standby rates as a barrier to chp · 2017. 11. 27. · scheduled 32-hour on-peak consumers dte xcel...
TRANSCRIPT
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Jennifer KeferAlliance for Industrial Efficiency
Executive Director202-816-9302
Standby Rates as a Barrier to CHPElectricity Consumers Resource Council (ELCON)
Sept. 14, 2017
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Agenda
Standby rates as a barrier
Best practices
Market trends and potential
5 Lakes AnalysisMichigan
Minnesota
Ohio
Pennsylvania
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Exposing the Hidden Fees
Facility charge
Delivery charge
Monthly demand charge for non-reserved service
Monthly customer charge
Monthly reservation charge
Seasonal maintenance charges
Seasonal energy charges for non-reserved service
Seasonal backup demand charges
Seasonal backup energy charges
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Issues Regarding Standby Rates
Rates are not transparent
Rates are inconsistent
In Minnesota, one company could pay up to 5x more
“Captive” ratepayers
Erodes economic benefits of CHP
Rates assume outages occur at peak – and that all systems breakdown simultaneously
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CHP Is Reliable
During Hurricane Sandy, when the grid lost power, all 24 CHP sites surveyed performed as expected.
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Reciprocating Engine
Steam Turbine Gas Turbine Microturbine Fuel Cell
96-98% 72-99% 93-96% 98-99% >95%
Source: EPA, 2015
SystemAvailability
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Best Practices
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Transparency
Reflect actual costs
Eliminate “demand ratchets”
Allow for customer choice
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Standby Rates in Practice
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Existing CHP Capacity (MW)
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CHP Technical Potential (MW)
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Alliance for Industrial EfficiencyExecutive Director
Jennifer Kefer
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www.5lakesenergy.com
“Apples-to-Apples”StandbyAnalysispresentationtoElectricityConsumersResourceCouncilSeptember14,2017
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www.5lakesenergy.com
Overview
• 5Lakes’apples-to-applesmethodcalculatesmonthlystandbychargesforanidenticalCHPcustomeracrossdifferentutilities– Detailedapproachenablesustocompare,contrast,andevaluatespecificaspectsofutilities’standbytariffs
– Breadthofanalyses(4statessofar)allowsustomakeeducatedobservationsandpolicyrecommendationsacrossstates
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www.5lakesenergy.com
Wheredidthisgetstarted?
• MinnesotaStandbyProceeding• DocketNo.E015/CI-15-115requiredrate-regulatedutilitiestofileupdatedstandbytariffs/riderswithMNPublicUtilityCommission.
• MinnesotaPower,XcelEnergy,OtterTailPower,andDakotaElectric
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www.5lakesenergy.com
DifficulttoCompare
• Lackofuniformity• Lackoftransparency• Utilitiesprovidedsimulatedcalculations,butsystemsizesandotherassumptionsdiffered
• Aneedtohighlightcustomerexperiencethroughestimatedstandbybills
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www.5lakesenergy.com
OutageScenarioComparison
• Nooutage• Scheduled,16-houroff-peak outage• Scheduled,16-hourON-peakoutage• Scheduled,8-hourON-peak,8houroff-peakoutage
• Scheduled,32-hourON-peak• UNscheduled,8-hourON-peak,8-houroff-peak outage
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www.5lakesenergy.com
CustomerCharacteristics
• 3,000kWinstandard(supplemental)service• 2,000kWinreservedstandbyservice• Generalservice,primarydistributionlevel• Onemonthofstandbycharges
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www.5lakesenergy.com
UtilitiesVerified
• Startedwith“coldread”ofpublishedtariff• Workedwithutilitiestoverifycalculations• Obtainednecessarydata• Clarifiedtarifflanguage• Clarifiedinterpretationandapplicationtoourscenarios
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www.5lakesenergy.com
MinnesotaPower
NoOutage ScheduledOutage,16
HoursOff-Peak
ScheduledOutage,16
HoursOn-Peak
ScheduledOutage,8Hours
On-Peak,8HoursOff-Peak
ScheduledOutage,32
HoursOn-Peak
UnscheduledOutage,8Hours
On-Peak
$1,007 $2,699 $2,699 $2,699 $4,391 $20,180
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www.5lakesenergy.com
DakotaElectric
NoOutage ScheduledOutage,16
HoursOff-Peak
ScheduledOutage,16
HoursOn-Peak
ScheduledOutage,8Hours
On-Peak,8HoursOff-Peak
ScheduledOutage,32
HoursOn-Peak
UnscheduledOutage,8Hours
On-Peak
$6,594 $20,127 $20,127 $20,127 $22,561 $20,127
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www.5lakesenergy.com
MNSnapshotNoOutage Scheduled
Outage,16HoursOff-
Peak
ScheduledOutage,16HoursOn-
Peak
ScheduledOutage,8HoursOn-
Peak,8HoursOff-Peak
ScheduledOutage,32HoursOn-
Peak
UnscheduledOutage,8HoursOn-
Peak,8HoursOff-Peak
MinnesotaPower $1,007 $2,699 $2,699 $2,699 $4,391 $20,180
XcelEnergy$4,940 $5,935 $5,935 $5,935 $7,912 $6,135
OtterTailPower $1,632 $3,167 $4,113 $3,640 $6,594 $4,408DakotaElectric $6,594 $20,127 $20,127 $20,127 $22,561 $20,127
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www.5lakesenergy.com
MinnesotaPowerStandbyReforms
• Redefine“unscheduled”toallowformaintenanceduringnon-shouldermonths
• Reconsideringunscheduled“ratchet”• Couldsavecustomer$14,000perunscheduledoutage
• Plusadditionalsavingsfromallowingmoreflexibilityforschedulingmaintenance
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www.5lakesenergy.com
DakotaElectricStandbyReforms
• DakotaElectricconsideringreducingchargesforscheduled/maintenancestandbyservice
• Customerscouldsave$9,000perscheduledoutage
• Assumingquarterlymaintenance,thisrepresentsasavingsofatleast$36,000peryear
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www.5lakesenergy.com
MichiganStandbyReforms
• StandbyRateWorkingGroup• ConsumersEnergyandDTEGeneralRateCases
• Examiningutilitycost-of-servicestudiesinlightofapples-to-applesstandbyanalyses
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www.5lakesenergy.com
Scheduled32-houron-peakConsumers DTE
Xcel- MNMinnesotaPower
OtterTailPower- MN
DakotaElectric- MN
ServiceCharge $200 $275 $25.75 $0 $304 $34
DeliveryCapacity/Distribution
Charge$8,100 $6,760 $0 $0 $0 $0
ReservationFee $0 $3500 $4,940 $1,007 $428 $0
DemandCharges $4,463 $20,800 $983 $0 $0 $18,020
EnergyCharges $2,070 $2,436 $1,989 $3,384 $4,961 $4,966
StandbyFacilitiesCharge $0 $0 $0 $0 $900 $0
Total $14,833 $30,271 $7,938 $4,391 $6,594 $23,020
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www.5lakesenergy.com
Unscheduled8on/8off-peakConsumers DTE
Xcel- MNMinnesotaPower
OtterTailPower- MN
DakotaElectric- MN
ServiceCharge $200 $275 $26 $0 $304 $34
DeliveryCapacity/Distribution
Charge$8,100 $6,760 $0 $0 $0 $0
ReservationFee $0 $3,500 $5,140 $0 $428 $0
DemandCharges $1,116 $9,340 $0 $21,180 $816 $18,020
EnergyCharges $1,775 $1,170 $995 hourlyenergycosts $1,959 $2,483
StandbyFacilitiesCharge $0 $0 $0 $0 $900 $0
Total $11,191 $17,545 $6,160 $21,180plushourly
$4,408 $20,537
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www.5lakesenergy.com
Pennsylvania
• PECOEnergyandPPLElectric• 2MWCHPsystem– PPL-$5,200/month– PECO- $11,500/month
• 30MWCHPsystem– PPL- $1,000/month– PECO- $65,000/month
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www.5lakesenergy.com
Pennsylvania
• PECOEnergyandPPLElectric• 2MWCHPsystem– PPL-$5,200/month– PECO- $11,500/month
• 30MWCHPsystem– PPL- $1,000/month– PECO- $65,000/month
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www.5lakesenergy.com
Ohio
• Duke,FirstEnergy,AEP,DaytonPower&Light• DiscussedhighdistributionchargeswithPUCO• InterestinaligningCHPIncentiveRebateProgramswithbetterstandbyratedesign
• Distributedgenerationviewedaskeytogridmodernizationefforts
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www.5lakesenergy.com
MajorTakeawaysre:StandbyRates
• Lackoftransparency,accessibilityforcustomers
• Lackofuniformityinlanguage,structure• Significantvariationincharges• Highreservationfees,demandchargesposebarriertoCHP
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www.5lakesenergy.com
Contagion?
• MichiganrespondedtoanalysisinMinnesota• PennsylvaniarespondedtoMinnesotaandMichigan– thenOhio
• InterestinLouisiana• Additionalanalysesincreasepressureonutilitiestoincreasetransparency,accessibility
• Helpsregulatorsidentify“redflags”forfurtherinquiry/discussion
• Replicableinotherstates
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www.5lakesenergy.com
JamieScripps5LakesEnergyLLC(517)897-4649