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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(mark one)
___ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
OR
X TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from to
Commission file number 0-22418
ITRON, INC.
(Exact name of registrant as specified in its charter)
Washington 91-1011792
(State of Incorporation) (I.R.S. Employer Identification Number)
2818 North Sullivan Road
Spokane, Washington 99216-1897
(509) 924-9900
(Address and telephone number of registrant's principal executive offices)
Indicate by check mark whether the registrant(1) has filed all reports required
to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes__X___ No_____
As of October 31, 1997, there were outstanding 14,600,037 shares of the
registrant's common stock, no par value, which is the only class of common or
voting stock of the registrant.
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<PAGE>
ITRON, INC.
INDEX
Part 1: Financial Information Page
Item 1: Financial Statements (Unaudited)
Consolidated Statements of Operations..............................1
Consolidated Balance Sheets........................................2
Consolidated Statements of Cash Flows..............................3
Notes to Consolidated Financial Statements.........................4
Item 2: Management's Discussion and Analysis of Financial Condition
and Results of Operations..........................................5-8
Part 2: Other Information
Item 1: Legal Proceedings..................................................9
Item 6: Exhibits and Reports on Form 8-K...................................10
Signature...................................................................11
Exhibit 11 - Statement re Computation of Per Share
Earnings....................................................................12
<PAGE>
Part 1: Financial Information
Item 1: Financial Statements
<TABLE>
<CAPTION>
ITRON, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per share data)
Three months ended Sept. 30, Nine months ended Sept.30,
1997 1996 1997 1996
-------------- -------------- ------------- --------------
<S> <C> <C> <C> <C>
Revenues
AMR systems $38,751 $28,195 $96,655 $97,800
Handheld systems 12,689 10,406 35,714 34,266
Outsourcing 6,987 142 19,373 2,924
-------------- -------------- ------------- --------------
Total revenues 58,427 38,743 151,742 134,990
Cost of sales and services
AMR systems 21,522 17,951 56,375 56,450
Handheld systems 9,322 6,153 25,392 19,426
Outsourcing 5,483 73 14,965 2,052
-------------- -------------- ------------- --------------
Total cost of sales and services 36,327 24,177 96,732 77,928
-------------- -------------- ------------- --------------
Gross profit 22,100 14,566 55,010 57,062
Operating expenses
Sales and marketing 6,800 7,511 21,385 20,673
Product development 8,079 10,351 23,481 25,412
General and administrative 2,867 2,705 8,568 8,153
Amortization of intangibles 534 392 1,611 1,086
-------------- -------------- ------------- --------------
Total operating expenses 18,280 20,959 55,045 55,324
-------------- -------------- ------------- --------------
Operating income (loss) 3,820 (6,393) (35) 1,738
Interest and other, net (1,172) (283) (3,561) (1)
-------------- -------------- ------------- --------------
Income (loss) before income taxes 2,648 (6,676) (3,596) 1,737
Benefit (provision) for income taxes (1,005) 2,130 1,305 (900)
-------------- -------------- ------------- --------------
Net income (loss) $ 1,643 $ (4,546) $(2,291) $ 837
============== ============== ============= ==============
Net income (loss) per share $ 0.11 $ (0.34) $ (0.16) $ 0.06
============== ============== ============= ==============
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ITRON, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands)
September 30, December 31,
1997 1996
<S> <C> <C>
------------------- ------------------
Assets
Current assets
Cash and cash equivalents $ 5,036 $ 2,243
Accounts receivable, net 51,852 44,376
Inventories 31,380 33,837
Deferred income taxes, net 5,478 4,171
Other 2,815 6,116
------------------- ------------------
Total current assets 96,561 90,743
------------------- ------------------
Property and equipment, net 50,060 51,699
Equipment used in outsourcing, net 38,210 19,650
Intangible assets, net 21,000 23,344
Long-term contracts receivable 16,833 1,187
Other 1,707 798
------------------- ------------------
Total assets $ 224,371 $ 187,421
=================== ==================
Liabilities and shareholders' equity
Current liabilities
Bank line of credit $ - $ 33,062
Accounts payable and accrued expenses 31,182 24,675
Deferred revenue 5,960 6,767
------------------- ------------------
Total current liabilities 37,142 64,504
------------------- ------------------
Mortgage notes payable 6,440 6,440
Subordinated notes payable 61,357 -
Project financing 1,486 -
Warranty and other obligations 1,398 2,255
------------------- ------------------
Total noncurrent liabilities 70,681 8,695
------------------- ------------------
Shareholders' equity
Common stock 103,433 98,686
Retained earnings 13,014 15,305
Other 101 231
------------------- ------------------
Total shareholders' equity 116,548 114,222
------------------- ------------------
Total liabilities and shareholders' equity $ 224,371 $ 187,421
=================== ==================
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ITRON, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
Nine months ended Sept. 30,
1997 1996
------------- -------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss) $ (2,291) $ 837
Noncash charges (credits) to income:
Depreciation and amortization 12,887 7,450
Deferred income taxes (1,288) (1,204)
Changes in operating accounts:
Accounts receivable (7,476) (6,836)
Inventories 2,457 (19,899)
Accounts payable and accrued expenses 2,734 2,899
Long-term contracts receivable (15,646) (586)
Deferred revenue (807) (4,234)
Other, net 6,177 (2,072)
------------- -------------
Cash used by operating activities (3,253) (23,645)
INVESTING ACTIVITIES
Short-term investments - 25,074
Acquisition of property, plant and equipment (7,863) (24,954)
Equipment used in outsourcing (22,308) (6,331)
Proceeds from sale of outsourcing equipment 3,035 -
Other, net (1,256) (4,502)
------------- -------------
Cash used by investing activities (28,392) (10,713)
------------- -------------
FINANCING ACTIVITIES
Change in bank line of credit, net (33,062) 25,511
Mortgage notes payable - 840
Borrowings under subordinated debt, net 61,515 -
Project financing 1,486 -
Issuance of common stock 4,556 3,056
Other, net (57) 43
------------- -------------
Cash provided by financing activities 34,438 29,450
------------- -------------
Increase (decrease) in cash and cash equivalents 2,793 (4,908)
Cash and cash equivalents at beginning of period 2,243 6,473
------------- -------------
Cash and cash equivalents at end of period $ 5,036 $ 1,565
============= =============
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
ITRON, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
Note 1: Basis of Presentation
The consolidated financial statements presented in this Form 10-Q are unaudited
and reflect, in the opinion of management, all normal recurring adjustments
necessary for a fair presentation of operations for the three and nine month
periods ended September 30, 1997. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to the
rules and regulations of the Securities and Exchange Commission. These condensed
consolidated financial statements should be read in conjunction with the audited
consolidated financial statements and the notes thereto included in the
Company's Form 10-K for the year ended December 31, 1996, as filed with the
Securities and Exchange Commission on March 5, 1997.
The Company reports revenue in three categories: AMR (automatic meter reading)
systems, Handheld systems (EMR or electronic meter reading), and Outsourcing.
AMR and Handheld systems revenues include all product and other revenue
associated with each business segment. Outsourcing includes revenues for
contracts under which the Company installs, owns, and operates an AMR system to
provide automated meter reading services over a period of time, typically 15
years.
The results of operations for the three and nine month periods ended September
30, 1997, are not necessarily indicative of the results expected for the full
fiscal year or for any other fiscal period.
Note 2: Balance Sheet Components
<TABLE>
<CAPTION>
Inventories (unaudited, in thousands): September 30, December 31,
1997 1996
------------------- ----------------
<S> <C> <C>
Material $ 16,514 $ 22,687
Work in process 3,830 1,570
Finished goods 9,802 9,047
------------------- ----------------
Total manufacturing inventories 30,146 33,304
Service 1,234 533
------------------- ----------------
Total inventories $ 31,380 $ 33,837
=================== ================
</TABLE>
<PAGE>
Item 2:MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The following table summarizes the major components of operating income for the
nine months ended September 30, 1997 and 1996, and changes between those two
periods:
<TABLE>
<CAPTION>
Percentage of Total Revenue Percentage
--------------------------------
Nine months ended September 30, 1997 1996 Change
- ----------------------------------------------------- ------------- ------------ --------------
<S> <C> <C> <C>
Revenues
AMR systems 64% 73% (1%)
Handheld systems 23% 25% 4%
Outsourcing 13% 2% 563%
------------- ------------
Total revenues 100% 100% 12%
Cost of sales and services
AMR systems 58% 58% -
Handheld systems 71% 57% 31%
Outsourcing 77% 70% 629%
------------- ------------
Total cost of sales and services 64% 58% 24%
------------- ------------
Gross profit 36% 42% (4%)
Operating expenses
Sales and marketing 14% 15% 3%
Product development 15% 19% (8%)
General and administrative 6% 6% 5%
Amortization of intangibles 1% 1% 48%
------------- ------------
Total operating expenses 36% 41% (1%)
------------- ------------
Operating income 0% 1% (102)%
============= ============
</TABLE>
Revenues
The Company's total revenues increased $19.7 million, or 51%, to $58.4 million
in the third quarter of 1997 from $38.7 million in the third quarter of 1996.
For the nine-month period ended September 30, 1997, total revenues were $151.7
million compared to $135.0 million in the same period one year ago.
AMR systems revenues were higher for the quarter ended September 30, 1997
compared to the comparable quarter in 1996 by $10.6 million. For the nine-month
period ended September 30, AMR revenues were $1.1 million lower in 1997 than in
1996.. The increased revenues in the quarter resulted primarily from increased
meter module shipments related to new contracts announced during the first half
of 1997 and a change in the mix of meter module shipments. For the 1997 nine
month period, slightly lower volumes of meter module shipments were partially
offset by AMR software systems revenues from the Company's UTS subsidiary. The
majority of these increased software systems revenues were related to initial
revenue from large power billing systems and work performed under the
Independent Systems Operator (ISO) contract in California. Although average
selling prices for meter modules decreased slightly in the 1997 periods compared
to the 1996 periods, the effect of that decrease was not material.
The Company expects that AMR sales will grow in the future and that a portion of
that growth will be from sales of telephone-based AMR meter modules, sales of
UTS's large power billing systems and additional ISO contracts which UTS hopes
to obtain. However, much of the expected growth in AMR continues to be dependent
upon the timing and resolution of mergers and acquisitions in the utility
industry, industry regulatory reform issues in the United States, development of
international markets, and various other factors.
<PAGE>
Handheld Systems revenues increased $2.3 million, or 22%, to $12.7 million in
the current quarter from the same quarter in 1996. On a year to date basis,
Handheld Systems revenues of $35.7 million were $1.4 million, or 4%, higher than
the year to date period ended September 30, 1996. The increased 1997 revenues
were mainly due to international shipments of the Company's latest handheld
computer, the Genesis Portable Computer ("GPC"), to a South Korean utility. The
Company expects that Handheld Systems revenues may decline as a percentage of
total revenues over time as utilities adopt more advanced meter reading
technologies. In recent years, the Company's Handheld Systems revenues have been
driven by sales to new customers internationally and by upgrade and replacement
sales domestically, and the Company expects this trend to continue in the
future.
Outsourcing revenues were $7.0 million and $19.4 million for the three and nine
month periods ended September 30, 1997, respectively, compared to $142,000 and
$2.9 million in the same periods in 1996. The Company currently has two
outsourcing contracts from which it is generating revenues. Outsourcing revenues
in 1997 were derived primarily from the Company's largest outsourcing contract,
which is with the Duquesne Light Company ("Duquesne"). During the third quarter,
the Company signed an amendment to its contract with Duquesne. The amended
contract revised completion dates for a number of critical contract milestones.
As in the original contract, the amended agreement provides for certain one-time
monetary penalties for failure to meet certain specified milestones, including
three milestones that must be met in the next eight months. The total amount of
these penalties, should the Company fail to meet every one of the specified
critical milestones is approximately $25 million. The Company is currently in
compliance with its agreement with Duquesne and believes it will fully satisfy
all future milestones. (For additional information see "Amended Duquesne
Agreement" filed as an exhibit with this 10-Q and "Description of Business --
Certain Risk Factors -- Dependence on the Installation, Operations and
Maintenance of AMR Systems Pursuant to Outsourcing Contracts" in the Company's
most recent Annual Report on Form 10-K.)
Outsourcing revenues are expected to stay at the same level experienced in the
current period through the remainder of the year. The Company expects
outsourcing revenues to decline in 1998 both as a percentage of total revenues
and in absolute dollars. The Company recognizes revenue for outsourcing
agreements using the cost-to-cost, percentage-of-completion method of accounting
for long-term contracts. Under this method, revenue is recognized
proportionately as project costs are incurred. Revenue recognition in any given
period is equal to: (a) the ratio of actual costs incurred during the period to
total projected costs over the life of the contract; multiplied by (b) the total
amount of minimum contractually committed revenue to be received over the entire
contract term if the minimum level of services required under the contract are
performed.. Estimates of future costs are reviewed quarterly. To the extent
actual revenues or actual costs, or the timing of those revenues or costs,
differ from projected revenues and costs, outsourcing revenues and margins could
be affected. In general, during the beginning of an outsourcing contract,
services are performed and expenses incurred at a greater rate than in the later
part of the contract. After the initial installation of project assets, customer
invoicing usually remains constant throughout the term of the contract. The
resulting excess of revenue over invoicing is reflected on the Company's balance
sheet as a Long-Term Contract Receivable. As work on an outsourcing contract
progresses, expenses are incurred at a lesser rate, resulting in recognized
revenue which is less than the invoiced amount, which causes a decrease in the
Long-Term Contract Receivable.
Gross Profit
Gross margins of 38% of revenues for the current quarter were equal to the 1996
third quarter. Overall gross margins for the nine month period ended September
30, 1997 were 36% compared to gross margins of 42% in the same period in 1996.
The lower profit margins result primarily from a higher portion of revenues
coming from the Company's contract with Duquesne, lower margins on International
Handheld System sales, and excess manufacturing capacity.
Year to date AMR systems gross margins were 42% for both 1997 and 1996.
<PAGE>
Handheld systems gross margins declined from 43% of revenues in the 1996 nine
month period to 29% in the comparable 1997 period. The decline in margins was
largely a result of a shift in mix to international sales. International
handheld sales have historically been at lower margins than domestic due to
volume pricing and lower software license content. In addition, replacement and
upgrade business, which is increasingly becoming a more significant share of the
Company's domestic handheld systems business, has traditionally been discounted
from new handheld systems sales.
Outsourcing gross margins were 23% and 30% of revenues for the nine month
periods ended September 30, 1997 and 1996, respectively. The primary source of
outsourcing revenues in the 1997 period results from the Company's contract with
Duquesne. The lower margins on this contract reflect the early stages of the
Company's fixed network product which has not yet benefited from any substantial
cost reduction programs, and the fact that this is the Company's first large
scale, fixed network installation.
The Company's overall gross profit may be affected in the future by competitive
pricing pressure, the ability to utilize existing manufacturing capacity, the
mix and volumes of meter modules shipped, the risks inherent in cost estimation
for outsourcing contracts, and other factors.
Operating Expenses
Sales and marketing expenses of $6.8 million for the three month period ended
September 30, 1997, decreased 9% from the comparable period in 1996 and also
decreased slightly as a percentage of revenue from 15% in the third quarter of
1996 to 14% in the current quarter. For the year to date period ended September
30, 1997, sales and marketing expenses were $21.4 million compared to $20.7
million for the same period in 1996, reflecting a 3% increase. The higher
expenses were primarily for consulting services and incentive compensation. The
Company expects that sales and marketing expenses will remain at approximately
13% to 14% of total revenues for the remainder of the year.
Product development expenses of $8.1 million in the current quarter decreased
$2.3 million, or 22%, from the comparable quarter in 1996, and decreased as a
percentage of revenues from 27% to 14%. For the year to date period ended
September 30, 1997, product development expenses of $23.5 million were down
almost $2 million from $25.4 million in the same period in 1996. The decreases
for both the quarter and year to date periods were primarily due to
non-recurring materials charges of approximately $2.1 million in the third
quarter of 1996. These materials charges resulted from design improvements to
both the Company's Fixed Network Cell Control Units and new handheld computer,
the GPC. The Company expects that 1997 product development expenses will remain
at approximately 15% to 16% of total revenues for the remainder of the year.
General and administrative expenses of $2.9 million in the three months ended
September 30, 1997, increased $162,000, or 6%, over the third quarter of 1996,
but decreased as a percentage of total revenues from 7% to 5%. For the year to
date period, general and administrative expenses increased $415,000, or 5%, over
the comparable 1996 period, yet remained level as a percentage of revenues. The
increase for both the quarter and year to date periods was due to several
factors including acquisition costs for DCI, the Company's subsidiary that is
responsible for telephone-based AMR systems for electric meters, DCI
administrative expenses, and incentive compensation expenses. General and
administrative expenses are expected to remain at approximately 5% to 6% of
total revenues in the foreseeable future.
Amortization of intangibles increased $142,000 and $525,000 in the three and
nine month periods ended September 30, 1997, respectively, over the same periods
in 1996, yet remained at 1% of total revenues. The increased expenses were due
to amortization of patents and licenses acquired during the last half of 1996.
<PAGE>
Interest and Other, Net
The Company had net interest and other expense in 1997 of $1.2 million for the
third quarter and $3.6 million year to date. Interest expense during the quarter
and year to date periods was reduced by $110,000 and $517,000, respectively, for
capitalized interest related to outsourcing installations. Interest expense in
the 1997 periods was incurred primarily in connection with the Company's 6 3/4%
Convertible Subordinated Notes ("the Notes") and by borrowings under the
Company's bank line of credit. Interest expense was partially offset by interest
income on the investment of a portion of the net proceeds from the Notes. The
Company completed a $63.4 million (including over-allotment option) private
placement of the Notes in March and April of 1997. In the 1996 third quarter and
year to date periods, the Company had net interest expense of $283,000 and
$1,000, respectively, from interest related to borrowings under the Company's
bank line of credit.
Income Taxes
The Company had an income tax benefit of 36% of pre-tax earnings for the nine
months ended September 30, 1997 compared to an income tax provision of 52% for
the same period in 1996. The higher 1996 tax rate is attributable primarily to
the UTS acquisition. The acquisition resulted in a one-time recognition of
taxable income due to an accounting method change and higher state taxes.
Additionally, the Company will benefit from higher research and development
credits in 1997 compared to 1996 as a result of the credit's extension to cover
all of the 1997 tax year. To the extent pre-tax earnings, or the components of
those earnings, differ from expectations, the effective tax rate for the year
could change from the current year-to-date rate.
<PAGE>
FINANCIAL CONDITION
Operating activities used $3.3 million in cash during the first nine months of
1997 compared to using $23.6 million during the same nine month period one year
ago. The decreased cash used in operating activities resulted to a large degree
from reductions in inventory balances during 1997 from year-end levels.
Inventory levels have steadily decreased since the Company has been in the
process of implementing a "build to order" production schedule since the fourth
quarter of 1996. During the first three quarters of 1996, the Company was
substantially operating under a "build to expectation" production schedule.
Accounts receivable balances have increased from the year-end level due to the
higher level of revenues along with the timing of revenues within the current
comparative quarter. The Company's Long-Term Contracts Receivable balance, which
represents the amount of outsourcing revenues earned but not yet billed,
increased $15.6 million during the nine months ended September 30, 1997. The
Company expects Long-Term Contracts Receivable may increase by approximately $5
million more at year end.
The Company invested $28.4 million of cash in the first nine months of 1997,
compared to $10.7 million in the comparable period in 1996. The lower investment
level in the 1996 year-to-date period was the result of liquidating $25.1
million in short-term investments. Cash was invested in the first nine months of
1997 to fund $7.9 million of property and equipment additions and $22.3 million
of product costs for the Company's outsourcing installations. In the first nine
months of 1996, the Company invested $25.0 million in property and equipment,
the majority of which was for equipment to expand production capacity at both of
the Company's principal manufacturing locations. The Company also invested $6.3
million in outsourcing installations and $4.0 million for acquisitions of
intellectual property rights in the 1996 period. Itron anticipates spending cash
on product costs for the Company's outsourcing installations at a substantially
reduced rate during the remainder of 1997. 1997 property and equipment additions
for the Company are expected to be less than half of the 1996 level.
Financing activities in the first nine months of 1997 generated $34.4 million in
cash. The Company received $61.5 million in net proceeds from the Note offering
in March and April of 1997, which were used to pay off the Company's bank line
of credit, and to fund operations. During the second quarter of 1997, the
Company closed an $8 million, long-term, fixed rate project financing facility
for an outsourcing agreement and has received $1.5 million of the funds to date.
. The Company generated $29.5 million in cash in the comparable nine months of
1996, primarily from borrowings under the Company's bank line of credit.
Existing sources of liquidity at September 30, 1997 include approximately $5.0
million of existing cash and cash equivalents and $50 million of available
borrowings under the Company's bank line of credit agreement. This agreement
expires on May 31, 1998 at which time the Company intends to renew it. Itron
expects to have some cash requirements during the remainder of the year for
existing outsourcing installations and intends to seek project financing for
future outsourcing agreements. The Company believes that existing cash and
available borrowings are sufficient to fund operations for the next twelve
months.
Certain Forward-Looking Statements
When included in this Quarterly Report on Form 10-Q, the words "expects,"
"intends," "anticipates," "plans," "projects" and "estimates," and analogous or
similar expressions are intended to identify forward-looking statements. Such
statements, which include, but are not limited to, statements contained in
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" are inherently subject to a variety of risks and uncertainties that
could cause actual results to differ materially from those reflected in such
forward-looking statements. Such risks and uncertainties include, among others,
changes in the utility regulatory environment, delays or difficulties in
introducing new products, increased competition and various other matters, many
of which are beyond the Company's control. These and other risks are described
in more detail in "Description of Business --Certain Risk Factors" in the
Company's most recent Annual Report on Form 10-K, and such description is hereby
incorporated herein by reference. These forward-looking statements speak only as
of the date of this report. The Company expressly disclaims any obligation or
undertaking to release publicly any updates or revisions to any forward-looking
statement contained herein to reflect any change on the Company's expectations
with regard thereto or any change in events, conditions or circumstances on
which any such statement is based.
<PAGE>
Part 2: Other Information
Item 1: Legal Proceedings
On October 3, 1996, Itron filed a patent infringement suit against CellNet Data
Systems ("CellNet") in the United States District Court for the District of
Minnesota, alleging that CellNet is infringing on the Company's United States
Patent No. 5,553,094, entitled "Radio Communication Network for Remote Data
Generating Stations," issued on September 3, 1996. The Company is seeking
injunctive relief as well as monetary damages, costs and attorneys' fees. The
discovery phase of this lawsuit has commenced. There can be no assurance that
the Company will prevail in this action or, even if it does prevail, that the
legal costs incurred by the Company in connection therewith will not have a
material adverse effect on the Company's financial condition.
On April 29, 1997, Itron was served by CellNet with a complaint alleging patent
infringement. The suit is pending in the United States District Court for the
Northern District of California. Itron's management has reviewed the complaint
and believes it to be without merit. The patent in question was issued in 1988.
Itron's management is unaware of any previous assertion by CellNet of any claim
of patent infringement by Itron. Itron intends to vigorously defend this suit.
The complaint seeks injunctive relief as well as monetary damages, costs and
attorneys' fees.
On May 29, 1997, Itron and its President and Chief Executive Officer, Johnny M.
Humphreys, were served with a complaint alleging securities fraud filed by Mark
G. Epstein (Epstein v Itron, et al.) on his own behalf and alleged to be on
behalf of a class of all others similarly situated, in the U.S. District Court
for the Eastern District of Washington (Civil Action No. CS-97-214 RHW). The
complaint alleges, among other matters, that Itron and Mr. Humphreys violated
Section 10(b) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5
thereunder by making allegedly false statements regarding the development
status, performance and technological capabilities of Itron's Fixed Network
automatic meter reading ("AMR") system and regarding the suitability of Itron's
encoder receiver transmitter devices for use with an advanced Fixed Network AMR
system. The complaint seeks monetary damages, costs and attorneys' fees and
unspecified equitable or injunctive relief. On July 28, 1997, the Company and
Mr. Humphreys filed a motion to dismiss the complaint for failure to state a
claim for relief. On October 26, 1997 a hearing was held on the motion to
dismiss, at which time the court took the motion under advisement. The Company
believes it has good defenses to the claims alleged and intends to defend itself
vigorously in this action.
On September 3, 1997, Itron and Mr. Humphreys agreed to accept service of
process of a complaint which was filed in the Superior Court of the State of
Washington, County of Spokane, (Civil Action No. 97204889-8) against the
Company, its President and Chief Executive Officer, Johnny M. Humphreys, Itron
Board Chairman Paul A. Redmond, Itron Director Jon E. Eliassen, and Washington
Water Power Company. The complaint, filed by plaintiff Katya M. Haub, purports
to be brought on behalf of herself and a class of all others similarly situated.
The class period alleged is identical to that alleged in a previously-filed
proposed class action (Epstein v. Itron, et al.) filed in the United States
District Court for the Eastern District of Washington at Spokane. The complaint
alleges, among other matters, that the defendants are liable for claims made
under the Washington State Securities Act, the Washington State Consumer
Protection Act, and the common law of negligent misrepresentation and seeks
monetary damages, costs, attorneys' fees and equitable or injunctive relief. The
complaint generally alleges that the defendants were responsible for materially
incorrect statements about Itron's business, markets, and future prospects
including allegedly misleading statements with respect to the development and
deployment of Itron's Fixed Network system. The Company has filed a motion to
stay. A hearing on this motion was held on October 31, 1997, at which time the
court issued a temporary stay pending determination of the Company's motion to
dismiss in the Epstein case, and took the motion under advisement. The Company
believes it has good defenses to the claims alleged, and intends to defend
itself vigorously against this action.
<PAGE>
Item 6: Exhibits and Reports on Form 8-K
a) Exhibits
Exhibit 10 -Amendment No. 1 to Amended and Restated Utility Automated
Meter Data Acquisition Lease and Services Agreement between the
Registrant and Duquesne Light Company dated September 11, 1997.
(Confidential treatment requested for a portion of this contract)
Exhibit 11 - Statement re Computation of Earnings per Share
Exhibit 27 - Financial Data Schedule
b) Reports on Form 8-K
One report on Form 8-K, dated September 3, 1997, was filed during the
quarter ended September 30, 1997, pursuant to Item 5 of that form. The
report related to a class action lawsuit filed against the Company.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Commission Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ITRON, INC.
(Registrant)
By: /s/ DAVID G. REMINGTON
David G. Remington
Vice President and
Chief Financial Officer
(Authorized Officer and Principal
Financial Officer)
Date: November 14, 1997
11
ITRON, INC.
STATEMENT RE COMPUTATION OF EARNINGS PER SHARE
(Unaudited, shares in thousands)
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30.
<S> <C> <C> <C> <C>
Primary Shares (Based on Average Price): 1997 1996 1997 1996
----------- ------------- ------------ -----------
Weighted average number of common shares outstanding 14,470 13,336 13,959 13,274
Dilutive effect of outstanding stock options and warrants 504 835
----------- ------------- ------------ -----------
Primary weighted average shares outstanding 14,974 13,963 13,959 14,109
=========== ============= ============ ===========
</TABLE>
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30.
<S> <C> <C> <C> <C>
Fully Diluted Shares (Based on Ending Price): 1997 1996 1997 1996
----------- ------------- ------------ ----------
Weighted average number of common shares outstanding 14,470 13,336 13,959 13,274
Dilutive effect of outstanding stock options and warrants 516 835
----------- ------------- ------------ ----------
Fully diluted weighted average shares outstanding 14,986 13,855 13,959 13,826
=========== ============= ============ ==========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 5,036
<SECURITIES> 0
<RECEIVABLES> 52,591
<ALLOWANCES> (739)
<INVENTORY> 31,380
<CURRENT-ASSETS> 96,561
<PP&E> 126,538
<DEPRECIATION> (38,268)
<TOTAL-ASSETS> 224,371
<CURRENT-LIABILITIES> 37,142
<BONDS> 0
0
0
<COMMON> 103,433
<OTHER-SE> 101
<TOTAL-LIABILITY-AND-EQUITY> 116,548
<SALES> 151,742
<TOTAL-REVENUES> 151,742
<CGS> 96,732
<TOTAL-COSTS> 96,732
<OTHER-EXPENSES> 55,045
<LOSS-PROVISION> (35)
<INTEREST-EXPENSE> (3,561)
<INCOME-PRETAX> (3,596)
<INCOME-TAX> 1,305
<INCOME-CONTINUING> (2,291)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,291)
<EPS-PRIMARY> (.16)
<EPS-DILUTED> (.16)
</TABLE>
EXHIBIT 10
To
ITRON, INC.'S
QUARTERLY REPORT
for the Quarter Ended September 30, 1997
On
Form 10-Q
" * " = omitted, confidential material, which material has been separately filed
with the Securities and Exchange Commission pursuant to a request for
confidential treatment.
<PAGE>
AMENDMENT NO. 1
TO
AMENDED AND RESTATED UTILITY
AUTOMATED METER DATA ACQUISITION
EQUIPMENT LEASE AND SERVICES AGREEMENT
THIS AMENDMENT NO. 1 TO AMENDED AND RESTATED UTILITY AUTOMATED METER
DATA ACQUISITION EQUIPMENT LEASE AND SERVICES AGREEMENT (this "Amendment") is
entered into and effective as of the 11th day of September, 1997, by and between
Duquesne Light Company, a Pennsylvania corporation with its principal office
located in Pittsburgh, Pennsylvania ("Duquesne"), and Itron, Inc., a Washington
corporation with its principal office located in Spokane, Washington
("Contractor"). (Duquesne and Contractor being sometimes referred to herein
individually as a "Party" and together as "Parties").
WITNESSETH:
WHEREAS, Duquesne and Contractor are parties to an Amended and Restated
Utility Automated Meter Data Acquisition Equipment Lease and Services Agreement
entered into and effective as of and including January 15, 1996 (the
"Agreement"); and
WHEREAS, the Parties have mutually agreed to amend the Agreement to the
extent and in the manner provided in this Amendment.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, and intending to
be legally bound hereby, the Parties hereby agree as follows:
1. The definition of "Certified" or Certify" in Section 1.1 of the
Agreement is hereby amended to delete the word "Owner" in the
last line and replace it with the word "Duquesne."
2. The definition of "Competitor" in Section 1.1 of the Agreement is
hereby deleted in its entirety and replaced with the following:
"Competitor" means any Person engaged in the *
3. The definition of "Contractor Intellectual Property" in Section
1.1 of the Agreement is hereby amended to delete the words
"during the Term" in the eleventh and twelfth lines and replace
them with the words "after the Effective Date".
4. The definition of "Data" in Section 1.1 of the Agreement is
hereby deleted in its entirety and replaced with the following:
"Data" means all of the meter readings and other data and information
of any kind generated by or transmitted via the Meters, Meter Modules
or the UTS MV-90 Translation System (to the extent such system
generates and/or transmits information, and derivatives thereof,
obtained from the Meters, Meter Modules or any other Duquesne owned
and/or controlled input source) pursuant to the terms of this
Agreement, including but not limited to outage and tampering reports,
time-of-day information, on demand and appointment readings,
information concerning unauthorized usage of inactive accounts, load
profiles, and other data to be delivered to Duquesne in accordance with
this Agreement. *
5. The definition of "Duquesne Intellectual Property" in Section 1.1
of the Agreement is hereby amended to delete the words "during
the Term" in the ninth line and replace them with the words
"after the Effective Date".
6. Section 1.1 of the Agreement is hereby amended to add the
following definition of "Fixed Network Build Out" after the
definition of Fixed Network":
"Fixed Network Build Out" has the meaning set forth in Section 4.16.
7. The definition of "New Meters" in Section 1.1 of the Agreement is
hereby deleted in its entirety and replaced with the following:
"New Meters" means all Single-Phase Meters and Three-Phase Meters
supplied by Contractor and installed by Contractor (in the case of
Single-Phase Meters (other than Transformer-Rated Meters)) or Duquesne
(in the case of Transformer-Rated Meters and Three-Phase Meters) in
Duquesne's service territory from time to time, and all Single-Phase
Meters (other than Transformer-Rated Meters) installed or held in
inventory by Contractor, and all Three-Phase Meters and all
Transformer-Rated Meters held in inventory by Contractor, pursuant to
this Agreement or in connection with its performance under this
Agreement (including, in either case, any such meters that are included
in the Equipment leased to Duquesne under the Equipment Lease).
8. Section 1.1 is hereby amended to add the following definition of
"Single-Phase Meters" after the definition of "Significant
Milestone":
"Single-Phase Meters" means single-phase meters for the measurement of
electric power usage, including but not limited to Transformer-Rated
Meters.
9. Section 1.1 of the Agreement is hereby amended to add the
following definition of "Transformer-Rated Meters" after the
definition of "Three-Phase Meters":
"Transformer-Rated Meters" means single-phase transformer-rated ABB
PowerPlus Alpha Meters, or any alternative single-phase
transformer-rated meters acceptable to Duquesne.
10. Section 3.5 of the Agreement is hereby deleted in its entirety and
replaced with the following: "Section 3.5 Phase I. The Phase I period
shall commence on the Effective Date hereof and extend through the date
on which (i) all Milestones have been met which, in accordance with
Schedule J, are to be met prior to the commencement of Phase II, (ii)
billing data for at least 100,000 Single-Phase Meters has been
delivered to the customer billing interface through the Fixed Network,
(iii) Contractor's portion of the customer billing interface has been
tested and accepted by Duquesne in accordance with the mutually agreed
test plan, and (iv) Duquesne shall have notified Contractor pursuant to
Section 4.6(a)(1) that Acceptance of such Work has occurred."
11. Section 3.6 of the Agreement is hereby deleted in its entirety and
replaced with the following: "Section 3.6 Phase II. The Phase II period
shall commence at the end of Phase I and extend through the date on
which (i) the Parties have mutually agreed upon a test plan concerning
the Acceptance of Phase II pursuant to Schedule F, (ii) all Milestones
have been met which, in accordance with Schedule J, are to be met prior
to the commencement of Phase III, and (iii) Duquesne shall have
notified Contractor pursuant to Section 4.6(b)(1) that Acceptance of
all Phase II Work has occurred."
12. Section 3.8(d) of the Agreement is hereby deleted in its entirety
and replaced with the following:
"(d) Contractor is not required to add Meter Modules to Three-Phase
Meters."
13. Sections 3.9(b), (c) and (d) of the Agreement are hereby deleted
in their entirety and replaced with the following:
"(b) Maintenance, Repair, Retirement and Replacement of Meters,
Three-Phase Meters and Transformer-Rated Meters. Contractor shall be
responsible for all maintenance and repair of Single-Phase Meters
(other than Transformer-Rated Meters) necessary in order to comply with
all Applicable Law and the terms of this Agreement. In addition,
Contractor shall maintain the Single-Phase Meters (other than
Transformer-Rated Meters) or any additions or replacements therefor so
that such Single-Phase Meters (other than Transformer-Rated Meters)
perform during the Term in accordance with the applicable
specifications in effect as of the Effective Date (as they may be
amended from time to time). Contractor shall remove from service any
Retained Meter which ceases to meet the meter specifications identified
in Schedule A at any time during the Term and shall replace it with a
New Meter (Single-Phase Meter) and Meter Module. Contractor shall
continue to buy and own New Meters (and lease them to Duquesne pursuant
to the Equipment Lease) as necessary to timely meet Contractor's
obligations hereunder. Duquesne shall be responsible for the
installation of and repairs to all Transformer-Rated Meters and
Three-Phase Meters, and, for each Transformer-Rated Meter installed by
Duquesne (and any future replacement thereof, if any), Contractor shall
make a one-time payment to Duquesne of
* as compensation for Duquesne's installation and maintenance of
such Meter during the Term. Such payment by Contractor shall be made in
immediately available funds within thirty (30) days after receipt of
Duquesne's quarterly invoice for each such Meter installed during the
preceding calendar quarter. Except as otherwise specifically provided
in this Article III with respect to purchasing, owning, leasing and
reading Transformer-Rated Meters and Three-Phase Meters, Contractor
shall have no liability or obligation with respect to such
Transformer-Rated Meters or Three-Phase Meters, and shall be excused
from any failure to perform the Work with respect thereto if and to the
extent that they are not in proper working order.
(c) Forecasted Meter Growth. Contractor shall, upon notice from
Duquesne in accordance with Schedule A, install additional New Meters
which are Single-Phase Meters (other than Transformer-Rated Meters),
and supply additional New Meters which are Transformer-Rated Meters or
Three-Phase Meters throughout the term with no increase to the Price
set forth on Schedule D, provided only that Duquesne does not request
installations of additional New Meters which are Single-Phase Meters
(other than Transformer-Rated Meters) in any period that exceeds the
number of meters by type (i.e., single phase KWH or single phase
demand) as shown through that period in the respective columns of the
table attached as Schedule H; and Duquesne does not request Contractor
to supply additional New Meters which are Transformer-Rated Meters or
Three-Phase Meters with an actual cost (including the cost of Meter
Modules) in excess of
* per year, provided that any amount not expended in a given year
shall be carried over and added to the amounts available for subsequent
years, and, any amount so carried over and remaining at the end of the
Term shall promptly be reimbursed and paid over to Duquesne.
(d) Unanticipated Meter Growth. If Duquesne requests the installation
of additional New Meters which are Single-Phase Meters in any period
that results in totals exceeding the number of meters by type (i.e.,
single phase KWH or single phase demand) shown through that period in
the respective columns of the table attached as Schedule H, or if
Duquesne requests the supply of additional New Meters which are
Transformer-Rated Meters or Three-Phase Meters in any period with a
cost (including the cost of Meter Modules) of more than * per year,
then Contractor shall so notify Duquesne. If Duquesne elects to proceed
with the installations or supply, it shall do so through the issuance
of a Change Order Notice in accordance with Section 4.8."
14. Section 3.12 of the Agreement is hereby amended by deleting the
words "the Term" from the first line and replacing them with the
words "Phase III".
15. Section 4.3 of the Agreement is hereby deleted in its entirety
and replaced with the following: "Section 4.3 Milestone Schedule
and Delay Liquidated Damages.
(a) Contractor shall perform the Work and install the
Equipment (other than Transformer-Rated Meters and Three-Phase
Meters, the installation of which shall be Duquesne's
responsibility) consistent with and in accordance with the
Milestone Schedule attached hereto as Schedule J, subject to
any extensions to such Milestones as may be provided in this
Agreement. TIME IS OF THE ESSENCE IN THE PERFORMANCE OF THIS
AGREEMENT.
(b) If Contractor fails to meet any General Milestone, then
the payment due from Duquesne on the invoice for the month in
which that General Milestone was missed, if any, shall be
reduced by a "holdback" of
* of that total invoice. The "holdback amount" shall
be due and payable, together with Duquesne's regular monthly
payment, in the month following the month in which such
General Milestone is actually achieved. Nothing in this
Section 4.3(b) shall affect Duquesne's right to dispute in
good faith the amount of any invoice.
(c) If Contractor fails to meet any General Milestone, as such
General Milestone may be extended hereunder, then Contractor
shall, within
* of such General Milestone, submit a corrective
action plan to Duquesne detailing how it will improve its
progress. The plan may include, without limitation, an
increase in Contractor's labor force, an increase in the
number of shifts worked, overtime, additional days of work per
week or similar measures, all without additional cost to
Duquesne. Duquesne agrees that, at Contractor's option,
Duquesne will work with Contractor to assist in developing a
plan to improve its progress and to meet future Milestones.
(d)
(i) If Contractor fails to meet any Significant
Milestone, as identified in Schedule J, as such
Milestone may be extended hereunder, then Contractor
shall, within
* of such Milestone, (y) submit a corrective
action plan like that described in Section 4.3(c) and
(z) pay to Duquesne the sum of * as a one-time Delay
Liquidated Damages payment for failure to meet said
Milestone. Such Delay Liquidated Damages shall be due
and payable for each Significant Milestone that is
not met, but shall be paid only one time with respect
to each such Milestone.
(ii) Provided that Contractor has made payment of
the Delay Liquidated Damages due with respect to any
delayed Significant Milestone, then when that
Milestone is completed, each subsequent Significant
and General Milestone will be extended by the same
time period as the period of delay suffered by the
delayed Significant Milestone, but the Critical
Milestone dates will remain unchanged.
(iii) If Contractor meets Critical Milestone Number
29 ("Fixed Network Functionality
Operational-Including Applicable Schedule A
Interfaces ( * of Single-Phase Accounts on Fixed
Network, Daily Reads, Billed From Fixed Network)") on
or before the scheduled date, Duquesne will reimburse
Contractor in the amount of * of all Delay Liquidated
Damages that were paid by Contractor with respect to
delays in the Significant Milestones.
(e)
(i) If Contractor fails to meet Critical Milestone
Number 29 ("Fixed Network Functionality
Operational-Including Applicable Schedule A
Interfaces ( * of Single-Phase Accounts on
Fixed Network, Daily Reads, Billed From Fixed
Network)"), as identified in Schedule J, then
Duquesne shall be entitled to an immediate
payment of five million dollars ($5,000,000)
from Contractor as Delay Liquidated Damages,
and, at Duquesne's option (exercised by notice
to Contractor at any time before Contractor
meets Milestone Number 29), one of the
following:
(a) a payment of an additional five million
dollars ($5,000,000) from Contractor as
Delay Liquidated Damages, in which event the
failure to meet Milestone Number 29 shall
not constitute a Default; or
(b) a right to declare a Default by
Contractor under Section 16.2 hereof and
terminate this Agreement in accordance with
Articles XVII (including but not limited to
the right to be paid the five million
dollars ($5,000,000) of liquidated damages
set forth in Section 18.3(b)(1)) and XVIII.
Duquesne shall be entitled to draw upon the
Performance Bond maintained in accordance with
Section 6.1 hereof to satisfy all or any part of
Contractor's foregoing obligations to Duquesne.
(ii) For the purpose of this Section 4.3(e),
Critical Milestone Number 29 is defined as completion
of (x) the installation of Meter Modules on one
hundred percent (100%) of all Single-Phase Meters
(excluding Transformer-Rated Meters in the event
Duquesne exercises its option in Section
4.3(e)(iv)(a) for Contractor to purchase certain ABB
Alpha Meters and further exercises its option in
Section 4.3(e)(iv)(a) to be responsible for the
installation and maintenance of such ABB Alpha
Meters) subject to any excused exceptions provided by
the terms of Schedule A, Section 3.4, with respect to
the number of attempts required to gain access to
each Existing Meter, (y) the connection of at least *
of those Meters to the Fixed Network (with billing
data delivered to the customer billing interface via
the Fixed Network), and (z) the installation of the
"Network Software" and "Network Applications" as
defined in Schedule A (per the table concerning AIBs
set forth therein) and Schedule B, and satisfaction
of certain testing and verification standards to be
developed pursuant to Schedule F during Phase II.
Contractor shall deliver a notice to Duquesne
certifying that it has completed Milestone Number 29
on a particular date, and Duquesne shall promptly
conduct such testing and inspections as are necessary
to verify that the Milestone has been completed. In
the event that during the course of this testing and
inspection Duquesne finds that Contractor failed to
meet Critical Milestone Number 29 as defined above,
Contractor shall be required to proceed immediately
in accordance with the terms of Section 4.3(e)(i) as
if it had originally failed to meet that Milestone;
provided, however, that if the particular failure to
meet Critical Milestone Number 29 is a minor and
inadvertent Nonconformity or variance from its
requirements, of which Contractor had no knowledge at
the time of its Certification that the Milestone had
been met, then Contractor shall have the right for
* following notification of the Nonconformity
or variance to Correct it before Contractor can be
required to proceed under Section 4.3(e)(i).
(iii) If Contractor fails to meet Significant
Milestone Number 27 ("Complete System Support for
Single Phase and Shared Line Three-Phase ABB Alpha
Meters Installed by Duquesne including Communications
Links and Required Interfaces (excluding * Accounts)
as Defined in Schedule A"), as identified in Schedule
J, then Contractor shall immediately pay to Duquesne
the amount of five million dollars ($5,000,000) as
Delay Liquidated Damages. If Duquesne does not
receive the payment, Duquesne may immediately draw
upon the Performance Bond maintained in accordance
with Section 6.1 hereof.
(iv) If Contractor fails to meet Critical Milestone
Number 23 ("Genesis Fixed Network Version 2.5
Software Installed and Operational ( * Accounts on
Fixed Network, Daily Reads, All Applications
Functioning)"), as identified in Schedule J, then
Duquesne shall be entitled to an immediate payment of
five million dollars ($5,000,000) from Contractor as
Delay Liquidated Damages, and, at Duquesne's option
(exercised by notice to Contractor at any time before
Contractor meets Milestone Number 23), one of the
following:
(a) the purchase (and lease to Duquesne
under the Equipment Lease at no additional
cost or charge to Duquesne), installation
and maintenance by Contractor of ABB Alpha
meters on all remaining (less than * )
single-phase demand accounts in lieu of *
hardware, in which event the failure to meet
Milestone Number 23 shall not constitute a
Default; provided however, if Duquesne
intends to exercise this option, it must do
so within
* of Contractor's failure to meet
Critical Milestone Number 23, and further
provided that if Duquesne exercises this
option, Duquesne shall have the option
(which it will exercise with reasonable
promptness) to be responsible for the
installation and maintenance of such ABB
Alpha Meters to the same extent that
Duquesne has such responsibility for
Transformer-Rated Meters pursuant to Section
3.9(b), in which case Contractor will pay to
Duquesne * for each such ABB Alpha Meter
installed by Duquesne to the same extent and
on the same terms as Contractor is to pay
Duquesne for Transformer-Rated Meters
pursuant to Section 3.9(b); or
(b) a payment of an additional five million
dollars ($5,000,000) from Contractor as
Delay Liquidated Damages, in which event the
failure to meet Milestone Number 23 shall
not constitute a Default; or
(c) a right to declare a Default by
Contractor under Section 16.2 hereof and
terminate this Agreement in accordance with
Articles XVII (including but not limited to
the right to be paid the five million
dollars ($5,000,000) of liquidated damages
set forth in Section 18.3(b)(i)) and XVIII.
Duquesne shall be entitled to draw upon the
Performance Bond maintained in accordance with
Section 6.1 hereof to satisfy all or any part of
Contractor's foregoing obligations to Duquesne.
Contractor shall deliver a notice to Duquesne
certifying that it has completed Milestone Number 23
on a particular date, and Duquesne shall promptly
conduct such testing and inspections as are necessary
to verify that the Milestone has been completed. In
the event that during the course of this testing and
inspection Duquesne finds that Contractor failed to
meet Critical Milestone Number 23 as defined above,
Contractor shall be required to proceed immediately
in accordance with the terms of Section 4.3(e)(iv) as
if it had originally failed to meet that Milestone;
provided, however, that if the particular failure to
meet Critical Milestone Number 23 is a minor and
inadvertent Nonconformity or variance from its
requirements, of which Contractor had no knowledge at
the time of its Certification that the Milestone had
been met, then Contractor shall have the right for *
following notification of the Nonconformity or
variance to Correct it before Contractor can be
required to proceed under Section 4.3(e)(iv).
(v) If Contractor fails to meet any of Phase III
Milestones 33 through and including 37, the Base
Price for Services payable by Duquesne in Phase III
(as shown on Schedule D) shall be reduced by * (which
shall not be cumulative with respect to Contractor's
failure to meet multiple Milestones) until such time
as such Milestone (and any other of such Milestones
which continue to not be met) has been met, and
Contractor shall not be entitled to recover such *
from Duquesne. Nothing in this Section 4.3(e)(v)
shall affect Duquesne's right to dispute in good
faith the amount of any invoice."
16. Section 4.6(a) of the Agreement is hereby deleted in its entirety
and replaced with the following:
"(a) Phase I. Upon Contractor's completion of all Milestones on
Schedule J which are to be completed prior to the commencement of Phase
II, Contractor shall notify Duquesne that all required Work under Phase
I has been installed and/or performed and is complete, fully
operational and ready for final Acceptance of Phase I. Duquesne shall,
within thirty (30) days from the date of such notice, conduct the Phase
I Acceptance Testing in accordance with Section 4.5 and Schedule F
hereto, and shall notify Contractor that (1) the Work meets the
requirements of this Agreement ("Acceptance" of Phase I) or (2) the
Work or parts thereof do not conform to this Agreement, in which case
Contractor shall Correct the Nonconformity. If Duquesne's Acceptance of
Phase I does not occur on or before October 1, 1997, Duquesne shall
exercise one of its options set forth in Section 17.2. The exercise by
Duquesne of any such option shall not be deemed a waiver of any
Nonconformity. Acceptance by Duquesne shall not waive any of Duquesne's
rights and remedies under this Agreement or relieve Contractor from any
of Contractor's duties and obligations."
17. Section 4.7 of the Agreement is hereby deleted in its entirety and
replaced with the following: "Section 4.7 Weekly Reporting. During
Phase II and the Fixed Network Build Out in Phase III (if elected),
Contractor shall, on a weekly basis, provide a report to Duquesne
pursuant to Section 10.2 showing the status of all Nonconformities.
Except as set forth in the preceding sentence, standard reporting of
the status of Nonconformities shall be monthly in Phase III.
18. Section 4.13(a) of the Agreement is hereby amended to replace the
reference to "Section 16.2(h)" in the fourteenth (14th) line with
a reference to "Section 16.2(g)."
19. Section 4.13(b) of the Agreement is hereby amended to delete the
words "four (4)" each place they appear.
20. Section 4.16 of the Agreement is hereby deleted in its entirety
and replaced with the following:
"Section 4.16 Fixed Network Build Out. If elected by Duquesne at
its sole option by written notice to Contractor after * and
before * , not later than * , Contractor will meet Milestone
Number 38 ("Fixed Network Build Out Completed (covering * of
customers in Service Area)"), and will do all Work necessary to
extend the Automated Services provided under the Fixed Network
from the * level required to Complete Phase II to a * level, for
* (the "Fixed Network Build Out"). In the event Contractor does
not complete such expansion by * , the one-time penalty of * for
missing a Significant Milestone shall be imposed and paid by
Contractor; provided, however, as provided in Schedule L, the
Performance Guarantees and "performance assessments" will be
adjusted to reflect the Fixed Network Build Out. Nothing in this
Section 4.16 shall affect Duquesne's right to dispute in good
faith the amount of any invoice."
21. Section 6.1(a) of the Agreement is hereby deleted in its entirety
and replaced with the following: "(a) Phase II. Contractor shall,
within * of the commencement of Phase II, furnish or replace, as
appropriate, and at all times throughout the remainder of Phase
II maintain, a Performance Bond (including a replacement for any
Performance Bond drawn or called upon by Duquesne in accordance
with the terms of this Agreement, as long as there continues to
be Phase II obligations of Contractor to Duquesne hereunder)
containing the terms and conditions set forth in Section 6.2 in
the amount of * as security for Contractor's faithful performance
during Phase II of this Agreement, including its obligations to
meet the Milestones or to pay appropriate liquidated damages for
failure to do so."
22. Section 6.2(b) of the Agreement is hereby amended to add the
following after the words "Performance Bond" at the end of that
Section and before the period::
"; provided, however, such Performance Bond may contain such
different and/or additional provisions as Duquesne may agree upon
in writing."
23. Section 12.6 of the Agreement is hereby amended to delete the
words "Promptly after the execution hereof" in the first and
second lines and replace them with the words "On or before
October 15, 1997".
24. Section 15.2(b)(iii) of the Agreement is hereby amended to delete
the sentence which begins "In addition to the selection of the
remedies set forth in . . ." in its entirety and replace it with
the following:
"In addition to the selection of the remedies set forth in
Section 15.2(b)(i), (ii) or (iii), Duquesne may in its sole
discretion require Contractor to provide, at Contractor's
expense, a Performance Bond in an amount and form acceptable to
Duquesne (and which may or may not meet any or all of the
requirements of Article VI, at Duquesne's option) to secure
Contractor's obligations to Correct the work."
25. Section 16.2(g)(i) of the Agreement is hereby amended by deleting
the words "four (4)" in the third line.
26. Section 16.2(b) of the Agreement is hereby amended by adding the
words "during Phase III" in the third line after the words
"(based on actual data)".
27. Section 16.2(c) of the Agreement is hereby amended by adding the
words "during Phase III" in the third line after the words
"(based on actual data)".
28. Sections 16.2(d) and (e) of the Agreement are hereby deleted in
their entirety and replaced with the following:
"(d) Either:
(i) Contractor fails to complete Milestone Number 23 of Schedule
J within the time period provided therefor in Schedule J, and
Duquesne exercises its option in Section 4.3(e)(iv)(c) to declare
such failure an Event of Default; or
(ii) Contractor fails to complete Milestone Number 29 of Schedule
J within the time period provided therefor in Schedule J, and
Duquesne exercises its option in Section 4.3(e)(i)(b) to declare
such failure an Event of Default;
(iii) Contractor fails to pay when due any liquidated damages
that become due and payable with respect to a delay in completion
of any of the Milestones in Schedule J.
(e) Contractor's abandonment of any material part of the Work at
any time."
29. Section 17.1(a) of the Agreement is hereby deleted in its entirety
and replaced with the following:
"(a) Initial Term. The initial Term of this Agreement shall be for a
period beginning with the commencement of Phase II (the "Term
Commencement Date") and ending fifteen (15) years after the date on
which the Acceptance of Phase II occurs, which period may be extended
pursuant to Section 17.1(b) below."
30. Section 17.2 of the Agreement is hereby deleted in its entirety and
replaced with the following: "Section 17.2 Termination Prior to
Acceptance of Phase I. If Acceptance of Phase I does not occur on or
before October 1, 1997 in accordance with Section 4.6(a), then Duquesne
must, prior to its Acceptance of Phase I, either (x) terminate this
Agreement or (y) enter into negotiations with Contractor in an attempt
to mutually agree upon an extension to Phase I, appropriate revisions
to Schedule J and other appropriate Changes, if any; if such
negotiations do not lead to agreement within a period of time
acceptable to Duquesne, then Duquesne shall terminate this Agreement.
Following termination pursuant to this Section 17.2, the Parties'
rights to the Equipment shall be as set forth in Section 18.2."
31. Section 18.2 of the Agreement is hereby deleted in its entirety and
replaced with the following: "Section 18.2 Termination Prior to
Acceptance of Phase I. In the event of a termination pursuant to
Section 17.2, Contractor shall transfer ownership of the New Meters
that were installed during Phase I to Duquesne, in which case any Meter
Modules attached to such New Meters shall be deemed abandoned in place
by Contractor at no cost to Duquesne, and such Meter Modules may not be
used by Duquesne for any purpose. Duquesne may, at its option, elect to
purchase from Contractor the Meter Modules that would otherwise be
abandoned under the terms of this Section 18.2, together with the
related Meters and all mobile automated meter reading equipment
(excluding any Fixed Network components) necessary to utilize the Meter
Modules for billing purposes, at a price of * per unit, upon
Contractor's then-standard terms and conditions for equipment sales
(for purposes of Section 12.3, "Duquesne's Buyout"). Duquesne may, at
its option, elect to purchase all other Fixed Network components at
Contractor's * plus Contractor's
* ."
32. Section 18.3(b)(i) of the Agreement is hereby deleted in its
entirety and replaced with the following:
"(i) Contractor shall immediately pay to Duquesne five million dollars
($5,000,000) as liquidated damages for Contractor's Event of Default
(unless Contractor has already made such payment, or Duquesne has
already received payment under the Performance Bond, pursuant to
Section 17.3(b)), which obligation may be satisfied by Duquesne's draw
down on the Performance Bond maintained by Contractor pursuant to
Section 6.1(a) hereof."
33. Section 18.7(b) of the Agreement is hereby amended to add at the
end of such Section the following sentence:
"In such event, Duquesne shall assume, and Contractor shall assign, all
of Contractor's rights and obligations under any third party pole,
tower or facility rental and lease agreements which Duquesne, in its
sole discretion, finds acceptable to it."
34. Section 21.2(a) of the Agreement is hereby amended to delete the
words "during Phase II" from the first line.
35. Schedules A, D, E, F, H, I, J and L to the Agreement are hereby
deleted in their entirety and replaced, respectively, with
Replacement Schedules A, D, E, F, H, I, J and L attached to this
Amendment.
36. Schedule B to the Agreement is hereby amended by adding thereto
the provisions set forth on the Addendum to Schedule B attached
to this Amendment.
37. Except as expressly amended by this Amendment, the Agreement and
each and every representation, warranty, covenant, term and
condition therein are hereby specifically ratified and confirmed.
38. Except as specifically addressed in this Amendment, by executing
and delivering this Amendment, Duquesne has not waived or
released any claim, right or remedy available to it under the
Agreement.
39. This Amendment shall be governed by the laws of the Commonwealth
of Pennsylvania (without giving effect to the principles thereof
relating to conflicts of laws).
40. This Amendment may be executed and delivered in two or more
counterparts, each of which shall be treated as an original but
which, when taken together, shall constitute one and the same
instrument, and may be delivered by facsimile transmission.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK]
<PAGE>
IN WITNESS WHEREOF, the Parties have caused this Amendment No. 1
to Amended and Restated Utility Automated Meter Data Acquisition Equipment
Lease and Services Agreement to be signed by their duly authorized
representatives as of the date first written above.
DUQUESNE LIGHT COMPANY
By: /s/______________________
Name: David D. Marshall
Title: President and Chief Executive
Officer
<PAGE>
ITRON, INC.
By: /s/______________________
Name: LeRoy D. Nosbaum
Title: Vice President and General Manager,
Network Systems
BA973140.009
(amend1)
<PAGE>
SCHEDULE A
DESCRIPTION OF WORK
<PAGE>
TABLE OF CONTENTS
- -------------------------------------------------------------------------------
1. INTRODUCTION 4
1.1 BACKGROUND 4
1.2 SCOPE 4
1.3 FUNCTIONAL REQUIREMENTS 6
1.4 STATEMENT OF SERVICES 5
1.5 SYSTEM OVERVIEW 10
1.6 IMPLEMENTATION 11
1.7 IMPLEMENTATION PHASES 11
FIGURE 1-1 (PRELIMINARY SYSTEM FLOW DIAGRAM) 8
2. PROJECT MANAGEMENT 12
2.1 PROJECT MANAGEMENT ROLE DEFINITION 12
2.1.1 SENIOR ACCOUNT MANAGER 12
2.1.2 PROJECT MANAGEMENT RESPONSIBILITIES 13
2.1.3 PROJECT MANAGERS 13
2.1.4 TECHNICAL COORDINATORS 14
2.2 DUQUESNE PROJECT ORGANIZATION 14
2.2.1 DUQUESNE PROJECT MANAGER 14
2.2.2 DUQUESNE PROJECT ORGANIZATION 14
2.3 PROJECT MANAGEMENT 15
2.3.1 TOOLS 15
2.3.2 SCHEDULING 15
2.3.3 DOCUMENT TRACKING 15
2.3.4 CORRESPONDENCE 15
2.3.5 TELEPHONE CONTACT REPORTS 16
2.3.6 PROGRESS REPORTS 16
2.3.7 ACTION ITEM LISTS 16
2.3.8 PROJECT MEETINGS 16
2.3.9 DOCUMENT REVIEW 16
2.4 CHANGE CONTROL PROCESS 17
2.4.1 TYPES OF CHANGES 17
2.4.2 CHANGE CONTROL DIAGRAM 18
2.4.3 CHANGE CONTROL PROCESS 19
3. PROJECT IMPLEMENTATION, SERVICES, EQUIPMENT 20
3.0 METER PURCHASES 20
3.1 SINGLE AND THREE PHASE DEMAND METERS 16
3.1.2 ERT-II * DEVICES 17
3.1.3 SINGLE PHASE INTERFACES 17
3.1.4 THREE PHASE METERS 17
3.1.5 THREE PHASE COMMUNICATION LINKS 17
3.1.6 MV-90 INSTALLATION AND INTERFACES 17
3.1.7 INSTALLATION TIMETABLE 17
3.2 METERING SERVICES 22
3.3 METER READING ACTIVITIES 20
3.4 METER RECORDS 24
3.5 FIELD INSTALLATION 25
3.6 FIELD EQUIPMENT AND OTHER INSTALLATION MAINTENANCE ITEMS 27
3.7 MV-90 SYSTEM IMPLEMENTATION 23
3.8 WORK FACILITIES 24
3.9 NEW DEVELOPMENTS 28
3.10 PROJECT SCHEDULE (GANTT CHART - HIGH LEVEL) 29
3.11 DELIVERY SCHEDULE 29
3.12 ERT INSTALLATION SCHEDULE 29
3.13 FIXED NETWORK/MV-90 EQUIPMENT INSTALLATION 26
3.14 CONTRACTOR RESPONSIBILITIES 30
3.15 DUQUESNE RESPONSIBILITIES 31
FIGURE 3-1 (COMMUNICATION LINK ALTERNATIVES DIAGRAM) 29
FIGURE 3-2 (GIHP/MV-90 INTERFACE PRIORITY LIST) 32
4. FIXED NETWORK SYSTEM COMPONENTS 37
4.1 DESCRIPTION 37
4.2 HARDWARE DELIVERABLES 37
4.2.1 ERT/ * /SENTRY METER MODULES 37
4.2.2 ERT METER MODULE OPERATION 37
4.2.3 * /DCI SENTRY DEVICES 34
4.2.4 CELL CONTROL UNITS (CCU) 38
4.2.5 NETWORK CONTROL NODES (NCN) 39
4.2.6 GIHP COMPUTERS AND COMPUTER EQUIPMENT 39
4.2.7 UTS MV-90 TRANSLATION SYSTEM HARDWARE 39
4.2.8 ADDITIONAL MV-90 EQUIPMENT AND SUPPORT 36
4.3 SOFTWARE DELIVERABLES 40
4.3.1 GIHP OPERATING SYSTEM SOFTWARE 40
4.3.2 GENESIS NETWORK MANAGEMENT SOFTWARE 40
4.3.3 GENESIS AUTOMATIC METER READING SOFTWARE 37
4.3.4 GENESIS SQL CLIENT APPLICATIONS 37
4.3.5 MV-90 DATA MANAGEMENT SOFTWARE 38
4.3.6 ABB POWERPLUS ALPHA SOFTWARE 38
4.3.7 LICENSES, TRAINING AND SUPPORT 39
4.3.8 MV-90 DOCUMENTATION 39
FIGURE 4-1 (TYPICAL HARDWARE REQUIREMENTS) 40
5. IMPLEMENTATION/INSTALLATION TOOLSETS 41
5.1 DESCRIPTION 41
5.2 ELECTRONIC DATA INTERFACE (EDI)/READONE SYSTEM 41
5.2.1 READONE PRO UNITS 41
5.2.2 READONE LINK SYSTEM SOFTWARE 41
5.2.3 ERTINSTALL SOFTWARE 42
5.3 ALTERNATIVE DATA COLLECTION CAPABILITIES 42
5.3.1 OFFSITE METER READING (OMR) SYSTEM 42
5.3.2 MOBILE AUTOMATED METER READING (MAMR) SYSTEM 42
5.3.3 DATACOMMAND LINK SYSTEM SOFTWARE 42
5.3.4 DCU SYSTEM SOFTWARE 43
5.3.5 DATACOMMAND UNITS (DCU) 43
6. SYSTEM INTERFACES AND ACCEPTANCE 45
6.1 INFORMATION SYSTEMS AND SERVICES 45
6.1.1 SYSTEM DATABASE 45
6.1.2 SYSTEM APPLICATIONS 46
6.1.3 DUQUESNE MODIFICATIONS, ENHANCEMENTS, AND INTERFACES 47
6.2 SYSTEM ACCEPTANCE 54
6.2.1 SYSTEM HARDWARE TEST 55
6.2.2 SYSTEM SOFTWARE TEST 55
6.2.3 VARIANCES AND PROBLEM TRACKERS 55
6.2.4 PROBLEM RESOLUTION AND ESCALATION POLICY 56
6.3 CERTIFICATION TESTING 56
7. SYSTEM OPERATIONS, SUPPORT, AND MAINTENANCE 57
- -----------------------------------------------------------------------------
7.1 SYSTEM OPERATIONS 57
7.1.1 OPERATIONS CENTER 57
7.1.2 OPERATIONS - DAILY ACTIVITIES 57
7.1.3 CUSTOMER SERVICE AND SUPPORT 58
7.2 SYSTEM MAINTENANCE 59
7.2.1 FIELD INVESTIGATIONS 59
7.2.2 DE-INSTALLS AND RE-INSTALLS 59
7.2.3 EQUIPMENT MAINTENANCE 59
7.2.4 RELATED DOCUMENTATION 59
7.2.5 TECHNICAL LIBRARY 59
7.3 PERSONNEL CERTIFICATION 60
7.4 DISASTER RECOVERY AND BACKUP PLANS 60
7.4.1 APPROACHES AND RESPONSIBILITIES 60
7.4.2 DISASTER AVOIDANCE AND RECOVERY 61
7.5 DUQUESNE'S TRAINING NEEDS AND DELIVERABLES 62
7.5.1 NEEDS ANALYSIS 62
7.5.2 TRAINING 62
8. DELIVERABLES 64
8.1 LIST OF DELIVERABLES - CONTRACTOR 64
8.2 LIST OF DELIVERABLES - DUQUESNE 67
9. GENERAL NOTES 68
<PAGE>
1. INTRODUCTION
- -------------------------------------------------------------------------------
Duquesne is committed to the implementation of new systems and
technologies that are available in the marketplace and which shall
contribute to the Company's goal of becoming a leader in the electric
utility industry. To that end, the Company has been exploring various
alternatives to bring new automated data acquisition services to its
service area that efficiently provide accurate information for billing
and outage management purposes while opening new opportunities for the
delivery of new products and services.
After considerable review, an RF spread spectrum fixed network
application has been selected as the system that can best provide basic
services while permitting maximum flexibility for expansion into other
functional uses. This technology has gained broader acceptance
throughout the public utility industry as increasing numbers of systems
are initiated and become operational. Duquesne has selected this type
of system as the most appropriate approach to meet its long term needs
for expanding customer oriented services while providing higher levels
of customer satisfaction.
1.1 Background
Duquesne is an electric utility with headquarters in the City
of Pittsburgh, Pennsylvania, providing electric service to
approximately 600,000 customers within a service area of 800
square miles located primarily in Allegheny and Beaver
Counties in Southwestern Pennsylvania.
Electric customers are billed on a monthly basis and
customers' meters are scheduled for monthly meter reading. All
meter reading is currently done manually utilizing The
Contractor's handheld datacaps with the Premierplus software
platform. Duquesne intends to improve its customer service
operations by installing a strategic automated solution.
Duquesne has determined that the pursuit of automatic meter
reading to its fullest advantage can best be achieved by
entering a long term service agreement to provide and deliver
meter data and other automated services.
1.2 Scope
The Contractor shall install, own and maintain an automated
meter data acquisition system covering Duquesne's geographic
service area including a communication network to provide and
deliver meter reading and other automated services (as defined
within this document) for approximately * meters, including
all single phase and three phase demand meters on the present
Duquesne system. All required ownership installation and
implementation services including mounting of Meter Modules on
new or used electric meters and installation of single phase
meters at customer premises shall be the responsibility of the
Contractor. Three phase meters shall be installed by Duquesne.
Single phase demand meters (ABB PowerPlus Alpha meters) which
are Transformer-Rated may be treated as three-phase meters if
Itron pays a one time per meter installation fee of * .
The Contractor must be capable of completing the installation
and operation of a wireless communication network (fixed
network) covering Duquesne's service area. The fixed network
shall provide single phase meter reading coverage to a minimum
of * of Duquesne's meters by June 30, 1998, with optional *
coverage by * (see Schedule J). The Contractor must be capable
of completing mass meter changeout programs and providing
implementation plans which comply with the schedule detail in
the schedule portion of the specification. The following
services and system features shall be provided by the
Contractor:
1. All required installation and implementation services,
including purchasing, ownership of all new meters, and
mounting of single phase meter modules on new or
reconditioned meters and installation of single phase
meters at customer premises as defined in Section 3 of
this document.
2. Ability to perform daily readings for all meters
covered by the fixed network and scheduled meter
readings using automated (van) or handheld equipment
meter reading technology. 3. Ability to perform real
time on demand/appointment readings.
4. Jointly develop and install the interface to Duquesne's
information system as described in Section 6.1.3. 5.
Near real time outage/alarm notification.
6. Tamper notification at the time of reading for all
meters that are ERT equipped.
7. Monitoring of inactive accounts for unauthorized usage.
8. Technological refreshment and regular upgrades to the
system to ensure the use of up-to-date technology via
change order process if required.
9. Flexible metering capabilities to provide requested
functionality such as time of use, demand billing, real
time pricing and load profiles, within five (5) days of
Duquesne's request. (Requests received prior to 3:00
p.m. each day).
10. Installation of the MV-90 translation system for
complex metering functions through use of the ABB
PowerPlus Alpha meter for three phase and higher demand
(greater than * ) single phase customers.
1.3 Functional Requirements
The Contractor's automated meter data acquisition system shall
include a wireless fixed network communication system covering
Duquesne's entire service area and shall provide a minimum of
* coverage of the total meters at completion of the full
system deployment (Phase II). This coverage will increase to *
of the total meter population if Duquesne exercises this
option by the date defined in Schedule J of the Agreement. The
system shall also include the installation of encoder,
receiver, transmitters (ERTs) or demand ERTs ( * ) on single
phase meters with less than * of demand in Duquesne's service
area with all new meters owned by Contractor. Contractor will
purchase approximately * single phase PowerPlus Alpha meters
and * three phase PowerPlus Alpha meters for installation at
Duquesne (see Section 3), with Contractor responsible for
installation and maintenance of the single phase Alphas.
Monthly meter readings shall be provided by the Contractor for
all single phase meters not covered by the fixed network.
These monthly meter readings shall be obtained by the
contractor by means of either mobile (vehicle readings) or
off-site hand-held devices (OMR) or other communications
medium selected by
<PAGE>
Contractor and furnished to Duquesne in accordance with the
buyer's established monthly meter reading and billing cycles.
Daily or more frequent meter readings shall also be provided
for all single and three-phase Alpha meters using the MV-90
system.
The Contractor's system shall meet or exceed the following
system service level requirements.
1. Ownership of all new meters on Duquesne's system;
installation of ERTs, * , DCI Sentry devices or
PowerPlus Alphas on all single-phase meters in
Duquesne's service area (approximately * meters);
includes existing and future single-phase demand
meters. Purchase, maintenance, and repair of all
single-phase meters as described in Section 3 of this
document. Purchase of three phase meters during
implementation and new three phase meters for new
services and replacement meters not otherwise
repairable by Duquesne during Phases II and III.
2. Fixed network coverage of * of total single-phase
meters at completion of the primary installation phase
(Phase II) of the project with an optional increase up
to * of the entire meter population as indicated on
Schedule J.
3. Daily consumption and demand (KW) readings for all
existing and future single phase demand accounts.
(approximately * meters at present.)
4. Ability to perform daily reads for all meters covered
by the fixed network; provide daily reads between 10:00
p.m. and Midnight for all Customer Choice Option
customers contracted for that advanced service (see
Schedule D).
5. Monthly reads for all certified single phase meters not
covered by the fixed network, DCI Sentry devices or ABB
PowerPlus Alpha meters.
6. Daily or more frequent read processing as defined in
Schedule D for all three phase meters in Duquesne's
service area through the MV-90 system.
7. Ability to perform on demand (unscheduled) reads for
all meters covered by the fixed network.
8. Power outage notification and monitoring for all meters
covered by the fixed network and MV-90 system.
CCU Level Outage Notification Timely notification alarm when
CCU loses power. Timely notification upon restoration of
power. Interface with Duquesne's outage management system. *
Provide ability to * , interface with Duquesne's system.
<PAGE>
Outage incident reporting for C&I accounts with ABB
PowerPlus Alpha meters reported through the MV-90 system.
9. Ability to provide time-of-use (TOU) reads for all existing
and future single phase TOU accounts - presently commercial
accounts only, including residential TOU customers.
10. MIS Interface - jointly develop all applications software
and Duquesne/Contractor software interfaces as described in
Section 6.1.3 of this document.
11. Capability to provide logical/virtual disconnect function.
12. Capability to monitor inactive accounts for unauthorized
usage.
13. Demand (KW) reads for commercial and industrial meters -
capability to provide enhanced functions for three phase
customers through the MV-90 system. Demand reads for
commercial and industrial applications must be measured and
maintained by the meter or CCU, until received by the MV-90
system (excludes * meters handled through the fixed
network).
14. TOU reads for all classes of customers including
residential, commercial and industrial ( * accuracy for
residential TOU being performed by the network) - capability
to provide similar service for three-phase meters. Demand
reads for commercial and industrial applications must be
measured and maintained by the meter, until received by the
system.
15. Load Profile Reads for residential, commercial and
industrial customers capability to initiate load profile
assignments and to monitor, store and display load profile
data. Load profile reads must be measured and maintained by
the meter or CCU until received by the MV-90 system into
Duquesne's DISCuS, data warehouse, or other systems. The
MV-90 system must retain a three-year storage and access of
data for load research and analysis purposes.
16. Real Time Pricing Reads for all classes of customers
including residential, commercial and industrial - with
similar capability for three-phase meters, using the MV-90
RTP package. Data must be delivered on a near real-time
basis initially for accounts processed through the MV-90
system with further enhancements for fixed network accounts
as required to meet Duquesne's business requirements.
17. Identification of unusually large shifts of energy use
patterns for tamper detection.
18. * Detection of high line loss circuits for circuits covered
by the fixed network.
19. Flexible metering capabilities capable of providing rate and
service interchangeability with or without the need for
meter replacement or changeout.
20. * Actual physical turn-on/turn-off capability.
21. Provide for customer energy management capability including
interval data through use of the MV-90 for ABB Alpha
customers and GIHP fixed network customers for use in
real-time pricing situations.
22. * Signature analysis - appliance end use monitoring
information.
23. * System diagnostic capabilities including:
Circuit monitoring System capacity
prediction System load profile Transformer
load profile Transformer outage
notification Load forecasting
24. Meter and metering services as defined herein, including
single phase services through the GIHP, and single and three
phase services through the MV-90 system.
25. MIS interface and development services as defined herein.
The functional requirements for the "asterisked items" have
not been defined nor developed. Following construction and
development, Contractor will make available to Duquesne the
option to include, based on contractual agreements, the
selected functionality.
1.4 Statement of Services
The following services shall be provided by the Contractor
upon implementation of this Agreement:
1. Ability to provide daily meter reads (KWH) for all meters
covered by the fixed network.
2. Ability to provide reads from 10:00 p.m. - Midnight each day
for customers designated as Customer Choice Option customers
and contracted for such service under Schedule D.
3. Ability to provide daily demand (KW) reads for all single
phase demand accounts covered by the fixed network (using *
or ABB PowerPlus Alpha meters), including the MV-90 system.
Ability to supply billing determinants through MV-90 system
for Alpha meter accounts to arrive at peak demand (KW) for
billing purposes and reset of demand each month coincidental
with billing period. Single phase accounts greater than *
will be equipped with the ABB PowerPlus Alpha meter and
processed through MV-90, while the remaining single phase
demand accounts will generally be handled through the fixed
network using the * device.
4. Monthly meter reads for all remaining certified single phase
meters not covered by the fixed network.
5. Ability to perform unlimited on demand/appointment readings
for all meters on the fixed network.
<PAGE>
6. Simultaneous group readings as required for various
categories or groups of meters to be determined by Duquesne.
7. Near real time tamper notification and reports for all
meters covered by the fixed network. The tamper reporting
application shall record each occurrence of tampering at
each meter. Periodic tamper reporting for ERT'd meters not
located on the fixed network.
8. Near real time power outage notification at the * CCU level
consistent with design criteria in Schedule B ( * based on *
). Outage data will interface with Duquesne's systems as
needed to support effective implementation of the outage
notification and restoration functions.
9. Logical/virtual disconnect function capability for all
accounts covered by the fixed network.
10. Monitoring and reporting of consumption for unauthorized
usage of inactive accounts for all accounts covered by the
Fixed Network.
11. Delivery of all data to the host billing system as
required.
12. Flexible metering capabilities for Customer Choice
Option reads, TOU, Load Profile and Real Time
Pricing for all accounts covered by the Fixed
Network, or processed through the MV-90
applications.
13. Installation testing and maintenance services for
all single phase equipment, GIHP system or MV-90
software and other deliverables excluding
installation and maintenance services for
three-phase meters.
14. Meter and metering services covered under the
Agreement.
15. Contractor interface and development services covered
under the Agreement, as necessary to fully implement
daily reads, billing, DISCuS or other functions through
use of * or other necessary interfaces as shown on the
GIHP/MV-90 flow diagram (see Figure 1-1).
1.5 System Overview
The Fixed Network shall utilize a communications system
consisting of local area and wide area networks to remotely
communicate with Meter Modules. All transactional data shall
be acquired, monitored, and managed by the Contractor's
real-time relational database, and stored in a Contractor
supplied relational database queried by Standard Query
Language (SQL) commands using an Oracle environment.
Actual equipment specifications, including both single and
three phase equipment and hardware, are included in Schedule
B. These specifications include, but are not limited to,
Genesis fixed network equipment and software, end point
devices such as * , ERTs, DCI Sentry, single and three phase
ABB PowerPlus Alpha meters, * theory and MV-90 system
operational and software specifications. These documents will
be integrated during Phase II into one overall system
specification describing the technical and operational
functionality of the complete system.
<PAGE>
1.6 Implementation
The Contractor shall provide and install all necessary
equipment, hardware, software, and services to implement a
Genesis fixed network automated data acquisition system in the
Duquesne service area. Specific requirements for Meters being
equipped with Meter Modules are covered in Section 3 Project
Implementation Services, Equipment. The specific Equipment,
Software, and Services to be provided are described in this
Description of Work.
1.7 Implementation Phases
Implementation of the automated meter data acquisition system
for Duquesne shall be separated into distinct phases. Phase I
shall demonstrate process development and verification.
Activities shall test and integrate all processes necessary to
install and operate all of the system components (Meters,
Meter Modules, radio communication devices, installation
tools, Software, etc.).
Phase II is actual installation of the complete system.
Primary activities to be performed during this period are
completion of all Meter exchanges, Meter Module installations,
radio device installations, and software interconnection and
integration of MV-90 applications. Included in this Phase is
installation of the MV-90 system for three phase and large
single phase meters, and initial processing of all customer
interval data.
Phase III is the operational phase and consists of the ongoing
data acquisition and Meter maintenance services provided to
Duquesne by the Contractor. It is expected that Phase I shall
be complete prior to Phase II. Phase II shall begin the Meter
change out process, provide the phase-in of all new
applications and interfaces to Duquesne's systems, and
conclude with testing and acceptance by Duquesne. In
accordance with Schedule J of the Agreement, the fixed network
may be expanded to * coverage of Duquesne's total Meter
population, at Duquesne's option.
<PAGE>
Preliminary System Flow Diagram
GIHP and MV-90 Operating Systems
- ------------------------------------------------------------------------------
*
- -------------------------------------------------------------------------------
Notes:
1) Diagram represents approximate interactive design of anticipated
interfaces and is subject to change based on future design
considerations.
2) All system interfaces are not finalized. Some systems, such as
the Power Billing System, require further development to define
all interfaces.
3) The MV-90 system shown above is comprised of a number of hardware
components that are not detailed in the diagram.
4) ABB Envision software may be implemented by Duquesne for
management of power quality data provided by ABB's PowerPlus
meters, with appropriate interfaces to DISCuS and MV-90 provided
(see Schedule J, Milestone #13 High Level Architecture).
FIGURE 1-1
2. PROJECT MANAGEMENT
- -------------------------------------------------------------------------------
2.1 Project Management Role Definition
As a minimum, the Contractor shall assign individuals to the
key positions listed in this section for project
implementation. Duquesne and the Contractor consider these
positions to be essential and the minimum necessary for
successful project completion.
The Contractor shall ensure that the necessary project
management is in place to support the transition from
Duquesne's current meter reading system to the new fixed
network automated meter data acquisition system.
Well-established project management, planning, and training
processes shall be utilized along with use of an experienced
staff of system engineers, project managers, trainers and
customer support staff to develop and implement these plans.
2.1.1 Senior Account Manager
The Contractor's project team shall be led by a
Senior Account Manager, who maintains overall
responsibility for project status and operations. The
Senior Account Manager shall be the primary point of
day-to-day contact between Contractor and Duquesne
and shall track system progress, schedules, changes
in scope and budgets.
The Senior Account Manager shall have Contractor's
overall project management responsibility. The Senior
Account Manager shall be responsible for on time,
implementation of the fixed network meter data
acquisition system, administration of all activities
and ensuring that all milestones, customer
satisfaction requirements and other requirements of
the Agreement are met.
2.1.2 Project Management Responsibilities
The Contractor's Senior Account Manager shall
coordinate Meter Module and radio device
installations by Contractor and its subcontractors.
Primary installation activities shall focus on
tracking project timelines, meeting defined
installation goals, maintaining quality assurance and
control, managing subcontractors, providing billing
and invoicing control, supporting and offering
guidance to Duquesne, and resolving complaints and
issues regarding installations. The Senior Account
Manager shall track installation progress, maintain
installation schedules and appointments, and ensure
quality of installations.
2.1.3 Project Managers
A Project Manager is one of the project's lead
technical team members; however, other technical
personnel may be called upon to perform appropriate
functions as necessary.
For software related issues, a Project Manager
assures that the system software is acceptable in its
overall technical design and function, that it
complies with requirements and design objectives, and
is setup and configured properly.
<PAGE>
For hardware related issues, a Project Manager
assures that the hardware deliverables meet the
system requirements, orders and procures necessary
hardware components, supervises technicians,
documents system configuration, and arranges for and
supervises system staging, integration, and
installation.
2.1.4 Technical Coordinators
Specific technical individuals shall be associated
with the project and shall be part of the extended
project core team. These Technical Coordinators shall
be responsible for providing information, procedures,
suggestions, and new product information, and
assisting with installation issues and anything that
pertains to appropriate system implementation.
2.2 Duquesne Project Organization
2.2.1 Duquesne Project Manager
The Duquesne project team shall be led by the Project
Manager who is responsible for project status and
operations. The Project Manager shall be the primary
point of contact between Duquesne and the Contractor.
The Project Manager shall manage and track system
implementation progress, schedules, changes in scope,
budget, quality control, and coordinate activities
among departments.. The Project Manager shall also
oversee customer relations and address concerns of
any customers this project will impact. The Project
Manager will have both technical and fiscal
responsibilities for the project.
2.2.2 Duquesne Project Organization
The Duquesne Project Organization shall:
a)Oversee the project equipment and software
deliverables.
b) Coordinate the interfaces between the new systems
and Duquesne's customer information systems.
c) Assign and track action items; request corrective
action plans as provided for under the Agreement.
d) Collect progress data.
e) Monitor project installation and coordination,
and adherence to Schedule J.
f) Collect project deliverables.
g) Document technical aspects of the project.
h) Audit the quality of installations.
i) Monitor meter conversions and interfaces between
Duquesne's and Contractor's systems.
j) Inspect projectinstallations for quality control.
k) Coordinate the transition from manual meter
reading to an automated system, including
implementation of automated three phase metering.
l) Establish engineering procedures and standards.
m) Assist with installation issues regarding meter
conversions.
n) Perform other functions as necessary.
<PAGE>
2.3 Project Management
2.3.1 Tools
Specific and common project management tools shall be
utilized throughout the Term of the Agreement at
Duquesne. This will provide consistent, revisable
documentation that can be tracked both electronically
and manually. The following tools shall be utilized:
Project Scheduling: Microsoft Project, version 4.0
Documents: Microsoft Word, version 6.0.1
Correspondence: Microsoft Word, version 6.0.1
Spreadsheets: Microsoft Excel, version 5.0a
Databases: Microsoft Excel, version 5.0a
These tools may be changed or upgraded from time to
time with mutual agreement.
2.3.2 Scheduling
The Contractor shall provide a detailed project
schedule, consistent with both the Meter installation
schedule and Schedule J, which identifies specific
Milestones, and supports the contractually agreed on
Milestone Schedule J, as well as other schedules
included herein. This schedule becomes the reference
schedule that the Contractor and Duquesne Project
Managers shall use to measure project progress.
The top level schedule (presented as Gantt and PERT
charts) shall be used to develop a detailed project
schedule, in order to assure that all project
commitments are based on the same assumptions and
milestones, and ensuring that completion dates are
consistent and completely listed.
Schedules shall be monitored and status updates
provided on a periodic basis by the Contractor or as
requested by Duquesne to reflect completed items,
adjusted task items or identification of significant
changes. Any minor changes shall require approval of
Duquesne, major changes will require review and
approval by Duquesne and Contractor, and shall be
handled in accordance with the appropriate change
control provisions of the Agreement.
2.3.3 Document Tracking
All documentation, including specifications, manuals,
guides, and correspondence, shall be numbered and
tracked by both project management teams. Document
tracking ensures consistent communication with clear
collaboration between the Contractor and Duquesne.
Document numbering and tracking schemes shall be
determined, jointly, by the project management teams.
A specific transmittal form will be developed for use
throughout the Agreement.
2.3.4 Correspondence
All correspondence, including letters and memoranda,
shall be numbered and tracked via the previously
specified document tracking mechanisms. All
correspondence shall be handled as a transmittal with
a cover form that includes appropriate numbering for
identification. A specific transmittal form will be
developed for use throughout the agreement.
2.3.5 Telephone Contact Reports
To ensure that telephone correspondence is accurately
tracked and recorded, a contact report shall be
generated for all significant communications. These
contact reports shall be tracked with a brief
communication description, date, and time by the
project teams. These reports may be entered into the
project correspondence tracking system as requested,
otherwise they will not be considered project
commitments. Contact reports are kept by both the
Contractor and Duquesne organization as appropriate.
2.3.6 Progress Reports
Progress Reports shall be provided by the Contractor
as formal updates to the status of the project
implementation. Reports shall be created and
distributed at specified milestone dates, monthly,
and as needed or as outlined in the agreement
(determined by project management teams). Included
within the status reports will be specific
milestones, updates, action item lists.
Weekly updates regarding the installation efforts
(i.e. number of installed Meter Modules and other
equipment, hard-to-get-at-meter-identification,
inaccessible meters, and equipment installation
issues) shall be provided to Duquesne from the
Contractor, based on similar reports from
subcontractors. Other reports including graphic
displays of project information shall be provided to
Duquesne on an as needed basis. In addition to the
formalized progress reports, daily verbal
communications shall take place between project
management. Other reports as required by Duquesne in
the Agreement will also be issued.
2.3.7 Action Item Lists
As a means to consistently track open issues and
actions, Action Item lists shall be created and
updated as necessary. These lists shall be maintained
by the project management team and shall be
distributed and available to all project team members
and other interested individuals as directed by the
Project Managers.
2.3.8 Project Meetings
Project review meetings shall be held every four (4)
weeks or more frequently as needed through Phase II
and as required during Phase III. Meetings shall be
scheduled to discuss technical aspects of the
project, provide status updates in addition to the
status reports, review performance and review
implementation changes (i.e. scope, additions,
schedules).
2.3.9 Document Review
Specific documents, as defined in Section 8
Deliverables and in Schedule N, shall be provided to
Duquesne.
Documentation for Contractor's standard hardware and
software is furnished for Duquesne review, but is not
typically subject to approval or customization except
as specified in the Agreement. If errors are found in
standard documentation, comments and "problem
tracker"' forms are available to identify the errors
for correction. Updated documentation shall be
provided to Duquesne as available.
2.4 Change Control Process
Change control is the prescribed process to manage changes
defined during the Agreement. To establish a basis for change
control, baseline documents are identified to guide the
activities on the project. The baseline documents for the
fixed network system are described as follows, and these
documents are grouped as one document.
Utility Automated Meter Data Acquisition Agreement and
Attached Schedules and Exhibits (as Revised) Is the
defining contract document that provides for the delivery
of defined services and controls all other documents.
Description of Work Is the document that defines all
project installation, field implementation and ongoing
service activities and is included in the Agreement as
Schedule A.
Technical and Functional Specifications Represent
subsequent baseline documentation for each component of
the fixed network system. These documents detail published
engineering specifications for each fixed network system
component (both hardware and software), system
configuration and diagnostic characteristics, operational
manuals and guides, other design specifications,
installation procedures, and also includes functional
requirements of the fixed network management system. The
technical specifications are attached to the Agreement as
Schedule B and product, functional or system specification
documents will be provided by Contractor as required in
Schedule J.
Upon completion of the installation efforts and movement into
the operational activities phase (Phase III) the change
control processes will continue to remain available to review,
monitor, schedule, and approve suggested changes to the fixed
network system services or implementation process. All changes
which affect the Agreement must be handled as specified under
Article IV of the Agreement.
2.4.1 Types of Changes
Change requests are categorized in Two categories:
Minor Change if the change is minimal and has no
cost, schedule, or other material impact; Major
Change if the change is major and causes a cost,
schedule, or other impact. The project management
teams shall determine and finalize the type of change
classification in accordance with the Agreement. If
there is a question on the type of change
classification, the request shall be considered
Major, and shall require review by the Contractor and
Duquesne Project Managers before being finally
classified as Minor or Major. (All Major changes must
be handled in accordance with Article IV of the
Agreement.)
<PAGE>
2.4.2 Change Control Diagram
The following diagram depicts the method that will be
used to handle change requests made by the Contractor
or Duquesne during the term of the Agreement:
Change Process Flow Diagram
[GRAPHIC OMITTED]
<PAGE>
2.4.3 Change Control Process
The following process shall be used for disposition
of changes requested during this Agreement:
a) Either party may initiate a request for change by
completing the form included as Schedule K of the
Services Agreement.
1) If the Schedule K form is completed by Duquesne, it
shall be submitted to the Contractor's Project Manager.
Unless otherwise stated in the request for change,
Contractor shall within * of the date of the request,
advise Duquesne whether the requested change is a Minor
Change or a Major Change.
If Contractor believes the requested change is a Major
Change, Contractor shall provide a proposal to Duquesne
within * unless an extension is agreed upon with its
advisement identifying the specific impact on price,
scope, schedule or any other impact on this Agreement
in sufficient detail for Duquesne to evaluate the
reasonableness of Contractor's proposal. Contractor
reserves the right to charge Duquesne its time and
expenses associated with preparing a proposal, if it is
estimated that such effort will take more than 8
manhours to prepare.
2) If the Schedule K form is completed by Contractor, it
shall identify whether the requested change is a Major
Change or a Minor Change. If a Major Change is
requested, Contractor shall include its proposal
identifying the impact on price, scope, schedule or any
other terms of the Agreement to implement the change in
sufficient detail for Duquesne to evaluate the
reasonableness of Contractor's proposal.
b) If the change requested by either party is a Minor
Change and Duquesne desires that Contractor proceed
with the change, the completed Schedule K form shall be
signed by both Project Managers and a copy of this
shall be maintained in each party's file as
authorization for this change, and is considered an
official Agreement document.
c) If the requested change is a Major Change and Duquesne
desires that Contractor proceed with the change, a
Change Order Notice shall be issued by Duquesne to
incorporate the change and any authorized adjustments
to price, scope, schedule or any other terms of this
Agreement.
Upon receipt of an approved Change Order Notice from
Duquesne, Contractor shall proceed with the change in
accordance with the change order/control procedure.
<PAGE>
3. PROJECT IMPLEMENTATION, SERVICES, EQUIPMENT
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3.0 Meter Purchases
Successful integration of meter hardware and services with ERT
data delivery functions is critical for the Contractor to
provide a fully integrated meter data acquisition system. This
integration can be best achieved through the Contractor
ownership of all new meters, as well as the ERT, CCU, NCN and
other system configuration hardware necessary to deliver data
services to Duquesne. Duquesne will maintain ownership of all
existing retained meters.
During the course of this Agreement, the Contractor shall
purchase new meters required for use in Duquesne's service
area where retrofitting meters is not possible for the
installation of Meter Modules. For new ERT'd meters, The
Contractor shall coordinate with the meter manufacturer to
have the ERT module installed at their factory. Other meters
shall be purchased with the objective of installing devices,
such as * and DCI Sentry to automate the data acquisition
function for those meters as well. In other cases, ABB
PowerPlus Alpha meters will be purchased by Contractor to meet
three phase and large (transformer-rated, above * ) single
phase demand requirements.
Purchase of new meters shall be completed by the Contractor in
accordance with Duquesne specifications and requirements.
Ongoing coordination between Duquesne and the Contractor will
be necessary for the purchase, scheduling and delivery of
three-phase meters being installed and maintained by Duquesne.
Contractor shall adopt industry standards (ANSI, IEEE SCC 31)
for communicating Meter data and defining interconnectivity of
Meter devices.
Assigning responsibility for ownership and control of meter
devices is critical to the successful integration of services
required under the Agreement. The responsibility to inspect,
test and maintain the single-phase meter population shall
provide the Contractor with the overall control necessary to
achieve the service level requirements specified under the
Agreement. Duquesne shall retain responsibility to inspect,
test and maintain the three-phase meter population.
3.1 Single and Three Phase Demand Meters
Contractor will ensure that the following single and three
phase demand meter requirements are implemented:
3.1.1 Single Phase Meters/Communication Links
Single phase ABB PowerPlus Alpha meters will be
installed by Contractor (or Duquesne pursuant to
Section 3.9 of the Agreement) on all single phase
transformer-rated demand accounts equal or greater
than * using telephone line communication links
(approximately * meters). Contractor is responsible
for providing the meters and telephone modems, and
for paying * , if any. Contractor will install, or
pay to have installed, the single phase meters,
modems, telephone line connections and any other
related charges.
<PAGE>
3.1.2 *
Single phase demand accounts less than * will be equipped
with * devices (see General Note #6) capable of recording *
. * accounts will be connected to the fixed network which
will deliver * . * will be passed through an appropriate
interface to the MV-90 system for * purposes.
3.1.3 Single Phase Interfaces
Appropriate interfaces to the GIHP, DISCuS, MV-90,
Power Billing and data warehouse subsystems will be
developed by the Contractor to carry out required
functions, such as billing, daily reads processing
and retail competition supplier reconcilement (see
Figure 1-1).
3.1.4 Three Phase Meters
Contractor will purchase approximately * three phase
ABB PowerPlus Alpha meters with power quality
monitoring functions, outage notification and load
profile capability, and the necessary modems for
connecting all three phase meters to telephone lines,
trunk radio, CDPD or other communications mediums as
appropriate for each account having three phase
service. These meters/modems will be leased to
Duquesne, with a * residual payout (see Schedule E)
at the end of Phase III (unless extended beyond 15
years). Duquesne will perform the installation of
these meters/modems at the customer's location, with
Contractor responsible for establishing the necessary
connection at the MV-90 head end system through
installation of head end equipment such as the MV-90
server and modems.
3.1.5 Three Phase Communication Links
Contractor will be responsible for providing
communication links via trunk radio, CDPD or
telephone connections, including monthly
communication charges if any, for all
transformer-rated three-phase services (approximately
* accounts). The trunk radio communications option
may be selected by Contractor for meters not
utilizing or requiring a telephone line connection if
trunk radio is available and compatible with the
MV-90 system as described in Figure 3-1. Duquesne
will provide connections and assume operating costs
for the remaining * three-phase meters.
3.1.6 MV-90 Installation and Interfaces
Contractor will install the MV-90 system and
appropriate billing and data interfaces (see Figure
3-1) such that the transition to automated services
will be smooth. Three phase interfaces with billing,
DISCuS, data warehouse or other systems will be
provided by Contractor in sufficient time to permit
continued orderly processing of all accounts by the
respective implementation dates on Schedule J and the
project interface priority list (Figure 3-2).
3.1.7 Installation Timetable
Figure 3-1 describes the timetable for installation
of single and three phase ABB PowerPlus Alphas using
shared as well as separate phone lines, trunk radio
or other communications medium.
3.2 Metering Services
The Contractor shall assume responsibility for all Meter
purchase and ownership functions described in the Agreement.
Beginning in Phase II, the Contractor will inspect, test,
install, remove and maintain all Meters on which an ERT, * or
DCI Sentry device has been installed. Duquesne will continue
to inspect, test, install, remove and maintain all Meters
which are not automated. Duquesne will also continue to
perform the actual physical connect and disconnect on all
meters during the term of the Agreement. The Contractor will
establish appropriate trained staff to perform required
support functions. Duquesne and the Contractor shall
coordinate the transition of three phase customers to
automated three-phase metering and related services based on
installation of the MV-90 system. The metering services
functions required to support the Agreement Meter provisions
are as follows:
1. The Contractor shall provide installation, inspection,
testing and maintenance functions for all single-phase
meters at a level that is consistent with Prudent
Utility Practices and regulatory requirements. Meter
inspection and maintenance activities initiated by
Duquesne must be completed by Itron within * of receipt
of a service order (using appropriate work order
management system; notification before 3:00 p.m.). This
effort includes requirements for Meter installations,
removals, periodic and sample testing, inspections
required for customer inquiries, high bill complaints,
tampering or other reasons, and maintenance and general
repairs of all damaged or defective meters and related
equipment encountered by the Contractor or requested by
Duquesne. All data required for recordkeeping or
customer response purposes shall be provided to
Duquesne in the manner and form consistent with the
Agreement.
2. The Contractor shall establish a Meter test and
maintenance facility as accepted by Duquesne to
complete all single-phase meter test requirements,
repair functions and ERT or single phase Alpha meter
installation and testing activities necessary to meet
system requirements. All testing shall be performed to
meet test requirements established under Schedule F.
Recordkeeping and reporting requirements associated
with these activities shall be maintained consistent
with the Agreement.
3. Sufficient metering services support staff shall be
required to accomplish the required meter services, and
to complete meter sets and removals within * of
notification by Duquesne (same notification
requirements as above). Sufficient Contractor
supervisory personnel shall also be required to oversee
this effort and ensure that all obligations covered
under the Agreement are satisfied. Duquesne agrees to
provide supervisory oversight during the transition
period, in order to assist the Contractor in ensuring
that all recordkeeping requirements, regulatory
compliance issues, and customer satisfaction are
maintained.
4. During the Agreement, Duquesne shall retain overall
responsibility for all engineering support, standards,
procedures, policies, and technology enhancement
functions related to the metering services contained in
this Section. Contractor shall maintain equipment and
facilities that meet all standards for safety, quality
and performance
<PAGE>
and include appropriate advanced metering technologies to
ensure that the overall meter population does not become
technologically obsolete during the term of this Agreement.
Duquesne shall provide all historical data necessary
permitting the Contractor to evaluate its costs and expected
resource requirements during this period.
5. Contractor shall utilize intelligence at the meter for
computing and retrieving both single and three phase
demand and higher level customer consumption data
through the fixed network or through the fixed network,
including MV-90 applications. The System shall be
capable of retrieving the required consumption data
from all meters connected to the fixed network.
6. Contractor shall qualify its labor force to ensure
that all personnel possess the necessary skills
and knowledge required to perform all required job
functions in compliance with Prudent Utility
Practices and regulatory requirements. Although
Duquesne shall not be directly responsible for
training Contractor maintenance personnel,
assistance shall be provided to Contractor
trainers regarding Duquesne's specific standards
and practices.
7. All necessary test equipment, tools, and
associated accessories to be used by Contractor
field maintenance crews shall be provided by the
Contractor and comply with Duquesne's requirements
and specifications.
8. Duquesne recognizes that certain details related
to test, maintenance and inspection requirements
shall require further evaluation. Necessary
material to support this effort are available for
review.
9. Installation of ERT retrofit kits shall be accomplished
in one of two manners. For new meters ERT retrofit kits
shall be installed by the meter manufacturer. The new, ERT'd
meters shall be exchanged with current meters in the field.
The Contractor shall select a sample of * from each shipment
of * new ERT equipped meters and perform a meter calibration
accuracy test in their retrofit center prior to field
install. The old meters that are being replaced with new
ERT'd meters shall be sorted by the Contractor and/or their
sub-contractor according to criteria set forth in Schedule
G. Meters meeting acceptable reuse criteria shall have ERT
retrofit kits installed by the Contractor or their
sub-contractor. Following ERT module installation, all
retrofitted meters shall be tested and recalibrated by the
Contractor per Duquesne specifications and Pennsylvania
P.U.C. rules.
10. Testing of new or retrofitted single phase meters
by the Contractor shall be conducted in a timely
manner to allow proper inventory levels for field
installation. Three phase meters shall generally
be tested at the manufacturer's location and shall
meet Duquesne's specifications prior to shipping.
All retrofitted single phase meters shall have a
bar code label attached by the Contractor per
Duquesne specifications. During Phases II and III,
the Contractor shall retain the option to scrap
any old meters and replace them with new ERT'd
meters as necessary and appropriate, consistent
with Duquesne's requirements.
<PAGE>
11. Field-related meter installation and servicing
activities by Contractor personnel will be
performed in a manner which maintains Duquesne's
monthly customer satisfaction ratings. Customer
satisfaction ratings will be determined as a
result of feedback received from customers at
whose locations Contractor performs work related
to the Agreement. A Customer Satisfaction Survey
card, supplied by Duquesne, will be left with
customer for return to Duquesne. Contractor will
supply a monthly exception report where
appropriate. Performance will be calculated based
on the number of surveys returned for the current
month with categories weighted as shown below:
Friendly and Courteous *
Timely *
Professional and Competent *
Respected Property *
Presentable *
3.3 Meter Reading Activities
During and upon completion of Phase II, as routes are assigned
or accepted, all meter reading activities shall be handled by
the Contractor, except for three phase meters awaiting
connection to MV-90. Readings shall be provided for all meters
on the Duquesne system, either via the fixed network, the
MV-90 system applications or by mobile or manual methods as
follows:
Fixed Network - Provide a minimum of daily reads for all
meters which are covered by the fixed network. Provide
consumption or other data for advanced services at the pricing
levels described in Schedule D.
Mobile - Monthly billing reads shall be provided via the
mobile system for all meters which have a Meter Module
installed but are not covered by the fixed network.
Manual - Duquesne will continue to read three phase demand
meters and single phase meters until they are automated.
Contractor may also retrieve readings manually, from time to
time, where automated systems are unable to retrieve data.
MV-90 System - Daily or more frequent reads will be provided
for all three phase and large (greater than * ) single phase
customers equipped with an ABB PowerPlus Alpha meter. All such
meters will be capable of delivering advanced rates such as
time-of-use or interval data for load profile as contracted by
Duquesne per Schedule D.
3.4 Meter Records
Maintaining accurate records for meters is critical towards
achieving Duquesne's goal for accurate customer billing and
customer satisfaction. This goal is best achieved using
DISCuS, Duquesne's Information System for Customer Service.
This state-of-the-art system integrates five major customer
service subsystems including meter records which supports the
functions of maintaining meter device, test and location
information.
During the Agreement, the Contractor shall maintain records of
all meter transactions and update DISCuS records per
specifications. Duquesne shall provide the necessary access to
its information systems to perform the required record keeping
functions.
3.5 Field Installation
The Contractor shall provide the equipment and labor necessary
to install, verify operation, and complete all single phase
(except for installations performed by Duquesne in accordance
with Section 3.9 of the Agreement) Meter exchanges, CCU
installations, and NCN installations. This effort includes
scheduling the work and arranging appointments, following
criteria established by Duquesne (Meter installation for
identified socket and A-Base meter sets, not including tamper
or diversion of service investigation, etc.). The Contractor
shall install the necessary communications facilities, power
transformers, service lines and connections needed to provide
a fully functional, installed fixed network and headend
applications including MV-90 as required to satisfy the
Agreement. Duquesne will provide available information
concerning the existing pole and transformer population.
The Contractor shall complete Meter exchanges on all
identified meters in the Duquesne services area.
The installation crews shall utilize off peak hours
if necessary to attempt to contact customers for
inaccessible locations
The field installer shall visit the house and
attempt access to the meters for installation (field
attempt number one).
If the meter is inaccessible or the installer cannot
gain access to the meter or work on the meter due to
customer related issues, the field installer shall
leave a door hanger provided by Duquesne (written
notice number one).
If questions arise due to inaccessibility, work
which can not be completed, or differences in the
parallel testing efforts (incorrect meter numbers,
different addresses, meter reading differences,
etc.), Duquesne and the Contractor shall conduct
individual or joint inspections to agree on how to
proceed.
On a separate occasion, typically another day of the
week, the field installer shall re-visit the house to
install the new ERT'd Meter (field attempt number
two).
If the meter is still inaccessible, the installation
crews shall notify the Contractor to send a post card
notice. Requesting access and appointment scheduling
(written notice number two).
The field installer shall attempt to install the
ERT'd Meter a final time (field attempt number
three).
The Contractor shall establish a reserve fund of up to * for
the purpose of handling service entrance and socket
modifications required to complete Meter change installations.
The overall contract scope change provisions shall be utilized
to address and approve requests in excess of the established
reserve fund. Unexpended amounts will be retained by
Contractor.
The Contractor shall establish appropriate policies
and procedures, subject to Duquesne approval, to
regulate and account for all charges assigned to this
reserve fund. Periodic audits initiated by Duquesne
will be conducted to ensure the reserve fund is
properly administered. Duquesne approval shall be
required for any job transaction charged to the
reserve fund in excess of * . The Contractor shall
provide Duquesne with a monthly statement showing the
reserve fund transaction details and fund balances
for the period. Upon completion of Phase II, all
unused dollars in the meter socket reserve fund
budget will be retained by the Contractor.
If work on the meter cannot be completed due to
meter issues (such as electrical wiring constraints
or physical room for the Meter), Duquesne shall be
consulted for guidance or other action as may be
appropriate to resolve the problem.
If an A-Base meter is encountered, the installer
shall install a socket adapter to enable installation
of the ERT equipped socket meter. If the A-Base
socket adapter cannot be installed due to meter
issues (such as wiring constraints, space problem or
unsafe conditions), Duquesne and Contractor shall
mutually decide how to proceed.
Relocating, replacing, repairing sockets.
Unsafe conditions.
Required rewiring to meet code specifications.
During the time between and following the first and second
inaccessible occurrences, the installation crews shall attempt
to contact the customer premise via telephone for scheduling
and meter access (three telephone attempts). A valid telephone
attempt is when the customer can be reached or when a message
is left on an answering machine or voice mail. If a meter is
inaccessible and the field installer has satisfied the
contracted number of three attempts and three telephone call
backs, the customer account shall be turned over to Duquesne
for evaluation.
Field Installation Specifications shall be developed
consistent with Prudent Utility Practices and documented by
Contractor, and reviewed and commented upon by Duquesne,
including installation of A-Base adapters, meter rings, lock
bands, suspected tampering, and seals on electric meters, and
other necessary supplies that may be required. These documents
shall cumulatively be known as the ERT Meter Module
Installations manual and shall be issued by the Contractor for
Duquesne's review and comment.
The installation process shall be documented to fully explain
the procedures and guidelines with respect to the installation
of Meter Modules, Meter exchanges and other on-site field
installation efforts. Field installers shall identify and
report unbilled meters and customers using without a meter.
Meter exchanges with ERT equipped meters should be performed
as these conditions are encountered. Included in this document
shall be procedures for office operations, customer
information system data input, installation expectations, and
general guidelines.
Duquesne shall define and schedule the specific work routes
where the ERT Meter Modules shall be installed. The
installation territory is divided into specific work units
that represent a cycle day's work. The work units are
comprised of Routes that the meter readers currently follow.
Installation crews shall follow the same work Routes across
multiple work units within a given day. Routes will be
vertically selected across work units to allow for consistent,
systematic removal of manual routes across the territory. Such
scheduling shall attempt to be within the window of the last
billing date and the future reading date. Duquesne will
attempt to schedule the Routes to allow efficient installation
and permit the information systems to be updated with current
operations. Work routes shall be selected and prioritized by
Duquesne using a selection criteria including (1) "hot spot"
identification, (2) balance within routes and work day, (3)
large work unit classification, (4) parts of a route versus
full assigned route (5) billing and customer communication
schedules. However, maintaining flexibility while selecting
work routes is a key function that shall be monitored by the
project management teams. Routes shall be considered completed
when * of the ERT capable meters have been retrofitted with
ERT Meter Modules and when certification testing has been
completed. Detailed exception lists shall be prepared by the
Contractor showing completed routes and accounts without
installed ERTs.
3.6 Field Equipment and Other Installation Maintenance Items
ReadOne Pro units are used to program ERT Meter Modules,
assist in the installation of the ERT Meter Modules on the
electric meters in the meter shop, and complete electric meter
exchanges via work order transactions. All necessary ReadOne
Pro handheld computers and all associated accessories (i.e.
batteries, chargers) to be used by the Contractor field
installation and maintenance crews shall be provided by the
Contractor. Up to * units to be used by Duquesne employees
shall be provided by the Contractor. Duquesne shall provide
and accept, electronically to the ReadOne Link application
software, appropriate work order transactions based on
selected work units and routes. The ReadOne Pro software shall
be modified, as necessary, to accommodate Duquesne's service
order processing system.
Other necessary equipment shall be provided by the Contractor
to further facilitate the installation or testing of the ERT
Meter Modules and meter exchanges, as well as installation and
testing of * , DCI Sentry devices, single phase ABB PowerPlus
Alpha meters, and any other equipment, including communication
lines.
Installation and maintenance crews (Contractor's and
Sub-Contractor's employees) are required to wear an
identification vest or shirt and badge at all times while
installing equipment in the field. Duquesne shall specify the
requirements related to proper identification or uniform type.
Specific training needs shall be addressed on an as needed
basis during the installation process. For field installation
efforts, Duquesne is not responsible for training the
Contractor installers directly, however, groups of trainers
may require specific training with regard to Duquesne's
operating practices.
The Contractor shall either provide or upgrade a sufficient
number of Duquesne's existing handheld units, up to eight, to
enable Duquesne to perform OMR readings for the purpose of
reviewing and monitoring readings and service activities and
capabilities.
3.7 MV-90 System Implementation
Automation of large (transformer rated, * or greater) single
and three phase demand accounts will occur in conjunction with
implementation of the UTS MV-90 applications with appropriate
interfaces for load research, load profiling, power billing,
power quality event reporting, and enhanced services as
defined in Schedule D. Access to the MV-90 system hardware and
software will be provided to Duquesne by Contractor to
facilitate an automated solution for complex metering by the
implementation dates specified on Schedule J.
Contractor will provide Duquesne with unrestricted access and
use of all capabilities of the MV-90 system needed to satisfy
Duquesne's business requirements, including data collection,
validation, editing, totalization, reporting, historical data,
load research functions, rate data, load control, power
quality event reporting, outage reporting, etc., as more fully
described in the MV-90 Reference Guide and in Schedule B, and
will provide maintenance, support, software upgrades and other
services as provided under the Agreement at no charge to
Duquesne.
Duquesne will operate the system and perform data processing
functions in conjunction with Contractor to minimize
operational requirements and redundancy of personnel.
Contractor will install, test and implement the MV-90
applications and hardware and train Duquesne personnel on
MV-90 operation. Thereafter, Duquesne will perform most daily
data processing activities.
3.8 Work Facilities
Separate work facilities shall be required for the Contractor
project team as well as the installation and maintenance
teams. The Contractor project team may be located at a
permanent Operations Center located in a Duquesne facility or
some other location. The facility space requirements include:
necessary work space, office space, and also shop space and
storage/warehouse space needs which will be provided at a
Retrofit Center Facility at a location approved by Duquesne.
Furniture requirements and accessories shall be determined as
necessary. A separate long term maintenance, test laboratory,
and equipment storage facility shall be required upon
completion of the installation process.
Installation crew facilities shall include space and operation
efficiency systems for operations involving sufficient number
of people, training facilities, phone operations for
scheduling and appointment planning, management, and any
additional required activities. Warehouse space shall be
necessary to house shipments of ERT Meter Modules from the
Contractor, new single and three phase meter shipments from
the meter manufacturer, reconditioned meters and returned
meters from the field to be scrapped. Similarly equipped
facilities shall be required for a maintenance crew.
3.9 New Developments
ERT Meter Modules and associated reading devices (Handhelds,
DataCommand Units, Cell Control Units and all other equipment)
are typically designed with backward compatibility to ensure
that future technology developments can be adapted and applied
to existing systems. While the direction of future
developments during the 15-year Term cannot be completely
predicted, Contractor guarantees that as a minimum it will
maintain the Equipment to ensure that all services included
under the Agreement will continue to be provided.
As future ERT Meter Modules are developed, the reading
technologies are expected to be able to read and implement
available functionality. New ERT development may include added
functionality. For example, there are currently three
generations of gas ERTs with expanded functionality in the
field that are all being read with the same devices. The
Contractor shall contact Duquesne management upon the release
of new ERT and system products that may be possible additions
to the Duquesne system, when they are available.
As system components are modified and updated, including
software, hardware, and firmware, the Contractor shall notify
Duquesne concerning recommended operational adjustments to the
fixed network system affecting Duquesne's operation and
maintenance. It is understood by both the Contractor and
Duquesne that future enhancements, and upgrades of the Genesis
Fixed Network and MV-90 system software, automated
applications, and related improvements shall be provided to
Duquesne during the period of the Agreement via the change
order process, except for those items provided by the
Contractor to its other customers under maintenance agreements
at no additional charge. It is also understood by both parties
that * shall be given to Duquesne, throughout the term of the
Agreement. This includes any MV-90 system and network related
applications or client end use applications software that may
be developed and would be desirable and provide benefits to
Duquesne.
3.10 Project Schedule (Gantt Chart - High Level)
An essential part of any project is the ability to track
milestones and tasks. The project schedule is the tool that
shall be implemented to track milestone dates, tactical items,
and responsibility check points. (See Section 2.3.2
Scheduling) Contractor agrees to support the milestone dates
outlined in the revised Schedule J.
3.11 Delivery Schedule
The Contractor shall provide a system that shall include the
necessary software and hardware to provide the required
functionality. Appropriate inventory lead times shall be
followed as necessary to maintain scheduled installation
activities in accordance with the installation schedule.
3.12 ERT Installation Schedule
The following Meter Module Installation Schedule has been
developed to support the ERT installation project Milestones
listed on the revised Schedule J. The Contractor will meet or
exceed this Schedule as required to achieve the Agreement's
September 30, 1997 Milestone completion date.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
----------------------- -------------------------------------- --------------- ---------------------
MONTHLY CUMULATIVE
MONTH DESCRIPTION INSTALLS INSTALLS
----------------------- -------------------------------------- --------------- ---------------------
----------------------- -------------------------------------- --------------- ---------------------
* Begin Installation * *
----------------------- -------------------------------------- --------------- ---------------------
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* * *
----------------------- -------------------------------------- --------------- ---------------------
----------------------- -------------------------------------- --------------- ---------------------
* * *
----------------------- -------------------------------------- --------------- ---------------------
----------------------- -------------------------------------- --------------- ---------------------
* * *
----------------------- -------------------------------------- --------------- ---------------------
----------------------- -------------------------------------- --------------- ---------------------
* Begin Retrofit Operations * *
----------------------- -------------------------------------- --------------- ---------------------
----------------------- -------------------------------------- --------------- ---------------------
* Ramp Up Meter Installations * *
----------------------- -------------------------------------- --------------- ---------------------
----------------------- -------------------------------------- --------------- ---------------------
* * *
----------------------- -------------------------------------- --------------- ---------------------
----------------------- -------------------------------------- --------------- ---------------------
* Stabilize Installations * *
----------------------- -------------------------------------- --------------- ---------------------
----------------------- -------------------------------------- --------------- ---------------------
* * *
----------------------- -------------------------------------- --------------- ---------------------
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* * *
----------------------- -------------------------------------- --------------- ---------------------
----------------------- -------------------------------------- --------------- ---------------------
* Peak Installations Achieved * *
----------------------- -------------------------------------- --------------- ---------------------
----------------------- -------------------------------------- --------------- ---------------------
* * *
----------------------- -------------------------------------- --------------- ---------------------
----------------------- -------------------------------------- --------------- ---------------------
* Ramp Down Meter Installations * *
----------------------- -------------------------------------- --------------- ---------------------
----------------------- -------------------------------------- --------------- ---------------------
* * *
----------------------- -------------------------------------- --------------- ---------------------
----------------------- -------------------------------------- --------------- ---------------------
* * *
----------------------- -------------------------------------- --------------- ---------------------
----------------------- -------------------------------------- --------------- ---------------------
* Complete Initial Contact * *
( * Customers)
----------------------- -------------------------------------- --------------- ---------------------
----------------------- -------------------------------------- --------------- ---------------------
* Complete Route Saturation/Cleanup * *
----------------------- -------------------------------------- --------------- ---------------------
</TABLE>
Notes:
1) Monthly installs are actual totals through June 30, 1997.
2) Contractor will achieve appropriate mix of new
and reconditioned Meters to assure
installation schedule can be achieved in a timely manner.
3) Above schedule excludes final URD deployment requirements
related to use of DCI Sentry devices (see Schedule J).
4) All ERT'd meters, excluding certain exempted accounts,
should be installed by September 30,1997.
3.13 Fixed Network/MV-90 Equipment Installation
Contractor shall install all fixed network equipment, single
phase PowerPlus Alpha meters with communication lines, and
MV-90 hardware and software by the dates shown on Schedule J.
Sufficient GIHP hardware should be deployed to support a *
account fixed network by December 31, 1997. Installation of
end point devices such as DCI Sentry, * , three phase Alphas,
etc. should support the revised project schedule.
3.14 Contractor Responsibilities
The following items are included under the responsibilities
for the Contractor.
Any tools and equipment necessary to complete
installation of the fixed network, MV-90 and single
phase end point devices are the responsibility of the
Contractor.
Delivery of fixed network systems, applications and
MV-90 documentation:
- Operating Manuals and Tutorials
- System Description
- Functional Specifications or Reference Guides
- Licenses (described elsewhere in the Agreement)
Delivery of MAMR system & documentation.
Delivery of at least * for reading ERTs not on the
Network.
Project management services.
ERT Meter Modules, ReadOne Pro units, OMR handheld
units, CCUs, NCNs, GIHP, MV-90 system including all
hardware, single and three phase PowerPlus Alpha
meters, other end point and network hardware as
required to satisfy the delivery of data devices such
as * and DCI Sentry.
Ship hardware per installation schedule.
Provide ReadOne Link.
Supply, configure, integrate GIHP software,
databases, NMS software, customer information system
software, client applications software related to
network, MV-90 software, communications software for
linkage of PowerPlus Alpha meters to MV-90.
Supply, configure, integrate DCLINK software and DCU
system software.
Install ERT Meter Module retrofits on new and old
meters in a meter shop atmosphere; Meters shall be
tested before installing in the field. Install single
phase PowerPlus Alpha meters.
Perform single phase Meter field exchange and
customer data update process.
Supervise shipment schedules.
Track and verify financial and budgets, provide
management reports.
Provide maintenance support, testing, meter changes,
inspections, repairs of single-phase meters, and
associated end point devices.
Provide all equipment necessary to test Meters in
field and shop.
Provide office and shop equipment for the
installation crews (i.e. PCs, shop benches, vests, id
badges).
Supply additional client software related to network
management and applications herein.
Recycle/Scrap old meters not being reconditioned
(except for three phase, single phase demand meters).
(During Phase II, as-found testing and register
readings will not be required.)
Perform testing and calibration of meters before
field installation.
Supply equipment and train installers for the
installation of the ERT Modules, Meters, CCUs, NCNs,
and any other end point devices to be installed by
Contractor.
Acquire shop office, lab and warehouse space for
installation and meter shop operations.
Complete installation of A-Base adapters and replacement of
all lock bands. Complete installation of necessary
communications lines where no Duquesne communication
facilities exist; install communication lines for single
phase and transformer-rated three phase PowerPlus Alpha
meters (approximately * accounts) to MV-90 system.
Locate and acquire tower space for NCNs where no
Duquesne towers exist.
Install transformers, service lines, and connections
to Duquesne's facilities as needed to energize the
Contractor equipment.
Secure Rights of Way on third party locations not
owned by Duquesne.
3.15 Duquesne Responsibilities
The following items are included under the responsibilities
for Duquesne.
Use of Duquesne pole space where available.
Use of Duquesne tower space where available.
Use of Duquesne communication lines where available.
Provide space for NCNs on Duquesne owned towers.
Review and comment on standard documentation.
Provide access to Duquesne's facilities for on-site
work by the Contractor.
Assist with route scheduling, training, support,
management.
Audit installation quality.
Evaluate obsolete and non-functioning meters.
Provide available electric meter installation
procedures and instructions in written form. This
allows the Contractor and its representatives to
follow proper installation techniques that meet
Duquesne's criteria.
Provide materials for Meter installations which are
the responsibility of Duquesne, thus provided by
Duquesne (locking bands, all sealing devices, and
A-Base adapters).
Provide locking bands (appropriate number of keys
shall be provided to the Contractor). Contractor will
follow appropriate procedures for securing and
tracking keys provided by Duquesne.
Public Relation fliers, bulletins, announcements,
postcards, postage, door hangers.
Review of installation goals, schedules and
procedures.
Provide installation labor to support installation
of three phase PowerPlus Alpha meters (see Section on
Meter installations).
Provide communication links for approximately *
three phase self-contained meters which are not
Contractor's responsibility.
Provide personnel for operation of MV-90 software
and processing of information collected therefrom.
<PAGE>
<TABLE>
<CAPTION>
Communications Link Alternatives Diagram
Three Phase Meter Installations
Installation Timetable
Final Deployment Period
Final Deployment Period (Stage II)
First (1) Limited Option (Stage I) a) Remaining
Pass Installation Period Customer Installations a) Limited Option Customers Installations Completed
(Shared Telephone Lines) Begin (2) b) Customer Choice Option b) * by * ,
Customers * by
*
- ---------------------------- --------------------------- --------------------------------- ------------------------------
* * * * *
Final Deployment Date
- --------------------------- ----------------------- -------------------------------------------------------------
<S> <C> <C>
Initial Remaining Population: Remaining Population: * Meters
Population: * Meters
* Meters Alternative Carriers: *
Difficult Locations: Trunk Radio/Separate Line: *
Anticipated Installation: * Meters Telephone/RF/Private Carrier Options (3)
* Meters (Telephone Lines)
- --------------------------- ----------------------- -------------------------------------------------------------
First Pass Projected Location Success Rate: Trunk Radio
Success Rate: * or Alternative Carrier:
* Remaining Customers *
Projected Final Deployment Profile ( * meters)
Communication Private
Cost Responsibility First Pass Limited Option Line Alternative Trunk Radio
------------------- ---------- -------------- ---------------- -----------
Contractor * * * *
Duquesne * * * *
TOTAL * * * *
Total Contractor Responsibility: * Three Phase Meters
Total Duquesne Responsibility: * Three Phase Meters
</TABLE>
I. Communications Alternatives
Several communication link options are available for use by Contractor to
support the installation of three-phase metering through the MV-90
translation system. These options include telephone lines, trunk radio or
CDPD cellular service depending on such factors as cost, reliability,
availability, and customer impact. Contractor and Duquesne both agree to
utilize best efforts to minimize communication costs and to work jointly to
optimize the installation with the least possible impact on either Company.
a) Duquesne agrees to make available its proposed trunk radio system for
three-phase communication services at no charge to Contractor other
than payment of incremental head end and technical support costs
associated with use of this system, if and when the trunk radio system
becomes available. Such costs would be appropriate only for the three
phase, and also the single phase ABB Alpha meters for which Contractor
has communication responsibility.
b) Duquesne agrees to aggressively promote the use of shared telephone
facilities to minimize the cost to Contractor for payment of monthly
line charges or other communication costs. In this regard, Duquesne
will initiate a customer notification and authorization program with
its customers.
FIGURE 3-1
c) Contractor and Duquesne will aggressively pursue the installation of
shared telephone line connections, and separate telephone connections
for customers where there is no suitable alternative to meet Duquesne's
timetable for completion of installation efforts identified in this
section.
d) For customers where shared lines are not an option, Contractor will
subsequently pursue the use of trunk radio technology or other private
carrier options as the next alternative after shared telephone line
communications until such time as other alternatives are ruled out, or
until the * final deployment date.
e) Beginning * , once the final communication choice is determined,
Duquesne will aggressively pursue the installation of the remaining
three-phase meters using the appropriate communications medium until
all installations are completed. Contractor agrees to support
completion of and provide system support for * of all three-phase
installations by * and * by * , with the understanding that existing
customers opting for customer choice (Customer Choice Option Customers)
will be connected by any available communication means if requested by
Duquesne from * until completion.
II. Definitions
a) Shared Telephone Lines: Existing telephone connections already in use
by the customer which can be interconnected to the telephone modem to
provide the necessary communications capability.
b) Separate Telephone Connection: If customer fails to agree to a shared
connection, a separate line can be brought in to operate the meter
device and modem. This "exclusive" line may cost an estimated * per
month in addition to the approximate * /minute per day data packet
charges incurred on all telephone line connections.
c) Limited Option Customer: Some customers, due to location, physical
restriction or other reason, may require separate telephone line
connections as the only feasible method for communication with the
meter, if they have not already agreed to shared telephone lines.
d) Final Deployment Date: The date specified in the agreement for
commencement of final deployment efforts using the available
communications alternative.
e) Customer Choice Option Customer: A customer potentially desiring to
shift to an alternate energy supplier will be a candidate for
immediate connection to MV-90, using separate telephone lines if
necessary, from * until completion, if requested by Duquesne.
III. Projected Deployment Formula
On or around * Duquesne will begin deployment of the ABB PowerPlus Alpha
meters with telephone line connections using the shared line alternative.
This approach should produce an estimated * acceptance rate. Beginning * ,
(Stage I) efforts will begin to install metering for the Limited Option
Customers (estimated to be * of the population) where RF communications
methods are not believed to be a viable alternative. Contractor also agrees
to proceed with connections to Customer Choice Option customers beginning
* (or beginning * if Duquesne pays the line charges until then).
FIGURE 3-1 (CONTINUED)
Installation efforts will continue in this manner until * , or earlier if
acceptable communications alternatives are found. At that time, the final
deployment rollout effort (Stage II) will commence using the appropriate
communications alternative, shown on the installation chart. By * , * of
all installations will be completed, with * completed by * .
Notes:
1) Contractor limited to one time telephone installation and/or service
activation charge of * per customer per installation for three phase Alpha
installations (no limit for single phase Alphas). Duquesne is responsible
for three phase telephone installation charges in excess of this amount.
2) Installation of Limited Option Customers can begin * if Duquesne pays
line charges until * .
3) Contractor's line costs are capped at * per month over the length
of the Agreement.
4) Contractor will provide the appropriate modem type in each ABB
PowerPlus Alpha meter that coincides with the type of communications
link that will be used.
FIGURE 3-1 (CONTINUED)
GIHP/MV-90 INTERFACE PRIORITY LIST
Following is a listing of identified interface priorities to date based
on Duquesne's current understanding of Contractor's proposed MV-90 system
functionality and data flow paths.
1. Billing Interface Requirements
a) Sentry Consumption Data Through Fixed Network *
b) MV-90 Determinants - Power Billing Package Delivered *
c) MV-90 Billing Determinants - (Current Complex Meters - * )*
d) Consumption/Demand/KVAR Through DCI, DCO, HHC & MV-90 *
e) * Consumption/Demand Data Through Fixed Network *
2. Daily Consumption Data Through Daily Reads Processing
a) Kilowatt Demand (Daily Reads with KVAR & TOU) - MV-90 System *
b) KWHR Consumption (Daily Reads with Demand) - Sentry/ * Devices *
c) TOU Data Collection (Version 2.5 Software) *
3. Load Profile Accounts
a) MV-90 to Data Warehouse Interface - Interval Data-Class Profile?*
b) Standard ERT'd Meters on Fixed Network - Up to * Intervals*
c) * Meters - Interval Data *
d) Sentry DCI - Interval Data *
4. Rate Scheduling Interfaces ( * Required)
a) Assigning Device to Rate *
b) Create New Rates *
5. Events and Alarms)
a) CCU Outage Detection * *
b) CCU Outage Detection * *
c) Alpha Meter Outage *
d) * *
e) Sentry Outage *
6. Real Time Pricing
a) C&I Accounts Through MV-90 RTP Package (Large) *
b) C&I Near Real-Time Interface (Small) *
c) Fixed Network Accounts Through Near Real-Time Interface *
(Potential * Requirement)
7. On-Request Reads *
8. Virtual Turn On/Off *
9. MV-90/DISCuS/Data Warehouse Data Synchronization *
The above list is not considered final. Continuing evaluation of MV-90 and
GIHP applications, such as load research and power billing system, is
expected to identify other critical interfaces which will be evaluated for
appropriate file transfer mechanism (such as * ) and required
implementation date.
NOTE:
PBS Power Billing Package delivered * will support an operational date
of * .
FIGURE 3-2
<PAGE>
4. FIXED NETWORK SYSTEM COMPONENTS
- ------------------------------------------------------------------------------
4.1 Description
Fixed network and MV-90 implementation will be accomplished by
installing a fully functional, vertically integrated system
for data acquisition purposes, including the Genesis system
for standard ERT, DCI Sentry and * applications, and the MV-90
system for three phase and large (transformer rated, * or
greater).
Within the Duquesne territory, the Contractor shall install
fixed network components to gather data on Duquesne customer
usage. Provide fixed network data acquisition, all meters in
Duquesne's service area shall be saturated with ERT Meter
Modules. The fixed network system shall utilize radio or other
communications, which have been integrated with the Cell
Control Units (CCU), Network Control Nodes (NCN) and GIHP to
remotely communicate with the ERT Meter Modules in the
saturated area and gather data on each customer's usage. The
MV-90 system shall utilize communication links as necessary to
deliver data between the ABB PowerPlus Alpha meters and
headend systems including MV-90 software applications.
4.2 Hardware Deliverables
4.2.1 ERT/ * /Sentry Meter Modules
Contractor shall provide and install Meter Modules, *
or DCI Sentrys for the Contractor's installation in
the Duquesne service area. Specific quantities of
equipment types for electric meters shall be
determined based on installation within the
territory. Retrofit kits shall be delivered for
installation on existing meters; additionally,
Contractor should identify planned meter acquisition
to allow for meters to be delivered from the meter
manufacturers with ERT Meter Modules already
installed. The exact type and manufacturer of these
meters shall be coordinated with Duquesne and can be
any of the meters on Duquesne's approved Contractor
meter list.
ERTs and * are a low power radio meter modules used
in the Contractor's Off-Site Meter Reading (OMR),
Mobile AMR (MAMR) and fixed network AMR systems. They
are designed to encode consumption and tamper
detection on electric, gas, and water meters, receive
a radio frequency "wake-up" signal from and transmit
data back to the reading device transceiver. (Please
refer to the ERT Meter Module, * or DCI Sentry
product specification sheets for specific equipment
information and specifications.) Contractor shall
implement a technology that is capable of retrieving
demand and higher level consumption data from the
meter. The ABB alpha meter and * are two alternatives
that are available to meet this requirement. Other
mutually agreed solutions may become available to
meet this requirement if best industry practices and
regulatory requirements can be satisfied.
4.2.2 ERT Meter Module Operation
The high data integrity during transmission of the
ERT Meter Modules is achieved through a sophisticated
preamble and Cyclic Redundancy Check (CRC) technique
that assures data integrity. The Manchester-encoded
data includes the following information:
Preamble
ERT meter module identification
<PAGE>
Electric consumption
Tamper status
CRC error check
The ERT Meter Module also incorporates a theft
detection or tamper feature. Individual tamper
indicators are counted when the ERT Meter Module
experiences a meter removal/inversion and when the
ERT Meter Module is tilted past a 60 degree angle in
any direction. These separate tamper flags are then
transferred to the billing computer and can be
compared to previous counts for possible theft
detection.
The electric ERT Meter Module receives power from an
AC transformer connected to the primary side of the
potential coil. The ERT Meter Module is tested to
meet appropriate ANSI C12, 1988 specifications. For
complete reference, the test results from the ANSI
testing shall be made available to Duquesne upon
request; Duquesne Meter Engineering has received
copies of the test results.
The pulse initiator technology of the electric ERT
Meter Module utilizes reflective optics located
behind the meter nameplate and is a proven technology
that ensures reliable retrieval of consumption data.
A light absorbing stripe is placed under the meter
disk and activates the optical sensor with no added
drag to the disk. A common housing provides shrouding
and secure mounting with no adjustment.
The electric ERT Meter Module shall incorporate a
theft detection feature. Individual tamper indicators
are counted when the ERT Meter Module experiences a
power down/up and is tilted past a 60 degree angle in
any direction. The tamper status is compared to its
previous state and any change would be reported as a
suspected tamper.
4.2.3 * /DCI Sentry Devices
These fixed network devices function in accordance
with the specifications included in Schedule B and
will provide special purpose end point applications
as required to meet contractual requirements for
daily reads, demand and interval data or to provide
advanced services when contracted by Duquesne per
Schedule D. Contractor will be responsible for the
telephone line charges associated with DCI Sentry
installation and operation; this device will be
limited in use to achieve fixed network coverage and
for other residential applications such as URD unless
alternate uses are subsequently approved by Duquesne.
Other similar devices may be developed from time to
time during the course of the Agreement which may be
utilized subject to review and approval by Duquesne
based on best industry practices and regulatory
requirements. Specifications for such approved
devices will be provided by Itron for inclusion in
Schedule B.
4.2.4 Cell Control Units (CCU)
Sufficient CCUs shall be delivered installed and
appropriately placed for reading the Meter Modules.
The CCUs shall be installed by the Contractor in
conjunction with Duquesne to collect data from the
meter modules and to monitor power outage conditions
at * the CCU * .
<PAGE>
The CCU is a fixed point data collection device which
requests, receives, and stores ERT and * Meter Module
data. It shall consist of two radio transmitters, two
radio receivers, and a microcomputer all housed in a
single cabinet mounted on a pole. An antenna shall be
used to transmit the "wake-up" signals and to receive
the incoming Meter Module transmissions; these
messages operate but are not limited to operate on
the
* MHz transmit and * MHz receive frequencies.
4.2.5 Network Control Nodes (NCN)
Sufficient NCNs shall be installed for communicating
to the CCUs, other NCNs and the GIHP. The NCNs shall
be located on Duquesne's microwave tower sites (or
other appropriate location) and shall be installed by
the Contractor in conjunction with Duquesne to
collect data from CCUs.
The NCN is a fixed point data collection device which
requests, receives, and stores meter module data from
the CCU. It shall consist of a radio transmitter, a
radio receiver, and an industrial computer. An
antenna shall be used to transmit messages to the CCU
to request ERT data and to send transactional message
commands, the antenna also receives and manages data
from the CCUs to pass on to the GIHP; these messages
operate on the
* frequencies (specific * information is covered
under non-disclosure agreements in a separate
contract and can be obtained by contacting the
project management team).
4.2.6 GIHP Computers and Computer Equipment
DEC Alpha or IBM RS6000 Workstations, or other
compatible physical platform that is mutually
agreeable to both Duquesne and the Contractor, shall
be provided for the Genesis Itron Host Processor
(GIHP) platform. This unit shall operate the
real-time relational database polling engine of the
Fixed Network. A similar physical workstation shall
be used for the operations of the Network Management
Software. Moreover, a similar physical workstation
shall be used for housing the `historical' relational
database that shall be the interface to the client
applications and billing interfaces, which shall be
an Oracle database. Two network monitoring
workstations shall be provided to Duquesne for
monitoring network operations.
A sufficient quantity of modems shall be necessary to
communicate between the NCN and the GIHP, to provide
diagnostic support for the NCN, to provide
operational support services and assistance in
troubleshooting. Modems shall be supplied by the
Contractor.
Several telecommunications lines shall be necessary
to communicate between the NCNs and the GIHP and to
provide diagnostic support the of the NCNs. Specific
numbers and configuration of the phone lines shall be
provided during the installation process.
Telecommunication lines not available through
Duquesne shall be provided by the Contractor.
4.2.7 UTS MV-90 Translation System Hardware
Many different hardware configurations are capable of
supporting the MV-90 system. Most importantly, the
system must support a large number of customers
(approximately
* accounts) with efficient data management
<PAGE>
and timely data throughput. Contractor will provide
the necessary system hardware to install the system
and provide access to Duquesne's local area network
(LAN) through a LAN connection, with a Windows NT
operating system and associated drivers required to
run the system in a multi-user, multi-tasking
environment consistent with the MV-90 system's
operational capability. Contractor will provide the
appropriate Master Station hardware with backup
capable of running the MV-90 System for meter data
management. Data collection functions will occur
through use of Contractor supplied NT servers and
specialized NT workstations, with sufficient capacity
to poll all MV-90 meters within an acceptable
timeframe and to successfully manage the required
data processing and throughput. Based on current data
requirements for polling and processing capabilities
the UTS mid-range system is targeted for
installation, should subsequent information dictate,
or system growth require, the installation of
increased capacity and throughput, Contractor will
increase system capabilities appropriately.
4.2.8 Additional MV-90 Equipment and Support
All supporting equipment, including terminal servers
if needed, modems, the Local Data Server if needed,
specialized NT workstations (cubix system
processors), and any other head end hardware required
for satisfactory operation of the MV-90 system at
Duquesne's level of account activity will be supplied
by the Contractor. In addition, Contractor will
provide full maintenance support of all MV-90
equipment throughout the term of the Agreement. (A
typical hardware installation requirement is shown on
Figure 4-1). Duquesne will provide the operational
capabilities and support described in Section 3.
Contractor will support all equipment required for
daily processing, presently anticipated to be three
workstations on site at Duquesne. Contractor will not
support installations at Duquesne's customer sites
for MV-90 read-only RTP installations.
4.3 Software Deliverables
Contractor shall provide the following software systems:
4.3.1 GIHP Operating System Software
The GIHP system software is the transactional,
relational database used by the fixed network
collecting information from the system components for
presentation to other applications via SQL
transactional messages, and shall interface with the
Duquesne Customer Information System. The GIHP
operating system shall come delivered or be loaded by
the Contractor personnel upon delivery.
4.3.2 Genesis Network Management Software
IBM NetView 6000 shall be used as the Simple Network
Management Protocol (SNMP) network management
software. The NCNs and CCUs are SNMP compatible
devices and are designed to be managed using SNMP
standard software. Thus, IBM NetView 6000 shall be
used to manage the Genesis Fixed Network.
<PAGE>
4.3.3 Genesis Automatic Meter Reading Software
The Automated Meter Reading Software works in
conjunction with the Network Management Software in
order to collect KWH meter data from the fixed RF
network equipment. All standard and newly developed
network applications will be provided.
4.3.4 Genesis SQL Client Applications
Among the fixed network client applications provided
and more fully defined in this Agreement are the
following:
a) Consumption Metering
b) Residential Time-of-Use
c) Daily Reads Processing
d) Tamper Reporting/Monitoring
e) Customer Choice Option Reads
f) Virtual Disconnect/Connect
g) Upon Request Meter Reads
h) Outage Detection/Restoration -
CCU Level
i) Outage Detection/Restoration - *
j) Create Groups
k) Group Time-of-Use
l) Group Load Profile
m) Group Consolidated Consumption
3 Metering
n) Group On-Request Reads
o) ERT Read Schedule Modifications
p) Load Profile
q) Storage of History Data
r) Database Population
s) Interface into Billing
t) Interface into SQL Database
u) Other Applications as Described in
Schedule B
<PAGE>
4.3.5 MV-90 Data Management Software
Contractor will provide and install the UTS MV-90
Multi-Vendor Translation System software for
consolidation and processing of all three phase and
transformer rated (greater than * ) single phase
services primarily using ABB PowerPlus Alpha meter
technology. Included in this system are the following
packages (descriptions included in Schedule B):
1) Base System with Reporting Package
2) TOU Option
3) Load Research/Load Profiling
4) Power Quality Functions
5) Real Time Pricing System
6) MV-PBS Power Billing System
7) MV-90 Read Only System
8) UTS Load Control Station
Contractor will provide licensing, documentation,
installation, training and ongoing software
maintenance support for the length of the contract.
Contractor will provide services of two
system/communication analysts or administrators as
necessary for effective operation of the system
throughout the term of the Agreement. Hardware for
installation of the MV-PBS Power Billing Package will
be provided by Duquesne or made available under
mutually agreed leasing arrangement.
The MV-90 Multi-Vendor Software will include the
following software in the base system package for use
on the Master System as well as for use on Local Data
Servers when used for distributed data collection.
MV-90 Base System with Reporting Package
Remote Interrogation Package
Totalization Package Time-of-Use
Package Graphics Package Lotus File
Format Package PC to Host File
Transfer Package Direct Unload of
Handheld Readers Load Research
Package
A software license agreement will be provided to
Duquesne describing all licensing rights granted to
Duquesne throughout the Term and will be signed and
returned to UTS. All software provided will be
standard, currently available applications or, the
soon-to-be-released application for MV-PBS. Software
customization will be provided via the software
development fund. Modifications, enhancements or
upgrades provided at no additional cost to other
clients under maintenance agreements will be provided
at no cost to Duquesne. All other modifications,
enhancements or upgrades will be provided to Duquesne
with preferred pricing.
4.3.6 ABB PowerPlus Alpha Software
In connection with the purchase of single and three
phase ABB PowerPlus Alpha meters, ABB will furnish
the necessary software to support power quality
monitoring functions and management of the C&I meter
<PAGE>
instrumentation and diagnostic functions. While this
software will be supplied with the ABB Alpha meters,
interface with DISCuS, MV-90 system or other
functions will be required and is identified on the
high level architecture provided via Milestone #13 of
Schedule J.
4.3.7 Licenses, Training and Support
The following licensing rights and support services
will be provided to Duquesne:
<TABLE>
<CAPTION>
Monthly
Software License License Fee Support Included
<S> <C> <C>
1) Multi-Vendor Data Collection * *
(Basic License)
2) Oracle Enterprise Database * * User
Oracle Silver Support
3) Real-Time Pricing System First * *
Customer Software (see * customer Thereafter
Schedule D)
</TABLE>
Contractor will provide sufficient support to
implement the MV-90 system at Duquesne, which will
include but not be limited to, Project
Administration, hardware/software installation, test
plan development and implementation; start-up
support, training and preparation of all required
documentation. Actual software license(s) will be
provided to Duquesne in the event of termination of
the Agreement.
4.3.8 MV-90 Documentation
Contractor will deliver to Duquesne a complete UTS
MV-90 Translation System specification covering all
base system software packages and other software
deliverables listed in Section 4.3.5 (four (4) sets).
In addition, all other required documentation, such
as user operating and training guides, hardware and
software system descriptions, maintenance guides,
diagnostics, security, licenses, warranties, etc.,
will be provided to Duquesne 30 days prior to
installation.
<PAGE>
<TABLE>
<CAPTION>
TYPICAL HARDWARE REQUIREMENTS FOR
BASE AND ENHANCED MV-90 SYSTEMS
I. Master Station Hardware - The following hardware is considered a minimum
requirement to support a modest MV-90 collection system (may not meet
Duquesne's needs):
<S> <C> <C> <C>
------- ------------- ---------------------------------------------------------------------------- ----------------
Item Model Description Quantity
------- ------------- ---------------------------------------------------------------------------- ----------------
------- ------------- ---------------------------------------------------------------------------- ----------------
1 Fileserver Compaq ProLiant 2 1
0, 6/200H, Model IS, 160 MB RAM, 3.2GB Hard Drives, RAID Array Controller,
Color Monitor, CD ROM, (2) 10/100 ENET Cards
------- ------------- ---------------------------------------------------------------------------- ----------------
------- ------------- ---------------------------------------------------------------------------- ----------------
2 TapeDrive Compaq 4/16 GB Tape Drive, Cheyenne Arcserver for NT, Single Server, (10) 1
4GB Tapes/Tape Cleaning
------- ------------- ---------------------------------------------------------------------------- ----------------
------- ------------- ---------------------------------------------------------------------------- ----------------
3 NT MS NT Server, V4.0, 100 User 1
------- ------------- ---------------------------------------------------------------------------- ----------------
------- ------------- ---------------------------------------------------------------------------- ----------------
4 Octopus with Super Automatic Switchover, (2) 3COM 10/100 Cards 1
------- ------------- ---------------------------------------------------------------------------- ----------------
------- ------------- ---------------------------------------------------------------------------- ----------------
5 (2) 3COM SuperStack II Switch, (2) 100TX Ports, (64) 10TX Ports 1
------- ------------- ---------------------------------------------------------------------------- ----------------
------- ------------- ---------------------------------------------------------------------------- ----------------
6 Client Compaq Deskpro 2000, 5/133, 16 MB RAM, 1.2GB Hard Drive, Color Monitor, 3
Workstation 3COM PCI 10/100 ENET Card
------- ------------- ---------------------------------------------------------------------------- ----------------
------- ------------- ---------------------------------------------------------------------------- ----------------
7 Printer HP Laserjet 4V 600 x 600 DPI, 16PPM Printer 1
------- ------------- ---------------------------------------------------------------------------- ----------------
------- ------------- ---------------------------------------------------------------------------- ----------------
8 Cubix Cubix System 1010 with 64 Processors, 32 MB RAM, 500MB Local Drives
------- ------------- ---------------------------------------------------------------------------- ----------------
------- ------------- ---------------------------------------------------------------------------- ----------------
Primary Site Hardware Required
------- ------------- ---------------------------------------------------------------------------- ----------------
------- ------------- ---------------------------------------------------------------------------- ----------------
Backup Site Hardware Recommended
------- ------------- ---------------------------------------------------------------------------- ----------------
</TABLE>
<TABLE>
<CAPTION>
II. Higher Capacity - The following enhanced hardware options are provided to
support higher level operations and the STAR Data Management System, and
may be required to meet Duquesne's needs:
<S> <C> <C> <C>
---------- ------------ ----------------------------------------------------------------------- -------------------
Recommended
Item Model Description Quantity
---------- ------------ ----------------------------------------------------------------------- -------------------
---------- ------------ ----------------------------------------------------------------------- -------------------
Option 1 8200 DEC Alpha - Mid-Range System (Main and Backup Site) 2
---------- ------------ ----------------------------------------------------------------------- -------------------
---------- ------------ ----------------------------------------------------------------------- -------------------
Option 2 8400 DEC Alpha - High End System (Main and Backup Site) 2
---------- ------------ ----------------------------------------------------------------------- -------------------
</TABLE>
<TABLE>
<CAPTION>
III. Local Data Server - The hardware for the Local Data Server will run MV-90
in a stand-alone NT based computer or on an NT LAN based system. The
following hardware is recommended for the Local Data Server:
<S> <C> <C>
------- --------------- -------------------------------------------------------------------------------------------
Item Model Description
------- --------------- -------------------------------------------------------------------------------------------
------- --------------- -------------------------------------------------------------------------------------------
1 Micron 4100 Magnum Computer, Intel 66MHZ-DX2
Processor, 2X EISA CD-ROM Drive, Windows NT, 32MB
RAM, 540MB IDE Hard Drive, 14" Micron Monitor
------- --------------- -------------------------------------------------------------------------------------------
------- --------------- -------------------------------------------------------------------------------------------
2 3COM Ethernet Card 16 Bit ISA, Ethernet Cable
------- --------------- -------------------------------------------------------------------------------------------
------- --------------- -------------------------------------------------------------------------------------------
3 HP LaserJet 4V 600 x 600 DPI Resolution, 16PPM Printer
------- --------------- -------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
IV. Terminal Servers (Meters) - Terminal Servers are used to connect meters to
a digital communications network. Terminal Servers convert TCP/IP from the
communications network into RS-232 for communication with meters. Terminal
Servers can support from 1 to 32 serial ports with a single connection to
the communications network.
The Terminal Servers recommended by UTS include the following:
<S> <C>
---------------------------------------------- --------------------------------------------------------------------
Black Box Terminal Server Description
---------------------------------------------- --------------------------------------------------------------------
---------------------------------------------- --------------------------------------------------------------------
1-Port Operating Temperature Range: 32F to 113F
4-Port Relative Humidity: 90% Non-Condensing
8-Port Ports: RS-232 (50 Feet)
---------------------------------------------- --------------------------------------------------------------------
---------------------------------------------- --------------------------------------------------------------------
Xyplex Terminal Server Description
---------------------------------------------- --------------------------------------------------------------------
---------------------------------------------- --------------------------------------------------------------------
8-Port Operating Temperature Range: 32F to 113F
20-Port Relative Humidity: 90% Non-Condensing
40-Port Ports: RS-423 (Extended Distance)
---------------------------------------------- --------------------------------------------------------------------
</TABLE>
V. Modems - Modems are used to connect meters to telephone lines or other
communications mediums for in-bound or out-bound communications. All
modems must be Hayes compatible.
----------------------------------------------------------------------
Note: A final decision on Duquesne's MV-90 system requirements, and
resulting equipment deliverables, will be made once all applications and
interfaces have been evaluated. Required hardware will be delivered by
Contractor in time to support the milestone date for MV-90 operation
shown on Schedule J. (See also MV-90 Reference Guide for operating
requirements.)
------------------------------------------------------------------------
FIGURE 4-1
5. IMPLEMENTATION/INSTALLATION TOOLSETS
- ------------------------------------------------------------------------------
5.1 Description
This section describes implementation tools and software
components that enable the Contractor to automate the
installation of ERT Meter Modules and Cell Control Units,
transitional and migratory reading mechanisms, as well as
backup reading systems if portions of the network are not
operational. The following installation toolsets (ReadOne Pro
handheld units, ReadOne Link, ERTInstall) and progressing to
other reading systems (OMR/Premierplus, and MAMR) shall be
used under this Agreement.
5.2 Electronic Data Interface (EDI)/ReadOne System
ReadOne Link and ERTInstall system software packages are
installation tools that shall be provided to the installation
crews and made available to Duquesne as appropriate under the
Services Agreement. These software systems are summarized and
described briefly as follows:
5.2.1 ReadOne Pro Units
The ReadOne Pro Unit is a handheld data terminal used
to install, program and investigate ERT Meter
Modules. When used in conjunction with ReadOne Link
Software, it electronically routes the installer and
captures all ERT module and meter installation
information. In addition to capturing all required
information, the ReadOne Pro ensures every
installation follows the same procedure and that the
ERT module is fully functional at the time of
installation. The ReadOne Pro transfers all
installation data to the ReadOne Link software for
reporting and electronic transfer to the utility
customer information system. The Contractor shall
provide electronic transfer and automatic updating of
Duquesne's customer information system directly from
the field installation data captured in the ReadOne
Pro which greatly improves overall effectiveness by
eliminating all manual processes.
The installation crews shall be provided ReadOne Pro
handheld units by the Contractor, for the
installation of the ERT Meter Modules. During the
installation for the service area, Duquesne shall be
provided * units for installation efforts and
oversight activities.
5.2.2 ReadOne Link System Software
Contractor shall use ReadOne Link (R1LINK) Software
or similar proven PC-based software and designed to
streamline the process of implementing the ERT meter
modules for automatic meter reading systems. Used in
conjunction with ReadOne Pro Units, ReadOne Link
Software shall provide computerized scheduling,
routing, data transfer to and from the ReadOne Pro,
processing of mainframe files and management
reporting.
ReadOne Link Software schedules, loads and unloads
ERT Meter Module installation work orders from the
ReadOne Pro Installer Handheld. This software
effectively manages the entire ERT meter module
installation process. It provides an efficient work
station for scheduling appointments for installation
work orders, managing labor resource allocation and
electronically transferring completed work orders
from the ReadOne Pro Installer Handhelds to the
utility's customer information system.
5.2.3 ERTInstall Software
Contractor shall provide proven ERTInstall software
to automate programming of the ERT module in a meter
manufacturer or utility shop environment. The
ERTInstall application shall eliminate all manual
programming by controlling operation of the ReadOne
Pro unit through a personal computer and bar code
scanner. Additionally, ERTInstall provides electronic
records of all programming data as well as the ERT
identification and meter number pairings for updating
Duquesne's customer information and meter history
system.
5.3 Alternative Data Collection Capabilities
Contractor shall provide Offsite Meter Reading (OMR) and
Mobile Automated Meter Reading (MAMR) systems as alternative
meter reading mechanisms for those areas that the fixed
network is not economically feasible. These systems shall also
provide a backup system in the catastrophic event that the
fixed network system becomes non-operational.
5.3.1 Offsite Meter Reading (OMR) System
The OMR meter reading system shall combine the use of
handheld computers (typically DataCap H or FS/2) and
software packages for personal computers
(Premierplus) or mainframe-based systems
(Integrator). OMR shall consist of manual electronic
data collection with the capability to communicate
remotely to individual ERT Meter Modules via radio.
Duquesne shall be provided * units for normal review
and oversight activities.
5.3.2 Mobile Automated Meter Reading (MAMR) System
The Mobile AMR System shall utilize radio
communication which has been integrated into a mobile
unit operating from a utility vehicle, to remotely
communicate with the ERT Meter Modules. DCLINK and
DCU System Software packages are examples of the
primary software applications associated with the
MAMR system.
5.3.3 DataCommand Link System Software
DataCommand Link (DCLINK) software is the personal
computer based interface software that receives files
from the mainframe billing system or Premierplus,
creates route diskettes for the DataCommand Unit in
the van for the MAMR system. This software shall
accept the completed route diskettes from the van
system and create files for the billing system.
DataCommand Link Software provides the necessary
"link" in a MAMR System between the utility billing
computer and the DataCommand Unit. This data
collection software is a PC-based software which
enables meter reading and route information to be
transferred between the data collection devices and
the utility's billing computer. Working together, the
utility billing computer, DataCommand Link Software,
and the DataCommand Unit perform a complete meter
reading and customer billing process.
<PAGE>
5.3.4 DCU System Software
The DataCommand Unit system is the van based software
that transmits a wake-up signal to the ERT Meter
Modules, receives the ERT readings, and writes the
appropriate information in a database based on the
route diskette created by DCLINK.
The DCU system software controls the transmitter
controller, receiver controller, and the system
control unit (a touch sensitive operator interface
display from which the DCU operator starts and stops
the DCU and monitors system performance). The DCU
also maintains route-related meter reading statistics
and provides on-going operating status information to
the DCU operator, stores readings received from the
receiver/controller, and formats data collected so
that it can be transferred to the DCLINK computer.
5.3.5 DataCommand Units (DCU)
At least * DCUs shall be utilized at Duquesne for
reading the installed ERT Meter Modules using
Contractor provided vehicles. Initially, two DCUs are
required for reading the Pittsburgh area, with
additional numbers available for backup purposes.
However, if the need increases, subsequent DCUs shall
be provided.
The DataCommand Unit (DCU) is a mobile data
collection device which requests, receives and stores
ERT Meter Module data. It consists of a radio
transmitter, 48 radio receivers and a microcomputer
all housed in a single cabinet which is mounted in a
vehicle. The DataCommand Unit (DCU) "reads" the ERT
Meter Module using radio frequency technology. In
simple terms, it collects, organizes and prepares
information transmitted by the ERT Meter Module for
billing use at the utility.
A single antenna is used to transmit the "wake-up"
signal and to receive the incoming ERT Meter Module
transmissions. The ability to transmit and receive
using the same antenna is accomplished using standard
RF duplexing equipment. The "wake-up" transmitter
operates on a primary radio frequency around * . The
specific frequency is assigned to each utility by the
Federal Communications Commission (FCC). When
operating, the transmitter is run continuously with a
power output of five watts. The primary frequency
carries a specific tone to only "wake up" the desired
ERT Meter Modules.
The RF splitter converts a single incoming channel
into 48 separate channels, one channel for each of
the 48 microprocessor-controlled receivers. As an ERT
Meter Module transmission is received, the splitter
"funnels" the transmission to the appropriate
receiver.
The receiver converts the analog signal to its
digital equivalent and checks the validity of the
data received (using the CRC data transmitted by the
ERT meter module). If the received data is valid, the
receiver retains the message in a buffer until it is
requested by the controller. The controller performs
several functions. Primarily it "polls" the 48
receivers for ERT Meter Module messages, eliminates
redundant messages, and passes the ERT Meter Module
messages to the data acquisition microcomputer.
The DataCommand Unit (DCU) controls the activities of
the entire system. Through the various peripherals
connected to the DCU, it performs the following
tasks:
Controls the operator interface
(touch-sensitive display).
Allows loading of route information (using
removable magnetic media).
Controls activation and de-activation of
the wake-up transmitter.
Starts and stops the controller software.
Receives ERT Meter Module messages from the
controller.
Stores unique ERT Meter Module messages in
non-volatile storage.
Allows unloading of meter reading data at
the end of a route (using removable magnetic
media).
<PAGE>
6. SYSTEM INTERFACES AND ACCEPTANCE
- --------------------------------------------------------------------------------
Throughout the term of this Agreement, Duquesne shall perform routine
and ongoing system testing to verify continuing system performance and
ensure that contracted services and related performance standards are
met. The Duquesne Test Plan identified as Schedule F of the Services
Agreement shall be developed and refined during Phases I and II of the
project to address installation requirements and prepare for final
acceptance testing in accordance with Article IV of the Agreement.
6.1 Information Systems and Services
The system database is the relational database connecting the
GIHP real-time relational database and polling engine with
Duquesne Information systems. This will require Duquesne's
services supporting the implementation of the system database,
the associated Contractor provided applications, modifications
and enhancements to existing Duquesne information systems, and
interfaces between the Contractor applications and Duquesne
applications. The Contractor is responsible for the
development, conversion, implementation, and appropriate
ongoing maintenance of these information systems. The services
to be provided by the Contractor are categorized below:
Implementation, operations and maintenance
of the GIHP and MV-90 system databases.
Daily reads processing, billing interfaces,
and interfaces to other Duquesne systems and
databases, as generally reflected in the
high level system data flow documentation
submitted per Schedule J.
Development, implementation, and ongoing
maintenance of the Genesis Fixed Network and
MV-90 System Applications.
Development and implementation services for
Duquesne Information System (DISCuS)
Modifications, Enhancements, and Interfaces
as described in Section 6.1.3.
6.1.1 System Database
Hardware:
Contractor shall provide two (2) IBM RS/6000
processors or equivalent compatible devices and
related hardware required to support the system
database, including * of data storage, and hardware
required for connection to Duquesne's computer
systems pursuant to the Agreement. Contractor is also
required to maintain this hardware.
Software:
Contractor shall provide all required software for
the system database including AIX, and any
communication software required to interface to
Duquesne's computer systems. Contractor shall also
provide the Oracle database and related software
required to support
* concurrent users attached via network attached
workstations. Contractor is also required to obtain
maintenance support for, or otherwise maintain, this
software.
<PAGE>
Database Support:
Contractor shall provide all database support
required to install, operate, and maintain the system
database. This includes performance tuning and
database restart, backup, and recovery.
Security:
Contractor shall provide under Duquesne's direction
secured access to the system production database in
accordance with Duquesne's corporate data security
policy and interfaced with Duquesne internal security
environment.
Disaster Recovery:
Contractor shall provide disaster recovery support
for the system database in the event of a disaster.
This will be further defined during the deployment
phase (Phase II).
Help Desk:
Contractor shall provide help desk support for the
system database and interface this support to
Duquesne's MIS help desk. Duquesne's MIS help desk
will supply primary (Level 1) support for all user
applications.
Operations:
Contractor shall provide all required operations
support for the system database. This support
includes, startup, shutdown, problem determination
and resolution, backup and recovery, job scheduling,
output distribution, and systems management. This
support shall be provided 24 hours a day 7 days a
week. It is understood that Contractor's system
support operations cannot be unilaterally performed
without Duquesne's knowledge and prior preparation.
Accordingly, such activities will be completed on
scheduled time periods that are mutually agreed on by
both parties.
Performance:
The Contractor shall provide * response time for
standard queries for individual record requests to
the system production or static databases for data
access for
* imultaneous users and provide 24 hour by
7 day access.
Test Facility:
The Contractor shall provide a system including
hardware, software, and test data for ongoing testing
of changes to the system production database and
related applications. Software changes will be tested
by Contractor and coordinated by Duquesne in a timely
manner.
6.1.2 System Applications
The Contractor shall provide system applications,
interfaces, data synchronization and related
implementation and maintenance services for the
following applications: These applications are
further defined in Schedule B of the Agreement.
Consumption Metering, Including Demand
Residential Time-of-Use (TOU)
Load Profile (Interval Data), All Customer Classes
Tamper Monitoring and Reporting
<PAGE>
Real-Time Pricing (RTP), Fixed Network and
MV-90 Accounts Virtual Connect/Disconnect
Outage Detection / Restoration Reporting
Daily Reads Processing Capability
Management Reports as Defined Herein
On-Request Reads Creation of Groups Group
Consolidated Consumption Metering Group
Time-of-Use (TOU) Group Load Profile
* Interfaces
MV-90 Interfaces to GIHP, DISCuS, ST-33
System, Power Billing System, and Data
Warehouse Billing, Daily Reads Interfaces
DCI Sentry Applications, Including Load
Profile, TOU, On-Request Reads
The Contractor shall deliver application software
with user documentation; provide licenses for use of
the application software by Duquesne employees or
agents; assist with the installation and testing of
the application software; verify functionality with
Duquesne data; provide initial trainer training and
help desk services; provide maintenance releases of
the application software; test and implement
releases; and provide problem management and
resolution services. In some cases, such as ST-30 or
Power Billing System implementation, specific,
customized interface development requirements will be
funded through the Software Development Fund.
6.1.3 Duquesne Information System Modifications,
Enhancements and Interfaces
To fully utilize the potential of the GIHP and MV-90
system databases, a number of modifications,
enhancements, and interfaces to Duquesne's
Information systems have been identified. These have
been categorized and generally described under the
Functional Support Requirements in the following
Subsections:
The services and the costs of developing and
implementing these proposed modifications,
enhancements, and interfaces shall be included in the
monthly fee for the duration of the contract.
Recognizing that, at this time, the specifications
for these services cannot be adequately defined and
incorporated into the scope of work, the final
determination of the specifications and scope of the
modifications, enhancements, and interfaces shall be
determined through the course of the system
implementation. A Software Development Fund of *
shall be provided by Contractor for these
modifications, enhancements, interfaces and license
requirements. Contractor shall provide for these
modifications, enhancements, and interfaces by either
directly providing the services or by reimbursing
Duquesne's MIS Unit for completing the service. The
decision on who is to complete the work and the
allocation of funds shall be determined through the
following process:
<PAGE>
1. Duquesne shall determine when a modification,
enhancement, or interface is required and shall request
in writing that a specification/scoping be prepared.
The Request for Specification/Scoping shall include a
description of the requirement, a business sponsor,
from Duquesne, who can be contacted for clarification,
and an indication of a required by date, if
appropriate. All Requests for Specification/Scoping
shall be authorized by the Duquesne Project Manager.
The Request shall be provided to the Contractor Project
Manager and Duquesne's DISCuS Information Systems
Development (ISD) Director.
2. The Contractor Project Manager and the Duquesne DISCuS
ISD Director shall cooperate in reviewing the request
and agreeing on the business requirements, business and
technical assumptions, and appropriate alternatives.
Contractor and Duquesne's MIS Unit shall agree on a
standard deliverable to document the
Specification/Scoping. The deliverable shall include a
description of the functional requirement, the
technical requirements, any business or technical
assumptions, constraints, dependencies, delivery dates,
and any schedule impacts. The Contractor Project
Manager and the DISCuS ISD Director shall independently
provide Specification/Scoping deliverables with
associated costing. Unless mutually agreed upon, the
Specification/Scoping deliverables shall be provided
within * of receipt of request. It is understood that
some major deliverables may require more than * and the
time period for these will be mutually agreed upon. The
Specification/Scoping documents shall be authorized by
the Contractor Project Manager and forwarded to the
DISCuS ISD Director. The DISCuS ISD Director shall
provide applicable specifications/scoping documents to
Contractor Project Manager. The DISCuS ISD Director
shall forward all Specification/Scoping documents to
the Duquesne Project Manager.
3. The Duquesne Project Manager shall review the
Specification/Scoping documents and determine
whether to approve and which alternative(s)
is/are selected. The selected alternative may be
the Contractor submitted Specification/Scoping,
the DISCuS submitted Specification/Scoping, or a
combination of each. The Duquesne Project Manager
shall notify the Contractor Project Manager and
the DISCuS ISD Director of his decision in
writing.
4. For the approved Specification/Scoping requests
that are to be provided by Contractor, Contractor
shall provide the full life cycle of developing
and implementing the change in accordance with
mutually agreed standards. The Development Budget
shall be reduced by the amount of the fixed price
provided in the Specification/Scoping document.
Contractor shall comply with the specifications,
the appropriate quality reviews by Duquesne, and
the committed delivery date.
5. For the approved Specification/Scoping requests that
are to be provided by ISD/DISCuS, ISD/DISCuS shall
provide the full life cycle of developing and
implementing the change in accordance with Duquesne
Light standards. Contractor shall reimburse the
Duquesne MIS Unit within one month of Duquesne's
acceptance of the completed applicable work for the
fixed price provided in the Specification/Scoping
document. The Development Budget shall be reduced by
the amount of the fixed price. ISD/DISCuS shall comply
with the specifications and the committed delivery
date.
6. Contractor and ISD/DISCuS shall coordinate
activities and cooperate appropriately in the
development and implementation of the approved
changes. Some of the changes may be grouped for
delivery, quality review, approval, and
implementation. Contractor and ISD/DISCuS shall
cooperate appropriately in identifying and
resolving problems encountered throughout the
development and implementation of the approved
changes.
7. Duquesne shall determine when no further
modifications, enhancements, and interfaces are
required from Contractor. Duquesne shall notify
Contractor when this occurs. Contractor shall
appropriately reduce the monthly fee within one
month to give credit for the unused balance
remaining in the Development Budget.
8. The overall contract scope change provisions
shall be utilized to address approved requests in
excess of the Development Budget.
Functional Support Requirements:
The following Duquesne application system integration
efforts are to be developed as mutually agreed and
defined, based on approved timeframes by Duquesne
and/or Contractor, to enable this technology to
properly operate within Duquesne's Customer
Information System environment (DISCuS). Each of the
following topics pertains to DISCuS functionality
that shall require modifications to allow the CaRS
System to co-exist in a seamless manner and supply
Duquesne and the Contractor with all of the necessary
data to meet both parties operational needs.
Phase I (Initial Installation Period):
To install the Phase I meters on Duquesne's
site requires basic systems functionality to
be enhanced. These software enhancements to
DISCuS include the following; which are
provided by the Contractor.
Support installation of the Phase I
customers through modifications to DISCuS
service order processes and all other DISCuS
applications as appropriate. (For example,
fixed network notification, on demand reads,
reading attempts screens).
Provide for new meter types, capabilities
and/or attachments in DISCuS including
interface with the 3rd party meter test
board system as the need arises throughout
the Term.
Provide the interfaces to the meter change
out process that shall be utilized by the
Contractor to replace the existing Duquesne
meters with the new meters that shall
contain the new Meter Modules.
Support the development of an interface to
obtain the meter readings from the system
production database to be utilized by DISCuS
for customer consumption and billing.
Provide for the implementation of a data
synchronization interface between the two
systems to ensure that any changes/additions
to Duquesne customer/premise base is
properly reflected in the GIHP/MV-90
systems.
Modify the Duquesne DISCuS/Valuation &
Property Records interface to properly
reflect meter ownership.
Phase II (Billing and Transition to Fixed Network
and MV-90 Operation):
Modify DISCuS to support the necessary
changes to bill all customers properly with
readings obtained from the CaRS system
production database.
Modify DISCuS billing routines by
eliminating route-based billing cycles.
Interface MV-90 system with DISCuS and
Power Billing System functions for effective
billing of commercial and industrial
accounts with ABB Alpha PowerPlus end point
devices.
Support the transition to the fixed network
system environment and support a dual
(manual and automated) environment to bill
customers during the Phase II efforts.
Build interfaces and synchronization
functions between the Duquesne and
Contractor's systems for maintenance of
Duquesne's metered accounts to ensure that
the correct meter is recorded at a premise
and that the measures that are being
obtained are also defined properly in
DISCuS.
Provide automated reporting processes to
monitor the performance of the Contractor
and evaluate the quality of Services.
Facilities Database:
Contractor shall provide and maintain a database
comprised of distribution system and fixed network
components and their relationships. Contractor shall:
Modify DISCuS to support the fixed network,
MV-90 system and ABB PowerPlus software data
components (event indications) that shall be
integrated into the outage management
functions of the complete network
environment.
Modify DISCuS and other applications (e.g.
transformers, work management) to support
the new business processes to maintain the
distribution system and fixed network
database.
Provide an automated mechanism to support
data collection for CCUs and other fixed
network components that will be used to
update the appropriate Duquesne asset
information system.
Outage Automation:
Contractor shall integrate the outage detection or
reporting capabilities provided by the fixed network
and MV-90 (from ABB PowerPlus Alpha meters) with
Duquesne's current or future Outage Analysis System
(OAS) to support trouble management from notification
to restoration. Contractor or Duquesne shall:
<PAGE>
Modify DISCuS interface to accept outage
detection from the system. Support both
premise and device notification via the CCU,
and develop the appropriate applications for
outage analysis purposes required by
Duquesne.
Provide data with which will enable the
analysis functions within OAS to identify
the probable failing distribution system
component based on available outage
detection information.
Through delivery of restoration data
provide for closure of outage trouble orders
when a service is restored and integrate
restoration verification into the process.
Implement CCU * outage detection functions
through the Genesis fixed network, and MV-90
outage reporting through use of the
capabilities provided by the single and
three phase ABB Alpha meters. Develop * or
other interfaces as appropriate (see
Schedule B Interface Priority List).
Implement ABB PowerPlus software as
necessary for effective system operation.
Provide an outage history database of * by
premise for historical studies to support
customer guarantees and to add new rates and
inquiries that result after a significant
outage is completed.
Contractor will provide * and DCI Sentry
outage capability through the fixed network
by * , consistent with performance of * as
identified on Schedule J.
Virtual Customer Service Orders:
Contractor shall utilize data supplied by the fixed
network or MV-90 to complete service orders that
require readings. Contractor shall:
Integrate the system with Duquesne's
automated field service system to provide
readings for service orders.
Provide a mechanism to report possible
unauthorized usage situations.
Develop interfaces between DISCuS service
order subsystem and the fixed network to
identify when a premise is in a physical
shutoff state.
Provide for a new type of meter status in
DISCuS to identify when a meter is in a
"Virtual" off state.
New Meter Types:
Contractor shall provide the ability to configure
meters to measure Demand and Time Of Use (TOU).
Contractor shall:
<PAGE>
Provide an interface into the fixed network
to establish the reconfiguration of a
current premise from one measure to another
to allow Duquesne to meet the needs of a
customer as their use of energy changes.
Provide demand, consumption, RTP, load
profile and TOU data for customers requested
by Duquesne with the calculation of the
usage amounts being performed by the
Contractor's system in a manner approved by
Duquesne for use in DISCuS.
Provide other advanced services involving
frequent reads as identified in appropriate
sections of the Agreement. Use * , DCI
Sentry, PowerPlus Alpha meters as
appropriate to acquire the necessary data.
New Rate Offerings:
Contractor shall utilize the features of the fixed
network and MV-90 applications to create new rate
offerings for Duquesne's customers. Contractor shall:
Define and implement new rate structures in
DISCuS to support various time-of-use and/or
demand type consumption billing applications
to be able to provide competitive
alternatives to Duquesne's customers.
Provide necessary billing or other
interfaces between DISCuS and the system
database to support the new rate structures.
Implement the MV-90 Power Billing System to
utilize customized or published commercial
and industrial rates for C&I customers to
support retail competition.
Provide the ability to reconcile customer
energy usage from multiple suppliers as
required in a competitive environment based
on designed functionality provided via the
MV-PBS Power Billing System, or
modifications funded through the Software
Development Fund.
New Billing Cycles:
Contractor shall provide the ability to permit
customers to select their billing date. Contractor
shall:
Develop the ability within DISCuS for
customer-selected billing dates.
Develop an interface to ensure that the
information related to cycle billing changes
is current within the system and that
readings are present to allow for a customer
billing to take place that night.
Develop appropriate control processes to
ensure that the maximum number of accounts
to be billed is not exceeded for any given
night.
Implement ability to adjust reading
schedules to support billing of commercial
and industrial customers through the MV-90
translation system.
New Customer Service GUI Interface:
Contractor or Duquesne shall develop a new
marketing-oriented user interface for Duquesne that
provides the user with appropriate information from
DISCuS and the fixed network to better respond to
customer inquiries and meet customer service requests
as follows:
Support a GUI interface capability that
supports access to all of the fixed network
and MV-90 consumption and billing data and
features, as well as access to DISCuS and
data warehouse information and transactions.
Load Profile:
Contractor shall provide the ability to review and
analyze load data at the premise, transformer or
subsystem level. Contractor shall:
Create and maintain a required storage
capability of load and customer information
from the fixed network, MV-90 and DISCuS
such that load profiles (interval data) can
be provided for any customer in the
distribution system. Historical load profile
data will be retained for three years,
within MV-90 or the customer data warehouse.
Provide a decision support environment for
both standardized and adhoc type load
profile analysis functions. Perform load
research functions through MV-90.
Provide an interface for consumption and
load profile data to the Power Billing and
DISCuS billing systems.
Real-Time Pricing:
The UTS MV-90 real-time pricing package
will be provided to meet the RTP provisions
of the contract for three phase and large (
* and greater) single phase demand accounts
which will be using the MV-90 system.
All necessary utility and customer
interface software will be provided by
Contractor and will be operational by * for
accounts handled through the MV-90 system
(three-phase, large single-phase, excludes *
). Contractor agrees to license the * MV-90
RTP customers at * . Contractor will provide
standard MV-90 Read Only RTP software for
Duquesne to distribute to their customers as
necessary to support RTP with ABB PowerPlus
Alpha Meters to be operational by * (see
Schedule D).
<PAGE>
Small single phase accounts (less than * )
using the * module will be capable of
implementing RTP through MV-90 or via
appropriate * connection for delivery of
hourly reading data on a near real-time
basis to an Internet server or similar
interface by
* .
Standard consumption meter accounts will be
converted at Duquesne's request to an RTP
account as described above and will be
capable of providing RTP data delivered on a
near-real time basis by * by paying the
incremental charge outlined in Schedule D.
Billing and database interfaces required to
make use of RTP data for billing or other
purposes will be provided by Contractor by
the above implementation dates. RTP will
deliver hourly reads on a near real-time
basis via * or mutually agreed file transfer
mechanism rather than the existing CBI or
DRDB by * .
Meter Service Management:
Contractor shall provide a system to manage all
maintenance activities at a customer's premise.
Contractor shall:
Modify DISCuS to route appropriate service
orders, both automated and paper, to the
Contractor for disposition.
Provide reporting facility to monitor
Contractor performance and customer
satisfaction results to assure Contractor
compliance to service levels.
Provide facility where the Contractor can
transfer or refer the service order to
Duquesne for disposition of request.
Provide all necessary interfaces to DISCuS
to update customer files.
6.2 System Acceptance
Duquesne shall conduct acceptance testing in accordance with
its Schedule F Test Plan which shall be finalized during
Phases I and II. This Test Plan shall at a minimum include the
following:
Spot checking of Routes during the
installation period.
Route testing and system testing shall be
conducted on a random and full system
integration basis.
Route testing shall include individual
Routes as well as higher level route summary
data to ensure that performance standards
outlined in Schedule L are capable of being
met.
System testing shall include an evaluation
of system network software, management
information bases, and user applications
software developed in accordance with the
Agreement.
System testing shall include an evaluation
of throughput capability, system speed and
fill capacity, data accuracy and other
parameters as necessary.
All functionality provided under the
Agreement shall be tested under low and high
volume conditions.
A parallel test comparison of the automated
routes against the manual route results
shall be conducted to verify system accuracy
following the successful comparison, the
reading of the route will be turned over to
the automated meter reading systems.
Final system acceptance testing shall be conducted by Duquesne
upon completion of Phase II. Contractor shall be notified, as
described in the Agreement, of the results of this testing and
of any Nonconformities that must be corrected prior to system
acceptance. All Nonconformances must be resolved within the
Agreement schedule timetable.
Ongoing and continuing system testing shall be included in the
Test Plan to ensure that system functionality and data
acquisition remain at required standards throughout the term
of the Agreement.
6.2.1 System Hardware Test
Testing the hardware usually consists of visually
inspecting the equipment and running any standard
hardware diagnostic programs. Other tests may be
developed during Phases I and II.
6.2.2 System Software Test
Every software function shall be investigated and
proven to be operating as per the documented
specifications and user guides. Software components
to be tested include all network application
software, SQL application software, CCU application
software and network management software
6.2.3 Variances and Problem Trackers
Variances are unexpected conditions experienced
during the system acceptance testing and system
operations. Software, hardware, and documentation
problems can be reported, and they may or may not
indicate legitimate System problems. System variances
and problem trackers are reported and tracked by The
Contractor utilizing a Central Problem Tracking (CPT)
mechanism to classify, track, describe, document, and
address the reported condition. This mechanism is
primarily utilized by the Customer Support Center.
CPT trouble data from the tracking system shall be
provided to Duquesne on a regular and periodic basis
to enable Duquesne to be aware of any outstanding
problems and the current status.
<PAGE>
When variances or problems requiring correction have
been resolved, the process is noted in the problem
tracker log, where it is archived for future
reference. Appropriate releases and adjustments are
made based on the nature of the issue.
6.2.4 Problem Resolution and Escalation Policy
The Contractor's Problem Resolution and Escalation
Policy serves to categorize issues according to
severity, match levels of severity with the
appropriate response, and define actions to be taken
if resolution is not achieved within appropriate
time-frames. This system will be used internal to the
Contractor to provide Nonconformity monitoring.
However, all handling of Nonconformities arising out
of the Certification, Acceptance or Final System
Testing will be handled in accordance with Schedule F
of the Agreement.
6.3 Certification Testing
Beginning with the Initial Notice, Contractor shall conduct
certification testing for each converted Route and shall
include in its plan the following:
A Certification Notice shall be provided to
Duquesne upon completion of the Route
testing.
Duquesne shall be notified in advance of
such testing and shall be permitted to
observe this testing on a spot basis.
A weekly report shall be provided to
Duquesne showing completed Routes, test
results, and related Nonconformities.
The Certification Notice shall certify that
the Route has been accepted and meets the
acceptance criteria set forth in Schedule F
of the Agreement.
Phase I Nonconformities shall be resolved
within the time period specifications
described in the Agreement.
Phase II Nonconformities shall be handled
in accordance with the acceptance testing
provisions prescribed in the Agreement.
Duquesne shall have at least * notice of Route Certification
Testing to provide an opportunity for spot checking or
otherwise observe the Contractor testing process. As the fixed
network installation advances, Duquesne shall observe as
deemed necessary the communication of network devices with
higher levels and the recording of data in the GIHP or Oracle
data warehouse.
<PAGE>
7. SYSTEM OPERATION, SUPPORT, AND MAINTENANCE
- ------------------------------------------------------------------------------
The Contractor shall provide proven procedures, tools, and techniques
for implementing, operating, supporting, and managing large automated
data acquisition systems and providing user support. The sections that
follow outline the basic components that shall be followed for the
delivery of services requested by Duquesne, including operations,
training and mainframe functions associated with the fixed network.
7.1 System Operations
System operations includes several areas of involvement
principally involving the ongoing service work associated with
a services agreement. Secondary, although no less important,
are the routine support mechanisms that accompany daily
operations.
7.1.1 Operations Center
The Operations Center is the central area where the
service work takes place and includes the physical
location of the computer systems for the fixed
network, the interface to the installation computers
(ReadOne system), and alternative/backup meter
reading systems (e.g. Premierplus OMR and
DCLink/MAMR). The Contractor shall establish this
Center in accordance with Schedule J.
At this location connections to the Duquesne
mainframe shall be available for interface to the
Oracle relational database (for billing interfaces
and client applications). Likewise, connections shall
be available for the ReadOne Link application for
installation activities.
The proposed computer facility shall fill the
Operations Center needs based on preliminary site
surveys. It is assumed that the existing facility
infrastructure, including heating/cooling, UPS,
communications connections, physical security, etc.
shall remain intact for the Operations Center. This
Center shall be staffed with the Contractor's
personnel to monitor and maintain the fixed network,
conduct daily activities, for system maintenance
functions, etc.
7.1.2 Operations - Daily Activities
The Contractor shall provide daily monitoring of the
fixed network to verify correct operational
efficiencies are taking place, verifying performance
needs, diagnosing system faults, and identifying
maintenance needs. The Contractor shall provide
experienced, trained personnel to perform the
following operational functions:
Initialize, monitor, and control the fixed
network.
Operate and sustain communication links
(excluding links provided by Duquesne such
as trunk radio) between PowerPlus Alpha
meters and the MV-90 head end system.
Maintain MV-90 hardware and software.
Execute standard operating procedures at
scheduled times.
<PAGE>
React to exceptional conditions and
maintenance needs.
Conduct component maintenance functions.
Provide configuration support.
Conduct appropriate backup, storage, and
diagnostic functions in close coordination
with Duquesne.
Recover from system failures.
Create problem reports for all exceptional
conditions.
Execute notification and escalation
procedures for exceptional conditions.
Collect and store appropriate
documentation.
Duquesne shall have the ability to request * (or more
frequent) reads, typically in a batched manner for
efficiency but not a requirement, to the Oracle
database for billing purposes. On request reads and
other application capabilities are defined previously
in the software applications section.
Operation of the alternative meter reading systems
shall take place by the Contractor operations
personnel, who will also dispatch maintenance and
installation crews for ERT and CCU components.
The Contractor operations group shall interface with
the Contractor's customer service and support
personnel to ensure that all Duquesne customer
service policies and procedures are fully supported.
7.1.3 Customer Service and Support
Duquesne level one help desk personnel shall
interface with Contractor's customer service
organization in Pittsburgh during working hours for
the initial operational phases. For additional
support, the Contractor support representative shall
contact the main Contractor support services
organization (Customer Support Center) as appropriate
to continue efficient system operations for Duquesne.
The Contractor shall also maintain an experienced
staff in the Customer Support Center based in
Spokane, WA. This center shall provide 24-hour, 7-day
per week service accessibility. The office is
currently staffed from 6:00 a.m. to 6:00 p.m. (PST),
Monday through Friday, with migration strategies in
place to staff the center 24 hours a day. If
emergencies arise outside of staffed hours, calls are
received by an answering service which connects them
directly with a Customer Support Analyst. In all
cases, problem trackers, Nonconformities, performance
deficiencies and any other problem arising through
operation of the network shall be handled on a basis
that meets the requirements of the Agreement.
<PAGE>
7.2 System Maintenance
7.2.1 Field Investigations
The Contractor shall dispatch appropriate Contractor
or sub-contract personnel to investigate any suspect
fixed network component not located on customer
premises (i.e.: CCUs, NCNs), and will take the
necessary action to ensure that acceptable system
operability is maintained. The results of such
investigations may be to repair, replace or add
additional system components to ensure acceptable
performance levels are maintained.
7.2.2 De-installs and Re-installs
The Contractor shall provide all personnel,
equipment, tools, and consumable supplies (wire,
hardware, etc.) necessary for de-installation and
re-installation of ERT Meter Modules, * , DCI Sentry
devices and Meters requiring service. In addition,
all new services requiring meters will have Meters
and Meter Modules installed by the Contractor.
7.2.3 Equipment Maintenance
Contractor shall provide corrective services for the
covered components listed in the Agreement and any
other system components that require servicing and
affect the services provided under the Agreement.
Corrective services shall be provided during regular
hours at the Contractor's servicing location with
consideration to the appropriate "return times" to be
identified based on individual component need and in
conformance with all published Service Procedures.
Upon receiving equipment at the servicing location,
the Contractor shall complete all corrective
maintenance services necessary to return the
equipment to the original operating specifications,
excluding minor cosmetic deficiencies.
In addition, the covered components returned for
corrective services shall receive preventive
maintenance service. Preventive maintenance service
includes complete functional testing, upgrades,
replacement of defective or suspect components, and a
final functional test. In all cases, equipment
maintained by Contractor shall be expected to operate
in a manner that meets the service levels established
in the Agreement.
7.2.4 Related Documentation
The Contractor shall provide applicable operations
and service publications as necessary to support the
fixed network and MV-90 systems and meet the
requirements of the Agreement, including hardware and
software components. Procedures and specifications
for product modifications and upgrades shall be
furnished as they become available. Engineering blue
prints, source code, proprietary protocols, and
additional Contractor technical documents considered
necessary for operation and maintenance of the fixed
network and MV-90 shall be furnished as part of this
Agreement except as provided for within the
Agreement.
7.2.5 Technical Library
The Contractor shall maintain a single Technical
Library at it's servicing location for storage and
maintenance of all related Fixed Network and MV-90
<PAGE>
system Agreements, back-up software, operators
manuals, service manuals, engineering change orders
(ECOs), specifications, service bulletins and reports
associated with installation, operation, maintenance
and administration. Duquesne agrees that all related
technical documents and data generated internally
shall be cataloged and maintained as part of the
Library per the Contractor's request, and listed in
the Technical Library. Unless specifically identified
as "Public Information", the Contractor and all
parties to this Agreement shall consider cataloged
materials maintained in the Technical Library to be
proprietary in nature, and agree not to copy or
distribute materials, documents, or software to any
third parties for any reason without prior written
consent from affected parties.
7.3 Personnel Certification
Personnel certification ensures that everyone who is using the
fixed network or MV-90 applications has received the same
consistent training as well as attained the same level of
knowledge that enables Duquesne and the Contractor to run the
systems more effectively, efficiently, and reduce the cost in
terms of retraining, and most important, not getting the most
from the system that you can.
Certification shall be performed through a series of courses
and exams that test the knowledge that should be gained from
the course. The exam shall be administered by the Contractor
or a neutral third-party. There may be some occasions when the
exam shall be administered at the conclusion of the course.
The acceptable passing mark is * with the exception of SNMP
which is
* .
Upon completion of applicable training courses, employees
shall be deemed certified for the appropriate engineering,
installation, operation, or maintenance job functions.
Individuals will be certified for back-up responsibility in
the event a position should unexpectedly become vacant.
Certified employees shall qualify for all applicable
engineering, installation, operation, and maintenance support
services as identified. Personnel not holding applicable
certification(s) shall be required to be enrolled in future
training class to be able to support the systems.
7.4 Disaster Recovery and Backup Plans
The Contractor understands that having metering data is
critical to Duquesne Lights financial operations. However,
complete and detailed disaster recovery and backup plans for
the fixed network and MV-90 implementation will not be
completed until the end of Phase II. The Contractor shall work
with Duquesne during Phases I and II to completely define the
disaster recovery and backup needs.
7.4.1 Approaches and Responsibilities
Approaches to disaster recovery can vary according to
a number of criteria. A single GIHP or MV-90 server
can be backed up by another comparable unit in
another building or site. A large grouping however,
requires a suitable, redundant system at an off-site
location, or subscription to a specialized disaster
recovery hot site. In all cases, suitable backup
provisions shall be provided to meet the backup plan
approved by Duquesne.
The Contractor shall work with Duquesne project
management to define the following disaster recovery
responsibilities:
Work with Duquesne personnel to identify
critical applications and time frames.
Negotiate for rapid delivery purchase
orders with key Subcontractors and provide
sufficient inventories of materials and
components on-site.
Ensure that hot-site contracts, if
applicable, provide sufficient resources for
processing critical work.
Ensure that proper backup procedures are
being followed and off-site storage of
critical data is accomplished.
Collect, organize, and periodically review
the disaster recovery documentation.
Coordinate and document results of disaster
recovery tests.
Provide an Incident Report for each
occasion that the Disaster Recovery Plan is
implemented.
7.4.2 Disaster Avoidance and Recovery
The Contractor agrees that the GIHP and MV-90
database servers shall have disaster recovery and
backup capability. Data on local computer disks
(Duquesne application users) are the responsibility
of the user unless provided under the services listed
in Section 6 of this Description of Work. Disaster
recovery and backup plans shall be pro-active in
nature to prevent loss of critical data. Therefore,
several approaches should be addressed:
Disaster Avoidance:
Network topology and configurations such as
alternate path routing, designed to minimize
single point failure.
Designated disaster recovery teams to
ensure valid, realistic procedures are in
place for network emergencies.
Annual testing of the actual recovery
capability performed on a scheduled basis on
a sample number of meters * .
Disaster Control:
Modular components used to enable hot
swapping of inoperative sub-components.
Market and standards-based products
recommended to ensure rapid access to
spares, trained personnel, and facilities at
disaster recovery locations.
Maintain an appropriate number of key
system components on-site for rapid
replacement.
<PAGE>
Disaster Recovery:
Automated diagnostic systems and network
controllers that provide disaster recovery
capability and constant surveillance during
an identified disaster recovery situation.
Disaster recovery needs and network
configurations that have been individually
identified for each utility's organization,
location, and system.
Since the final components of any Disaster Recovery
and Backup Plan are unique to the utility
implementing the plan, the development of a suitable
plan must be accomplished over time as the system is
installed. The Contractor agrees that this plan will
be developed and approved by Duquesne during Phases I
and II.
7.5 Duquesne's Training Needs and Deliverables
7.5.1 Needs Analysis
The Contractor shall work with Duquesne to gain an
understanding of the skill levels that currently
exist in their organization as well as the skill
levels that they want to exist in their organization
for the cooperative operations of the fixed network.
This analysis of Duquesne's needs shall provide the
Contractor with the opportunity to work jointly to
make the determination as to where to begin
curriculum paths for the personnel who are going to
work with the fixed network system. Likewise, an
analysis of The Contractor's needs shall provide
Duquesne Light with the opportunity to tailor
training and curriculum paths for the Contractor
personnel involved with Duquesne's systems.
7.5.2 Training
The Contractor has focused its customer training on
three distinct groups of participants: participants
from an Information Systems (IS) Department,
Engineering, and Customer Service Representatives
(CSRs). Each group of participants shall participate
in training that is dedicated to ensuring their
success in using the fixed network system.
The Contractor believes that for the fixed network
and MV-90 systems to run effectively and efficiently
people need to have certain knowledge, skills, and
abilities. The Contractor has adopted a certification
approach based upon the participant's needs. The
levels coincide with four different levels: novice,
proficient, expert, and master. The differentiation
in the levels is to ensure that everyone understands
that they do not need every course or become a master
in order to succeed with the fixed network system for
their position. The Contractor encourages Duquesne
Light to have an on-site master or an expert who
works closely with a master from the Contractor. The
master provides the training and undergoes a rigorous
train the trainer program in addition to being an
expert in a particular subject matter area. The
definitions of each level are as follows:
<PAGE>
Novice - has no knowledge of the subject matter area.
Requires an overall conceptual understanding of
information focusing on terminology, definitions, and
minimal use of the system. Most managers shall take
these courses to afford them the opportunity to have
a clearer understanding of how the overall system
works from a high-level overview. Focuses on
knowledge and comprehension levels of Bloom's
Taxonomy (an educational philosophy that
differentiates between knowledge/comprehension and
synthesis/evaluation levels of learning).
Proficient - has little previous knowledge of the
subject matter area. Begins to gain an understanding
at the application and synthesis levels. Has the
ability to begin using the system and performing
lower complex tasks such as recognizing that there is
a problem within the system.
Expert - has extensive experience, knowledge, and
skills set. Knows several areas `inside and out'. Has
the ability to diagnose as well as troubleshoot and
fix the problems within the system. Has the knowledge
to show others how to fix problems using `shortcuts'.
Understands the overall working of the system as well
as being technically deep in one particular area. If
the person doesn't know the answer to the question,
they know where to go in order to find it. This
person performs at the evaluation and judgment
levels. Usually has a great deal of hands-on
experience as well as conceptual and theoretical
knowledge.
Master - the major difference between the expert and
master levels is that the master has the ability to
train others on the various aspects of the system.
The master has excellent verbal and written
communication skills as well as good interpersonal
skills that enables them to perform as an outstanding
trainer and coach. The master works in conjunction
with the expert in order to rely upon someone else
for technical assistance in a particular area. The
master has taken a few more classes as well as
completed a train-the-trainer program that focuses on
offering excellent technical training for all levels
of the organization.
The above description of training requirements and
levels is typical of the training effort required to
ensure successful operation of the system. This
program will be made available to Duquesne, and shall
be consistent with Prudent Utility Practices and
submitted to Duquesne for review and comment. In
addition, any other training requirements,
documentation, manuals, etc. will be provided by the
Contractor if requested by Duquesne.
<PAGE>
8. DELIVERABLES
- -------------------------------------------------------------------------------
The following listing of deliverables as listed on Schedule N of the
Agreement is intended to be representative of the materials that will
be provided by the Contractor at appropriate time periods under the
Agreement. This listing is not considered all inclusive and any other
deliverables identified on Schedule N shall also be provided.
8.1 List of Deliverables - CONTRACTOR
1. System Overview Documentation
All of the documentation that provides initial overview
information of the system software components, system
hardware components, and implementation activities.
2. System Data Definitions and File Layouts
The file layouts necessary for the transfer of data between
the mainframe and the SQL databases.
3. Project Plan, Initial
The initial project plan contains all sections of a plan as
outlined by the Metzger text "Managing a Programming
Project". This version of the plan is generally considered
to be about
* accurate.
4. Project Plan, Updated
The second version of the project plan is an expansion of
the initial version using the information gathered in the
System Definition Phase. This version of the plan is
generally considered to be about * accurate.
5. Project Plan, Final
The final revision of the project plan is an expansion of
the second version using the information gathered in the
System Definition and System Development Phases. This
version of the plan is generally considered to be about *
accurate.
6. ReadOne Pro Design
Describes the utility specific adjustments and
customizations to the standard ReadOne Pro (ROCL)
application for the ReadOne Pro handheld unit.
7. Implementation Plan
The plan that contains all specific activities for Duquesne
and Contractor in the implementation of the MAMR system.
8. DC_LINK Users Manual
Details the operational procedures of the DataCommand Link
application software to allow an operator to perform the
tasks associated with the PC operations of the MAMR system.
9. ReadOne Pro Users Manual
Details the operational procedures of the ReadOne Pro
handheld unit to allow an installer to program and verify
the ERT module installation.
10. ERT/ * /DCI Sentry Meter Installation Manuals
Provides operational procedures for the changeout to ERT, *
, DCI Sentry devices for electric meters in the field (see
also Note 7).
<PAGE>
11. Electric ERT Module Retrofit Manual
Provides operational procedures for retrofitting meters
with electric ERT modules with the meter shop. The
procedures shall encompass installation of the ERT
retrofit module, installation of a meter Bar Code label
and meter accuracy testing.
12. System Acceptance Plan
This is a high level document that discussed the testing
and acceptance conditions relating to the Fixed Network
AMR system.
13. ReadOne Pro Application
The ReadOne Pro functionality necessary for the
implementation and maintenance of the MAMR system, as
well as the installation of the ERT modules.
14. DC_LINK
Provides all DataCommand Link application functionality
necessary for PC operations in the MAMR system. The
application functionality is detailed in the DC_LINK Users
Manual.
15. DCU
Provides all DCU functionality necessary for data
collection of ERT module readings. The application
functionality is detailed in the DCU Operators Manual.
16. Carbon Copy Plus or PROCOMM Plus
Provides remote communication capabilities for Contractor
support services and troubleshooting assistance.
Contractor supplied, one package per PC office location,
of Carbon Copy Plus or ProComm Plus.
17. Electric ERT Modules
Sufficient quantity of ERT Modules for installation in
the field
18. ReadOne Pro units
Sufficient quantity of ReadOne Pro handheld units, for
installation and verification of ERT modules in the field.
These shall remain Contractor property, except for *
provided to Duquesne.
19. ReadOne Pro Cradles
Sufficient quantity of ReadOne Pro cradles, one per PC per
office. These shall remain Contractor property, except for
* provided to Duquesne.
20. ABB Electronic Alpha Meters
Sufficient quantity of ABB Electronic PowerPlus Alpha
meters equipped with Contractor fixed network or MV-90
Compatible Communication interface, outage event
reporting, power quality reporting and load profile
capability for field installation on single and three
phase demand accounts.
21. Bar Code Label Printer
Sufficient Bar Code printer units for attaching meter
identification Bar Code labels on all retrofitted electric
ERT meters.
22. Cell Control Units (CCU)
Sufficient quantity of Cell Control Units for
implementation of the Fixed Network and data collection
from the ERT modules.
<PAGE>
23. Network Control Nodes (NCN)
Sufficient quantity of Network Control Nodes for
implementation of the Fixed Network and data collection
from the ERT modules and CCUs.
24. Genesis Itron Host Processors (GIHP)
Sufficient quantity of Genesis Itron Host Processors for
head end databases and applications for the fixed network
and data collection from the ERT modules, CCUs, and NCNs.
Hardware platforms shall be mutually agreeable, probably
IBM RS6000 or DEC Alpha devices.
25. Personal Computer
One PC per office for ReadOne Link capabilities and DC_LINK
applications; minimum specifications include:
IBM PC AT, PS/2, or compatible 640 KB of RAM
memory 20 MB hard disk drive 3.5" diskette drive
Monitor and display adapter Serial mouse, if
necessary Serial port for ReadOne Pro
communications Parallel port for printer
communications Printer, cabling, supplies PC DOS
version 3.2 or greater File transfer
communications board
26. Telecommunications Modems
Sufficient quantity of modems, Hayes compatible, for use
with carbon copy and file transfer packages and for dial-up
diagnostics of the fixed network, and appropriate modems
for communication links with ABB PowerPlus Alpha meters and
MV-90 head end system.
27. OMR Handheld Units
Provide up to * handheld units, new or upgraded, for
monitoring and reviewing reading and service functions.
28. MV-90 Translation System Hardware and Functional
Specification (Reference Guide) Provide head end equipment
including modems and servers for operation of MV-90 for all
three phase and large (transformer rated, * or greater)
single phase accounts. Provide appropriate specifications
or reference guide documents to support system
implementation and operation.
29. MV-90 Documentation, Software and Licenses
Provide MV-90 documentation software and licensing rights
supporting delivery of all applications as defined in the
Agreement.
30. Communications Links
Provide communications to all single phase and three phase
accounts as required within the Agreement.
<PAGE>
8.2 List of Deliverables - DUQUESNE
1. ReadOne Pro Application Interface
The ReadOne Pro interface functionality necessary for the
implementation and maintenance of the AMR system, as well
as the installation of the ERT Modules.
2. Carbon Copy Plus or PROCOMM Plus
Provides remote communication capabilities for the
Contractor support services and troubleshooting assistance.
Utility supplied, one package per PC office location, of
Carbon Copy Plus or ProComm Plus (if available).
3. File Transfer Package
Provides communications between the mainframe and PC to
allow transfer of data files for meter reading and DCU
operations.
4. DISCuS Access
Provides communications to the mainframe sessions for
viewing and appropriate updating to the DISCuS sessions to
The Contractor for installation and ongoing operations.
5. ReadOne Pro Units (If more than * are needed.)
A specific quantity of ReadOne Pro handheld units, for
installation and verification of ERT modules in the field.
6. ReadOne Pro Cradles (If more than * are needed.)
Sufficient quantity of ReadOne Pro cradles, one PC
peroffice.
7. Personal Computer
One PC per office for ReadOne Link capabilities; minimum
specifications include:
IBM PC AT, PS/2, or compatible 640 KB of RAM
memory 20 MB hard disk drive 3.5" diskette drive
Monitor and display adapter Serial mouse, if
necessary Serial port for ReadOne Pro
communications Parallel port for printer
communications Printer, cabling, supplies PC DOS
version 3.2 or greater File transfer
communications board
8. Telecommunications Modem
Sufficient quantity of modems, Hayes compatible, for use
with Carbon Copy and File Transfer packages.
9. Telecommunications Links
Sufficient quantity of telecommunications links per PC for
use with Carbon Copy and fixed network components. Provide
trunk radio or other communication links as required for
connection with the three phase accounts through MV-90 that
are Duquesne's responsibility.
<PAGE>
9. GENERAL NOTES
- -------------------------------------------------------------------------------
1. Advanced functionality will be provided only to those meters
covered by the Fixed Network, or the MV-90 applications. Upon
issuance of a general system specification, MV-90 will be
integrated into, and become part of, the fixed network.
2. Polyphase/three-phase meters are read by MV-90 in accordance
with the terms included in this Agreement.
3. The Words "Radio" or "Wireless" shall be deemed deleted prior to
the words "Communication Network".
4. The Words "Certified Training" shall be deemed to mean
"qualified training".
5. Terms such as URD, * , MV-90, GIHP, Fixed Network,
CaRS, CBI, DRDB, CDPD, etc. have specific meanings that are defined in
various sections of the Agreement.
6. For the purpose of describing a * in Schedule A, or elsewhere in
the Agreement, the term * has been used to represent this device.
All specific references to * are interpreted to mean the * , which
is the official model designation.
7. References to DCI Sentry and * devices are attempts to identify
specific types of end point devices that may provide ERT level or
advanced ERT functionality. The appropriate end point device will
be selected by Itron to meet the precise data collection
requirement. All such devices are included under the defined term
Meter Module in the Agreement.
<PAGE>
REPLACEMENT SCHEDULE C
<PAGE>
- -------------------------------------------------------------------------------
SCHEDULE C
- ------------------------------------------------------------------------------
PERMITS
1. Licenses will be required from Duquesne for attachment to poles,
towers and fixtures owned by Duquesne.
2. Licenses or permits will be required from the City of Pittsburgh
for attachments to street lights in
the City of Pittsburgh.
3. Permits or licenses may be required for attachment to any
poles, towers, fixtures or facilities not
owned by Duquesne.
4. Work permits may be required from some municipalities for
performing certain construction activities within their
boundaries. Street opening permits may be required for digging or
trenching activities in municipalities.
The above items represent the known permit requirements as of the date
of execution of this Agreement. Contractor accepts responsibility for
obtaining these and any other permits required for completion of the
Work. Duquesne agrees to utilize best efforts to assign, facilitate or
minimize the impact of permit requirements on Contractor's work and
further agrees that if unforeseen permit requirements caused by new
regulations significantly change or impact the price of the Work, the
new requirements will be addressed through the change control process.
<PAGE>
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
SCHEDULE D
PRICE SCHEDULE
PHASE I
BASE PRICE
* *
* *
PHASE II
BASE PRICE
* *
* *
* *
* *
PHASE III
A. SERVICES
BASE PRICE (See Note 7)
As defined in the Agreement. *
B. EQUIPMENT LEASE
LEASE PRICE
Covering the Equipment as described *
in the Agreement.
C. ADVANCED SERVICES
* *
<PAGE>
Notes:
1. Except as set forth herein and in the Agreement, *
.
2. Monthly billing is calculated based on quantities as of the
* .
3. The above prices cover all * provided under the
Agreement as shown on * .
4. Advanced services will be billed at the * or the
* .
5. * reads includes up to *
reads can be obtained at up to
* .
6. Customer Choice Option reads (readings recorded * will be billed at * per
meter per month during the first three years of Phase III, and * per meter
per month thereafter.
7. A * price reduction will be imposed on the monthly base price amount, once
Phase III pricing is in effect, if certain Phase III milestones are missed
(See Schedule J).
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
SCHEDULE E
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
BUYOUT SCHEDULE FOR CONVENIENCE
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
(In Thousands (1) (2) (3) (4)
of Dollars) Meter Fixed Associated
New Meters Modules Network Services Total
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
Phase II * Pro rated Pro rated Pro rated Pro rated Pro rated
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
Phase III
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
Year 0 * * * * *
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
Year 1 * * * * *
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
Year 2 * * * * *
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
Year 3 * * * * *
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
Year 4 * * * * *
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
Year 5 * * * * *
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
Year 6 * * * * *
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
Year 7 * * * * *
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
Year 8 * * * * *
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
Year 9 * * * * *
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
Year 10 * * * * *
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
Year 11 * * * * *
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
Year 12 * * * * *
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
Year 13 * * * * *
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
Year 14 * * * * *
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
* Total equipment purchased plus * fee for termination of services.
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
BUYOUT SCHEDULE FOR CAUSE
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
(In Thousands (1) (2) (3 (4)
of Dollars) Meter Fixed Associated
New Meters Modules Network Services Total
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
Phase II Pro rated Pro rated Pro rated Pro rated Pro rated
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
Phase III
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
Year 0 * * * * *
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
Year 1 * * * * *
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
Year 2 * * * * *
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
Year 3 * * * * *
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
Year 4 * * * * *
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
Year 5 * * * * *
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
Year 6 * * * * *
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
Year 7 * * * * *
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
Year 8 * * * * *
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
Year 9 * * * * *
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
Year 10 * * * * *
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
Year 11 * * * * *
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
Year 12 * * * * *
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
Year 13 * * * * *
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
Year 14 * * * * *
- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------
</TABLE>
Notes:
1. New Meters (Column 1) includes *.
2. Meter Modules (Column 2) includes * .
3. Buyout prices will be amortized on a * .
4. At the end of Term, Duquesne has an optional buyout of the New Meters
at * which includes a * residual payment for three-phase PowerPlus Alpha
meters. Should Duquesne elect not to buy the New Meters, Duquesne
Will pay the Contractor
*
5. New Meter buyout price * in the event that the Term is extended.
<PAGE>
- -------------------------------------------------------------------------------
Schedule F-9
- ------------------------------------------------------------------------------
9/11/97
[10145-0003/BA97314b] 1
* = Confidential treatment requested
SCHEDULE F
PERFORMANCE TESTING AND
PROCEDURE CERTIFICATION REQUIREMENTS
INTRODUCTION
Under this Agreement, Duquesne is purchasing automated data acquisition
services to enhance the billing, marketing and outage management functions of
its customers.
Duquesne, as the purchaser in this Agreement, in cooperation with the
Contractor, will approve a Test Plan to test these systems and to certify
compliance with key regulatory areas as specified in the Agreement. Contractor
will in most cases develop the test plan details based on input from Duquesne
and the product or functional requirements of the system and submit them to
Duquesne for review and approval.
As system components, including hardware, operating software, software
applications and data interfaces are installed and implemented during each Phase
of the Agreement, detailed test plans will be developed and performed to ensure
that each system achieves acceptable performance levels.
OUTLINE OF TEST PLAN
The System Test Plan will include the following major sections. Testing
will be conducted as set forth below during Phases I and II to demonstrate that
Contractor meets the requirements of the Agreement, including the appropriate
functional requirements of Schedules A and B and the performance standards
identified in Schedule L, and during and throughout Phase III, as appropriate,
for ongoing testing during the entire Term of the Agreement.
1. System Installation Acceptance Testing
2. Meter Testing and Operational Performance
3. Software Acceptance
a) Network Management Applications
b) Contractor Supplied Network Applications
c) Duquesne Application Enhancements and Interfaces, including
Interfaces and Other File
Transfer Mechanisms
4. UTS MV-90 System Performance
5. Operating Performance - Information Services (IS) Management
6. Radio Frequency (RF) System Performance
The detailed test criteria and required performance levels included in
this plan will be more fully described in each test plan document. All tests
will be developed prior to the time each test is to be performed. In some cases,
such as the development of some user applications, the final test criteria will
not be completed until just prior to testing. When issued, the test plan will
describe which testing is to be concluded prior to Phase II acceptance, and
identify any anticipated tests that will be completed during Phase III.
I. SYSTEM INSTALLATION ACCEPTANCE TESTING
A. Fixed Network Routes
When a Route or Routes on the Fixed Network are turned over to Duquesne
during Phases I and II, the following tests may be performed at
Duquesne's option prior to its Acceptance of the Route. (Some tests,
for functions such as * notification, will occur during Phase III.)
1. Cross reference the van or manual meter reading data and the
readings from the Fixed Network to verify
accuracy.
2. Test the outage notification feature of the system by (1)
de-energizing a select number of special non-billing meters and
(2) cross referencing Itron's outage reports with Duquesne's
circuit outage records to indicate that an outage has registered.
* is based on
* .
3. Test the tamper detection function by removing a select number of
Meters to verify that a tamper report is provided and is
processed in a manner which is consistent with Schedules A and B.
4. Verify that the system is providing daily readings for each
Meter.
5. Verify that the Fixed Network communications coverage is
consistent with the required number of
billing Meters outlined in the Agreement.
6. Verify that load profile Data can be obtained without Meter
replacement on a sampling of single-phase self-contained Meter
installations.
7. Perform an on-demand test of * load profile accounts equipped
with * (see Schedule D) to stress test the system (prior to Phase
II acceptance). These * accounts will be distributed throughout
the Fixed Network on multiple routes.
8. Verify that data passed to Duquesne satisfies data collection
and delivery requirements for at least
* of the eligible meters in the system.
B. GIHP/Polling Engine
Tests will be developed and conducted to evaluate the correct operation
and performance of the Genesis Itron Host Processor to confirm its
ability to meet the performance requirements of the Agreement.
C. MV-90 Translation System
Test Plans will be developed and conducted to evaluate the correct
operation and performance of all hardware and software components that
will be implemented for the MV-90 Translation System, to confirm their
ability to meet system performance requirements. Hardware and software
interfaces not totally designed and finalized will have test plans
developed once all functionality and interfaces have been completely
defined. The required test plans will be developed by Itron to be
reviewed and approved by Duquesne Light during Phase II as the system
components are designed and installed. Any negative impact on
performance caused by shared phone lines will not constitute system
failure.
<PAGE>
D. *
Tests will be developed and conducted to evaluate the correct operation
of the * device which will be used for the single phase demand
customers with loads less than * . Other technology options may be
utilized that are available and satisfy Duquesne's regulatory (ANSI
specification) and Best Industry Practices.
E. DCI Sentry
Tests will be developed and conducted to evaluate the correct operation
of the DCI Sentry equipment which may be utilized at Itron's option for
fixed network deployment, and residential accounts that are in URD
areas, and also in remote areas, where fixed network coverage or
advanced functions are desired. Test plans will be developed by Itron
to be reviewed and approved by Duquesne. Other similar end point
devices may also be utilized upon approval by Duquesne subject to their
ability to meet best industry practices and regulatory requirements.
F. ABB PowerPlus Alpha
Tests will be developed and conducted to evaluate the correct operation
of the ABB PowerPlus Alpha meters and the various required interfaces
between the C&I Customer locations and the MV-90 Translation System.
Duquesne may perform the above tests, and any others identified as
appropriate, as described in the test plan documents. As Routes,
systems or components are completed and certified by Contractor as
complete, Duquesne will perform acceptance testing in accordance with
the Agreement. Once accepted by Duquesne, accounts will become
available for billing purposes as part of the installed system in
accordance with Schedule D.
II. METER TESTING AND OPERATIONAL PERFORMANCE
The following test functions may be performed at any time throughout the
Term, at Duquesne's option, as required to ensure proper Meter testing
operational performance and procedure compliance.
METER SHOP OPERATIONS
1. Verify that the Meter Shop facility is fully capable of
providing all required meter maintenance
repair and test functions.
2. Verify that purchase orders have been issued to approved vendors
for new single-phase and three-phase meters in accordance with
Duquesne's specifications and requirements.
3. Verify that backup plans for meter test and new purchase data
upload are in place.
4. Verify the process of preparing meters for installation to
ensure that all Meters are equipped with a
Duquesne approved bar code label.
5. Verify that all meter warehouse areas are secured and
organized to distinguish tested and untested
Meters.
6. Verify that all meter test boards are connected to Duquesne's
Automated Micro Systems automated meter test data collection
system.
7. Verify that mainframe terminals are installed for access to
Duquesne's DISCuS system and that appropriate customer service
and meter records data is properly entered.
FIELD OPERATIONS
1. Verify that agreed on procedures are documented and are being
followed for all field operations.
2. Verify that the Contractor adheres to Duquesne's meter
installation standards and procedures.
3. Confirm that the Read-One Pro electronic data capture system is
working properly.
4. Confirm that a meter training program is in place for installers.
5. Confirm that field personnel are provided all necessary test
equipment, tools and accessories.
PERIODIC CERTIFICATIONS
1. Certify that the Contractor is compliant with all applicable
Pennsylvania Public Utility Commission
regulatory requirements.
2. Certify that the following numbers of New Meters are accuracy
tested before installation: *
of new transformer-rated meters and a random sample of *
of every *
new self-contained Meters.
3. Certify that the Contractor is following Duquesne's meter shop and
installation requirements; such as, periodic calibration of
watt-hour meter test boards and maintenance of Duquesne's accuracy
tolerances.
4. Certify that the Contractor is meeting Duquesne's requirements to
ensure the integrity and correctness of the meter installation;
such as, verifying the billing constants, inspection for correct
instrument transformer ratio, and verifying correct use for
single-phase transformer rated meters.
5. Certify that the Contractor is adhering to Duquesne's record
keeping requirements for meter records (description, location and
test) and service order completion.
III. SOFTWARE ACCEPTANCE
In accordance with this Agreement, Itron will provide all fixed network
and MV-90 software and the necessary interfaces to meet the requirements
of Schedules A and B.
1. Network Management Applications
Final deliverables will be accepted when they successfully operate
in accordance with the requirements of Schedules A and B. This
includes all SNMP MIB information for Contractor supplied equipment
for a time period reasonably sufficient to demonstrate that it
possesses no defects, program errors, malfunctions or
inconsistencies that impair its ability to substantially perform
its intended functions in accordance with the Design
Specification(s) (see definition of "Design Specification(s)" under
Item #4 of this Section).
<PAGE>
2. Contractor Supplied Client Applications
Final deliverables will be accepted when they successfully operate
in accordance with the requirements of Schedules A and B for a time
period reasonably sufficient to demonstrate (1) that they are
functioning correctly on data generated by Duquesne business
operations as reflected in the Design Specification(s), which data
has been updated by the Duquesne application enhancements and
interfaces themselves in a prior cycle, and (2) that they possess
no defects, program errors, malfunctions, or inconsistencies that
impair their ability to substantially perform intended functions in
accordance with the Design Specification(s).
The permanent technical and user documentation for the Contractor
supplied client applications shall meet standards regarding
content, media, and quality criteria as reflected in the Design
Specification(s).
Test plans will be developed and performed for the numerous
hardware and software interfaces that will be required between
Duquesne's DISCuS, data warehouse, customer record and billing
systems and the Itron GIHP and MV-90 systems. The overall data
system architecture will continue under design review and
determination during Phase II; however, the following interfaces
have been identified as likely to be required and will be tested as
they are developed and implemented:
1. Billing Interfaces
a) Sentry Consumption Data through Fixed Network
b) MV-90 Determinants - Power Billing Package (see Schedule
A)
c) MV-90 Billing Determinants - (Current Complex Meters -
* Accounts)
d) Consumption/Demand/KVAR through DCI, DCO, HHC and MV-90
e) * Consumption/Demand Data Through Fixed
Network
2. Daily Consumption Data through Daily Reads Process
a) Kilowatt Demand (Daily Reads with KVAR & TOU) - MV-90
System
b) KWHR Consumption (Daily Reads with Demand) - Sentry/
* Devices
c) TOU Data Collection (Version 2.5 Software)
3. Load Profile Accounts
a) MV-90 to Data Warehouse Interface - Interval Data- Class
Profile
b) Standard ERT'd Meters on Fixed Network - Up to *
Intervals
c) * Meters - Interval Data
d) DCI Sentry - Interval Data
Note: In many cases, the appropriate end point device for a
load profile application will be determined by Itron
through analysis of system link level reliability, or other
factors affecting or limiting performance under Schedule L.
Interval data interfaces are more completely identified and
defined in Schedule A.
4. Rate Scheduling Interfaces ( * Required)
a) Assigning Device to Rate
b) Create New Rates
<PAGE>
5. Events and Alarms
a) CCU Outage Detection *
b) CCU Outage Detection - *
c) Alpha Meter Outage
d) *
e) DCI Sentry Outage
6. Real Time Pricing
a) C&I Accounts Through MV-90 RTP Package (Large)
b) C&I Near Real-Time Interface (Small)
c) Fixed Network Accounts Through Near Real-Time Interface
Note: Near real-time RTP interfaces are identified in
Milestone #13 system architecture documents
and described in Schedule A. See also Schedule L.
7. On-Request Reads
8. Virtual Turn On/Off
9. MV-90/DISCuS/Data Warehouse Data Synchronization
3. MV-90 Data Management Software
In addition to fixed network applications, Contractor will provide
and install the MV-90 software applications for consolidation and
processing of three phase and larger (transformer rated, * or
greater) single phase services primarily using ABB PowerPlus Alpha
meter technology.
Included in this system are the following packages:
1) Base System with Reporting Package
2) TOU Option
3) Load Research/Load Profiling
4) Power Quality Functions
5) Real Time Pricing System
6) MV-PBS Power Billing System
7) MV-90 Read Only System
8) UTS Load Control Station
The MV-90 Multi-Vendor Software will include the following software
in the base system package mentioned above for use on the Master
System as well as for use on Local Data Servers when used for
distributed data collection.
MV-90 Base System with Reporting Package
Remote Interrogation Package
Totalization Package Time-of-Use
Package Graphics Package Lotus File
Format Package PC to Host File
Transfer Package Direct Unload of
Handheld Readers Load Research
Package
<PAGE>
4. Duquesne's Application Enhancements and Interfaces
The final deliverables will be accepted when they successfully
operate in accordance with the Design Specification(s) for a time
period reasonably sufficient to demonstrate that it is functioning
correctly on data generated by Duquesne business operations as
reflected in the Design Specification(s), which data has been
updated by the Duquesne application enhancements and interfaces
themselves in a prior cycle, such that it possesses no defects,
program errors, malfunctions or inconsistencies that impair its
ability to substantially perform its intended functions in
accordance with the Design Specification(s).
The permanent technical and user documentation for the Duquesne
application enhancements and interfaces shall meet standards for
content, media, and quality criteria as reflected in the Design
Specification(s).
5. Design Specification Definition
Design Specifications shall be prepared by the Contractor and shall
include all functional and performance requirements and
characteristics of the final system deliverables and provide the
necessary criteria for acceptance thereof. The parties shall
jointly develop the Design Specification during Phase I of the
Contract or in Phases II or III as appropriate. The Design
Specification shall include, among other things, the following
criteria, characteristics, and descriptions:
a) Identification of business areas affected by the Duquesne
enhancements and interfaces and the
business impacts for each area. Detailed description of
the deliverable with the intended
functionality;
b) Conversion requirements, permanent documentation
requirements, implementation strategies, and
knowledge transfer approach for the final deliverable;
c) System testing using controlled test data;
d) Integration testing using actual Duquesne data generated by
Duquesne operations.
A deliverables schedule will be generated which will describe
what must be provided and tested during Phases I and II. Any
deliverables not completed and fully tested as required during
Phase I must be clearly identified and approved for transfer to
Phase II by Duquesne. Similarly, all deliverables not completed
and tested as required during Phase II must be identified and
approved by Duquesne for transfer to Phase III.
IV. OPERATING PERFORMANCE
Information Services Management
The Contractor shall provide * response time for standard queries to the
CaRS database for access to individual records by * simultaneous users
as described in Schedule A.
The Contractor shall provide twenty-four (24) hour by seven (7) day
access to the CaRS database for data access for * simultaneous users.
Backup plans and help desk support must be in place, and network
monitors provided under the Agreement must be operational.
<PAGE>
Meter reading Data must be available to accomplish the required customer
billings.
DISCuS and Oracle interfaces must function properly. GIHP and MV-90
interfaces must be established with appropriate file transfer mechanisms
in place and operating properly.
Installation files, service order processing and other DISCuS interfaces
must be properly synchronized to permit effective operation of
Duquesne's Customer Information System (CIS) systems.
Meter change and DISCuS update processes must be working properly, and
provide the required data transfer functions.
V. RADIO FREQUENCY (RF) SYSTEM PERFORMANCE
Considerations for Testing of the Fixed Network
The automated data acquisition system may be considered to have two
general functions: (1) reliably obtain an accurate meter reading via an
external system, and (2) transfer that reading to the Duquesne CIS
system. The following tests may be used for acceptance of the installed
system to ensure proper operation of the RF network:
In a System Control and Data Acquisition System (SCADA) or similar
network, the most significant parameter would typically be the bit error
rate (BER) achieved which enables transmission of data at the desired
level of accuracy. Any equipment providing this type of transmission
must be shown to be reliable, (i.e., not incur excessive malfunctions
which result in system errors). The system must also perform in the
environment in which it is installed. It must have sufficient margin to
demonstrate dependability in all weather conditions expected to be
encountered.
Itron's spread spectrum system involves signals with short dwell times.
Measurement of average BER as in a continuous wave would be undesirably
complex. Data transmission will therefore be indirectly verified by
separately verifying functional transmissions and their accuracy. From
this point of view, a series of recommended system tests will be
developed and included in the Test Plan during Phase I. In addition,
some recommended tests for five years and beyond will be included for
continued system monitoring and/or confirmation of ongoing system
performance.
Functional Test - Single Read
As each ERT'd Meter is installed, the Meter may be polled to verify that
a reading has been received by the Fixed Network system. The readout
will then be verified for accuracy. The correct type of reading, such
as, consumption, demand, TOU, or Profile will also be obtained.
The Meter will then be temporarily disconnected to verify that an outage
is reported by the CCUs when polled. This process will be conducted on a
sample basis to ensure the integrity of the Route Certification Test
prior to turnover to Duquesne for Acceptance Testing.
Functional Test - Aggregate
The actual percentage of Meters installed and reported by the system
will be measured and verified to ensure it is within specifications. The
balance of the Data must be obtained by some alternative method, such as
the mobile van, and must demonstrate that all remaining Meters have been
identified and are being read in accordance with Schedule A.
<PAGE>
Minimum Phase I Approximately *
Percentage:
Phase II (The Primary Installation) *
Extended Buildout Requirement *
(If Option is Exercised by Duquesne Light)
The recommended test should be performed during a * period from Contractor's
certification of Phase I and * period for Phase II. Accuracy Test
During Phase I of the Agreement, accuracy tests will be developed to be
part of the Test Plan and will address system performance during Phase
I, Phase II, and Phase III and will be performed throughout the contract
Term.
Environmental Signal Variation Test
Propagation is subject to variation in environmental and climatic
conditions, both short term and long term. A measurement on any given
day cannot be assumed to represent either the worst or the best case. In
addition to accuracy tests as above (during the thirty (30) day
aggregate tests), an abbreviated accuracy test with sample size as above
will be performed at least monthly and at least once during each type of
extreme weather condition - hot, cold, wet, and dry. The sample selected
should compare favorably against the same sample used for Phase I so
that comparability can be documented through the test history.
Power Levels
The power levels at the transmitter outputs of all CCUs and NCNs will be
measured and should confirm that the RF levels do not exceed licensed
levels. ERT transmission outputs will be checked to confirm
manufacturing certification requirements and assure that ERTs do not
exceed FCC regulations.
Unscheduled Reads
The system will be configured for aggregate tests as described above.
Unscheduled reads will be requested for each type of Meter on top of
normal system activity. The readings obtained by the system will be
verified to ensure that they meet the on-demand time specification.
System Data Storage
The aggregate test will be run for the specified storage time with the
NCNs off. The NCNs will then be turned on to verify that the Meter reads
can be recovered from stored Data in the CCU.
A similar test will be run from the NCN. The uplink from the NCN to the
Host Processor (GIHP) will be disabled. The links will then be restored
to verify that the meter reads can be recovered from the stored Data.
The aggregate test will then be run to verify that the stored Meter
reads can be recovered from the GIHP data. Itron will provide Data
analysis that confirms that the remaining available storage area is
within the storage specification requirement provided in the Agreement.
Power Outage
Duquesne will first verify that the system identifies an outage as a
block (or CCU) outage * . Other tests will then be performed to
confirm that the * and then indicating that power has been
restored.
Scalability
The Contractor should provide a complete analysis which shows that the
system design is in accordance with, and can accommodate, the Meter
growth projections outlined in Schedule H. This analysis will be
completed, as further described in the final test plan, during Phase II,
and will be a prerequisite for Phase II acceptance.
Sample Size
Test sample sizes are based on usage projections that will be better
quantified in the Test Plan. Generally a * sample is taken for Phase I
and * for the full system.
VI. ACCEPTANCE TESTING
The Fixed Network testing that will be performed during Phase II
acceptance will include among other tests the identical tests that
Contractor now has the capability of performing on an existing test
system in Spokane, Washington. The following are the current test
functions:
CCU and ERT Testing will focus on the efficiency, effectiveness, and
reliability Communications of CCU and ERT communications.
CCU and NCN Testing will focus on the efficiency, effectiveness, and
reliability Communications of CCU and NCN communications.
NCN and NCN Testing will focus on the efficiency, effectiveness, and
reliability Communications of NCN to NCN communications.
NCN and GIHP Testing will focus on the efficiency, effectiveness, and
reliability Communications of NCN and GIHP communications.
Genesis Applications Testing will be
performed on the Software
included in Itron's Fixed Network
applications. Methodology and
criteria will be based on the
Design Specifications included
with these applications. For
further definition, refer to
Schedules A and B.
Network Application Network functionality has
been provided to ensure
ease of
Software Functionality installation, maintenance, and
Data collection flexibility.
These functions will be tested
based on definitions described3
in Schedule A.
<PAGE>
Network Management SNMP and associated GUI
interfaces have been provided
and will be
Software Functionality tested for effective management
of network components. For
further
definition refer to Schedule A.
Itron Specific SNMP Custom MIB tables have been defined and will be
tested according to MIBs Itron's defined specifications.
Billing Interface These applications will be tested to ensure Data
reliability and Functionality integrity of Meter reads.
Remote Dial-In PC anywhere for Windows, PPP, and Xwindow capabilities
will be tested Functionality for diagnostics, trouble shooting and
monitoring or network components.
Ease of Installation of Evaluations of the installation of hardware
and Software will occur Hardware and Software throughout Phase I of
the contract.
Implementation Evaluations of the implementation methodology will
occur throughout Methodology Phase I of the Agreement.
Usability of Documentation will be provided throughout Phase I
for evaluation and Documentation updates
ERT Installation Location Various environmental locations will be
tested to determine Profiles communication effectiveness.
Acceptance testing upon completion of Phase II installations will be
conducted as necessary to confirm that applications and components meet
appropriate functional requirements outlined in Schedules A and B, and
to ensure that they meet the requirements of Schedule L. System
performance will be measured against required performance criteria such
as individual application performance, timeliness of data delivery,
application response time, data throughput and storage capability, and
other criteria as specified during Phase II. All deliverables must be
operational as defined in various sections of the Agreement prior to
system acceptance, except for those items specifically designated for
Phase III completion.
VII. TEST PLAN DEVELOPMENT
Required test plans will be developed during Phases I and II as systems
components and software applications are designed and implemented, and
must be approved by both Duquesne and the Contractor before equipment,
software, or software applications or interfaces are placed into a
production environment.
The overall test plan will contain two parts with Part 1 containing
tests that can be fully identified at the writing of the plan, and Part
2 including the tests for requirements of the system that cannot be
fully identified by the time that original plan is written, as well as
listing the final tests and performance levels that must be achieved
prior to the Acceptance of the parts of the system that the particular
test plans cover at the conclusion of Phase II. For example, a test for
an application software feature that hasn't been identified or designed
by the time that the original test plan is written will be included in
Part 2, which will also provide a methodology or template for the
development of any required test plan documents for new applications and
equipment implemented during Phase III of the services contract.
<PAGE>
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
REPLACEMENT SCHEDULE G
<PAGE>
- -------------------------------------------------------------------------------
SCHEDULE G
- -------------------------------------------------------------------------------
<TABLE>
SINGLE PHASE IN-SERVICE METER POPULATION
<CAPTION>
<S> <C> <C> <C> <C> <C>
- -------------------- ---------------------- ---------------- ------------------- -------------------- -------------------
DUQUESNE METERS
SAMPLE PRODUCTION NUMBER TO BE
GROUP MANUFACTURER TYPE YEARS IN SERVICE SCRAPPED
- -------------------- ---------------------- ---------------- ------------------- -------------------- -------------------
- -------------------- ---------------------- ---------------- ------------------- -------------------- -------------------
D Westinghouse CS, CA 1941 - 1961 * *
- -------------------- ---------------------- ---------------- ------------------- -------------------- -------------------
- -------------------- ---------------------- ---------------- ------------------- -------------------- -------------------
E Westinghouse CS 1950 - 1957 * *
- -------------------- ---------------------- ---------------- ------------------- -------------------- -------------------
- -------------------- ---------------------- ---------------- ------------------- -------------------- -------------------
F Westinghouse DS 1955 - 1957 * *
- -------------------- ---------------------- ---------------- ------------------- -------------------- -------------------
- -------------------- ---------------------- ---------------- ------------------- -------------------- -------------------
G Westinghouse DS 1957 - 1960 * *
- -------------------- ---------------------- ---------------- ------------------- -------------------- -------------------
- -------------------- ---------------------- ---------------- ------------------- -------------------- -------------------
I Westinghouse D2S 1961 - 1963 * *
- -------------------- ---------------------- ---------------- ------------------- -------------------- -------------------
- -------------------- ---------------------- ---------------- ------------------- -------------------- -------------------
J Westinghouse D3S 1963 - 1968 * *
- -------------------- ---------------------- ---------------- ------------------- -------------------- -------------------
- -------------------- ---------------------- ---------------- ------------------- -------------------- -------------------
K Westinghouse D4S 1968 - 1971 * *
- -------------------- ---------------------- ---------------- ------------------- -------------------- -------------------
- -------------------- ---------------------- ---------------- ------------------- -------------------- -------------------
L General Electric I60 1948 - 1967 * *
- -------------------- ---------------------- ---------------- ------------------- -------------------- -------------------
- -------------------- ---------------------- ---------------- ------------------- -------------------- -------------------
M General Electric I70 1968 - Present * *
- -------------------- ---------------------- ---------------- ------------------- -------------------- -------------------
- -------------------- ---------------------- ---------------- ------------------- -------------------- -------------------
N Westinghouse D4S 1971 - 1977 * *
- -------------------- ---------------------- ---------------- ------------------- -------------------- -------------------
- -------------------- ---------------------- ---------------- ------------------- -------------------- -------------------
O Westinghouse D4S 1977 - 1984 * *
- -------------------- ---------------------- ---------------- ------------------- -------------------- -------------------
- -------------------- ---------------------- ---------------- ------------------- -------------------- -------------------
P Westinghouse D5S 1984 - 1988 * *
- -------------------- ---------------------- ---------------- ------------------- -------------------- -------------------
- -------------------- ---------------------- ---------------- ------------------- -------------------- -------------------
R Westinghouse D5S 1988 - Present * *
- -------------------- ---------------------- ---------------- ------------------- -------------------- -------------------
- -------------------- ---------------------- ---------------- ------------------- -------------------- -------------------
S Schlumberger J5S 1986 - Present * *
- -------------------- ---------------------- ---------------- ------------------- -------------------- -------------------
- -------------------- ---------------------- ---------------- ------------------- -------------------- -------------------
Hexagram Schlumberger J5S 1986 - Present * *
- -------------------- ---------------------- ---------------- ------------------- -------------------- -------------------
</TABLE>
* ABB type D5S residential meters in the range G72,000,000 to G73,999,999
Total Meters (Active Accounts) *
Total Meters (Inactive Accounts) *
Total In-Service Meters *
Notes:
1. Contractor will purchase new Meters to replace Meters identified
above as "to be scrapped."
2. The above single-phase in-service Meter population is based on
in-service Meters as of July 14, 1995.
3. The above table pertains to single-phase KWH residential Meters only.
The quantity of single-phase demand Meters which will be provided by
the Contractor is identified in Schedule H.
<PAGE>
- -------------------------------------------------------------------------------
REPLACEMENT SCHEDULE H
- -------------------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
SCHEDULE H
- ----------------------------------------------------------------------------------------------------------------------
METER POPULATION FORECAST
---------------------------------------------
SINGLE PHASE
---------------------------------------------
<S> <C> <C> <C> <C> <C>
- ----------- ---------------------- ---------------------- ---------------------- ---------------------- ----------------
THREE- GROWTH
YEAR KWH DEMAND PHASE TOTALS PERIOD
- ----------- ---------------------- ---------------------- ---------------------- ---------------------- ----------------
1995 * * * *
- ----------- ---------------------- ---------------------- ---------------------- ----------------------
- ----------- ---------------------- ---------------------- ---------------------- ----------------------
1996 * * * *
- ----------- ---------------------- ---------------------- ---------------------- ----------------------
- ----------- ---------------------- ---------------------- ---------------------- ----------------------
1997 * * * * 1
- ----------- ---------------------- ---------------------- ---------------------- ----------------------
- ----------- ---------------------- ---------------------- ---------------------- ----------------------
1998 * * * *
- ----------- ---------------------- ---------------------- ---------------------- ---------------------- ----------------
- ----------- ---------------------- ---------------------- ---------------------- ---------------------- ----------------
1999 * * * *
- ----------- ---------------------- ---------------------- ---------------------- ----------------------
- ----------- ---------------------- ---------------------- ---------------------- ----------------------
2000 * * * * 2
- ----------- ---------------------- ---------------------- ---------------------- ----------------------
- ----------- ---------------------- ---------------------- ---------------------- ----------------------
2001 * * * *
- ----------- ---------------------- ---------------------- ---------------------- ---------------------- ----------------
- ----------- ---------------------- ---------------------- ---------------------- ---------------------- ----------------
2002 * * * *
- ----------- ---------------------- ---------------------- ---------------------- ----------------------
- ----------- ---------------------- ---------------------- ---------------------- ----------------------
2003 * * * * 3
- ----------- ---------------------- ---------------------- ---------------------- ----------------------
- ----------- ---------------------- ---------------------- ---------------------- ----------------------
2004 * * * *
- ----------- ---------------------- ---------------------- ---------------------- ---------------------- ----------------
- ----------- ---------------------- ---------------------- ---------------------- ---------------------- ----------------
2005 * * * *
- ----------- ---------------------- ---------------------- ---------------------- ----------------------
- ----------- ---------------------- ---------------------- ---------------------- ----------------------
2006 * * * * 4
- ----------- ---------------------- ---------------------- ---------------------- ----------------------
- ----------- ---------------------- ---------------------- ---------------------- ----------------------
2007 * * * *
- ----------- ---------------------- ---------------------- ---------------------- ----------------------
- ----------- ---------------------- ---------------------- ---------------------- ---------------------- ----------------
2008 * * * *
- ----------- ---------------------- ---------------------- ---------------------- ----------------------
- ----------- ---------------------- ---------------------- ---------------------- ----------------------
2009 * * * * 5
- ----------- ---------------------- ---------------------- ---------------------- ----------------------
- ----------- ---------------------- ---------------------- ---------------------- ----------------------
2010 * * * *
- ----------- ---------------------- ---------------------- ---------------------- ----------------------
2011 * * * *
- ----------- ---------------------- ---------------------- ---------------------- ----------------------
- ----------- ---------------------- ---------------------- ---------------------- ----------------------
2012 * * * *
- ----------- ---------------------- ---------------------- ---------------------- ---------------------- ----------------
</TABLE>
Notes:
1. The above Meter forecast represents projected net Meter growth activity
throughout the Term. Duquesne is not committed to achieving these
quantities, nor does it agree to be limited by them.
2. Growth projections are approximate. If net cumulative Meter population
exceeds the ending projected levels for the appropriate growth period by *
or greater, the Change Order Notice process described in Section 4.8 of the
Agreement will be initiated.
3. The Parties agree that the Contractor shall expend up to * per year for the
purchase of Three-Phase and single phase ABB PowerPlus Alpha Meters. Any
amount not expended in a given year shall be added to the amounts available
for subsequent years. If the cumulative purchase cost for such meters
exceeds the cumulative annual amount identified above, Contractor may
proceed under Section 4.8 of the Agreement.
4. If actual Meter growth exceeds the above cumulative Meter population
forecast, either by type or period, Contractor may proceed under Section
4.8 of the Agreement.
5. Requirements for load research meters are identified in Schedule A.
If these requirements are exceeded, the change
control process will apply.
<PAGE>
9/11/97
REPLACEMENT SCHEDULE I
<PAGE>
SCHEDULE I
CUSTOMER SERVICE REQUIREMENTS
REGULATORY GUIDELINES
1. Pennsylvania Public Utility Commission Compliances Guidelines
2. Chapter 56 Regulations - Standards and Billing Practices for
Residential Utility Service
PROGRAMS/MANUALS
1. Customer Service Guarantee Programs as attached hereto
2. Customer Service Representative Section Manual Requirements
3. Maintenance of a Customer Satisfaction Performance Index, as
measured by Customer Contact Survey results conducted by Duquesne
for work performed by Contractor, for field-related meter
installation and servicing activities of not less than 6.7 out of
a possible 7.0 scale based on criteria defined in Schedule A
including categories for Friendly and Courteous, Timely,
Professional and Competent, Respected Property, and Presentable
performance.
Contractor acknowledges the importance of customer service and agrees that
compliance with these programs and guidelines is essential to the delivery of
quality customer service. In this regard, Contractor agrees to assume
responsibility, during Phase III, for reimbursement to Duquesne for applicable
Customer Service Guarantee Program payments made by Duquesne as the result of
Contractor's actions or inactions. A quarterly summary report outlining all
Contractor infractions will be prepared and provided to the Contractor by
Duquesne, applicable payment amounts will be shown as a credit on the following
month's invoice.
Note:
In the event that a performance guarantee is assessed for the
accuracy/error rate category defined in Schedule L, any reimbursement amounts
already charged for reading errors will be treated as a credit to the total
assessment due under Schedule L, Table 3.
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE J
MILESTONE SCHEDULE
- ----------------------------------------------------------------------------------------------------------------------
MILESTONE DATE CATEGORY
<S> <C> <C>
1. Agreement Signed January 15, 1996 Complete
2. Begin Kickoff Meetings and Preparation March 4, 1996 Complete
3. Phase I Installations Begin April 28, 1996 Complete
4. * May 1, 1996 Complete
5. Initial Phase I Meter Installations Completed June 17, 1996 Complete
6. Initial Receipt of New Phase II Meters With Modules June 17, 1996 Complete
7. Oracle/GIHP Installed With Basic Oracle Applications June 21, 1996 Complete
8. * August 16, 1996 Complete
9. Retrofit Center Becomes Operational August 30, 1996 Complete
10. Maximum Meter Deployment Rate Achieved March 31, 1997 Complete
(60,000 - March 1997)
11. Complete Meter Test Lab Setup July 15, 1997 Complete
12. Version 2.4.2 Operational, CBI Operational with 100,000 Accounts July 31, 1997 Complete
Read on Fixed Network (Available to Be Billed)
13. Finalize High level GIHP/MV-90 Data Flow Paths and Interfaces July 31, 1997 Complete
14. Contractor Begins Testing and Maintenance of Single Phase August 15, 1997 Complete
(Non-Demand) Meters
15. MV-90 and Version 2.5 Application Specifications, * August 31,1997 Complete
and DCI Product Specifications Delivered to Duquesne
16. Achieve Phase I Acceptance (100,000 Fixed Network Accounts August 31, 1997 Not Applicable
Available for Billing in August)
17. Phase II Begins September 1, 1997 Not Applicable
18. 100% ERT Field Installations Completed (Non-Demand) (Except URD) * *
19. MV-90 Translation System Installed and Operational with Required *
Interfaces
20. * Functional Specification Delivered to Duquesne *
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MILESTONE DATE CATEGORY
<S> <C> <C>
21 50% of Identified Equipment Field Installations Completed * *
22. * * *
23. Genesis Fixed Network Version 2.5 Software Installed and December 31, 1997 CRITICAL
Operational ( * Accounts on Fixed Network, Daily Reads, - See Note 4 -
All Applications Functioning)
24. * Functional Specification Delivered to *
Duquesne
25. 100% of Fixed Network Equipment Installations Completed - * * *
Fixed Network Coverage/100% with ERTs or Sentry (including URD,
excluding Demand Accounts)
26. Network Monitoring Capability - SNMP Implemented *
27. Complete System Support for Single Phase and Shared Line Three May 31, 1998 Significant
Phase ABB Alpha Meters Installed by Duquesne including Required - See Note 7 -
Interfaces (excluding * Accounts) as Defined in
Schedule A
28. Complete * Installations on Applicable Single-Phase * *
Demand Accounts
29. Fixed Network Functionality Operational-Including applicable June 30, 1998 CRITICAL
Schedule A interfaces ( * of Single-Phase Accounts on Fixed - See Notes 5 & 6 -
Network, Daily Reads, Billed from Fixed Network)
30. Real-Time Pricing Implemented and Operational (MV-90 Accounts) * *
(Excludes * )
31. Phase II Acceptance - Achieved * Not Applicable
32. Phase III Begins * Not Applicable
33. * * *
34. Complete Remaining Interfaces Identified in Schedule A Section 3.2 * *
35. Enhanced * Performance Achieved - (See * *
Schedules B and L)
36. * for Fixed Network (including * ) * *
Accounts - Operational
37. Complete Appropriate Communication Links for Three Phase Alpha * *
Meters Installed by DLCo as of * as defined in
Schedule A
38. Fixed Network Build Out Completed if Option Exercised by Duquesne * *
(Covering up to * of Customers in Service Area)
</TABLE>
<PAGE>
CATEGORY DEFINITIONS PROJECT IMPACT
1. Critical - Top Priority Milestone Potential Default of Contract
2. Significant-Serious Schedule Delay Liquidated Damages Imposed by
Deficiency Duquesne
3. General - Area of Concern Corrective Action Plan Submitted to
(All Others) Duquesne
4. Complete Milestone has been Completed
Notes:
1. Finish dates for equipment milestones remain fixed regardless of
changes in equipment quantities that may occur.
2. "Production" or "operational" use is defined as delivered, tested
and accepted for use by Duquesne.
3. MV-90 system and functions to be delivered by the dates
established upon completion of Milestone #13, but not later
than October 1, 1997 (see Milestone #19).
4. If Milestone #23 is not achieved on schedule, Itron agrees to pay
$5 million delay liquidated damages and then either install ABB
Alpha meters on all remaining (less than * ) single-phase demand
accounts in lieu of * hardware (Duquesne must select this option
within 30 days) or pay a second $5 million "cure for default",
whichever is requested by Duquesne. At Duquesne's option in lieu
of either of these two alternatives, Duquesne may collect the
first $5 million delay liquidated damages and then proceed with
default.
5. If Milestone #29 is not achieved, Contractor agrees to pay
$5 million delay liquidated damages, and then pay a second
$5 million "cure for default" penalty at Duquesne's option
in lieu of proceeding with default. At Duquesne's option,
Duquesne may collect the first $5 million delay liquidated
damages and then proceed with default. Selection of one of
these second two options will remain open, if a choice is
not made, until such time as the milestone is achieved.
6. Once Milestone #29 is achieved and Phase III pricing is in
effect, subsequent failure to complete one or more of
Milestones #33-37 will bring about a * (non-cumulative)
reduction in the monthly base price amount shown on Schedule
D until such time as that milestone(s) has been completed.
7. Milestone #27 will have special status. Both parties agree
that failure to meet that date will result in a (no cure
period) payment of $5 million delay liquidated damages even
though Milestone #27 is considered a significant milestone.
8. Phase I Acceptance is defined as Milestone #12 completed,
tested and operational, with Milestones #13-16 also
completed, and 100,000 accounts available to be billed
through the fixed network.
9. Phase II Acceptance is defined as Milestone #31 completed
with Milestones #18-30 also completed. All deliverables
tested and accepted by Duquesne per agreed test plans as
defined in Schedule F.
<PAGE>
REPLACEMENT SCHEDULE K
<PAGE>
SCHEDULE K
MINOR CHANGE ORDER
- ------------------------------- ------------------------------ ----------------
SUBMITTED BY: CHANGE ORDER NO.: DATE:
- ---------------------------------------- --------------------------------------
ACTION
- ---------------------------------------- --------------------------------------
- -------------------------------------------------------------------------------
DESCRIPTION OF CHANGE
- -------------------------------------------------------------------------------
- ----------------------------- ----------------------------- -------------------
Scope Change: Price Adjustment: Significant Performance Impact:
Schedule Impact:
|_|YES |_| NO |_| YES |_| NO |_|YES |_| NO |_|YES |_| NO
- ----------------------------- ----------------------------- -------------------
- -------------------------------------------------------------------------------
Disposition:
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
The above description describes in detail the nature of the change, along with
the explanation of any categories where "Yes" has been selected above. The
undersigned agrees that no work will be performed concerning this change until
approval is received as indicated below:
Authorized Representative
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SIGNATURES
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Signature: Date:
Itron Project Manager:
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Duquesne Light Project Manager: Signature: Date:
- -------------------------------------------------------------------------------
<PAGE>
REPLACEMENT SCHEDULE L
<PAGE>
- -------------------------------------------------------------------------------
SCHEDULE L
- ------------------------------------------------------------------------------
PERFORMANCE GUARANTEES
Under terms of the Agreement, Contractor guarantees the following during Phase
III:
I. SCHEDULED BILLING READS COMPLETION
* of the scheduled billing reads required for billing purposes
during any month will be attempted during such month. The following
assessments shall be charged if * of the scheduled billing reads are not
attempted within the * reading window in any month (see Note 3).
<TABLE>
<CAPTION>
----------------------------------------------------- -----------------------------
SCHEDULE COMPLETION % ASSESSED
----------------------------------------------------- -----------------------------
<S> <C>
----------------------------------------------------- ------------------------------
Less than * or more *
----------------------------------------------------- ------------------------------
----------------------------------------------------- ------------------------------
Less than * or more *
----------------------------------------------------- ------------------------------
----------------------------------------------------- ------------------------------
Less than * or more *
----------------------------------------------------- ------------------------------
----------------------------------------------------- ------------------------------
Less than * *
----------------------------------------------------- ------------------------------
TABLE 1
</TABLE>
II. PERCENT OF SCHEDULED BILLING READS OBTAINED
During any month, * or more of the scheduled billing reads will be
obtained during the * period such reads are permitted to be obtained. In
the event the percentage of scheduled billing reads obtained on schedule
falls below * in any month, the following assessments shall be charged
(see Note 3):
<TABLE>
<CAPTION>
------------------------------------------------
ASSESSMENTS
------------------------------------------------
<S> <C>
----------------------- ------------------------
% OF READS OBTAINED
% ASSESSED
----------------------- ------------------------
----------------------- ------------------------
* *
----------------------- ------------------------
----------------------- ------------------------
* *
----------------------- ------------------------
----------------------- ------------------------
* *
----------------------- ------------------------
----------------------- ------------------------
* *
----------------------- ------------------------
----------------------- ------------------------
* *
----------------------- ------------------------
----------------------- ------------------------
* *
----------------------- ------------------------
----------------------- ------------------------
* *
----------------------- ------------------------
----------------------- ------------------------
* *
----------------------- ------------------------
TABLE 2
</TABLE>
<PAGE>
III. ACCURACY/ERROR RATE
During any monthly billing cycle the number of reading errors will not
exceed * . In the event the number of reading errors exceeds * during a
monthly billing cycle, the following assessments will be charged:
<TABLE>
<CAPTION>
-----------------------------------------------------
ASSESSMENTS
-----------------------------------------------------
<S> <C>
--------------------------- -------------------------
# OF ERRORS % ASSESSED
--------------------------- -------------------------
--------------------------- -------------------------
* *
--------------------------- -------------------------
--------------------------- -------------------------
* *
--------------------------- -------------------------
--------------------------- -------------------------
* *
--------------------------- -------------------------
--------------------------- -------------------------
* *
--------------------------- -------------------------
--------------------------- -------------------------
* *
--------------------------- -------------------------
--------------------------- -------------------------
* *
--------------------------- -------------------------
--------------------------- -------------------------
* *
--------------------------- -------------------------
--------------------------- -------------------------
* *
--------------------------- -------------------------
TABLE 3
</TABLE>
IV. SCHEDULED DAILY READS FROM FIXED NETWORK METERS
PERCENT OF VALID DAILY READS OBTAINED ON SCHEDULE
During any month the percentage of valid scheduled daily reads received
by the following day (based on cumulative totals for such month as
measured on a calendar day basis) obtained from meters covered by the
fixed network and the MV-90 system (excluding communications deficiencies
or operator error) will equal
* or more. In the event the percentage of valid scheduled daily reads
falls below * for any month, the following assessments will be charged
(see Notes 4 and 7):
<TABLE>
<CAPTION>
-----------------------------------------------------
ASSESSMENTS
-----------------------------------------------------
<S> <C>
---------------------------- ------------------------
% OF READS OBTAINED
% ASSESSED
---------------------------- ------------------------
---------------------------- ------------------------
* *
---------------------------- ------------------------
---------------------------- ------------------------
* *
---------------------------- ------------------------
---------------------------- ------------------------
* *
---------------------------- ------------------------
---------------------------- ------------------------
* *
---------------------------- ------------------------
---------------------------- ------------------------
* *
---------------------------- ------------------------
---------------------------- ------------------------
* *
---------------------------- ------------------------
---------------------------- ------------------------
* *
---------------------------- ------------------------
---------------------------- ------------------------
* *
---------------------------- ------------------------
---------------------------- ------------------------
* *
---------------------------- ------------------------
TABLE 4
</TABLE>
V. OUTAGE DETECTION AND RESTORATION REPORTING
Deliver CCU * outage detection and restoration notification through
appropriate delivery mechanisms within the required response times
defined in Schedule B, * of the time by * (as determined through random
sampling techniques initiated by Duquesne - See Note 8).
<TABLE>
<CAPTION>
----------------------------------------------------------------------
ASSESSMENTS
----------------------------------------------------------------------
<S> <C>
----------------------------------- ----------------------------------
% REPORTED
WITHIN SPECIFIED RESPONSE TIME * % ASSESSED
----------------------------------- ----------------------------------
----------------------------------- ----------------------------------
* or Greater *
----------------------------------- ----------------------------------
----------------------------------- ----------------------------------
Less than * *
----------------------------------- ----------------------------------
----------------------------------- ----------------------------------
Less than * *
----------------------------------- ----------------------------------
----------------------------------- ----------------------------------
Less than * *
----------------------------------- ----------------------------------
----------------------------------- ----------------------------------
Less than * *
----------------------------------- ----------------------------------
----------------------------------- ----------------------------------
Less than * *
----------------------------------- ----------------------------------
----------------------------------- ----------------------------------
Less than * *
----------------------------------- ----------------------------------
TABLE 5
</TABLE>
VI. OPERATING STANDARDS
Respond to Level 1, 2 and 3 system operating deficiencies within
* , * and * , respectively.
VII. SYSTEM PERFORMANCE STANDARDS
Near real time data availability is defined as * or sooner, when posting
current RTP data for customer access, through the appropriate data
transfer mechanism (see Note 5).
NOTES:
1) The percentages set forth in Tables I through V will be applied to
the total amount due to Contractor for the applicable month
(excluding any credits, set-offs, or assessments) and will be
shown as a credit on the invoice for the month.
2) A reading error will exist if the difference between the Itron
recorded and actual reading as displayed on the meter is greater
than * kilowatt hours.
3) The * reading window is defined as * before the scheduled reading
date through the * period after the scheduled reading date.
<PAGE>
4) A valid scheduled daily read is defined as delivery of any read or
combination of reads on a daily basis as required to support a
rate or advanced service listed on Schedule D. Reads required to
support TOU and Customer Choice Option accounts, for example, must
occur at specific times to support implementation of the rate.
Consequently, each such daily read or required combination of
reads is considered a "valid scheduled read" when evaluating
performance. As a minimum, the valid scheduled daily read for
fixed network and MV-90 system accounts not requiring advanced
services is a daily read (see also Schedule A for read
frequencies). Assessments for the Customer Choice Option rate will
not begin before
* .
5) Section VII System Performance Standards are subject to the
appropriate assessment schedules in Table IV for the purpose of
determining any assessments to be charged if reads or alarms are
not obtained.
6) Level 1 system operating deficiency is defined as a "critical"
deficiency requiring immediate action; Level 2 deficiency is a
"serious" deficiency requiring prompt action; Level 3 deficiency
is a "non-critical" deficiency requiring follow-up action as
described in the Contractor's Fixed Network Test Plan dated
September 21, 1996.
7) The assessment and performance provisions of Schedule L are based
on * of all metered accounts in Duquesne's service area being
covered by the fixed network or MV-90 system beginning with Phase
III. The total number of meters subject to these provisions will
increase up to * of all meters by * , if Duquesne exercises its
option to expand the fixed network up to * of all accounts. The
formulas for calculating performance and determining assessments
will be adjusted to reflect the increased number of accounts on
the fixed network which are thereby subject to additional
scheduled reads.
8) Outage detection and restoration reporting performance will be
evaluated by Duquesne based on periodic statistically significant
sampling of randomly selected meters throughout the fixed network
coverage area once or twice annually.
