One Utility’s Perspective on Investment inOne Utility’s Perspective on Investment inOne Utility s Perspective on Investment in One Utility s Perspective on Investment in Clean EnergyClean Energy
Frederick LynkFrederick Lynk
Manager of Market Strategy and Planningg
September 22, 2008
6,400 employees Np y2.1M electric customers1.7M gas customers24/7 ti
EW
S
24/7 operation2,600 sq miles service territory
STATEN ISLAND
Serving 6 major cities and 300 communities150 000 miles of wire
0 10ml1 2 3 4 5 6 7 8 9
COMBINED ELECTRIC & GAS TERRITORIES
ELECTRIC TERRITORY
GAS TERRITORY
KEY:
150,000 miles of wire15,000 miles of pipe
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NJ Energy Master Plan GoalsNJ Energy Master Plan GoalsPSE&G Committed to State Goals
PSE&G Exploring Disciplined Investments to Address NJ’s State Goals
B 2020 20% f20% reduction in energy consumption by 2020
By 2020 20% of energy supply will come from
renewable sources
Reduce Peak demand by 5,700 MW by 2020
Energy Efficiency RenewablesDemand Response
Consumption back to 2005 levels
Placing information and control with customers
Wind, Biomass, Solar
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Energy EfficiencyEnergy Efficiency -- PSE&G’sPSE&G’sEnergy Efficiency Energy Efficiency PSE&G s PSE&G s Carbon Abatement Filing ($46MM)Carbon Abatement Filing ($46MM)
Residential customers in Urban Enterprise Zones (UEZs)Residential customers in Urban Enterprise Zones (UEZs)Tune-Up Program in targeted neighborhoods:
Energy audit, thermostat, weather stripping, CFLsAttic insulation duct sealing and/or insulationAttic insulation, duct sealing and/or insulation
Install programmable thermostats and provide CFLs as part of routine utility-related gas service calls
Small business customers in UEZs audit and directSmall business customers in UEZs – audit and direct installation of energy efficiency measuresLarge Customer Technology DemonstrationHospital Efficiency – audit and financial incentives
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Pending approval from the Board of Public Utilities.
Peak Demand ReductionPeak Demand Reduction –– PSE&G’sPSE&G’sPeak Demand Reduction Peak Demand Reduction PSE&G s PSE&G s Demand Response Filing ($93MM)Demand Response Filing ($93MM)
Residential CustomersResidential CustomersCentral Air Conditioner Cycling
Replace existing equipmentIncrease program enrollmentIncrease program enrollment
Pool Pump Load ControlSmall Commercial A/C CyclingC&I Curtailment Services – investments in installation of infrastructure to enable demand responseresponseLoad Shifting Demonstrations
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Pending approval from the Board of Public Utilities.
myPower Pricing Pilot OverviewmyPower Pricing Pilot OverviewmyPower Pricing Pilot OverviewmyPower Pricing Pilot OverviewProgram Goals
Understand how price signals can influence customers’ energyUnderstand how price signals can influence customers energy usage patterns.Test customers’ reaction to the opportunity to conserve and shift load when power is in peak demand.Assess the value of technology in supporting customers’ ability in becoming more energy savvy.Improve understanding of system requirements, technology options and performance.options and performance.
Program DesignedTo test participant response to variable TOU and CPP rates. To integrate testing of in-home technology and multiple two-way communications systems that transferred energy pricing and interval consumption data to and from the customer’s meter. To try multiple technology solutions under real field conditions.
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To try multiple technology solutions under real field conditions.
myPower Pricing Pilot OverviewmyPower Pricing Pilot OverviewmyPower Pricing Pilot OverviewmyPower Pricing Pilot OverviewControl Group myPower Sense myPower Connection
Customers 450 Residential 379 Residential 319 Residential
Rate* RS TOU-CPP (RSP) TOU-CPP (RSP)
Electric interval Electric interval Electric interval meter
Equipment
Electric interval meter
Electric interval meter
Electric interval meter Programmable thermostatTwo-way communications infrastructure - PLC, RF, Hybrid
Customer Education and Communication
N/A MailE-mailTelephone
MailE-mailTelephoneSignal to thermostatCo u c o Signal to thermostat
Usage and Billing Information
N/A Internet Internet
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* RS = Residential Service, TOU-CPP = Time-of-Use, Critical Peak Pricing
myPower TimemyPower Time--ofof--Use Use –– Critical Peak Pricing Critical Peak Pricing (TOU(TOU CPP) S 2007 P i i PlCPP) S 2007 P i i Pl(TOU(TOU--CPP) Summer 2007 Pricing PlanCPP) Summer 2007 Pricing Plan
WeekdaysJune - September
28$1.46Critical
WeekendsJune - September
28
24
Critical Price
24
h
16
20
in c
ents
per
kW
h
23.7 ¢High Price(On-
Peak)16
20
in c
ents
per
kW
h8
12Pric
e
8.7¢ 8.7¢
Standard Residential Rate
8
12
Pric
e 8.7¢
M di
Standard Residential Rate
0
4
8.7¢Medium
Price(Base Price)
¢Medium
Price(Base Price) 3.7¢
Low Price (Night Discount)
0
4
Medium Price
(Base Price)3.7¢ Low Price (Night Discount)
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9 AM 1 PM
Time of Day
9 AM6P M 10 PM 9 AM
Time of Day
9 AM10 PM
m Po er Pricing Impact Res ltsm Po er Pricing Impact Res ltsmyPower Pricing Impact ResultsmyPower Pricing Impact ResultsParticipants in the myPower Pilot reduced peak demand
Time-of-Use Impacts – shifting from High price periods to Low and Medium price periodsperiods to Low and Medium price periodsCPP Impacts – reduction in peak demand on critical peak days
Participants in the myPower Pilot saved energyEnergy conservation effect - difference in energy use b t C t l G d P ti i tbetween Control Group and myPower participants
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myPower Connection CustomersmyPower Connection CustomersTiTi ff U d C iti l P k I tU d C iti l P k I tTimeTime--ofof--Use and Critical Peak ImpactsUse and Critical Peak Impacts
4.0Average kW
TOU and CPP Impacts on Summer Peak Days
3.0
3.5
Average kW per Customer
1.5
2.0
2.5
0.5
1.0
CPPTOUBaseline
0.01 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Hour Ending
Night Base On-Peak Base
10Source: myPower Pricing Pilot results based on 2006 and 2007 data through September 30, 2007
Customers with inCustomers with in--home technology reduced Onhome technology reduced On--Peak period Peak period demand by 47% (1.33 kW) on critical peak days.demand by 47% (1.33 kW) on critical peak days.
myPower Sense CustomersmyPower Sense CustomersTimeTime--ofof--Use and Critical Peak ImpactsUse and Critical Peak Impacts
4.0Average kW
With Central AC on Summer Peak Days4.0
Average kW
Without Central AC on Summer Peak Days
2.5
3.0
3.5
Average kW per Customer
2.5
3.0
3.5
Average kW per Customer
CPPTOUBaseline
1.5
2.0
CPPTOU
1 0
1.5
2.0
0.0
0.5
1.0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Baseline
Night Base On-Peak Base0.0
0.5
1.0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Night Base On-Peak Base
Customers who received no inCustomers who received no in--home technology were able to reduce home technology were able to reduce OnOn--Peak period demand on critical peak days by up to 20% even ifPeak period demand on critical peak days by up to 20% even if
Hour Ending Hour Ending
11Source: myPower Pricing Pilot results based on 2006 and 2007 data through September 30, 2007
OnOn--Peak period demand on critical peak days by up to 20%, even if Peak period demand on critical peak days by up to 20%, even if they do not have Central AC.they do not have Central AC.
Key Takeaways From myPower PilotKey Takeaways From myPower PilotKey Takeaways From myPower PilotKey Takeaways From myPower PilotmyPower Pricing participants consistently lowered their energy use in response to price signals across two summers (peak demand red ction of 1 33 kW for m Po er Connection(peak demand reduction of 1.33 kW for myPower Connection, and 0.32 to 0.43 kW for myPower Sense).
During the summer there were daily reductions in energy use from 1:00 p.m. to 6:00 p.m. due to on-peak prices in the TOU rate. During Critical Peak Price events customers increased their load reductionsDuring Critical Peak Price events, customers increased their load reductions during the 1:00 p.m. to 6:00 p.m. period.Participants achieved summer period energy savings of 3-4% when compared to the Control Group.
Technology-enabled customers produced greater reductions inTechnology enabled customers produced greater reductions in energy use in response to the TOU rates and the CPP events. Majority of participants achieved bill savings: 87% of myPower Connection and 68% of myPower Sense saved.myPower Pricing participants would recommend the program to amyPower Pricing participants would recommend the program to a friend or relative, believe they saved money, believe the program is good for the environment and that PSE&G should offer more programs similar to myPower.
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Beyond myPowerBeyond myPowerBeyond myPowerBeyond myPowerNJ’s Draft Energy Master Plan
Smart grid technologies such as AMI are an essential part of theSmart grid technologies such as AMI are an essential part of the State’s plan to meet its EMP goals in energy efficiency and demand response (20% each by the year 2020) EMP Implementation Plan lists a number Performance Metrics to be pinvestigated in a new AMI Pilot. Some metrics were already studied in myPower.
PSE&G’s Two-Step ApproachStep One - Technology Evaluation
Technical evaluation of the strengths and weaknesses of several AMI technologiesDetermine the technology best suited for PSE&G’s service territoryStart in September 2008 for one-year. In municipalities of Wayne, Paterson and Totowa deploy 15,000 meter points.
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Beyond myPowerBeyond myPowery yy yPSE&G’s Two-Step Approach
Step Two – Convene an educational stakeholder forum to address the societal, operational and financial aspects of deploying AMI in the PSE&G service territory.
AMI is the gateway necessary to proceed with future “Smart Grid” and demand response programs which will be needed to achieveand demand response programs which will be needed to achieve the EMP goal to reduce electric demand by 5700 MW by 2020.Educational stakeholder forum will allow interested parties to help PSE&G and the BPU refine the strategic and policy goals throughPSE&G and the BPU refine the strategic and policy goals through consideration of participant inputs.PSE&G will submit a final stakeholder report to the BPU for its information and consideration in the BPU’s evaluation of an appropriate AMI strategy for PSE&G and its customers.
PSE&G will seek BPU approval prior to deploying AMI or Smart Grid Technology Statewide
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By 2020, 20% of energy supply will f blcome from renewable sources
Two year pilot program limited to 30 MWPSE&G will provide about $105 million in securedPSE&G will provide about $105 million in secured loans to qualified borrowersPSE&G provides 40-60% of the total capitalBorrower can pay back in SRECs with secured SRECBorrower can pay back in SRECs with secured SREC pricingCall option price is 75% of the then current market value of SRECs if loan is prepaidPSE&G earns rate of return on loanSince mid-April, received applications totaling 45% of available non-residential solar capacity (24 MW)Program was opened up to residential applications in July (6 MW)
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Currently evaluating ways to expand this program beyond 30 MW
SummarySummaryyyGrowing the utility while providing a societal benefit
Creation of new “green” sources of energyP i l f j b hPotential for green job growthDeveloping additional initiatives
Providing universal access to customersProviding universal access to customersCommitment to customers; serving under-served markets
Deploying patient capital for investmentsEnergy efficiency, peak demand reduction and renewablesSeeking regulated returns
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