NEW SERVICE OPTIONS TARIFF INTRODUC TION BY : Carolyn Shellman - PowerPoint PPT Presentation

NEW SERVICE OPTIONS TARIFF INTRODUC TION BY : Carolyn Shellman Chief Legal & Administrative Officer (CL&AO) P RE SE NTED BY : Chad Hoopingarner Sr. Director, Strategic Pricing & Cost Recovery September 24, 2018 Approv al Requ est ed

AGENDA • REGULATORY OVERVIEW • PILOT PROGRAM (NEW SERVICE OPTIONS TARIFF) • COMMERCIAL EV PILOT RATE 2

REGULATORY OVERVIEW To provide products & services to our customers, we must set pricing (i.e., rates) based • on the utility’s cost to provide those products & services Our rates, along with the underlying terms & conditions (i.e., tariffs), are approved by • the Board of Trustees and City Council Our industry is undergoing significant change, creating opportunities for CPS Energy to • serve customers in new & exciting ways To optimize these opportunities, we need the ability to test products & services in order • to ensure that we are meeting customer expectations, recovering our costs, and optimizing the community’s investment in the electric & gas infrastructure BOT & Council Concept Pilot Refine Launch Approval Once a successful pilot is concluded, we will be required to seek approval from the Board and City Council on new rates & tariffs 3

PILOT PROGRAM NEW SERVICE OPTIONS TARIFF (NSO) • We are seeking approval from the Board of Trustees and City Council on the New Service Options tariff The NSO tariff is an umbrella tariff that enables CPS Energy to conduct • product pilots by defining: – Requirements for launching new product pilots – Accountability & oversight procedures with COSA’s Office of Public Utilities • Your approval will enable CPS Energy to: – Evaluate technologies & assess changing customer needs – Measure the cost of service requirements The NSO tariff creates a testing framework for new products & services to be rapidly developed and offered to customers 4

PILOT PROGRAM NSO Tariff Commercial EV Pilot #2 Pilot #3 Pilot #4 Pilot #5 Rate Pilot Future rate pilots may include: Smart Cities initiatives (e.g., kiosks) • Resiliency products • Commercial EV fleet opportunities • Intelligent lighting projects • Growth tools for gas business • 5

COMMERCIAL EV RATE PILOT (1 OF 2) Summer Weekday System Load (Conceptual) We want to enable the positive • 5,000 impacts of electric vehicles on San Assets designed to meet peak system needs. Antonio’s air quality and electric 4,500 system 4,000 Our strategy is to encourage and • 3,500 MW incentivize “off - peak” usage of our EV Load Current Load 3,000 system 2,500 “Off - peak” load optimizes existing • 2,000 CPS Energy assets and reduces capital System Peak 1,500 investment 1 AM 4 AM 7 AM 10 AM 1 PM 4 PM 9 PM 12 AM 6

COMMERCIAL EV RATE PILOT (2 OF 2) Commercial EV Rate Details 12 11 1 Monthly Charge: $175/month 10 2 Demand Charge: $7/kW 9 3 Energy Charge: 8 4 4pm-9pm on weekdays: 20¢/kWh 7 5 All other times of day: 6¢/kWh 6 CPS Energy will assess the effectiveness of this rate over ~1-2 years 7

REQUEST FOR APPROVAL NEW SERVICE OPTIONS TARIFF (NSO) Approve the New Service Options tariff to ensure that we are meeting customer expectations, recovering our costs, and optimizing the community’s investment in the electric & gas infrastructure 8

Thank You