1. Grid Modernization Dan Lysaker Senior Grid Modernization Engineer
September 26, 2016

2. Agenda Xcel Energy Overview Grid Modernization Efforts
Battery Projects – Special Focus
Questions
Overview of my presentations, and objectives for each section

3. XCEL Energy Overview Gas Customers 1.9 M Electric Customers 3.5 M
Southwestern Public Service Company
Northern States Power Company Minnesota
Northern States Power Company Wisconsin
Public Service Company of Colorado
Gas Customers M
Electric Customers M
Main message: Who are we?
Vertically integrated generation, transmission, distribution
9th largest US regulated power producer
Regulated operations in 8 Midwestern and Western states (facilities in 10 states)
Provides safe, clean, reliable energy to more than 3.5 million electric and 2.0 million gas customers
Xcel Energy’s fleet includes power plants with a net maximum capacity of over 18,000 MW, more than 19,500 miles of transmission lines, and approximately 1,200 transmission and distribution

4. Emerging Opportunities
Grid Modernization/
Battery Storage
Technical and Policy Solutions
Renewable Energy Integration
Smart Technologies
to support customer choice
For Xcel Energy, we see many emerging opportunities on the distribution and customer facing side of our business.

5. Trends in the Energy Industry
Changing Economics
Growing Customer Expectations
Changing Policy Landscape
Why we’re doing it? What’s driving these changes for us?
The changing landscape presents challenges & opportunities
Economics – With the changing market- drop in renewable energy costs - it increasingly makes business sense
Customer expectations - Customers want more energy efficiency and clean energy options
Policies- Renewable energy standards and goals, divergent state interests, federal energy policy as more of a driver
Regulatory framework – Changes to our regulatory framework to fit with a changing utility business model and policy landscape
NY REV – 50% by 2030 renewable
HA – 100% by 2045
Hawaii recently announced legislation to be 100% renewable by A major driver for this is that electricity in HA costs around 35 cents a KWh.
CA – 50% by 2030 renewable
Wind, solar, bio, geothermal
Xcel is not interested in the commission shaking our world too much
New regulatory framework

6. Wind Resources Wind speed is key to development location
US Wind Electricity Net Generation
Wind subsidies expired several years ago
Wind is primarily installed as a transmission asset in large scales, but we do have many DG wind systems and continue to receive applications for them. Even with the subsidies expired now for wind, the installations continue (due to low cost)

7. Global Solar Energy Growth
Residential solar still isn’t cost competitive to the price of energy in our service territories, but in many places it is becoming close – where
Subisidies dropping at the end of 2016

8. Challenges and Opportunities of Renewable Energy Integration
Variability of resources
Capacity accreditation
Integration costs
Transmission capacity limits
Distribution system impacts
Frequency response
System balancing
Emissions reduction
Reduced fuel costs
Price stabilization
Economic development
Energy storage potential
Grid modernization
How do you bring the distribution system impacts into a larger plan that hasn’t normally had to consider those

9. Elements of our Resource Plan
Retirement of Sherco Unit 2 (2023) and Sherco Unit 1 (2026)
-1,362 MW Coal
Addition of 800 MW of wind by 2020 and 1,000 MW of wind between 2020 and 2030
+1,800 MW Wind
Addition of 400 MW of solar by 2020 and 1,000 MW solar between 2020 and 2030
+1,400 MW Large Solar
New 786 MW natural gas combined cycle unit at Sherco by 2026
+786 MW Combined Cycle
New 230 MW of natural gas combustion turbine by 2025
+230 MW Combustion Turbine
Maintain 1,100 MW Prairie Island Units 1 and 2 and 671 MW Monticello
Maintain Nuclear

10. Grid Modernization Policy and Projects

11. Regulatory Process – Standard Rate Case
Initial Filing
Incoming Comments
Reply Comments
Briefing Papers
Commission Hearing
Commission Order
Implementation
Compliance Filing
A filing we are required to make in order to request authority to take some sort of action. Includes rate cases, new program proposals, Resource Plans, etc.
Other parties comment on our initial filing, usually approximately 30 days after our filing.
We respond and receive other parties’ comments, usually 10 days after incoming comments.
Issued by Commission staff summarizing the filing and parties’ comments, as well as staff’s analysis and sometimes a recommendation for the Commission.
Commission meets to discuss the request. Parties available to comment and answer questions. Commissioners deliberate and take a vote.
I was asked to touch a bit on the regulatory process, so at a high level, here is some of the steps we must take before we can really implement a large-scale project. As a publically regulated utility, it is important that this process be followed and well-vetted
This is one element of the regulatory process (one example of the process)
After a decision at the hearing, the Commission issues a formal order memorializing the decision. This can be days or weeks after the hearing.
Once the proposal has formal Commission approval, it can be implemented.
Some Commission orders trigger the need for a compliance filing, updating a tariff, or filing schedules or additional information.

12. Emerging Technologies – New Opportunities
Advanced Distribution Management System
Community Solar Gardens
Battery Storage - Pilot Projects
Electric Vehicle Charging Rate
Smart Thermostat Pilot
Over the past several years, the emergence of new electric technologies across multiple sectors has really change customer perception and awareness of their energy usage and impacts. We’ve been implementing several new technologies and are partnering with 3rd parties for even more

13. Core Grid Modernization Projects

14. Current State Of The Grid
Visibility primarily at the feeder level
Some Distribution Automation
For system reliability
Power Factor control system
For system efficiency
WHAT’S COMING?
Enhanced visibility to the meter
Robust distribution automation
Centrally managed voltage control system
More ways to manage energy usage

15. Traditional Energy Management
Demand Response
Interruptible loads
Saver’s Switch (Air Conditioner Control)
On-site generation
At Other Utilities:
Peak pricing
Voltage control

16. Advanced Distribution Management System (ADMS)
What it is
Real-time network modeling
Enhanced visibility and control
Platform that enables high-value apps
Benefits
Enhanced reliability
Improved voltage control
Enables more distributed resources
Our plan is for the base ADMS system to be running for NSP summer, It will take us, however, a couple years to improve our data for all the feeders.
SCADA –
Xcel has Scada at 6 of 14 subs (43%) but covers 96% of ND customers
Subs without include Berthold, Hatton, Larimore, Mill Road, Reynolds, South, and Thompson
Apps include:
Power Flow
Operator Simulations
Check before Operate
Forecasting (load and weather integration)
The base upon which we can build other applications.
Utilities across the nation are implementing, or in some state of preparation – planning, budgeting or specifying. The time is right for Xcel Energy.
AGIS for ND PIE

17. Fault Location, Isolation and Service Restoration (FLISR)
What it is:
Automated circuit switching
Reduces outage durations
Identifies faults, isolates and auto-restores
Fault Location application calculates location of problems
Benefits
Enhanced reliability
Improved customer experience
Improved employee safety
Automated switching can work where we have interconnected feeders, as we do in Fargo, Grand Forks, and Minot.
Our Fault Location application will be helpful in the remainder.
(Feeders in Fargo – 21, Grand Forks – 20, Minot - 11)
Average cost is $175k/feeder.
AGIS for ND PIE

18. Integrated Volt-VAr Optimization (IVVO)
What it is:
Better voltage control throughout the system
Energy efficiency & peak shaving capabilities
Powered by the ADMS software
Enables higher penetration of Distributed Generation such as Solar Panels
Benefits
Voltage control for better power quality
Environmental stewardship
Renewables integration
Define VAr
Voltage control will help us reduce energy by 1) reducing losses and 2) enable the possibility of reducing voltage without risking low voltage.
Such control can help us integrate more renewables, which can otherwise cause significant voltage swings.
We have 107 capacitors operating in the metro areas.
Timeframe – 2020 and on (at rate of FAN)
AGIS for ND PIE

19. Advanced Metering Infrastructure (AMI)
What it is:
Powerful metering capability
Accessible via two-way communication
Provides more granular insight into use
Enables more products and services
Reliability and power quality insights
Benefits
Outage/restoration awareness
Improved customer experience
Awareness of energy use
Improved products and services
Rates
Improved usage portals
Demand Response
Products and services
Rates – more refined, better pricing signals
AGIS for ND PIE

20. Field Area Network (FAN)
What it is:
High Speed Communications Network
Ties it all together
Standards-based, seeking interoperability
Secure
Benefits
Provides visibility and control path
Enabler of field applications
To be built
AGIS for ND PIE

21. Battery Storage
“(Batteries will) fundamentally change the way the world uses energy” – Elon Musk

22. Why do we need storage?
Source: Meetmaslow.com

23. Source: Energyclub.stanford.edu

24. Energy Storage Projects - Overview
Planned pilots
Belle Plaine, MN
Capital deferment at substation
Panasonic, Denver, CO
Stapleton, CO
Status
Belle Plaine on hold
Panasonic – 2017 in-service
Stapleton – 2017 in-service
Benefits
Renewables penetration
Improved products and services

25. Main Operations for Battery Projects
Voltage Regulation
System Peak Demand Reduction
Energy Arbitrage
Compare and contrast utility-sited and Behind the Meter applications
Viewed as an enabler for more distributed generation

26. MN Belle Plaine Project
Grid deferral project
i.e. Using solar and batteries rather than upgrading other infrastructure
2 MW, 6 MWH
1.0 MW Solar Generation
Proposed October 2015
Commission feedback:
Need more details

27. Panasonic Microgrid Project
Partnership with Panasonic Enterprise Solution & City of Denver
1 MW/2 MWh Li-Ion Younicos Bulk Energy Storage System(BESS)
1.3 MW Carport PV & 250 kW rooftop
Distribution feeder approaching ~20% PV penetration

28. Panasonic - Main Operations
Microgrid Mode
Voltage Regulation
System Peak Demand Reduction
Solar Ramp Rate Control
Energy Arbitrage
Frequency Response
Performing multiple functions with the battery is key to making these systems more cost effective.
Battery storage system will be testing multiple operations.
TEST

29. Stapleton Project Located in Stapleton neighborhood in Denver, Colo.
6 utility-sited batteries
6 customer sited/behind-the-meter batteries
Utility-owned
2015: ~18.5% PV (solar panels) penetration

30. Questions?

32. AMI Advanced Metering Infrastructure (AMI) Benefits
Two-way communication
Interval data
Utilize for power quality improvements
Enables more products and services
Rates
Improved usage portals
Demand Response
Benefits
Improved products and services
Renewables integration
Improved customer experience
TEST

33. FLISR Fault Location, Isolation and Service Restoration
Identifies faults / isolates and auto-restores
Logic is within ADMS
Will integrate existing systems
Reduces outage durations and time to locate faults
Fault Location Application also enabled
Benefits
Enhanced reliability
Improved customer experience
Improved employee safety
TEST

34. IVVO Integrated Volt-VAr optimization (IVVO) Benefits
Enables voltage control for energy efficiency & peak shaving
Requires Capacitors, SCADA, LTC Control, ADMS, sensors (AMI is best)
Also enables higher penetration of DER
Benefits
Environmental stewardship
Renewables integration
Voltage control will help us reduce energy by 1) reducing losses and 2) enable the possibility of reducing voltage without risking low voltage.
Such control can help us integrate more renewables, which can otherwise cause significant voltage swings.
TEST

35. Community Partnerships
Minneapolis Clean Energy Partnership
Rice Creek Commons Solar Project

36. Energy Vision: 2016-2030 Upper Midwest Resource Plan
What we’re doing? How does it help advance renewable energy production in Minnesota and beyond?
Resource Plan proposal: Closing 2 units at Sherco in the next 10 years, adding over 4,000 MW of renewable energy in the next 15 years, huge shift to renewable energy while maintaining diversity in our portfolio and reliability on our system, reducing carbon emissions by 60% by 2030
Our Upper Midwest energy mix will be 63% carbon free by 2030, and 35% renewable energy, reduces coal reliance by more than half (38% to 15%)

37. Regulatory Initiatives
Xcel Energy’s mission is to provide our customers with the safe, clean, and reliable energy services they want and value at a competitive price. To accomplish this mission, we need to maintain, expand, and modernize our infrastructure.
In order to make these investments in infrastructure, we need approval of cost recovery through rates or riders. We can recover costs through riders or rate cases. Riders recover costs for major projects that need regulatory review prior to moving such projects into base rates through a rate case.
Major infrastructure regulatory filings include:
Transmission Cost Recovery Rider (TCR) – For building transmission facilities on the NSP System
South Dakota Infrastructure Rider – For generation and transmission capital projects
Renewable Energy Standard Rider (RES) – For building company-owned wind projects
Gas Utility Infrastructure Costs Rider (GUIC) –For natural gas pipeline improvements
Renewable Development Fund Rider (RDF) – For grant awards to organizations for innovative renewable energy projects in Minnesota
Renewable Energy Rider (RER) – For the company’s eligible renewable energy projects

38. Customers Jobs Corporate Giving Upper Midwest System
500,000 natural gas
1.4 million electric
Jobs
Employees 5,000
Contractors 3,700
Corporate Giving
$6.5 million
Main message: Who are we?
Vertically integrated generation, transmission, distribution
Regulated operations in 5 Midwestern
Provides safe, clean, reliable energy to more than 1.8 million electric and gas customers (0.5 million gas customers)
NSP’s fleet includes power plants with a net maximum capacity of over 8,300 MW, more than 5,300 miles of transmission lines, and approximately 350 transmission and distribution substations.
Headquartered in Minneapolis, approximately 2,700 employees here

39. A Leader in Conservation
ACCOMPLISHMENTS
No. 1 wind provider in America
Building Solar Capacity
A Leader in Conservation
All at a Competitive Price
A Leader in Transmission
Strong Reliability
Storm Response
30%
Carbon Reduction
A Leader in Emission Reductions

40. Projected Carbon Reduction from 2005 Levels