TVAs Quest for DSM

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TVAs Quest for DSM

• Chris Smith
• Tennessee Valley Authority
• Customer Resources
• Market Research Evaluation

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About TVA

• The nations largest public power company.
• TVA provides power to all of Tennessee, large
  areas of Kentucky, Alabama, and Mississippi, and
  smaller portions of Virginia, North Carolina, and
  Georgia.
• TVA has over 33,000 megawatts of dependable
  generating capacity.
• 158 local power distributors and 61 direct-serve
  industries.
• Nearly 9 million residents live in TVAs service
  territory.
• TVA has about 4 million metered customers.

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What prompted TVAs interest in DSM

• Growing population and peak demand, without a lot
  of planned capacity on the way.
• Record Peak Demand of 32,008MW set on July 18,
  2006
• EPAct
• Current drought and warm temperatures.
• Reduction of high-priced purchased power.

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Barriers to Entry

• Current Contract Structure for Power Distributors
• No current demand and energy charge passed on to
  customers.
• Technological barriers
• Many PDs do not currently have the technological
  infrastructure to curtail load.
• Residential rates are below national average.
• Barrier for many Southern utilities

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Initial Foray

• In early 2007, TVA Senior VP of Marketing Jim
  Keiffer established an internal group tasked with
  finding a third-party aggregator with whom TVA
  could work on a pilot program.
• The decision was made to focus on a solution to
  curtail Commercial Industrial loads in the
  Tennessee Valley.
• One RFP was issued in February and three
  responses were received in mid-March.
• The staff reviewed these proposals and selected a
  vendor.

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The choice was????

• EnerNOC, a Boston, Massachusetts based developer
  of clean and intelligent solutions for CI
  customers.
• EnerNOC was chosen, in part, because of their
  proven experience and results with ISOs in the
  Northeast and in California.
• In issuing an RFP, we found that many bidders may
  not have any feathers in their caps.
• Similar to a lot of DSM technological proposals
  you see.

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The choice was???? Part 2

• EnerNOC provided a flexible approach to
  curtailment (not a one size fits all approach)
  that eliminated some of the previously mentioned
  technological barriers. EnerNOC works with the
  existing infrastructure of customers to find
  solutions.
• EnerNOCs energy specialists identify many
  curtailment strategies in participant locations
  in order to meet event parameters.

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Participants in the Pilot

• Pilot participants are CI customers that operate
  in the following service areas
• Nashville Electric Service
• Electric Power Board of Chattanooga
• Huntsville (AL) Utilities
• Members of TVAs marketing staff and
  representatives of EnerNOC met with the decision
  makers at all three of these utilities to elicit
  interest in this pilot.
• To avoid cannibalization of established programs,
  TVA and the PDs avoided signing-up any customers
  that were already on an interruptible rate.

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TVA-EnerNOC Pilot Layout

• TVA can trigger an event with 30 minutes notice.
• Only one event in a calendar day.
• Pilot will contain six possible events for a
  maximum of thirty hours in the months of July and
  August.
• Single events will not last longer than six
  hours.
• Curtailments will occur weekdays between the
  hours of 1100AM and 900PM (CDT), excluding
  major national and regional holidays.
• Our goal is to achieve 2 to 4 MW of curtailment
  during a specific event.
• Proof of concept
• TVA triggers events based on reliability.

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Equipment

• EnerNOC has installed load control devices,
  called the EnerNOC Site Server (ESS), on
  equipment in the participating customers
  facilities.
• ESS collects five-minute interval data and has
  the ability to trigger automatic curtailment.
• Most pilot participants will utilize manual
  curtailment.

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Economic incentive for participants

• Participant companies receive payments based on
  the electrical demand businesses can reduce. The
  total payment consists of a capacity payment and
  an energy payment.

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Evaluation of Pilot

• Summit Blue Consulting will provide the
  third-party analysis of the pilot program.
• Summit Blue has worked with utilities to develop
  sound DR measurement and verification processes.
• TVA will receive a detailed analysis of the pilot
  on October 1, 2007.

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Thank you for inviting me to speak about our
pilot!

• Chris Smith
• TVA Market Research Evaluation
• cksmith1_at_tva.gov