Non-Wires Alternatives - CASE STUDIES FROM LEADING U.S. PROJECTS NOVEMBER 2018 - E4TheFuture

 
Non-Wires Alternatives - CASE STUDIES FROM LEADING U.S. PROJECTS NOVEMBER 2018 - E4TheFuture
Non-Wires
  Alternatives
 CASE STUDIES FROM
LEADING U.S. PROJECTS

      Load Management Leadership

           NOVEMBER 2018
Non-Wires Alternatives - CASE STUDIES FROM LEADING U.S. PROJECTS NOVEMBER 2018 - E4TheFuture
NON-WIRES ALTERNATIVES

TABLE OF CONTENTS
ABOUT THE REPORT....................................................................................................................................................................4
EXECUTIVE SUMMARY.................................................................................................................................................................7
INTRODUCTION......................................................................................................................................................................... 10
BACKGROUND............................................................................................................................................................................ 11
      §§ State of the Non-Wires Alternatives Market......................................................................................................... 12
      §§ Featured Case Studies.................................................................................................................................................. 14
      §§ Case Study Overview and Commonalities............................................................................................................. 15
      §§ Case Study Summaries................................................................................................................................................. 19
KEY INSIGHTS AND CHALLENGES........................................................................................................................................ 28
      §§ Planning and Sourcing.................................................................................................................................................. 29
      §§ Project Implementation............................................................................................................................................... 30
      §§ Technology Implementation...................................................................................................................................... 32
      §§ NWA Project Findings.................................................................................................................................................... 35
CONCLUSION.............................................................................................................................................................................. 38
      §§ Areas for Further Discussion and Research.......................................................................................................... 38
APPENDIX: CASE STUDIES....................................................................................................................................................... 41
      §§ Arizona Public Service (APS)—Punkin Center....................................................................................................... 42
      §§ Bonneville Power Administration—South of Allston......................................................................................... 45
      §§ Central Hudson Gas & Electric—Peak Perks Targeted Demand Management........................................ 49
      §§ Con Edison—Brooklyn Queens Demand Management................................................................................... 52
      §§ Consumers Energy—Swartz Creek Energy Savers Club................................................................................... 56
      §§ GridSolar, LLC—Boothbay........................................................................................................................................... 59
      §§ National Grid—Old Forge............................................................................................................................................ 63
      §§ National Grid—Tiverton NWA Pilot.......................................................................................................................... 65
      §§ Southern California Edison (SCE)—Distribution Energy Storage Integration (DESI) 1........................... 67
      §§ SCE—Distributed Energy Storage Virtual Power Plant (VPP).......................................................................... 70

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Non-Wires Alternatives - CASE STUDIES FROM LEADING U.S. PROJECTS NOVEMBER 2018 - E4TheFuture
Load Management Leadership

LIST OF FIGURES
FIGURE 1: MAP OF TOP SELECTED NWA CASE STUDIES.............................................................................................. 14
FIGURE 2: CASE STUDY PROJECT TIMELINES................................................................................................................... 17
FIGURE 3: SOUTH OF ALLSTON 2017 SUMMER PEAK FLOWS................................................................................... 20
FIGURE 4: EXAMPLE OF HOURLY LOAD REDUCTION PROVIDED BY DIFFERENT NWA RESOURCES............ 21
FIGURE 5: PROJECT AREA, BOOTHBAY PENINSULA....................................................................................................... 23
FIGURE 6: SITING LOCATION MAP FOR CONSTRAINED AREA, WESTERN LOS ANGELES BASIN................... 27

LIST OF TABLES
TABLE 1: STATE-LEVEL REGULATORY PROCESSES FOR NWAs................................................................................... 13
TABLE 2: NON-WIRES ALTERNATIVES CASE STUDIES BY PROJECT SIZE, STATUS, AND TECHNOLOGIES........16
TABLE 3: T&D CHALLENGES, DRIVERS, AND SOURCING............................................................................................. 18
TABLE 4: SUMMARY OF COST EFFECTIVENESS FOR THE TIVERTON NWA PILOT PROJECT............................. 25
TABLE 5: SUMMARY OF KEY INSIGHTS AND CHALLENGES......................................................................................... 28
TABLE 6: ENERGY EFFICIENCY AND DEMAND RESPONSE: LESSONS LEARNED.................................................. 33
TABLE 7: ENERGY STORAGE—IMPLEMENTATION CHALLENGES............................................................................. 34
TABLE 8: SUMMARY FINDINGS FOR NWA CASE STUDIES........................................................................................... 36

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Non-Wires Alternatives - CASE STUDIES FROM LEADING U.S. PROJECTS NOVEMBER 2018 - E4TheFuture
NON-WIRES ALTERNATIVES

                                About the Report
COPYRIGHT                                              ABOUT PLMA
© Smart Electric Power Alliance, Peak Load             PLMA (Peak Load Management Alliance) is a
Management Alliance, and E4TheFuture, 2018.            non-profit organization founded in 1999 as the
All rights reserved. This material may not be          voice of load management practitioners. PLMA’s
published, reproduced, broadcast, rewritten,           over 140 member organizations share expertise
or redistributed without permission.                   to educate each other and explore innovative
                                                       approaches to demand response programs, price
AUTHORS                                                and rate response, regional regulatory issues,
Brenda Chew, Research Analyst, Smart Electric          and technologies as the energy markets evolve to
Power Alliance                                         represent a broad range of energy. Learn more at
Erika H. Myers, Research Director, Smart Electric      www.peakload.org.
Power Alliance                                         ABOUT E4THEFUTURE
Tiger Adolf, Member Services Director, Peak Load       E4TheFuture is a nonprofit organization advancing
Management Alliance                                    clean, efficient energy solutions. Advocating for
Ed Thomas, Executive Director, Peak Load               smart policy with an emphasis on residential
Management Alliance                                    solutions is central to E4TheFuture’s strategy.
                                                       “E4” means: promoting clean, efficient Energy;
ABOUT SEPA                                             growing a low-carbon Economy; ensuring low-
The Smart Electric Power Alliance (SEPA) facilitates   income residents can access clean, efficient,
the electric power industry’s smart transition to a    affordable energy (Equity); restoring a healthy
clean and modern energy future through education,      Environment for people, prosperity and the
research, standards and collaboration. SEPA is an      planet. Dedicated to bringing clean, efficient
unbiased, industry-trusted source for insights and     energy home for every American, E4TheFuture’s
knowledge on clean energy and grid modernization.      endowment and primary leadership come from
Learn more at www.sepapower.org.                       Conservation Services Group whose operating
                                                       programs were acquired in 2015 by CLEAResult.
                                                       Visit www.e4thefuture.org.

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Non-Wires Alternatives - CASE STUDIES FROM LEADING U.S. PROJECTS NOVEMBER 2018 - E4TheFuture
Load Management Leadership

ACKNOWLEDGEMENTS
The development of this report was the result of significant time and input from a large number of industry
peers. SEPA and PLMA would first like to thank Steve Cowell and Julie Michals for their efforts
at E4TheFuture to drive this important joint research effort forward.
PLMA staff performed the work of soliciting abstracts, establishing the peer review team, administering the
abstract scoring for selected case studies, and interviewing authors to develop case studies. This effort was
led by Tiger Adolf and Ed Thomas. Case studies developed for this report would not be possible without the
input from the following representatives:
Alan Harbottle,                     Damei Jack,                                    Matthew Chase,
Arizona Public Service              Consolidated Edison                            National Grid
Tom Spence,                         Mark Luoma,                                    Grant Davis,
Arizona Public Service              Consumers Energy                               Southern California Edison
Lee Hall,                           Kitty Wang,                                    Loic Gaillac,
Bonneville Power Administration     Energy Solutions                               Southern California Edison
Sarah Arison,                       Rich Silkman,                                  Polly Shaw,
Bonneville Power Administration     GridSolar, LLC                                 Stem
Mark Sclafani,                      George Cruden,
Central Hudson Gas & Electric       National Grid

Beyond case study participants, this research effort also included input from a number of peer review team
members and external reviewers:
Bruce Humenik,                      Steve Fine,                                    Jason Prince,
Applied Energy Group                ICF                                            Rocky Mountain Institute
Alexander Núñez,                    Andrea Simmonsen,                              Jeff Waller,
Baltimore Gas and Electric          Idaho Power                                    Rocky Mountain Institute
Frank Brown,                        Henry Yoshimura,                               Mark Dyson,
Bonneville Power Administration     ISO New England                                Rocky Mountain Institute
Derek Kirchner,                     Jason Cigarran,                                Ross Malme,
DTE Energy                          Itron                                          Skipping Stone
Rich Philip,                        Bill Steigelmann,                              Eric Winkler,
Duke Energy                         Lockheed Martin                                Winkler Consulting
Ryan Brager,                        Brett Feldman,                                 Joe Peichel,
Eaton                               Navigant                                       Xcel Energy
Ron Chebra,                         Ashley Van Booven,                             Dave Hyland,
Enernex                             New Braunfels Utilities                        Zen Ecosystems
Keith Day,                          Elizabeth Titus,                               Eric Smith,
E.ON                                Northeast Energy Efficiency Partnerships       Zome
Ric O’Connell,                      Michael Brown,
GridLab                             NV Energy
Rich Barone,                        Ahmed Mousa,
Hawaiian Electric                   Public Service Enterprise Group

Additional staff at SEPA helped to review and develop this report: K Kaufmann, Maclean Keller, Tanuj Deora,
Sharon Allan, Medha Surampudy, Nick Esch, Ian Motley, Maliya Scott, Chris Schroeder, Robert Tucker,
Jeffrey Fromuth, Erika Tomatore, Kate Strickland, Jared Leader, and Sharon Thomas.

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Non-Wires Alternatives - CASE STUDIES FROM LEADING U.S. PROJECTS NOVEMBER 2018 - E4TheFuture
NON-WIRES ALTERNATIVES

    METHODOLOGY

    In April of 2018, the Smart Electric Power Alliance   nn Challenges identified and lessons learned:
    (SEPA) and PLMA (Peak Load Management                    How compelling or unique are the challenges
    Alliance) received funding from E4TheFuture              encountered in any one project, and the
    for a study on the current status of non-wires           resulting lessons learned, which could be
    alternatives (NWA) projects across the United            shared across the industry?
    States. In particular, the goal of the study was      nn Cross-sectional representation: How do the
    to identify 10 representative projects and share         projects contribute to a well-rounded set of
    the lessons that utilities and other industry            case studies representing different geographic
    stakeholders have learned from the process of            locations, utility or project lead types, and
    developing and, in some cases, completing and            project sizes?
    operating these projects. To select the projects,     Once the 10 case studies were selected, we
    SEPA and PLMA issued an industry-wide call            conducted follow-up interviews with the utilities
    for NWA case studies, and ultimately received         and other project developers. The responses
    papers on more than 25 such projects, either in       were put into a case study template, which was
    development or in operation, from across the          then reviewed by the individual utilities and
    country. A peer review team of 29 volunteers          project developers. This report is based on the
    scored the papers, ultimately selecting the           original case studies submitted, and the in-depth
    10 case studies with the highest rankings.            information and insights gathered through the
    Selection was based on three key criteria:            interviews. Available data (e.g., cost data and
    nn Applicability: How relevant to other utilities     information on project challenges and solutions)
       and technology developers are the lessons          collected through this process varied depending
       learned from this NWA project? How can this        on the sensitivities and willingness of project
       project best inform utilities and be replicated?   participants to share information.

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Non-Wires Alternatives - CASE STUDIES FROM LEADING U.S. PROJECTS NOVEMBER 2018 - E4TheFuture
Load Management Leadership

                                       Executive Summary
In today’s electricity market, projects such as Con
Edison’s Brooklyn Queens Demand Management                                  CASE STUDIES
(BQDM) initiative are capturing public attention and
inspiring decision makers to examine the potential                          Case studies (listed alphabetically by utility or
of non-wires alternatives (NWAs).1 As interest in                           key project implementer2 if different from the
NWAs grows, industry practitioners are seeking out                          utility, followed by project name):
more information and lessons learned from past                              1. Arizona Public Service (APS)—Punkin Center
and existing efforts. To help shed light on a broader
                                                                            2. Bonneville Power Administration (BPA)—
set of NWA projects in the U.S., E4TheFuture
                                                                               South of Allston
provided funding to the Smart Electric Power
Alliance (SEPA) and PLMA (Peak Load Management                              3. Central Hudson Gas & Electric—Peak Perks
Alliance) to select 10 NWA case studies and share                              Targeted Demand Management Program
insights from these projects with the public.                               4. Con Edison—Brooklyn Queens Demand
Using help from 29 volunteer Peer Review Team                                  Management (BQDM) Program
members, the 10 case studies summarized in this
                                                                            5. Consumers Energy—Swartz Creek Energy
report were selected based on their applicability,
                                                                               Savers Club
lessons learned, and cross-sectional representation
(see Methodology for more details). These projects                          6. GridSolar—Boothbay
represent a range of technology and program                                 7. National Grid—Old Forge
solutions, project sizes, and geographies.
                                                                            8. National Grid—Tiverton NWA Pilot
There are over 100 NWA projects in various
                                                                            9. Southern California Edison (SCE)—
planning stages today. They account for over
                                                                               Distribution Energy Storage Integration
three-quarters of total planned and completed
                                                                               (DESI) 1
NWA capacity in the U.S.3 A smaller subset of NWA
projects have moved into implementation stages,                             10. SCE—Distributed Energy Storage Virtual
and an even smaller set of projects have reached                                Power Plant (VPP)
completion. The 10 case studies examined in this
report reflect the early stages of NWA development
across the U.S. One project is still in the
procurement phase, seven projects are currently
active, and two projects have reached completion.
Across these 10 case studies, key lessons learned
and challenges surfaced along three main
categories, as detailed in the table on page 8.

1   Non-wires alternatives are defined as “an electricity grid investment or project that uses non-traditional transmission and distribution
    (T&D) solutions, such as distributed generation (DG), energy storage, energy efficiency (EE), demand response (DR), and grid software
    and controls, to defer or replace the need for specific equipment upgrades, such as T&D lines or transformers, by reducing load at a
    substation or circuit level,” (Navigant, 2017).
2   Key project implementer is the key project sponsor indicated in case study submissions. Most projects were led by utilities.
3   Greentech Media, A Snapshot of the US Gigawatt-Scale Non-Wires Alternatives Market, August 2017. Available at:
    https://www.greentechmedia.com/articles/read/gtm-research-non-wires-alternatives-market#gs.lytvWGw.

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NON-WIRES ALTERNATIVES

1. Planning and Sourcing—A number of utilities,                            not materialize. These projects pointed to the
   during the initial planning and procurement                             uncertainty of forecasting load growth and the
   phases, noted the importance of having a deep                           benefit NWAs provide in substantially reducing
   understanding of their service territories and                          potential stranded costs from investing in
   grid conditions to help inform their program                            unnecessary infrastructure upgrades.
   and technology procurement processes.                               2. Project Implementation—For the majority of
   Utilities use a “benefit to cost” assessment to                        the project teams, implementing the NWA effort
   evaluate NWA and other design options in                               meant navigating through uncharted territory.
   order to determine the least cost alternative                          As these teams tested out new technologies
   for consumers. In all cases, safety, reliability,                      and programs novel to utility customers, it was
   customer experience and affordability should                           necessary to plan for internal development,
   be foundational pillars for decisions on NWA                           reach out to local communities, and engage
   options.4 Utilities noted the importance of                            customers through a multipronged approach.
   building in more time for the sourcing process,                        Performance risks associated with new
   and the benefits of having an open and                                 technologies justify the use of demonstrations
   technology-agnostic approach.                                          and pilots to better understand performance
    For at least two projects, NWA opportunities                          and customer impacts, as well as exploring
    originally emerged as a result of high load                           mechanisms for prudent sharing of risks
    growth forecasts; however, load growth did                            between participants.

    SUMMARY OF KEY INSIGHTS AND CHALLENGES

                                                                               IMPLEMENTATION
     PLANNING AND SOURCING
                                                                                                 TECHNOLOGY-SPECIFIC
                                               PROJECT IMPLEMENTATION
                                                                                                   IMPLEMENTATION
     Open and technology-agnostic               Plan for internal development             Launching energy efficiency first allows
       approaches can help with                                                         longer lead times for other DER solutions
           project success
       Procurement processes and                 Community outreach helps                    Demand response encompasses
    bidding responses require more             overall reception and likelihood              a wide range of technologies and
     time than originally anticipated                 of project success                       was met with varying levels of
                                                                                              success across six case studies
       Uncertainty of load growth                 Recruitment and customer                   Energy storage implementation
        is a challenge for utilities               engagement requires a                   has its share of obstacles, including:
        but a strength for NWAs                    multipronged approach                       siting, reliability requirements,
                                                                                           interconnection, and system impact
    Know as much about your service
                                                                                                challenges. These challenges
      territory as possible to inform
                                                                                              are largely due to the nascency
           program recruitment
                                                                                                   of storage technologies
     Utilities often use a benefit-to-
      cost assessment to evaluate
            NWA opportunities
Source: SEPA, PLMA, and E4TheFuture, 2018.

4   Note: In many states, environmental impacts must also now be considered a foundational pillar for future investments.

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3. Technology-Specific Implementation—                                     significant role in the varying levels of success
   Projects in this study included a mix of                                of energy efficiency (EE) and demand response
   technology solutions.5 Case study participants                          (DR) programs included in NWA solutions. For
   noted that different technologies, their                                six of the case study participants leveraging
   market maturity, and customer recruitment                               electric storage, the nascency of electric storage
   opportunities all factored into the varying                             and the inexperience of project teams led
   levels of success when implementing these                               to significant lessons being learned for this
   NWA projects. Customer engagement played a                              technology type.

                                               SUMMARY OF FINDINGS
While the majority of case studies examined in                             Edison’s BQDM and BPA’s SOA demonstrated
this report are still active or in the early stages of                     significant cost savings in implementing their
sourcing, a number of high-level findings became                           NWAs in comparison to the originally proposed
apparent:                                                                  infrastructure investment. A major obstacle
nn Successful delays and deferrals of                                      and opportunity is overcoming the traditional
   infrastructure upgrades—The majority of                                 rate-based cost recovery model and evolving
   the 10 case studies demonstrated success                                the utility business model to provide alternative
   in helping to delay or permanently defer                                revenue streams and incentives for utilities
   infrastructure upgrades.                                                to explore benefits from DER technologies. It
                                                                           should be acknowledged that in many cases,
nn Flexibility—NWA projects offer the ability                              this requires an update of the traditional utility
   to implement solutions incrementally and in                             compact and revenue recovery model while
   phases as load grows. This allows opportunities                         maintaining the commitment to providing the
   to approach load growth uncertainty flexibly                            customer safe, reliable and affordable choices.
   and help avoid large up-front costs.                                    Central Hudson’s Peak Perks Program showed
nn Cost Savings and Allocations—While many                                 success with the development of a unique
   of the case studies were unable to report                               incentive-based compensation model rewarding
   cost data and analysis, projects such as Con                            both utilities and customers.

                                        AREAS FOR FURTHER RESEARCH
As interest in NWAs continues to expand, many                           nn NWA benefit-to-cost analysis (BCA) and new
issues will require further utility research and                           incentive models for utilities;
discussion, including:                                                  nn Beneficial electrification, its impact on the grid,
nn NWA sourcing best practices;                                            and the role of NWAs.
nn Ownership and control of NWAs;
nn Utility contracting benchmarks with technology
   providers and third party owners;
nn Navigating multiple value streams of, and cost
   recovery approaches for, DERs serving as NWAs;

5   Case study technology solutions included: energy efficiency (EE), demand response (DR), rooftop solar photovoltaics (PV), combined heat
    and power (CHP), conservation voltage optimization, thermal storage, generators, electric storage, and generation redispatch.

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NON-WIRES ALTERNATIVES

                                                    Introduction
A significant shift is taking place in the electric                        be addressed before NWAs can become more
power sector today. Regulators, policy makers,                             mainstream.
and utilities are beginning to investigate and                             As noted in the Methodology section of this report,
deploy alternatives to traditional transmission and                        the NWA projects discussed here were selected
distribution assets—that is, building power plants                         based on their applicability, lessons learned, and
and other traditional electric infrastructure as has                       cross-sectional representation. For each case
been done for the past 100 years. They are instead                         study, key personnel at utilities and at third-
looking at non-wires alternatives, or NWAs.6                               party organizations shared insights regarding
A number of factors have contributed to                                    the planning, procurement, and implementation
the changes now underway. The large-scale                                  stages of their projects, as well as the technical and
deployment and increasing cost-effectiveness                               regulatory challenges they faced.
of distributed energy resources (DERs) is fueling                          The report is broken down into four key sections:
interest in NWAs. Navigant Research forecasts
global spending on NWAs will grow from $63                                 nn Background provides the history, a policy
million in 2017 to $580 million in 2026.7 In                                  review, and a summary of the overall state of
California, New York and a number of other                                    NWAs today. This section also includes short
regions, efforts are underway to examine the                                  descriptions of the 10 NWA case studies.
potential benefits DERs and their use in NWAs can                          nn Key Insights and Challenges delves into
provide to transmission and distribution systems.                             the key lessons learned and findings from the
However, the growing interest in NWAs has                                     10 case studies. Insights are shared at the
revealed a major gap in current knowledge,                                    planning, procurement and implementation
specifically, the lack of publicly available                                  phases.
information describing challenges and lessons                              nn Conclusion explores areas for further
learned from NWA projects. To meet this need,                                 discussion and research.
E4TheFuture provided funding to the Smart                                  nn Appendix provides the 10 NWA case studies in
Electric Power Alliance (SEPA) and PLMA (Peak                                 their entirety, and resources for further reading.
Load Management Alliance) to select 10 case
studies of NWA projects and share information
and insights regarding these initiatives with a
broad range of industry stakeholders.
For many utilities and third parties leading these
projects, NWAs proved to be the testing ground for
new technologies, programs, and methods. These
projects challenged traditional utility business
models and shed light on the legislative, regulatory,
and customer experience barriers that need to

6    NWAs are generally defined as the use of non-traditional solutions (e.g., distributed energy resources) to help defer or replace traditional
     infrastructure investments (see next section for a full definition).
7    Non-Traditional Transmission and Distribution Solutions: Market Drivers and Barriers, Business Models, and Global Market Forecasts,
     Navigant, 2017. Available at: https://www.navigantresearch.com/reports/non-wires-alternatives.

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                                                    Background
While NWAs have recently become a focus of
discussions across the electric power industry, the                         DEFINING NON-WIRES ALTERNATIVES
concept of non-wires alternatives has been around
for over three decades.8 Earlier opportunities for                          Non-wires alternatives is one of several terms
NWA development were often talked about as                                  now used to refer to the use of DERs in place
“targeted demand-side management” or other                                  of traditional power plants and infrastructure.
aliases, the objective of which was to offset                               Other terms include non-wires solutions (NWS)
distribution investment. Bonneville Power Authority                         and non-transmission alternatives (NTA). NWA
(BPA) started exploring NWA opportunities in the                            remains the most commonly used term, which
Pacific Northwest as early as 1987 and has since                            is our main reason for using it in this report.
considered over 150 potential NWA projects.9 To                             Our working definition of NWAs comes from
date, however, BPA has implemented just three                               Navigant:
of these projects. In California, Pacific Gas and
Electric (PG&E) developed its first NWA in 1991 as                              Non-wires alternatives is defined as “an
a targeted demand-side management measure.10                                    electricity grid investment or project that uses
                                                                                non-traditional transmission and distribution
Renewed interest in NWAs is taking place today in                               (T&D) solutions, such as distributed generation
large part due to the widespread deployment of                                  (DG), energy storage, energy efficiency (EE),
DERs and the potential to leverage their multiple                               demand response (DR), and grid software
capabilities. Efforts to reform the traditional                                 and controls, to defer or replace the need for
utility business model, respond to forecasted                                   specific equipment upgrades, such as T&D
load growth, and integrate DERs are leading to                                  lines or transformers, by reducing load at a
a growing number of of opportunities for NWA                                    substation or circuit level.” 11
projects. In some instances, these projects are
being driven by state-level regulatory processes;
in others, utilities and other industry stakeholders
are independently assessing and testing strategic,
locational deployment of DERs.

8   Most utilities currently consider new technologies and applications through a BCA formula that considers foundational pillars of safety,
    reliability customer experience, affordability and more recently environmental impacts.
9   BPA, Non-Wires Alternatives to Transmission, 2003. Available at: https://aceee.org/files/pdf/conferences/eer/2003/Hoffman-CPAw.pdf.
10 The PG&E Model Energy Communities Program: Offsetting Localized T&D Expenditures with Targeted DSM, 1992. Available at:
   https://aceee.org/files/proceedings/1992/data/papers/SS92_Panel5_Paper17.pdf.
11 Navigant, Non Wires Alternatives, 2017.

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NON-WIRES ALTERNATIVES

  NWAs: HOW ARE THEY DIFFERENT FROM VIRTUAL POWER PLANTS AND MICROGRIDS?

  The difference between NWAs, virtual power                          report is referred to as a virtual power plant. VPPs
  plants (VPPs) and microgrids remains a point of                     and microgrids also have the potential to reduce
  some confusion within the industry.                                 constraints on existing T&D infrastructure and
  nn VPPs rely on software and advanced                               help avoid the needs for system upgrades.
     communication systems to aggregate, control,                     However, a distinction can be drawn based on
     dispatch, plan, and optimize a suite of DERs                     the purpose and goals of a project. The NWAs
     to provide services similar to a conventional                    discussed in this study were developed explicitly
     power plant.12                                                   to defer or replace grid infrastructure upgrades,
  nn Microgrids are comprised of a group of                           while VPPs and microgrids are traditionally
     interconnected loads and DERs within clearly                     developed for a variety of other purposes.
     defined electrical boundaries. A microgrid can
     act as a single controllable entity with respect                 SEPA, PLMA, and E4TheFuture look forward to
     to the grid, and can connect or disconnect from                  working with industry peers to align terminology
     the grid to operate in both grid-connected and                   to prevent confusion among stakeholders and
     “island” mode.13                                                 provide clear distinctions between the purposes
                                                                      for each end use of DER technologies.
  Certainly, some NWA projects include VPPs and
  microgrids. In fact, one of the case studies in this

                    STATE OF THE NON-WIRES ALTERNATIVES MARKET
Global spending on NWAs is forecasted to grow                             (GW) of cumulative distributed solar capacity
from $63 million in 2017 to $580 million in 2026,                         in the state.15 CPUC’s guidance for developing
according to Navigant Research.14 While some U.S.                         distribution resource plans (DRPs) requires
utilities are choosing to explore NWA opportunities                       utilities to assess the grid impacts of DERs
on their own, a significant number of projects are                        and optimize utility operations and planning
the result of state-level regulatory processes and                        processes.
public-private partnerships, as outlined in Table 1.                  nn In New York, the REV initiative is in the process
Regulatory processes have had the biggest impacts                        of overhauling the traditional utility business
in California and New York—states which have long                        model so that utilities will become distribution
provided models for industry-wide changes later                          system platform providers.16 In addition, the
adopted in many other states.                                            REV has made utility planning processes
nn In California, high levels of DER penetration                         more transparent. As of May 2018, New York
   have begun to cause operational grid issues. As                       utilities had 41 current and upcoming NWA
   of the end of 2017, there was over 7 gigawatts                        procurements listed on the REV Connect site.17

12 SEPA, Virtual Power Plants: Buzzword or Breakthrough?, November 2016. Available at: www.sepapower.org.
13 U.S. Department of Energy definition, https://building-microgrid.lbl.gov/microgrid-definitions. See also SEPA and EPRI, December
   2016, Microgrids: Expanding applications, implementations, and business structures, www.sepapower.org.
14 Navigant, Non-Wires Alternatives, 2017. Available at: https://www.navigantresearch.com/reports/non-wires-alternatives; see also
   https://www.utilitydive.com/news/non-wires-alternatives-whats-up-next-in-utility-business-model-evolution/446933/.
15 SEPA, 2018 Utility Solar Market Snapshot, 2018. Available at: https://sepapower.org/resource/2018-utility-solar-market-snapshot/.
16 ScottMadden, California and New York Demonstration Projects, 2017.
17 NYREV, accessed 9/12/2018, available at: https://nyrevconnect.com/non-wires-alternatives/.

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Load Management Leadership

  TABLE 1: STATE-LEVEL REGULATORY PROCESSES FOR NWAs

    CALIFORNIA            The California Public Utilities Commission (CPUC) has approved a number of NWA-related
                          actions, including:
                          §§ Providing guidance to the state’s investor-owned utilities (IOUs) regarding development of
                             distribution resource plans (DRPs) that “identify optimal locations for the deployment of
                             distributed resources.”18
                          §§ Approving a pilot regulatory incentive mechanism that awards a 3-4% pre-tax incentive
                             to utilities deploying cost-effective DERs that defer or displace traditional distribution
                             investments.19
                          §§ Directing California IOUs to procure at least 150 MW of “preferred resources,” such as EE,
                             solar PV, or energy storage resources.20
     NEW YORK             In 2014, New York launched a set of regulatory proceedings and policy initiatives known as
                          Reforming the Energy Vision (REV). One of REV’s key goals is to incentivize utilities to leverage
                          the deployment of DERs to address problems traditionally handled by new investments in
                          centralized generation, transmission, and distribution infrastructure.21

  RHODE ISLAND            In 2006, Rhode Island enacted a requirement for utilities to file annual System Reliability
                          Procurement reports. As part of this process, utilities have to consider NWAs. The state’s major
                          distribution utility is also allowed to recover costs of investments in system reliability.22

     VERMONT              The Vermont Public Utility Commission enacted legislation in 2015 requiring the Vermont
                          System Planning Committee to identify deferral projects when considering new transmission.23

        MAINE             The state’s Smart Grid Policy Act Directive requires regulators to consider NWAs before
                          approving T&D projects. As of 2016, Maine has also designated a non-transmission alternative
                          (NTA) coordinator to establish an independent investigator responsible for identifying cost-
                          effective projects.24

Source: SEPA, PLMA, and E4TheFuture, 2018.

18 CPUC Public Utilities Code Section 769 issued on August 14, 2014.
19 Decision Addressing Competitive Solicitation Framework and Utility Regulatory Incentive Pilot, Decision 16-12-036, CPUC, December 15,
   2016.
20 Order Instituting Rulemaking to Integrate and Refine Procurement Policies and Consider Long Term Procurement Plans, California Public
   Utilities Commission, 2014. Available at: http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M089/K008/89008104.PDF.
21 Proceeding on Motion of the Commission in Regard to Reforming the Energy Vision, New York Department of Public Service, 2014.
   Available at: http://www3.dps.ny.gov/W/PSCWeb.nsf/All/C12C0A18F55877E785257E6F005D533E?OpenDocument.
22 Rhode Island Office of Energy Resources, System Reliability Program. Available at: http://www.energy.ri.gov/reliability/.
23 Northeast Energy Efficiency Partnerships, EM&V Forum and Policy Brief: State Leadership Driving Non-Wires Alternative Projects and
   Policies, 2017. Available at: https://neep.org/sites/default/files/resources/NWA%20brief%20final%20draft%20-%20CT%20FORMAT.pdf
24 Maine Public Utilities Commission, Docket No. 2016-00049, Commission Initiated Investigation into the Designation of a Non
   Transmission Alternative Coordinator, March 2016. Available at: https://mpuccms.maine.gov/CQM.Public.WebUI/Common/
   CaseMaster.aspx?CaseNumber=2016-00049.

NON-WIRES ALTERNATIVES: CASE STUDIES FROM LEADING U.S. PROJECTS		                                                                     13
NON-WIRES ALTERNATIVES

The NWA market is still nascent, but the number         to looking at non-traditional options. From their
of proposed or potential projects is growing.           perspective, it is an obstacle to look beyond current
Some stakeholders see NWAs as a cost effective          practices unless there are updates to the regulatory
opportunity to help meet the power needs of             compact and associated revenue recovery
a region and provide environmental benefits.            models that reward performance and establish
However, utilities have long relied on traditional      accountability for customer satisfaction.
solutions. They may be skeptical and resistant

                                             FEATURED CASE STUDIES

  FIGURE 1: MAP OF TOP SELECTED NWA CASE STUDIES

                                                                             BPA—SOUTH OF ALLSTON
                                                                             ALLSTON, WA
                                                                             SCE—VIRTUAL POWER PLANT
                                                                             LOS ANGELES, CA
                                                                             SCE—DESI 1
                                                                             ORANGE, CA
                                                                             APS—PUNKIN CENTER
                                                                             PUNKIN CENTER, AZ
                                                                             CONSUMERS ENERGY—
                                                                             SWARTZ CREEK ENERGY SAVERS
                                                                             SWARTZ CREEK, MI
                                                                             NATIONAL GRID—OLD FORGE
                                                                             OLD FORGE, NY
                                                                             CENTRAL HUDSON GAS &
                                                                             ELECTRIC—PEAK PERKS PROGRAM
                                                                             MID-HUDSON RIVER, NY
                                                                             CON ED—BROOKLYN QUEENS
                                                                             DEMAND MANAGEMENT
                                                                             BROOKLYN, NY
                                                                             NATIONAL GRID—TIVERTON
                                                                             NWA PILOT
                                                                             TIVERTON/LITTLE COMPTON, RI
                                                                             GRIDSOLAR—BOOTHBAY PILOT
Source: SEPA, PLMA, and E4TheFuture, 2018.                                   BOOTHBAY PENINSULA, ME

  SELECTED NON-WIRES PROJECTS

  Case studies (listed alphabetically by utility and    5. Consumers Energy—Swartz Creek Energy
  key project implementer if different from the            Savers Club
  utility, followed by project name):                   6. GridSolar—Boothbay
  1. Arizona Public Service (APS)—Punkin Center         7. National Grid—Old Forge
  2. Bonneville Power Administration (BPA)—             8. National Grid—Tiverton NWA Pilot
     South of Allston (SOA)
                                                        9. Southern California Edison (SCE)—Distribution
  3. Central Hudson Gas & Electric—Peak Perks              Energy Storage Integration (DESI) 1
     Targeted Demand Management Program
                                                        10. SCE—Distributed Energy Storage Virtual
  4. Con Edison—Brooklyn Queens Demand                      Power Plant
     Management (BQDM) Program

14                                                                          E4THEFUTURE | PLMA | SEPA
Load Management Leadership

                     CASE STUDY OVERVIEW AND COMMONALITIES
The case studies profiled in this study encompass     Table 2 provides a detailed list of each project’s
a broad range of project types and characteristics:   size, status, and technology portfolio.
nn Project sizes include transmission-level NWAs      Each of these projects has unique elements, based
   providing 100 megawatts (MW) of load relief, as    on regulatory environment, service territory, and
   well as distribution-level NWAs ranging from 330   specific grid constraints and conditions. However,
   kilowatts (kW) to 85 MW.                           a handful of key commonalities became evident
nn Status of projects ranges from complete,           among many of them:
   currently active, and early procurement phases.    nn Regulatory mandates played a large role in
nn Technologies and programs include a mix               over half of the 10 case studies. For projects
   of behind-the-meter and front-of-the-meter            in states such as New York and California,
   solutions. Behind-the-meter solutions include         broader policy initiatives, such as New York’s
   EE, DR, rooftop solar PV, combined heat and           REV and California’s DRPs, are challenging
   power (CHP), conservation voltage optimization,       traditional utility business models and pushing
   thermal storage, generators, and electric             utilities to look at ways to leverage DERs to
   storage. Front-of-the-meter solutions include         optimize operations and planning processes.
   energy storage and generation redispatch.            For a few case studies, direct regulatory
    (See Table 2 or Appendix).                          mandates came as a result of a third-party
nn Results and Outcomes of these projects               challenging a utility’s rate case filing and winning
   were positive for the most part. They                commission approval to explore clean energy
   successfully helped delay or permanently defer       and NWA opportunities.
   infrastructure upgrades.

 ALTERNATIVE UTILITY REVENUE STREAMS AND INCENTIVES FOR NWAs:
 PROVIDING CERTAINTY IN AREAS OF UNCERTAINTY

 For many NWA efforts taking place across               environmental impact, reliability, or resiliency,
 the U.S., overcoming the traditional utility           that potentially could yield more revenue
 compensation model of obtaining an established         than a fixed rate of return (i.e., higher risk, but
 rate of return on traditional capital investments      higher reward);
 is a major hurdle. Further, NWA projects require     nn Utility revenue-sharing on NWA savings;
 more effort to design and execute than most
 traditional upgrades. In order for the utility       nn Providing greater clarity regarding utility
 industry to be motivated to explore NWA                 ownership or compensation for NWAs,
 opportunities, alternative revenue streams and          particularly in deregulated states, so that
 incentives, opportunities for demonstrations and        financial compensation opportunities are
 testing, consideration of new service offerings         more transparent;
 and clear understanding of procedural and            nn Addressing concerns associated with revenue
 performance responsibilities are needed. Some           opportunities in areas of the country where
 examples include:                                       high levels of DR and EE investments already
 nn Performance-based regulation that could              exist. This could be done by developing
    include some financial incentive, for example        policies and regulations that account for these
    associated with congestion-cost management,          limitations as part of the incentive design.

NON-WIRES ALTERNATIVES: CASE STUDIES FROM LEADING U.S. PROJECTS		                                             15
NON-WIRES ALTERNATIVES

 TABLE 2: NON-WIRES ALTERNATIVES CASE STUDIES BY PROJECT SIZE, STATUS, AND TECHNOLOGIES

                                                                                                                                                                                            COMBINED HEAT AND POWER
                                                                                                                                                                                                                      CONSERVATION VOLTAGE
                                                                                                                                                           BACKUP GENERATORS
                                                                                                DEMAND RESPONSE
                                                                            ENERGY EFFICIENCY

                                                                                                                             ENERGY STORAGE

                                                                                                                                                                                                                      OPTIMIZATION
                                                                                                                                              GENERATION

                                                                                                                                                                               FUEL CELLS
                                                                                                                  SOLAR PV
 UTILITY, KEY PROJECT
 IMPLEMENTER—PROJECT
 NAME                                  PROJECT SIZE            STATUS                                                                                                                                                                        NOTES
 ARIZONA PUBLIC
 SERVICE—PUNKIN                        2 MW, 8 MWh           A: Q1 2018                                                        ˜
 CENTER
 BONNEVILLE POWER                       200 MW Inc.
                                                             A: July 2017
 ADMINISTRATION—                       200 MW Decr.                                                ˜                                            ˜
                                                            T: Sept. 2018
 SOUTH OF ALLSTON                      100 MW Relief
 CENTRAL HUDSON
 GAS & ELECTRIC—
                                           16 MW               A: 2016                             ˜                                                          ˜
 PEAK PERKS DEMAND
 MANAGEMENT PROGRAM
 CON EDISON—
 BROOKLYN QUEENS
                                           52 MW               A: 2014         ˜ ˜ ˜ ˜                                                                                           ˜ ˜                                        ˜
 DEMAND MANAGEMENT
 (BQDM) PROGRAM
 CONSUMER ENERGY—
 SWARTZ CREEK ENERGY                       1.4 MW           A: Oct. 2017       ˜ ˜
 SAVERS CLUB
                                                                                                                                                                                                                                             Thermal
 GRIDSOLAR—                                                  A: Q4 2013
                                          1.85 MW                              ˜ ˜ ˜ ˜                                                                        ˜                                                                              and electric
 BOOTHBAY                                                    T: Q2 2018
                                                                                                                                                                                                                                             storage
 NATIONAL GRID—                          19.8 MW,                In
                                                                                                                               ˜
 OLD FORGE                               63.1 MWh           development
 NATIONAL GRID—
                                           330 kW              A: 2012         ˜ ˜
 TIVERTON NWA PILOT
 SOUTHERN CALIFORNIA
 EDISON—DISTRIBUTION                      2.4 MW,
                                                            A: May 2015                                            ˜
 ENERGY STORAGE                           3.9 MWh
 INTEGRATION (DESI) 1
                                                                                                                                                                                                                                             Storage
 SOUTHERN CALIFORNIA
                                                                                                                                                                                                                                             systems
 EDISON—VIRTUAL                            85 MW            A: Dec. 2016                           ˜                           ˜
                                                                                                                                                                                                                                             applied as
 POWER PLANT (VPP)
                                                                                                                                                                                                                                             DR
Note: Status indicates when project started. A: Active; T: Terminated.
Source: SEPA, PLMA, and E4TheFuture, 2018.

16                                                                                                                                                     E4THEFUTURE | PLMA | SEPA
Load Management Leadership

 CASE STUDY PROJECT TIMELINES

 Projects’ timelines for NWA projects varied based                       For some utilities with larger portfolios of
 on the scale of the project and the technologies                        solutions or customer programs (e.g., DR and
 or programs selected to implement. For a number                         EE), the procurement process was an iterative
 of cases, a significant amount of time was spent                        one, occurring alongside implementation.
 ideating and examining the viability of an NWA                          Implementation was, in some cases, much clearer
 solution. Similarly, the planning phases ranged                         when installing a battery, whereas it took longer
 from four months to 38 months. Procurement                              when requiring customer recruitment for DR
 fell on average from three months to 11 months.                         programs.

   FIGURE 2: CASE STUDY PROJECT TIMELINES

   ARIZONA PUBLIC SERVICE (APS)—PUNKIN CENTER

   BONNEVILLE POWER ADMINISTRATION (BPA)
   —SOUTH OF ALLSTON (SOA)
   CENTRAL HUDSON GAS & ELECTRIC
   —PEAK PERKS PROGRAM
   CON EDISON—BROOKLYN QUEENS
   DEMAND MANAGEMENT (BQDM) PROGRAM*
   CONSUMERS ENERGY—SWARTZ
   CREEK ENERGY SAVERS CLUB

   GRIDSOLAR—BOOTHBAY

   NATIONAL GRID—OLD FORGE*

   NATIONAL GRID—TIVERTON NWA PILOT
   SOUTHERN CALIFORNIA EDISON (SCE)—
   DISTRIBUTION ENERGY STORAGE INTEGRATION (DESI) 1
   SCE—DISTRIBUTED ENERGY STORAGE
   VIRTUAL POWER PLANT
                                                                     0       1        2       3      4     5    6         7      8      9
                                                                                                      YEARS
                           IDEATION        PLANNING         PROCUREMENT/SOURCING                   IMPLEMENTATION

 Note: Project timeline information and detail varied widely across the 10 case studies. This figure was developed with input from utilities
 to provide a high level picture of project timelines. More detailed project timelines are available upon request.
 *Additional notes: For BQDM, multiple programs contribute to the BQDM portfolio, and thus timelines for procurement and
  implementation are ongoing. National Grid’s Old Forge is currently in the planning and procuring phases. BPA’s South of Allston,
  GridSolar’s Boothbay and National Grid’s Tiverton NWA Pilot are the only three projects of the 10 that have been fully wrapped up.
 Definitions for timeline phases:
 §§ Ideation: The more informal period of discussing and exploring potential for NWA solutions to address reliability concerns,
    increased load forecasts, or deferment of new transmission and distribution investments.
 §§ Planning: The time involved in identifying needs of the system and developing criteria for a non-wires project and preparing for
    sourcing solutions.
 §§ Procurement/Sourcing: The time needed to develop, release, and conclude negotiations for proposals of a non-wires alternative
    project, primarily through competitive solicitation or a customer program.
 §§ Implementation/Construction: The time needed to recruit customers for EE and DR programs, as well as deploy new assets (e.g.,
    electric storage).
 Source: SEPA, PLMA, and E4TheFuture, 2018.

NON-WIRES ALTERNATIVES: CASE STUDIES FROM LEADING U.S. PROJECTS		                                                                           17
NON-WIRES ALTERNATIVES

nn Internal management decisions also played                               explore alternatives to large-scale generation or
   a significant role in NWA projects. A number                            grid upgrade projects.
   of projects came to fruition due to an internal                      nn Sourcing across the 10 case studies was
   management decision influenced by regulatory                            predominantly through direct procurement,
   mandates (e.g., CPUC’s preferred resources                              either single-source or competitive bidding
   pilot). Other NWA opportunities were primarily                          processes.
   driven by internal management decisions to

  TABLE 3: T&D CHALLENGES, DRIVERS, AND SOURCING

 UTILITY, KEY PROJECT
                                                          T&D CHALLENGE                    DRIVERS                    SOURCING
 IMPLEMENTER—PROJECT NAME
                                                                                     Regulatory Mandate,
 ARIZONA PUBLIC SERVICE—                                  Thermal constraint                                      Direct procurement
                                                                                    Internal Management
 PUNKIN CENTER                                                on feeder                                          (competitive bidding)
                                                                                          Decision
 BONNEVILLE POWER ADMINISTRATION—                          Transmission grid        Internal Management
                                                                                                                 Direct procurement
 SOUTH OF ALLSTON                                             constraint                  Decision
 CENTRAL HUDSON GAS & ELECTRIC—
                                                              Distribution
 PEAK PERKS DEMAND MANAGEMENT                                                        Regulatory Mandate           Customer Program
                                                               constraint
 PROGRAM
 CON EDISON—                                               Sub-transmission          Regulatory Mandate,
 BROOKLYN QUEENS DEMAND                                   feeder constraint at      Internal Management           Customer Program
 MANAGEMENT (BQDM) PROGRAM                                    substation                  Decision
                                                                                     Regulatory Mandate,
 CONSUMERS ENERGY—                                            Distribution
                                                                                    Internal Management           Customer Program
 SWARTZ CREEK ENERGY SAVERS CLUB                               constraint
                                                                                          Decision
                                                              Distribution           Regulatory Mandate,          Direct procurement
 GRIDSOLAR—
                                                             constraint and         Internal Management          (competitive bidding,
 BOOTHBAY
                                                               reliability          Decision, Public Input           sole-sourced)
                                                              Distribution                                        Direct procurement
 NATIONAL GRID—                                                                     Internal Management
                                                             constraint and                                      (competitive bidding,
 OLD FORGE                                                                                Decision
                                                             grid resiliency                                         sole-sourced)
 NATIONAL GRID—                                           Feeder substation         Internal Management
                                                                                                                  Customer Program
 TIVERTON NWA PILOT                                        upgrade deferral               Decision
 SOUTHERN CALIFORNIA EDISON—                                                                                      Direct procurement
                                                              Distribution          Internal Management
 DISTRIBUTION ENERGY STORAGE                                                                                     (competitive bidding,
                                                               constraint                 Decision
 INTEGRATION (DESI) 1                                                                                                sole-sourced)
                                                                                    Internal Management           Direct procurement
 SOUTHERN CALIFORNIA EDISON—                               Long term local
                                                                                        Decision with            (competitive bidding,
 VIRTUAL POWER PLANT (VPP)                               capacity constraints
                                                                                     Regulatory Mandate              sole-sourced)
Note: In a majority of case studies, NWA solutions were procured through competitive solicitations (e.g., RFI and RFPs). A subset of these
case studies leveraged existing customer programs (e.g., EE and DR) to help meet NWA objectives.
Source: SEPA, PLMA, and E4TheFuture, 2018.

18                                                                                                E4THEFUTURE | PLMA | SEPA
Load Management Leadership

                                              CASE STUDY SUMMARIES
APS—PUNKIN CENTER
At Punkin Center, Arizona, APS was faced with
the traditional option of rebuilding 17 miles of
distribution lines over rough terrain to address
load growth and consequent thermal constraints
on the feeder. After reviewing the growing
community’s needs, APS determined that adding
battery storage could address the problem at
a lower cost. The utility deployed a 2 MW, 8
megawatt-hour (MWh) battery system that has
been in daily operation since March 2018.
The Punkin Center project required high                                Source: Arizona Public Service, 2018.
reliability, which led APS to plan the deployment
and operation of the battery system to provide                         line. The success of the project demonstrates
several layers of redundancy and flexibility for                       the capability of this NWA solution to serve the
future expansion. Spares of critical items with                        residents of Punkin Center for a decade and
long procurement lead-times, such as an extra                          possibly longer depending on the load growth.
transformer, were kept on-site. The site was
configured to connect a diesel generator in case                       BPA—SOUTH OF ALLSTON
of a contingency event. In addition, the project                       Faced with projections of growing demand on its
was designed with additional concrete pads for                         transmission system, BPA originally proposed the
the future addition of battery capacity to meet                        I-5 Corridor Reinforcement Project in 2009. At that
load growth. APS also ran up against a number                          time, the plan involved construction of an 80-
of challenges during the first operating summer,                       mile, 500 kilovolt (kV) transmission line that would
including the development of a battery dispatch                        stretch from Castle Rock, Washington to Troutdale,
method for peak shaving, the impact of battery                         Oregon and cost more than $1 billion. This
ramp limitations due to the Integrated Volt/VAR                        transmission project faced community opposition
Control (IVVC) voltage control scheme and high                         and heightened legislative scrutiny due to its high
feeder impedance, and operational considerations                       cost and local impacts.
for reverse power flow situations. Overall, APS
considered this effort as proof that cost-effective                    After taking a comprehensive look at the local
NWA projects using energy storage can be                               impacts of the build-out and other project details,
successful and should be in the utility planner’s                      such as load forecasts and project costs, the BPA
toolbox.                                                               Administrator decided not to carry out the I-5
                                                                       project and instead embraced a more flexible,
Outcome: The Punkin Center battery project                             scalable, economically and operationally efficient
successfully provided reliable peak shaving service                    approach to managing the transmission system.
on the thermally constrained feeder during the                         The NWA project included two basic types of
summer of 2018. The project proved to be a                             solutions: DR centered on a large commercial
cost-effective solution for APS to serve the rural                     and industrial (C&I) end user, and generation
community, compared to reconductoring of the                           redispatch.25

25 Generation redispatch at BPA consisted of bilateral purchases of incremental and decremental capacity from existing commercial
   generators to alleviate congestion by reducing power transmitted along a path and increasing the amount of generation closer to load.

NON-WIRES ALTERNATIVES: CASE STUDIES FROM LEADING U.S. PROJECTS		                                                                     19
NON-WIRES ALTERNATIVES

  FIGURE 3: SOUTH OF ALLSTON 2017 SUMMER PEAK FLOWS
                                                     2017 PEAK FLOWS
      3,300

                                                                                                                  100
      3,100

      2,900                                                                                                       80

                                                                                                                        DEGREES FAHRENHEIT
      2,700
                                                                                                                  60
MWs

      2,500
                                                                                                                  40
      2,300

                                                                                                                  20
      2,100

      1,900                                                                                                       0
         JULY 31   AUG 1      AUG 2      AUG 3      AUG 9    AUG 10       AUG 11   AUG 22     AUG 28   AUG 29
          HE15     HE15       HE15       HE15       HE15      HE15         HE15     HE15       HE15     HE15
                                                 CONTROL DAY

          COMMERCIAL TOTAL          FORECAST FLOW           ACTUAL FLOW      POTENTIAL FLOW      PORTLAND, OREGON
          TRANSFER CAPABILITY                                                W/O REDISPATCH      TEMPERATURE

Note: HE15: Hour Ending 15 (the hour from 14:00 to 15:00)
Source: Bonneville Power Administration, 2018.

The South of Allston (SOA) pilot ran for two years                 CENTRAL HUDSON GAS & ELECTRIC—
and operated on a day-ahead, pre-schedule basis                    PEAK PERKS PROGRAM
on weekdays in the summer months of July, August                   Central Hudson’s Peak Perks Targeted Demand
and September to balance roughly 200 MW of                         Management Program was designed in
increased generation south of the transmission                     conjunction with the New York Public Service
line and 200 MW of reduced load north of the line                  Commission’s REV initiative. The program seeks
to reduce transmission constraints.                                to defer the need for new infrastructure in three
Outcome: The SOA project met BPA’s original                        targeted zones for five to 10 years, reduce future
objective to demonstrate that flows across SOA                     bill pressure for customers, and create additional
can be reduced during summer peak periods                          earnings opportunities for the utility.
through bilateral contracts. The 2017-2018 SOA                     The program consists of residential direct-load
project expenses were each within the $5 million                   control using two-way Wi-Fi thermostats and
per year transmission budget amount (compared                      one-way load control switches. A special initiative
to the originally proposed $1 billion transmission                 focused on industrial facilities and others that
line). BPA plans to leverage lessons learned from                  could make curtailment commitments and shut
the SOA Pilot to inform future longer-term, non-                   down their facilities when needed. Residential
wires program plans.                                               customers with electric generators fueled by
                                                                   propane and natural gas also received annual
                                                                   payments to switch to their generators during

20                                                                                      E4THEFUTURE | PLMA | SEPA
Load Management Leadership

peak events. Itron provided participant recruitment               to 52 MW of traditional and non-traditional
and program administration support, as well as                    resources. This project was designed to help delay
its cloud-based IntelliSOURCE software as the                     the construction of a new substation beyond initial
foundation for the project.                                       load relief projections. This project on its own has
Outcome: In the first six months of the program,                  been a driver and leader for NWAs as other utilities
Central Hudson achieved over 30% participation                    and regulators learn more about the benefits
of eligible customers within Fishkill, the targeted               resulting from this project and begin to explore
zone with the greatest capacity need. The utility                 opportunities themselves.
also exceeded the total first-year MW target for all              Con Edison’s traditional approach to potential
three zones, achieving 5.9 MW of load reduction                   overload conditions would have been to construct
compared to the original target of 5.3 MW.                        a new area substation, establish a new switching
                                                                  station, and construct sub-transmission feeders.
CON EDISON—BROOKLYN QUEENS                                        Instead, Con Edison filed a petition with the New
DEMAND MANAGEMENT PROGRAM                                         York Public Service Commission in July 2014
The Brooklyn Queens Demand Management                             proposing to implement the BQDM Program,
Program (BQDM) is one of the largest and most                     which would consist of 11 MW of non-traditional
well-known NWA projects in the U.S, with close                    utility-side solutions and 41 MW of traditional

      FIGURE 4: EXAMPLE OF HOURLY LOAD REDUCTION PROVIDED BY DIFFERENT NWA RESOURCES

                70

                60

                50
PEAK LOAD, MW

                40

                30

                20

                10

                0
                     1   2   3   4   5   6   7   8   9 10 11 12 13 14 15            16    17    18   19 20   21 22   23   24
                                                     TIME OF DAY, HOUR ENDING
                 ENERGY        NEW YORK STATE ENERGY RESEARCH    NEW YORK CITY                  RESIDENTIAL           FUEL
                 STORAGE       AND DEVELOPMENT AUTHORITY         HOUSING AUTHORITY              LIGHTING PROGRAM      CELLS
                               COMBINED HEAT AND POWER
                 MULTI-FAMILY ENERGY            COMMERCIAL       UTILITY-SIDED                  FORECASTED
                 EFFICIENCY ADDER PROGRAM       DIRECT INSTALL   SOLUTIONS                      NEED 2018
Source: Con Edison, 2018.

NON-WIRES ALTERNATIVES: CASE STUDIES FROM LEADING U.S. PROJECTS		                                                              21
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