1. 1 Docket 7081 Transmission Planning Information Workshops Third Workshop September 30, 2005 Shaping Demand-Side Resources To Address Transmission Constraints John Plunkett Optimal Energy, Inc.

2. 2 Shaping Demand-Side Resources To Address Transmission Constraints 1.Determining desired shape of DSM resources to address transmission constraints 2.Shape of reliability solutions needed for Southern Loop 3.Developing and integrating demand-side options into Southern Loop transmission planning

3. 3 1. Determining Desired Shape of DSM Resources Seasonal timing of additional capacity requirements Future timing of capacity requirements Hourly duration of capacity requirements

4. 4 Determining Desired Shape of DSM Resources (Continued) Seasonal timing of additional capacity requirements Summer and/or winter peaking? NRP disregarded all space-heat fuel-switching Southern Loop peak driven by ski area development, so cooling savings irrelevant.

5. 5 Determining Desired Shape of DSM Resources (Continued) Future timing of capacity requirements: DSM savings take time to build momentum and accumulate. A consistent advance planning horizon is needed to effectively integrate DSM into transmission planning (3-10 years).

6. 6 Determining Desired Shape of DSM Resources (Continued) Hourly duration of capacity requirements The longer the hourly duration of constraint, the more kWh per kW of peak reduction needed Efficiency is often superior to load control, curtailment, or shifting because efficiency kWh follow hourly load curve before and after the system reaches peak kW loading

7. 7 2. Reliability needs of the Southern Loop Load growth driven by ski areas and surrounding communities from southwestern to southeastern Vermont Steady load growth due to ski area expansion since 1980s Winter peaking, despite shift to statewide summer peak late 1990s CVPS steadily reduced load growth with DSM programs throughout 1990s Past emphasis has been on space-heating and water-heating fuel- switching from electricity, high-efficiency snowmaking equipment, interruptible contracts Efficiency Vermont continued efficiency investment 2000-present Reliability solutions needed imminently at current loads Over time, reliability needs intensify under continued load growth

8. 8 3. Developing and Integrating Demand-Side Options into Southern Loop Transmission Planning As part of Southern Loop collaborative, CVPS used the DUP scoping tool to assess potential for DSM to defer need for T&D upgrades Preliminary findings indicated that additional DSM –could not defer immediate problems –Could defer need for subsequent T&D investment to meet reliability needs in future

9. 9 Developing and integrating potential demand-side T&D capacity options for the Southern Loop (continued) VELCO and CVPS engaged Optimal to assist in detailed analysis of potential efficiency and renewable options for the Southern Loop Scope of alternatives to be examined includes efficiency, cogeneration, and photovoltaic

10. 10 Developing and integrating potential demand-side T&D capacity options for the Southern Loop (continued) Progress to date: –Updated scoping tool analysis to incorporate changes in available technologies (e.g., super-T8s, T-5s) –More detailed cost-effectiveness analysis using program cost-effectiveness analysis tool and more detailed market and technology characterizations –Analyzed EVT experience in Southern Loop to refine assessment of remaining potential

11. 11 Developing and integrating potential demand-side T&D capacity options for the Southern Loop (continued) Next steps: –Work with CVPS and VELCO to determine where in region demand reductions would have most impact on relieving reliability needs (e.g., Manchester) –Work with EVT project managers to determine which efficiency measures and which customers would provide additional cost-effective savings –Perform detailed site visits to a sample of customers to further refine estimates of achievable potential costs and savings –Develop draft RFP specifications soliciting demand-side solutions –Possible that VELCO/CVPS could apply to PSB for combined approval for –Initial wires solution to address immediate reliability need –Expenditures for targeted DSM initiatives to defer need for subsequent T&D investments