DISTEUBUTION AUTOMATION:

How Should It Be Evaluated?

Donald Gruenemeyer
Resource Management International, Inc.

ABSTRACT

A Distribution Automation (DA) System enhances the efficiency

and productivity of a utility. It also provides intangible
benefits such as improved public image and market advantages.
A utility should evaluate the benefits and costs of such a
system before committing funds. The expenditure for
distribution automation is economical when justified by the
deferral of a capacity increase, a decrease in peak power
demand, or a reduction in O&M requirements.

Distribution Automation Systems have been defined by the Institute of Electrical

and Electronic Engineers (IEEE) as systems that enable an electric utility to
monitor, coordinate, and operate distribution components in a real-time mode from
remote locations. The DA System is modular and may be implemented in phases
to include remote monitoring and control of substation, feeder and consumer
devices, and loads. The overall goals of distribution automation are to:

Reduce costs
Improve service reliability
Provide better consumer service
Enhance govenunent relations

The successful implementation of the DA System results in:

Deferred capital expenditures

Reduced operations and maintenance expenses
Improved outage response and restoration
Enhanced system efficiencies
Enhanced consumer satisfaction
Improved data and information
Positive Public Image

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 The successful implementation of the DA System does NOT:

Prevent outages
Alleviate the need for a sound maintenance program
Replace good operating practices
Eliminate the need for appropriate planning

As utility managers and engineers interested in effective approaches to increasing

efficiency and productivity, the latest "high tech' developments must be
continuously reviewed by the utility. Increased competition has led large, existing
and potential commercial consumers to carefully evaluate both the direct cost of
electric service and the monetary value of reliable electric service. These activities,
in conjunction with increased awareness by residential consumers of even the
shortest loss of electric service, have resulted in increased emphasis by regulatory
agencies in quantifying the ''cost'' to consumers of outages. It is important to
identify the costs and benefits of each project, including the value of improved
reliability to the consumer. This information can be used to facilitate prioritization
in the use of the utility's limited resources. This paper addresses the key question:
"What factors should the utility consider when trying to determine the benefits and
costs of distribution automation?"

BENEFITS OF DI!S"WBUTION AUTOMATION

Since distribution systems and associated operating costs vary among utilities, as
do the priorities and value of desired benefits, each proposed project should be
evaluated to determine the cost of functions which could provide the desired
benefits. Identifying and, to the extent practical, quantifying the expected benefits
are important in developing the system design.

Though not all DA's benefits can be quantified, they are nevertheless valuable to
utilities. An enhanced public image from shortened restoration times during
emergency conditions and better information for planning are examples of the
benefits that cannot be quantified, but are high priorities with utilities, regulatory
authorities, and certain consumers. In determining whether or not to proceed with
a distribution automation project, a utility should identify both the consumer's and
utility's needs, assess the value - quantitatively and qualitatively - of the expected
benefits, and quantify the expenditures necessary to achieve those benefits.

In most cases, the installation of a system requires a large capital investment.

Those projects that can be justified on the basis of economics typically result in the
deferral of capital projects or significant reduction in O&M requirements including
purchased peak power requirements.

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 The best prospects for expecting net benefits from DA are utilities which:

- will require additional generation, transmission, or substation

facilities or circuit capacity;
have areas or loads which require high reliability;
have areas with diverse loads;
have areas with unusually high losses;
have areas with significant voltage problems;
have many remote or inaccessible meters; and
have a high rate of turn on/turn off requests.

Traditional planning methods are used to develop alternate plans to serve the
future load within the desired service parameters. To determine costs, benefits,
and resultant savings, comparable plans should be developed both with and
without DA. More than one plan using DA may be developed to look at the
impact of varying DA components and functions on the net benefits achieved.

DA systems can be installed in stages to meet the changing needs of an area

and/or to spread out the capital investment over several years. A critical
consideration when specifying equipment for the initial modules is how that
equipment will ultimately be integrated into the completed system as well as other
information systems, planned or in place.

The three distinct modules of a DA system are:

SUBSTATION AUTOMATION;
FEEDER AUTOMATION; AND
CONSUMER LOCATION AUTOMATION.

SUBSTATION AUTOMATION

Substation automation includes supervisory control of circuit breakers, load tap

changers (LTCs), regulators, and substation capacitor banks. Remote data
acquisition is required in order to achieve effective use of the supervisor control
function.

The potential benefits of substation automation are:

deferred capital expenditures;

reduced O&M costs;
consumer savings;
improved consumer and governmental relations;
market advantages; and
better information for planning & engineering.

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 Deferred Capital Expenditures

Deferral of capital expenditures is achieved through more efficient use of

substation facilities. By controlling circulatingcurrents and improving voltage/var
profiles, additional capacity is freed for consumer loads. Overloading of substation
transformers and the resultant loss of life can be minimized due to the availability
of real time data. If a utility can postpone capital expenditures for additional
capacity, the savings are readily quantified. The present value of the deferred
capacity requirements for substation, transmission, or generation facilities is
calculated for each alternative plan. For the plans with DA, the present value of
the capital required to install the DA system must be included.

Reduced O&M Costs

Lower O&M costs typically result from the reduced time required to remotely
operate breakers and LTCs. Additional savings are realized from remote relay
testing and setting, data collection and analysis, and testing of data logging devices
because fewer trips to the substation are required.

This annual savings can be calculated for each function by multiplying the
reduction in the number of required trips each year by the cost per trip. The net
present value of these savings over the study period is then calculated.

Consumer Savings

Improved restoration time results in consumer savings. These savings are in the
form of avoided outage costs for the consumer. The value each consumer places
on these avoided costs varies, but is consistent within each consumer classification:
industrial, commercial, residential and agricultural. Utilities and regulatory
commissions have begun to consider the value that consumers place on reduced
outage time in the economic evaluation of capital projects. It is anticipated that
in the future regulatory commissions will follow the lead of European utilities and
include these social costs in evaluating a utility's projects. The emerging concept
of value of service (VOS) is discussed in Value Based Planning for Electric
Utilities" by Roger D. Levy and Arun P. Sanghvi submitted to the California Energy
Commission, December 12, 1986; and "Incorporating Customer Value of Service
into Reliability Project Justification" by J. R. Sender presented to Edison Electrical
Institute Distribution System Design Task Force, October 19, 1988. The VOS
associated with the saved outage time that is used in the economic evaluation is
typically expressed in $/kwh for each consumer classification.

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 Improved Consumer and Governmental Relations/hdarket Advantages

In a competitive marketplace where a consumer can choose electric suppliers, the

supplier with higher reliability and faster restoration times has a real advantage.
Installation of a distribution automation system is specific evidence for regulatory
and financing agencies that the utility has a program to improve service reliability.

Better Information for Planning and Engineexing

Real-time data provides accurate load and system parameters. This information
can be used to more accurately plan future system reinforcements and
configuration.

FEEDER AUTOMATION

Feeder automation includes data acquisition and supervisory control of line

equipment; reclosers, regulators, capacitors, sectionalizers, and switches. Remote
monitoring of the status of fault indicators and analyzers can also be included.

The benefits of circuit feeder automation include:

deferred capital expenditures

reduced operation and maintenance costs
consumer savings
increased revenues
improved consumer and governmental relations
market advantages
better information for planning and engineering

Deferred Capital Expenditures

Remote monitoring and switching to balance load between feeders reduces losses.
It also permits increased utilization of existing substation and feeder facilities
which should result in deferral of requirements for additional generation,
transmission, substation, and feeder facilities.

In order to quantify this benefit, the present value of the deferred capacity
requirements are calculated. For each plan that includes installation of a DA
system, the present value of the capital expenditures required to install that system
is included.

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 Reduced Operation and Maintenance Costs

Reduced O&M costs are due mostly to the reduced time required for the following
functions:

fault location and isolation

feeder reconfiguration
service restoration
switching operations
recloser setting and testing
data collection
capacitor bank inspection

The cost savings are calculated by specific function. These annual savings are
calculated by multiplying the reduction in the number of required trips each year
by the cost per trip. The net present value of these savings over the study period
is then calculated.

There are fuel cost savings from reduced losses. Even though these costs are
passed through to the consumer, the present value of these savings are calculated
and should be considered in the benefit analysis.

Consumer Savings

Improved restoration time has a value to consumers. The VOS associated with
these savings should be included in the economic evaluation of a DA project.

Increased Revenues

The ability to isolate and restore service quickly when an outage does occur results
in increased revenues. The increased revenues are the result of decreased outage
time.

Improved Consumer and Governmental Relations

Market Advantages
Better Information for Planning and Engineering

The ability to respond more quickly to outages and other abnormal system
conditions reduces consumer complaints and enhances both consumer and
governmental relations. Improving restoration times provide market advantages.
Real-time data provides better information which assists operations, engineering
and planning.

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 CONSUMER AUTOMATION

Automation at the consumer's location includes the ability to remotely: read

meters, program time-of-use (TOU) meters, connect/disconnect services, control
consumer loads, and send TOU signals. The expected benefits from automating
consumer locations are:

deferred capital expenditures

reduced O&M costs
increased revenues
improved consumer satisfaction
better information for planning and engineering
market advantage
improved public image.

Deferred Capital Expenditures

Through load management and TOU incentives, customer peak demand is reduced
and the need for additional facilities is deferred. The present value of the deferred
capacity requirements is used to quantify this benefit.

Reduced Operation and Maintenance Costs

Operation and maintenance costs are reduced through reduced labor requirements
for meter reading, reprogramming of meters, service connects/disconnects, and
processing of consumer claims. The savings are calculated by determining the time
saved for each task, the number of times each task is performed, and the cost to
perform each task. These factors are multiplied for each task then summed to
determine the total savings. The present value of the savings over the study
period is calculated.

Savings are initially realized in decreased purchased power costs resulting from
regulatory lags and rate design practices. These savings are the result of reduced
peak demand due to load management and TOU programs. They should be
considered to be highly transitory in nature and are more conservatively
represented as deferred capital investment for peaking generation. The present
value of a short term decrease in power costs may be considered a benefit of
consumer automation.

Increased Revenues

Increased revenues are the result of improved tamper detection. Quantifying the
increased revenue involves estimating the revenue impact of theft aversion and
calculating the present value of these additional revenues.

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 The reduced time to connect/disconnect services following a request improves
consumer satisfaction, provides a market advantage, and enhances the utility's
public image. The real time load data at the consumer's location provides better
information for planning and engineering. The added value of these
unquantifiable benefits should be considered when evaluating consumer
automation.

COSTS OF DISlWBUTION AUTOMATION

The costs that are presented here are to help the reader understand the magnitude
of the costs of installing an automated distribution system. They are not intended
to represent the costs any utility will actually incur for a DA system. The size of
the utility, the type of communication facilities installed, how many functions in
the system are being automated, the data desired, the control functions selected,
and the ultimate design of each system will all affect the cost of a DA system.

Substation Automation

Typical range of costs:

SCADA Master Station Hardware $60,000 to 100,000

SCADA Master Station Software 40,000 to 90,000
Communications per substation 18,000 to 40,000
System Installation and Startup 40,000 to 100,000
Circuit Breaker Automation per breaker 8,000 to 12,000
Load Tap Changer (LTC) Automation per LTC 7,000 to 10,000
Annual O&M (% of capital and installation cost) 12 to 20

Feeder Automation

It is assumed that substation automation is already in place or is being

accomplished in conjunction with feeder automation. Therefore, no costs are
included here for the SCADA Master Station hardware and software. The only
SCADA costs included here are the incremental costs to develop and install the
feeder functions.

Typical range of costs:

SCADA System and Applications Software $40,000 to 90,000

Installation and Startup 20,000 to 50,000
Overhead Switches (retrofit) 6,000 to 12,000
Underground Switches (new) 20,000 to 25,000
Reclosers (retrofit) 9,000 to 15,000
Annual O&M (Yo of capital and installation) 12 to 20

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 Consumer Automation

Typical range of costs:

Master Station Hardware $30,000 to 150,000

System and Applications Software 10,000 to 50,000
Installation, Testing, Startup, and
Training for Master Station 10,000 to 50,000
Installed Meter per meter 150 to 300
Communications per meter 25 to 50
Annual O&M (% of capital and installation costs) 12 to 20

BENEFIT/COST ANALYSIS

The economic analysis of any DA project should include a comparison over the
study period of the present value of the total benefits to the present value of the
total costs. Typically those projects and functions that have a ratio of benefits to
costs greater than one are economically justifiable. The role of unquantifiable
benefits or costs becomes more significant when comparing projects with similar
benefit/cost ratios or benefit/cost ratios less than one.

For each DA module, the following benefit/cost analysis is developed for the study
period:

PRESENT VALUE OF TOTAL BENEFITS

PRESENT VALUE OF TOTAL COSTS

The benefit/cost analysis for substation automation:

Deferred Investment + Reduced O&M Costs + VOS

SCADA Installation Cost + Field Equipment Cost + O&M Costs

The benefit/cost analysis for feeder automation:

Deferred Investment + Reduced O&M Costs + VOS

SCADA Incremental Cost + Field Equipment Cost + O&M Costs

The benefit/cost analysis for consumer automation:

Deferred Investment + Reduced O&M Costs + Increased Revenue

Base Station + Meter Costs + O&M Costs

Before completing the benefit/cost analysis, a sensitivity analysis should be

performed to determine the impact of factors whose accuracy cannot be

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 determined. Some good examples of factors with a high degree of uncertainty are
timing of a capacity increase, estimates of operational savings, or the real life cycle
of DA systems. The sensitivity analysis indicates the change in benefit/cost ratio
due to a change in a single assumption or variable. The level of confidence in a
study is determined by the outcome of this analysis. For those projects that are
justified on the basis of a specific benefit, it is particularly important to do a
sensitivity analysis of the variables used to calculate the benefit in order to
estimate the probability of achieving the desired benefit. Plans which indicate
small changes in the cost/benefit ratio for a large number of variables may be the
more desirable during periods of high uncertainty.

SUMMARY

Distribution automation can provide net benefits for utilities, but determination of
the benefits of a particular project cannot be made without a detailed comparison
of the proposed project and alternatives. The study should quantify benefits and
costs where possible. The unquantifiable benefits should be utilized along with the
utility's analysis of uncertainty when selecting among alternative plans offering
similar quantifiable benefits.

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 DISTRIBUTION AUTOMATION: HOW SHOULD IT
BE EVALUATED?

Donald Gruenemeyer
Resource Management International, Inc.

Paper No.

91CH3002-3- 1 CH3002-3/9 1/0000-0018$0 1.00 @ 199 1 IEEE

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