supplemental testimony of southern california edison ... sce does not have an ongoing obligation to...

Application No.: 16-11-002 Exhibit No.: SCE-02 Witnesses: C. McAndrews

(U 338-E)

Supplemental Testimony Of Southern California Edison Company In Support Of Application For Approval Of The Results Of Its Second Preferred Resources Pilot Request For Offers

PUBLIC VERSION

Before the

Public Utilities Commission of the State of California

Rosemead, California

May 1, 2017

SCE-02: Supplemental Testimony Of Southern California Edison Company In Support Of Application For Approval Of The Results Of Its Second Preferred Resources Pilot Request For

Offers Table Of Contents

Section Page Witness

-i-

I. BACKGROUND ...............................................................................................1 C. McAndrews

II. THE PRP RFO 2 PROCUREMENT IS NOT DUPLICATIVE ........................2

A. PRP RFO 2 Procurement is Not Duplicative of Commission-Approved DSM or Other Customer Programs .................2

B. PRP RFO 2 Procurement Does Not Duplicate Commission Mandated Procurement ..........................................................................3

C. PRP RFO 2 Contracts are Supportive of Other Commission-Approved Grid Modernization Activities .........................5

III. PRP RFO 2 CONTRACTS WILL ALLOW VALIDATION OF LOCALLY-SITED PREFERRED RESOURCES TO OFFSET LOAD ................................................................................................................8

A. Overview ................................................................................................8

B. PRP RFO 2 Contracted Preferred Resources Were Acquired to Deliver during the Hours of Expected Incremental Load Growth ......................................................................8

IV. PRP RFO 2 CONTRACTS DEMONSTRATE ABILITY TO ACQUIRE AND DEPLOY PREFERRED RESOURCES AT A LOCAL LEVEL...............................................................................................11

A. PRP RFO 2 Demonstrate Ability to Acquire Preferred Resources at a Local Level ..................................................................11

B. PRP RFO 2 Contracts Demonstrate SCE’s Ability to Deploy Preferred Resources at the Local Level ..................................12

Appendix A PRP RFO 2 Application Meet & Confer with ORA

Appendix B Confidentiality Declaration of Caroline McAndrews

1

I. 1

BACKGROUND 2

At the prehearing conference the Commission held in this matter, Administrative Law Judge 3

Miles directed the parties to meet and confer to address the Office of Ratepayer Advocates’ (ORA’s) 4

specific concerns about the reasonableness of the 19 agreements for resources sited within the Johanna-5

Santiago (J-S) Region and to identify what supplemental testimony, if any, SCE should submit.1 During 6

the meet and confer, SCE gave ORA a presentation based on the discussion at the pre-hearing 7

conference. The presentation is attached to this testimony as Appendix A and is incorporated by 8

reference. Thereafter, SCE and ORA jointly filed a brief addressing the appropriate scope of 9

supplemental testimony, if any, and the overall scope of the proceeding. In that briefing, SCE agreed to 10

submit supplemental testimony, if the Commission deemed it necessary, on two issues: (1) whether the 11

PRP RFO 2 procurement is duplicative; and (2) how SCE will test the efficacy of the PRP RFO 2 12

procurement to support the PRP’s goals.2 The Commission issued its Scoping Ruling in this proceeding 13

on Friday, April 21, directing SCE to serve its supplemental testimony by Monday, May 1.3 Set forth 14

below is SCE’s supplemental testimony on those two issues. 15

1 2/23/17 PHC Transcript at 48:19-49:6, 49:11-50:8; 51:13-27.

2 Joint Brief at pp. 6, 11-12.

3 Due to technical problems caused by a power outage, the Commission was not able to effect service on all parties. The Commission remedied that issue on Tuesday, April 25.

2

II. 1

THE PRP RFO 2 PROCUREMENT IS NOT DUPLICATIVE 2

As SCE explained in its Opening Testimony and Appendix A at slides 12 and 13, 4 the PRP RFO 3

2 procurement is neither duplicative of, nor subsumed by, other procurement. For the most part, SCE 4

has acquired preferred resources to meet PRP needs through its Local Capacity Requirements (LCR) 5

RFO5 and various existing Commission-approved customer programs6 and Demand Side Management 6

(DSM) programs. 7 SCE has relied on unique, stand-alone solicitations for the J-S Region only when 7

those other mechanisms did not yield sufficient resources in the J-S Region. SCE, however, launched 8

the PRP RFO 2 in a manner designed to maximize the value of the resources across numerous programs 9

and endeavors. 10

A. PRP RFO 2 Procurement is Not Duplicative of Commission-Approved DSM or Other 11

Customer Programs 12

SCE did not procure (1) Energy Efficiency (EE), (2) Demand Response (DR) that receives 13

funding from DR program accounts, or (3) projects receiving Net Energy Metering (NEM) or Self-14

Generation Incentive Program (SGIP) subsidies in the PRP RFO 2. Stated differently, the PRP RFO 2 15

procurement will not utilize any funding from these Commission programs and will not count toward 16

any of these program targets. Accordingly, the PRP RFO 2 procurement is not duplicative of 17

procurement occurring through these Commission-approved programs. Table II-1 demonstrates how 18

much EE, DR, Distributed Generation (DG) and storage SCE acquired by resource and the basis for the 19

procurement not being duplicative. 20

4 SCE testimony, Chapter II, Circumstances Justifying the PRP RFO 2 Solicitation and Procurement for the J-S

Region, p. 6.

5 On November 21, 2014, SCE filed Application (A.) 14-11-012 for approval of the results of its 2013 LCR RFO for the Western LA Basin. The Commission approved the contracts in D.15-11-041.

6 Utility Customer Programs include utility-managed EE and DR programs, as well as the California Solar Initiative (CSI) (including the Single and Multi-family affordable solar housing (MASH/SASH programs), SGIP, New Solar Homes Partnership (NSHP), and Net Energy Metering program.

7 More information can be found at this website: http://www.cpuc.ca.gov/Demand_Side/.

3

Table II-1 Summary of Basis:

PRP RFO 2 Contracts are Not Duplicative of Commission Program Activities

Commission Program

PRP RFO 2 MW Acquired

Basis

Energy Efficiency

0 PRP RFO 2 acquired no EE.

Demand Response

55 PRP RFO 2 contracts are not utilizing funds from DR program accounts.

Distributed Generation1

10 PRP RFO 2 hybrid (solar portion) contracts get no NEM subsidies.

SGIP (energy storage (ES))

15+ PRP RFO 2 hybrid (ES portion) or DR (ES portion) contracts get no SGIP subsidies.

1 Distributed generation program resources include solar incentives through the California Solar Initiative (CSI) and NEM.

B. PRP RFO 2 Procurement Does Not Duplicate Commission Mandated Procurement 1

PRP RFO 2 procurement does not duplicate, but rather supports, several mandated procurement 2

targets. With regard to Local Capacity Requirements (LCR) for the Western Los Angeles Basin, SCE 3

designed the PRP RFO 2 to solicit resources that would count toward the satisfaction of LCR 4

requirements.8 Specifically, to conform to the LCR RFO requirements, SCE required all PRP RFO 2 5

resources to be preferred and incremental, located in the Western L.A. Basin, online by 2021, and 6

qualify for Resource Adequacy (RA) either through the interconnection process, by meeting minimum 7

timing requirement (e.g., number of months, days and duration), or modifying RA need. 8

Similarly, SCE’s 2016 Energy Storage Procurement Plan indicated if the Commission approved 9

energy storage acquired through the PRP RFO 2, SCE would seek to count it toward its energy storage 10

procurement targets.9 11

In addition, the PRP RFO 2 procurement is informing the development of the Integrated 12

Distributed Energy Resources (IDER) proceeding and related procurement. The timing of the IDER 13

8 The LCR background is discussed in greater detail in Chapter II of SCE’s Opening Testimony at pp. 14-17.

9 Testimony of Southern California Edison Company in Support of Its 2016 Energy Storage Procurement Plan, p. 41.

4

lags behind the PRP and has not yet resulted in any procurement. The PRP RFO 2 contract pro formas, 1

products, resource attribute needs, and lessons learned have provided guidance and been part of the 2

stakeholder process shaping the outcome of the IDER.10 3

Table II-2 below summarizes how PRP RFO 2 is not duplicative, but supportive, of Commission 4

mandated procurement. 5

Table II-2PRP RFO 2 Contracts are Not Duplicative of Commission Procurement Targets

Procurement Targets

PRP RFO 2 MW Acquired

Basis

LCR 125 The PRP RFO 2 contracts count toward SCE’s current residual LCR MW target. PRP RFO 2 supports but does not duplicate LCR.

SPVP 0 PRP RFO 2 procurement is not duplicative because SCE

no longer has an obligation to procure under the SPVP.

Aliso Canyon (AC)

0 SCE does not have an ongoing obligation to contract for resources to address the unavailability of Aliso Canyon. Some of the PRP RFO 2 contracts are expected to benefit the AC issues. Similarly, some of the resources procured out of the AC RFO also support the J-S Region therefore PRP RFO 2 is not duplicative.

RPS 0 PRP RFO 2 contracts do not count toward the RPS; the

hybrid contracts are behind the meter (BTM) and therefore not duplicative.

RAM 0 None of the PRP RFO 2 contracts count toward RAM.

Energy Storage (ES)

60+ 60 MW of in front of the meter (IFOM) ES from PRP RFO 2 are eligible to count toward the ES distribution target.

CHP 0 PRP RFO 2 acquired no CHP resources. IDER 0 IDER procurement process is in development and

benefiting from the lessons learned associated with PRP RFO 2 procurement, both in acquisition and, subject to CPUC approval, ability to deploy locally-sited resources.

10 As included in the scope of the February 26, 2016 Assigned Commissioner and Administrative Law Judge

and Amended Scoping Memo for Rulemaking 14-08-013, at 6, and as discussed throughout the competitive solicitation framework working group process as evidenced in SCE’s presentation at the March 28, 2016 Lessons Learned on Prior Solicitation Experiences Workshop and SCE’s Comments on Competitive Solicitation Framework Working Group Final Report, at p. 12.

5

C. PRP RFO 2 Contracts are Supportive of Other Commission-Approved Grid 1

Modernization Activities 2

The PRP RFO 2 contracts will support important endeavors informing the emerging modern 3

grid, including (1) two proposed demonstration projects in SCE’s Distribution Resources Plan (DRP), 4

and (2) an Electric Program Investment Charge (EPIC) activity. The PRP RFO 2 contracts also have the 5

capability to inform the Commission’s efforts in establishing an Integrated Resource Plan (IRP) at the 6

distribution level of the grid. The PRP RFO 2 contracts, if approved and once deployed in the J-S 7

Region, will further the State’s important and ambitious energy and environmental policy goals. 8

More specifically, PRP-related procurement consists of resources interconnecting at the A-Bank 9

level. Concentrated and early procurement of Distributed Energy Resources (DERs) at the A-Bank level 10

will inform grid modernization efforts because the A-Bank is the interface between the transmission and 11

distribution grids. Various Commission-approved endeavors, such as the LCR, EPIC, and DRP 12

demonstration projects, focus on other locations on the grid. LCR procurement is at the system level; 13

DRP demonstration project D focuses on the B-bank level; and demonstration project C focuses on the 14

circuit level. Because the PRP is focused on the A-bank level, the successful deployment of the PRP 15

RFO 2 contracts inform improved future grid interactions at three levels: 1) transmission to distribution 16

(A-bank), 2) A-bank to A-bank distribution, and 3) A-bank to subservient B-banks. Because the PRP 17

RFO 2 procurement provides the DERs to the DRP demonstration projects C and D, the EPIC project, 18

and the LCR area, they support the goals of those endeavors. 19

With regard to each of these endavors, first the DRP has a variety of objectives, including the 20

identification of “…optimal locations for distributed energy resources,” and the evaluation of 21

“…locational benefits and costs of distributed energy resources located on the distribution system.”11 22

As discussed in greater detail in SCE’s opening testimony, because Demo C and Demo D are within the 23

11 http://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=PUC&sectionNum=769.

6

J-S Region, the PRP RFO 2 contracted resources will “…support the timely commencement and 1

completion of the field demonstration projects.”12 2

Second, EPIC supports the development of non-commercialized new and emerging clean energy 3

technologies in California. SCE is implementing an EPIC project within the J-S Region known as the 4

Integrated Grid Project (IGP). The IGP seeks to demonstrate the next generation grid infrastructure to 5

manage, operate, and optimize the use of preferred resources; determine the controls and protocols to 6

manage distributed energy resources; and demonstrate ability to optimally manage an integrated 7

distribution system to provide safe, reliable, affordable service. The EPIC-IGP also serves as SCE’s 8

DRP Demonstration D – Demonstrate Distribution Operations at High Penetrations of DERs. The 9

EPIC-IGP relies on the presence of DERs to accomplish its goal. However, the EPIC-IGP scope does 10

not include preferred resources acquisition. Therefore the PRP RFO 2 is supportive of the EPIC-IGP in 11

that preferred resources, or DERs, will be connected to the EPIC-IGP substations/circuits. 12

Third and finally, the Integrated Resource Plan13 (IRP) requires14 the CPUC’s long-term resource 13

planning activities to: (1) actively identify a preferred portfolio of resources that meets multiple 14

objectives including minimizing costs, maintaining reliability, and reducing greenhouse gas emissions;15 15

and (2) oversee an integrated resource planning process involving a wide range of load-serving 16

entities.16 Currently, the IRP process is focused on development of a planning document that may or 17

may not lead to resource acquisition. The portfolio of preferred resources procured through the PRP 18

RFO 2 may inform the IRP’s development. 19


Region, p. 10.

13 The IRP requirement was instituted by Senate Bill 350 (de Leon), Stats. 2015, chapter 547. The IRP for CPUC jurisdictional entities is codified at Public Utilities Code §§ 454.52.

14 CPUC Staff Concept Paper on Integrated Resource Planning, August 11, 2016; http://www.cpuc.ca.gov/WorkArea/DownloadAsset.aspx?id=12399.

15 See Pub. Util. Code § 454.51.

16 See Pub. Util. Code § 454.52.

7

Table II-3 PRP RFO 2 Contracts are Supportive of Other Commission Related Activities

Activity PRP RFO 2 MW Basis

DRP 21.5 1 contract for 1.5 MW supports DRP Demo C; 3 contracts for 20 MW support DRP Demo D; BTM contracts may support Demos C & D b/c

deployment site may coincide with demo circuits. EPIC-IGP 20 PRP RFO 2 contracts support EPIC because EPIC

provides no funding for preferred resource acquisition.IRP 0 IRP process focuses on developing SB 350 planning

document, not resource acquisition.

8

III. 1

PRP RFO 2 CONTRACTS WILL ALLOW VALIDATION OF LOCALLY-SITED PREFERRED 2

RESOURCES TO OFFSET LOAD 3

A. Overview 4

As discussed in SCE’s Opening Testimony, SCE expects the J-S Region load to grow.17 5

Preferred resources, unlike base load power plants, deliver varying amounts of energy generation or 6

reduction over each hour of the day. SCE expects the PRP RFO 2 contracted resources, based on the 7

preferred resource type18 (e.g., DR, ES, or hybrid), to validate the ability of preferred resources to serve 8

the varying hourly load of the forecasted incremental load for the peak day. 9

B. PRP RFO 2 Contracted Preferred Resources Were Acquired to Deliver during the Hours 10

of Expected Incremental Load Growth 11

SCE’s annual distribution system analysis forecasts the peak load at each distribution substation. 12

When SCE launched the PRP in 2013, it estimated the J-S substations peak load would grow to about 13

1,500 MW over the next 10 years. That forecast has continued to show growth. When SCE launched 14

PRP RFO 2 in 2015, SCE forecasted an incremental load on the peak day of 275 MW and the total 15

forecasted peak to be 1,547 MW in year 2022. Using the 2015 incremental peak forecast and historical 16

daily load on prior year peak days, SCE determined the expected load by hour. The PRP RFO 2 17

resources will be available to serve the J-S Region peak according to the forecasted hourly demand. 18

Figure III-1, illustrates the (1) forecasted incremental hourly load demands, (2) predicted 19

delivery capabilities of the already acquired preferred resources (i.e., EE, PLS, DG, DR, and ES), and 20

(3) predicted delivery capabilities of the PRP RFO 2 contracted resources (i.e., Hybrids-PRP RFO 2, 21

ES-PRP RFO 2, and DR-PRP RFO 2). 22


Region, pp. 7-8.

18 PRP RFO 2 contracted for demand response (DR), energy storage (ES) and hybrid systems (solar and energy storage used in combination).

9

Figure III-1 Contribution of Deployed and Acquired PRs Toward 2022 Combined Johanna

and Santiago Incremental Peak Load

The illustration above shows one example of how the current portfolio of preferred resources may meet the incremental load and offset the peak.19

When used in combination as part of an integrated portfolio, preferred resources have the 1

potential to serve local incremental load growth. The objective of the PRP is to conduct the full 2

demonstration of the integrated application of preferred resources and the validation of their 3

performance to better inform how to manage the future grid and help meet the State’s environmental 4

goals. The PRP RFO 2 contracts directly supports this PRP objective. 5

As summarized in Table III-4, the 19 PRP RFO 2 contracts are available to deliver during the 6

high demand periods in the J-S Region (i.e., including forecasted hourly incremental load). SCE plans 7

to validate that these locally-sited preferred resources are able to serve load by using the approach 8

summarized in Table III-4 and the measurement metrics further described on Slide 9 of Appendix A. 9

Note, the validation approach varies for each product type. 10

19 SCE previously acquired 151 MW. The procurement that is the subject of this Application is for 125 MW.

Although that brings the total to 275 MW, a gap remains because photovoltaic (PV) devices and energy efficiency (EE) typically deliver less than their nameplate value as measured on the grid. Accordingly, they may contribute a fraction of their nameplate value to offsetting peak load. As a result, the delivery amount of each resource is based on its expected production depending on weather conditions and the time of day.

10

Table III-4 PRP RFO 2 Contracted Resources Delivery Parameters and Validation Approach

# Seller Project Hour of

the Day Available1

Delivery Duration (hours)

Annual Limits

Validation Approach

Demand Response2

1

AMS

Cedar Technologies 1

4 Measure load reduction based on customer usage (meter) against a 10-10 baseline over the dispatched period.

2 Cedar Technologies 23 Cedar Technologies 34 Cedar Technologies 45 Cedar Technologies 56

NextEra OC Distributed ES I

4 7 OC Distributed ES II 8 Swell Swell Energy Fund 4

In-Front of the Meter Energy Storage 9

Convergent Orange County ES-1

4 Measure each units output (meter) over the dispatched hours.

10 Orange County ES-2 11 Orange County ES-3 12

Hecate Energy Johanna 1

4 13 Energy Johanna 2 14 NextEra Valencia ES 4

Behind-the-Meter Solar and Energy Storage Hybrid 15

NRG

PRP-2016-DGES-001

Measure each units output (meter) over the available hours.

16 PRP-2016-DGES-00217 PRP-2016-DGES-00318 PRP-2016-DGES-004

19 PRP-2016-DGES-0051 – Hour ending (HE): A term that denotes the preceding hourly time period. For example, 12:01 a.m. to 1:00 a.m. is

hour ending 01. Hour ending 18 is the time period from 5:01 p.m. to 6:00 p.m. 2 – Demand response products have a maximum dispatch hours per term year. 3 – Energy storage products are market products that also include an option for up to 20 days per year where SCE may

specify the day and hours when capacity is to be delivered in response to load demands in the J-S Region. Consequently, during these days, these products are restricted from charging between the hours of 11 am through 6:59 pm in order to prevent an unintended demand spike.

4 – The hybrid firm output corresponds to the listed seasonal delivery duration. Additional output will occur in the shoulder hours as available and used by the customer.

In sum, given J-S Region projected load growth, the PRP RFO 2 contracts, if approved and 1

subsequently deployed, provide a portfolio of preferred resources portfolio to verify the ability of 2

locally-sited preferred resources to serve load. 3

11

IV. 1

PRP RFO 2 CONTRACTS DEMONSTRATE ABILITY TO ACQUIRE AND DEPLOY 2

PREFERRED RESOURCES AT A LOCAL LEVEL 3

SCE’s PRP RFO 2 procurement demonstrate SCE can acquire preferred resources for a specific 4

local, and in this case urban, area at the circuit level. Commission approval is necessary to demonstrate 5

SCE’s ability to deploy a concentrated amount of preferred resources in a local region and the 6

performance capability of those resources to serve load. 7

A. PRP RFO 2 Demonstrate Ability to Acquire Preferred Resources at a Local Level 8

SCE’s procurement strategy for the J-S Region first focused on acquiring resources through 9

existing procurement mechanisms and Commission programs.1 When they did not produce results in 10

sufficient quantities with online dates by 2020, SCE launched PRP RFO 2. Table IV-5 summarizes the 11

amounts of preferred resources acquired through the various acquisition processes. The PRP RFO 2 12

demonstrates preferred resources can be acquired at the local distribution level in an urban area in a fair 13

and reasonable manner and on reasonable terms.2 These resources will be deployed in the J-S Region, 14

three contracts will be deployed at a specific B-bank to support DRP, Demonstration D, and one contract 15

for 1.5 MW will be deployed at specific circuits to support the DRP, Demonstration C, as summarized 16

on Slide 15 of Appendix A. 17

1 Commission programs include utility-managed energy efficiency and demand response programs, as well as

CSI (including SASH/MASH), SGIP, NSHP, and NEM.

2 SCE testimony, Chapters III through Chapter VII.

12

Table IV-5 Preferred Resources Acquisitions in the J-S Region (As of January 2017)

Acquisition Process Acquired (MW) Total

Deployed (MW)

EE/PLS DR DG ES Hybrid

Existing Programs

DSM 23.01 0 27.31 - 0 - -0- 50.32 50.32

Existing Solicitations

LCR 48.97 17.68 12 - 0 - -0- 77.65 0.68

SPVP - 0 - - 0 - 1.4

(terminated) - 0 - -0- 0 -0-

Aliso Canyon

-0- -0- -0- 2 -0- 2 -2

RPS -0- -0- -0- -0- -0- -0- -0-

RAM -0- -0- -0- -0- -0- -0- -0-

ES -0- -0- -0- -0- -0- -0- -0-

CHP -0- -0- -0- -0- -0- -0- -0-

J-S Region Specific Solicitations

PRP DG RFO

- 0 - - 0 - 2.167

(terminated) - 0 - -0- 0 -0-

PRP RFO 2 - 0 - 55

With 1.5 MW at two circuits

-0- 60 10 125 -0-

Other

Pilot/Utility Owned

-0- -0- -0- 4.3 -0- 4.3 -0-

Total 71.98 72.68 39.31 (Was 42.88)

66.3 10 260 51

B. PRP RFO 2 Contracts Demonstrate SCE’s Ability to Deploy Preferred Resources at the 1

Local Level 2

As summarized in Table IV-1, preferred resources have not been deployed in significant 3

quantities to meet forecasted hourly incremental load demand in the J-S Region. SCE acquired the bulk 4

of the presently deployed preferred resources through the DSM programs and some from the LCR RFO. 5

13

The capacity savings of these resources are established using Commission-approved measurement and 1

validation methodology and are not measured at the individual customer’s meter. SCE will need to 2

analyze individual customer meter data to verify change in system demand from these contracts once 3

these LCR EE/PLS resources are fully deployed. 4

As an example, at the end of 2016 customer-installed systems deployed about 27 MW of solar in 5

the PRP region of which the output of few systems is measured. SCE must approximate the remaining 6

solar systems’ output. As another example, the LCR EE/PLS contracts did not establish a capacity 7

savings as seen at the individual customers’ meters. Therefore, once these LCR EE/PLS resources are 8

deployed, SCE will need to use the customers’ utility meter to determine the extent to which there is a 9

change in system demand from these resources. 10

The PRP RFO 2 contracts are reasonable because they are specifically contracted to provide grid 11

level benefits that, once deployed, will provide the means to acquire actual performance data to validate 12

their grid-level contribution to SCE’s grid.13

Appendix A

PRP RFO 2 Application

Meet & Confer with ORA

PRP RFO 2 ApplicationMeet & Confer with ORA

March 6, 2017

A-1

Executive Summary

The PRP Activities and Objectives are Important, Supported by all 19 contracts secured in PRP RFO 2, and in Customers’ Best Interest

• California’s electric grid is fast moving toward a clean electric grid• Distributed Energy Resources (DERs) are expected to play an increasing role in the grid• PRP is seeking to validate DERs ability to manage grid parameters• The Johanna and Santiago A-Bank Substations (J-S Region) are an ideal location for the PRPo load growtho effectiveness to site resourceso high expected DER penetration

• Time is of the essence to validate the performance of DERs to support the state’s rapid movement toward a clean distribution grid.

PRP RFO 2 Procurement is Not Subsumed nor Duplicative of Other Procurement or Programs• Despite other program and procurement efforts, PRP RFO 2 procurement remains valuable• Other programs and procurements vary in scope and timing

PRP RFO 2 Procurement Supports Other Endeavors• Other programs are relying on PRP RFO 2 procurement to meet their objectives• Specific contracts from the PRP RFO 2 support SCE’s DRP Demonstration Projects Demos C and D, and SCE EPIC supported Integrated

Grid Project

The PRP RFO 2 Procurement Benefits Customers Because It Reflects Good Corporate Citizenship• PRP RFO 2 contracts supports the state’s aggressive and important energy and environmental policy goals, which rely more and

more on DERs.• Timing is critical to determine if DERs can actually perform as assumed. A wait and see approach may result in reliability problems

or not able to support the state’s objectives

A-2

The PRP Activities and Objectives are Important, Supported by all 19 contracts secured in PRP RFO 2, and in Customers’ Best Interest

A-3

DERs are Increasingly Playing an Active Role

• Reliance on large central plants with a focus on transmission level system planning

• Assumed DER performance capabilities from regulatory and state planning agencies

• Increasing policy goals to boost role of DERs and reduce reliance on gas-fired generation

• Aggressive environmental state goals

• Reliance on DERs to meet more grid reliability objectives

• Reduced greenhouse gases• Reduced reliance on gas-fired

generation• Plug-in Play integrated grid

platform• Increased customer choice and

control• Enhances capabilities from

DERs and DER-enabling technologies

Current State Vision for DERs

PRP Validation of DERs Performance

• Acquire portfolio of DERs to meet increasing demand

• Deploy DERs at high-penetration level in a concentrated area

• Operate DERs in an integrated manner• Validate performance capabilities• Inform grid of the future

The role and functions of DERs in grid operations and the energy economy is rapidly changing. Validating their performance is vital to properly incorporating them into grid planning and operations. DER performance validation will help right-size current and future investments in DERs and their dependability.

A-4

Achieving the Future Requires More Knowledge

System

A Bank

B Bank

Circuit

Gri

d L

eve

l of

Focu

s

DRP Demo

D

PRP

LCR

DRP Demo

C Sources: DER Forecast: 2016 IEPR SCE Form 1.4-Mid, 2016 IEPR SCE Form 1.1-Mid, 2016 IEPR Mid Baseline-Mid AAEE, Doubling Factor of Mid AAEE, 2015 DR Ex Ante Load Impact ReportGM Circuits Modernized: Estimate of 288 circuits/year modernized over population of 4500

The A-Bank is the interface between transmission and distribution grids. Early procurement of DERs concentrated at the A-Bank level informs grid modernization efforts.

A-5

Otay Mesa

LagunaBell

Viejo

Serrano

Johanna

Santiago

SanOnofre

HuntingtonBeach 452 MW

Alamitos2,011 MW

Lighthipe

SDG&E

Encina946 MW

Redondo1,343 MW

El Segundo*335 MW

Mira Loma

Mesa

Vincent Lugo

RanchoVista

Walnut

Barre Lewis

VillaPark

Ellis

Alberhill

Valley

Olinda

RioHondoMesa

500 kV

ReactiveSupport1,700 MVAR

Phase Shifting Transformers

San Luis Rey

Tijuana

ImperialValley

Suncrest

Miguel

CFE

Talega

ECO

WESTERN LA BASIN

Ocotillo

Carlsbad558 MW

Pio Pico300 MW

CAISO Assumes DER and Transmission Mitigation Actions for OTC Plant Retirements will Succeed

Alamitos640 MW

Stanton98 MW

Huntington644 MW

OTC Plant (Impending Retirement)

500 kV

230 kV

SubstationLine

* Represents unit 4, unit 3 repowered 8/2013

Mitigation

Utility Procured (MW) Deployed (MW)

SCE 430.6 minimal

SDG&E 37.5 of 93.5 37.5

Source of Procured: CAISO Draft 2016-2017 Transmission Planning and SDG&E public information.

A-6

J-S Region is the Ideal Real-World Test Location to Validate Performance of DERs

J-S Region

238 MW of expected load growth by 2022

Among most effective substation locations to site resources to meet Western LA Basin Local Capacity Requirements

Region will be most affected by closure of SONGS and impending retirement of OTC plants if mitigation efforts in flight do not perform as expected

Target region for DRP demonstration projects C & D

PRP RFO 2 enable high penetration of DERs by 2020, 28% region wide, up to 55% in some circuits Leading region for SCE

Urban to semi-urban region representative of location to site DERs in lieu of gas-fired generation

Peak is driven by commercial and industrial customers

A-7

Testing Locally Sited Portfolio of DERs to Meet J-S Region Incremental Load Growth

The 19 contracts support the PRP portfolio delivery of 226 MW at the peak and deliver through the hours of 10 a.m. and 8 p.m. based on the inherent production limitations of each type of preferred resource. Resource assumption

Key DER portfolio assumptions• EE performs at close to 90% of installed

capacity• Solar PV, at its peak, performs at 48% of

installed capacity (based on measured systems in the J-S Region)

• DR and ES are assumed to perform at 100 percent of installed capacity

Remaining gap should be filled without a PRP specific solicitation

Note: Peak hour for Johanna and Santiago are non-coincidentalExisting resources include a 19.6 MW resource not under contract with SCE but interconnected as of Jan. 2017 in the J-S Region

A-8

The performance of the DERs procured will be measured by the capability to off-set local load and the impact on the grid by assessing the resources availability (available when called upon), dependability (ability to deliver an expected load reduction or production) and durability (ability to deliver persistently in future years).

Availability

Dependability

Durability

Performance Measurement

Metrics to Evaluate J-S Region DER Performance

PRP RFO 2 Resource

Availability & Dependability Durability

Performance Metrics Measurement Process

Hybrids - CombinedSolar and Energy Storage

MW generation over hoursDelivered metered output (dependability) consistent with the terms in the contract (availability).

Energy generation realized year over year for the life of the contract during specific times of day.

Demand Response (LR or ES)

MW load drop compared to a baseline over the dispatched hours

Load drop measured using a 10-10 baseline methodology comparison to the actual usage during dispatch (dependability) with dispatches consistent with the terms in the contract (availability).

Energy reduction realized year over year for the life of the contract during dispatch

Energy Storage (IFOM)

MW generation over the dispatched hours

Delivered metered output (dependability) consistent with dispatches that meet the terms in the contract (availability).

Energy output realized year over year for the life of the contract during dispatch

A-9

Approval of the PRP RFO 2 Resources is in the Best Interest of Customers

Key PRP Objectives Supported by the PRP RFO 2 Resources• Validate DERs ability in aggregate to manage key distribution

grid parameters (e.g., substation load at an A-Bank level)• Inform planning and operational enhancements needed to

operate grid between A-Banks at high penetration of DERs. While the DRP demonstration project D is seeking to understand the operations of DERs at higher penetration of DERs, it is not looking at the A-Bank level, and the expected DER penetration level from the DRP may not be sufficient to fully understand grid operations at high penetration of DERs

• Guide DER policies, preferred resource incentives, and grid system upgrades

• Support Local Capacity Resource Requirements, Distribution Resources Plan, EPIC and Demonstration projects, and state environmental goals

More specifically, the PRP RFO 2 procurement will help determine if: 1. locally-sited preferred resources will allow SCE to effectively

manage or offset a forecasted load growth2. DERs can be acquired and deployed down to the circuit level

Expected Value to CustomersAs grid investments are underway, PRP RFO 2 resources will enable the PRP’s efforts to:• Support right-sizing the grid

investment beyond the DRP demos to inform emerging modern grid standards with distributed energy resource (DERs) performance data

• Develop valuable information about DER locational value

• Improve urban acquisition and deployment of DERs

• Expand means to integrate and operationally manage DERs

• Enhance methods to facilitate customer choice of cleaner energy resources

A-10

PRP RFO 2 Procurement is Not Subsumed nor Duplicative of Other Procurement or Programs

A-11

PRP RFO 2 Contracts are Not Duplicative

The DER acquisition strategy for the J-S Region has focused on three key pillars• Existing Demand Side Management programs

• Existing solicitations by listing J-S as preferred location

• J-S specific solicitations used when existing programs or solicitations do not deliver the needed preferred resources for energy reduction/generation or portfolio diversity

Neither existing programs nor

solicitations have provided sufficient

locally sited DERs in the J-S Region to meet the 2022 incremental load demands of 238 MW

Results from Existing Programs and Solicitations

Existing Programs• EE – 23 MW• DG – 27 MW• DR – 0

Existing Solicitations• LCR – 78 MW• Aliso Canyon – 2 MW • SPVP – 1.4 MW (Terminated) • RPS – 0 • ES – 0• RAM – 0 • CHP – 0

Note:Approximately 4 MW of energy storage from pilots and SCE-owned storage are expected in the J-S Region in 2017.

The two PRP DG RFO contracts for a combined total 2.2 MW were terminated in 2016.

The location-targeted PRP RFO 2 resulted in a 125 MW in executed contracts: • that were obtained using a

fair and objective process• that will contribute to a

portfolio of DERs providing numerous customer benefits

Depending on the performance of DERs, a locally sited DER portfolio of ~280 MW may meet the incremental load demand in the J-S Region

A-12

The PRP RFO 2 Procurement Remains Valuable Despite Existence of Other Programs

Program/Procurement Distinction Between Other Programs

Integrated Distribute Energy Resources (IDER)

• Timing lags behind PRP• PRP informs IDER, e.g., IDER contracts build from PRP contracts

Distribution Resources Plan (DRP) • Demo C• Demo D

• Not a DER procurement mechanism• Leverages other procurement including PRP RFO 2 procurement

o Demo C at the circuit levelo Demo D at the B-Bank level

Integrated Grid Project • Not a DER procurement mechanism• Leverages other DER procurement including PRP RFO 2 procurement

Local Capacity Requirements RFO

• Procurement addresses transmission system level needs• Assumes performance of DERs• Uncertainty about contracts coming online

A-13

PRP RFO 2 Procurement Supports Other Endeavors

A-14

Summary of PRP RFO 2 Benefits# Seller Project Product PRP LCR

DemoC

Demo D

IGP ESState Goals

Metrics

1

AMS

Cedar Technologies 1

Demand Response (End-Use Load Reduction (LR)/ Energy Storage (ES))

√ √ TBD √ √ TBD √

In addition to a series of quantitative metrics used to determine the offers value, SCE used the following metrics to determine these contracts attributes would contribute toward the PRP, LCR, DRP, IGP and ES goals

• Location• Online date• Delivery Hours• Delivery months• Frequency availability• Portfolio contributions

See SCE’s TestimonyChapter III, V & VI

2 Cedar Technologies 2 √ √ TBD TBD TBD TBD √




6NextEra

OC Distributed ES I √ √ TBD TBD TBD TBD √

7 OC Distributed ES II √ √ √ TBD TBD TBD √

8 Swell Swell Energy Fund √ √ TBD TBD TBD √ √

9

Convergent

Orange County ES-1

IFOM Energy Storage

√ √ √ √ √ √

10 Orange County ES-2 √ √ √ √ √ √

11 Orange County ES-3 √ √ √ √

12 Hecate Energy Johanna 1 √ √ √ √

13 Hecate Energy Johanna 2 √ √ √ √

14 NextEra Valencia ES √ √ √ √

15

NRGNRG Distributed Generation PR LLC

Behind-the-Meter (BTM) DG-ES Hybrid

√ √ TBD TBD TBD TBD √

16 √ √ TBD TBD TBD TBD √



19 √ √ TBD TBD TBD TBD √Note: The location of behind the meter contracts is the J-S region but the actual customer location will not be known until shortly before the contract starts delivery. Therefore the benefit is TBD

A-15

The PRP RFO 2 Procurement Benefits Customers Because It Reflects Good Corporate Citizenship

A-16

SCE’s PRP RFO 2 Procurement Demonstrate Good Corporate CitizenshipPRP RFO 2 contracts support the state’s aggressive and important energy and environmental policy goals, which rely more and more on DERs. SCE believes it has a corporate responsibility to its customers to take the lead on supporting state policies in a reasonable manner.

Indicators of State Policies:

• Reduce emission from criteria pollutants – SB 350

• Reduce fossil fuel consumption – SB 350

• Accelerate energy storage deployment – AB 2868

• Renewables Portfolio Standard

• GHG Cap and Trade program – AB 32, SB 32

• Support preferred loading order

• Inform DRP and IDER proceedings

• Act as a backstop to unexpected LCR contractsnot delivering

Time is of the essence to determine if DERs

can actually be counted on to

perform. A wait and see approach may result in reliability

problems or inability to support the state’s

objectives

A-17

Back-up

A-18

DER Acquisitions to Date in the J-S RegionAcquired (MW) Total Deployed (MW)

EE/PLS DR DG ES Hybrid

Existing Programs

DSM 23.01 0 27.31 - 0 - -0- 50.32 50.32

Existing Solicitations

LCR 48.97 17.68 12 - 0 - -0- 77.97 0.68

SPVP - 0 - - 0 -1.4

(terminated)- 0 - -0- 0

Aliso Canyon -0- -0- -0- 2 -0- 2

J-S Region Specific Solicitations

PRP DG RFO - 0 - - 0 -2.167

(terminated)- 0 - -0- 0

PRP RFO 2 - 0 - 55 -0- 60 10 125

Other

Pilot/Utility Owned -0- -0- -0- 4.3 -0- 4.3

Total 71.98 72.68 42.88 66.3 10 260 51

Note: RPS, RAM, ES, and CHP resulted in zero DERs in the J-S Region

A-19

Appendix B

Confidentiality Declaration of Caroline McAndrews

B-1

DECLARATION OF CAROLINE MCANDREWS REGARDING THE CONFIDENTIALITY 1

OF CERTAIN DATA 2

I, Caroline McAndrews, declare and state:

1. I am the Director of the Preferred Resources Pilot for Southern California Edison Company 3

(SCE) and the sponsor of SCE’s Supplemental Testimony (SCE-2) in Support of its Application for 4

Approval of the Results of its Second Preferred Resources Pilot (PRP) Request for Offers (RFO) (PRP 5

RFO 2) (the Application). I make this declaration in accordance with Commission Decisions (D.) 06-6

06-066 and D.08-04-023, issued in Rulemaking 05-06-040. I have personal knowledge of the facts and 7

representations herein and, if called upon to testify, could and would do so, except for those facts 8

expressly stated to be based upon information and belief, and as to those matters, I believe them to be 9

true. 10

2. In accordance with Decision (D.) 91-05-007, D.06-06-066, which adopted the investor-11

owned utilities’ proposed Matrix (the IOU Matrix), D.08-04-023, issued in Rulemaking 05-06-040, 12

D.11-07-028, General Order (GO) 96-B, GO 66-C,22 and California Public Utilities Code Section 13

454.5(g),23 which protects the confidentiality of market sensitive information, SCE requests confidential 14

treatment of the redacted information in the Table III-4 in SCE-2. 15

22 Section 2.2(b) of the Commission’s GO 66-C requires the Commission to protect confidential information

that would place a utility at an “unfair business disadvantage” if publicly disclosed. It categorizes as information that is “not open to public inspection,” those “[r]eports, records, and information requested or required by the Commission which, if revealed, would place the regulated company at an unfair business disadvantage.”

23 Section 454.5(g) provides: “The commission shall adopt appropriate procedures to ensure the confidentiality of any market sensitive information submitted in an electrical corporation's proposed procurement plan or resulting from or related to its approved procurement plan, including, but not limited to, proposed or executed power purchase agreements, data request responses, or consultant reports, or any combination, provided that the Office of Ratepayer Advocates and other consumer groups that are nonmarket participants shall be provided access to this information under confidentiality procedures authorized by the commission.”

B-2

3. Listed in the below chart are the data in Table III-4 in SCE-2 for which SCE seeks 1

confidential treatment, the justification for that treatment as identified in the IOU Matrix appended to 2

D.06-06-066, and the period of confidentiality for the data identified. 3

Data Page Justification Period of

Confidentiality Hours of Daily Availability

Delivery Duration

Annual Limits

Columns of Table III-4 on page 10 of SCE-2

VII.B For specific contracts between the IOU and other parties to deliver power to the IOU, contact terms -- other than contract summaries of the counter party, resource type, location, capacity, expected deliveries, delivery point, length of contract, and online date -- are confidential.

3 years from the date contract states deliveries to begin; or until one year following expiration, whichever comes first.

4. I am informed and believe and thereon allege that the data in the table above cannot be 4

aggregated, redacted, summarized, masked or otherwise protected in a manner that would allow partial 5

disclosure of the data while still protecting confidential information. 6

5. I am informed and believe and thereon allege that the data in the table above has never been 7

made publicly available. 8

I declare under penalty of perjury under the laws of the State of California that the foregoing is

true and correct.

Executed on May 1, 2017 at Rosemead, California.

/s/ Caroline McAndrews

Caroline McAndrews

supplemental testimony of southern california edison ... sce does not have an ongoing obligation to...

Documents