Interconexión monolítica Procesos P1, P2 y P

This section outlines the CBA assumptions on the incremental smart metering IT systems costs that Bord Gáis Networks (BGN) will need to bear to support the introduction of gas smart meters. It does not include the additional incremental communication and meter data management system (MDMS) costs that ESB Networks (ESBN) will need to bear to support the introduction of gas smart meters, which is addressed later in Section 3.2.4.

The introduction of smart metering will obviously lead to a huge increase in the volume of gas metering data to be validated and processed by BGN for market- settlement purposes. It will also lead to new functional requirements including:  Extracting the gas smart metering data from the ESBN head-end and MDMS

systems, and storing the smart metering interval data;

 Validating the data and converting it into the required format for the market- processing systems (e.g. summarising the data into daily, monthly data- formats etc);

 Processing, filtering and prioritising the alarm and event data, and forwarding it to asset management and work-order systems for follow-up actions (as required);

 Executing shipper requests, e.g. remote disablement of meters, and re- enablement of “locked meters”, change of billing status (i.e. switch from credit to PPM);

 Managing set-up and configuration data for the gas smart meter, e.g. deploying firmware upgrades, updating shipper tariff data as required etc; and  Ensuring that the gas meter database is kept up to date and fully

synchronised with the corresponding ESBN electricity meter communication hub database (for device authentication, data protection and work- management purposes).

It will be necessary for BGN to purchase a separate MDMS system to manage all this additional functionality for gas meters, and to integrate it with both the ESBN MDMS system and the gas market systems using:

 B2B (business-to-business) interfaces between the ESBN and BGN MDMS systems, and the BGN MDMS and the web-based data portal; and

 A2A (application-to-application) interfaces between the BGN MDMS and the market facing CIS and market messaging systems, and between the BGN MDMS and asset management systems – i.e. MAXIMO and GIS etc.

It will also be necessary to implement a web-based data portal to allow customer access to the gas smart metering data. Finally it will be probably necessary to implement a new CIS system to replace the existing IUS legacy system, i.e. it

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would be more cost-effective to build a new system to deliver the smart meter functionality rather than upgrading an old legacy system.

The detailed smart metering IT systems costs assumptions are outlined under the categories below in the followings sections:

 MDMS

 Web-Based Data Portal  IT Deployment Support  Market Systems

 Programme Management

Table 12 below gives an overview of the smart metering IT systems costs assumptions included in the CBA model.

Table 12: Smart metering IT systems - All Scenarios

Capital cost Opex

Total licence costs 2.5 €/meter (one-off) 0.5 €/year/meter

MDMS Licence fee 1.5 €/meter (one-off) 0.3 €/year/meter

Hardware and application

support cost 8,560,000 € (one-off) 121,904 €/year

System implementation 4,000,000 € (one-off) €/year

System hardware 3,360,000 € (one-off) €/year

A2A Interface 1,200,000 € (one-off) €/year

Other CIS OPEX (Application

and hardware support) € (one-off) 0 €/year

Other MDMS OPEX (Application and hardware support)

€ (one-off) 121,904 €/year

Capital cost Opex

Other costs 5,900,000 € (one-off) 277,142 €/year

Web-based data-portal 1,000,000 € (one-off) 80,000 €/year

IT deployment support 1,000,000 € (one-off) €/year

Market systems 3,900,000 € (one-off) 197,142 €/year

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Meter Data Management System (MDMS) Costs

 The CBA model assumes the following costs related to MDMS licence fees: o CAPEX: €1.50 per gas meter. This assumption is based on the MDMS

licence costs established through confidential discussion with clients and vendors for the electricity CBA.

o OPEX: €0.30 per gas meter per year. This value has been calculated as 20% of total licence fee (€1.50). It covers ongoing maintenance and support and has been determined through confidential discussions with clients and vendors for the electricity CBA.

 The CBA model assumes a gas MDMS system implementation cost of €4m (CAPEX). This figure is within the range identified in the electricity CBA for the implementation of a MDMS of a similar scale (€3m - €6m). The cost incorporates MDMS vendor support, systems integrator costs and internal IT resources. Costs also include the interfaces to the ESB Networks MDMS, data portal and security.

 The CBA model assumes the following costs related to MDMS system hardware costs:

o CAPEX: €3.36m, which includes system hardware costs and hardware refresh costs. Hardware costs can vary considerably depending on specification of resilience. The initial hardware investment included in this estimate (€1.86m) is in line with a the value assumed for the electricity CBA, scaled down to reflect the lower number of meters this system will have to support.

o OPEX: €2.56m (€121,904 per annum), which is at the lower end of the range established as part of the review of the inputs to the electricity CBA. This is due to two main reasons. First, the cost of hardware refresh in this case has been assumed to be part of the CAPEX. Second, in the case of gas smart meters, the MDMS acts mainly as a data repository, so it less mission critical: this reduces costs.

 The CBA model assumes a cost of €1.2m (CAPEX) for the application-to- application (A2A) interface, which includes the customer interface system (CIS), market messaging systems and asset management systems, such as Maximo and GIS. When combining this cost assumption with the system implementation costs above, it is still within the range established as part of the electricity CBA.

Web-Based Data Portal Costs

 The CBA model assumes the following costs related to Web based data portal costs:

o CAPEX: €1m for the incremental costs for the Web portal which assumes that it will be primarily a data-presentation portal and will not support more advanced functionality such as pre-registration of HAN devices etc. This is based on the cost assumed in the context of the electricity CBA and concurs with Web portal costs for similar solutions internationally, based on designing and implementing an “incremental”

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web portal, held on an existing system. The lower initial licence fee associated to the lower number of gas meters for which data is being made available is likely to be offset by the increased complexity of building a single user interface for both gas and electricity.

o OPEX: €80k per year (€1.44m total) for Web portal ongoing costs, which is comprised of €40,000 p.a. of licence costs (20% of the licence element of the total cost), €15,000 p.a. for hardware support and an €22,000 p.a. for an incremental 0.25 FTE (€88,000 p.a.) resource to support the portal’s Web user interface over the corporate IT support. Total amounts to €77,000 p.a., rounded up to €80,000 p.a. to capture some uncertainty surrounding the actual FTE time required.

IT Deployment Support Costs

 The CBA model assumes a cost of €1m (CAPEX) for IT support of meter deployment:

o This is intended to support the co-ordination of the deployment of gas meters with electricity meters, as well as for managing the authentication of gas meters.

o The cost includes provision of handheld terminal for the meter installers to support provision of exchange of passwords and systems to support the exchange of passwords and electronic keys between ESBN and BGN. The cost of ruggedized handheld terminals is assumed to be €3,000 each as established in the electricity CBA. A refresh of the handheld technology halfway through the rollout period is assumed, to support business as usual smart meter installations. In total a cost of €0.65m is assumed. There will also be some system costs.

Market Systems Costs

 The CBA model assumes the following cost allowances for gas market system changes, which would be required to deal with increased data volumes and to move to a near real-time access to the smart metering infrastructure. BGN have stated that its existing market systems will need replacing, but that the deployment of smart gas meters will bring forward by 2 years that upgrade activity and enhanced functionality. These costs are BGN’s estimate of the incremental costs associated with supporting the move to smart metering.

o CAPEX: €3.9m (€121,904 p.a.) which includes €1/meter initial licence cost for the incremental functionality in CIS to support smart gas meters and €3.3m for system implementation and hardware. These costs compared reasonably with international comparisons.

o OPEX: €4.14m (€197,142 p.a.) which includes application support and hardware support, and assumes annual licence costs of 20% of

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CAPEX, in line with the general commercial approach to costing licences assumed in the CBA.

Programme Management Costs

The detailed design, procurement, implementation and rollout of smart-meters and new IT systems will require considerable project and programme management support. It is assumed that a project team will be established to manage the rollout (see Figure 14 below). The project will include a programme management team and various work-streams to manage the following phases of the rollout:

Figure 14: Overview of Programme Timetable (Fast Rollout)

 Project planning and product selection (assumed 18-months): Refining the smart-meter business case, developing initial work-plan and schedule, defining requirements and target architecture solution, commencing procurement, technology and system integrator (SI) selection, and negotiating and signing off initial contracts;

 Pre-deployment planning: Refining business case (assumed 18-months), work-plan and schedules, commencement of meter and WAN communication testing, finalising technology and SI selection, defining business and market design requirements, field testing of selected technologies, implementing MDMS and other IT solutions;

 Deployment (assumed 4-years): Supporting the actual rollout, including full- scale implementation of IT infrastructure and meter rollouts;

 Provision for €1.0m has also been made for market-process and Code Modifications, covering the legal drafting of Code Modifications and market assurance testing of the new IT systems.

Planning &

Selection

Q4 2011 & 2012

Pre-Deployment

Planning

2013 & 2014

Deployment

2015 - 2018

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The gas CBA assumes that all of the programme management, planning and selection, pre-deployment and the full deployment costs will be capitalised and charged to the programme costs.

Table 13 below details the smart metering programme costs assumptions included in the CBA model.

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