CDM Study
October 19, 2011
Stan But
Manager, Economics &
Load Forecasting
1
Agenda
•OEB Directive
•Stakeholder Recommendations
•CDM Study Objectives
•Study Findings
•Preliminary CDM Impacts for 20112013
•Summary
2
OEB Directive
• In its Decision with Reasons for EB-2010-0002, the
Board noted the following:
– “there does not appear to be a broadly accepted
methodology in place to identify reasonably anticipated
effects of any CDM program on the throughput of the
respective distribution or transmission systems.”
– “For the purposes of establishing credible load forecasts,
much more acuity than is currently available is needed.”
• The Board accepted Hydro One’s CDM estimates
used in the load forecast, but directed Hydro One to
“work with the OPA in devising a robust, effective
and accurate means of measuring the expected
impacts of CDM programs.”
3
Stakeholder Recommendations
• Hydro One held two stakeholder consultations in
February and March 2011
• Below is a summary of recommendations from the
above sessions:
– An in-house study prepared by Hydro One staff instead of
an external study by consultant
– A review of CDM categories and methodologies to
incorporate the CDM impacts into the load forecast used
by utilities in other jurisdictions
– CDM categories should be comprehensive and can be
tracked
– Hydro One should work closely with the OPA to better
define and measure CDM impacts for use in its load
forecast
– CDM impacts should be presented by customer class
4
CDM Study Objectives
• Objective 1: Develop a robust methodology to
forecast CDM impacts using comprehensive and
well-defined categories
• Objective 2: Develop a methodology to incorporate
the CDM impacts into Hydro One’s load forecast
5
Study Findings
Literature Review
• Utilities reviewed:
– British Columbia, New York and California as
recommended by stakeholders
– Other major utilities in North America with
CDM experience
• Tools used: web-search and personal
communication
6
Study Findings
Load Forecast Survey
•
•
A web-based survey was sent to about 100
utilities/organizations in North America and 41
responses were received
The literature review and the survey provided a
list of well-defined and comprehensive CDM
categories:
•
•
•
•
•
Programs initiated by the utility
Program initiated by other organizations
Building codes and appliance efficiency standards
Rate structures
Increased conservation effect
7
Study Findings
Load Forecast Survey (Contd…)
•
Three methods are commonly used to incorporate CDM impacts
in the load forecast:
Method 1: Forecast using actual load (without any CDM adjustment)
Method 2: Forecast CDM impacts as an explanatory variable on the
right hand side of the econometric equation
Method 3: Add back historical CDM impacts to the actual load and
then forecast forward
8
Study Findings
Review of load forecast methodologies for
incorporating CDM in the load forecast
• Hydro One undertook a review of the three
methods to evaluate the advantages and
challenges associated with each method
• The review results suggested that:
– Method 3 is the most robust, technically sound
and efficient and it produces reliable and accurate
load forecasts
– Method 3 addresses the OEB directive to apply a
methodology that is less primitive and that
provides more acuity
• Hydro One has adopted Method 3
9
Study Findings
• Alignment with the OPA
10
Study Findings
• Alignment with the OPA (Contd…)
– Hydro One worked closely with the OPA to better
understand the savings assumptions used in their
current conservation forecast
Step 1
Obtain
detailed
savings
assumptions
for each CDM
category
Step 2
Determine
Hydro One
specific
annual CDM
savings by
sector
Step 3
Step 4
Derive
monthly CDM
savings using
Hydro One
specific load
shapes
Derive CDM
savings by rate
class
11
Preliminary CDM Impacts for 2011-2013
Hydro One Distribution Energy Savings by Category
800
Energy Savings (GWh)
700
600
500
2011
400
2012
2013
300
200
100
0
Hydro One and OPA
Other influences
Codes & Standards
Programs
Rate Structure
Increased
Conservation Effect
CDM Category
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Summary
– The literature review provided a list of well-defined
and comprehensive categories
– The survey results helped Hydro One better
understand the methodologies used by utilities to
incorporate CDM impacts into the load forecast
– The comparative review of methodologies helped
identify an effective and efficient method to
incorporate CDM in the load forecast
– Hydro One worked closely with the OPA to derive
CDM forecast specific to Hydro One
– Hydro One believes that the CDM study
incorporates all recommendations from
stakeholders and meets the Board’s Directive
13
Thank You
14