Load Shift Working Group AUG 22, 2018 10AM – 2PM PST CPUC COURTYARD ROOM https://gridworks.org/initiatives/load-shift-working-group/
Agenda 10:00AM -10:20 AM: Intros, Updates, and Purpose ◦ Introductions ◦ DR Regulatory Updates ◦ Today’s Objective: Refine our thinking on: ◦ CLECA’s Critical Consumption Period pilot/product ◦ Evaluation criteria for a load shift product ◦ Possible impacts of the load shift product on the distribution system 10:20AM – 10:35 AM: Evaluation Criteria: Overview 10:35 AM – 12:00 PM: Critical Consumption Period Pilot/Product (Nora Sheriff, CLECA) 12:00 PM – 1:00 PM: Lunch 1:00-1:45 PM: Evaluation Criteria: Discussion on Applying the Framework 1:45 – 2:25 PM: Distribution Impacts Associated with a Load Shift Product (Chase Sun/Larsen Plano, PG&E) 2:25 PM – 3:00 PM Next Steps ◦ Recap of meeting ◦ Update on Workplan and Future Sessions https://gridworks.org/initiatives/load-shift-working-group/
Introduction and Purpose Introduction: Roll call DR Regulatory Updates Today’s Objective: Refine our thinking on: ◦ CLECA’s Critical Consumption Period pilot/product ◦ Evaluation criteria for a load shift product ◦ Possible impacts of the load shift product on the distribution system https://gridworks.org/initiatives/load-shift-working-group/
Evaluation Framework LSWG Evaluation Framework https://gridworks.org/initiatives/load-shift-working-group/
CLECA Critical Consumption Period Pilot Presented by Nora Sheriff, Counsel to CLECA nsheriff@buchalter.com August 22, 2018 5 www.buchalter.com
Critical Consumption Period Pilot Goals • To help raise the belly of the duck and avoid renewable curtailment • Enable California ratepayers to take advantage of their renewable investment – CAISO transfers through the EIM • 66 GWh of renewable energy to other states’ ratepayers in Q1 2018, “saving $42 M” for EIM participants • 129 GWh of renewable energy to other states’ ratepayers in Q2 2018, “saving $71 M” for EIM participants – California ratepayers should also be able to access excess, low cost, renewable supply – California ratepayers have already paid for the renewable resources and will continue to pay for them in their rates • Address the current gap in DR Programs due to termination of Demand Bidding Program by enabling industrial customers to dual participate in both reliability and economic demand response, per dual participation rules www.buchalter.com
Critical Consumption Product • A DR load increase product – Possibly paired with a load drop and thus a load shift product, depending on notification times – To be delivered during Critical Consumption Periods – Not directly dispatchable by CAISO • No changes needed to CAISO processes, practices or policies – To be considered “integrated” into the CAISO market because the DLAP or nodal price signal sent to the participating customers is the CAISO real time energy market price – No requirement for exact 1:1 load shift • allow more flexibility for customer response to wholesale market pricing signal www.buchalter.com 8/22/2018 CLECA - Market Participation Deck, LSWG 7
How are loads instructed to shift • IOU communication based on their day-ahead forecast periods of negative pricing (expected mostly during the winter season) as indicative of expected renewable curtailment – when the DLAP or nodal pricing is forecast to be mainly negative or low • Granularity of pricing (DLAP or nodal) is still under discussion • Customer takes the price risk – Duration of Critical Consumption Period: 3 to 5 hours • Up to the customer to pick duration – IOU communicates the forecast price the day ahead by 2 pm – Customers “bid” Critical Consumption amount by 5 pm • Exact timing can be revised, but notification must be day-ahead 8/22/2018 CLECA - Market Participation Deck, LSWG 8 www.buchalter.com
Frequency of Critical Consumption Periods • Range of 12-15 Critical Consumption Periods (event days) over the course of the year – 2017 CAISO Real time 15 minute pricing data on periods of low or negative prices suggest there could be more, but fewer periods of negative pricing so far in 2018 • Most Critical Consumption Periods would be expected in winter season (during shoulder months) • Signal is not expected to change, but participation in Critical Consumption Period is voluntary, so long as customer participates in at least 4 events – this should enable sufficient flexibility for customer equipment outages or maintenance • If in the unlikely event there are simultaneous Critical Consumption Periods and Base Interruptible Program events, Base Interruptible Program events take priority www.buchalter.com 9 8/22/2018 CLECA - Market Participation Deck, LSWG
Organizational Roles • Customer provides the energy product and is paid (pass-thru of wholesale energy price for the Critical Consumption Period) by the LSE/Distribution Utility – Like XSP Pilot • Third Party / Aggregator: not applicable • Non-IOU Load Serving Entity (CCA or DA provider) may have customers participate • LSE/Distribution Utility “pays” customer for energy and administers* the pilot (*or has an administrator) • CAISO: not applicable • This would be a CPUC-jurisdictional Pilot www.buchalter.com 8/22/2018 CLECA - Market Participation Deck, LSWG 10
Customers • Limit to bundled large power customers – PG&E E-19T, E-20T; SCE TOU-8-Sub – Open to allowing DA/CCA customers too, if LSE (ESP/CCA) wants to participate • MUST ALLOW DUAL PARTICIPATION WITH BIP – No need for capacity value payment if can dual participate with BIP (capacity program) and pilot (energy program) • Customer co-benefits (CLECA perspective): – Increases RDRR headroom under cap – Enables increased in-state energy-intensive manufacturing, which helps the state meet its climate goals by avoiding leakage • Estimated min/max size per site: 0.5 MW to 10 MW • Likely use cases where participant economic benefit coincides with grid needs: – increased manufacturing production during low price periods • No expectation of need for control technology upgrade 8/22/2018 CLECA - Market Participation Deck, LSWG 11 www.buchalter.com
Participating Load/Device Boundary/Settlement • Critical Consumption Period Pilot should be technology-neutral • Smallest intended boundary for settlement is whole premise – No expected sub-metering needs • Settlement process: how is value estimated and performance verified – By the LSE/IOU (not CAISO); like XSP – Compare event load to typical usage – Performance = event load minus baseline – Use 10-in-10 wholesale baseline methodology • Estimate average load to get baseline 8/22/2018 CLECA - Market Participation Deck, LSWG 12 www.buchalter.com
Expected Challenges • Retail maximum demand charge – non-coincident facilities related demand charge – for transmission, set at FERC, passed through to CPUC – E20T Transmission Max Demand Charge $8.01/kW • Power Charge Indifference Adjustment • Retail rate signals from current Time-of-use periods • Pilot funding www.buchalter.com 8/22/2018 CLECA - Market Participation Deck, LSWG 13
Potential Solutions • Sufficiently negative energy prices to overcome/help mitigate the maximum demand charge? – Query how much higher it would be due to Critical Consumption Period • Flexibility around CPUC-jurisdictional, generation-related coincident demand charge • Consider seeking FERC-approval (with CPUC support) for pilot ratchet-based maximum demand charge – 12 month rolling period; get charged maximum demand set during the 12 month period – Anticipation is for transmission system to continue to be summer-peaking, so winter Critical Consumption Periods should not lead to increased marginal transmission costs • Fund-shifting, or work into XSP for PG&E www.buchalter.com 8/22/2018 CLECA - Market Participation Deck, LSWG 14
Grid IT Systems: Describe how the product is compatible with existing utility IT/metering/billing systems • Does retail meter data granularity meet product needs? – For large C&I, yes • Do overall utility IT systems meet product needs? – Not yet; expect a “work - around” (like PG&E’s use of Olivine for XSP) • If no to any above, what changes may be warranted? – Utility billing system changes to enable real-time pricing • What are potential challenges/costs of those changes? – Utility billing system changes are significant • What are potential spillover benefits of those changes? – More dynamic and responsive load generally www.buchalter.com 8/22/2018 CLECA - Market Participation Deck, LSWG 15
Grid Needs: Avoid Renewable Generation Curtailment Grid Policy Value Market Revenue for Operational Good fit Need Mechanism Shift DR Requirements for Shift? ? Value of GHG reductions that Low Pollution GHG Emission is not reflected ? Not established (at low cost) Reductions in RPS compliance credit. CAISO’s ESDER 3 proposes load Fuel and other shift resource through PDR . marginal cost Energy market [see note below on PDR for Day-ahead Low cost operational Shift] price arbitrage Energy OR savings while dispatch Real-time dynamic prices balancing (with low + responsive load controls. dispatchable pollution) generation with Real-time Energy market net load Energy price arbitrage Same as above. 8/22/2018 www.buchalter.com CLECA - Market Participation Deck, LSWG 16
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