Locational Net Benefit Analysis Working Group January 11, 2017 Webinar 1pm-3pm drpwg.org

Purpose To continue discussion on the use of LNBA within the context of the planning use case, and provide a demonstration of the LNBA tool

ICA and LNBA Working Group Background ICA and LNBA WG Purpose - Pursuant to the May 2, 2016, Assigned Commissioner’s Ruling (ACR) in DRP proceeding (R.14-08-013), the Joint Utilities are required to convene the ICA and LNBA WG to: Refine ICA and LNBA Methodologies and Requirements Authorize Demonstration Project A and Project B CPUC Energy Division role Oversight to ensure balance and achievement of State objective (ensure adequate stakeholder representation in consensus statements, keeping WG activities on track with Commission expectations/needs, demonstration project results review, quality control on deliverables) Coordination with both related CPUC activities and activities in other agencies (IDER CSF WG, CEC and CAISO interagency matters, interconnection/Rule 21/SIWG, other proceedings that may impact or be impacted by locational value calculation such as AB 350/IRP and LTPP/TPP/RPS) Steward WG agreements into CPUC decisions when necessary More Than Smart role Engaged by Joint Utilities to facilitate both the ICA & LBNA working groups. This leverages the previous work of MTS facilitating stakeholder discussions on ICA and LBNA topics.

Updated LNBA timeline Wednesday, 1/11: LNBA webinar (1pm-3pm) Friday, 1/13: First round of comments, questions, and recommendations due Thursday, 1/19: First draft of LNBA report circulated Friday, 1/20: Joint ICA/LNBA meeting to review and form recommendations At meeting: decide whether to request report extension past 1/31 If no extension, tentative schedule: Tuesday, 1/24: Second draft of LNBA report circulated Friday, 1/27: Final round of comments due Monday, 1/30: Report finalized Tuesday, 1/31: Report submitted

DRP LNBA Demonstration (Demo B) Q&A on Applications in Distribution Planning and Tool Demonstration January 11, 2017

Agenda Distribution Planning and LNBA/Demo B Review LNBA Use Case Discussion Overview of IOUs’ Proposed Distribution Infrastructure Deferral Framework (DIDF) and Prioritization Process Other Learnings from Demo B related to Distribution Planning LNBA Tool Demonstration

LNBA Use Cases Refresher Heat Map of Potential Optimal Locations Public/Indicative Generic OR DER Specific No DER Costs Included Visual heat map to inform DER providers and stakeholder of locations where DERs may be most valuable. Prioritization for DER Deferral Opportunities Confidential/Commercial DER Costs May Be Included Use LNBA to identify & prioritize locations for deploying DERs (results may be shared with DPAG non-market-participants) Future? Demo B May not include all the same components and inputs as public LNBA LNBA uses outputs of the distribution planning process, but is not part of that process. July 26, 2016 LNBA WG Meeting

Proposed DIDF Process Deferral Framework and IPE/DDAG Review Planning Activities following application of Deferral Framework Develop Assumptions and Scenarios Distribution Planning Assessment Evaluate Conventional Solutions and determine projects Apply Deferral Criteria Incorporate into Future Demand and DER Forecast Non-deferrable Projects Implement conventional solution Planning Prioriti-zation and selection of projects for RFO Projects not selected: Reassess next planning cycle Planning Activities Potentially Deferrable Projects Selected Projects: Develop contingency plan Implement contingency plan (if necessary) LNBA Project list drives Public LNBA output LNBA Activities Selected Projects: Proceed to RFO Develop requirements Launch RFO Receive bids Least-Cost/ Best Fit Valuation & Selection Procurement Select DER Portfolio to meet needs of potentially deferrable projects Monitor Performance RFO and IE/PRG Cost Recovery Mechanism Cost Recovery for Contingency planning Cost Recovery for Selected Portfolio Seek Cost Recovery December 12, 2016 DRP Workshop

Prioritization Process Process occurs following the identification of DER deferrable candidate projects Process will determine which potentially deferrable projects should be sourced immediately via RFO, and which projects may be sourced in a future year Process will consider both Timing of need, as well as Market/Economic Considerations We envision a “Walk – Jog – Run approach” to sourcing for DER Deferrals (expand scope as knowledge increases) Projects not selected for current RFO will be reassessed through next year’s planning cycle Timing Considerations Higher Priority: Timing of Need is soon (less than 5 years out) with a high certainty of need Lower Priority: Timing of Need is further out (greater than 5 years) and is relatively uncertain Market/Economic Assessment Based on market knowledge gained over time Likely to be a location-specific benefit analysis that includes some components of LNBA with additional confidential information December 12, 2016 DRP Workshop

Other Demo B Learnings Relevant in Distribution Planning Different DER Growth Scenarios do impact LNBA results, not always intuitively Increasing DER growth embedded in forecast can increase or decrease locational T&D benefits of incremental DERs Level of DER growth assumed in distribution planning can impact the magnitude and timing of a deficiency, however, not always intuitively Learnings from Load Reduction Requirements Development New methods to create load reduction requirements for distribution upgrade deferrals in Demo B will be refined/evaluated as DERs are increasingly deployed for this purpose. Load reduction requirements to mitigate voltage issues are large and very locational Relatively low cost of voltage support equipment and large amount of load reduction needed in a very small area results in relatively low benefit Using DERs to reduce load to mitigate voltage issues may not be as successful as using DERs to manage reactive power

LNBA Tool Demonstration Public Version of LNBA Tool and Documentation is available here: https://e3.sharefile.com/d-sb2965cf362c48399

Conclusion http://www.drpwg.org