Discussion with NASUCA

TRANSITIONING TO THE GRID OF THE FUTURE

November 8, 2015

Austin, Texas

FUTURE OF THE GRID

TRANSITIONING TO THE GRID OF THE FUTURE 2

BACKGROUND AND INITIATIVE

OVERVIEW

FUTURE OF THE GRID

TRANSITIONING TO THE GRID OF THE FUTURE

FUTURE OF THE GRID

3

Future of the Grid – Evolving to Meet America’s Needs

Developed through a public/private partnership with the Department of Energy’s (DOE) Office of Electricity Delivery and Energy Reliability (OE)

Workshops in Seattle, Dallas, Durham, and New York City National Summit in Washington, DC Input from over 400 industry stakeholders – including policymakers,

utility representatives, vendors, and game changers Final report published in December Available at: www.smartgrid.gov/future_grid and

http://www.gridwise.org/uploads/reports/GWA_14FutureoftheGridReport_final.pdf

FUTURE OF THE GRID

TRANSITIONING TO THE GRID OF THE FUTURE 4

Grid Modernization: Framing the Issues

Electric System of the Future

Evolving Grid

Operations

Evolving Business Model

Evolving Regulatory

Model

Planning the

Transition

FUTURE OF THE GRID

TRANSITIONING TO THE GRID OF THE FUTURE

FUTURE OF THE GRID

5

Consumers Will have different expectations

and demand new options Prosumers

Characteristics: Electric System of the Future

Generation Will be both centralized and

distributed Will be both dispatchable and

non-dispatchable Microgrids will be complementary,

not a replacement

Markets Wholesale and retail Third party non-regulated

competitive players

Balancing Supply and Demand Will become increasing

complex and important

Energy Storage Will not replace the need

for “dispatchable” options

FUTURE OF THE GRID

TRANSITIONING TO THE GRID OF THE FUTURE

FUTURE OF THE GRID

6

Evolving Grid Operations: Key Themes from Workshops

Will still want and need a grid

No longer just a delivery “pipe” => two-way power flow

Must be agile and “fractal” - flexible, adaptable, responsive

Enabling platform for very dynamic and complex system

Capable of supporting robust retail market transactions

Capable of coordinating wholesale and retail functions (operational and market) will be essential

Distribution grid will look and act more like transmission grid

Balancing supply and demand -increasingly complex and important

Evolving Grid Operations

FUTURE OF THE GRID

TRANSITIONING TO THE GRID OF THE FUTURE

FUTURE OF THE GRID

7

Evolving Business Model

Evolving Business Model: Possible Future Value Props for Grid Operator

Supporting/implementing public policies Integrating all types of generations – agnostic to where it comes from Increasing grid efficiency Optimizing assets utilization Maintaining a safe and reliable grid Enabling highly reliable and resilient energy services to end consumers Enabling customers to provide services back to grid Facilitating a retail market for consumers to buy and sell services Identifying most cost-effective way to achieve outcomes

FUTURE OF THE GRID

TRANSITIONING TO THE GRID OF THE FUTURE 8

Our Objective

To create a guide to facilitate public policy discussions for state and local policy makers and regulators to create their strategies (policy level) and roadmaps (regulatory level).

The guide will focus on framing the issues associated with distributed energy resources (DERs) as a driver for change from multiple stakeholder perspectives.

FUTURE OF THE GRID

TRANSITIONING TO THE GRID OF THE FUTURE

FUTURE OF THE GRID

9

How we define DERs

DERs are “behind the meter” resources that can impact system demand. These resources include distributed generation, distributed storage, smart load management (including EVs), and traditional demand response/load control. We will also consider the impacts of combined DERs into non-utility owned microgrids.

FUTURE OF THE GRID

TRANSITIONING TO THE GRID OF THE FUTURE

FUTURE OF THE GRID

10

Engaging Stakeholders

UtilitiesIOUs

MunisCoops

RTO/ISORetail Services ProvidersTransmission Companies

ConsumersIndustrial

CommercialResidential

Consumer Advocates

GovernmentDOENIST

USDA - RUS

RegulatorsPUCs

FERC/NERCFCCFTC

Policy MakersGovernors’ Offices

Energy OfficesFederal

Local – MayorsState Legislators

OthersFinancial – InvestorsR&D Organizations

EPRI

Industry TradesEEI

APPANRECANEMA ACORESEPAAEE

Environmental Stakeholders

EDFNEDC

EAUCS Vendors/Service

ProvidersITC Providers

ServicesEquipment

Manufactures

Third Party PlayersSolar ProvidersWind Providers

Microgrid ProvidersDER Aggregator

FUTURE OF THE GRID

TRANSITIONING TO THE GRID OF THE FUTURE 11

• Implementation Support

• Cost/Benefit Development & Analysis

Tools

• Partners• DOE & Labs • EPRI/Industry • Universities

• Methodology/Framework

• Considerations/Options• Interdependencies

• Implications

•

• Framing Policy Considerations• Role of the utility• Role of 3rd parties• Risk management –

Stranded Assets• New rules

Guiding Principles

Decision & Investment

Guide

Technical Assistance &

Tools

Research and Development

(QTR)

Policy Makers& Industry

DOE & National Labs

Technical

Public Policy

Distributed Energy

Resources

Our Focus

Collaborate, Coordinate &

Leverage

FUTURE OF THE GRID

TRANSITIONING TO THE GRID OF THE FUTURE

FUTURE OF THE GRID

12

Policy Considerations Associated with Increasing DERs Role of the utility versus role of third parties Transparent, fair, and equitable allocation of costs for maintaining and

operating the grid with increasing DER penetrations Utilities’ obligation to serve and universal service compact Balancing pubic good while allowing consumer choice and control Maintaining consumer protections in a changing environment Consumer education – bringing consumers along as part of the

conversation Others?

FUTURE OF THE GRID

TRANSITIONING TO THE GRID OF THE FUTURE 13

Two Breakout GroupsGroup 1 – How do we maintain affordability for all consumers with increasing penetrations of DER? Impacts of rooftop or community PV (and

other DER) on non-participating consumers?

How can all consumers take advantage of the benefits of DER?

How do we properly value the higher costs associated with DERs (i.e., costs shifts)?

Group 2 – What are the key policy considerations for Consumer Advocates related to DER Are there additional policy considerations

that should be covered? What do you want to make sure policy

makers consider, know or include when developing new policies?

What opportunities do DERs present for consumers?

FUTURE OF THE GRID

TRANSITIONING TO THE GRID OF THE FUTURE 14

THANK YOU