puc of texas eeip meeting residential a/c load control program ©2012 comverge – confidential and...
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PUC of TexasEEIP MeetingResidential A/C Load Control Program
©2012 Comverge – Confidential and Proprietary 1
11.27.2012
Comverge Introduction
©2012 Comverge – Confidential and Proprietary 2
• Operating in Texas since 2001– Austin Energy – Power Saver Free Thermostat
Program– TXU Energy - iThermostat program– Utility C&I Standard Offer DR Programs– ERCOT C&I ERS Program (Formerly EILS)
• Equipment provider for other Texas energy service providers
• Active market participant at ERCOT
World-leading provider of Intelligent Energy Management
(IEM)/Demand Response (DR) solutions
Headquartered in Atlanta, GA
~520 employees
Revenues: 2011 - $136.4 million 2010 - $119.4 million
Q1 2012: Revenue growth of 75% compared to 2011
Acquired by H.I.G. Capital – 5/2012
HighlightsHighlights
Leading Provider of Intelligent Energy Management/Demand Response Solutions
Revenues From All Customer Classes (2011)Revenues From All Customer Classes (2011)Client Base GeographyClient Base Geography
PPS CHART #3USE RIDER A
(next page)Residential
57%
C&I43%Grid Operators Electric Utilities
Electric Utilities
C&I43%
Wide Range of ServicesWide Range of Services
Program Design, Planning and Execution
Marketing Strategy & Execution
Installation
Measurement and Verification
Energy Audit
Customer Care
© 2012 Comverge, Inc. 3
VPC Structure Description• VPC™ – Virtual Peaking Capacity
– Pay-for-Performance• Payment is based on delivered Peak Load Reduction• Paid through a $/kW-yr charge • M&V Methodology is specified by contract
– Fully Outsourced
– Comverge takes the risk of performance
• Can be offered through REP’s, Utilities or Direct from Comverge or other third party
• Can be tailored to fit the market need
©2012 Comverge – Confidential and Proprietary 4
Demand Response is our Business
5© 2012 Comverge, Inc. Confidential and proprietary.
Offer Summary• 400 MW Residential Air Conditioning Cycling Pilot• 2 pilot locales each 200 MW• Pay for Performance – Comverge guarantees MW
– Direct Air Conditioning Load Control – Smart Switches• Communications over Paging & Zigbee using AMI
– Residential & Small Commercial market – Creates 80-90 jobs in Texas– Representative Implementation Costs
• $145/kW-yr Includes $50/yr Incentive per device & $50/customer sign on bonus
– Pilot roll out over 4 years, Device life > 10 years
©2012 Comverge – Confidential and Proprietary 6
Switches Allow for Flexible Control - Load Guard
M⃰ Load Guard is a Comverge program implemented for Com Edison for their real time pricing program
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Load Guard is an optional “set and forget” service that utilizes the already deployed load management switch population to allow participants (via a website) to make their own cycling option decisions for dynamic pricing events
Load guard enables customers to take advantage of dynamic pricing events automatically by pre-selecting a cycling level that runs during a high price event
Provides added value at little incremental cost to utilities
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Real Time Pricing – Innovative Set & Forget Solution
©2012 Comverge – Confidential and Proprietary
Measurement and Verification (M&V) Plan• Basic Assumption – Use Customer’s or Aggregations of
Customer’s individual AMI Meter data
• Two Options for Measurement and Verification (M&V)– Controlled/Comparison Methodology
• Performance calculated by statistical sample of Customers’ metered load prior to dispatch instruction compared to metered load at the reduction deadline
• This is a very common methodology for residential air conditioning load control
– Baseline Methodology• A baseline is defined as an estimated or predicted load in the absence of a DR deployment. • Baselines are appropriate for loads or aggregations of loads that are predictable in nature • Can be modeled based on their historical usage patterns • This is an appropriate methodology for Weather Sensitive residential air conditioning load.
• Both Methodologies are recognized as applicable for DR programs by the International Performance Measurement and Verification Protocol (IPMVP) Option
©2012 Comverge – Confidential and Proprietary 9
Comverge M&V Experience
• Comverge Energy Sciences team:– 10 engineers and mathematicians
– Oversee & shepherd the process
– M&V processes have been evaluated and approved by numerous utilities and by PJM
• Responsible for M&V measurements & evaluation of many residential and small commercial DR programs since 2006
– Seven seasons of meter deployment and data acquisition for thirteen programs
– Energy Sciences team creates a detail M&V plan annually
– Per the plan, meters are deployed, baseline and event measurements are obtained during the summer season and a final report is prepared in the fall
• Comverge has used many different approaches for measurement – Direct metering of air conditioners and hot water heaters, including monitoring run times as
determined by the thermostats and service meter measurements
– For the proposed program, Comverge envisions using AMI service meters to calculate demand reduction
– Estimates can be prepared for each event using a prior day(s) baseline based approach
– The estimates from each premise would be aggregated to provide a system wide determination of the demand response
©2012 Comverge – Confidential and Proprietary 10
Summary of Results• Residential programs produce reliable Demand Reduction
• Programs across the country producing perennial results – Emergency Curtailment, Ancillary Svc, Operating Reserves– Attacks the primary Contributor to annual Peak System Load
• Job Creation – as many as 85 Jobs if fully deployed (400 MW) – Potential for more during deployment phase (3-5 years) – Scales down by 30-40% after deployment phases
• Assumed Penetration Rates– 6.7% Proposed Penetration– 432,350 Proposed Enrollments– 18 Months expected to reach the proposed penetration level
• Assumes Two largest TDSP service territories as target markets
©2012 Comverge – Confidential and Proprietary 11
Demonstrated Performance
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14% Penetration119,077 Enrollments26 Months
Utility 1
Demonstrated Performance
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9.4% Penetration56,604 Enrollments16 Months
14% Penetration119,077 Enrollments26 Months
Utility 1
Utility 2
Demonstrated Performance
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6.7% Proposed Penetration432,350 Proposed Enrollments18 Months
9.4% Penetration56,604 Enrollments16 Months
14% Penetration119,077 Enrollments26 Months
Utility 1
Utility 2
Applicability• Demand Response is an integral component of several existing EE
Program offerings– Oncor, CenterPoint, AEP – Load Management Standard Offer Program for Commercial &
Industrial Customers
– TNMP – Commercial Load Management Pilot Program
– Other Texas Utilities – Various Load Management Standard Offer Programs
• Residential programs will be a valuable addition• Program Structure fits well in the Texas Market
– Ability to transition program to ERCOT when appropriate
• Comverge design reduces risk for the customer through experience and process
– Example - in VPC, Comverge assumes risk for program dropouts and customer opt outs • Allowances for these risks are designed into the program plan • Allow customers to opt out of 2 control events per season • Program is Voluntary – If customer wants to leave the program – accommodate the request • Since contract is MW based we manage churn through the life of the program
©2012 Comverge – Confidential and Proprietary 15
Market• Demand Response is a critical element in Texas Resource Adequacy
Discussion
• Residential Price Responsive Demand is a desired end-state
• ERCOT making strides to facilitate products for loads to participate in Market
– 30 min Emergency Response Service • Pilot in Second Season• Load Aggregation Participation
– Weather Sensitive Loads Product category• Protocol changes currently in development
– Aggregated Load Resources• Draft White Paper
• Residential DR – Deployment through multiple channels– Third Party DR Providers– Retail Electric Providers– Channel Partners (HVAC, Security, Cable)
©2012 Comverge – Confidential and Proprietary 16
Conclusions• Demand Response is our business
– The estimates are achievable– The Resource is reliable– M & V is proven industry accepted practice
• Pay for performance structure ensures value
• 400 MW pilot offer – Large enough to provide system value– Small enough to fit the budget over roll-out period
• Next steps:– Meet with PUCT Staff and/of Commissioners to Answer additional
questions– Road show to gauge interest from TDSP’s and Utilities– Advance the program concept to filing phase with Sponsor Utility
©2012 Comverge – Confidential and Proprietary 17
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