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Smart Metering & Infrastructure Program

Program Completion and Evaluation Report

December 21, 2016

Program Completion and Evaluation Report


December 21, 2016

Table of Contents
1
2

3
4

6
7
8

Executive Summary ........................................................................................... 1


The SMI Program ............................................................................................... 3
2.1 Legislative Context .................................................................................... 3
2.2 Regulatory Context ................................................................................... 4
2.3 Scope ........................................................................................................ 6
2.4 Program Requirements and Timelines ...................................................... 9
2.5 Organization ............................................................................................ 10
2.6 Communications ..................................................................................... 13
2.7 First Nations Engagement ....................................................................... 14
2.8 Security and Privacy ............................................................................... 16
2.9 Safety ...................................................................................................... 19
2.10 Procurement ........................................................................................... 20
Program Risk Management .............................................................................. 22
Program Status and Variance .......................................................................... 28
4.1 Scope Variance ....................................................................................... 29
4.2 Cost Variance ......................................................................................... 31
4.3 Schedule Variance .................................................................................. 33
Project Evaluation - Benefits Realization .......................................................... 36
5.1 Business Case ........................................................................................ 36
5.2 Benefits Realization Framework ............................................................. 38
5.3 Benefits Realized to March 2016 ............................................................ 38
Lessons Learned and Recommendations ........................................................ 45
Financial Closure.............................................................................................. 48
Program Completion ........................................................................................ 49

List of Figures
Figure 1

SMI Program Framework ................................................................. 12

List of Tables
Table 1

Meter Choices Program Participation Breakdown As of


March 31, 2016 .................................................................................. 9
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Table 2
Table 3
Table 4
Table 5
Table 6
Table 7
Table 8
Table 9

SMI Program Key Risks ................................................................... 23


SMI Program Unanticipated Risks.................................................... 28
SMI Program Budget and Cost at Completion ................................. 32
SMI Program Schedule .................................................................... 34
SMI Program Benefit Realization to Fiscal 2016 .............................. 39
Theft Detection Benefit, Inception to Fiscal 2016 ............................. 42
Overall SMI Program Business Case NPV Outlook (Fiscal 2016) .... 45
Incremental Operating Costs and Operating Costs Savings to
Fiscal 2019 ....................................................................................... 49

Appendices
Appendix A
Appendix B
Appendix C
Appendix D
Appendix E
Appendix F
Appendix G
Appendix H
Appendix I
Appendix J

Program Document List


Program Budget
Program Operating and Capital Expenditures
Program EAR Revisions
Contract Values Spent Greater than $3 million
Reasons for Commitment of Contingency and Reserve Funds
Program Asset Classes
Program Quarterly Reports Summary
SMI Program Operating and Capital Expenditures by SMI Program,
with Energy Related Benefits (GWh) and Revenues
Glossary

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Executive Summary

The Smart Metering & Infrastructure (SMI) Program was an important, necessary

investment that helped modernize B.C.s aging electricity system. Since 2011,

BC Hydro has installed 1.93 million smart meters more than 99 per cent of

BC Hydro customers have a new meter.

The program delivered the components required under British Columbias Clean

Energy Act (CEA) on-time at the end of 2015 and about $150 million under budget.

Smart meters have delivered $235 million in benefits to BC Hydro customers in the

first five years.

10

The program is a foundational first step in modernizing our electricity system. Some

11

of BC Hydros metering equipment had been in place for more than 50 years

12

providing only basic consumption information. The program allowed BC Hydro to

13

replace existing customer meters with smart meters as well as upgrade the

14

technology and telecommunications infrastructure.

15

The new infrastructure is intelligent and responsive, and provides many benefits.

16

80 per cent;

17

18

Reduced theft: Smart meters have reduced electricity theft by more than

Accurate bills: Ninety-eight per cent of customers with smart meters are

19

receiving automated bills thanks to remote meter reading. This has made

20

customer bills more accurate due to reduced manual meter reads and bill

21

estimates;

22
23

New conservation tools: With smart meters, customers can view their hourly
and daily energy use through their free online MyHydro account;

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Safer system: More than 3,000 pre-existing unsafe meter socket conditions

were repaired during meter exchanges by a certified electrician at no cost to

homeowners;

Enabled distributed generation: Smart meters have laid the foundation for

more widespread use of small scale electricity generation including solar and

wind power; and

Faster outage restoration: Smart meters help crews restore outages faster

after major storm events. BC Hydro can now remotely check meters in an area

to ensure power has been restored, allowing crews to move to the next outage

10

sooner.

11

The Smart Metering Program more than pays for itself through reduced theft of

12

electricity, energy savings and operating efficiencies.

13

The Program was completed at a cost of $779.2 million, approximately $150 million

14

under the original budget of $930 million. The expected cost savings of the program

15

have been embedded into BC Hydro's rate applications since 2012, which means

16

that BC Hydro customers have already received lower rates as a result of the

17

success of this program.

18

At the completion of the program, the business case was updated to reflect the

19

actual implementation costs, benefits realized to date, as well as current

20

expectations and assumptions. The program is now projected to deliver $1.1 billion

21

in benefits by fiscal 2033.

22

Smart meters help customers conserve energy and reduce energy theft. As a result,

23

a significant portion of the project benefits are based on the avoided cost of

24

acquiring new sources of energy supply. This cost has decreased since 2011 as

25

advancements in technology have reduced energy supply costs and as commodity

26

prices have decreased, which has led to a lower rate of forecast load growth.

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The SMI Program

2.1

Legislative Context

In the spring of 2008, amendments to the Utilities Commission Act (UCA) were

made to require BC Hydro to install and put into operation smart meters by the end

of 2012. Subsequently the UCA requirements with regard to smart meters were

repealed and replaced by section 17 of the CEA.

BC Hydro was required under section 17 of the CEA to install and put into operation

smart meters in accordance with, and to the extent required by the ministerial

regulations. The Smart Meters and Smart Grid Regulation was issued by the

10

Minister on December 15, 2010. It was amended on December 21, 2012 so that

11

BC Hydro was not required to install smart meters where it was impractical due to

12

factors such as distance, electromagnetic interference or physical obstructions. As of

13

December 2015, the SMI Program completed the requirements of the Smart Meters

14

and Smart Grid Regulation under the CEA, Section 17 by putting in place a program

15

for theft detection using more than 9,000 measurement points from system devices,

16

implementing energy analytics software to perform energy balancing and

17

implementing a network of WiMAX base station sites and Subscriber Units which are

18

successfully transporting data from nearly one million smart meters throughout

19

BC Hydros service territory.

20

On September 25, 2013, the Lieutenant Governor in Council issued Direction No. 4

21

(B.C. Reg. 203/2013), which provides direction to the British Columbia Utilities

22

Commission (Commission) with respect to implementing the Governments policy

23

that BC Hydro will offer new meter options and related services to eligible customers

24

who choose not to have a smart meter at their premises, and that eligible customers

25

choosing an alternative meter option will have to pay additional charges designed to

26

recover the costs attributable to their chosen option. This offer is referred to as the

27

Meter Choices Program.

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On March 6, 2014, the Lieutenant Governor in Council issued Direction No. 6

(B.C. Reg. 29/2014), which authorized BC Hydro to defer the net operating costs

incurred in fiscal 2015 and fiscal 2016 arising from the SMI Program and net

operating costs arising from Commission Order No. G-166-13 (refer section 2.2).

On March 6, 2014, the Lieutenant Governor in Council issued Direction No. 7

(B.C. Reg. 28/2014), directing that when setting rates for BC Hydro under the UCA,

the Commission must not disallow the recovery in rates of the costs with respect to

the SMI Regulatory Account.

2.2

Regulatory Context

10

The following Commission Orders pertaining to the SMI Program were made:

11

Order No. G-64-09, dated June 11, 2009, authorizing BC Hydro to establish an

12

SMI Regulatory Account regarding actual fiscal 2009 and forecast fiscal 2010

13

SMI Program Operating Costs and authorizing BC Hydro to carry forward the

14

SMI Regulatory Account;

15

Order No. G-67-10, dated April 8, 2010, authorizing BC Hydro to include in the

16

SMI Regulatory Account the actual fiscal 2010 Smart Metering Program and

17

Smart Grid Program operating costs and authorizing BC Hydro to carry forward

18

the SMI Regulatory Account. BC Hydro was also directed to file with the

19

Commission a schedule detailing all deferred fiscal 2009 and fiscal 2010 SMI

20

costs and a revised forecast of SMI costs for fiscal 2011.1 This Order set out the

21

requirements for quarterly updates on all SMI activities2 and required BC Hydro

22

to file with the Commission an application in relation to its Smart Metering

23

Program and Smart Grid Program/Business Plan for the SMI program;3

BC Hydro filed its SMI Regulatory Account - Fiscal 2010 Expenditures Application with Commission on
May 31, 2010.
Twenty-three Quarterly Program Update Reports were filed with Commission. Appendix H indicates the filing
dates of the Quarterly Update Reports.
BC Hydro filed its SMI Program - SMI Program Business Plan with the Commission on December 23, 2010.

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Order No. G-115-11, dated June 30, 2011, authorizing BC Hydro to include in

the SMI Regulatory Account the actual fiscal 2011 Smart Metering Program and

Smart Grid Program operating costs and authorizing BC Hydro to carry forward

the SMI Regulatory Account. BC Hydro was also authorized to accelerate the

rate of depreciation on its existing meters and also to include the increased

amortization incurred in fiscal 2011 in the SMI Regulatory Account. BC Hydro

was instructed to file a schedule detailing all deferred costs in the SMI

Regulatory Account4 and further refined the reporting requirements for the

quarterly updates on all SMI Program activities;

10

Order No. G-77-12A, dated June 20, 2012, to BC Hydros Fiscal 2012 to

11

Fiscal 2014 Amended Revenue Requirements Application approved the

12

deferral to the SMI Regulatory Account of the following: the amount of actual

13

net operating costs, amortization on capital assets, finance charges, and return

14

on equity in relation to the SMI Program from fiscal 2012 to fiscal 2014; and

15

Order No. G-48-14, dated March 24, 2014, issued in compliance with Direction

16

No. 6 authorized BC Hydro to defer to the SMI Regulatory Account its

17

fiscal 2015 and fiscal 2016 net operating costs from the SMI Program. In

18

addition, BC Hydro was directed to amortize specific amounts from the SMI

19

Regulatory Account.

20

Meter Choices Program

21

Order Nos. G-166-13, G-167-13, and G-186-13 dated October 9, 2013,

22

October 11, 2013, and November 18, 2013 respectively, approving the charges

23

related to the Meter Choices Program on an interim and refundable basis and

24

authorizing BC Hydro to include in its existing SMI Regulatory Account certain

25

program costs incurred during the period January 1, 2013 to March 31, 2014.

26

Order Nos. G-167-13 and G-186-13 also set out a regulatory process for the
4

BC Hydro filed its schedule of all additions to the SMI Regulatory Account with the Commission on
March 30, 2012.

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review of BC Hydros Application for Approval of Changes Related to the Meter

Choices Program, filed on October 7, 2013;

Application of Commission Order Nos. G-167-13 and G-186-13;

4
5

Order No. G-50-14, dated March 28, 2014, disallowing a Reconsideration

Order No. G-97-14, dated July 17, 2014, disallowing the Reconsideration

Application of the Commission decision on an application for approval of

charges related to the Meter Choices Program to proceed to Phase 2; and

Order No. G-59-14, dated April 25, 2014, setting the charges related to the
Meter Choices Program on a permanent basis.

10

2.3

Scope

11

BC Hydros SMI Program has been an important foundational step in the

12

modernization of BC Hydros electricity system. To achieve effective program

13

execution and successful implementation, the Program was organized into

14

Releases 0 through 6. The scope of the releases was executed as follows:

15

Release 0 - Architecture and Execution Framework

16

Release 0 established the Program Solution Architecture Governance,

17

Execution Framework, Information Management Strategy, Security and Privacy

18

Strategy, Test Strategy and Telecommunications. An Architecture and Design

19

Council was created, as an authority to oversee the implementation of SMI

20

technical architecture and verify compliance to standards and regulations.

21

Release 1 - Mass Meter Deployment

22

Release 1 enabled mass meter deployment processes by provisioning field

23

personnel with deployment tools integrated with BC Hydro corporate systems

24

and establishing the Deployment Control Centre. Smart meters were deployed

25

at residential and commercial customer premises. Metering telecommunications

26

systems were implemented and deployed. The Automated Data Collection

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System (ADCS) was implemented. A Smart Metering and Network Operations

team was established to support, maintain and troubleshoot meters, collectors

and associated telecommunications network equipment.

Release 2 Billing from Register Reads

Release 2 activities enabled implementation of the Meter Data Management

System (MDMS), along with processes necessary to facilitate customer billing

via automated meter reads. The MDMS supports the use of data (meter reads)

obtained over the air. In addition, Release 2 created technology and processes

to support the local download of data from meters that are not connected via

10

the Field Area Network. The data obtained from the meters, either over the air

11

or locally is used to support customer billing, the energy visualization portal and

12

electricity theft detection.

13

Release 3 In-home Feedback

14

Release 3 delivered a customer portal application, providing timely In-home

15

Feedback on energy consumption, and enabling the infrastructure to support

16

In-Home Display (IHD) such as home energy monitors. The concept of smart

17

meter connected IHD devices being registered and managed through the smart

18

meter telecommunications and IT infrastructure was validated. IHD devices

19

communicate with smart meters to display energy feedback to customers in

20

near real-time. The energy visualization portal (Customer Portal) displays next

21

day and historical energy consumption information with the goal to change

22

customers behavior to conserve energy and save money.

23

Release 4 Capability of Billing from Interval Data

24

Release 4 initiated an interval billing proof of concept without requiring updates

25

to the production environment and or changes to the existing rate structure.

26

This proof of concept was successfully delivered to validate that the MDMS

27

acquired by BC Hydro included the capability for interval billing.

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Release 5 Advanced Telecom and Operational Support

Release 5 implemented advanced telecommunications infrastructure, as well as

operational functionalities in support of meter configuration and firmware

management. Release 5 also enabled on-demand meter reads (interactive

communications), remote meter disconnect and reconnect capability, outage

management system integration, and built an infrastructure to enable migration

of smart meters and the network to an advanced networking protocol, Internet

Protocol version 6 (IPv6).

Release 6 Advanced Theft Detection

10

Release 6 developed the advanced theft detection solution, including

11

distribution system metering devices (SCADA and Check Meters), and their

12

associated applications. Release 6 also implemented the Energy Analytics

13

Solution that combines theft analytics and energy balancing with business

14

processes to automate timely identification of potential revenue losses.

15

Additional supporting applications were implemented, including the Field

16

Investigation Tool, Connectivity Manager (to support GIS connectivity model

17

data quality improvement), and Investigation Case Management software.

18

In addition, the SMI Program implemented Disaster Recovery Capabilities that

19

established duplicates of core SMI components to reduce the impact from a potential

20

future disaster affecting any location that hosts the production instances of SMI

21

infrastructure used to receive and/or process revenue meter reads for customer

22

billing. Impacted applications included MDMS, Open Way Collection Engine, Outage

23

Reporting System and the Network Management System.

24

Meter Choices Program

25

Following an announcement from the Minister of Energy and Mines on

26

July 18, 2013, BC Hydro implemented the Meter Choices Program to offer new

27

options for customers who had delayed their smart meter installation. On

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September 25, 2013, the Government of British Columbia issued Direction No. 4

providing direction to the Commission with respect to implementing Government

policy. On October 7, 2013 BC Hydro filed its Application for approval of charges

related to the Meter Choices Program, offering eligible customers an installation of a

standard smart meter at no cost, or an installation of a radio-off meter, or the existing

legacy meter at the premises for a fee approved by the Commission. On

April 25, 2014, the Commission issued Order No. G-59-14 and set the charges

related to the Meter Choices Program on a permanent basis.

The composition of Meter Choices Program participants as of March 31, 2016 is

10

identified in Table 1 below.


Table 1

11
12

Meter Choices Program Participation


Breakdown As of March 31, 2016

Option

Number of Accounts

Legacy Meter

12,001

Radio-off

771

Total

12,772

13

2.4

14

The elements of the SMI Program that were required by the end of calendar

15

year 2012 as described in the Smart Meters and Smart Grid Regulation, were

16

delivered in Releases 0, 1, 2, 3 and 4 as follows:

17

Replacement of approximately 1.9 million legacy meters with smart meters;

18

Deployment of telecommunication systems required to transmit metering data;

19

Implementation of infrastructure to support in-home feedback options including:

20
21
22

Program Requirements and Timelines

A web portal which displays previous day consumption data to customers


via computer and mobile phone browsers;
Support of an in-home display feedback device; and

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Infrastructure for billing based on interval data as described above in


Release 4.

Additional SMI Program work required under the Smart Meters and Smart Grid

Regulation to be completed by the end of calendar year 2015, was delivered in

Release 5 and Release 6 including:

Deployment of field devices and information technology in support of energy


theft detection;

7
8

Establishment of advanced telecommunications networks; and

Integration of the operation of the smart grid with other BC Hydro operations.

10

2.5

Organization

11

The SMI Program was delivered using resources from BC Hydro along with a

12

number of partners and vendors, such as Capgemini, Itron, Accenture Business

13

Services for Utilities, EMC Corporation and others providing deployment services or

14

technical expertise.

15

The Program was implemented using an integrated (multi-vendor) Project

16

Management Office (PMO) and Program Controls Office.

17

To ensure successful execution of the SMI Program, and to follow best practices for

18

project management processes and procedures, a Program Governance Plan,

19

Program Execution Plan and Program Quality Management Plan were developed

20

and followed.

21

The SMI Program adopted BC Hydros IT Development Standard Process (ITDSP)

22

so that its IT projects were executed following the appropriate System Development

23

Life Cycle practices and were validated by sign-off of deliverables and milestone

24

gates.

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The scope of the SMI Program was defined and delivered in six releases as well as

a foundational Release 0. Each business release was comprised of multiple projects

and delivered by a Release Manager and various assigned Project Managers.

Management of each business release (1 through 6) included:

Detailed project schedules and plans;

Regular status meetings and reporting;

A deliverables tracking process that included a Deliverable Approval Matrix (a

log of defined project deliverables specific for each release) and participation in

BC Hydros ITDSP Program;

10

Work Package Agreements to manage budget and scope;

11

Issues, Risks and Assumptions Registers; and

12

Go-live planning and execution as well as working with stakeholders on


transition to sustainment.

13

14

In addition to delivery of Releases 0 to 6, other Program Elements included:

15

Program Management;

16

Public Relations, Stakeholder Engagement and Corporate Communications;

17

Finance and Regulatory;

18

Security, Privacy and Safety;

19

as well as Support Services:

20

Infrastructure/Environment Management;

21

Contract Management; and

22

Program Reporting.

23

SMI Program Framework, high-level scope and timeline are illustrated below.
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Figure 1

SMI Program Framework

In support of validating compliance to information technology standards, the SMI

Program established a Technology Governance Council.

BC Hydro also put in place an executive level governance structure consisting of:

BC Hydro Board of Directors - accountable for approving any significant

changes to budget, scope and schedule, approving contract awards over

$50 million, and approving any potential draws on the Board reserve;

8
9
10

Executive Project Board - to provide guidance and oversight to project staff and
to the Chief Executive Officer on project strategy as well as other issues such
as regulatory and procurement, as required. The Audit and Finance Committee

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of the Board of Directors assumed the responsibilities of the Executive Project

Board in January 2013; and

Executive Operating Committee to provide direction on operational strategy

and integration and business policies and to recommended contract awards for

approval as appropriate. In the spring of 2011, the full Executive Team

assumed the responsibilities of the Steering Committee.

2.6

Communications

BC Hydro recognized that visiting the homes and business of all customers

throughout the province, to exchange approximately 1.9 million electricity meters,

10

would require a thorough and proactive communications and engagement program.

11

Accordingly, we provided customers, stakeholders and First Nations with information

12

throughout the Smart Metering Program. This included information about how smart

13

meters will help modernize the electricity grid; how customers will benefit from the

14

new metering system; what customers should expect during the meter exchange

15

process; and where they could find more information.

16

BC Hydro communicated broadly about the Smart Metering Program through its own

17

channels and media. BC Hydro channels included BCHydro.com, bill inserts, and

18

customer newsletters. Media channels included information in local newspapers

19

before and during meter installation, public service announcements, radio spots and

20

interviews, and online banners.

21

Engaging with communities, in advance of smart meter installations, was a priority.

22

Engagement efforts included open houses, and meetings with provincial and

23

municipal government representatives, first responders, business associations, and

24

other community groups. In addition, BC Hydros outreach representatives offered

25

face-to-face engagement at the community level.

26

Although the vast majority of customers accepted a new meter, a small organized

27

group opposed the installations. Their main concerns were related to health, privacy
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and safety. Significant effort was required to combat the misinformation spread by

the opponents and to share the facts about the program.

Our commitment to building awareness of the Smart Metering Program and

addressing our customers questions and concerns resulted in the majority

99.9 per cent of customers accepting smart meters as a necessary and beneficial

upgrade.

2.7

The SMI Program deployed smart meters to First Nations On-Reserve residential

and commercial account customers in B.C. First Nations smart meter deployment

First Nations Engagement

10

activities were completed with a high level of successful meter installation and

11

positive engagement results from First Nations Bands. Early in the project

12

implementation, BC Hydro recognized the potential for resistance to smart metering

13

change and developed a distinct First Nations Strategy. The detailed approach

14

addressed challenges through customer engagement tactics and proactive

15

information sharing. The SMI Deployment team developed appropriate First Nations

16

deployment targets as well as detailed plan and reporting requirements to monitor

17

First Nations deployment progress.

18

The SMI First Nations Deployment teams identified, proactively communicated and

19

engaged with First Nations regional and provincial leadership and on-reserve

20

customers. The team set separate First Nations deployment targets that took into

21

consideration their unique environment and requirements. In addition, the team

22

implemented an on-reserve First Nations Ambassador program, dedicated First

23

Nations installation teams and cultural trainers.

24

The following steps were taken to engage, strengthen relationships and successfully

25

deploy smart meters on First Nations premises:

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Chief and council meetings, as well as community open houses were

undertaken to promote, inform and respond to field enquiries from First Nations

provincial and regional leadership and on-reserve First Nations customers,

including explaining the benefits of the smart meter technology and the timing

of the deployment activities;

deployment;

7
8

Nine per cent of Corix meter deployment employees were aboriginal versus a
target of 5 per cent; and

15
16

First Nations customers were informed in a timely manner on upcoming


deployment activities related to their meter exchange;

13
14

Employees and contractors were educated on BC Hydros First Nations


engagement strategy and cultural sensitivities;

11

12

Meter deployment customer feedback was obtained from First Nations


provincial and regional leadership and on-reserve customers;

10

Employment and training of Band members as Ambassadors during

Corix formed an all aboriginal deployment team that specialized in First Nations
smart meter installations;

17

18

Results (as of March 31, 2016) were as follows:

19

The program engaged with 173 First Nations Bands, serviced by


31,955 meters;

20
21

Of these, 97 per cent have had a smart meter installed;

22

Two per cent remain as legacy meters under the Meter Choices Program; and

23

Six First Nations bands are currently refusing smart meters and efforts to gain

24

access to install smart meters are ongoing.

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2.8

Security and Privacy

The SMI Program established a dedicated safety, security and privacy office at the

onset of the project following active and ongoing involvement with industry standards

and policy groups. As a public body, BC Hydro is bound by provincial Freedom of

Information and Protection of Privacy Act to protect customers personal information.

Privacy, security and safety features were key criteria in all developments related to

the SMI Program, including procurement processes. Privacy-by-Design and

Security-by-Design processes were used for all design, development and

implementation activities, and were validated during solution acceptance testing.

10

Privacy-by-design and Security-by-design were also established as key project

11

execution components when the Project Execution Plan was developed.

12

The Security, Privacy and Safety office of the SMI Program developed a Security &

13

Privacy Framework document to guide all development work for the project. This

14

framework was the result of work by a team of security experts who assembled legal

15

requirements, policies, standards and best practices for the end-to-end architecture

16

that SMI was to develop and deploy. This document became the foundational

17

reference for all security architecture and privacy oversight as standards were

18

applied to the SMI Program.

19

The SMI Program established a baseline for Privacy Impact Assessments at a

20

minimum of one assessment for each application, interface, network and device

21

where information used within the SMI Program was in flight or at rest. In addition,

22

Privacy Impact Assessments were completed for all work performed within the SMI

23

scope by contractors, vendors and other entities who would have access to

24

BC Hydro data and become part of the development, test and operating groups that

25

formed SMI. Over 120 Privacy Impact Assessments were completed between 2010

26

and 2015; a body of work that far exceeds the assessment efforts of any other

27

project in British Columbia. Privacy Assessments were completed through a close

28

relationship with the Office of the Information Privacy Commissioner of British


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Columbia who was consulted on numerous occasions and offered advice and

direction about privacy concerns related to SMI work.

To reassure customers of the protection of their information, BC Hydro

commissioned independent white hat hackers to perform system penetration tests.

Details of their efforts were not shared publically, and while some vulnerabilities

were found during various testing efforts, each vulnerability was appropriately

indexed, categorized, prioritized and resolved prior to deployment. The SMI Security

Delivery Team also employed a number of contractors who were experienced in

penetration testing (hacking) and vulnerability scanning. SMI deployed many of its

10

own scanning tools and conducted vulnerability assessments for all of the

11

applications and IT based tools used in the overall solution. In addition, the SMI

12

Program managed security risk through two baseline Governance-Risk-Compliance

13

(GRC) surveys that were completed across the entire SMI interface landscape.

14

These GRC assessments were used to identify and resolve risk indicators over any

15

part of the BC Hydro IT environment, where existing or emerging governance and

16

compliance risks might negatively impact the architecture that SMI was introducing.

17

Itron architecture was submitted to GRC assessments and all risks were catalogued

18

for mitigation management. No High or Critical risks were identified through the GRC

19

assessments.

20

The security delivery team also completed Security Assessment Reports in order to

21

review new technology against the SMI Security & Privacy Framework. The purpose

22

of the Security Assessment Reports was to identify gaps in standards so that SMI

23

Program vendors and suppliers (as well as BC Hydro IT enterprise) could mitigate

24

risks associated with these gaps prior to deployment.

25

The culmination of each type of security assessment was a risk indicator that was

26

used to assess readiness to deploy all systems prior to the go-live date. Security risk

27

indicators taken with all other deployment factors determined whether new systems

28

could be deployed or if they required additional development time.


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In each case, where assessment revealed a defect or gap in standards that

needed to be addressed (separate from any operational or performance defects),

defects were entered into a tracking system where a team of BC Hydro employees,

contractors and vendors addressed deficiencies until each was managed. No

system was permitted to be deployed with a critical defect. All high defects required

mitigation over a short time duration; medium and low priority defects were managed

over longer time frames with an expectation that no security defect would be left

unmitigated.

As a backstop to all deployment work, Privacy approval for each phase of the project

10

was required. No deployment was permitted to proceed without full privacy approval.

11

Privacy gaps were treated with zero tolerance throughout the project.

12

Overall, the Security, Privacy & Safety office of the SMI Program employed a

13

seven-layered approach to managing security and privacy risk as defined, above.

14

These included:

15

1.

Security Architecture Reviews and approval process;

16

2.

Security Assessment Reports;

17

3.

Security Vulnerability Scanning;

18

4.

Security Penetration testing (white hat hacking);

19

5.

GRC Assessments;

20

6.

Privacy Impact Assessments (which also review security controls); and

21

7.

Defects management.

22

The end result of this risk management work has been a leading edge application of

23

security policies, standards and best practices for BC Hydros smart metering

24

deployment with a fully functioning privacy management environment integrated into

25

the solution, by design.

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2.9

Safety

Electrical Safety

Smart meters used by BC Hydro are fully compliant with electrical safety standards

established by the American National Standards Institute (ANSI), Institute of

Electrical and Electronics Engineers (IEEE) and International Electrotechnical

Commission (IEC). BC Hydro's smart meters underwent quality assurance testing

both by Itron, the meter manufacturer, and by BC Hydro.

To alleviate possibility of fires due to old and aged meter sockets, BC Hydro

included meter socket checks during meter deployment. If an installer discovered a

10

problem, BC Hydro offered to fix the problem on behalf of the home owner. Over

11

3,000 customer meter sockets were found to have pre-existing damage including

12

eroded wiring, improper meter socket installations and electrical bypasses and were

13

fixed or replaced by BC Hydro.

14

Radio Frequency Safety

15

Smart meters use radio frequency to communicate data to and from BC Hydro. The

16

radio frequency levels must be compliant with Health Canadas Limits of Human

17

Exposure to Radiofrequency Electromagnetic Energy in the Frequency Range from

18

3 kHz to 300 GHz, as documented in Safety Code 6. As part of the SMI Program,

19

BC Hydro commissioned an independent telecommunications engineering firm to

20

prepare three Safety Code 6 compliance reports. These reports confirmed that

21

BC Hydros smart meters are safe and communicate at a radio frequency level far

22

below the thresholds established in Safety Code 6.

23

Legal Challenges Related to Smart Meter Safety

24

On July 25, 2013, a Notice of Civil Claim was filed against BC Hydro related to the

25

installation of residential smart meters. The plaintiff sought to have the Claim

26

certified as a class proceeding, supported by Citizens for Safe Technology. The

27

Claim was later amended twice to expand the action to include commercial

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customers as well as focus the Claim on the installation of smart meters being a

breach of Sections 7 and 8 of the Charter of Rights.

On July 12, 2016, the B.C. Supreme Court dismissed the application to certify the

suit as class action. This decision follows other decisions by the B.C. Court of

Appeal and the BC Human Rights Tribunal to dismiss legal challenges related to

smart meters.

2.10

Beginning in fiscal 2008 and following the identification of user requirements across

business units, BC Hydro commenced a Joint Solution Design procurement process

Procurement

10

by issuing a Request for Qualifications to assess proponents capability to both

11

provide an end-to-end smart metering solution and assume meaningful operating

12

accountability. Three proponents were selected to participate in the Joint Solution

13

Design stage of the procurement process and offers (solution, pricing, and

14

commercial terms) were submitted by each. Ultimately, it was found that an

15

end-to-end turnkey approach to implementing SMI was not in the ratepayers interest

16

as none of the submitted offers provided BC Hydro with a satisfactory allocation of

17

risks given underlying solution costs. The level of retained risk was reviewed through

18

an independent risk assessment completed by PricewaterhouseCoopers, LLP.

19

The Joint Solution Design approach was subsequently abandoned in favour of a

20

disaggregated procurement framework, wherein each key component of the smart

21

meter system was procured under separate processes, and BC Hydro would

22

contract directly with meter and metering system vendors, software suppliers, and

23

deployment services companies.

24

During fiscal 2011, BC Hydro launched competitive procurement processes for the

25

following key SMI supply and service streams:

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Smart Metering System (RFP 4401): a single vendor to provide the full

end-to-end metering system including smart meters, collectors to consolidate

meter reading data, and the ADCS software application. Itron Canada was

selected as the vendor to supply smart metering supply and services;

Meter Deployment Services (RFP 463): A single services provider to

complete in-field mass deployment of meters. Corix Utilities was selected as the

deployment services vendor;

Meter Data Management System (RFP 546): A packaged software application


that stores the large volumes of meter reading data and ensures that data is

9
10

accurate, complete, and useable before sending the data into BC Hydros

11

corporate systems. Itron Canada was selected as the MDMS vendor; and

12

Professional Services Solution Integrator (RFP 371): A Solution Integrator

13

services company to support the Project Management, IT and integration, and

14

custom software development tasks for the SMI Program. Capgemini Canada

15

was selected as the Solution Integrator.

16

To assist with the above, Partnerships BC was retained to leverage their experience

17

in the design and execution of competitive procurement processes related to large,

18

complex projects. In addition, Mr. John Singleton, Q.C. was appointed by the SMI

19

Executive Project Board to monitor and report on the fairness of these procurement

20

processes. In each case, Mr. Singletons findings were that the procurement

21

processes in their entirety were fair, transparent and concluded without bias.

22

On September 16, 2010 the BC Hydro Board of Directors approved an expenditure

23

authorization request in the amount of $930 million (inclusive of contingency and

24

board reserve) allowing the SMI Program to proceed to the Implementation Phase.

25

SMI Procurement activities continued in fiscal 2012 and fiscal 2013, and focused on

26

the development of the theft detection solution components and theft analytics

27

software including:
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Distribution System and Metering Devices (RFP 906 and RFP 907):

RFP 907 - Transformer Meters and RFP 906 - Distribution System Meter

Devices (DSMD) Feeder Meters. QinetiQ North America was selected for the

provision of meters and software tools as well as training and support for the

installation, operation, maintenance and repair of transformer meters and

feeder meters;

Energy Analytics Solution (RFP 1180): EMC Corporation (and partners SAS

Institute Inc., Bridge Energy Group and Space-Time Insight Corporation) and

Informatica Corporation were selected to license, procure and provide software,

10

hardware and other technologies as needed to meet the requirements for an

11

energy analytics system and provide services required for the implementation

12

and sustainment of that system; and

13

Check Meter Device (RFP1850): Awesense was selected to supply Portable

14

check meters and the provision of software and services including True Grid

15

Insight API Software Licencing and Maintenance, hot stick adapters, USB

16

gateways, and training.

17

A list of major contracts, greater than $3 million, is presented in Appendix E.

18

19

The SMI Program implemented a Risk Management process to identify, assess, and

20

mitigate risks. The risks were managed, monitored, mitigated and transitioned to

21

sustainment. Managing risks was an essential responsibility of the Project

22

Managers, Release Managers and the SMI Program Leadership team. The Program

23

Controls Office validated risks, and monitored timely mitigation and treatment in the

24

SMI Issue and Risk Register.

25

High impact and priority risks were reported to the Executive Project Board, the

26

BC Hydro Executive Team, and the BC Hydro Board of Directors.

Program Risk Management

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Table 2 below presents key risks identified in the SMI Program Business Case and

during SMI Program Implementation. In the majority of cases, the actual

implemented mitigation strategies were consistent with the program plan. In some

cases, additional strategies were deployed as detailed below.

Table 2

SMI Program Key Risks

Risk and Description

Planned Mitigation Strategy

Meter Supply Chain


Risk of markets inability to meet meter
supply chain requirements, and
interdependencies with other vendors.

Emerging Technology
Risk of technology continuing to evolve
resulting in stranded assets.

Actual Mitigation

Procurement evaluation criteria


considered the vendors ability to
meet the timeline.
Incentive mechanisms in place to
align the related suppliers to
deliver on time and on budget.
Significant liquidated damages
included in final contracts to
ensure vendors meet their
commitments.

As planned.
In addition, the Program
implemented robust procurement
processes to select proven
technologies. Studied and
consulted with other utilities.
Engaged with industry standards
groups. Critical path items and
dependencies were reviewed
weekly at all Program levels.

All meter vendors under


consideration in the procurement
process have met minimum
mandatory criteria which included
having sizable deployments in
other North American and
European utilities, and based on
proven technologies.
Technology selection criteria were
designed to meet current and
expected future business needs.
Procurement evaluation criteria
included technology future
proofing to ensure future
business, technical and
operational requirements were
considered.
Where technology risks could still
exist, the successful vendor was
contractually committed to
meeting BC Hydros requirements
by an agreed date. In addition,
they were required to provide full
backward compatibility for
selected products.

As planned.
In addition, the SMI Program
gated functionality releases going
into production environments.
Extensive field trials were
conducted where technology was
emergent. Engagement with other
utilities and industry standards
groups on best practices. Use of
lab testing to make informed
choices.

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Risk and Description

Planned Mitigation Strategy

BC Hydro Resource Constraints


Significant resource constraints
internally for telecommunications, field
crews, and technology personnel
skills and head count could impact
the schedule.

Meter Deployment
Unable to complete meter deployment
by the end of 2012.

The Smart Metering Program was


a top corporate priority with broad
executive oversight and
commitment.
Leverage meter and field contract
labour market for peak resource
requirementsincluding
incentives for vendors to grow
and create jobs in British
Columbia.

As planned.

Contract incentives were in place


for solution integrator, meter
system and meter deployment
vendors to meet 2012 timeline.
Various strategies were used to
deploy meters in multiple regions
concurrently, including distributed
warehouses.

As planned.

Procurement approach designed


to achieve cost certainty for at
least 50 per cent of the project
budget, including mechanisms
like:
Affordability ceilings;
Fixed price contracts; and
Incentive mechanism shared
with all vendors.
Rigorous control over scope
elements implemented including:
Formal change control
process for any change in
scope, timeline, or
deliverables; and
Project controls office in place
to manage issues, risks,
assumptions and changes.
Rigorous financial controls were
implemented including:
Budget assigned to
accountable managers and
measured; and
Financial performance
tracking and forecasting tools.

As planned.

Budget
Risk of exceeding project budget due
to unforeseen costs or changes in
scope.

Actual Mitigation

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Risk and Description

Planned Mitigation Strategy

Safety/Security/Customer Privacy
Risk of security or privacy breach
impacting customers or system
operations.

Customer Experience
Risk of limited customer awareness
and public support of Smart Metering,
and/or negative customer experience
during meter deployment.

Actual Mitigation

Safety, security and privacy were


built into all procurement
processes.
Safety, security and privacy were
built into end-to-end solution
architecture and all business
processes, which were validated
during solution acceptance
testing.
BC Hydro is an active participant
in external standards setting
groups, including committees
focused on safety, security, and
privacy.
A dedicated smart metering
safety, security and privacy office
was established.
Formal penetration test plan
including hiring external agencies
to attempt to break into the
system.

Customer research to discover


baseline level of public awareness
and to identify specific issues and
concerns regarding meter
deployment.
Comprehensive Smart Metering
Program communications plan
developed and implemented;
including specific customer
contact plans pre-, during, and
post- meter deployment.
Incorporating lessons learned
from other utilities with respect to
customer engagement.

As planned.
In addition, ongoing monitoring
and dialogue in cooperation with
BC Office of the Information and
Privacy Commissioner.
IT security built into sustainment
model.
Managing threats and violence in
the work place through safety
programs; working with police as
required.

As planned.
In addition, development of Meter
Choices customer experience
after Directive 4 was issued.

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Risk and Description

Planned Mitigation Strategy

Regulatory Deadline
Risk of not meeting the
December 2012 Regulation deadline
due to internal, external or product
delays. Risk of exceeding
December 2015 Smart Grid Regulation
deadline for Advanced Telecom and
Energy Loss/Theft Detection
(installation and operation of at least
9,000 system devices).

Benefits Realization
Risk of not being able to achieve
benefits or lower benefits realized due
to higher costs, project schedule
delays or external factors such as
impact of legacy meters on benefits.

Actual Mitigation

Procurement evaluation criteria


considered the vendors ability to
meet the timeline.
Development of a robust
deployment strategy.
Incentive mechanisms in place to
align the related suppliers to
deliver on time.
SMI Leadership Team closely
monitoring work for scope
containment and swift issue
resolution.
Review critical path items and
milestones weekly at all levels to
meet the deadline.
Regular Issues and Priorities
Meeting to discuss and approve
mitigation strategies and take
corrective action as soon as
impacts are identified (additional
resources, schedule changes,
scope changes).

Cost certainty, fixed fee terms of


contract built into core solution
services and program delivery.
Build statements of work to
leverage fixed fee model where
appropriate.
Contractual incentive mechanism
for coming in under budget.
Strong financial controls in place:
Identifying manager
accountability by Work
Breakdown Structure,
forecasting of costs to
completion; and
Formal change control
process where Finance
approval is required.
Built-in contingency on delivery
costs.
Board reserve that requires board
approval.
Business groups have signed-off
on the benefits of business case.

As planned.

As planned.
In addition, cost reduction:
SMI continuing to push
equipment delivery schedules;
and
Government support for Meter
Choices.
Keeping benefits intact:
In-depth workshops with
relevant business units; and
Organizational commitment
and executive support for
business case benefits.
Seeking additional benefits:
Organizational commitment
and executive support in
pursuing additional benefits.

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Risk and Description

Planned Mitigation Strategy

Theft Solution Based on Emerging


Technologies
Risk of substantial SMI benefits being
dependent on energy/ theft analytics
and DSMDs.
Complexity of implementing the energy
balancing functionality
Dependency on Distribution System
Metering Devices deployment.
Alignment of the solution with
performance of the devices.

Network Completion and


optimization
Risk of more than planned
non-communicating smart meters
needing to be manually read and
lacking ability for other remote benefits

Actual Mitigation

Careful testing of technology


capabilities, in lab tests as well as
field trials in different
environments.
Contract terms in DSMD supply
contract negotiated to manage
risk.
Managing budget risk by
optimizing quantities of feeder
and transformer meters, check
meters and network devices.
Leveraging vendor expertise in
problem solving.
Soft deployment strategy to
minimize impact of early issues.
Ongoing scope management for
analytics solution.

As planned.
In addition, reduced reliance on
emerging technology (devices) by
increasing reliance on software
and existing SCADA devices.

Vendor contractual obligations


Escalation to BC Hydro and
vendor executives
Proposed by vendor alternate
technology solutions in the longer
term to maximize long-term
network performance
Weekly Issues and Priorities
Meeting to keep focus on delivery
and scope

As planned
In addition, formal discussions
with vendor regarding network
and system acceptance

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Table 3

SMI Program Unanticipated Risks

Risk and Description

Mitigation Strategy

Risk of program wide


decisions being made
without considering all
affected groups and teams

Risk of disputes amongst


internal and external
stakeholders
Risk of disagreements between
project stakeholders due to
lack of process to resolve
conflicts, lack of role clarity and
accountability

Actual Mitigation

Ensure all affected teams are


engaged in assessment of
alternative strategies prior to
decisions being made
Develop a project
communication plan

Ensure stakeholders are


appropriately embedded in
process development
Obtain stakeholder input on
design and deployment,
planning and implementation

Organized issues and


priorities meetings,
lessons learned sessions
Assignment of an issue/
risk management role
Project communication
plan developed and
implemented
Embedded stakeholders
in process creation and
obtained their input on
design and deployment
planning and
implementation
Engaged BC Hydro
partners early in
discussion of
requirements and impacts

Program Status and Variance

The SMI Program delivered the required scope components adhering to the CEA

and Smart Meters and Smart Grid Regulation.

On March 31, 2016, there were 1,943,833 smart meters on the BC Hydro grid

serving residential and commercial customers of British Columbia. The smart meters

capture power consumption and provide two-way communication. Metering

telecommunications and an ADCS along with the MDMS are in place to support

customer billing.

10

The SMI Program implemented an infrastructure to collect meter reading data and

11

manage smart meters, as well as the interfaces and transformed business

12

processes to support the organizations adoption of the new technologies and

13

systems.

14

BC Hydro residential and commercial customers with smart meters have access to

15

conservation feedback tools like in-home display devices and a secure energy

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visualization website (Customer Portal) to monitor and visualize their energy

consumption. An advanced theft detection solution has been implemented to detect

energy theft and prevent potential revenue losses.

Through the SMI Program, BC Hydro has upgraded and modernized grid

infrastructure. The SMI Program deployed advanced telecommunications

infrastructure to support future advanced electricity grid functions and emerging

customer applications, and implemented advanced operational application to

support real-time monitoring and operations of the metering system.

All new technologies, tools and processes have been successfully transitioned to

10

operations.

11

The SMI Program managed scope, budget and schedule changes through the PMO

12

and the Program Controls Office following the Change Management process defined

13

in the SMI Program Governance Plan.

14

Identified SMI Program changes were reviewed, evaluated and logged into a

15

Change Request Log. Review and approval of the proposed changes was

16

conducted by the SMI Change Control Board at the weekly Change Review Meeting.

17

There were 280 approved change requests and five change request addendums.

18

4.1

19

Main components of the SMI Program scope changes include:

20

Scope Variance

Voluntary Time-of-Use Rates and Critical Peak Pricing The program

21

implemented the infrastructure necessary to bill customers using rates that

22

encourage the shift of the use of electricity from periods of higher demand to

23

periods of lower demand. The program also included a proof of concept that

24

billing according to time intervals was possible. In accordance with government

25

policy direction, Time-of-Use Rates were not implemented. The cost of these

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activities was treated as a reduction of project benefits and not as a project

cost;

Customer refusals during mass deployment resulted in meter deployment

inefficiencies and higher manual meter reading costs on an interim basis. This

increased the SMI Program implementation cost by $18.5 million, requiring a

draw on Project Reserve held by the Board of Directors;

Scaled down Home Area Network (HAN)/In-Home Display Program and Mass

Rebate when the SMI Business Case was completed in 2010, the vision for

the HAN Program involved a large rebate program and subsidy to assist over

10

500,000 customers in purchasing in-home display devices. A Government

11

review in June 2011 recommended reassessment of the program. Following

12

re-evaluation, the program was scaled down, decreasing program related

13

expenditures by $37.4 million, while complying with the CEA and meeting

14

BC Hydro customers needs; and

15

Commercial Energy Visualization Portal - Through consultation with business

16

customers and key stakeholders, it was determined that the original intent of

17

utilizing the same Energy Visualization Portal for both commercial and

18

residential customers would not provide meaningful information to businesses.

19

With the BC Hydro tariff, residential customers are charged mainly through their

20

consumption in terms of electricity used (i.e., kWh) whereas business

21

customers are charged by their consumption of electricity, demand and power

22

factor and therefore, information in the form of KWh alone does not provide

23

meaningful impact or insights.

24

Regulatory Amendments:

25

On December 27, 2012 the Ministry of Energy and Mines announced a plan to

26

extend the deadline under the CEA from December 31, 2012 to December 31, 2013,

27

largely due to customer requests to defer meter installation as well as equipment

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and labour shortages. Other exceptions included meters that require an equipment

upgrade prior to smart meter installation due to concerns over potential for

interference with community-based Internet Service Providers.

4.2

The SMI Program was approved by the BC Hydro Board of Directors in

September 2010 with an authorized amount of $930 million. The budget was broken

down into an expected amount of $840 million (including $60 million contingency

managed by the SMI Program team) and a $90 million Board reserve.

The SMI Program Costs are shown in Table 4 below.

Cost Variance

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Table 4

1
2

SMI Program Budget and Cost at


Completion

Program Expenditures
($ million)

Original
Estimate

Cost at
Completion

Variance
Favourable/
(Unfavourable)

Initiation Phase (Completed Fiscal 2007)

1.4

1.4

0.0

Identification Phase (Completed Fiscal 2008)

8.9

8.9

0.0

38.8

37.8

1.0

391.1

398.5

(7.4)

60.9

87.5

(26.6)

110.5

86.5

24.0

Conservation Feedback Tools

62.8

19.2

43.6

Grid Modernization Infrastructure Upgrades

54.2

76.7

(22.5)

Program Delivery Activities

37.0

50.9

(13.9)

765.6

767.4

(1.8)

14.4

11.8

2.6

Contingency

60.0

60.0

Reserve Subject to Board Control

90.0

90.0

930.0

779.2

150.8

Definition Phase (Completed Fiscal 2011)


Implementation Phase (Fiscal 2011 to Fiscal 2016):
Smart Metering System
Solution Integration
(Information Technology)
Theft Detection

Total: Program Costs before IDC and


Contingency
Interest During Construction
5

Total: Program Authorized Amount


3

Overall, there is a total favourable variance (Program Authorized Amount including

interest-during-construction, contingency and reserve) of $150.8 million, reducing

the cost of the program from $930 million to $779.2 million.

The favourable variance in Theft Detection implementation costs is due to the

change in the distribution system meter devices strategy executed in October 2014.

The favourable variance in Conservation Feedback Tools reflects the removal of a

mass market in home feedback display rebate program from the project scope. The

10

higher solution integration costs are due to an increase in the number of applications

11

implemented, compared to the original business case. An example is the

12

introduction of applications required to support Internet Protocol Version 6.


5

Refer to Appendix E for Contingency Usage. Actual Contingency and Reserve Subject to Board Control used
in the implementation of the Program is presented with the applicable program expenditures that required a
draw of contingency or reserve.

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The higher grid modernization infrastructure upgrades costs are due to increased

smart grid telecommunication costs. An example is additional network devices that

were required to connect meters in challenging radio environments such as rural

communities and underground concrete meter rooms.

Higher than budgeted Program Delivery costs are due to a 21-month extension of

the implementation timeframe to provide more time to address customer concerns

and allow for the implementation of the Meter Choices Program.

4.3

The SMI Program adopted an Integrated Program Schedule using Microsoft Project.

Schedule Variance

10

The schedule was managed by a designated Program Scheduler, a member of the

11

PMO, and followed a rolling-wave planning approach. The Integrated Program

12

Schedule covered the entire breadth of the project and contained a level of detail

13

sufficient to manage key milestones and cross-teams dependencies. The following

14

table presents a comparison of major Baseline Schedule milestone target dates by

15

release, and the actual achieved completion dates.

16

To assist with the execution and implementation of the SMI Program componenets,

17

and after discussion and review with Program Management, SMI Program schedule

18

and target dates were baselined on April 27, 2011 when the implementation

19

activities had commenced following establishment of an architecture and execution

20

framework as well as detailed schedules provided by program teams.

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Table 5

Release Descript
ion

SMI Program Schedule

Target Dates
Baseline
Schedule
April 27, 2011

Actual
Completion
Date

Release 0
Architecture and
Execution
Framework

April 2011

May 2011

Release 1
Mass deployment
of meters
complete
(1,754,789)

December 2012

December 2012

Release 1
Deployment of
deferral list
meters and other
limited exceptions

N/A

December 2015

Release 2
Billing from
automated
register reads

March 2012

March 2012

Release 3
Residential and
commercial web
portals (with
register reads and
interval data)

Residential:
April 2012

Residential:
November 2012

Commercial:
N/A

Commercial:
December 2012

Release 3
Home Area
Network (In-Home
Feedback)
Program

March 2013

Soft Launch:
March 2015

Schedule Variance
Reason

CEA Smart
Meter and
Smart Grid
Regulation

3 (1) (a)
3 (2)
3 (4)

Ongoing Meter
Choices Program.

3 (1) (b) (ii) (A)


3 (1) (b) (ii) (B)
3 (3)
3 (4)
Longer than
anticipated
development work.
Longer than planned
testing and user
acceptance test.
Commercial web
portal required
separate
deployment (after
residential portal).

2 (g)
3 (1) (b) (ii) (C)

Reduction in scope
and costs while
adjusting technology
to fully functioning
and scalable
system.
Review and
reassessment of the
Program resulted in
an extension of the
implementation
timeline.

3 (1) (b) (ii) (D)

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Release Descript
ion

Target Dates
Baseline
Schedule
April 27, 2011

Actual
Completion
Date

Schedule Variance
Reason

CEA Smart
Meter and
Smart Grid
Regulation

Release 4
Time-of-Use
Rates and billing
from interval data

July 2012

December 2012

Resource
constraints and
schedule delays.

3 (1) (b) (ii) (E)

Release 5
Advanced
Telecom and
Operational
Support

Interactive
Communication:
November 2012

Interactive
Communication:
December 2012

4 (1) (c)
4 (2)

Remote Connect/
Disconnect:
November 2012

Remote
Connect/
Disconnect:
February 2013

Interactive
Communication:
schedule
dependency.
Remote
Connect/Disconnect:
additional testing
and defect
resolution time.
Outage
Management: after
storm season
additional
enhancement and
deployments were
implemented
Advanced Telecom:
additional time for
defects resolution
and schedule
dependency on IPv6
network protocol
implementation

Outage
Management:
November 2012
Advanced
Telecom:
March 2014

Outage
Management:
Phase 1
December 2012
Phase
2 - August 2014
Advanced
Telecom:
December 2015

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Release Descript
ion

Release 6
Advanced Theft
Detection
Program

Target Dates
Baseline
Schedule
April 27, 2011
May 2014

Actual
Completion
Date

Schedule Variance
Reason

December 2015

During 2014,
BC Hydro
reassessed the
DSMD strategy and
decided to
discontinue the
development of
DSMDs and their
associated
applications. In
October 2014,
BC Hydro
commenced
integrating SCADA
and check meter
devices into the theft
solution.
Development of the
associated
applications started
in January 2015.

CEA Smart
Meter and
Smart Grid
Regulation
4 (1) (a)
4 (1) (b)
4 (2)

Project Evaluation - Benefits Realization

5.1

Business Case

In January 2011, BC Hydro released the SMI Business Case reflecting program

benefits to be realized over 20 years.

The SMI Program delivered the following benefits:

Improved reliability and safety Real-time outage notification provided by smart

meters avoids the need for field crews to search for the location and cause of an

outage, often in adverse weather conditions, thereby accelerating the outage

restoration process. In addition, reduced energy theft will result in reduced safety

10

risks and reduced customer outages caused by premature transformer failures.

11

Enhanced customer service Smart meters provide improved accuracy of meter

12

reads, the elimination of estimated billing (for customers with network coverage),

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streamlined moving procedures, and better informed customer service

representatives who now have substantially more information available when

responding to customer calls.

Reduced electricity theft Prior to the implementation of the SMI Program,

BC Hydro estimated that approximately 850 Gigawatt Hours (GWh) per year was

lost to electricity theft. Revenue Assurance investigation results show that of the

marijuana grow-ops that were identified, the proportion with electricity theft present

increased from 41 per cent in fiscal 2006 to 62 per cent in fiscal 2011 (i.e., the last

fiscal year prior to the commencement of smart meter deployment). In fiscal 2013,

10

the proportion of identified grow-ops with theft present declined to 22 per cent, with a

11

further reduction in fiscal 2014 to 7 per cent, to 3 per cent in fiscal 2015 and to

12

2 per cent in fiscal 2016. This suggests that a significant proportion of energy theft

13

has already been eliminated due in part to a combination of media coverage of the

14

SMI Program, proactive communications around the meter change out process, and

15

BC Hydros visible expanded revenue assurance field inspection program supported

16

by interim technology solutions.

17

Operational Efficiencies Aside from reduced operating costs resulting from

18

automated meter reads, remote connect and disconnect, improved outage

19

management, and the suspension of the meter sampling program, voltage

20

information from smart meters can be used to reduce system losses. In the absence

21

of voltage information, more energy is transmitted than needed to maintain an

22

acceptable level of power quality. With available voltage information from smart

23

meters, adjustments can be made to reduce the amount of energy transmitted while

24

maintaining power quality levels.

25

Customer Choice and Control Smart meters provide specific and timely energy

26

usage information, which makes it easier for customers to understand and actively

27

manage their electricity consumption patterns. Increased energy awareness is

28

facilitated through:
Smart Metering & Infrastructure Program
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Program Completion and Evaluation Report


December 21, 2016

in-home displays and energy management gateways;

2
3

Optional in-home feedback tools Including in-home feedback devices such as

Customer Web Portal - Customers are able to access their hourly consumption
(typically by the next day) using BC Hydros customer web portal.

Modernized British Columbia Electricity System The Program replaced

obsolete legacy meters with smart meters, implemented in-home feedback tools and

advanced telecommunications infrastructure including new networking protocol

(IPv6), created advanced systems and infrastructure to reduce electricity theft and

created the foundation to support new uses of electricity such as electric vehicles,

10

customer generation and microgrids.

11

5.2

12

To maintain the ongoing achievement of SMI Program benefits, BC Hydro

13

developed a benefits realization framework which identified each benefit included in

14

the SMI Business Case and grouped these into benefit work-streams based on the

15

nature of the benefit and the business group accountable for delivery. The quantified

16

benefit for each work-stream was formalized in a benefit acceptance document,

17

which was signed by the accountable business group manager accountable for the

18

realization of SMI Program benefits. Benefit realization was tracked and reported on

19

a periodic basis, where benefits realized were compared to forecast per the SMI

20

Program Business Case.

21

5.3

22

The SMI business case includes benefits to be realized through the end of

23

fiscal 2033. Table 6 below presents the cumulative benefits realized through to the

24

end of fiscal 2016.

Benefits Realization Framework

Benefits Realized to March 2016

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Table 6

SMI Program Benefit Realization to Fiscal 2016

$ million (Nominal, unless otherwise noted)


Type of Benefit

Operational Efficiencies,
Avoided Capital

Description

Meter Reading Automation

Actual
(to Fiscal 2016)

Business Case
(to Fiscal 2016)

Variance
Favourable/
(Unfavourable)

29

73

(44)

Meter Sampling

61

36

25

11

Remote Reconnect Automation

47

15

(7)

Distribution Asset Optimization

15

(3)

Outage Management Efficiencies

10

(4)

(1)

Call Centre & Billing

Revenue Protection

Lifecycle
Business Case
to Fiscal 2033
(Present Value)
222

Continuous Optimization and Load Research

Energy Savings

Inception to Fiscal 2016

(2)

(5)

(4)

(1)

359

74

123

(49)

Voltage Optimization Commercial Customer Sites

108

(10)

10

Voltage Optimization Distribution System

100

26

(25)

208

16

(15)

732

154

156

(2)

1,299

229

294

(65)

Theft Detection

Derived from BC Hydro Operational Efficiencies


Capacity Savings

Voluntary Time-of-Use Rates

110

(59)

59

Energy Savings

Conservation Tools (In-Home feedback tools)

220

147

(141)

330

88

(82)

1,629

235

382

(146)

Increased Customer Conservation


Total Quantified Benefits

Refer to Appendix I for SMI Program Energy Related Benefits (GWh) to fiscal 2016 with impact on SMI Operating and Capital Expenditures and
Revenues.

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Meter Reading Automation:

The business case assumed that manual meter reading routes would be

decommissioned approximately six months after the installation of a smart meter.

However, actual project execution focused on minimizing deployment costs, rather

than maximizing avoided meter reading costs.

In mid-fiscal 2012, BC Hydro decided to manage the termination of the Accenture

Meter Reading contract by letting it expire on March 31, 2013 instead of terminating

the contract at an earlier date. This avoided significant early termination penalties

but required the continued payment for meter reading services.

10

In addition, meter installations for the 75,000 customers who refused smart meters

11

were put on hold until the announcement of the Meter Choices Program in

12

July 2013. Meter installations for the Meter Choices Program customers who

13

ultimately selected a smart meter commenced in January 2014. As a result of the

14

delays in smart meter installations related to customer installations put on hold, and

15

the resulting delays in optimizing the telecommunications network, actual cumulative

16

manual meter reading costs (including related vehicle operating costs) to fiscal 2016

17

were higher than estimated in the business case by $13 million.

18

The SMI Program has delivered $29 million in meter reading automation benefits

19

to-date. This is $44 million less than assumed by the original business case due to

20

the factors outlined above. The business case assumed that 95 per cent of customer

21

meters would have billing information captured by automated reads. As of

22

March 2016, 98 per cent of customer meters are read automatically over the air.

23

Theft Detection:

24

Revenue Assurance investigation results show that of the grow-ops that were

25

identified in the field each year, the proportion with electricity theft present increased

26

from 41 per cent in fiscal 2006 to 62 per cent in fiscal 2011 which was the last fiscal

27

year prior to the commencement of smart meter deployment. In fiscal 2013, the
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Program Completion and Evaluation Report


December 21, 2016

proportion of identified grow-ops with theft present declined to 22 per cent, with a

further reduction in fiscal 2014 to 7 per cent, to 3 per cent in fiscal 2015 and to

2 per cent in fiscal 2016. This suggests that a significant proportion of energy theft

has been eliminated due to a combination of media coverage of the SMI Program,

proactive communications around the meter change out process, and BC Hydros

visible expanded revenue assurance field inspection program supported by interim

technology solutions. It is estimated that by fiscal 2015 reduced theft had resulted in

increased revenue of approximately 300 GWh per year and reduced load of

approximately 300 GWh per year relative to 2010. This represents a significant

10

benefit to BC Hydro ratepayers.

11

Theft reduction costs, which include costs associated with investigation, security,

12

and collections, have been less than planned in each of the years from fiscal 2012

13

through fiscal 2016, resulting in a cumulative favourable variance of $22.4 million

14

comparing to the SMI Business Case.

15

The SMI Program has exceeded the theft reduction targets in the original business

16

case which expected theft reduction to peak in fiscal 2016 at 75 per cent. To-date,

17

the Program has reduced theft by more than 80 per cent.

18

While theft reduction targets have been exceeded, the overall Theft Detection

19

benefit to end of fiscal 2016 has been $2 million less than assumed in the SMI

20

Business Case. This is because the business case assumed that all electricity theft

21

detected prior to fiscal 2018 would be converted to paying customer revenue. While

22

some theft has been converted to paying customer revenue, other theft activity has

23

stopped all together, which has reduced BC Hydros future energy supply costs. The

24

short-term value of energy supply is less than the value of increased customer

25

revenue. As a result, while BC Hydro has exceeded its theft detection targets, the

26

value of theft reduction to-date is less than assumed in the original business case.

27

Over the life of the program, theft reduction is expected to deliver approximately

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Program Completion and Evaluation Report


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$715 million (net present value) in benefits. Table 7 below presents Theft Detection

benefit realization to fiscal 2016 based on an estimated theft reduction impact.


Table 7

3
4

Theft Detection Benefit, Inception to


Fiscal 2016
$ million

Benefit Component Description

Actual

Business Case

Variance
Favourable/
(Unfavourable)

148

198

(50)

29

25

Diversion Reduction Costs

(23)

(46)

23

Total

154

156

(2)

Increased Revenue from Diversion


Reduction
Energy and Capacity Savings

Voltage Optimization Program

Voltage Optimization is the management of voltages and reactive power flows in the

distribution network to enable energy conservation, peak reduction, loss

minimization and power factor improvement. The value of these benefits is based on

the avoided cost of acquiring new sources of energy supply. This cost has

10

decreased since 2011 as advancements in technology have reduced energy supply

11

costs and as commodity prices have decreased, which has led to a lower rate of

12

forecast load growth. In fiscal 2016 the Voltage Optimization Program realized

13

10.8 GWh of energy savings. Voltage Optimization capabilities will be improved

14

following the planned implementation of a metering system firmware upgrade in

15

fiscal 2017 that will introduce bellwether metering and the ability to collect near-real

16

time data from a small sample of customer meters located in areas of significance to

17

the distribution grid structure.

18

In-Home Display:

19

The IHD Rebate Program was significantly reduced in scope compared to the SMI

20

Business Case and was implemented in late fiscal 2015. Measurement of the energy

21

savings resulting from the Energy Visualization Web Portal have been estimated at

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Program Completion and Evaluation Report


December 21, 2016

8.46 GWh for fiscal 2016 (refer to page 33 for a discussion of the change in scope

related to the In-Home Display Program).

Outage Management:

Smart meters played an important role in BC Hydro restoration efforts following the

major storm in September 2015. The new metering system helped BC Hydros field

crews in their efforts to restore power to customers more efficiently.

For example, once crews completed a work order, the Restoration Centre did a

remote check or ping of meters in the neighbourhood to confirm power was indeed

restored as expected. If restoration was confirmed, the crews could move on to the

10

next work order rather than waiting on-site while Restoration Centre employees

11

called customers to check if they had power.

12

Smart meter outage notifications are best used for individual or smaller scale

13

customer outages. For large storms like August 2015, the Restoration Centre is

14

more likely to use critical infrastructure status such as station and feeder outage

15

information as a primary driver, and use the smart meter data as supplemental

16

information to help predict how widespread an outage is.

17

Time of Use Rates:

18

In fiscal 2012, policy direction was received from the shareholder indicating that

19

voluntary Time-of-Use and other Time Based Rates should neither be developed nor

20

implemented. All activities in this regard ceased immediately. However, the

21

functionality required to collect and process hourly interval data was implemented in

22

order to support presentation of this data on the web as a customer conservation

23

tool, as required by the Smart Meters and Smart Grid Regulation under the CEA.

24

To the end of fiscal 2016, the business case assumed $61 million of time

25

differentiated rate design costs would be incurred, none of which has been spent.

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Benefits Impaired by Lower Energy Price

The Energy Reference Price used in the SMI Business Case was based on the

prices in the 2009 Clean Call for Energy, inflated over time. This was a proxy for the

avoided cost of acquiring future energy under long-term contracts, and was the

approach used to assess all BC Hydro Demand Side Management programs.

Since that time, the cost of acquiring new sources of energy supply has decreased

as advancements in technology have reduced energy supply costs and as

commodity prices have decreased, which has led to a lower rate of forecast load

growth.

10

The reduction in the cost of new energy supply accounts for $128 million of the

11

$146 million variance in benefits realized to-date. .

12

Table 8 below presents an overall outlook of the SMI Business Case NPV estimated

13

in fiscal 2016, covering benefits and costs for the period from the start of the

14

Program through to fiscal 2033, assuming the energy price remains at current levels.

15

However, the energy price will continue to fluctuate over the remaining 16-year

16

lifetime of the business case.

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Table 8

1
2

Overall SMI Program Business Case NPV


Outlook (Fiscal 2016)
$ million NPV

1.

Published SMI Business Case (Fiscal 2011)

520

2.

Less:

3.

De-scoping of Time-of-Use Rates (reduction in capacity benefit)

(110)

4.

Reduction in Energy Price (impact on all energy benefits)

(375)

5.

De-scoping IHD Rebate (reduction in energy benefit, offset by reduction in


implementation costs)

(115)

6.

Impairment of Meter Reading Benefit

(62)

7.

VVO (reduction in benefit)

(84)

8.

Other Benefits

9.

Add:

10.

Increase in Theft Detection and Meter Sampling benefits compared to plan


(excluding energy price impacts described above)

11.

Lower sustainment operating and capital costs

12.

Reduction in Overall SMI Program Costs (incl. IHD, DSMD)

100

13.

Business Case Long Term Outlook (Fiscal 2016)

138

(9)
264
9

Lessons Learned and Recommendations

The SMI Program was a complex, multi-year initiative that included delivery of

significant information technology, telecommunications technology, and deployment

of assets. As a result, there were a number of lessons learned throughout the

Program that could be applied to projects of a similar nature.

SMI Program lessons learned were discussed and disseminated within Program

teams including vendors as well as BC Hydro sustainment groups as applicable.

10

A number of approaches used on the SMI Program contributed to a successful

11

implementation of smart metering technologies and delivery of new functionality into

12

the business groups. The Program successes included:

13

Defined Program Business Releases and Work-stream (team) structure

14

15

Business Releases defined the work that was accomplished and grouped
business functionality into manageable pieces of scope.

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Program Completion and Evaluation Report


December 21, 2016

and managed cross-work-stream interactions.

2
3

Dedicated Release Managers coordinated delivery across the work-streams

Release Managers had visibility across the whole Release to identify and

manage risks, issues and changes. Delivery of each Release typically involved

team members from most or all of the work-streams.

Structuring the Program team into a matrix of work-streams and business

releases allowed an efficient use of work-stream resources and contributed

greatly to efficient delivery. Resourcing was smoothed through the natural

delivery lifecycle and staggered release dates.

10

Decision Making Process

11

Structured and formal Change Control processes and a technical Change

12

Advisory Board, included from the beginning of the Program, helped manage

13

Program budget, scope and schedule while ensuring that changes were verified

14

and well understood by involved program stakeholders.

15

Program risks, critical issues and key assumptions were logged and updated

16

regularly by the PMO team following the recurring Program Leadership Issues

17

and Priorities meetings.

18

which allowed them to make timely and efficient decisions.

19

20

Release Managers and Project Managers were allocated full time to projects

A single page high level Critical Path Diagram showing key interdependencies

21

between Program releases complemented a detailed Gantt Chart of the

22

Program Schedule and helped to facilitate Program Leadership decision

23

making.

24

Go/no-Go meetings, supported by a detailed checklist, were required before

25

releasing technology applications to a production environment or deploying

26

technology into the field. The presence of representatives at the Program and

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Program Completion and Evaluation Report


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Release level (i.e., Release manager, technical project manager, relevant

work-stream representative and sustainment organization business lead)

ensured that the appropriate managers were present to make decisions.

Centralized End-to-End Testing

The SMI Program had a centralized testing team assigned to perform

end-to-end tests across the entire solution, which allowed for objectivity and a

focus on efficiency.

End-to-End Testing assessed functionality across an entire business process in


which multiple systems connected through multiple integrations from system to

system.

10

11

Release 0

12

The purpose of Release 0 was to refine the preliminary SMI Technical

13

Reference Architecture and the related architectural guidelines, strategies,

14

business use cases and architectural principles. It served as a technical

15

foundation for all subsequent Program releases improving implementation

16

efficiency.

17

Multi-vendor Environment

18

The Program paired a BC Hydro lead with a System Integrator lead (a Box

19

buddy concept) for key work-streams. This approach matched utility

20

experience with smart metering/project expertise and ensured informed

21

decision making.

22

Lessons Learned and Recommendations:

23

24

Reliance on Vendor Testing


The project team performed some tests that vendors had already conducted.

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Program Completion and Evaluation Report


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Lesson/ Recommendation: Leverage vendor expertise and align testing

strategies so that the project team can focus its testing efforts on areas not

covered by the vendors.

Research and Development (R&D) project nature

Release 6 had projects of a research and development nature (i.e., considered

an emerging technology) that required extensive testing and field trials.

Frequently the results of testing and field trials required product changes,

resulting in schedule delays.

Lesson/ Recommendation: Consider alternate delivery methodologies or project

10

management practices to allow for adequate schedule durations, costs and

11

product iterations.

12

Reliance on Contractors

13

The project team was supported by contractors to implement new and complex

14

technology.

15

Lesson/ Recommendation: Consider leveraging more BC Hydro technology

16

staff for better retention of knowledge and continuity.

17

Financial Closure

18

Assets detailing was completed in fiscal 2016 and SAP charge codes have been

19

closed. A total of $696.6 million assets were capitalized. A list of the SMI Program

20

Asset Classes and their corresponding value is presented in Appendix F.

21

As of March 31, 2016, all sustainment activities related to the implemented Smart

22

Metering and Infrastructure technologies were successfully transitioned and

23

integrated into BC Hydro operations. Total Incremental Operating Costs (including

24

both sustainment and benefit-related operating costs) in fiscal 2017 are expected to

25

be $44.3 million before Operating Cost Savings of $22.2 million. The projected

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Incremental Operating Cost and Operating Cost Savings for fiscal 2017 to

fiscal 2019 fiscal are presented in Table 9 below.


Table 9

3
4

Incremental Operating Costs and


Operating Costs Savings to Fiscal 2019
$ million
Fiscal 2017

Fiscal 2018

Fiscal 2019

44.3

43.1

43.2

Savings

(22.2)

(22.4)

(22.6)

Net Total

22.1

20.7

20.6

Operating Costs

The planned incremental and operating costs for fiscal 2017 to fiscal 2019 were

presented in BC Hydro Revenue Requirements Application filed with the British

Columbia Utilities Commission on July 28, 2016.

As discussed throughout this report, the SMI Program also creates significant

energy cost reductions and increased revenues that are not captured in operating

10

costs, resulting in an overall net positive benefit to ratepayers.

11

12

The SMI Program was successfully completed in accordance with the Project

13

Management Procedures of BC Hydro. This report has been completed in

14

compliance with BC Hydros Management and Accounting Policies and Procedures.

15

The Program delivered business functionality and new technologies as outlined in

16

section 2 of this document.

Program Completion

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Appendix A
Program Document List

Program Completion and Evaluation Report


December 21, 2016
Appendix A

Document

Date

The British Columbias Clean Energy Act, Section 17 and Smart Meters and
Smart Grid Regulation

June 2010

SMI Program Business Plan

December 2010

SMI Program Governance Plan

December 2010

SMI Program Execution Plan

December 2010

SMI Program Baseline Budget

December 2010

SMI Program Business Case

January 2011

SMI Program Baseline Schedule

April 2011

SMI Program Quality Management Plan

July 2011

The British Columbias Clean Energy Act Ministerial Order No. M294

December 2012

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Program Completion and Evaluation Report

Appendix B
Program Budget

Program Completion and Evaluation Report


December 21, 2016
Appendix B

BC Hydro Board Approved Amount and Authorized Amount September 2010.


Amount ($ million)
Initiation Phase (Completed Fiscal 2007)

1.4

Identification Phase (Completed Fiscal 2008)

8.9

Definition Phase (Completed Fiscal 2011)

38.8

Implementation Phase (Fiscal 2011 to Fiscal 2016):


Smart Metering System

391.1

Solution Integration (Information Technology)


Theft Detection

60.9
110.5

Conservation Feedback Tools

62.8

Grid Modernization Infrastructure Upgrades

54.2

Program Delivery Activities

37.0

Total: Implementation Phase

716.5

Interest During Construction

14.4

Contingency

60.0

Sub-Total: Program Expected Amount


Reserve Subject to Board Control
Total: Program Authorized Amount

840.0
90.0
930.0

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Program Completion and Evaluation Report

Appendix C
Program Operating and Capital Expenditures

Program Completion and Evaluation Report


December 21, 2016
Appendix C

Operating and capital expenditures related to the SMI Program incurred by


BC Hydro for the SMI Program to date are shown in Table C-1.
Table C-1
($ million)

SMI Program Operating and Capital


Expenditures SMI Program to Date
Operating
Expenditures

Capital
Expenditures

Total
Expenditures

Labour

31.8

49.5

81.3

Consultants and Contractors

58.2

338.4

396.6

Materials/Other

(7.4)

296.9

289.5

11.8

11.8
779.2

Interest

n/a

Sub-total SMI Program

82.6

696.6

7.5

n/a

90.1

696.6

Interest on Deferral
Total

7.5
786.7

Operating and capital expenditures by program component1 for SMI Program at


completion are presented in Table C-2.
Table C-2

SMI Program Operating and Capital


Expenditures by SMI Program
Component SMI Program to Date and
Actual Expenditures at Completion
Actual Expenditures
Program to Date

($ million)

Operating
Expenditures

Capital
Expenditures

Total Expenditures

11.9

359.2

371.1

Telecommunications Systems

0.4

39.5

39.9

Meter Data Management


System

0.2

8.1

8.3

Solution Integration

0.0

53.9

53.9

In-Home Display/In-Home
Feedback

7.3

19.3

26.6

Conservation Based Rates

0.0

3.9

3.9

22.3

140.1

162.4

Smart Meters

Smart Grid

1,5

Other
1

In Directive No. 4 of Commission Order No. G-67-10, BC Hydro was directed to report SMI Program costs
broken down by the components specified therein.

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December 21, 2016
Appendix C

Actual Expenditures
Program to Date
Program Management

4.7

20.1

24.8

Facilities

2.2

5.0

7.2

2.7

5.1

7.8

Regulatory

1.3

0.0

1.3

Procurement

0.1

20.3

20.4

Contract Management

0.0

2.3

2.3

Customer

2.6

0.0

2.6

Business Transformation

2.0

0.0

2.0

Engineering, IT, Telecom,


Security & Field Trials

3.4

0.0

3.4

Utility Operations

1.3

0.0

1.3

Human Resources

0.9

0.5

1.4

11.3

0.0

11.3

Transition to Operations

0.7

0.0

0.7

Leasehold Improvements

0.0

0.4

0.4

Field Trial Equipment

0.0

0.0

0.0

Security

0.0

2.0

2.0

0.0

16.9

16.9

7.3

0.0

7.3

0.0

0.0

0.0

Total Other

40.5

72.6

113.1

Contingency

0.0

0.0

0.0

82.6

696.2

779.2

Finance
4

Communication & Stakeholder


Engagement

Infrastructure (IT)
Program Development

Interest During Construction

Total
1
2

4
5

Smart Grid includes theft detection and other advanced telecom infrastructure related expenditures.
Program Initiation and Identification includes expenditures of $7.3 million incurred during fiscal 2006 and
fiscal 2008 (inclusive). These amounts were expensed in the year in which they were incurred, although only
$0.6 million was recovered in rates (i.e., $6.7 million was incurred ex-plan).
Interest during construction is included in actual expenditures for each expenditure category, but not included
in planned expenditures by category. Therefore, a separate line item is included in Other.
Itron credit of $10 million previously reported under deferred regulatory reclassified to Smart Grid.
DSMD write off of $19.1 million reclassified from capital to operating.

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Smart Metering & Infrastructure Program

Program Completion and Evaluation Report

Appendix D
Program EAR Revisions

Program Completion and Evaluation Report


December 21, 2016
Appendix D

EAR Revision
Number

Date

Nature of Change

Amount
($ thousands)

EAR No. 1

Prior to 2008

Initiation Phase Funding

1,512

EAR No. 2

February 29, 2008

Identification Phase
Funding

8,283

EAR No. 3

April 17, 2008

To fund April - May 2008

4,278

EAR No. 4

April 17, 2008

To fund June
December 2008

30,347

EAR No. 5

August 29, 2010

Extension of SMI to
December 2010

20,000

EAR No. 6

March 15, 2011

Implementation Phase
Funding

Total

865,580
(775,580+90,000)
930,000

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Program Completion and Evaluation Report

Appendix E
Contract Values Spent Greater than $3 million

Program Completion and Evaluation Report


December 21, 2016
Appendix E

Contract Number

Vendor

Description

Total Value
($ million)

CO 60950
CO 61015
Multiple

Itron Canada Inc.

Metering Systems and


Metering Data Services

231.7

CO 60135

Corix Utilities Inc.

Meter Deployment
Services

83.4

CO 55836
Multiple

Capgemini Canada Inc.

System Integrator and


Consulting Services

86.8

CO 73727
CO 73729
CO 79207
CO 87280

EMC Corporation of
Canada

Energy Analytics
Solution and Services

21.0

CO 69350
CO 86427

Awesense Wireless Inc.

Portable Check Meters

11.6

Multiple

Teksystems Canada Inc.

IT Consulting Services

14.3

CO 51068
Multiple

Compugen Inc.

IT Software and
Hardware Purchases

22.6

Multiple

West Pacific Consulting


Group

IT Consulting Services

7.9

CO 64130
Multiple

Telus

Telecom Infrastructure
Services

7.6

Multiple

JTS Consulting Inc.

IT Consulting Services

7.2

CO 62115

A.T. Maintenance Plus


Contracting

Meter Technician
Services

5.2

Multiple

DDB Canada

SMI communications
campaigns

5.0

CO 31955

Everest Outsourcing
Canada

Consulting Services

4.9

Multiple

QinetiQ North America

Distribution System
Metering Devices

5.5

Multiple

Annex Consulting Group

IT Consulting Services

4.8

CO 33456

McKinsey & Company


Canada

Consulting Services

4.3

CO 64863

Karma Midnight
Ventures Ltd.

Meter Technician
Services

3.5

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Smart Metering & Infrastructure Program

Program Completion and Evaluation Report

Appendix F
Reasons for Commitment of Contingency and
Reserve Funds

Program Completion and Evaluation Report


December 21, 2016
Appendix F

In May 2013, the BC Hydro Board approved the release of $18.5 million of the
reserve funds to implement Meter Choices Program.
Reserve Funds
($ million)
Increased project costs resulting from the refusal of a smart meter
installation by some customers, including incremental meter
installation costs, additional network components and increased call
centre resources.

18.5

Unused Reserve

71.5

Total Reserve Subject to Board Control

90.0

The main drivers for the commitment of the contingency funds were as follows:
Contingency Funds
($ million)
Budget Re-baseline (June 2011)

10.9

Testing (All Releases)

10.8

R6 IT

8.6

R3 Portal

6.2

Vendor Incentives

4.8

R6 EAS

4.4

R5 IPv6

4.3

DRC

4.2

IDC

4.1

Staffing

3.9

R5 Advanced Telecom

(4.6)

Foreign Exchange

(6.2)

Meter Reading Contract Termination

(9.4)

Other

8.1

Total Funds Allocated

50.1

Unused Program Contingency


Total Value

9.9
60.0

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Program Completion and Evaluation Report

Appendix G
Program Asset Classes

Program Completion and Evaluation Report


December 21, 2016
Appendix G

Asset Class

Asset Class Description

Total Value
($ million)

Meters
C59403

Automated Meters, Distribution

420.6

Software
C80302

Software Enterprise Systems

C80318

Software 5-Year Life Internally Developed

14.9

C80319

Software 10-Year Life Internally Developed

8.4

C80303

Software, Mid-range Systems

7.0

Subtotal Software

128.2

158.5

Control Systems
C68201

Control Centre (Master Equipment)

45.3

C68204

Distributed Control System

7.4

Subtotal Control Systems

52.7

Tools
C82550

Tools/ Work Equipment, Miscellaneous

16.6

Computer Hardware
C80504

Servers

12.4

C80502

Routers

10.8

Subtotal Computer Hardware

23.2

Assets Classes below $5 million, including but


not limited to: telecom network equipment,
transformers, poles

25.0

Other

Total: SMI Capital Assets

696.6

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Program Completion and Evaluation Report

Appendix H
Program Quarterly Reports Summary

Program Completion and Evaluation Report


December 21, 2016
Appendix H

Report

Period Cover

Date Filed

April 2010 to June 2010

September 15, 2010

July 2010 to September 2010

November 17, 2010

October 2010 to December 2010

February 9, 2011

January 2011 to March 2011

June 8, 2011

April 2011 to June 2011

August 30, 2011

July 2011 to September 2011

November 29, 2011

October 2011 to December 2011

March 30, 2012

January 2012 to March 2012

May 21, 2012

April 2012 to June 2012

August 17, 2012

10

July 2012 to September 2012

December 7, 2012

11

October 2012 to December 2012

February 28, 2013

12

January 2013 to March 2013

May 15, 2013

13

April 2013 to June 2013

August 14, 2014

14

July 2013 to September 2013

November 14, 2013

15

October 2013 to December 2013

February 14, 2014

16

January 2014 to March 2014

May 15, 2014

17

April 2014 to June 2014

August 14, 2014

18

July 2014 to September 2014

November 13, 2014

19

October 2014 to December 2014

February 13, 2015

20

January 2015 to March 2015

May 12, 2015

21

April 2015 to June 2015

August 14, 2015

22

July 2015 to September 2015

November 10, 2015

23

October 2015 to December 2015

February 11, 2016

Smart Metering & Infrastructure Program


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Smart Metering & Infrastructure Program

Program Completion and Evaluation Report

Appendix I
SMI Program Operating and Capital Expenditures by
SMI Program, with Energy Related Benefits (GWh)
and Revenues

Program Completion and Evaluation Report


December 21, 2016
Appendix I

Actual

F2012
Plan V a ria nc e

Actual

F2013
Plan V a ria nc e

Actual

F2014
Plan V a ria nc e

Actual

F2015
Plan V a ria nc e

Actual

F2016
Plan

V a ria nc e

Cum ulative
(F2012 to F2016)
Actual
Plan
V a ria nc e

A. SMI Operating Costs ($ m illions)


KBU Operating Costs - SMI Implementation
Call Centre
Diversion Reduction
Meter reading - Manual reads

0.0
2.6
0.0

1.7
6.9
0.0

1.7
4.2
0.0

0.0

0.0

0.0

Total - KBU Operating Costs - SMI Implementation 2.6

8.6

5.9

(4.9)
(4.1)
(0.8)
0.0
0.0
0.0
(0.8)

(4.1)
(4.1)
0.0
(0.2)
0.0
0.0
(0.2)

0.8
0.0
0.8
(0.2)
0.0
0.0
0.6

(4.9)
(3.2)
(1.7)
0.0
0.0
0.0
(1.7)

0.0
50.0
0.0
50.0

0.9
4.0
25.5
30.4

(0.9)
46.0
(25.5)
19.6

200.0

1.0

199.0

Other

KBU Operating Costs - SMI Benefit Related


Reduction in Meter Sampling Costs Realized
Less: Meter Sampling Benefit Included
Net Meter Sampling Benefit
Meter Reading
Remote Disconnect / Reconnect
Other
Net Benefit

4.5
6.0
0.0

2.5
9.3
1.9

(2.0)
3.3
1.9

0.0

3.0

3.0

10.5

16.7

6.2

(4.9)
(4.9)
0.0
(14.4)
(1.9)
(1.5)
(17.8)

(0.0)
(1.7)
1.7
(14.4)
(1.9)
(1.5)
(16.1)

0.0
100.0
0.0
100.0

198.0
6.0
34.0
238.0

300.0

51.0

0.4
6.0
10.3

0.5
10.5
3.4

0.1
4.5
(6.9)

0.0

3.6

3.6

16.7

18.0

1.3

(6.0)
(6.0)
0.0
(22.3)
(2.1)
0.0
(24.4)

(6.0)
(6.0)
0.0
(26.4)
(4.5)
(1.8)
(32.7)

0.0
0.0
0.0
(4.1)
(2.4)
(1.8)
(8.3)

(198.0)
94.0
(34.0)
(138.0)

10.3
161.0
0.2
171.5

249.6
1.0
47.0
297.6

249.0

339.0

287.0

0.0
4.8
7.6

0.0
7.1
6.0

0.0
2.3
(1.6)

0.0

0.0

0.0

12.4

13.1

0.7

(5.5)
(5.5)
0.0
(20.4)
(1.1)
(0.3)
(21.8)

(5.5)
(5.5)
0.0
(20.4)
(1.4)
(0.4)
(22.2)

0.0
0.0
0.0
(0.0)
(0.3)
(0.1)
(0.4)

(239.3)
160.0
(46.8)
(126.1)

12.4
300.0
7.0
319.4

7.8
0.0
6.1
13.9

52.0

300.0

510.0

0.0
3.9
7.9

0.0
6.6
5.5

0.0
2.7
(2.4)

4.9
23.3
25.8

4.7
40.4
16.8

(0.2)
17.1
(9.0)

0.0

0.0

0.0

0.0

6.6

6.6

11.8

12.1

0.3

54.0

68.5

14.4

(4.5)
(4.5)
0.0
(20.4)
(0.8)
(0.3)
(21.5)

(4.5)
(4.5)
0.0
(20.4)
(1.4)
(0.3)
(22.1)

0.0
0.0
0.0
0.0
(0.6)
0.0
(0.6)

(25.8)
(23.3)
(2.5)
(63.0)
(4.0)
(0.6)
(70.2)

(25.0)
(25.0)
0.0
(81.7)
(9.2)
(4.0)
(94.9)

0.7
(1.7)
2.5
(18.7)
(5.2)
(3.4)
(24.8)

4.6
300.0
0.9
305.5

36.6
315.8
12.0
364.4

285.3
3.8
10.5
299.6

(248.7)
312.0
1.5
64.8

59.3
926.8
19.2
1005.3

741.6
14.8
123.1
879.5

(682.3)
912.0
(103.9)
125.8

(210.0)

359.0

637.5

(278.5)

1498.0

1486.5

11.5

B. SMI Energy Related Benefits (GWh)


Energy Savings
DSM Conservation *
Diversion Program Conservation **
Voltage Optimization
Total Energy Savings
Theft Reduction - Increased Energy Sales**

C. SMI Im pact on Capital Costs ($ m illions)


Meter Sampling - Failed Meter Samples
Load Research - Avoided capital replacement
Net Benefit

(3.5)
0.0
(3.5)

(0.4)
0.0
(0.4)

3.1
0.0
3.1

(1.7)
0.0
(1.7)

(1.7)
0.0
(1.7)

0.0
0.0
0.0

(2.4)
(1.4)
(3.8)

(2.4)
(2.2)
(4.6)

0.0
(0.8)
(0.8)

(1.4)
(0.4)
(1.8)

(1.4)
0.0
(1.4)

0.0
0.4
0.4

(1.0)
(1.3)
(2.3)

(1.0)
(1.3)
(2.3)

0.0
0.0
0.0

(10.0)
(3.1)
(13.1)

(5.9)
(2.2)
(8.1)

4.1
0.9
5.0

* DSM Conservation F2016 target based on Energy Visualization Portal Benefit only
** Theft Reduction - Increased Energy Sales and Diversion Program Conservation estimated based on analyses performed in F2016

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Smart Metering & Infrastructure Program

Program Completion and Evaluation Report

Appendix J
Glossary

Program Completion and Evaluation Report


December 21, 2016
Appendix J

Automated Data Collection System (ADCS)


Software that manages the metering network and processes high volume of interval-based meter
reads.
Clean Energy Act (CEA)
This Act guides government, BC Hydro and the British Columbia Utilities Commission in advancing
the Provinces sustainable energy vision.
Check Meters
Individual, self-contained, line-powered devices installed directly on distribution conductors that are
used to measure and record Amps and Power Factor on the BC Hydro distribution network.
Deployment Control Centre (DCC)
An operations centre established by SMI Program Deployment team in order to provide centralized
support and effectively manage the multitude of activities involved in the meter deployment.
Disaster Recovery Capability (DRC)
Established duplicates of core SMI components to reduce the impact from a potential future disaster
impacting any location that hosts the production instances of SMI infrastructure used to receive
and/or process revenue meter reads for customer billing.
Distribution System Metering Devices (DSMD)
Devices that are used to measure and record a range of energy load flow and are necessary to
accurately maintain an inventory of energy across the BC Hydro grid. Examples include SCADA and
Check Meter devices used in support of advanced theft detection and Energy Analytics Solution.
Energy Analytics Solution (EAS)
Solution that combines theft analytics and energy balancing with business processes by using
information from different systems to automate timely identification of potential energy losses.
The EAS technology performed advanced analytics and modeling, and visualizes the results.
Energy Visualization Portlet (EVP)
BC Hydro customer portlet application that provides timely feedback on energy consumption and
encourages conservation behavior to achieve savings under the BC Hydro Power Smart program for
residential and commercial customers.
Home Area Network (HAN)
A data communication network contained within a premise that allows customers to use devices,
such as in-home-display (IHD) and home energy monitors (HEM) devices, to track a real time energy
use at home. These devises communicate with smart meters to display energy feedback in real-time
to the users.
In-home Display (IHD) or Home Energy Monitor (HEM)
An energy monitoring device that can help BC Hydro customers to save energy and money by
enabling them to see an electricity use in real-time, in kilowatts, and dollars and cents.
Internet Protocol Version 6 (IPv6)
Advanced networking protocol for smart meters and the metering network. It increases
communication responsiveness between BC Hydros systems and the smart meters.
Meter Data Management System (MDMS)
Software that supports the use of meter reads data obtained over the air by ensuring that data is
accurate, complete, and useable before sending the data into BC Hydros corporate systems

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Program Completion and Evaluation Report


December 21, 2016
Appendix J

Multi-Protocol Label Switching (MPLS)


The SMI Program deployed MPLS technology that provides a shared infrastructure for telecom
connectivity on a province-wide scale. The MPLS Wide Area Network (WAN) carries BC Hydro
Corporate Services traffic (email, phone and data) between offices, stations and data centres.
Supervisory Control and Data Acquisition (SCADA)
System primarily used to acquire data and perform supervisory control to operate the electrical grid.
For the purpose of advanced theft detection the system is also configured to acquire additional
measurement data to support Energy Balancing capabilities across distribution feeders using
distribution equipment (e.g. distribution and substation reclosers, substation relays, bus voltage,
underground switch gear, voltage regulators, capacitor banks).
WiMAX
BC Hydros own WiMAX network service used for smart meter collectors to transport data from nearly
one million smart meters throughout BC Hydro service territory. This service is occurring primarily in
areas where BC Hydro has established WiMAX networks that can be leveraged to reduce cellular
service costs.

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