2003 04 04 ROSENFELD CO

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2003 04 04 ROSENFELD CO Powered By Docstoc
					   Joint CEC/CPUC Proceeding on Advanced
Meters, Dynamic Pricing, and Demand Response
                                 in California.


 Connecting Wholesale and Retail Electricity.
                           Denver CO, April 4, 2003

                         Arthur H. Rosenfeld, Commissioner
                           California Energy Commission
                                    916 654 4940
                          Arosenfe@Energy.State.CA.US
                                www.Energy.CA.gov
 Efficiency
 Energy for the Future
Starting 2001, during the California Electricity Crisis

California Legislature authorized $ 32 million for
 15-minute interval meters
23,000 meters for customers with loads >200kW,
 (if a building, floor area > ~40,000 sq.ft. )
 5,000 customers >500 kW already on Time-of-
 Use (TOU) rates
 so 18,000 new customers, many new to TOU
now cover 1/3 of California’s peak load
   Efficiency
   Energy for the Future
                                                          2
                                               Cal ISO Daily Peak Loads
                                         January 1, 2000 - December 31, 2000
          50
                                                                                      Peak Day August 16 -
                                                                                      43.5 GW
          45
                                                                                                      Commercial AC

          40
GW




          35


          30

                                                                        Residential AC
          25


          20
                                           0




                                                                                 0
                                                      0




                                                                                                             0
        00


                       00




                                                               0




                                                                                                  0
                                                                        0




                                                                                        00




                                                                                                                      0
                                 00




                                                                              -0
                                        -0


                                                   -0




                                                                                                         -0
                                                              0




                                                                                                -0
                                                                    l-0




                                                                                                                   -0
      n-


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               Efficiency
               Energy for the Future
                                                                                                                          3
                                Top Ten California Peak Energy Uses/Sectors
                                       (assumes a 50,000 MW peak)
            8,000
                        15%           14%
            7,000

            6,000                           11%   11%
Megawatts




            5,000

            4,000
                                                        7%     6%
            3,000
                                                                    4%   4%   4%   4%
            2,000

            1,000

               0




                   Efficiency                 End-Use/Sector
                   Energy for the Future
                                                                                    4
                                                 Actual ISO Load 2000 and 2001
                                        Sorted Highest to Lowest in a Load Duration Curve
                                                       Highest 1000 Hours
     46,000
                                      Top 50
                                      Hours
     44,000


     42,000


     40,000                                                2000
MW




     38,000


     36,000


     34,000

                           2001
     32,000


     30,000
               1           101         201       301       401       501       601          701   801   901

              Efficiency                                           hours
              Energy for the Future
                                                                                                              5
                                             ISO Actual Loads -- Three Summers
                                          Highest 50 Hours of Load in Each Summer
     46,000
                                                                                                   summer 1999

     45,000                                                                                        summer 2000
                                      1999
                                                                                                   summer 2001
     44,000
                                                                                                   summer 2000 if no
                                                                                                   curtailments (estimated)
     43,000

                  2000
mw




     42,000


     41,000


     40,000

                                  2001
     39,000


     38,000                                                                                       33
                                                13
                                                     15
                                                          17
                                                               19
                                                                    21
                                                                         23
                                                                              25
                                                                                   27
                                                                                        29
                                                                                             31


                                                                                                       35
                                                                                                            37
                                                                                                                 39
                                                                                                                      41
                                                                                                                           43
                                                                                                                                45
                                                                                                                                     47
                                                                                                                                          49
                                           11
                                      9
              1
                   3
                        5
                              7




              Efficiency
              Energy for the Future
                                                                                                                                               6
                                                Loads and Estimated End Use Consumption
                                                        Highest 50 hours of a Year
50,000




                                          1999 ISO Loads
45,000                                                                                                                                    100%




40,000                                                                                                                                    89%
                                                         Commercial AC


35,000                                                                                                                                    78%
                                                         Residential AC


30,000                                                                                                                                    67%


                                                         Commercial Lighting

25,000                                                                                                                                    56%
         1

             3

                 5

                       7

                            9

                                     11

                                          13

                                               15

                                                    17

                                                          19

                                                               21

                                                                    23

                                                                         25

                                                                              27

                                                                                   29

                                                                                        31

                                                                                             33

                                                                                                  35

                                                                                                       37

                                                                                                            39

                                                                                                                 41

                                                                                                                      43

                                                                                                                           45

                                                                                                                                47

                                                                                                                                     49
             Efficiency
             Energy for the Future
                                                                                                                                           7
                                              Price Duration Curve Full 8,760 Hours
                                           ISO's Real Time Price in Northern California


        700
                                 1999
                                 2000
        600

                         $500/MWh Price Cap
        500


        400
$/MWh




        300
                                            $250/MWh Price Cap

        200


        100


          0
               1              1001         2001     3001      4001       5001      6001   7001   8001

        -100
                   Efficiency
                   Energy for the Future
                                                                                                        8
                                                     Average Costs of a New CT1 --
                                                     $/MWh including debt service
        4,000

        3,500

        3,000

        2,500
$/MWh




        2,000

        1,500

        1,000

         500

           0
                0                      50                 100                 150                200                 250              300
                                                                   hours of operation
                             1
                                 - CT cost data taken from Appendix Table B-2 CEC Staff Draft of California Energy Outlook, 8/22/01
                Efficiency
                Energy for the Future
                                                                                                                                        9
                              Measured Hourly Average A/C Loads - at SMUD Office Bldg.
                         Curtailment = Setpoint + 4 Degress (1 to 5 PM) + Dimmed Lights


                         4
                                                                                Baseline
                        3.5


                         3
Load (kW/1000 Square)




                                                                              IMPACTS / 1000 sf:
                        2.5
                                                                              Avg . kW (1-5PM) = 1.0,
                                             Curtailment                      = 30% of Baseline a-c
                         2


                        1.5


                         1


                        0.5


                         0
                              9   10   11   12   13   14   15   16  17   18     19   20    21      22   23   24
                                                                 Hour
             Efficiency
             Energy for the Future                            ,
                                             Source: Ed Hamzawi SMUD, Oct. 20, 2000
                                                                                                                  10
                                                  Simulation (DOE-2) Medium Office - Hot Day (Max. 100 Deg.)
                                                                        in Sacramento
                                             Load Control = Basecase + 4 Deg. & 30% Lighting Reduction (1 to 5 PM)
                                   6.0                                                                                                       115
                                                                                                           IMPACTS / 1000 sf:
                                   5.5
                                                                                                           Avg. Kw (1-5PM) = 1.5             110
                                                                          KW Base Case                     First Hour kW (1PM) = 2.7
                                   5.0
                                                                                                           Daily kWh = 6.1                   105
Total Load (kW/1000 square feet)




                                   4.5
                                                                                                                                             100
                                   4.0




                                                                                                                                                   Temp. (deg. F)
                                                                                                                                             95
                                   3.5
                                         KW Curtailment
                                   3.0                                                                                                       90

                                   2.5
                                         Temp Outside                                                                                        85

                                   2.0
                                                                                     Temp Inside Curtail                                     80
                                   1.5
                                                                                                                                             75
                                   1.0
                                                                                      Temp Inside Base                                       70
                                   0.5

                                   0.0                                                                                                       65
                                         9       10       11         12    13   14   15    16   17   18    19   20    21   22    23    24
                                             Efficiency                                     Hour
                                             Energy for the Future
                                                                                                                                            11
        CEC Experience with Peak Load Reduction

 In 2000 and 2001, the California legislature allocated to the Energy
  Commission funds for peak load reduction programs
 The Energy Commission offered grants, loans and rebates.
  Specifically, $ 21 million for “enhanced automation”
 Due to problems with electricity supply in California during 2000 and
  2001, these programs were designed and implemented in a very fast
  manner before any dynamic tariffs were provided (e.g. CPP, RTP)
 The next two slides provide a summary of program results during 2001




   Efficiency
   Energy for the Future
                                                                          12
                                  CEC Contracts for Peak Reduction Summer 2001
                                                 % Load Curtailed

     All 1,800 Projects



Specific Case Histories



 Macanan Investments



      Doubletree Hotel



      Hewlett-Packard



       Foothill College



                 Staples


                           0%              5%           10%           15%        20%   25%
          Efficiency
          Energy for the Future
                                                                                       13
                                 CEC Contracts for Peak Reduction Summer 2001
                                             Cost per kW curtailed


     All 1,800 Projects



Specific Case Histories



 Macanan Investments



      Doubletree Hotel



      Hewlett-Packard



       Foothill College



                 Staples


                           $0          $200        $400       $600       $800   $1,000   $1,200
         Efficiency
         Energy for the Future
                                                                                         14
  TOU Pricing vs. Dynamic Pricing (CPP & RTP)
 Time-of-Use (TOU) is typically 3 time blocks published in
  advance for entire season
   – Peak, Shoulder, Off-Peak
   – Cannot address unforeseen weather or equipment failures
 Critical Peak Pricing (CPP) is a high price imposed on a few
  days a year when energy is expensive or system conditions are
  critical or near critical
   – Non-CPP hours are less expensive as a result
   – Customer pays the critical price when invoked by the utility
           • day-ahead forecast of CPP offers added time for response
 Real-Time Pricing (RTP) is the hourly marginal cost of a kWh
   – Reflects hot weather, scarcity, or equipment failure
           • day-ahead forecast of RTP offers added time for response
   Efficiency
   Energy for the Future
                                                                        15
  CEC/CPUC Vision: Dynamic Prices & Choice
 Always TOU or Better if digital meters available and if economic
 “CPP” is an extension of TOU
 Residential and Small Commercial
    – Default = CPP
    – Hedge = TOU
 Intermediate Size Customers (perhaps 200 kw to 1 MW)
    – Default = CPP
    – Hedge = TOU
    – Option = RTP (voluntary)
 Large (perhaps > 1 MW)
   – Default = RTP
   – Hedges to CPP or perhaps TOU
 Goal of an additional 1% of Load Response per year

   Efficiency
   Energy for the Future
                                                                 16
                 Gulf Power GoodCents Select Tariff
                    2000 homes in Pensacola FL

 Reduces need during critical or near critical periods
  (emergencies -- present or expected --, very high prices)
    – Summer Peak Load Reductions of 2.1 kW per house (1st
      hour)
    – Winter Peak Load Reduction of 2.7 kW per house (1st hour)
 4-hour reduction roughly 1 kW
 96% Customer Satisfaction Rating
    – Cost savings, greater control and better information
 Improves competitive position of Gulf Power in wholesale
  markets

   Efficiency
   Energy for the Future
                                                                  17
                                                  Critical Peak Pricing (CPP)
                                   e.g. Gulf Power residential GoodCents Select tariff with
                                          a limit of 87 hours per year of CPP prices
                    35
                                                                                         Standard TOU
                    30                                                                   Critical Peak Price
                                                                                         Standard Rate

                    25
Price (cents/kWh)




                    20

                    15

                    10

                     5

                     0
                               Sunday            Monday   Tuesday Wednesday Thursday   Friday   Saturday

                         Efficiency
                         Energy for the Future
                                                                                                               18
                                                                        Gulf Power GoodCents Select Program
                                                                            Critical Price Dispatch: July 17, 2002
                                                                                         (139 Homes)
                                                         6.0
                                                                  No Critical - July 16*
                                                         5.0      1-Hour Critical - July 17
Gulf Power




                            Average Load per Home (kW)
                                                         4.0


Residential                                              3.0

                                                         2.0

July 2002                                                1.0

                                                         0.0
                                                               1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
                                                                                               Hour
                           *Temperature adjusted


                                                                       Gulf Power GoodCents Select Program
                                                                            Critical Price Dispatch: July 18, 2002
                                                                                         (139 Homes)
                                                         6.0
                                                                  No Critical - July 16*
                                                         5.0      2-Hour Critical - July 18
                           Average Load per Home (kW)




                                                         4.0

                                                         3.0

                                                         2.0

                                                         1.0

                                                         0.0
  Efficiency                                                   1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

  Energy for the Future                                                                         Hour
                          *Temperature adjusted                                                                                 19
  Georgia Power’s Voluntary 2-part RTP Program
 Customer bill = Part 1 + Part 2
    – Part 1 based on historical load profile (customer baseline load --
      CBL). CBL is a list of hourly loads for entire year
    – Part 2 based on price responsive departures from load profile
 Part 1 is the CBL x TOU tariff
    – What you expect to pay if you don’t respond to real-time price
 Part 2 is the hourly departures from CBL
    – Enables customer to buy additional kWh when prices are low
    – And sell back kWh when prices are high
 Saves 17% of participant’s load at ~$1/kWh on hot
  afternoons

   Efficiency
   Energy for the Future
                                                                           20
                  Example of Incremental Energy
                   Charges (Relative to Baseline)
               Customer “sells” load at high RTP prices


MWh
                                                            CBL
                         Customer “buys” load at low        Actual
                         RTP prices                         load




              1                 Hour of Day            24
 Efficiency
 Energy for the Future
                                                                     21
                        Real Time Pricing
                        at Georgia Power

 q    1,650 commercial and industrial
      customers, totaling 5,000 MW
 q    Two-part, day-ahead and hour-ahead
      hourly pricing
 q    High customer satisfaction; low
      turnover
 q    Up to 1,000 MW of load response
      during critical high-price conditions
 q    Related risk management products called Price
      Protection Policies

Efficiency
Energy for the Future
                                                      22
                                                    Hour Ahead, Large Customers
                                                  (Summer weekdays, hours 14 - 21)

                           0.30


                           0.20

                                                                                     $1/kWh
                           0.10

                                                        $0.21                $0.6             $2     Price /kWh
                           0.00
ln(Q/Qg)




           -1.00              0.00         1.00            2.00               3.00            4.00       5.00     6.00

                         -0.10


                         -0.20


                         -0.30


                         -0.40
                                                                  ln(P/Pg)




              Efficiency
              Energy for the Future   Source: Steve Braithwait, Christensen and Associates
                                                                                                                    23
                                                            Day Ahead Industrial
                                                        (Summer weekdays, hours 14 - 21 )
                                 0.20


                                 0.15


                                 0.10
                                                                                         Price per kWh

                                                                                 $0.23              $0.70   $1
                                 0.05
ln(Q/Qg)




                                 0.00
           -1.00       -0.50          0.00       0.50         1.00      1.50      2.00      2.50     3.00        3.50   4.00

                                -0.05


                                -0.10


                                -0.15


                                -0.20
                                                                      ln(P/Pg)

                   Efficiency
                   Energy for the Future     Source: Steve Braithwait, Christensen and Associates
                                                                                                                        24
                                                          Day Ahead Commercial
                                                       (Summer weekdays, hours 14 - 21 )
                                 0.20


                                 0.15


                                 0.10
                                                                                           Price per kWh
                                                                                 $0.23             $0.70    $1
                                 0.05
ln(Q/Qg)




                                 0.00
           -1.00       -0.50         0.00       0.50         1.00      1.50      2.00       2.50     3.00    3.50   4.00

                                -0.05


                                -0.10


                                -0.15


                                -0.20
                                                                     ln(P/Pg)

                   Efficiency
                   Energy for the Future    Source: Steve Braithwait, Christensen and Associates
                                                                                                                    25
   California’s Energy Agencies Promote Demand
               Response to Retail Price
 Beginning in the Summer of 2002, the Energy Commission, Public
  Utilities Commission, and the Power Authority began a joint
  proceeding to promote demand response to retail prices and tariffs
 Divided into three parts:
   – Working Group 1: Policy Issues
   – Working Group 2: Large Customers
   – Working Group 3: Small Customers
 Decisions regarding how to proceed are being made
   – Initially, regarding tariffs for large customers and experimental
      design to assess response to price from small customers




   Efficiency
   Energy for the Future
                                                                         26
   Working Group 2: Large Customers (>200 kW)
    Coordinator, Mike Jaske (mjaske@energy.state.ca.us)

 Original goal was a “quick win” to take advantage of the interval
  meters already in place through tariffs or programs for Summer 2003
 Products will include: dynamic tariffs (this summer, 2003), demand
  bidding tariffs (also this summer), and a group is formulating a two-
  part RTP (Real Time Price) tariff.
 A CEC objective was to include commercial buildings since these
  were the ones where the customers getting advanced metering systems.
 The initial utility proposals discriminated against “peaky” commercial
  buildings, so WG2 modified its approach and developed CPP tariff
  proposals.




   Efficiency
   Energy for the Future
                                                                       27
                                        Joint Utility CPP Tariff Applied to PG&E Summer A 10

        $1.40
                                                         Prices on CPP Days

        $1.20


        $1.00


        $0.80
$/KWh




        $0.60


        $0.40
                                                                            TOU Prices

        $0.20

                                                                      Prices on non-CPP days
        $0.00



                                                              hour of day
                Efficiency
                Energy for the Future
                                                                                               28
                                    Joint Utility CPP Tariff Applied to PG&E Summer A 10

        $1.40


        $1.20
                                        Prices on CPP Days

        $1.00


        $0.80
$/KWh




        $0.60


        $0.40
                                                                    TOU Prices


        $0.20

                                                        Prices on non-CPP days
        $0.00
               30
               00

           10 0
                0

           11 0
                0

           12 0
                0

           13 0
                0
                0

           14 0
                0

           15 0
                0
                0

           17 0
                0

           18 0
                0

           19 0
                0
                0

           20 0
                0
                0
               3
              :0
              :3
              :0
              :3
              :0
              :3
              :0
              :3
              :0
              :3
              :0
              :3
              :0
              :3
              :0
              :3
              :0
              :3
              :0
              :3
              :0
              :3
              :0
            8:
            9:
            9:


           10


           11


           12


           13
           14


           15


           16
           16


           17


           18


           19
           20


           21
                                                                 hour of day
                Efficiency
                Energy for the Future
                                                                                           29
      Working Group 3: Small Customers
Coordinator: Mike Messenger (mmesseng@energy.state.ca.us)
Scope
  – All three IOU service territories in California
  – Residential, small commercial & industrial <200kW
Goals
  – Identify information needed to decide whether
    deployment of advanced meters is cost-effective
          • for all or some subset(s) of small customers
  – Collect existing and new data needed to allow educated
    decisions on meter and tariff policy by early 2004
 Efficiency
 Energy for the Future
                                                             30
          Working Group 3: Small Customers
               Statewide Pricing Pilot
Sample
   – 2,060 participants (after 20% opt-out)
           • 1,520 residential; 540 commercial
Treatments
   – TOU & CPP rates; information & technology types
Objectives
   – Short-term price elasticities
   – Customer acceptance and preferences
Cost: ~ $10 million

  Efficiency
  Energy for the Future
                                                       31
                           Concluding Remarks

 Price responsive demand will enhance the competitiveness of
  electricity markets
 A direct link between wholesale and retails markets is essential
 However, other types of electrical system emergencies may require
  instantaneous load response
 California had a separate proceeding dealing with interruptible load
  programs
 We plan to merge price-sensitive demand response and interruptible
  programs
   – For example, one approach could involve a curtailment signal that
      a customer would not have the option to over ride.
   – The next graph illustrates how this might work

   Efficiency
   Energy for the Future
                                                                         32
                             Critical Peak Pricing (CPP)
                          with additional curtailment option

                    40

                    35
                                                                 ?          Standard TOU
                                                                            Critical Peak Price
                                  Price Signal                              Standard Rate
                    30
                                                                        Extraordinary
Price (cents/kWh)




                    25
                                                                        Curtailment
                                                                        Signal
                    20

                    15

                    10

                     5

                     0
                         Sunday   Monday   Tuesday Wednesday Thursday   Friday   Saturday


      Efficiency
      Energy for the Future
                                                                                                  33
                            For more details see
 PUC R.02-06-001
    – http://www.cpuc.ca.gov/static/industry/electric/demand/index.htm
 CEC 02-Demand Response-01
    – http://www.energy.ca.gov/demandresponse/documents/index.html
 Dynamic Pricing, Advanced Metering and Demand Response
  in Electricity Markets
   – The Hewlett Foundation Energy Series Foundation monograph by
     Severin Borenstein, Mike Jaske and Art Rosenfeld, September 2002
   – http://www.energy.ca.gov/commission/commissioners/rosenfeld. html,
     http://www.ef.org/energyseries_dynamic.cfm
 How and Why Customers Respond to Electricity Price Variability: A
  Study of NYISO and NYSERDA 2002 PRL Program Performance
   – Neenan, B., et.al., January 2003 http://certs.lbl.gov/PDF/NYISO.pdf

    Efficiency
    Energy for the Future
                                                                         34

				
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