1. Discussion and Preliminary Findings Concerning Voltage Reduction (VR) for Peak Shaving Mark Carpenter Sr. VP T&D Operations December 6, 2012 Presentation to Reliability Operations Subcommittee Austin, TX

2. Voltage Reduction Demand Response (VR) Overview  Historically, the effectiveness of VR in ERCOT has been viewed to provide minimal effectiveness during short supply conditions;  Nationwide, the use of VR is on the increase;  Present residential HVAC loads appear to respond favorably to VR;  Nationally, more effectively harvesting the benefits of VR is improved due to:  Improvements in load tap-changer (LTC) control systems  Ability to inexpensively monitor voltage along the distribution circuit  Ability to flatten the voltage along the distribution feeder 2

3. What others in the utility space are seeing:  Across all circuits, for a 1% drop in voltage, many claim a 0.7 % drop in sustainable demand reduction is obtained;  Typical voltage reductions are limited to 5%;  This results in a demand reduction of 3.5%;  Generally, the reductions on residential loads is greater than industrial loads;  The VAR reduction due to VR is greater than the power reduction;  No adverse customer impact has been noted. 3

4. Residential air-conditioner load appears to respond well at reduced voltage because:  AC motors are typically rated 230 volts ( not 240 volts)  Motors that are not variable speed drive that are not fully loaded run more efficiently at reduced voltage

5. Historic view/usage of VR in ERCOT  Oncor is the only TDSP using VR in ERCOT (EEA2 Reactive Reserve < 1750 MW)  Oncor’s use is limited in scope  Automatic controls only installed on 219 out of 1040 substation transformers that have LTCs  Manual controls via patrolmen can be used on other transformers  Oncor’s use is limited in sophistication  Automatic controls fool LTC controllers by adding selectable 2.5% or 5% boosting transformer in control circuit to “fool” normal LTC controller 5 For EEA Step 2 – >or= 124V …………5% 123.9V to 121V ….. 2.5% <121V …………….. 0%

6. While the Oncor LTC control system is simple, it does not fully harvest the VR potential:  Because the voltage is always lowering at the beginning of the event, as soon as the voltage gets within the bandwidth of the controller, the controls stop lowering the voltage. Therefore, the voltage always ends up being left above the nominal set point, up to 1.49 V above it (assuming the LTC is set with a 3 V bandwidth).  Also, because the trigger event usually occurs as load is increasing, there is a high probability that the voltage will start off in the lower half of the voltage band prior to the voltage reduction event being triggered. 6

7. PUCT Present Voltage Requirements PUCT Substantive Rule 25.51 references ANSI C84.1 voltage requirements Range B necessarily results from the practical design and operating conditions on supply and/or user systems, which are part of practical operations. However, such conditions should be limited in extent, duration and frequency. Corrective measures shall be undertaken within a reasonable time to bring back voltages within Range A limits, in cases of Range B values occurrence. 110 Volts Where Utilities typically operate Where utilities operate during VR events

8. Summer 2012 Testing 8

9. Example Test – Temple North

10. LOAD COMPARISON VR (9/6) VS NO VR (9/5) 10 9/5 (101.8  F) 9/6 (102.5  F) Difference

11. LOAD COMPARISON VR (9/6) VS NO VR (9/5) 11 9/5 (101.8  F) 9/6 (102.5  F) Difference

12. Interpolating Oncor’s test results shows significant peak shaving possibility 12 Category Current Process (5% & 2.5% Reduction)5% Reduction Process Voltage Target Reduction Scheme Effectiveness (% MW Reduction) 1.67%2.95%2.67% Benefits Proven ProcessGreatest VR Benefit Mitigates Low Voltage Risk While More Logically Reducing Voltage Risks Results in Least Load Shed Mitigation Greatest Potential for Low Voltage Issues New Scheme Required - Up-Front Cost and New Procedures Interpolated VR potential (2011 Peak) - MW 328.4580.4525.3 Current VR XFMRs – 13% VR Upgrade Capable XFMRs – 49% No VR Capability XFMRs – 38%Transformers with LTCs or voltage regulators Transformers w/o LTCs or voltage regulators

13. Longer-term varying levels of VR benefit can be obtained depending on the system investment made: 13 VR Baseline Improve LTC Control System Monitor/control with end of feeder voltage Modify feeder to flatten voltage profile $ $ $$$ Amount of improvement not yet defined

14. Given industry experience and these tests result, Oncor recommends that ROS:  Establish a task force to investigate the potential use of voltage reduction to assist with ERCOT’s resource adequacy challenges by:  Reviewing what others are doing in the industry and how they are doing it  Facilitating testing across ERCOT to validate the VR benefit  Determining the applicability of VR in ERCOT

15. QUESTIONS/Discussion?