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Published by Power System Engineering, Inc. Fall 2013 Keeping Up with System Protection System protection devices and schemes are important to utilities for many reasons, including their ability to: 1. Sectionalize the system by minimizing the outage area following the failure of a particular system component or permanent fault. 2. Minimize the number of permanent outages by automatically reclosing after temporary faults have been cleared. 3. Minimize hazards to both the general public and utility personnel. 4. Provide protection to distribution facilities from damage during fault conditions. 5. Improve overall system reliability by reducing outage minutes and blinks experienced by customers. Preparing a system protection study, commonly referred to as a sectionalizing study, is critical to ensuring that the protection devices and schemes installed on the system do indeed meet the intended objectives. Changes to the system such as substation or line upgrades, load growth, and distributed generation interconnections will have an impact on load and fault currents and affect the ability of existing protection devices and schemes to operate correctly for anticipated Announcements © 2013 Power System Engineering, Inc. (PSE) Continued on page 2 What’s New at PSE We continue to grow and are excited to add the following professionals to our staff. MN Office Jeff Ruschen – Engineering Technician OH Office Bobby Triplett – Engineering Technician WI Office Steve Hall – Senior Designer PSE chosen to speak: DistribuTECH’s 2014 Utility University (pre-conference courses) San Antonio, TX Monday, January 27 8 am - 12 pm Jim Weikert will present Enhanced Reliability and Demand Reduction with Distribution Automation. Monday, January 27 1 - 5 pm Rick Schmidt will present Replacement Alternatives for Your Aging Communications Infrastructure. Kansas Corporation Commission Approves “DSC Ratemaking” Pilot Plan On September 26, 2013 the Kansas Corporation Commission (KCC) approved an alternative ratemaking pilot plan for the Mid-Kansas Electric Company service territory served by Southern Pioneer Electric Company (Southern Pioneer). Termed “DSC Ratemaking,” the plan was submitted by PSE’s Rich Macke and will utilize a predetermined formula to assess whether the Southern Pioneer retail rates are in need of a rate increase or decrease based on Debt Service Coverage (DSC) performance each year. The five-year pilot plan is the first of its kind in Kansas and is expected to reduce regulatory/litigation costs, regulatory lag, and stabilize financial performance for Southern Pioneer. As a result, rates are expected to be more reflective of current costs and net income/margins will be largely decoupled from sales volumes. In his filed statement, KCC Chairman Sievers commented that, “Based on my review and experience with contested issues brought before the Commission in adversarial rate cases, I find the proposed protocols and plan to be well thought out and comprehensive. I commend the parties for the plan they have developed and very much hope to see similar collaborative, streamlining proposals in other cases.” Please reference KCC Docket No. 13-MKEE-452-MIS for further details. Submitted by Rich Macke – Vice President, Economics, Rates, and Business Planning [email protected]

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Keeping Up with System Protection

System protection devices and schemes are important to utilities for many reasons, including their ability to:

1. Sectionalize the system by minimizing the outage area following the failure of a particular system component or permanent fault.

2. Minimize the number of permanent outages by automatically reclosing after temporary faults have been cleared.

3. Minimize hazards to both the general public and utility personnel.

4. Provide protection to distribution facilities from damage during fault conditions.

5. Improve overall system reliability by reducing outage minutes and blinks experienced by customers.

Preparing a system protection study, commonly referred to as a sectionalizing study, is critical to ensuring that the protection devices and schemes installed on the system do indeed meet the intended objectives. Changes to the system such as substation or line upgrades, load growth, and distributed generation interconnections will have an impact on load and fault currents and affect the ability of existing protection devices and schemes to operate correctly for anticipated

Announcements

© 2013 Power System Engineering, Inc. (PSE)

Continued on page 2What’s New at PSEWe continue to grow and are excited

to add the following professionals to our staff.

MN OfficeJeff Ruschen – Engineering Technician

OH OfficeBobby Triplett – Engineering Technician

WI OfficeSteve Hall – Senior Designer

PSE chosen to speak:

DistribuTECH’s2014 Utility University

(pre-conference courses)

San Antonio, TX

Monday, January 27 8 am - 12 pmJim Weikert will present Enhanced Reliability and Demand Reduction with Distribution Automation.

Monday, January 27 1 - 5 pmRick Schmidt will present Replacement Alternatives for Your Aging Communications Infrastructure.

Kansas Corporation Commission Approves “DSC Ratemaking” Pilot PlanOn September 26, 2013 the Kansas Corporation Commission (KCC) approved an alternative ratemaking pilot plan for the Mid-Kansas Electric Company service territory served by Southern Pioneer Electric Company (Southern Pioneer). Termed “DSC Ratemaking,” the plan was submitted by PSE’s Rich Macke and will utilize a predetermined formula to assess whether the Southern Pioneer retail rates are in need of a rate increase or decrease based on Debt Service Coverage (DSC) performance each year. The five-year pilot plan is the first of its kind in Kansas and is expected to reduce regulatory/litigation costs, regulatory lag, and stabilize financial performance for Southern Pioneer. As a result, rates are expected to be more reflective of current costs and net income/margins will be largely decoupled from sales volumes.

In his filed statement, KCC Chairman Sievers commented that, “Based on my review and experience with contested issues brought before the Commission in adversarial rate cases, I find the proposed protocols and plan to be well thought out and comprehensive. I commend the parties for the plan they have developed and very much hope to see similar collaborative, streamlining proposals in other cases.”

Please reference KCC Docket No. 13-MKEE-452-MIS for further details.

Submitted by Rich Macke – Vice President, Economics, Rates, and Business Planning – [email protected]

Page 2 • PSE / / The Utility Edge

conditions. Over time, this affect could be quite significant. It is therefore important to continually stay on top of system protection.

Depending on the load growth of your system and construction activities, the timeframe in which system protection studies need to be completed will vary. In general, a good rule of thumb is to complete a detailed and thorough review every 5 to 10 years; however, waiting too long between reviews may leave areas of the system with poor reliability due to the inability of existing protection devices and schemes to properly protect the system. Therefore, any time a major change to the system is made, such as a substation being upgraded or a main line feeder being reconductored, the system protection in the area should be reviewed.

One strategy utilities should consider is reviewing system protection for a portion of the system each year. In this manner,

upgrades needed to accommodate changing system conditions are easier to handle from a budgetary perspective as well as from an implementation perspective. This strategy can be particularly effective if coupled with a recloser maintenance program. Every utility should have an established program to remove hydraulic reclosers from the field and perform recommended maintenance on a set cycle to keep them in good working order. During this process, it is much easier and more economical to review system protection in the area where maintenance is being performed and simply ensure the right recloser is being re-installed in the field.

Submitted by Jeff Triplett, PE – Utility System Consultant – [email protected]

Continued from page 1

Keeping Up with System Protection

“Your radio system is not as good today as it was yesterday.” This statement is true every day, since all radio systems degrade over time. With the high cost and increasing complexity of mission-critical wireless systems, preventive maintenance is becoming increasingly important. The goal of a preventive maintenance program is to reverse ongoing degradation before problems appear that could impact service.

The High Cost of Doing NothingNot performing regular preventive maintenance often means waiting until unplanned corrective maintenance must be completed, often when mission-critical equipment has failed and often at a safety risk to your personnel. While short-term savings might be gained by not maintaining the network, these savings will ultimately be outweighed by the high cost of outage time, premature equipment failure, and unplanned repairs.

What Does Preventive Maintenance Entail?Similar to a car, mission-critical communications systems, both wired and wireless, need periodic tune-ups. Typically, preventive maintenance involves performing basic checks every quarter, some more specialized tasks twice a year, and some in-depth checks once a year. These in-depth checks are usually the only checks that require specialized communications knowledge.

Quarterly checks comprise the majority of any preventive maintenance program. These tasks are mainly observational in nature and build the most valuable part of any maintenance program: site familiarity.

Knowing what normal operation looks like, sounds like, and even smells like is important. Does your technician know if a light is normally blinking, solid, or off? Does your technician know what

color that light is supposed to be, where a laptop can be plugged in, or how to log into the radio to test the system?

Preventive maintenance helps ensure that problems are recognized before they affect the network, and that in the event a repair is needed, your technicians are on familiar ground and know exactly what to do.

How to Get StartedPSE’s best practice for developing a comprehensive preventive maintenance program begins with creating a detailed list of all the equipment at each communications site. Then, we assemble the manufacturers’ maintenance recommendations, industry standards, and PSE’s best practice tasks that should be performed. Next, we customize a schedule and tracking form unique to your systems. Finally, we help you obtain the necessary tools and test equipment, train your technicians, and assist in finding local contractors to perform any maintenance tasks your technicians are not able to complete.

Submitted by Jon Powvens – Communications Consultant – [email protected]

Communications Network Preventive Maintenance

PSE / / The Utility Edge • Page 3

With recent large storms (Hurricane Sandy, for example) creating extended outages on the electric grids of major metropolitan areas, the question of whether the industry should be increasing its investment in infrastructure in order to reduce outages is a popular topic. Is the electric industry, at large, currently at the proper cost/reliability balance, or should distributors be spending more (or less) money to improve or maintain reliability?

Economic theory posits that the optimal position is when the costs of improving system reliability equal the benefits of avoiding outages. For the electric distribution industry to be at the proper equilibrium, this condition should be met. If the costs are significantly lower than the benefits, then the industry, as a whole, should spend more money to improve reliability; likewise, if the costs are significantly higher than the benefits, then less money should be spent.

Cost to Improve System Reliability: PSE gathered publicly available cost and reliability data that allowed us to estimate the average cost of improving system reliability by calculating the cost of avoiding a single outage. At the industry mean, avoiding an outage lasting an average of 90 minutes has a cost range of $250 to $500 per customer.

Benefit of Avoiding Outages: Using estimates published within a June 2009 report by the Lawrence Berkeley National Laboratory (LBNL), PSE estimated that a sustained 90-minute outage creates approximately $300 of economic damage for the average customer

(including residential, commercial, and industrial). Naturally, estimates of customer demand have a wide variance both within and between studies.

Based on an estimated cost to improve reliability of between $250 to $500 and the estimated benefit of avoiding $300 in damage, it appears the industry, as a whole, is close to an optimal cost/reliability equilibrium.

But how does your utility measure up? Are you spending too much or not enough? Is your reliability target optimal given the conditions faced by your utility? It is important to calculate customized reliability and spending targets in order to get a clear picture of your utility’s unique cost/benefit ratio. This ratio can then be benchmarked against the industry norm. This valuable information can help you make the smartest decisions when it comes to how much you should be spending on system reliability.

Submitted by Steve Fenrick – Leader, Benchmarking and Economic Studies – [email protected]

ASK PSE A QUESTIONIs My Utility Spending Too Much or Not Enough on System Reliability?

Next to providing reliable electric service at the lowest reasonable cost, a major goal of many electric utilities is to establish a trusting relationship with its customers and nearby communities. Trust goes a long way when it comes to explaining rate changes, marketing new products and services, and answering billing questions. Good communication and a knowledgeable staff are essential to achieving that trust. To that end, PSE offers In-House Rate Seminars as an economical and effective way to develop and educate staff.

Successful CEOs and managers place high value in educating their staff, but it can be challenging due to both time constraints and expense. Making sure your staff is well-versed in rates is particularly important because it is fundamental to business. Not only are rates the basis for the majority of the utility’s revenues, but they also define the core services provided. Hence, it is important for employees who have contact with customers on a day-to-day basis (both in and outside the office) to be knowledgeable on the topic of most concern to those customers—their electric bill. Customer service and key account staff benefit greatly from a deeper grasp

of how rates are determined and applied, allowing them to discuss billing concerns with confidence, which in turn helps instill trust.

PSE’s In-House Rate Seminar offers a convenient, affordable, and customized educational opportunity. Conducting a seminar onsite at your office location allows for wide participation, making it very cost-effective. The content is tailored to your situation and focused on the particular needs of those attending. The seminar also provides continuity and consistency in that each employee is hearing the same information and can benefit from Q&A, examples, and classroom discussion with their co-workers.

For additional information or to schedule a seminar, please contact:

Jeff Laslie – Senior Financial Analyst in our Indianapolis [email protected] or 371-322-5906.

Rich Macke – Vice President, Economics, Rates, and Business Planning in our Minnesota [email protected] or 763-783-5349.

PSE Offers In-House Rate Seminars

Page 4 • PSE / / The Utility Edge

Trending: Hybrid Fiber and Microwave Communications Backbone

When it comes to selecting backbone technologies, PSE and our clients are trending toward a hybrid approach. Given the increased use of utility-owned fiber optics (and the corresponding expense), a combination of technologies—both fiber optics and point-to-point microwave— often provides the most cost-effective solution.

While having two backbone technologies can increase the need for administrative oversight, the cost savings and synergies of a hybrid approach can often justify the extra maintenance. For example, the substation and office network devices can be the same for both fiber and microwave networks. In addition, microwave tower sites can be used to complement AMI and DA programs that use wireless communications to reach take-out points and DA feeder sites. Locating master radios on the backbone can reduce backhaul costs for these programs.

How do you know if a hybrid approach is right for you? Often, utilities evaluate the network site-by-site and make the decision between fiber and microwave at each location based on cost. But designing a hybrid system that is sure to function seamlessly across the backbone requires careful and comprehensive planning.

The steps for assessing a hybrid fiber and microwave network include:

Developing a Long-Range Communications PlanMany of PSE’s engagements start with a long-range plan that satisfies the utility’s voice, data, video, and customer broadband needs. These plans usually include upgrading backbone communications to substations as well as extending backhaul communications to field locations for DA, AMI, and LMR. Establishing a long-range plan helps clarify, right at the start, whether a hybrid network will meet your present and future needs.

Comparing Fiber and Wireless CostsA conceptual fiber network design is developed, and route miles are estimated for each site. For the microwave analysis, path studies are required for each link to determine feasibility at reasonable tower heights.

Designing Hybrid Fiber and Microwave NetworkFiber route staking and a detailed fiber network design must then be completed for all links where fiber is the preferred technology. For all sites where microwave is preferred, field work must be completed, including tower inspections and physical path studies.

Selecting Routing and Switching EquipmentFinally, the utility must select the routing and switching equipment that interfaces with the automation applications and office enterprise locations while also addressing NERC/CIP cyber security requirements.

Once the backbone media is selected, and the design and deployment are complete, adding layers for applications that will “ride the backbone” becomes much more cost effective and scalable.

Submitted by Rick Schmidt – Vice President, Utility Automation and Communications – [email protected]

PSE Contributes to School Supply DrivePSE – Madison Office

In mid-August, our Madison office supported the River Food Pantry by participating in their school supply drive. Besides a monetary donation, we donated several boxes of much-needed school supplies.

PSE / / The Utility Edge • Page 5

Who’s Evaluating Third-Party Communication Attachments to Your Poles?Third-party communication attachments to overhead power poles is nothing new for electric utilities; however, in a deregulated telecommunications market with advancements in fiber technology and demand for high-speed internet, a new group of competing entities want to benefit by attaching aerial fiber and cable to electric utility poles.

Over the last few months, PSE has ramped up its support to clients in reviewing proposed third-party attachments and identifying make-ready work utilities must complete in order to accommodate those attachments. Whereas utilities had historically dealt with one or two third-party attachments, they are now faced with three or four, which creates significant incremental loading on poles as well as a complex array of clearance scenarios that need to be verified for compliance of the National Electrical Safety Code (NESC). To compound these matters, a number of these new entities do not have an engineering background or experience with aerial cable and fiber, nor do they fully understand all of the provisions in the NESC. This lack of expertise has caused some issues when these entities are allowed to assess the level of required make-ready work on their own.

Two common misunderstandings of the NESC are related to vertical clearances between the communication attachments and supply conductors

as well as vertical clearances of the lowest communication attachment above earth and over roads. As a result, some third-party attachments have resulted in NESC compliance issues when taking into account the sag characteristics of power supply conductors

and communication cables. Resolving these issues after the attachments are completed can be costly and challenging for both the attaching party and the electric utility. Therefore, it is in everyone’s best interest that a proper assessment be conducted before the attachments are made.

We encourage our clients to review their pole attachment application process and specifically the quality control methods associated with NESC compliance. If applicants are allowed to conduct self-assessments, it is important to verify their understanding of the NESC and possibly require a licensed professional engineer, who is qualified to assess third-party attachments, to sign off on the application before any attachments are allowed.

Submitted by Erik Sonju, PE – Vice President, Power Delivery Planning and Design – [email protected]

Services OfferedPSE is a full-service consulting firm, and we have been helping utilities succeed for over 35 years.

Our services include:

We are employee-owned and independent, which gives our clients confidence that we are motivated to satisfy their needs and represent their best interests.

For a complete list of services, please visit our website.

www.powersystem.org

n Communications, IT, and Automation Planning and Design

nEconomics, Rates, and Business Planning

nElectrical Engineering Planning and Design

nProcurement, Contracts, and Deployment

Published by Power System Engineering, Inc.

Inside this issue:Keeping Up with System Protection .......................... pg. 1

Kansas Corporation Commission Approves “DSC Ratemaking” Pilot Plan .................................... pg. 1

Communications Network Preventive Maintenance ................................................................ pg. 2

Ask PSE a Question: Is My Utility Spending Too Much or Not Enough on System Reliability? ............ pg. 3

PSE Offers In-House Rate Seminars ........................ pg. 3

Trending: Hybrid Fiber and Microwave Communications Backbone ...................................... pg. 4

PSE Contributes to School Supply Drive .................. pg. 4

Who’s Evaluating Third-Party Communication Attachments to Your Poles? ...................................... pg. 5

Email [email protected] with questions, comments, or for more information.

PSE Office Locations:

Madison, WI – (608) 222-8400

Minneapolis, MN – (763) 755-5122

Marietta, OH – (740) 568-9220

Indianapolis, IN – (317) 322-5906

Sioux Falls, SD – (605) 221-1770

Visit our website for more information

www.powersystem.org

Power System Engineering, Inc.1532 W. BroadwayMadison, WI 53713

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