1. MTS Working Group September 8, 2015

2. 2 Introduction More Than Smart Mission – Enabling state integrated distribution grid efforts 1.Continue the work of CA MTS Working Group - today 2.Push to help other state distribution grid efforts around country 3.Communications & Outreach push for other states to utilize MTS work Areas of Focus Operationalizing distribution grid planning work Funding to be a mix of foundation, membership and state/federal grants Two main MTS forums –MTS Working Group & Regular open webinars Subgroups for quick turn-around as required

3. 3 MTS Working Group Purpose Provide an open, voluntary stakeholder forum to educate and discuss core issues toward identifying potential common ground regarding the evolution of California’s distribution system and the seamless integration of DER to meet customers’ needs and public policy. The discussions will be for the benefit of the participants and may be made public without specific participant attribution

4. 4 More Than Smart Tony Brunello, More Than Smart tbrunello@morethansmart.org tbrunello@morethansmart.org Paul De Martini, MTS/ICF International paul.demartini@icfi.com paul.demartini@icfi.com Laura Manz, MTS/ICF International laura.manz@icfi.com laura.manz@icfi.com Michael Murray, MTS/Mission:Data mmurray@morethansmart.org mmurray@morethansmart.org Deborah Shields, MTS dshields@morethansmart.org dshields@morethansmart.org Annie Howley, MTS ahowley@morethansmart.org ahowley@morethansmart.org MTS meetings, webinars and information exchange are designed solely to provide a forum or means for the expression of various points of view in compliance with antitrust laws. Under no circumstances shall MTS activities be used as a means for competing companies to reach any understanding, expressed or implied, which tends to restrict competition, or in any way, to impair the ability of participating members to exercise independent business judgment regarding matters affecting competition or regulatory positions. Proprietary information shall not be disclosed by any participant during any MTS meeting or its subgroups. In addition, no information of a secret or proprietary nature shall be made available to MTS or its membership. All proprietary information which may nonetheless be publicly disclosed by any participant during any MTS meeting or its subgroups shall be deemed to have been disclosed on a non-confidential basis, without any restrictions on use by anyone, except that no valid copyright or patent right shall be deemed to have been waived by such disclosure

5. 5 Agenda 9:00-9:15am 9:15–10:30am Introductions Presentations (about 15 minutes each) and group discussion to explore various views on integrated distributed planning process 10:30-noon Facilitated discussion to define IDPP and identify key components to frame further evaluation by WG Lunch 12:30-1:30pm 1:30-3:00pm Continuation of IDPP discussion Discussion of DER portfolio scope and overall schedule of activity for working group - scope, timing, subgroups

6. 6 Context: Evolution of DRP Walk Jog Run No. of Benefit Categories & Sophistication of Analysis 2015-1H 20162H 2016-2019 2020+ Visibility & Initial DPA Locational Benefits System-wide DRP including LTPP & TPP locational benefits System-wide DRPs incl. Locational Societal Benefits Discussion framework from Phase 1

7. 7 Integrated Distribution Planning Process - develop a working definition Presentations by MTS Members

8. 8 IDPP Presentations by: Heather Sanders, SCE Ryan Hanley, SolarCity Will Speer, SDG&E Lorenzo Kristov, CAISO Mark Esguerra, PG&E

9. 9 Integrated Statewide Planning Process Alignment L. Kristov, CAISO

10. 10 There are two aspects to the DRP process alignment 1. Optimally align new DRP cycle with the existing structure of IEPR- LTPP-TPP State agencies & legislature are concerned that all procurement & planning processes utilize consistent & up-to-date assumptions IEPR-LTPP-TPP alignment created in 2013-14 achieves this for those processes DRPs & DER adoption projections & impacts will be key elements of assumptions & scenarios for procurement & planning Many DER types reflected in DRPs are load modifiers that need to go into the IEPR demand forecast A needed next step is to map the content & timing of important inputs & outputs between DRPs & the other processes Page 10

11. 11 Second aspect – 2. Distribution investment proposed in DRPs must be input to utility GRCs Required by PU Code Sec 769 Three IOU GRC cycles are three years long & staggered IOUs perform annual internal distribution planning processes to plan each year’s infrastructure build-out, based on their own latest GRC approved funding What is relationship between existing annual planning process and new DRP cycle? How to define the future DRP cycle to address both aspects of the problem? Page 11

12. 12 Process suggestions Inter-agency group to address first aspect Existing inter-agency process alignment group (CPUC-CEC-ISO) describes & maps most important inputs & outputs Engage broad group of CPUC staff working on various CPUC procurement proceedings (LTPP, RPS, EE, DR, Storage, RA) Present inter-agency work to IOUs for comment & revisions MTS Subgroup to address second aspect Develop initial framework Full MTS working group Reviews draft framework presented by subgroups for feedback Page 12

13. 13 Integrated Distribution Planning Process (DPP) - develop an end-to-end framework

14. 14 DPP/DRP timing considerations Relationship with interconnection processes (Rule 21, SGIP) Enhancements to improving methodologies/assumptions of analyses Data Access & Transparency - which data needs to be shared? Coordination Topics Page 14 Integrated Distribution Planning Process (DPP)

15. 15 Enhancements to improving methodologies/assumptions of analyses Integrated Capacity Analysis Additional locational value components and enhancements to methods Scenario enhancements (incl. DER forecasting) And any enhancements Page 15 Integrated Distribution Planning Process (DPP)

16. 16 Data Access & Transparency - which data needs to be shared? Hosting Capacity refinements? Locational Value Planned Expenditures (capital and OpEx) Data Access (incl. mechanisms for sharing i.e. RAM maps, etc.) Page 16 Integrated Distribution Planning Process (DPP)

17. 17 Coordination Topics DRP/IDSR/other proceedings Alignment of DPP with TPP/LTPP/IEPR CAISO coordination whitepaper Page 17 Integrated Distribution Planning Process (DPP)

18. 18 DER Sourcing Structures & Portfolio Management Scoping Discussion

19. 19 Planning driven definition of distribution needs DER Portfolio framework and development considerations DER Sourcing (rates/pricing, programs, procurements) considerations DER portfolio operational “dispatch” consideration (“merit order Page 19 Planning and Sourcing

20. 20 DER Services Portfolio Development & Operations DER Services Development DER Portfolio ManagementDER Portfolio Development For illustration only (Renewable DG, Storage, DR, EE, EV & Power Electronics)

21. 21 DER Services Lifecycle Process Identify grid needs & locational value based on operational & engineering requirements Specific services are identified and various sourcing mechanisms are employed Sourcing results from competitive market are assessed against need and any gaps are identified DER deliver value as measured against specific performance metrics DER settlement & performance results feed into next distribution planning cycle Portfolio Development Portfolio Management

22. 22 Nested Locational Portfolios Potentially DR/DER providing value at multiple levels will create nested relationships that will need to be considered Regional Portfolio DLAP Portfolio LMP/LCR Portfolio Distribution Value

23. 23 DER Value Components for Distribution Value ComponentDefinition Distribution Subtransmission, Substation & Feeder Capacity Reduced need for local distribution system upgrades Distribution LossesValue of energy due to losses between wholesale transaction and distribution points of delivery Distribution Power Quality + Reactive Power Improved transient & steady-state voltage, reactive power optimization and harmonics Distribution Reliability + Resiliency+ Security Reduced frequency and duration of individual outages & withstand and quickly recover from large external natural, physical and cyber threats Distribution SafetyImproved public safety and reduced potential for property damage Propose to Define Specific Services & Performance Requirements

24. 24 DER Portfolio Development & Management The identified services needed and the respective sourcing mechanisms employed create locational portfolios Local portfolios can be developed through the use of: Pricing – Rates & Markets Programs – EE & DR Procurements These portfolios also aggregate Bulk Power System values that need to be considered and managed Development of an optimal portfolio including DSM rates and programs with competitively procured DER services should be discussed by the IDSM proceeding From a market development perspective, this could include consideration of the effect of portfolio allocation between the 3 P’s on market development and overall portfolio net benefits effectiveness From a quantitative perspective, this could include identifying the option value, if not explicitly understood and the covariance among the various elements in relation to each other to create an optimal mix

25. 25 Distributed Energy Resource Sourcing Attributes Technical requirements by value component Commercial considerations Control Sourcing Consideration Timing Prioritization Distribution merit order Allocation Interrelationship of Portfolio Categories (EE, DR, DS, DG, EV, etc.) Page 25 Planning and Sourcing Considerations

26. 26 DER Portfolio framework & development considerations Current Customer tariff composition Scenario for change in tariffs LMP Nodal Forecasts (CAISO change to Plexus to be more granular to LMP Nodes) Scenarios linked to ICA DSO described barriers – how to consider Deferral framework Page 26

27. 27 WG Deliverables

28. 28 WG Deliverables Recommendations on an integrated Distribution Planning Process for system-wide implementation by _______. Recommendations to enhance planning scenarios regarding granularity and DER forecasting Recommendations on data sharing and related mechanisms Recommendations on IDPP to CA state-wide planning processes alignment Development of a framework for the intersection of planning and DSR/DER sourcing Development of a framework for “DER alternatives” evaluation and related “merit order ” Page 28

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