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NASHVILLE ELECTRIC SERVICE |
Association for Financial Professionals
March 2012
NASHVILLE ELECTRIC SERVICE |
Introduction
• Overview of NES• Compliance/Regulation Summary• Electric Vehicles• Electric Rates• Smart Grid• Funding of Underground Utilities
NASHVILLE ELECTRIC SERVICE |
Overview of NES
NES is the 12th largest public power electric distributor in the United States.
• Approximately 360,000 customers • 1,000 employees• $1.2 Billion in annual revenues• Largest taxpayer in Metro Nashville with in-lieu-
of taxes of $26.3 million last year
NASHVILLE ELECTRIC SERVICE |
Overview of NES
NES’ service territory includes nearly all of Davidson County and
portions of six surrounding counties; it
contains about 700 square miles.
NASHVILLE ELECTRIC SERVICE |
Overview of NES
NES has no generating capacity and purchases its entire supply of power from the Tennessee
Valley Authority (TVA) under long-term contract.
About 80% of all electric revenue received by NES is passed on to TVA for power costs.
NASHVILLE ELECTRIC SERVICE |
Customers % kWh
Sales
% Total Operating
Revenue
Residential Customers 320,000 40.50% 42.30%
Commercial & Industrial Customers 40,000 59.50% 57.70%TOTAL: 360,000 100.00% 100.00%
Service Area Makeup
NASHVILLE ELECTRIC SERVICE |
Compliance/Regulation
TVA’s Role as Regulator
• Rates
• Use of Revenues
• Cash Reserves
Renewable Portfolio Standards
North American Reliability Corporation
Electric Vehicles
NASHVILLE ELECTRIC SERVICE |
• NES has been an integral part of the Electronic Vehicle (EV) movement here in Middle Tennessee.
• NES is an original member of the Tennessee Governor’s Zero Emission Vehicle Partnership with Nissan.
• We have partnered with TVA and EPRI to study the impact of plug-in electric vehicles on the electric distribution system.
NASHVILLE ELECTRIC SERVICE |
Rates
TVA’s New Rate Structure • An effort to reduce peak power demand
throughout the region• Wholesale rate options• After extensive research and a thorough customer
impact analysis, NES selected a rate that provides stability and helps avoid an immediate rate increase
NASHVILLE ELECTRIC SERVICE |
Rates
TVA’s New Rate Structure - Impacts• Need for higher cash reserves• Confusion for our customers
– Higher rate in summer and winter when fuel costs are higher—June through September and December through March
– Lower rates in transition months—April, May, October, November
• Need for better data and more control
Grant from TVA for Pilot Projects• Advanced Voltage Management
–Voltage reduction results in a reduction in total power–Approx. 700 meters will monitor system voltage
• Direct Load Control–Commercial Rooftop HVAC–Commercial and Residential Water Heaters
• Critical Peak Pricing–Voluntary load reduction/conservation
Smart Grid
• What Do We Hope to Accomplish?– Install 30,000 new meters at key points in the NES
service area
– Reduce a total of 52 megawatts (MW) of peak demand on the NES system
• 40 MW through voltage reduction
• 10 MW using direct load control devices
• 2 MW through critical peak pricing rates
Smart Grid Project Goals
Benefits to NES•Accurate system information•Improved system reliability and power quality•Dynamically manage system load
Benefits to the Customer•Meter readings done remotely•Better for the environment•Lights coming on sooner after an outage
Benefits of Upgraded Meters
NASHVILLE ELECTRIC SERVICE |
Smart Meters
Conversion to Smart Meters• Transition toward time of use• Demand response• Automatic detection of problems; enhanced ability to correct
problems• Better prediction of energy usage
Concerns• Privacy, particularly in light of open records• Radio frequency
NASHVILLE ELECTRIC SERVICE |
Underground Utilities
Current Policy on Underground Utilities•Conversion projects are funded by the requesting party•Allowances for new construction are revenue-based•Conduit and excavation cost is borne by the developer during new construction•Underground services are provided at no additional charge
NASHVILLE ELECTRIC SERVICE |
Underground Utilities
Converting System to Underground•Disregarding lighting costs, customer wiring and other utilities, NES estimates the cost to be $7,000+ per residential customer•Based on an estimated 320,000 residential customers, the total cost would be $2.25 billion
NASHVILLE ELECTRIC SERVICE |
Underground Utilities
New Construction•Distribution conductor – 13 times more expensive•Service conductor – 2 times more expensive•Transformer – 1.4 times more expensive
Music City Center
• A tunnel was built to place high-voltage transmission lines underground downtown.
• In 2011, we completed the relocation of a downtown substation that was required to be moved due to the construction of Nashville’s new Convention Center.
• The new Peabody Substation was constructed with state-of-the-art equipment and is designed to be completely enclosed upon completion of the project.
NASHVILLE ELECTRIC SERVICE |
Partially Completed Tunnel
Architectural Rendering of Enclosed Peabody Substation
QUESTIONS?
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