vermont public service department · transmission planning, new transmission costs would begin in...
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VERMONT PUBLIC SERVICE DEPARTMENTRATE DESIGN INITIATIVE / DISTRIBUTED ENERGY RESOURCES STUDYSTAKEHOLDER ENGAGEMENT MEETING #3
April 16, 2020
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NEWGEN STRATEGIES AND SOLUTIONS, LLC
VERMONT RATE DESIGN INITIATIVELSAM™ AND THE VT RATE DESIGN INITIATIVE
• LSAM™ allows iteration of input assumptions to evaluate a multitude of future states of the electric market in Vermont
Future electric usage will vary vis-à-vis market forces, decarbonization, and technology adoption
• LSAM™ allows the user to manage system peaks through
Electric rates to send price signals to manage load
• Static and dynamic rate design
• Behavioral change, technology adoption, or both
Directly manage load through flex capacity
Controllable flex load “calls”, timing and duration
2
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NEWGEN STRATEGIES AND SOLUTIONS, LLC
VERMONT RATE DESIGN INITIATIVELSAM™ UPDATE – SINCE LAST STAKEHOLDER MEETING
• Updated demand elasticity
• Carbon accounting refinement
• “Dynamic” rate design
• Increased detail on Utility Cost Key Performance Indicators (KPIs)
• Increased model functionality from stakeholder feedback
3
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NEWGEN STRATEGIES AND SOLUTIONS, LLC
VERMONT RATE DESIGN INITIATIVELSAM™ UPDATE – SINCE LAST STAKEHOLDER MEETING
• Updated demand elasticity
RAP/Brattle survey of Critical Peak Pricing (CPP) / Time-of-Use (TOU) program elasticity for non-electric vehicle (EV) loads
4
0%
5%
10%
15%
20%
25%
30%
35%
0% 200% 400% 600% 800% 1000%
Pea
k R
edu
ctio
n
On-Peak to Off-Peak Pricing Differential
RAP Report – Elasticity of Electric Demand
Price Only Technology
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NEWGEN STRATEGIES AND SOLUTIONS, LLC
VERMONT RATE DESIGN INITIATIVELSAM™ UPDATE – SINCE LAST STAKEHOLDER MEETING
• Updated demand elasticity
RAP/Brattle survey of Critical Peak Pricing (CPP) / Time-of-Use (TOU) program elasticity for non-electric vehicle (EV) loads
EV short-run elasticity is assumed to be substantially greater, per Department of Energy (DOE) EV Project
5
0%
20%
40%
60%
80%
100%
120%
0% 200% 400% 600% 800% 1000%
Pea
k R
edu
ctio
n
On-Peak to Off-Peak Pricing Differential
RAP + DOE (EV) Elasticities
Price Only Technology EV-Specific Elasticity
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NEWGEN STRATEGIES AND SOLUTIONS, LLC
VERMONT RATE DESIGN INITIATIVELSAM™ UPDATE – SINCE LAST STAKEHOLDER MEETING
• Carbon accounting refinement
Feedback from EAN Vermont
Increased detail on accounting for current space / water heating fuel portfolio
• Feedback from Biomass Energy Resource Center (BERC)
6
(3,000,000)
(2,500,000)
(2,000,000)
(1,500,000)
(1,000,000)
(500,000)
-
2017 2021 2025 2029 2033 2037
MET
RIC
TO
NN
S C
O2
CO2 Emissions Savings Sector/Year
EV Savings Vermont Renewables Savings Electrified Space/Water Heating Savings
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NEWGEN STRATEGIES AND SOLUTIONS, LLC
VERMONT RATE DESIGN INITIATIVELSAM™ UPDATE – SINCE LAST STAKEHOLDER MEETING
• Dynamic rate design
Critical Peak Pricing (CPP)
• Regional Network Service (RNS) annual capacity costs moved into an energy rate to be “called” by the model user up to 60 times in a modeled year
Real-Time Pricing
• Passes-through 2018 actual ISO-NE hourly Day-Ahead energy charges to the customer
• Rate design is separated for EV and non-EV load
7
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NEWGEN STRATEGIES AND SOLUTIONS, LLC
VERMONT RATE DESIGN INITIATIVELSAM™ UPDATE – SINCE LAST STAKEHOLDER MEETING
• Increased detail on Utility Cost KPIs RNS-Related Bulk Transmission Costs
• Embedded costs – current RNS rate forecast from Vermont Department of Public Service (PSD)
• Marginal costs – for incremental system peaks above 1,100 MW
VELCO providing feedback on $/MW of new capacity above embedded costs / RNS rate
Incremental Distribution Capacity Costs• Feedback from GMP and VEC on costs
of substantial new load on distribution system
8
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2018 2022 2026 2030 2034 2038
Meg
awat
ts
Vermont Modeled Forecast Peak Demand
Current Trans. Capacity Incremental Trans. Capacity
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NEWGEN STRATEGIES AND SOLUTIONS, LLC
VERMONT RATE DESIGN INITIATIVELSAM™ UPDATE – SINCE LAST STAKEHOLDER MEETING
• Increased model functionality from stakeholder feedback
New inputs• New rate implementation assumptions:
% of customers participating in new rate
• Discrete EV adoption inputs, % of vehicles that are EV in 2030 and 2040
• Discrete electric combined cooling, heat and power (CCHP) and heat pump hot water inputs (kWh/yr and % adoption)
• Incremental impacts of rates / flex load:
2018 baseline
Including Tech but no rates / flex load
Including Tech but with rates / flex load
9
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NEWGEN STRATEGIES AND SOLUTIONS, LLC
VERMONT RATE DESIGN INITIATIVE – WORKSHOP 3
• Introduction
• Panel Discussion 1
Policymaking and planning in the context of VT electric market evolution
• NewGen presentation on LSAM™ modeling and innovative rate design
• Panel Discussion 2
Implementation challenges of electric rate innovation
10
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PANEL DISCUSSION 1UTILITY PLANNING FOR THE FUTURE AND THE STATE’S OBJECTIVES
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DYNAMIC RATES AND FRAMEWORK FOR EVALUATING FUTURE OPTIONS
RATE DESIGN INITIATIVE / DISTRIBUTED ENERGY RESOURCES STUDYSTAKEHOLDER ENGAGEMENT MEETING #3
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13NEWGEN STRATEGIES AND SOLUTIONS, LLC
UTILITIES INCUR COSTS DIFFERENTLY BY UTILITY FUNCTION
13
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NEWGEN STRATEGIES AND SOLUTIONS, LLC
OVERVIEW OF LSAM™ “UTILITY COST KPIS”
14
Local Distribution System(s)
ISO-NE Power Supply Costs
Bulk TransmissionRegional Network Service (RNS)
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NEWGEN STRATEGIES AND SOLUTIONS, LLC
REGIONAL NETWORK SERVICE (BULK TRANSMISSION)
• Bulk Transmission is pooled in New England
Vermont is charged for average of state’s aggregate peak load per month
• Future RNS costs depend on several factors:
Total transmission costs in pool
Regional transmission rate design
Vermont load
15
VELCO: Vermont’s system can handle ~1,200 MW without new investment, but for long-term planning, new investment is
needed in the 1,100-1,150 MW range
23.9%
19.2%
26.9%
21.5%
29.9% 28.4%
0%
5%
10%
15%
20%
25%
30%
880
920
960
1,000
1,040
1,080
1,120
1,160
1,200
2008 2010 2012 2014 2016 2018
% In
crea
se t
o 1
,20
0 M
W
Me
gaw
atts
Year
Vermont Peak Load and Excess RNS Capacity
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NEWGEN STRATEGIES AND SOLUTIONS, LLC
REGIONAL NETWORK SERVICE (BULK TRANSMISSION)
• For this study, we assume the regional transmission pool = Vermont
Capacity has headroom (~28%)
Transmission rate design remains constant
• Vermont load incurs transmission costs in two ways:
Load <1,100 MW billed forecast RNS rate
Load >1,100 MW billed incremental $/MW• Assumed $94/kW-year from updated
screening tool values used for Efficiency Vermont, which was comparable to VELCO levelized cost
16
VELCO: Vermont’s system is built for ~1,200 MW without new investment, but due to long-term nature of
transmission planning, new transmission costs would begin in the 1,100-1,150 range
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2018 2022 2026 2030 2034 2038
Meg
awat
ts
Vermont Modeled Forecast Peak Demand
Current Trans. Capacity Incremental Trans. Capacity
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NEWGEN STRATEGIES AND SOLUTIONS, LLC
OVERVIEW OF LSAM™ “UTILITY COST KPIS”
17
Local Distribution System(s)
ISO-NE Power Supply Costs
Bulk TransmissionRegional Network Service (RNS)
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NEWGEN STRATEGIES AND SOLUTIONS, LLC
VERMONT RATE DESIGN INITIATIVELSAM™ UPDATE – SINCE LAST STAKEHOLDER MEETING• Increased detail on incremental Distribution
capacity costs Feedback from GMP and VEC on costs of
substantial new load on distribution system
• Cost estimate currently under further review
• Cost does not currently include cost of upgrading nearly all poll transformers, currently <10 kVA
~$1,400/transformer, ~1,000 transformers on 10 evaluated circuits
18
1. Conductor is priced $200k/mi, with each overloaded conductor event equating to 250 ft. of conductor
$240.00
$250.00
$260.00
$270.00
$280.00
$290.00
$300.00
$310.00
$-
$20,000,000
$40,000,000
$60,000,000
5,000 65,000 125,000 185,000
$/kW
Incr
emen
tal L
oad
Gro
wth
$To
tal
kW Incremental Load Growth
Cost of Incremental Dist. Upgrades
Fuses Conductor Regulator Recloser $/kW
GMP Data
Dist. Element $/Overload
Fuses $400
Conductor1 $9,470
Regulator $130,000
Recloser $50,000
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NEWGEN STRATEGIES AND SOLUTIONS, LLC
REFINED “UTILITY COST KPIS” FOR LSAM
19
Local Distribution System(s)
• Capacity: Highly Specific to Utility and Specific Location
• Calculated: ~$300/kW
Bulk TransmissionRegional Network Service (RNS)
• Embedded Capacity: ~$110-$200/kW-yrAvg. of 12 Monthly Peaks
• Incremental Capacity: $94/kW-yr >1,100 (2020)
ISO-NE Power Supply Costs
• Energy: ~$0.03-$0.07/kWhDepending on Timing
• RES Compliance: ~$1.50-$12.00/MWh over period
• Capacity: ~$6-$7/kWhDuring 1 ISO-NE CP Hour
Important Note: LSAM Utility Cost KPIs
do not make up the entirety of VT utilities’ revenue requirements
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NEWGEN STRATEGIES AND SOLUTIONS, LLC
CALCULATING “UTILITY COST KPIS” FOR LSAM
Component Billing Determinants and Forecast Cost Basis
ISO-NE Capacity VT Demand during ISO-NE CP Time x Forecast Forward Capacity Price
ISO-NE Energy All Purchased Energy from ISO-NE x Forecast All-In Energy Rate
RES Compliance Costs All Purchased Energy from ISO-NE x RES % x Forecast REC Price
RNS Capacity (Embedded Costs) Average Total VT Monthly Peak Demand x Forecast RNS Capacity Rate
Incremental Bulk Transmission Cost Incremental Annual Peak Demand (>1,100MW) x Incremental Trans. Cost
Incremental Distribution Cost Incremental Annual Peak Demand (>2018 Baseline) x ~$300/kW + infl.
20
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NEWGEN STRATEGIES AND SOLUTIONS, LLC
LSAM™ SCENARIO ANALYSIS – KEY ASSUMPTIONS/OUTPUTSPROVIDED FOR ILLUSTRATIVE PURPOSES
21
-
50,000
100,000
150,000
200,000
250,000
300,000
350,000
2013 2017 2021 2025 2029 2033 2037
TOTA
L EV
S
EV Adoption Forecast
0%
20%
40%
60%
80%
100%
2019 2023 2027 2031 2035 2039
Assumed EV Chargers by Voltage
1.8 kW 7.2 kW 12 kW
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
KIL
OW
ATT
S -
DC
PV Adoption (Actual + Forecast)
Forecast
-
50,000
100,000
150,000
200,000
2017 2021 2025 2029 2033 2037
TOTA
L U
NIT
S
Electrification Adoption Forecast
Cold Climate Heat Pumps Electric Hot Water
Forecast
Forecast
PV Policy:
Offsetting onsite load credited at
retail;
Excess generation credited at $0.09/kWh,
trued-up hourly
EV Adoption:
20% of all consumer
vehicles by 2030
50% of all consumer
vehicles by 2040
10% of vehicles
have access to at-work charging
Elec. Adoption:
CCHP: 20% by 2030
H2O: 5% by 2030
CCHP: 50% by 2040
H2O: 10% by 2040
EV Charger Voltage:
Reasonable assumptions based on currently available models,
assumed to increase in
voltage over time
Illustrative Scenario
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NEWGEN STRATEGIES AND SOLUTIONS, LLC
$-
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
2020 2025 2030
$000
Add Technology Adoption
ISO-NE Capacity ISO-NE Energy
RES Compliance Costs RNS Capacity (Embedded Costs)
Incremental Bulk Transmission Cost Distribution Capacity
$-
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
2020 2025 2030
$000
2018 Baseline w/ 0.5% Growth
ISO-NE Capacity ISO-NE Energy
RES Compliance Costs RNS Capacity (Embedded Costs)
Incremental Bulk Transmission Cost Distribution Capacity
COMPARISON BETWEEN MODELED SCENARIOSBASELINE VS. INCLUDING TECHNOLOGY ADOPTION - 2030
22
3.2% CAGR
5.1% CAGR
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NEWGEN STRATEGIES AND SOLUTIONS, LLC
$-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
2020 2025 2030 2035 2040
$000
Add Technology Adoption
ISO-NE Capacity ISO-NE Energy
RES Compliance Costs RNS Capacity (Embedded Costs)
Incremental Bulk Transmission Cost Distribution Capacity
$-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
2020 2025 2030 2035 2040
$000
2018 Baseline w/ 0.5% Growth
ISO-NE Capacity ISO-NE Energy
RES Compliance Costs RNS Capacity (Embedded Costs)
Incremental Bulk Transmission Cost Distribution Capacity
COMPARISON BETWEEN MODELED SCENARIOSBASELINE VS. INCLUDING TECHNOLOGY ADOPTION - 2040
23
3.8% CAGR
7.1% CAGR
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NEWGEN STRATEGIES AND SOLUTIONS, LLC
COMPARISON BETWEEN MODELED SCENARIOSBASELINE VS. INCLUDING TECHNOLOGY ADOPTION - 2040
24
22.1%, $101,458
78.9%, $510,849
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
Base w/ Tech Base w/ Tech Base w/ Tech Difference Base w/ Tech Base w/ Tech Difference
2020 2025 2030 2030 2035 2040 2040
$0
00
ISO-NE Capacity ISO-NE Energy RES Compliance Costs RNS Capacity (Embedded Costs)
Incremental Bulk Transmission Cost Incremental Dist. Capacity Cost Total Base Total Tech
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NEWGEN STRATEGIES AND SOLUTIONS, LLC
COMPARISON BETWEEN MODELED SCENARIOSBASELINE VS. INCLUDING TECHNOLOGY ADOPTION - 2040
25
-
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
$-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
2020 2025 2030 2035 2040
Ret
ail E
ner
gy (M
Wh
)
$000
2018 Baseline w/ 0.5% Growth
ISO-NE Capacity ISO-NE Energy
RES Compliance Costs RNS Capacity (Embedded Costs)
Incremental Bulk Transmission Cost Distribution Capacity
Retail Energy - Base
-
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
$-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
2020 2025 2030 2035 2040
Ret
ail E
ner
gy (M
Wh
)
$000
Add Technology Adoption
ISO-NE Capacity ISO-NE Energy
RES Compliance Costs RNS Capacity (Embedded Costs)
Incremental Bulk Transmission Cost Distribution Capacity
Retail Energy - Tech
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NEWGEN STRATEGIES AND SOLUTIONS, LLC
$-
$0.02
$0.04
$0.06
$0.08
$0.10
$0.12
$0.14
$0.16
$0.18
$0.20
2020 2025 2030 2035 2040
$/kW
h
Average Rate (Cost KPIs / Retail Energy Sales)
Avg. Rate - Base Avg. Rate - Tech
OPTIONS TO MANAGE UPWARD RATE PRESSURE
• Increasing electrification drives both new utility revenues and costs
LSAM™ modeling suggests costs outpace revenue growth
• Options to manage upward rate pressure:
“Pay the bill”
• Continue to buy capacity/energy from the “market”
“Acquire” capacity and energy in other ways
26
2.8% CAGR
4.8% CAGR
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NEWGEN STRATEGIES AND SOLUTIONS, LLC
FUTURE VERMONT CAPACITY PROCUREMENT
Wholesale-Side Management
• Generation
ISO-NE Capacity
VT Utility-Owned Gen/Storage
• Transmission
RNS Capacity Cleared in Market
VT Utility-Owned Gen/Storage
Load-Side Management
• Sources of controllable load
EV
Industrial/Lg. Commercial
Residential
Energy storage
• Control
Direct: Utility, Third-Party
Indirect: Customer (Rate Design)
27
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NEWGEN STRATEGIES AND SOLUTIONS, LLC
FUTURE VERMONT CAPACITY PROCUREMENT
Wholesale-Side Management
• Sources of controllable load
EV
Industrial/Lg. Commercial
Residential
Energy storage
• Control
Direct: Utility, Third-Party
Indirect: Customer (Rate Design
Customer Load Control – Rate Design
• Static Rate Design
Non-TOU
TOU
• Demand, Energy
• Seasonal
• Tiered
• Dynamic Rate Design
Real-Time Pricing (RTP)
Critical Peak Pricing (CPP)
28
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BREAK FOR LUNCH11:30 – 12:30 EST
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DYNAMIC RATES AND FLEXIBLE LOADS TO MANAGE UTILITY COST KPIS
RATE DESIGN INITIATIVE / DISTRIBUTED ENERGY RESOURCES STUDYSTAKEHOLDER ENGAGEMENT MEETING #3
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31NEWGEN STRATEGIES AND SOLUTIONS, LLC
INNOVATIVE RATE DESIGN
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NEWGEN STRATEGIES AND SOLUTIONS, LLC
INNOVATIVE RATE DESIGN AND IMPLEMENTATION CHALLENGES
• Without management, increasing electrification will drive an increase in capacity costs outpacing increased revenue
• Rates can serve as a resource in managing loads, but challenges exist:
Efficacy in managing loads requires:
• Higher enrollment in innovative rates / programs
Regulatory mandates
Self-selecting enrollment
Other options?
• Customers changing usage patterns
Third-party and/or technology facilitation
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NEWGEN STRATEGIES AND SOLUTIONS, LLC
RATE DESIGN COMPLEXITY, EFFICACY & RESPONSIVENESS STATUS
Rate Design Enrollment Pricing StrategyComplexity to
CustomerEfficacy in Managing
LoadResponsiveness to
Rapid Market Evolution
Static Rate Design
Non-TOU Status Quo Status Quo
TOU High Aggressive
Mid Less-Aggressive
Low Less-Aggressive
Dynamic Rate Design
Real-Time Pricing High Market pass-through
Low Market pass-through
Critical Peak Pricing High Aggressive
Mid Less-Aggressive
Low Less-Aggressive
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/
/
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NEWGEN STRATEGIES AND SOLUTIONS, LLC
RATE DESIGN COMPLEXITY, EFFICACY & RESPONSIVENESS STATUS – FILTERED FOR EFFICACY
Rate Design Enrollment Pricing StrategyComplexity to
CustomerEfficacy in Managing
LoadResponsiveness to
Rapid Market Evolution
Static Rate Design
TOU High Aggressive
Dynamic Rate Design
Real-Time Pricing High Market pass-through
Critical Peak Pricing High Aggressive
34
/
/
Aggressive pricing in which there are substantial customer “winners and losers” will not result in high
rates of voluntary enrollment
Higher enrollment can stem from:1. Regulatory mandate2. “Opt-Out” structure3. Third-Party load management
Mandates are challenging with more aggressive pricing/greater efficacy
“Opt-Out” and Third-Party unlikely to get as much enrollment
/
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PANEL DISCUSSION 2UTILITY PLANNING FOR THE FUTURE AND THE STATE’S OBJECTIVES
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ADDITIONAL SCENARIO MODELING:THE MODELED VALUE OF INNOVATIVE RATES
RATE DESIGN INITIATIVE / DISTRIBUTED ENERGY RESOURCES STUDYSTAKEHOLDER ENGAGEMENT MEETING #3
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NEWGEN STRATEGIES AND SOLUTIONS, LLC
LSAM™ MODELED SCENARIO
• Tech adoption assumptions previous employed
PV adoption based on updated NM policy
EV adoption
• 20% of vehicles by 2030; 50% by 2040
Electric space and water heating
• CCHP: 20% of Residential by 2030, 50% by 2040
• Heat pump H20: 5% of Residential by 2030, 10% by 2040
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NEWGEN STRATEGIES AND SOLUTIONS, LLC
COMPARISON BETWEEN MODELED SCENARIOSBASELINE VS. INCLUDING TECHNOLOGY ADOPTION - 2040
38
22.1%, $101,458
78.9%, $510,849
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
Base w/ Tech Base w/ Tech Base w/ Tech Difference Base w/ Tech Base w/ Tech Difference
2020 2025 2030 2030 2035 2040 2040
$0
00
ISO-NE Capacity ISO-NE Energy RES Compliance Costs RNS Capacity (Embedded Costs)
Incremental Bulk Transmission Cost Incremental Dist. Capacity Cost Total Base Total Tech
Up
ward
Pre
ssure
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NEWGEN STRATEGIES AND SOLUTIONS, LLC
LSAM™ MODELED SCENARIOSTRATEGIC RATE DESIGN
• Static TOU Rates
EV charging rates set with 3-4 hour on-peak evening window
• On-Peak rate is current otherwise effective energy rate
• Off-Peak rate is set to 2/3 of On-Peak rate
• Up to 24 flexible load events “called,” with capacity ½ max EV load
Duration of 4 hours, limited at one/day
• RNS capacity costs recovered through Critical Peak Events
Up to 5x per month, with duration of 4 hours, limited at one/day
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NEWGEN STRATEGIES AND SOLUTIONS, LLC
COMPARISON BETWEEN MODELED SCENARIOSTECHNOLOGY ADOPTION FUTURE VS. TECH W/ RATES - 2040
40
-9.0%, $50,324
-12.8%, $148,286
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
Tech w/ Rates w/ Tech Tech w/ Rates w/ Tech Tech w/ Rates w/ Tech Difference Tech w/ Rates w/ Tech Tech w/ Rates w/ Tech Difference
2020 2025 2030 2030 2035 2040 2040
$0
00
ISO-NE Capacity ISO-NE Energy RES Compliance Costs RNS Capacity (Embedded Costs)
Incremental Bulk Transmission Cost Incremental Dist. Capacity Cost Total Tech w Rates Total Tech
Do
wn
ward
Pre
ssure
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NEWGEN STRATEGIES AND SOLUTIONS, LLC
COMPARISON BETWEEN MODELED SCENARIOSTECHNOLOGY ADOPTION FUTURE VS. TECH W/ RATES, AT-WORK EV - 2040
41
-9.0%, $50,324
-12.8%, $148,286
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
Tech w/ Rates w/ Tech Tech w/ Rates w/ Tech Tech w/ Rates w/ Tech Difference Tech w/ Rates w/ Tech Tech w/ Rates w/ Tech Difference
2020 2025 2030 2030 2035 2040 2040
$0
00
ISO-NE Capacity ISO-NE Energy RES Compliance Costs RNS Capacity (Embedded Costs)
Incremental Bulk Transmission Cost Incremental Dist. Capacity Cost Total Tech w Rates Total Tech
-4.4%, $50,000
50% At-Work EV Charging
Do
wn
ward
Pre
ssure
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CONCLUSIONS AND KEY TAKEAWAYSRATE DESIGN INITIATIVE / DISTRIBUTED ENERGY RESOURCES STUDY
STAKEHOLDER ENGAGEMENT MEETING #3
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NEWGEN STRATEGIES AND SOLUTIONS, LLC
CONCLUSIONS AND KEY TAKEAWAYS
• Electric market evolution will exert upward rate pressure
CAGR of 4.8% vs. 2.8% (Base)
• Innovative rates can send price signals for customers to change usage and manage costs
Initial modeled savings $150M-$200M
43
$-
$0.02
$0.04
$0.06
$0.08
$0.10
$0.12
$0.14
$0.16
$0.18
$0.20
2020 2025 2030 2035 2040
$/kW
h
Average Rate (Cost KPIs / Retail Energy Sales)
Avg. Rate - Base Avg. Rate - Tech Avg. Rate - Tech w/ Rates
2.8% CAGR
4.8% CAGR
4.2% CAGR
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NEWGEN STRATEGIES AND SOLUTIONS, LLC
CONCLUSIONS AND KEY TAKEAWAYS
• There are challenges in implementing innovative rates:
Increased complexity to the customer
Efficacy in reducing peaks
Program enrollment
Regulatory approval
Third-party participation
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NEWGEN STRATEGIES AND SOLUTIONS, LLC
NEXT STEPS
45
THANK YOU FOR YOUR PARTICIPATION!