ICE Calculator Case Study: CMP Distribution Automation

In a recent rate case, Central Maine Power (CMP) proposed distribution automation investments for substations and line reclosers throughout its service territory (around 500,000 customers). CMP projected that these investments would reduce CAIDI from 2.00 hours/year to 1.96 hours/year through a 15-minute reduction in duration for all outages affected by distribution automation investments. CMP articulated the benefits of these investments to regulators in part by quantifying how incremental improvements in reliability would provide value to CMP customers by reducing customer outage costs.

Avoided utility restoration costs were considered to the extent that automation may reduce headcount or overtime hours, but these utility benefits were found to be small relative to customer benefits and were not included in the rate case filing. Avoided customer outage costs were estimated using the 2009 Interruption Cost Estimate (ICE) econometric models, the development of which was funded by the Department of Energy (DOE) and Lawrence Berkeley National Laboratory (LBNL). These models were also a core input into the development of the ICE Calculator, which was also funded by DOE and LBNL. This analysis estimated that for the first 6 years of the automation investments, the net present value of the customer reliability benefits was $20.7 million. This benefit was more than twice the net present value of the levelized investment cost ($10.1 million) for the first 6 years of the 20-year asset lifetime (not including the communications costs that were already incurred as part of its AMI deployment). The Maine Public Utilities Commission (PUC) ultimately approved the capital expenditures in CMP’s distribution automation investment proposal.