NWA Suitability Criteria

NWA Suitability Criteria Distribution System Planning Engagement Group June 8, 2016

RI NWA Standards Rhode Island Standards for System Reliability Procurement established in 2011 provide a comprehensive framework for systematically identifying customer-side and distributed resources that may defer or eliminate distribution and transmission upgrades, as well as improve reliability and asset utilization These Standards are a result of a joint effort between RI Energy Efficiency and Resource Management Council (EERMC) participants - including Acadia Center, Office of Energy Resources, and the NCEC - and National Grid The Standards are continuously being revised and additional changes will be introduced later this year

RI NWA Standards The Standards include four key provisions: 1. NWA definition 2. NWA suitability criteria 3. Basis for comparing alternatives 4. Financial analysis

Grid Needs Suitable for NWA System capacity and load constraints Distributed generation constraints Operational considerations Preventative measures, e.g. reducing load and increasing useful life of equipment Reliability and resiliency

NWA Suitability Criteria in RI 1. The need is not based on asset conditions 2. The wires solution will cost more than $1 mln 3. If load reduction is necessary, it is expected to be less than 20% of the relevant peak load in the area of defined need 4. Start of wires alternative construction is at least 36 months in the future The utility may propose a project that fails to meet one or more of the above criteria if it has reason to believe that a viable NWA solution exists, assuming the benefits justify the costs

NWA Suitability Criteria in RI Since the criteria have been implemented, only one identified need has deemed suitable for NWA the most limiting requirement is that the need is not based on asset condition RI is currently considering relaxing the criteria as the load growth rate decreased significantly in recent year peak load growth rate is currently 1% or less in RI providing for longer time horizons for planning and implementing NWAs

NWA Solicitation Process Characterization of the need: Identification of the need, including the magnitude of the need, the shape of the load curve, the projected year and season by which a solution is needed, and other relevant timing issues. Identification of the level and duration of peak demand savings and/or other operational functionality required to avoid the need for the wires upgrade. Other information needed for regulators/decision-makers in order to assess alternative solutions: Description of the business as usual upgrade in terms of technology, net present value, cost (capital and O&M), revenue requirements, and schedule. Identification and description of the wires solution and how it would change as a result of the NWA. Description of the sensitivity of the need and T&D investment to load forecast assumption.

NWA Solicitation Process Information that should be solicited in NWA proposals: Description of the NWA solution, including a description of the NWA in terms of technology, reliability, cost, net present value, and timing. Ability of affected customers to participate. Implementation plan, including ownership and contracting considerations and options. NWAs should be compared to wires solutions based on the following: Ability to meet the identified need. Anticipated reliability of the alternatives; Risks associated with each alternative (e.g. risks of stranded investments, sensitivity of alternatives to differences in load forecasts, emergence of new technologies) Potential for synergy savings based on alternatives that address multiple needs. Operational complexity and flexibility. Implementation issues Customer impacts to potentially modify usage.

Contact Information Irina Rodina irodina@acadiacenter.org Abigail Anthony aanthony@acadiacenter.org Boston, MA Hartford, CT New York, NY Providence, RI Rockport, ME Ottawa, ON, Canada www.acadiacenter.org