1. JU Stakeholder Engagement Conference
September 23, 2016
DER Sourcing
&
Granular Pricing

2. Agenda for September 23th
Time
Topic
01:30 – 01:40 EDT
Introductions & Stakeholder Engagement Process Overview
Dale Murdock (ICF)
01:40 – 02:15 EDT
DER Sourcing & Q/A*
Co-led by Greg Elcock (Con Edison), Stacey Hughes (National Grid) and Erika Diamond (EnergyHub)
02:15 – 02:50 EDT
Granular Pricing & Q/A*
Co-led by John Borchert (Central Hudson) and Mike DeSocio (NYISO)
02:50 – 03:00 EDT
Summary & Wrap-up

3. Joint Utilities Filed DSIP Stakeholder Engagement Plan
The Final DSIP Guidance envisions the Initial DSIPs and the jointly filed Supplemental DSIP as coordinated vehicles by which “improved future planning and operations will be defined and implemented.”
The Joint Utilities’ filed a plan for stakeholder engagement on May 2 that is “following a coordinated pathway that addresses both the Initial DSIP and Supplemental DSIP, as well as ongoing engagement.”
For the Initial DSIPs, each utility convened at least one workshop to engage stakeholders in the context of its specific Initial DSIP filing, and held an informational forum on February 29 focused on system planning.
For the Supplemental DSIP, the Joint Utilities have developed and implemented a multi- tiered approach to stakeholder engagement that allows detailed discussion on technical topics within the timeline for the development of the Supplemental DSIP filing on Nov. 1,
It is anticipated that the stakeholder Advisory Group will continue to meet on an ongoing basis in support of future DSIP filings…membership will be reviewed on an annual basis and potentially rotated to ensure representation across the breadth of stakeholders.
The Joint Utilities have retained ICF International to lead stakeholder engagement efforts. ICF brings experience advising prior working groups in NY and facilitating the related stakeholder working groups underway in California.

4. DSIP Stakeholder Engagement Objectives
The DSIP stakeholder engagement process is intended to:
Promote utility/stakeholder relations and provide for greater transparency with respect to utility operations and planning
Allow for adequate vetting of DSIP topics
Utilities/stakeholders expected to collaborate to determine the types, level, amount and format of data and information to be provided.
Stakeholder engagement will continue into the future, beyond the first round of utility DSIP filings.
Process for stakeholder comment on the DSIP filings will be set forth pursuant to public notice

5. Supplemental DSIP Engagement Structure
The Advisory Group, an ongoing group, comprised of approximately 15 organizations representative of the breadth of stakeholders that are a party to the proceeding created to guide the engagement process.
Includes Commission staff, DER providers, public utilities, and organizations representing large customers, residential and small commercial customers, wholesale market and retailers and environmental advocates.
Engagement Groups now through early September are intended to foster shared understanding on the technical details and strive toward common ground through discussion and feedback. The Groups are organized around the topic categories included in the Final DSIP Guidance.
Engagement groups are open to participation by all stakeholders through in- person and virtual meetings
Engagement Conferences in July, August and September open to participation by all stakeholders for the JU to share updates on the various topics in development for the SDSIP and to solicit feedback from stakeholders.

6. Engagement Process Overview
Stakeholder Engagement Schedule
Jan 2016
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
2017
DSIP Final Guidance
Initial DSIP Filings
Supplemental DSIP Filing
Advisory Group Mtgs
Initial DSIP
Stakeholder Engagement*
Supplemental DSIP
Engagement Groups
Distribution Planning**
Grid Operations
Market Operations
Stakeholder
Conferences***
*Initial DSIP engagements dates based on individual JU workshop schedule during this period. **ITWG beginning in March, EG begins in May.
*** Stakeholder engagement conferences to engage a wider set of participants to inform technical discussions and share Engagement Group results, as needed and in consultation with the Advisory Group
Source: Updated plan for stakeholder engagement process as reflected in May 5th DSIP filing

7. Conference/Webinar Discussions and Inputs on SDSIP topics
Topic Areas
Distribution System
Planning
Grid Operations
Market Operations
Interconnection
Hosting
Capacity
System Data
Monitoring &
Control
Granular
Pricing
Customer Data
Demand
Forecasting
NWA
Suitability
Cyber
Security
ISO/DSP Roles, Responsibilities, Interaction
DER Sourcing
- Procurement
Electric Vehicle Supply Equipment
Topics
DER Forecasting
Load Flow
Analysis
Discussed in 7/27 Conference/Webinar
Probabilistic
Planning
Discussed in 8/18 Conference/Webinar
Discussed in 9/15 Conference/Webinar
Discussed in 9/23 Conference/Webinar
DPS discussion topic

8. Market Operations Engagement Group DER Sourcing Greg Elcock – ConEdison Stacey Hughes – National Grid Erika Diamond - EnergyHub Dale Murdock - ICF

9. DER Sourcing Topic Description
DER Sourcing: market actions taken by the utility to increase the amount of installed DER on its system. This may be done to address specific system deficiencies (i.e. Non- Wires Alternatives), and/or to secure the environmental or other attributes of DERs. The chief mechanisms for DER Sourcing are Pricing (e.g. Net Energy Metering tariffs, TOU pricing), Programs (e.g. distribution-level Demand Response tariffs) and Procurement (e.g. bilateral contracts, RFPs/RFIs/RFOs).

10. Market Operations Charter – DER Sourcing
Purpose: Explore the Joint Utilities' approaches for facilitating market mechanisms that effectively support and encourage the adoption of Distributed Energy Resources while meeting customers’ needs and complying with the DSIP Guidance Order.
Topic & Scope: Distributed Energy Resources (DER) Sourcing
DER Sourcing
DER Sourcing - Describe and discuss dependencies with other REV and REV-related proceedings
Share existing NWA plans and challenges/lessons learned
Discuss potential refinement of the NWA Procurement approaches to improve efficiency and effectiveness and the potential for common implementation by the Joint Utilities

11. Discussion Themes – DER Sourcing
Stakeholders commented that the NWA procurement process should be as streamlined and transparent as possible. Comments included:
Recent NWA procurement RFPs contained detailed demographic information that was very helpful from a developer perspective
Solicitation, evaluation, selection and deployment process should be streamlined with the goal of being able to run multiple procurements and shorten timelines when possible
The JU should provide a single “portal” where NWA opportunities would be posted, in addition to the existing practice of using the individual utility websites
Sometimes RFIs require developers to disclose too much sensitive information
The rules for DER participation in multiple programs (e.g. wholesale and distribution-level demand response) should be clarified, since some DERs may require multiple revenue streams to be financially viable
The JU should explore standardized commercial & operational performance standards

12. Discussion Themes – DER Sourcing
Stakeholders supported the JU's proposed refinements to the NWA procurement process, and offered numerous additional suggestions:
System Data elements
Customer size
HVAC penetration
Existing DER penetration
Map of zip code(s) in need area
Pre-qualification - stakeholders supported the proposed pre-qualification approach, noting that it was successful in Con Edison's recent BQDM auction for DR products
Stakeholders commented that NYC has a list of pre-qualified contractors, updated annually on a rolling basis
Stakeholders inquired about the envisioned feedback mechanism for addressing poor performance by a pre-qualified vendor

13. Discussion Themes – DER Sourcing
Stakeholders supported the JU's proposed refinements to the NWA procurement process, and offered numerous additional suggestions:
Performance characteristics:
Resource's emission profile and ability to be fueled by its stated fuel
Performance penalty structure
Triggers for when the resource would be called; M&V baseline
Requirements for integrating with DERMS and other communications protocols
Other useful information for DER developers
Identification of relevant planned utility marketing campaigns in need area
Bid evaluation methodology
Information on how often resources may have been called in the past
Expected deployment timeline of the NWA solution sought (in addition to the duration deferral)

14. Discussion Themes – DER Sourcing
NWA Opportunity – Traditional Solution Cost Transparency
Stakeholders requested that the utility include the cost of the “traditional solution” in the NWA opportunity solicitation:
The traditional solution cost establishes the “price to beat” for respondents
The JU commented that providing the solution cost could influence respondents’ bids, and that perhaps an auction approach would provide a more competitive outcome
Stakeholders stated that respondents would be competing with each other for the opportunity, thus competition would drive the bid to a competitive market result
The JU appreciates this suggestion and will take it under consideration

15. Discussion Themes – DER Sourcing
NWA Non-Distribution System Benefits
Some stakeholders commented that non-system benefits such as air quality, economic development and LMI should be considered in the NWA DER procurement evaluation process; if not as primary evaluation criteria, then perhaps as potential “tie-breaker” evaluation factors
The JU commented that the BCA Handbook establishes the methodology and requires respondents to submit their total costs in order to be considered
Other evaluation factors may be considered but would need to be incorporated into the BCA handbook following the applicable update/revision processes
The JU appreciates this point of view but believes this issue is outside the scope of the DER NWA Procurement engagement charter and would be addressed in other proceedings (i.e. BCA Handbook)

16. Discussion Themes – DER Sourcing
Other DER Sourcing Mechanisms
Some Stakeholders stated that an open enrollment tariff mechanism could be used to incent DER development over a long period, to the benefit of both DER developers and utilities
Allows developers to deploy DER projects that might not have otherwise deployed
Allows utilities to operate the DER based on the utility need/ requirements prescribed by the tariff
Bilateral contracts could provide flexibility for developers to offer and the utility to procure non-standard products and services without having to wait for "open windows“ or provide a solution for a specific location
Stakeholders commented that the utilities might consider expanding NWA opportunities to include low-to-medium need projects and take advantage of existing DER assets in the field
The JU appreciates these viewpoints and will take these suggestions under consideration. The JU notes that sourcing mechanisms and processes other than NWA procurement (i.e. Programs and Pricing) are outside the scope of the DER Procurement Engagement Group Charter and are largely dependent on outcomes of other current proceedings

17. Discussion Themes – DER Sourcing
NWA Procurement Contract Time Horizons
Stakeholders expressed a need for considering longer-term (i.e year) NWA contracts
Support for vendor to finance technologies (e.g. storage) that are not usually cost- competitive within the shorter time horizons currently used in utility procurements
Stakeholders stated that initial NWA needs and suitability seemed to focus more on near-term issues (i.e. short term deferral) versus longer-term solutions (i.e. anticipated growth, need to adopt DER to address longer term goals like 50/2030, replacement of existing assets v. deferral). Stakeholders expressed a concern that utilities should consider a portfolio approach of near-term and longer-term procurement contracts
Stakeholders also noted that applying commonplace risk management practices from other industries (i.e. a staggered maturity strategy) could make long-term contracts more viable from the utility's perspective
Stakeholders requested more granularity regarding the expected trajectory and pace of long-term market development
The Joint Utilities will provide additional details in the SDSIP filing, and will use demonstration projects as ongoing learning opportunities with which to refine these details

18. Discussion Themes – DER Sourcing
NWA Suitability
Several Stakeholders had questions about and expressed interest in gaining more insight into the utilities’ evolving process for identification and solicitation of NWA opportunities. Stakeholders expressed concern about:
NWA suitability criteria for cost floors, project type (i.e. load relief, reliability, resiliency, etc.), project size, applicable technology, etc. may be too prescriptive and restrict opportunities for NWA solutions. Stakeholders were interested in more visibility into the identification and decision processes associated with developing the NWA opportunity
Identifying all NWA opportunities, unconstrained by deferral size or cost assumptions, and letting the market respond with proposals that the utility can evaluate and use to build a portfolio of solutions that best meets the need
Minimum size constraints that may preclude small yet scalable NWA solutions, which could ultimately prove cost-effective to the utility and the supplier if the solution is replicable
The JU noted that some of these issues are being addressed within the Distribution System Planning working group by the NWA Suitability team.

19. Stakeholder Presentations on DER Sourcing
SolarCity
Advanced Microgrid Solutions
EnergyHub

20. Q&A - Discussion

21. Market Operations Engagement Group Granular Pricing Mike DeSocio – NYISO John Borchert – Central Hudson Dale Murdock - ICF

22. Market Operations Advisory Group Topics
Purpose: Explore the Joint Utilities' approaches for facilitating market mechanisms that effectively support and encourage the adoption of Distributed Energy Resources while meeting customers’ needs and complying with the DSIP Guidance Order.
Topic & Scope: Granular Pricing
Granular Pricing
Discuss NYISO initiative for revealing subzonal LMPs
Background
Explore stakeholders' views on:
What locational naming convention might be provided to easily identify the price point?
Ways to make pricing data accessible and available
Discuss price variability expectations
Explore and discuss timing of current initiative and criteria and considerations for moving forward
Paul – variation for process with more detail – will create new version

23. Joint Utilities - Market Operations Stakeholder Engagement Group
Granular Pricing
Joint Utilities - Market Operations Stakeholder Engagement Group

24. Background
The NYISO and its stakeholders prioritized the Wholesale Market Alignment with the NY PSC REV Proceeding project in 2016
This project will develop concepts for aligning the NYISO’s markets with the REV initiatives, including more granular pricing.
The NYISO anticipates participating in REV development activities, advancing wholesale market design concepts, and supporting applicable pilot projects.
Pilot projects will involve collaboration with DSPs and other external organizations to develop a potential future structure of market participation for distributed energy resources and prepare for the integration of those resources into the NYISO market.
This presentation provides some background on the NYISO’s efforts towards more granular pricing

25. Pricing
Today, the NYISO develops day-ahead (hourly) and real-time (5-minute) location based marginal prices (LBMP) for each supplier location and each load zone

26. LBMP
LBMP is based on the cost of providing (or not consuming) the next MW of load
LBMP has three components
Marginal Cost of Energy
Calculated at a reference location (Marcy Substation)
Marginal Cost of Congestion
Due to dispatching more expensive suppliers to prevent overloading transmission lines
Marginal Cost of Losses
Due to losses on the transmission system where some energy is lost in transportation

27. Zonal Load Weighted Price
Developing the Zonal Load Weighted Price
Zonal LBMP is $54, which is the sum of all weighted Load Bus LBMPs
Load Bus LBMP ($90) is weighted by using the Bus Load (10MW) and dividing it by the Zonal Load (1000MW)
Bus to Zone Weighting Example $90*(10/1000) = $0.90

28. Granular Pricing Providing additional transparency
There has been much interest throughout the REV discussions on having the NYISO provide additional location granularity for its LBMPs
Before July 2016, the NYISO will provide a subset of load bus prices
The NYISO will do this initially by creating simulated generators within the model so that RTD, RTC, and SCUC will calculate that bus price
These prices will be available within the Generator LBMP postings on the NYISO’s OASIS web pages.

29. Granular Pricing Additional Locations added before July 2016
The list of initial locations
Names subject to change
DUNWOODS_138KV_38W08_REV_LBMP
E179THST_138KV_TB4_REV_LBMP
E.WALDEN_115KV_TR_1_REV_LBMP
EASTVIEW_138KV_38W32_REV_LBMP
FORGEBRK_115KV_TR1_2_REV_LBMP
FARRAGUT_138KV_32071_REV_LBMP
VINEGAR_115KV_917_CH_LD_REV_LBMP
GREENWD_138KV_38B11_REV_LBMP
ELM_ST_23KV_LD_REV_LBMP
MILLWOOD_138KV_38W41_REV_LBMP
PACKARD_115KV_ADAMS_187_REV_LBMP
MOTTHAVN_138KV_9M4_REV_LBMP
N.HEMPST_138KV_BK345_REV_LBMP
PARKCHTR_138KV_TB2S_REV_LBMP
WHAVSTOR_138KV_BK127_REV_LBMP
W49TH_ST_138KV_38M43_REV_LBMP

30. Granular Pricing: Current Status
Joint Utilities, NYISO and ICF met with stakeholders on June 28 at NYISO
NYISO now calculates sub-zonal LMPs at 35 locations, on both Day-Ahead and Real- Time bases. These have been published to the NYISO website since late June
NYISO aims to expand to 22 more locations by the end of the year
Next steps:
NYISO through its Budget Priorities Working Group will discuss a budget and timeline for developing the remaining ~500 buses with its stakeholder group

31. Discussion Themes – Granular Pricing
Stakeholders inquired how the locations were chosen
NYISO asked each of the Joint Utilities for a sample set of points. The utilities generally selected areas on the high and low levels of the transmission interface, and areas where growth or other changing system conditions give the greatest potential for price divergence
Stakeholders inquired whether the project is still in the pilot phase
NYISO is evaluating next steps, as the project will require analysis of cost estimates and proposed delivery methods to reach scale.

32. Q&A - Discussion

33. Wrap-up

34. JU Website & Contact Information
Please fill out the short survey following the presentation if you have additional questions or comments regarding the material presented or on the engagement process overall
Visit the Joint Utilities of New York website to learn more about the JU stakeholder engagement effort:
Presentation material from Engagement Group Meetings
Presentation material, Q&A summaries and recordings of Engagement Conferences
Potential opportunities for involvement
us at for additional information or with questions and concerns
Please refer any interested colleagues to jointutilitiesofny.org for more information

35. Draft for Discussion Purposes Only
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Please contact or
visit our website for more information
Draft for Discussion Purposes Only