1. Sacramento Municipal Utility District
Lupe Jimenez
Manager, Energy Storage
May 4, 2017

2. Sacramento Municipal Utility District Overview
Sacramento County in Northern California
900 Square Miles
2nd largest muni in California, 6th largest in the US
Not-for-Profit Municipal Electric Utility
Governed by a Board of Seven Directors
2000 Employees
$1.46B Budget
625,000 Accounts (1.46M Population)
550,000 Residential Accounts
75,000 Commercial Accounts
Load Serving Capability
SMUD-owned generation provides over 1800 MW of generating capacity
Hydro - 11 reservoirs and 9 power plants Thermal - 5 plants and the gas pipeline Renewable - wind and utility-grade solar
Generate enough power to serve ~65% of annual load
Summer-peaking load is ~3300 MW (air conditioning)
Sacramento residents voted in 1923 to form their own community-run electric utility.
The investor-owned utility fought the voters’ wishes in the courts for more than 20 years before the California Supreme Court ruled in SMUD’s favor. SMUD began providing electric service in 1946.
We’re now the nation’s sixth-largest public electric utility, serving a population of nearly 1.5 million.
SMUD’s service territory encompasses 900 square miles in Northern California.
SMUD’s budget in 2014 was $1.46 billion.
SMUD is governed by a seven-member Board of Directors that determines policy and appoints the CEO/General Manager, who is responsible for SMUD’s daily operations.
SMUD PURPOSE STATEMENT (Policy # SD-1A)
SMUD's purpose is to provide solutions for meeting our customers' electrical energy needs.
PURPOSE STATEMENT (Policy # SD-1A)
SMUD's purpose is to provide solutions for meeting our customers' electrical energy needs

3. Preparing for the Future
From Centralized To Distributed Energy Future
Yesterday
Centralized Power
Tomorrow
Distributed, Clean, Local
These drivers of industry transformation are moving us from a centralized, one way power system to a dynamic two way power system.
Today’s power systems are designed to support large generation plants that serve customers by transmitting energy on a transmission and distribution system that is essentially one-way.
However, the grid of the future will necessarily be a two-way system where power is generated by many small, distributed sources. Energy will flow in both directions on a network rather than a hierarchical structure. Moving utilities to consider models in which energy can flow from utility to customer, customer to customer or customer back to the utility.
Note: The CPUC has proposed three business models for electric utilities in the future. The first is the utility as a platform – where the utility is not the provider of energy but enables market transactions between third parties. The second is the utility as a platform in which the utility can also participate in the market providing energy services. The third is the utility as only a wires and poles company – in which the utility's role is limited to designing and maintaining the grid and another entity would operate the grid.
By 2030, the utility business as we know it will likely be substantially different in terms of the utility business model or compact we have with customers, as well as how the utility system is planned and operated.
One-Way Power Flow
Utility Customer
Multidirectional Power Flow
Utility Customer Customer

4. The Changing Landscape
Drivers Of Industry Transformation
New Markets and Third Party Entrants
Legislative mandates and concerns over climate change are changing utility landscape
DR: Aggregation is creating new markets. CAISO piloting DR Auction Mechanism relying on 3rd Party Aggregators for capacity.
Policies to allow third parties to provide grid services. CA AB 327 requires utilities to post distribution system planning maps for capacity bidding.
Regulation and Disruptive Technologies
Solar: Increased push for sustainability. SB 350 requires 50% renewable power by 2030.
Storage: Scaling & becoming cost-effective . Three largest IOUs mandated by CPUC to procure 1325 MW of storage by 2020.
EV: Policies are driving transportation electrification to reduce CO2 emissions. CA Executive Order to reach 1.5M EVs by 2025.
EE: Sharp increase in goals. Double efficiency to 2% in CA by 2030.
Climate Change: SMUD goal 90% OF 1990 levels by 2050, CA goal 80% by 2050
Customer Expectations
So what things are driving these changes in the electric utility industry?
Legislative mandates and concern over climate change will significantly reshape utilities’ resource portfolios, change business practices and grid operations
These changes are driven by:
Regulation and Disruptive Technologies
Solar adoption is on the rise and will continue to do so in light of increased renewables goals.
Storage is becoming cost-effective due to battery cost declines and subsidies.
Policies are driving the electrification of the Transportation sector to reduce CO2 emissions.
Energy Efficiency mandates are increasing – in California there are requirements to double energy efficiency goals by 2030
Climate Change to concerns continues to gain attention and requirements directly impact utility operations.
New Markets and third party entrants are emerging
Aggregation of demand response is creating new markets. Aggregators have the ability to bid services directly into the market
Policies that allow and encourage third parties to provide grid services. CA Assembly Bill 327 required that electric utilities to post distribution system planning maps so that third parties can bid services into capacity constrained areas.
Customer Expectations are changing
We are seeing an increase in environmentally conscious customer
Customers want choices – they want choices and options for increased control over their energy use and to control costs
PG&E's target for the 2017 DRAM is 10MW of capacity.
PJM is bidding in frequency regulation.
Environmentally Conscious Customers
Customer Choice for increased control and cost management.
Smart grid technology advancements changing the customer relationship.

5. Privileged and Confidential Draft. For Internal Purposes Only.
Market and Economics
Technological
Social
Grid innovation
Customer behavior and demographics
Distributed energy resources
Global and regional economy
Smart home technologies
Increasing expectations for customer choice for control and cost management
Fuel prices
Enabling devices, software and tools
Utility business models
New energy markets and third party entrants
Cultural shift toward immediacy of information, response to needs, delivery of options and satisfaction of needs
Customer energy-independence
Environmental
Political
Environmentally conscious customers
Policy
Climate change
GHG emissions
Legislation
Regulation
Codes and standards
The Changing Landscape
Drivers of Industry Transformation
Privileged and Confidential Draft. For Internal Purposes Only.

6. Privileged and Confidential Draft. For Internal Purposes Only.
Technology and Services Excellence
Safe and Reliable Grid Integration
Leadership in Sustainability
Strength in Economics and Markets
Cultivate emerging technologies, advanced applications and innovative services to support smart customer and utility technology adoption to achieve operational excellence in delivery of products and services for our customers.
Enable safe and reliable integration, control, and visibility of distributed energy resources, grid-scale storage, and large-scale renewables into the electric grid and prepare for the migration to a transactive grid.
Further SMUD's environmental and sustainability leadership role in the energy industry by informing strategy to reduce regional GHG emissions, advancing sustainability technology, and directing climate readiness planning.
Prepare for the delivery of progressive customer products and services, the enablement of customer participation in the energy market, and new approaches to SMUD’s participation in energy markets to maintain financial strength.
ER&D Vision
Privileged and Confidential Draft. For Internal Purposes Only.

7. Privileged and Confidential Draft. For Internal Purposes Only.
RESEARCH
PROGRAM AREAS
Distributed Generation
Renewables
Energy Efficiency
Climate Change
Electric Transportation
Grid Modernization
Demand Response
Electrification
Energy Storage
Privileged and Confidential Draft. For Internal Purposes Only.

8. Electric Transportation
Research Areas
Advanced Data Analytics
Multi-family and Workplace Charging
Managing Charging
DC Fast Charging
Grid Integration
EV Infrastructure
Medium- and heavy-duty vehicles
Non-road vehicle applications
Network and communications
Electric Transportation
Privileged and Confidential Draft. For Internal Purposes Only.

9. Distributed Generation
Research Areas
Biomass
Distributed Wind
In-conduit hydro PV
Fuel cells
Analytical tools
Visibility and forecasting
Distributed Generation
Privileged and Confidential Draft. For Internal Purposes Only.

10. Research Areas Energy Efficiency
Electric homes
Electrification of end-uses
Real-time savings verification
Zero Net Energy
Emerging Energy Efficiency Technologies
Energy Efficiency
Privileged and Confidential Draft. For Internal Purposes Only.

11. Research Areas Demand Response
Dynamic Rates
Direct Load Control Devices
Automation
Thermal Energy Storage for DR
Customer-Owned Devices
Behavior Modification
Ancillary and Balance Services
Demand Response
Privileged and Confidential Draft. For Internal Purposes Only.

12. Research Areas Energy Storage
Customer-sited storage
Utility-sited storage
Distribution investment deferral
Shared cost and share-use scenarios
Interoperability and interconnection
Location and temporal valuation
Communication reliability and standards
Visibility and control platforms
Energy Storage
Privileged and Confidential Draft. For Internal Purposes Only.

13. Research Areas Renewables
Biomass
Methanization and GHG clean-up
Hybrid technologies
Low speed wind
Biogas
Renewables
Privileged and Confidential Draft. For Internal Purposes Only.

14. Research Areas Climate Change
Community partnerships
Climate
Forest thinning
Biosequestration
modeling
Corporate and regional action plans
Climate Change
Privileged and Confidential Draft. For Internal Purposes Only.

15. Research Areas Grid Modernization
Smart Inverters
Distribution System Visibility and Automation
DER Optimization
Grid Modernization
Privileged and Confidential Draft. For Internal Purposes Only.

16. Lupe Jimenez Research and Development lupe.jimenez@smud.org