1. Can DER Defer Traditional Distribution Capital Investments?
January 31, 2017
Dan Zaweski - PSEG LONG ISLAND
Sunil Pancholi - LOCKHEED MARTIN ENERGY

2. Contents Innovative Efforts in Support of NY REV
Preliminary Analysis for NWA Projects
Project Plans for Selected NWA project
NWA Decision Framework
Innovative Load Relief – a Super Saver Project
Can DER defer capital investments?

3. Innovative Efforts in Support of NY REV
Promotion of distributed resources, improving system efficiency, identifying opportunities for the deferral of capital investment, and enhancing customer choice and supporting a market for clean energy investments
South Fork project RFP
Western Nassau RFP
Dynamic Load Management Tariffs
Renewable RFP
Advanced Metering Rollout to Major Customers
Combined Heat and Power incentives
Geothermal Heat Pump incentives
Thermal Storage incentives
Non Wire Alternatives

4. Preliminary Listing of NWA Opportunities (2015)
Projects
Total Load MW
Relief Required MW
% Load Relief Required
T&D Required Date
Project 1
241
7-10
4.1%
Summer
Project 2
175
6-11
6.3%
Project 3
119
6.1
5.1%
Summer 2017
Project 4
100
6-12
12.0%
Project 5
106 26
25.0%
Project 6
200 63
32.0%
Project 7 25
0.6
0.15%
In 2015, System Planning and EERE reviewed several projects for NWA feasibility
Project 6 and Project 7 were eventually removed from consideration due to equipment reconfiguration, in-service date and environmental condition reasons.

5. NWA Request for Information
RFI issued in 2015 that requested proposed DER solutions and indicative pricing
Included pertinent customer information, load profiles, and load reduction needs information provided
All feasible DER technologies requested
Key considerations for evaluation:
Cost effectiveness
Timeliness
Reliability of the technology and solutions
Functionality
42 responses: Provided a higher confidence regarding technologies potential for load reductions and projected costs
3 major cost categories of solutions:
 Technology Groupings
Relative Costs 
 Demand Load Control/DR $
Multiple Technologies (Renewables, CHP, Thermal $$
Energy Storage (Battery)
 $$$

6. Portfolio Approach: Example of Analyses Conducted for NWA Projects – Project 1
Totals
2017
2018
2019
2020
Projected DLC savings from HVAC Residential customers
2.7 MW
1.0 MW
1.7 MW
Projected DLC savings from non-HVAC Residential customers
0.8 MW
0.5 MW
0.3 MW
Projected DLC savings from customers with pool pumps
1.9 MW
0.9 MW
Large C&I customer load reduction potential
2.6 MW
0.6 MW
Small/Medium C&I customer load reduction potential
2.0 MW
Load reduction required for Battery installations
Not Required
Total required load reductions
10.0 MW
3.0 MW
4.0 MW
1.5 MW
Projected costs
$10.0M
Key Conclusions, based upon analyses of all 5 projects:
Knowledge of local customers load profiles and existing EE/DR work
DLC/DR opportunities limited based upon customer loads
Renewables and Storage can be scaled up based upon project needs

7. Analysis and Recommendations for Selected NWA Projects
All $ are in Thousands
Discount rate 5.5%
Project 1
Project 2
Project 3
Project 4
Project 5
Load Relief Required (MW)
10.0 MW
11.0 MW
6.1 MW
12.0 MW
26.0 MW
Years of Deferment 4 1
% of Load Relief Required
4.1%
6.3%
5.1%
12.0%
25.0%
NPV Analysis
NPV Analysis (Benefits – Costs)
$ (1,808)
$ (10,738)
$ (4,902)
$ (12,743)
$ (37,991)
SENSITIVITY PROJECTIONS
Impact on NPV: If 10% reduction in load relief project costs $
$ ,714 $
$ ,911
$ ,362
Impact on NPV: If 10% increase in capacity savings price $ $ $ $
$ ,198
Impact on NPV: If asset life is 15 years (rather than 10 years)
$ ,542
$ ,661 $
$ ,950
$ ,973
Impact on NPV: If 10% lower MW requirements $
$ ,147 $
$ ,435
$ ,278
RECOMMENDATON (GO/NO-GO)
Issue RFP for Projects 1 and 2
Project 3 looked favorable, but not considered for NWA project due to additional issues such as reliability of existing equipment and in-service date requirements
Project 4 while interesting was removed from consideration due to decision time constraints which could have resulted in loss of load reliability conditions
Approve T&D Capital projects for Projects 3, 4 and 5

8. NWA Project Decision Framework
Load Relief – Alternative to T&D Project
Ideal
Possible
Not Recommended
Load relief required as a % of total load
<5% Expect DLC
<5% Feeders
5-20% Group of substations
>10% Feeders
>20% Group of substations
Load relief requirement timeline
>3 years
2-3 years
Less than 2 years
Exposure to load left unserved No
Yes
Capital project costs
>$10M typically
$2M-$10M typically
<$2M
Load relief required for substation group, substation or feeder levels
Wider-load area or substation group
A few substations in a group; Non-specific at feeder levels
Multiple specific feeders and substations
Residential customer loads as a % of total load
<40%
40-60%
>60%
Load relief required (hrs. per event)
<3 hrs.
3-8 hrs.
>8 hrs.
Number of DR/DLC events per year 4
8-12
>12
The decision making framework establishes a collaborative process for PSEG Long Island decision makers to determine if an alternative load relief is feasible
While each capital project will contain some/many decision criteria that may look favorable (or unfavorable), this guideline provides a decision making tool to ensure key aspects of the project(s) are considered

9. NWA Project Plans – NWA Project 2
Project 1 was most favorable
However, revised T&D Planning load projections, performed in mid 2016, eliminated the need for capital as well as load relief projects
Request for load relief alternatives proposal (RFP) is in final stages
Load relief requirement modified from 11 MW to 8.5 MW, which improved the cost-benefit
RFP will include both BTM (behind-the-meter) and IFM (in-front-of-the-meter) projects to allow for changes in technologies and costs, which may have come about since RFI
We will look for guaranteed load relief solutions
We anticipate awarding multiple unique solutions and multiple vendors
Tentative RFP Timeline:
RFP Issuance – 1Q 2017
RFP Response due date – early 2Q 2017
Contract Awards – 3Q 2017
Project Delivery – Commence by early 2018

10. Proposed New Initiative – Super Saver Project
Pilot unique comprehensive solution for a selected load constrained distribution on transmission capital project for 2020/2021 need
Incorporate select load management tools and techniques such as:
Offer to install AMI (Smart Meters) for all customers fed by the selected substation(s)
Perform Energy Audit at no cost for residential customers
Offer Smart thermostat to customers who have Central A/C (“CAC”) and will enroll in the DLM tariff
Establish analytical capabilities to utilize the smart meters’ data and develop programs/methods to deliver cost-beneficial load reductions
Offer TOU pricing to empower customer decision-making regarding energy usage and timing of the use (targeted for 2018 implementation)
Review suitability of load reduction technologies such as thermal storage and CHP, and develop target offerings
Deployment of these tools will improve the system-wide efficiency
Monitor progress to maintain reliability with a traditional approach, if necessary.

11. Can DER defer capital investments?
Selection of NWA projects
Development of NWA project selection framework
Buy in and participation by key internal organizations
Screening potential NWA project early, allows more time for analysis
RFI or recent RFPs improve the accuracy of the costs and technology potential
DER technology alternatives and costs
DER technology alternatives and maturity are expanding
DER costs are becoming more competitive
Trend is going to continue and can accelerate
Critical to integrate DER portfolio
Utilities have many diverse projects and technologies in consideration and implementation
The resource utilization can improve with an integrated DER plan
Take Aways
Not every project suitable for analysis
Initial Projects will set stage for acceptance – reliability still primary concern
If successful, will likely require changes in certain operating protocols
Portfolio solutions will bring command and control questions into play