of phone calls, our customers can drop enough load to reduce system peak by over 2%. Customers control their own loads and we provide the metering and monitoring. It has been very successful.

But we haven’t done much more with regards to AMR. We have had a few walk-by projects, just as a transition strategy to an AMI project. The meter readers in our organization are retiring or taking new jobs, and the question is, do we hire new readers or use technology? We have been doing both, but we’re moving closer towards technology as we prepare for our AMI project.

We have 45,000 residential and 6,000 industrial customers. Our business customers use 90% of the power, which makes us a slightly different utility than most.

Tell us about your AMI project and what you see as the key benefits of AMI.
LO: At the moment we have approval for an AMI project to provide two-way communication with 100% of our customers. We have a five year plan and we’re just at the beginning of defining business requirements; we will be launching an RFP in Q2 2008. We are not sure yet if we are going to call for individual proposals for MDMS and the balance of the infrastructure, or whether we should combine them. The industry is changing so fast now and specialties are developing, mergers and acquisitions are happening all the time, so it’s difficult to make a decision at this early stage.

There is a cross-divisional strategic planning team developing internal business requirements and the business process changes that will result from the way we read meters. Our vision is to implement MDMS first, by mid-to-late 2008, and work toward metering selection and installation as an over-lapping second step. Right now we have stop-by, walk-by, land-line and cell phone meter reading systems, and we need a common platform to bring all this information together. We would also like to streamline the interface with the billing and other operational systems.  

What strategies have you implemented to strengthen relationships with customers?
LO: Customers in general have no idea how their bills are calculated. There is no connection between a higher bill and the fact that they use the oven at certain times, or an electric heater for a certain number of hours. So we hope to provide energy information in a granular and more real-time fashion to interested customers. Right now we have an energy auditor who will go to your home and look for devices that may be big energy users, but customers still have to relate this to a 30 day meter read. It would be easier to see energy use historically by the hour and, even better, in real time. This will be a transforming event – every-day people’s consciousness is moving towards what they do and how it effects the environment, and we want to enable customers to understand and control their energy usage.

The bigger customers will be looking for automated data information exchange so they can tie it into their energy management systems to allow their buildings to respond in an almost lifelike manner. Clearly as we move forward in a resource-constrained world, real-time pricing will become more of an issue, and if not pricing then carbon content information.

Our interest is optimizing our customer services and benefits within our community, and energy conservation and renewable energy have been key focuses, particularly in the last ten years. We’ve added more wind power, doubled our energy efficiency and so on. Of course, metering plays a role in the service and customer contact side of our business and program development. It’s the metric device that connects our customer usage with our supply and operates as a pivotal contact point with our customers.  

How do you manage energy theft?
LO: Identifying energy theft is difficult without some type of monitoring that is more regular than once a month. We do find the most blatant stuff – seals that are broken, or wires strung from neighbors. Catching those who routinely pop out the meter and install another is harder. Our current system losses are actually pretty low, so investing in revenue protection has not been a primary concern. However, we are looking to the AMI to take us into revenue protection in a more serious way.

What are the security issues you foresee with AMI?
LO: Security is important to us – not only security of the data, but of the network and going upstream. You have to ask if someone can get into your system, find their way upstream and somehow breach the firewall. Our development team includes two people who are very sensitive to network security. Within the past two months we’ve had 11 attempts to go upstream on one of our pilot implementations. This is the doubled-edged sword of going with a standardized protocol for flexibility versus the proprietary protocol for higher security. A lot of people are hacking WiFi, and probably a few eyeing ZigBee. At some point in the collection system there is an IP access point. This whole topic is going to be hot.

What other R&D activities are you undertaking in the metering area?
LO: We have launched three pilots. Two of them were based on a mobile canopy backhaul system. At the local area network we were using WiFi from the meter to a nearby light post, and the other pilot used ZigBee for the local area network. We attempted a broadband over powerline implementation, but it never got off the ground. BPL is yet untested in our territory.

The results of the WiFi pilot were variable. We found up to 24 hotspots on a block – all of them interfering with our ability to collect the meter data. If we pumped up the power we could override the interference, but this would only create more interference for the other hot spots. So we had intermittent drops in reception on some of the meters – clearly not enough of a problem for a daily or a monthly read, but definitely a problem for regular information exchange. ZigBee communication was not a problem.

What is the vision for your utility?
LO: One has to know that this is the beginning of customers having access to information like never before. Utilities have to take advantage of the information to optimize their assets and resources. Today it is price per kilowatt hour, but tomorrow it could be optimizing their CO2 emission profile by turning on certain resources or paying customers to shed or curtail load.

It’s not hard to imagine that in ten years time the grid will be almost a living network, making decisions about switching around power faults, transformer load balancing without human intervention, turning on distributed generation resources to support end-of-line customers. And potentially even becoming a remote portal into a person’s home, giving the customer control of devices in their home. Reliability is our customers’ number one priority – a split-second blip costs companies thousands of dollars. Controlling the system for maximum reliability is a clear target of our system. On the other side of that coin, the opportunity to take instant reads and to turn customers off remotely on an individual basis becomes possible with advanced metering – that eliminates high-cost truck-rolls. The possibilities are infinite.

Thank you for your input.