Understand Non-Transmission Alternatives for Energy Efficiency and Grid Planning

CONSIDERATION OF ALL OPTIONS TO MEET TRANSMISSION NEEDS? Just what are NWA/NTAs? Just what are NWA/NTAs? History of FERC on issue History of FERC on issue State Laws State Laws RTOs Use of Alternatives RTOs Use of Alternatives -- -- Process Process MISO MISO New England New England- -ISO ISO NYISO NYISO CAISO CAISO PJM PJM Actual On Actual On- -The The- -Ground Use of NTAs Ground Use of NTAs

NON-TRANSMISSION/WIRES ALTERNATIVES Energy Efficiency Energy Efficiency Energy Storage Energy Storage Demand Response Demand Response Distributed Generation, as Aggregated Distributed Generation, as Aggregated Traditional Generation sited near loads Traditional Generation sited near loads Micro Micro- -Grids Grids Transmission in a smaller scale plus one of the above Transmission in a smaller scale plus one of the above

ACTIVE VS PASSIVE Passive Passive Active Active Growth in EE/DR/DG Growth in EE/DR/DG can impact future can impact future loads, delaying or loads, delaying or avoiding need for avoiding need for transmission transmission lines/substations lines/substations Actual decision to Actual decision to increase NTAs, increase NTAs, offer alternatives offer alternatives instead of a instead of a transmission transmission solution solution

FERC ACTIONS Order 890 Order 890- -A A 2007 2007 Give comparable Give comparable consideration to all types of consideration to all types of solutions in grid process solutions in grid process Make sure states and Make sure states and programs are participants programs are participants Largely process, participatory Largely process, participatory reform reform Did not authorize Non Did not authorize Non- - Transmission Alternatives Transmission Alternatives to recover their costs in the to recover their costs in the way that transmission can way that transmission can Order 1000 Order 1000 2011 More direct More direct -- -- builds on 890, builds on 890, but applies it more broadly but applies it more broadly to the Regional Grid to the Regional Grid Planning Process Planning Process However, still stated that However, still stated that issue of cost recovery for issue of cost recovery for NTAs beyond scope of other NTAs beyond scope of other cost allocation reforms cost allocation reforms though may be eligible for though may be eligible for treatment as transmission treatment as transmission for ratemaking purposes. for ratemaking purposes. 2011

ORDER 1000 REGIONAL PLANNING

FERC ORDER 1000 CONTINUED (PLANNING, COST, PARTICIPATION) Planning: Each utility must participate in regional plan; must consider and Planning: Each utility must participate in regional plan; must consider and analyze transmission needs and solutions driven by other public policies like energy efficiency transmission needs and solutions driven by other public policies like energy efficiency and renewable portfolio standards, etc. and renewable portfolio standards, etc.); must consider non ); must consider non- -transmission solutions. Cost Allocation: Must participate and look at cost allocation based on principles; must Cost Allocation: Must participate and look at cost allocation based on principles; must develop common cost develop common cost- -allocation tariffs/principles, and again, must assess CBA of non allocation tariffs/principles, and again, must assess CBA of non- - transmission solutions transmission solutions Participation: Encouragement to third Participation: Encouragement to third- -party participation (merchant transmission and non party participation (merchant transmission and non- - traditional actors), even as it recognizes the primacy of incumbent solutions. If delays traditional actors), even as it recognizes the primacy of incumbent solutions. If delays occur, can require further analysis, including non occur, can require further analysis, including non- -incumbent solutions analyze transmission solutions. incumbent solutions Transmission companies must compare and look at DSM as more than just a reduction in Transmission companies must compare and look at DSM as more than just a reduction in load load i.e. Not just look at static DSM as reduction to load but as an active participant i.e. Not just look at static DSM as reduction to load but as an active participant ie ie what happens if you actively increase it/use it to solve transmission issues what happens if you actively increase it/use it to solve transmission issues

LAW VS REALITY FERC 1000 lacked lots of details, to be worked out at ISO/RTO FERC 1000 lacked lots of details, to be worked out at ISO/RTO Level Comparable Consideration in most ISOs has not led to real alternative analysis for NTAs Comparable Consideration in most ISOs has not led to real alternative analysis for NTAs Thus, regions like MISO and SERC appear to have no specific requirements on NTAs, other than Thus, regions like MISO and SERC appear to have no specific requirements on NTAs, other than they must be considered they must be considered Cost Cost- -Allocation of NTAs beyond the requirement Allocation of NTAs beyond the requirement Transmission planners (and ISOs): Transmission planners (and ISOs): More comfortable with transmission solutions More comfortable with transmission solutions Able to recover costs on transmission infrastructure Able to recover costs on transmission infrastructure Have more influence than non Have more influence than non- -traditional market participants traditional market participants No obvious powerful stakeholder to champion NTAs No obvious powerful stakeholder to champion NTAs ESCOs do not generally participate at RTO level level Co Co- -benefits of DR/EE/Storage (less pollution, less water use, benefits of DR/EE/Storage (less pollution, less water use, etc of comparing Traditional vs. NTAs for cost of comparing Traditional vs. NTAs for cost- -benefit analysis benefit analysis Level ESCOs do not generally participate at RTO etc) do not fit inside the framework ) do not fit inside the framework

OTHER FERC-RELATED DECISIONS Sustainable FERC project Sustainable FERC project and others successfully and others successfully defeated initial NYISO defeated initial NYISO proposed tariff that was proposed tariff that was transmission solution transmission solution- - only through FERC only through FERC MISO decision to require MISO decision to require more consideration of more consideration of NTAs when coal plants NTAs when coal plants retire retire Storage Policy (2017) Storage Policy (2017) FERC Released policy on FERC Released policy on electric storage, which electric storage, which states that storage can states that storage can be utilized both for be utilized both for reliability and participate reliability and participate in the market and in the market and should not be should not be discriminated against.. discriminated against.. (Docket No. Pl 17 (Docket No. Pl 17- -2 2- -00 Utilization of Electric Utilization of Electric Storage for Multiple Storage for Multiple Services ) Services ) 00

THE LEADERS ON NEW APPROACHES TO NTO New England ISO New England ISO first began incorporating EE and DR into long first began incorporating EE and DR into long- -term planning forecasts, as well as more recently potential study amounts as well as more recently potential study amounts performs analysis of hypothetical MRAs to identify combination of NTAs to address performs analysis of hypothetical MRAs to identify combination of NTAs to address thermal and voltage area issue thermal and voltage area issue which can lead to choosing this as issues arise which can lead to choosing this as issues arise New York New York Through system Through system- -wide Reliability Needs Assessment identifies reliability needs wide Reliability Needs Assessment identifies reliability needs for resource adequacy and transmission reliability for NYISO Board, then requests for resource adequacy and transmission reliability for NYISO Board, then requests proposed solutions through RFP for market proposed solutions through RFP for market- -based solution, and also picks a TO backstop solution should Market not produce need backstop solution should Market not produce need MISO MISO largely limited as alternatives when there are retirements through the SSR largely limited as alternatives when there are retirements through the SSR (Suspension Support Resource), though beginning to address it in larger planning (Suspension Support Resource), though beginning to address it in larger planning context context CAISO CAISO largely limited to local (distribution) level decisions in considering NTAs, though largely limited to local (distribution) level decisions in considering NTAs, though because of other laws (Storage mandate, Net because of other laws (Storage mandate, Net- -metering), NTAs are being developed STATE OF VERMONT STATE OF VERMONT PREDATES FERC 1000 PREDATES FERC 1000 Vermont System Planning Committee produces 20 year plan with lots of public participation (keep in mind only one TO), and produces 20 year plan with lots of public participation (keep in mind only one TO), and actively considers NTA and work of Efficiency Vermont in planning actively considers NTA and work of Efficiency Vermont in planning term planning forecasts, based solution, and also picks a TO metering), NTAs are being developed Vermont System Planning Committee

SOME RECENT EXAMPLES NY PSC allows battery storage for reliability to also provide electricity to grid to lower peak NY PSC allows battery storage for reliability to also provide electricity to grid to lower peak demand as part of a NWA in Brooklyn/Queens through New York s Reforming the demand as part of a NWA in Brooklyn/Queens through New York s Reforming the Energy Vision initiative. Energy Vision initiative. As part of large upgrade, including transmission, Long Island Power authority to build two As part of large upgrade, including transmission, Long Island Power authority to build two large energy large energy- -storage batteries to help with soaring summer energy demand, and a storage batteries to help with soaring summer energy demand, and a separate authority to build emergency generators. separate authority to build emergency generators. PJM began a pilot to model storage as a reliability tool PJM began a pilot to model storage as a reliability tool assuming unit used to control and improved energy flows to lower congestion improved energy flows to lower congestion could lead to storage qualifying in future assuming unit used to control and could lead to storage qualifying in future NE NE- -ISO engaged in pilots in Greater Hartford ISO engaged in pilots in Greater Hartford Central Connecticut, VT/NH and SEMA/RI area that simultaneously assessed MRAs and Transmission options going forward to area that simultaneously assessed MRAs and Transmission options going forward to give option to pursue MRA/NTA give option to pursue MRA/NTA Central Connecticut, VT/NH and SEMA/RI

NE ISO PLANNING GUIDE, 2013 Assessing Assessing the suitability of resources during the planning process can be challenging the suitability of resources during the planning process can be challenging because of the wide variability of the characteristics, locations, and possible because of the wide variability of the characteristics, locations, and possible combinations of resources, such as central station and distributed generation combinations of resources, such as central station and distributed generation resources, end resources, end- -use efficiency, and storage technologies. To date, System Planning use efficiency, and storage technologies. To date, System Planning has performed MRA analysis for the VT/NH, Greater Hartford and SEMA/RI has performed MRA analysis for the VT/NH, Greater Hartford and SEMA/RI transmission projects. The results of these analyses are available to the transmission projects. The results of these analyses are available to the marketplace to encourage their development and/or to encourage the marketplace to encourage their development and/or to encourage the transmission transmission owner to pursue the MRA as part of the transmission process. owner to pursue the MRA as part of the transmission process.