Government

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Governments Evolving Role in Resource Planning
and Environmental Protection

• Arthur H. Rosenfeld, Commissioner
• California Energy Commission
• April 19, 2002
• [phone]
• ARosenfe_at_Energy.State.CA.US

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Subset of units in California, ranked in order of
NOx emission rate
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Electricity Use in California

• 2/3 of all electricity (kWh) is used in buildings
• 50 of buildings in PGE are in Block 50
  (exempted from rolling blackouts)
• 40 of Peak Demand is due to Air Conditioning
  plus Lighting

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Top Ten Peak Energy Uses/Sectors (assumes a
50,000 MW peak)
8,000
15
14
7,000
11
6,000
11
5,000
Megawatts
4,000
7
6
3,000
4
4
4
4
2,000
1,000
0
Com AC
Res AC
Com Light
Res Misc
Com Misc
TCU Buildings
Process Industry
Res Refrigerator
Assembly Industry
Ag Water Pumping
End-Use/Sector
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CEC has Two Types of Regulatory
AuthorityRelated to Demand Response

• Building and Efficiency Standards
• Title 20 and 24 Update with adoption in 2003 and
  implementation in 2005
• Everything from efficient air conditioners to
  white roofs
• Load Management Powers
• New buildings -- first priority
• Then most existing buildings
• CEC feels responsible for the 23,000 interval
  meters installed with state funds
• 16,000 meters are in 7,000 more by summer
• Covers 25 of the peak load of the state
• However, only Time-of-Use tariffs in widespread
  use
• Concerns regarding non-specific nature of TOU
• Same price in all summer afternoons regardless of
  system load, system condition, or wholesale price

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Demand Response to Time-Dependent Prices

• Load Management Tools Are Increasingly
  Cost-Effective
• Interval Meters and Communication
• Price Responsive Thermostats
• Lighting Controls
• Other Process Modifications
• Hourly Electric Rates Are Still in Pilot Stage
• For load with new meters (gt 200 kW), CPUC
  requires TOU rates and offers emergency load
  management incentives
• But has yet to combine these into an hourly
  tariff
• In other jurisdictions, hourly rates have
• reduced the cost to serve load and
• enabled firms to reduce their costs of operation

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Critical Peak Pricing (CPP) -- My Visionbased on
Gulf Power tariffCPP varies empirically to
reduce demand at critical locations and times
Variable CPP
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Gulf Power GoodCents Select Tariff

• Reduces need during critical or near critical
  periods (emergencies -- present or expected --,
  very high prices)
• Summer Peak Load Reductions of 2.1 kW per house
  (1st hour)
• Winter Peak Load Reduction of 2.7 kW per house
  (1st hour)
• 4-hour reduction roughly 1 kW
• 96 Customer Satisfaction Rating
• Cost savings, greater control and better
  information
• Improves competitive position of Gulf Power in
  wholesale markets

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Critical Peak Pricing (CPP)e.g. Gulf Power
residential GoodCents Select tariff
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Proposed System for Demand Response in New Homes
Small Commercial Buildings
Cost of Avoided Load 100-200 per kW
Price/Proxy/Curtailment Signal1
Communicating Thermostat ?502
Load Data1
Interval Meter ?1001
1. Utility responsible for signal,
communications, meter, and load data. 2. Builder
responsible for communicating thermostat.
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Georgia Powers Voluntary 2-part RTP Program

• Customer bill Part 1 Part 2
• Part 1 based on historical load profile
• Part 2 based on price responsive departures from
  load profile
• Historical load profile is from previous year
• Called Customer Baseline Load (CBL)
• a list of hourly loads for entire year
• Part 1 is the CBL x TOU tariff
• What you expect to pay if you dont respond to
  real-time price
• Part 2 is the hourly departures from CBL
• Enables customer to buy additional kWh when
  prices are low
• And sell back kWh when prices are high
• Saves 17 at 1/kWh on hot afternoons

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Summary of Time-of-Use (TOU), Critical Peak
Pricing(CPP), and Real-Time (RTP) Prices

• Time-of-Use (TOU) is typically 3 time blocks
  published in advance for entire season
• Peak, Shoulder, Off-Peak
• Cant foresee weather or equipment failures
• Critical Peak Pricing (CPP) is a high price
  imposed for a few days a year when system
  conditions are critical or near critical
• A discount is given during off peak hours
• Customer pays the critical peak price when
  invoked by the utility
• a day ahead forecast of CPP offers additional
  time for response
• Real-Time Pricing (RTP) is hourly real-time
  marginal cost of a kWh
• Reflects hot weather, scarcity, or equipment
  failure
• a day ahead forecast of RTP offers additional
  time for response

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Load Management with Time-Dependent (Dynamic)
Pricing

• MICRO-Economic Benefits
• Leads to lower costs
• Lowers risk of market power
• Treats supply and demand symmetrically
• Independent of regulated, deregulated, or hybrid
  industry structure
• Issues
• Understanding how loads will respond
• Additional study regarding voluntary vs.
  mandatory
• Impact on customers
• Stable industry structure credit-worthy
  participants
• Clear, consistent government regulation

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My Vision of Tariff Options

• Residential and Small Commercial
• Default CPP
• Hedge TOU

• Industrial and Large Commercial
• Default CPP
• Hedge TOU
• Option RTP (voluntary)

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4o F Thermostat Rise for a 10-ton Rooftop
A/C 4-hour average saves one-third of A/C,
1W/sq. ft.
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Average Hourly Data -- All AC units
SMUD
From Ed Hamzawi, SMUD, Oct. 20, 2000
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5- Minute Data (Lights)
SMUD
59th. St. Building - 5 Minute Interval Loads
Second Floor Lights
Curtailment 30 Reduction In Lighting Level (1
to 5 PM)
3.0
2.5
2.0
Load (kW)
1.5
1.0
0.5
0.0
100
115
130
145
200
215
230
245
300
315
330
345
400
415
430
445
500
515
530
545
600
1100
1115
1130
1145
1200
1215
1230
1245
Time
Curtailment Day kW
Baseline Day kW
From Ed Hamzawi, SMUD, Oct. 20, 2000
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