Load Shift Working Group DECEMBER 12, 2018 10AM – 3:00PM PST CPUC GOLDEN GATE ROOM https://gridworks.org/initiatives/load-shift-working-group/

Purpose of Today’s Meeting Reflect comments received on the November 30 draft of the Final Report Iron out needed clarifications Decide how to resolve key questions for the purposes of the report Identify next steps in finalizing the report https://gridworks.org/initiatives/load-shift-working-group/

https://gridworks.org/initiatives/load-shift-working-group/ Agenda 10:00AM – 10:15 AM: Intros & Updates 10:15 AM – 12:15 PM: Final Report Discussion 12:15 PM – 1:15 PM: Lunch 1:15 – 2:30 PM: Final Report Discussion (Continued) 2:30 – 3:00 PM:  Next Steps https://gridworks.org/initiatives/load-shift-working-group/

Comment’s Received From CAISO SCE Evolve SDG&E ECCO International Stem LBNL Ohmconnect Thank you! PG&E https://gridworks.org/initiatives/load-shift-working-group/

https://gridworks.org/initiatives/load-shift-working-group/ Comment Summary Organization of the Report Link pop-out boxes issues to recommendation section Requests for Additions and Clarification (Gridworks’ To Do list) Add to explanation of what Grid Needs could Load Shift address and how the proposals compare; raise profile of benefits beyond avoided curtailment, including distribution services Clarify Sunrun proposal summaries by relating them to LSR 2.0 and P4LS, tighter explanation https://gridworks.org/initiatives/load-shift-working-group/

https://gridworks.org/initiatives/load-shift-working-group/ Comment Summary Requests for Additions and Clarification (cont’d) Requests to add explicit response to Commission direction on a GHG metric for storage https://gridworks.org/initiatives/load-shift-working-group/

https://gridworks.org/initiatives/load-shift-working-group/ Comment Summary Stakeholder-to-Stakeholder Questions SCE to Peter: Is there an overlap in the potential Load Shift benefits cited and that gained through implementation of TOU rates? If so, how should we discuss the overlap? STEM on LSR 2.0: “Assuming no netting of the retail bill, there’s no scenario where bidding positive for increasing load is economically reasonable. Especially using the NBT as a threshold. The NBT makes no logical sense in this direction unless you’re talking negative numbers.” CAISO agrees. https://gridworks.org/initiatives/load-shift-working-group/

https://gridworks.org/initiatives/load-shift-working-group/ Comment Summary Stakeholder-to-Stakeholder Questions SCE on CCP: “assume the customer selects their available duration(event hours) and quantity(MW, kW) up-front as part of signing up for this program – is that correct, can it be clarified?” CAISO on LSR 2.0: On hourly block bidding: “the CAISO determined this was not technically feasible under the current PDR-LSR model and therefore it would not be possible under LSR 2.0.” https://gridworks.org/initiatives/load-shift-working-group/

https://gridworks.org/initiatives/load-shift-working-group/ Comment Summary Stakeholder-to-Stakeholder Questions CAISO on CCP, MIDAS, and Sunrun Market Integrated : CCP – The functions and constraints needed to integrate CCP into the market would be opposite of the type of resources the future of the grid needs (transition to flexible and dynamic resources). MIDAS – Should remain as market informed because the principle design of the proposal is similar to a load modifying product. Sunrun market Integrated - Mentions the similarity of a PDR-LSR but through a DSO. The CAISO believes that this proposal can’t be considered market integrated unless “market integration” is defined as a distribution market and the wholesale market. https://gridworks.org/initiatives/load-shift-working-group/

Final Report Discussion Overview of Key Issues Raised by Feedback: Energy Neutrality GHG Emission Impacts Why Out-of-Market Proposals are Important Need for Incentives Beyond Energy Payments Cost-Benefit Performance Evaluation Objective: ensuring the report reflects the views of the group on the issue, not resolving the issue. https://gridworks.org/initiatives/load-shift-working-group/

https://gridworks.org/initiatives/load-shift-working-group/ Comment Summary Energy Neutrality Concern raised: Does the Commission worry about non-productive energy use? https://gridworks.org/initiatives/load-shift-working-group/

https://gridworks.org/initiatives/load-shift-working-group/ Comment Summary Energy Neutrality What the report says: “Load Shift may include both “take” and “shed” and the two may be asymmetric. A requirement that any take be offset by an equal shed (an arrangement referred to as “energy neutral”) is technologically impractical, not representative of grid needs, and potentially misaligned with market efficiency.” https://gridworks.org/initiatives/load-shift-working-group/

https://gridworks.org/initiatives/load-shift-working-group/ Comment Summary Energy Neutrality What the report did not say, but should: Retail rate impacts discourage take during positive wholesale market price events. Take events during positive price events adds to customer costs, making such behavior highly unlikely. It doesn’t seem necessary to prohibit such behavior. Take events may be matched by shed events. https://gridworks.org/initiatives/load-shift-working-group/

https://gridworks.org/initiatives/load-shift-working-group/ Comment Summary GHG Emission Impacts Concerns raised: “Most of the proposed products had significant potential for increasing load during times of non-zero emissions. Whenever such increase happens, the questions remains whether a subsequent “shed” will reduce more emissions than was increased during the “take”. This question should be answered before any load shift product is implemented at scale outside of a pilot program.” https://gridworks.org/initiatives/load-shift-working-group/

https://gridworks.org/initiatives/load-shift-working-group/ Comment Summary GHG Emission Impacts What the report says: “The emissions impacts were evaluated on two criteria. First, if the proposal was market integrated and/or resulted in incremental consumption during periods of negative pricing, that proposal would not require additional emissions metrics due to the strong correlation between negative prices and GHG emissions in CAISO markets. Second, If the proposal was not market integrated or was reasonably expected to result in consumption during periods of positive prices, that proposal would need to identify its proposed emission metric for further consideration by the Commission.” https://gridworks.org/initiatives/load-shift-working-group/

https://gridworks.org/initiatives/load-shift-working-group/ Comment Summary GHG Emission Impacts What the report says, based on Alstone analysis: · Broadly, Load Shift stands to significantly reduce GHG emission by reducing renewable curtailment. · Were Load Shift mature in 2017, approximately 50% of the operational curtailment may have been avoided by a shift of 1% of retail load. · Both market integrated and market informed Load Shift can be impactful. The market integrated approach results in a more direct positive impact on curtailment; while the market informed approach has the advantage of also providing greater peak load reduction and energy market cost savings. https://gridworks.org/initiatives/load-shift-working-group/

https://gridworks.org/initiatives/load-shift-working-group/ Comment Summary Concern raised: Why are out-of-market proposals important? https://gridworks.org/initiatives/load-shift-working-group/

https://gridworks.org/initiatives/load-shift-working-group/ Comment Summary Why Are Out-of-Market Proposals Importants? What the report says, “Proponents of the Market Informed approaches cited the cost and complexity of market participation as a primary hindrance. (These challenges are well documented[1] and not repeated here). Some of the hindrances to market integration may be manageable for some customers but may be slowing the spread of demand response to a greater number of participants.” https://gridworks.org/initiatives/load-shift-working-group/

Does out of market dispatch impact the market? Comment Summary Why Are Out-of-Market Proposals Importants? What the report says, Does out of market dispatch impact the market? Any change in customer consumption will impact market conditions, eventually and to some degree. But how much? It depends on: 1) the magnitude of the change – is it enough to rise above noise in load data? 2) the consistency of the change – is it predictable enough for a forecast to anticipate the change? 3) the Load Serving Entities implementation – does the LSE effectively represent the change as it bids load in CAISO markets? If all three of these boxes get checked, market informed resources can impact market conditions. The alternative is participation in PDR or LSR 2.0 as a supply-side resource. https://gridworks.org/initiatives/load-shift-working-group/

https://gridworks.org/initiatives/load-shift-working-group/ Comment Summary Need for Incentives Beyond Energy Payments Concern raised, “The Load Shift as a resource needs to receive capacity credits to financially become a viable resource in the market. Absent a capacity payment, derived from a process or an organized capacity market, makes this resource financially unsustainable.” Here capacity payment could be replaced with participation payment or other incentive. https://gridworks.org/initiatives/load-shift-working-group/

https://gridworks.org/initiatives/load-shift-working-group/ Comment Summary Need for Incentives Beyond Energy Payments What the report says, “Compensation for other value streams. The Working Group discussed the notion that an energy payment alone may not incent load shift. While the Working Group has discussed that another payment may be necessary, it did not identify where that value would come from. No active proceeding at the CPUC or initiative at CAISO is addressing this consideration.” https://gridworks.org/initiatives/load-shift-working-group/

https://gridworks.org/initiatives/load-shift-working-group/ Comment Summary Cost-Benefit Concern raised: Could we frame cost-benefit broadly? Can we have a first-order swipe at cost-benefit? https://gridworks.org/initiatives/load-shift-working-group/

https://gridworks.org/initiatives/load-shift-working-group/ Comment Summary Cost-Benefit What the report says, Report identifies potential costs to ratepayers at a high-level Report refers to LBNL analysis that used CPUC costs-effectiveness tests estimating potential for cost-effective load shift Acknowledges that implementation costs may vary and warrant further consideration in the design of each product. https://gridworks.org/initiatives/load-shift-working-group/

https://gridworks.org/initiatives/load-shift-working-group/ Comment Summary Performance Evaluation Concern raised: “Need to demonstrate and substantiate with certainty how approved FERC baselines work for LSR 2.0. LSWG should consider formal evaluation of approved baselines and their application to LSR 2.0. Just saying these work is not good enough and not sufficient for ISO to settle this product through its Tariff. Would need to pass FERC as justifiable and reasonable.” https://gridworks.org/initiatives/load-shift-working-group/

https://gridworks.org/initiatives/load-shift-working-group/ Comment Summary Performance Evaluation What the report says, “LSR 2.0 could be evaluated using all FERC approved baseline calculations measures previously developed under the CAISO’s ESDER 2 process.” “For any DR that uses a baseline (not just for load increase), baselines will need to be evaluated and potentially updated in light of more frequent dispatch, device participation, bi-directional operation, and export.” https://gridworks.org/initiatives/load-shift-working-group/

https://gridworks.org/initiatives/load-shift-working-group/ Next Steps LSWG Wrap-up Survey How far we’ve come... Final Report Timeline https://gridworks.org/initiatives/load-shift-working-group/

https://gridworks.org/initiatives/load-shift-working-group/ How far we’ve come... Number of in person sessions: 11 Number of Homework/Subgroup meetings: 11 Average number of participants/meeting: 28 Total number of participants: 423 Number of Participating Organizations: 71 Total person hours together: ~1850 Thank you! We are grateful for the chance to undertake this work together. https://gridworks.org/initiatives/load-shift-working-group/

https://gridworks.org/initiatives/load-shift-working-group/ How Did We Do? Please complete this survey on the Load Shift Working Group process by January 7. Survey Link: https://goo.gl/forms/bFm1iZDndPevm7FR2 https://gridworks.org/initiatives/load-shift-working-group/

https://gridworks.org/initiatives/load-shift-working-group/ Date Milestone Topics   Notes Dec. 14 Report Draft V2 to WG   Gridwork to WG Friday, Dec. 21 Stakeholder Submissions WG comments due on report draft V2 Deadline for stakeholders to provide written feedback on report V2 draft Monday, Dec. 31 Final report to working group Gridwork to WG Redline + clean draft for transparency Jan, 2019 Admin time for design and submit report Next Steps https://gridworks.org/initiatives/load-shift-working-group/