1. Locational Net Benefit Analysis Working Group
January 6, 2017
In-person meeting
drpwg.org

2. Agenda Time Topic 1:00 – 1:15 1:15 – 2:00 2:00 – 3:00 3:00 – 4:00 4:00
Introduction, Overview of January Calendar, Purpose of WG Report
1:15 – 2:00
B. IOU presentations on final demo results
2:00 – 3:00
Q&A session with IOUs and WG members on results
3:00 – 4:00
D. WG recommendations and report drafting process
4:00
E. Next Steps and Conclusion

3. ICA and LNBA Working Group Background
ICA and LNBA WG Purpose - Pursuant to the May 2, 2016, Assigned Commissioner’s Ruling (ACR) in DRP proceeding (R ), the Joint Utilities are required to convene the ICA and LNBA WG to:
Refine ICA and LNBA Methodologies and Requirements
Authorize Demonstration Project A and Project B
CPUC Energy Division role
Oversight to ensure balance and achievement of State objective (ensure adequate stakeholder representation in consensus statements, keeping WG activities on track with Commission expectations/needs, demonstration project results review, quality control on deliverables)
Coordination with both related CPUC activities and activities in other agencies (IDER CSF WG, CEC and CAISO interagency matters, interconnection/Rule 21/SIWG, other proceedings that may impact or be impacted by locational value calculation such as AB 350/IRP and LTPP/TPP/RPS)
Steward WG agreements into CPUC decisions when necessary
More Than Smart role
Engaged by Joint Utilities to facilitate both the ICA & LBNA working groups. This leverages the previous work of MTS facilitating stakeholder discussions on ICA and LBNA topics.

4. CPUC Decision Points for ICA/LNBA Working Group
Short-Term Final Reports
ICA/LNBA Working Group
January 6, 2017
Oakland, CA

5. Proposed Decision on Demo A&B will need to address:
Compliance with May 2, 2016 ACR (and February 6, 2015 Guidance Document)
ICA/LNBA Use Cases
WG-recommended methodological adjustments needed to achieve Use Cases
Based on prescribed Demo methodologies and Short- Term refinements
Implementation requirements/schedule

6. Consensus Process Proposal for Discussion
For each topic, the WG will characterize its recommendation as:
1. General or majority consensus (by a show of hands or absence of objecting voices)
2. Non-consensus, with alternative proposals
For non-consensus positions, MTS will identify the number of parties and list party’s attribution and proposed alternative in the report
A comment period after the final report is filed is considered for parties to submit final comments.
MTS will work with WG members to develop text for the report. For certain sections, the WG may assign a chair and co-chair lead to coordinate development of text.
For the first draft, MTS will use the recording and notes from the 1/6 meeting and any submitted written comments by 1/10*.
*see next slide

7. Update on Timelines Date Short Term Long Term Jan. 6 In-person meeting
Determine schedule for discussions up to Q2 2017
Begin LT refinement discussions
Jan. 11
First draft circulated
Jan. 17
First round of edits due
Jan
Second draft circulated
Jan. 20
Webinar
Jan. 27
Second and final round of edits due
Jan. 31
Report submitted
For consideration: Extend first round of writing to Jan. 12/13?
* Targeted internal deadline

8. DRP Demo B Final Report Highlights January 6, 2017

9. Safety Awareness of your surroundings “Duck and Cover”
First Aid and CPR Certified
Contact 911
Guide Emergency Responders
Exit Routes and Evacuation Procedures

10. Agenda
Demo B Background
Demo B Highlights
LNBA After Demo B

11. Demo B Requirements per 5/2/2016 ACR (amended)
Select 1 or 2 Distribution Planning Areas (DPAs)
Must have at least one thermal capacity and one “other” deferral opportunity (voltage, power quality, reliability, or resiliency)
Must have one near term deferral and one longer-term opportunity
Identify ALL projects in DPA by location in planning horizon, regardless of deferrability
Upgrade, reliability and maintenance projects
Describe electrical parameters of need, equipment lists
Include opportunities from smart inverters, CVR, VVO
Do this under two DER growth forecast scenarios
IOU’s base planning forecast
DRP Very High forecast
To the extent DER can provide a distribution service otherwise provided by a project, calculate LNBAs and deferral requirements
Present two scenarios of LNBA results and DER forecasts in a heatmap along with ICA results
Make inputs and tools public to the extent possible
Engage WG in monthly meetings and coordinate with IDER

12. LNBA as defined for Demo B in 5/2 ACR
LNBA for Demo B:
Focus is on T&D deferral opportunity
LNBA combines T&D with many other components
DER cost is not one of the components (would be determined through a sourcing process)
Each component can be positive or negative
Components over multiple years are expressed as a net present value
DERAC = E3 DER Avoided Cost model

13. Demo B Highlights Select 1 or 2 Distribution Planning Areas (DPAs)
PG&E used Chico and Chowchilla Planning Areas
SC&E used Rector Planning Area
SDG&E used Northeast District
Identify ALL projects in DPA by location in planning horizon, regardless of deferrability
Projects providing the following services are considered deferrable:
Distribution Capacity
Voltage Support
Reliability (Back-Tie)
Resiliency (Microgrid)
In addition, we have many projects not considered deferrable under the following categories:
Reliability (non-back tie)
Compliance / Maintenance Tasks
Do this under two DER growth forecast scenarios
Using latest versions of load forecasting tools that enables scenario analysis with different “DER Adjustment Portfolios”
IOU’s base planning forecast
DRP Very High forecast – Very High/Scenario 3 from 2015 DRP
Certain DER types were excluded from distribution planning DER Scenarios for Demo B
Report includes high-level description of load and DER forecasting process

14. Demo B Highlights
To the extent DER can provide a distribution service otherwise provided by a project, calculate LNBAs and deferral requirements
Financial inputs based on public or confidential information
Load reduction requirements developed in consultation with Distribution Engineers
Present two scenarios of LNBA results and DER forecasts in a heat map along with ICA results
Joint utilities’ heat map specifications
Common color schemes – 4 levels, based on three year deferral benefit per kW
DER forecasts all presented in MW coincident with local peak, not installed MW
Only location with distribution deferral show up on heat map (since the other LNBA components don’t vary within a DPA, everywhere else is the same)
Clicking on a deferral opportunity will lead to a downloadable dataset with
Overload description, wires solution description and associated services, public cost of wires solution
Hourly load reduction requirements
Benchmark deferral value (three-year deferral value per kW of required load reduction - $/kW)

15. Demo B Highlights Make inputs and tools public to the extent possible
Joint IOUs hired E3 to develop joint IOU Demo B LNBA tool;
Final version is complete and available for download
Tool is technology agnostic – user puts in any hourly DER profile
Tool uses hourly DER profile input to calculate:
System-level avoided costs (e.g. energy and generation capacity) per ACR
Distribution benefit per ACR
Verifies that DER profile achieves hourly DER load reduction requirement
Uses wires project cost and financial inputs to calculate deferral value
Engage WG in monthly meetings and coordinate with IDER
Adopted T&D Services Definitions from IDER Competitive Solicitation Framework WG Final Report (Distribution Capacity, Voltage Support, Reliability-Back Tie, Resiliency-microgrid)
Worked with WG to recommend DER growth Scenario 1 be the planning scenario
Worked with WG to develop heatmap specifications

16. Demo B Long-Term Refinements - 1
There is a long list of long-term refinements, including the four below – need a process to prioritize for June LNBA WG Report after Q1 LNBA Decision.
Transmission and Sub-transmission
The LNBA tool can calculate a Tx deferral in the same way it does for Distribution
Requires financial inputs, including project cost, as well as hourly load reduction requirement
Per ACR, supposed to use CAISO Transmission Plan; however the plan lacks
Specific projects that would be deferred by DERs
Cost of those projects
Requirements to defer those projects
Tool has a generic system-level Tx avoided cost input defaulted to zero, per the default in the NEM Public Tool (consistent with the ACR “Plan B”)
Deferring upgrades on network systems may require DERs at multiple locations
Current tools don’t enable iterative, system-wide load flow analyses required to determine DER requirements

17. Demo B Long-Term Refinements - 2
Uncertainty in Planning has impact on LNBA
All 3 IOUs observed changes in planned projects due to forecast updates
How to capture uncertainty in planned projects and in places without a current project but with some probability of requiring an emergent upgrade
Smart Inverter, CVR and VVO
These functions rely upon lots of other things happening and require more detailed analysis to evaluate potential, requirements and benefits
HOWEVER, since the tool is technology agnostic, these can be incorporated into the DER profile tool input
LNBA modeling Enhancements
Refine LNBA tool to address situations where one project mitigates overloads at multiple locations
“Need” profiles may or may not be “additive”.
Improve relationships between profiles and locations

18. Recommendations WG Final Report should focus on Demo A and B Reports
IOUs should have flexibility to choose DER sensitivities to evaluate, if any
Sub-transmission should be addressed as a long-term refinement along with transmission
LNBA should include only deferrable projects. The Deferral Screens should be applied so that deferral value calculations are performed for relevant projects only
Further expansion of LNBA tool should be discussed after the Deferral Screens are approved in Track 3 of the DRP OIR

19. Appendix

20. Helpful Acronyms and Definitions
DRP = Distribution Resources Plan
Name for a 2015 filing & CPUC proceeding (R )
DER = Distributed Energy Resource
AB 327 defines as distribution-connected EE, ES, DR, EV, DG
IDER = Integrated Distributed Energy Resources
CPUC Proceeding (R ) Formerly IDSR/IDSM
LNBA = Locational Net Benefit Analysis
Method to identify optimal locations from a benefit perspective
ICA = Integration Capacity Analysis
Method to identify optimal locations from a hosting capacity perspective

21. AB 327 added Public Utilities Code Section 769
769. (a) For purposes of this section, “distributed resources” means distributed renewable generation resources, energy efficiency, energy storage, electric vehicles, and demand response technologies.
(b) Not later than July 1, 2015, each electrical corporation shall submit to the commission a distribution resources plan proposal to identify optimal locations for the deployment of distributed resources. Each proposal shall do all of the following:
(1) Evaluate locational benefits and costs of distributed resources located on the distribution system. This evaluation shall be based on reductions or increases in local generation capacity needs, avoided or increased investments in distribution infrastructure, safety benefits, reliability benefits, and any other savings the distributed resources provides to the electric grid or costs to ratepayers of the electrical corporation.
(2) Propose or identify standard tariffs, contracts, or other mechanisms for the deployment of cost-effective distributed resources that satisfy distribution planning objectives.
(3) Propose cost-effective methods of effectively coordinating existing commission-approved programs, incentives, and tariffs to maximize the locational benefits and minimize the incremental costs of distributed resources.
(4) Identify any additional utility spending necessary to integrate cost-effective distributed resources into distribution planning consistent with the goal of yielding net benefits to ratepayers.
(5) Identify barriers to the deployment of distributed resources, including, but not limited to, safety standards related to technology or operation of the distribution circuit in a manner that ensures reliable service.
(c) The commission shall review each distribution resources plan proposal submitted by an electrical corporation and approve, or modify and approve, a distribution resources plan for the corporation. The commission may modify any plan as appropriate to minimize overall system costs and maximize ratepayer benefit from investments in distributed resources
(d) Any electrical corporation spending on distribution infrastructure necessary to accomplish the distribution resources plan shall be proposed and considered as part of the next general rate case for the corporation. The commission may approve proposed spending if it concludes that ratepayers would realize net benefits and the associated costs are just and reasonable. The commission may also adopt criteria, benchmarks, and accountability mechanisms to evaluate the success of any investment authorized pursuant to a distribution resources plan.

22. How do DERs Defer T&D Projects and Avoid Cost?
Need-based (tied to deferral or elimination of a specific T&D project)
DERs push an investment into the future, which reduces cost to ratepayers.

23. WG Report Recommendations: Proposed Outline
Executive Summary
Key Takeaways:
Use cases
Methodology
Implementation schedule and requirements
Use Cases
Methodology Recommendations
Evaluation of Results
LNBA Implementation Requirements and Time Frame (timing/frequency of updates)
Others?
Use cases: what improvements needed to achieve these use cases? Make recommendation on by Q or further long-term issue?
Proposed method by IOUs sufficient?
Methodology for ICA translator tool sufficient (For portfolios)