Raab Subcommittee Update draft 3-12-13

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MA DPU Electric Grid Modernization
Working Group
Reports From Subcommittees
Steering Committee Meeting #3
March 12, 2013
Dr. Jonathan Raab, Raab Associates
Customer-Facing Subcommittee
Mtg. #2 Agenda (2/26/13)
• Alternative Metering Scenarios, Functions, Costs for
Massachusetts
– Review utilities’ current metering infrastructure and practices
– Presentation/Discussion of Subcommittee’s working group on
scenarios, functions & costs
• Time-Varying Rate Options & Consumer Protections around
Time- Varying Rates and Metering
– Rick Weston, Principal, Regulatory Assistance Project (RAP)
– Barbara Alexander, Consumer Affairs Consultant
• Principles and Regulatory Policies for Time-Varying Rates and
Advanced Metering
– What principles/recommendations should be considered around
time-varying rates and advanced metering, including any
recommended consumer protections?
2
Meter Age & Planning Assumptions
Approximate
average meter
age (years)
Book life
(years)
Operating life
(years)
Approx. avg.
life remaining
(years)
NSTAR
WMECO
National Grid
FG&E
Energy 10
Energy 12
Demand 7
Demand 8-9
17.8
7.1
TOU 5
TOU 2
24
23
28.9
20
15 - 20
15 - 20
30
20 - 30
5-15
3-18
12.2
12.9 - 22.9
3
Time-Varying and Dynamic Rate Design
A RAP Global Series Report
Massachusetts Grid Modernization Workgroup
Boston, 26 February 2013
Frederick Weston
魏雷克
The Regulatory Assistance Project
Global
China
European Union
United States
www.raponline.org
Risk-Reward Trade-Off
5
Peak Reductions with or without
Enabling Technology
Price-Only (n = 42) and Enabling Technology (n = 32)
40%
Peak Reduction
30%
Enabling Tech
Full Dataset
20%
Price-Only
10%
0%
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
Peak to Off-Peak Price Ratio
6
Questions Still to be Answered
• Customer rate preferences
•
•
•
•
– In absence of mass deployments, preferences and
willingness to opt out (or opt in) are not well
understood
Impact of CPP versus PTR
Conservation impacts of time-varying rates
Fuel-switching impacts
Impacts of information on peak demand
– Does, and if so how does, more (non-price)
information about one’s demand as it relates to
system peak demand affect behavior?
7
Time-Varying Rate Design Criteria
• Short peak period
• Strong price signal and opportunity for
significant savings
• Rates should reflect system costs
• Simplicity is important
• Rates should account for the “hedging”
premium
8
THE NEED FOR ESSENTIAL CONSUMER
PROTECTIONS:
WHITE PAPER ON SMART METER AND DYNAMIC
PRICING
Barbara R. Alexander
Consumer Affairs Consultant
83 Wedgewood Dr.
Winthrop, ME 04364
(207) 395-4143
E-mail: [email protected]
Note: Ms. Alexander is a consultant to the Attorney General, but this presentation
should not be interpreted as the views of any client
NASUCA et al RECOMMENDATIONS
• SMART METER PROPOSALS MUST BE COSTEFFECTIVE AND UTILITIES MUST SHARE THE
RISKS ASSOCIATED WITH THE NEW
TECHNOLOGIES AND THE BENEFITS USED TO
JUSTIFY THE INVESTMENT
• TIME OF USE OR DYNAMIC PRICING MUST NOT
BE MANDATORY; CONSUMERS SHOULD BE
ALLOWED TO OPT-IN TO ADDITIONAL
DYNAMIC PRICING RATE OPTIONS.
February 26, 2013
MA Grid Modernization Collaborative
10
NASUCA et al RECOMMENDATIONS
• REGULATORS SHOULD ASSESS ALTERNATIVES TO
SMART METERS TO REACH THE LOAD MANAGEMENT
GOALS, PARTICULARLY DIRECT LOAD CONTROL
PROGRAMS
• SMART METER INVESTMENTS SHOULD NOT RESULT IN
REDUCED LEVELS OF CONSMER PROTECTIONS,
ESPECIALLY RELATING TO THE IMPLEMENTATION OF
REMOTE DISCONNECTION, AND TRADITIONAL BILLING
AND DISPUTE RIGHTS SHOULD BE RETAINED
February 26, 2013
MA Grid Modernization Collaborative
11
SUMMARY AND CONCLUSIONS
•
•
February 26, 2013
These principles or recommendations are no substitute for factbased analysis of costs and benefits for any consideration for smart
meter deployment;
Policies should not be adopted without a firm understanding of costs
and benefits:
– Very expensive: bill impacts are important part of decision
– Consider purpose and cheaper alternatives
– Document benefits; avoid aspirational conclusions
– Allocate risks fairly
– Link cost recovery to performance of promises
– Don’t force customers to eat spinach!
MA Grid Modernization Collaborative
12
Subcommittee Brainstormed
Principles/Recommendations
• Over 30 potential principles/recommendations
suggested by Subcommittee members
• Sorting into at least 3 categories—TVR, Meters,
Cross-Cutting Grid Modernization
• Starting list for Members to work from
• Next steps?
13
Grid-Facing Subcommittee
Mtg. #2 Draft Agenda (2/28/13)
• Potential Grid Modernization Functionality &
Enablers for Massachusetts
– Subcommittee’s working group presents draft matrix
• Regulatory Options for Grid Modernization
– Review/discuss straw proposals from Subcommittee’s
working group members
Note: Both of these work products will be presented in
detail in today’s Steering Committee so not reviewed
here.
14
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