Load Management

SMUD

& Demand Response

Jim Parks

CEC Load Management Standards Scoping WorkshopMarch 3, 2008

SMUD

SMUD System Load

• Highest 50 hours responsible for 500 MW

• System load projected to grow by 15% over next 10 years (including EE)

• Resource gap projected in 2012 and beyond due to expiring bilateral and renewable contracts

SMUD

SMUD Customer Policies

• Preservation of local decision-making and control are vital to ensure public power systems can provide solutions that best meet the needs of their customers The District is primarily accountable to its customer-owners Community citizens have a direct voice in utility decisions

• Compact with the Customer ―To meet anticipated load growth while balancing environmental and customer service goals, SMUD must implement: Integrated EE programs which focus on peak A robust AMI infrastructure Rates which reflect time-differentiated costs Strong and active dispatchable LM programs Construction of clean, renewable plant

• Held series of ~40 focus groups around compact with customer concepts with all customer classes August – November 2007

SMUD

AMI Activities

• December 2005: Completed initial AMI Business Case

• March 2006: Presented AMR drive-by strategy

• December 2006: Board approved AMR contract

• January 2007: Began converting routes to AMR

• January 2007: Board requested AMI Business Case Update

• May 2008: Presented AMI Business Case Update

• May 2008: SMUD embarked on AMI project

SMUD

AMI Requirements

• Two-way communications

• Communications protocol agnostic

• Robust, secure, and scalable

• Interval data and TOU capabilities

• Home Area Network agnostic

• Enables programmable communicating thermostat control and in home displays

• Enables end-to-end system efficiencies―from generator to end use

SMUD

AMI Project Timeline

• AMI RFP – 2nd Quarter 2008

• AMI Selection – 4th Quarter 2008

• AMI Acceptance Test – 2nd Quarter 2009

• Full Deployment – 2009 - 2012

SMUD

SMUD Rates Policy

• District’s rates will be designed to balance and achieve the following goals: Reflect the cost of energy when it is used Reduce use on peak Encourage energy efficiency and conservation Minimize “sticker” shock in the transition from one rate design to

another Offer flexibility and options Be simple and easy to understand Meet the needs of people with fixed incomes and severe medical

conditions Equitably allocate costs across customer classes

SMUD

Rate Concepts Under Consideration

• Large Commercial (1> MW) Basic TOU – 4-month summer, 3 pricing period TOU rate that is energy only TOU Demand – Same as Basic TOU with addition of a super-peak demand charge Critical Peak Pricing – Basic TOU with a risk discount and a critical peak price on

call days Real Time Pricing – Hourly energy prices on a day-ahead basis

• Medium Commercial (300 kW – 999 kW) Basic TOU TOU Demand Critical Peak Pricing

• Small Commercial (<300 kW) Basic TOU Critical Peak Pricing

• Residential 3-Tier Increasing Block – Standard rate with price risk premium TOU/Tier – Standard tier rate with 3-hour super peak period Critical Peak Pricing – TOU/Tier with risk discount and critical peak price on call

days

SMUD

Focus Group Findings on Rates

• General: Customers readily understood that SMUD’s cost of supplying energy is

higher in the summer, especially in very hot weather Customers understood that they would pay higher rates over fewer

summer months and lower rates over more winter months Most like a narrow (3-hour) super peak period

• Commercial: Customers who find it difficult to shift load and/or have flat load prefer a

demand charge, and vice versa Customers want a minimum of 24-hour notice for CPP Prefer fewer CPP hours with higher prices vs. more hours with lower

prices

• Residential: Customers with flexible lifestyles said they will shift activities off peak Want energy savings (from TOU vs. Tier) shown on bill Basically like the idea of having pricing choices

SMUD

Focus Group Findings on LM/DR

• General: Most customers said they would respond to public pleas for energy conservation

during periods of peak demand Customers want the ability to override DR events Generally more receptive to temperature reset than to AC cycling

• Commercial: Small and medium customers want education on DR—more likely to participate in

DR when it was explained to them Some find it challenging to curtail/shift energy usage during peak periods due to

industry type or business situation Customers were creative in finding ways to adjust their business operations around

peak periods Many want event notification by cell phone or email

• Residential: Households with ill or elderly members said personal control of their AC is critical Renters find DR challenging because they don’t own the AC or have window AC

units Responses were mixed regarding preference for manual controls vs. “set it and

forget it” controls

SMUD

Current LM and DR Programs

• Curtailment contracts―14 MW

• Temperature-Dependent Rate―8 MW

• Demand Bid―5 MW

• Used only in emergencies: Voluntary Emergency Curtailment Program―~45 MW Peak Corps (residential AC cycling)―97 MW cycling, 135 MW

shed

• Total dispatchable load = 111 to 149 MW Using AC cycling, and special curtailment contracts

• Total non-dispatchable load = 0 to 58 MW Using Temperature-Dependent Rate, Demand Bid and VECP

SMUD

Proposed LM and DR Offerings

• Currently being evaluated in IRP process

• Designed to be used for active LM and DR

• Residential Customers Air conditioning cycling Air conditioning temperature reset Choice of time-of-use rates, critical peak pricing Public appeal to reduce electrical load

• Commercial Customers Air conditioning temperature reset (<300 kW) Aggregator program (300 kW – 999 kW) Special curtailable contacts with the largest accounts (1> MW) Choice of time-of-use rates, critical peak pricing, real time pricing Technical assistance to evaluate demand response potential Technology incentives for enabling equipment Public appeal to reduce electrical load

SMUD

LM/DR Program Redesign Timeline

• Develop new program concepts – 4th Quarter 2007

• Initial program screening – 1st Quarter 2008

• Evaluate programs through resource planning model – 3rd Quarter 2008

• Determine LM/DR resource mix and goals for next 10 years – 4th Quarter 2008

• Implement programs – 2009 - 2012

SMUD

SMUD Position on PCT Standard

• Participation in programs should be voluntary (opt-in and/or opt-out)

• Override capability should be offered to participants in cycling and temperature reset programs

• SMUD prefers PCT standard because:

Offers customers more energy control options Reduces costs of SMUD’s t-stat programs Provides potential for greater participation with temperature reset option Grows programs faster with opt-out for new construction and dwellings/buildings

with existing equipment• Opt-out retention rate of 60%-70% over 3 years• Opt-in growth rate of 1.5%-2.5% annually, total of 5%-8% over 3 years

Reduces price of t-stats with bulk purchase power and lower installation costs in new construction

Increases control functionality and integration through greater sales Grows DR infrastructure faster