maryland’s grid modernization experience

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1 Maryland’s Grid Modernization Experience Presentation for the New England Electricity Restructuring Roundtable Kelly Speakes-Backman Boston, MA September 20, 2013

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Maryland’s Grid Modernization Experience. Presentation for the New England Electricity Restructuring Roundtable Kelly Speakes-Backman Boston, MA September 20, 2013. 1. EmPOWER Maryland Energy Efficiency Act. Enacted: April 2008 (PUA § 7-211) - PowerPoint PPT Presentation

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Page 1: Maryland’s Grid Modernization Experience

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Maryland’s Grid Modernization Experience

Presentation for the New England Electricity Restructuring Roundtable

Kelly Speakes-BackmanBoston, MASeptember 20, 2013

Page 2: Maryland’s Grid Modernization Experience

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EmPOWER Maryland Energy Efficiency Act Enacted: April 2008 (PUA § 7-211)

15% by 2015: per capita energy consumption reduction by 2015 2117 MW 5,475,000 MWh

Multi-faceted : Cost-effective programs for energy efficiency (EE), demand response (DR), distributed generation, CVR, and AMI/Smart Grid

Verifiable: §7-211(g)(1) requires projected & verifiable electricity savings

Three year plans: 2009-2011, 2012-2014 plans developed as Work Group recommendation of PSC Staff, OPC, MEA, Utilities and other stakeholders

Reporting: Quarterly data to Staff, semi-annual reports to the Commission

Page 3: Maryland’s Grid Modernization Experience

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Scope of EmPOWER Maryland Includes Energy Efficiency (EE), Demand Response (DR) & Smart Grid (SG) 2012 – 2014 program portfolios $695m in EE/DR Programs 2009 – 2015 projected to exceed $1b (not including SG)

Grid-Facing AMI (BGE, Pepco, DPL,

SMECO) Conservation Voltage

Reduction (Pepco, DPL, PE)

Customer-Facing Lighting & Appliance rebates HVAC HPwES (existing homes, whole-house) Residential New Construction C&I prescriptive measures (lighting,

HVAC, motors, VSD, custom retrofits, CHP)

Low-income Multi-family housing (e.g., common-

area EE measures) Direct Load Control

Page 4: Maryland’s Grid Modernization Experience

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Energy Reduction Program-to-Date,

September 30, 20122015 Goal (MWh) Percentage of 2015

Goal

BGE 1,231,156 3,593,750 34%Pepco 424,839 1,239,108 34%PE 176,686 415,228 43%DPL 75,724 143,453 53%

SMECO 87,630 83,870 105%

Utility Program Achievement of the 2015 Energy Reduction Goal

Demand Reduction Program-to-Date,

September 30, 20122015 Goal (MW) Percentage of 2015

Goal

BGE 726 1,267 57%Pepco 188.357 672 28%PE 24.511 21 117%DPL 39.765 18 221%

SMECO 56.558 139 41%

Utility Program Achievement of the 2015 Peak Reduction Goal

EmPOWER Maryland Progress

Page 5: Maryland’s Grid Modernization Experience

Cost Recovery Mechanisms

Customer-Facing Portfolios: monthly surcharges2012 Residential Avg Monthly Impacts 2012 C&I Consumption Charge (per kWh)

Grid-Facing Programs: regulatory asset Smart grid utilities will use AMI reg asset Non-smart meter utilities will recover in rate base (PE)

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Utility EE&C DR TotalBGE $1.28 $0.75 $2.03

Pepco $1.13 $1.53 $2.66DPL $1.07 $1.89 $2.96PE $1.67 n/a $1.67

SMECO $1.52 $1.47 $2.99

Utility EE&C DRBGE $0.000870 N/A

PEPCO $0.000831 $0.000101DPL $0.000430 $0.001055PE $0.000754 N/A

SMECO $0.000180 $0.001470

Page 6: Maryland’s Grid Modernization Experience

Maryland Smart Grid Context

Introduced in the context of EmPOWER No legislative mandate or specific guidelines set forth BGE and Pepco each received up to $200m ARRA Smart Grid

Investment grants All Maryland AMI proposals were preceded by pilot projects,

including: Technology pilots Multi-year peak pricing pilots Operational benefits pilot

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Page 7: Maryland’s Grid Modernization Experience

Maryland Smart Grid Business Cases BGE, Pepco, DPL proposals estimated strong cost-effectiveness

Roughly half the benefit from operational savings and half from peak load reductions (mostly capacity benefits)

Dynamic pricing using peak time credit approach to achieve usage reductions during critical peaks

SMECO cost effectiveness positive Includes operational benefits only Did not include peak load reduction savings Possible time of use rates in the future

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Page 8: Maryland’s Grid Modernization Experience

Maryland Commission Decisions Cost recovery contingent upon demonstrated cost-

effectiveness Smart grid expenditures may be requested in first rate case

following full deployment and cost-effectiveness analysis Plans and Metrics

55 total metrics Metrics monitor deployment progress, costs/benefits, customer

engagement Customer education plans Cyber-Security plans

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Page 9: Maryland’s Grid Modernization Experience

Maryland Smart Grid Progress

BGE 1.2 million electric & 660,000 gas meters Roughly 33% of installations completed, complete in 2014

Pepco-MD (PHI Affiliated) 550,000 electric meters in Maryland (largest jurisdictional PHI utility) Preceded (one year) by full implementation in Pepco-DC 98% complete by June 2013

DPL-MD (PHI Affiliated) 210,000 electric meters in Maryland DPL-DE completed full implementation (electric and gas) in 2012 Installations underway, complete late 2013/early 2014

SMECO 160,000 electric meters Approved Summer 2013

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Page 10: Maryland’s Grid Modernization Experience

Maryland Smart Grid: AMI

AMI overall benefits Reliability (duration) Demand reduction Energy use information transparency New technology advances and applications

Forecasted Smart Grid demand reductions through 2017 (MW)

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Page 11: Maryland’s Grid Modernization Experience

Leveraging EmPOWER and AMI

Dynamic Pricing Direct load control Peak time rebates Time of use pricing Real-time pricing

Conservation Voltage Reduction (“CVR”) Behavior-based EE programs Electric Vehicles and the Grid

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Page 12: Maryland’s Grid Modernization Experience

Maryland Smart Grid: Dynamic Pricing

Dynamic pricing includes DLC, PTR, TOU, real time pricing

Peak event days Includes PJM DR days, high LMP days, and could include distribution

problem days In most cases, declared for the following day Generally declared June – Sept. Maximum hours are 12pm – 8pm, usually actual is less Multiple customer communication streams in advance

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Page 13: Maryland’s Grid Modernization Experience

Maryland Smart Grid: Direct Load Control

DLC program reductions approximately 700 MW BGE “Smart Energy Rewards”

Voluntary “Opt-in” for residential 100%, 75%, 50% option

PHI “Peak Energy Savings Credit” Voluntary “Opt-in” for residential, small commercial 100%, 75%, 50% option

$1.25/kWh during peak period Reductions monetized in PJM capacity and energy markets True-up in annual distribution surcharge/credit

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Page 14: Maryland’s Grid Modernization Experience

Maryland Smart Grid: Peak Time Rebates

$1.25/kWh credit for reduction from customer-specific baseline Calculates usage difference from a comparable degree-day

Cash flow similar to DLC programs Peak load reductions monetized in PJM capacity and energy markets PJM payments fund customer credits True-up in annual distribution surcharge/credit

Can augment DLC programs If monthly reduction exceeds DLC commitment, customer receives end-

of-season credit for the difference No penalty for non-participation Retail supply neutral – except for customers whose supplier

provides their own PJM based load reduction program

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Page 15: Maryland’s Grid Modernization Experience

Maryland Smart Grid: CVR

PE received approval to implement CVR program under its EmPOWER portfolio Recovery of program costs will be sought in rate base after full

implementation

Commission Order No. 84569 directed other utilities to investigate feasibility of implementing CVR in respective service territories (Dec. 22, 2011) Directed recovery of program costs to be sought through rates

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Page 16: Maryland’s Grid Modernization Experience

Maryland Smart Grid: Behavior-based EE Behavior-based programs encourage direct customer

engagement April 2012: Commission authorized EmPOWER utilities to

implement energy usage programs

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Metric: Participants

Annualized Energy Savings (MWh)

Peak Demand

Reduction (MW)

Total Program

Expenditures

Forecasted 50,000 5,126 0.000 $381,327Reported 50,198 5,517 2.427 $617,669Forecasted 25,000 1,809 0.000 $154,888Reported 24,024 0 0.000 $350,981Forecasted 25,000 9,398 1.071 $412,749Reported 72,697 11,824 0.111 $588,530Forecasted 12,500 3,888 0.445 $114,440Reported 51,486 1,769 1.592 $304,983

Behavior-Based Residential Program Results (Net Wholesale 2013 Q1 and Q2)

SMECO

PE

DPL

Pepco

Page 17: Maryland’s Grid Modernization Experience

Maryland Smart Grid: Electric Vehicles Maryland Senate Bill 179 (2011)

Establish “a Pilot Program for electric customers to recharge electric vehicles during off-peak hours.” Pilot Program in place June 30, 2013 Report findings to General Assembly by February 1, 2015

Increase efficiency and reliability of electric distribution system Encourage lower electricity use at times of high demand

BGE Pilot Program: voluntary, residential, TOU rate Based on whole-house TOU with lower off-peak pricing (400)

Pepco Pilot Program: voluntary, residential options Existing customers with EVSE: whole-house TOU or PIV rate (200) Existing customers without EVSE: PIV rate and bill, Level II charging

station, second meter (50) New customers without EVSE: whole-house TOU (1000)

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Page 18: Maryland’s Grid Modernization Experience

Maryland Smart Grid: Opt-out? Jan. 7, 2013: Order No. 85294

Commission concluded (3-2) that the public interest requires provision of additional option related to installation of smart meter

Additional proceedings held August 20, 2013 Whether to allow option to retain existing meter, RF-free or “near RF-

free” meter Associated costs, allocation and procedures for exercising option Treatment of “non-responsive” customers What percentage opt-out scenario to consider Low-income opt-out scenarios

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Page 19: Maryland’s Grid Modernization Experience

Maryland Smart Grid: Cyber Security Plans

Company-specific AMI cyber security plans Plans apply to AMI, not utility-wide operations Work Group consensus support

Commission oversight plan applicable to BGE, Pepco, DPL Key feature is independent 3rd party consultant answerable to PSC to

review all details of utility AMI cyber security activities and incidents Approved by Commission June 21, 2013

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Page 20: Maryland’s Grid Modernization Experience

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For more information…

www.psc.state.md.us

Page 21: Maryland’s Grid Modernization Experience

SMECO Operational Pilot Results

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