An Electric Industry Perspective...2015 Plan 70+ utilities committed 800+ plug-in vehicles $90+...
Transcript of An Electric Industry Perspective...2015 Plan 70+ utilities committed 800+ plug-in vehicles $90+...
David K. Owens
Aryeh B. FishmanAssociate General Counsel, Legal Regulatory Affairs
Edison Electric Institute
AGA/EEI Public Utility Accounting Courses August 22, 2016
Atlanta, GA
An Electric Industry Perspective
Customer
Value-Focused
Modern, Reliable
Grid
Even Cleaner
Customer-Driven
Industry HallmarkSafe ReliableAffordableClean
Our Messages
Value-Focused Electricity’s
value Industry
footprint (economic impact, jobs)
CapEx Workforce
development Community
giving/support
A Modern, Reliable Grid Grid security Grid technologies Grid investments Tech partnerships Smart grid
deployment
Even Cleaner Ongoing fleet
transition Emissions
reductions Renewables
leadership and investment
Importance of fuel diversity
Customer-Driven Efficiency and
conservation programs
Electric transportation
Tech/start-up partnerships
Customer partnerships
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As of 2014, industry CO2 emissions were 15 percent below 2005 levels Nearly 1/3 of U.S. power generation came from zero-emissions sources
U.S. Power Sector CO2 Emissions Declining
Source: Developed from U.S. Energy Information Administration, Monthly Energy Review March 2016
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Executive branch not going quietly into the night• Methane and HFC regulations; impacts on human health report,
CAFE standards, efficiency standards, etc.
• Paris Agreement likely will enter into force this year
• Next administration may continue, expand carbon efforts
Congress continues to be divided• Partisan oversight hearings; appropriations efforts
States moving forward at various speeds• Stakeholder dialogs continuing, even if informally• Some may pursue new carbon policies, regardless of CPP
Prudency suggests planning for future carbon policy, even in face of uncertainty
Carbon Policy Landscape
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Some Clean Energy Challenges
Wholesale Electricity Markets are not Working• Low natural gas prices and subsidies for renewable
technologies are distorting RTO/ISO markets and forcing some nuclear facilities to retire prematurely.
Investor Initiatives are Emerging Focused on Reporting of Fossil Fuel Exposure• Initiatives seek to affect access to capital for
companies with significant coal-based holdings, including the electric power sector.
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Electric Power Companies Are Leading the Way on Solar Power
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EV Public-Private Partnership
“EV Everywhere-Utility Partnership”
Actions include:• Research to demonstrate
value proposition• Education and outreach
campaigns• Collaboration across federal
government to support fleet electrification
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Leading by Example
Fleet Electrification Initiative
2015 Plan
70+ utilities committed 800+ plug-in vehicles
$90+ million investment 740+ charging ports
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Growing EV Momentum
“Electrification is going to play an important role in our future.” – Ford CEO Mark Fields, on investing $4.5 billion in electrification by 2020
“It’s really providing that technology for everyone, not just the elite.” – General Motors CEO Mary Barra, on launching the $30,000 Bolt EV
“I think electrification is not a question of ‘I want it or don’t want it.’ Electrification is happening.” – Nissan CEO Carlos Ghosn
“We are, in full force, joining the electric revolution.” – Audi of America President Scott Keogh, on announcing at least 25% of U.S. sales will come from electric vehicles by 2025
422,677
-
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
2011 2012 2013 2014 2015 2016
Cumulative PEV Sales
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Utility Development of EV Infrastructure
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The Electrification Opportunity
New solutions for our customersUtilities as “fuel” providers: infrastructure, energy advisors, system integration
Distribution grid of the futurePlug-in vehicles as grid assets: demand response, renewable integration
SOURCE: EPRI, Environmental Assessment of a Full Electric Transportation Portfolio
Grow load for our businessAdds 5% in 2030, 13% in 2050 vs. baseline
Clean the transportation sectorReduce GHGs 48% - 70% vs. today
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The Electric Distribution System in Transition
Source: The Edison Foundation Institute for Electric Innovation, Thought Leaders Speak Out: Key Trends Driving Change in the Electric Power Industry, December 2015
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Projected Functional CapEx
$95.2 B
as of October 2013 as of September 2015
$108.6 B
6% 6%7% 5%
12% 12%
17% 18%
21%26%
37%
32%
$0 B
$20 B
$40 B
$60 B
$80 B
$100 B
Generation
Distribution
Transmission
Gas-Related
Environment
Other
2013P 2015P
Notes: Total company functional spending of U.S. Investor-Owned Electric Utilities. 2015P total does not sum to 100% due to rounding. Projections based on publicly available information and extrapolated for companies not reporting functional detail (1.3% of industry).
Source: EEI Finance Department, company reports (September 2015).
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State Initiatives
New York: “Reforming the Energy Vision” (REV)
California: Distributed Resource Plans Minnesota: “e21 Initiative” Massachusetts: Grid Modernization Plan Hawaii: Power Supply Improvement Plan Illinois: Energy Infrastructure Modernization
Act
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Grid Evolution Requires Increasing Investment
Grid Technologies Digitization Data Analytics Distribution system sensing and monitoring Controls to enhance operational efficiency and
to integrate new resources to improve reliability and grid resiliency, achieve power supply diversity, and achieve evolving clean energy goals.
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Distributed Energy Resources (DER) as an Integrated Part of the Grid
Requires- Visibility- Controls- Assessment of Grid Benefits/Grid Impacts- Clarity/Transparency- Interoperability and a holistic approach which recognizes the grid as an essential platform. Collaborative planning is important.
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The Threat Landscape
Source: The Chertoff Group
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Approach to Grid Security
Standards
Physical
Cyber
Industry-Government Partnership
Electricity Subsector Coordinating Council
(ESCC)
Electricity Information Sharing & Analysis
Center (E-ISAC)
Partnerships with federal, state, & local
governments
Incident Response
Grid Resiliency
Mutual Assistance
Spare Equipment Programs
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Cyber & Physical Security
Securing and protecting our nation’s critical electric grid assets are top industry priorities.
Security of the electric industry is regulated—critical electric grid assets are subject to mandatory, enforceable cyber and physical security standards.
Industry and government collaboration is essential. Exercises are taking place nationally and regionally to prepare for extraordinary scenarios.
The industry is making significant investments to protect the most critical assets.
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Complimentary Spare Equipment Programs
The Spare Transformer Equipment Program (STEP) provides a ready mechanism for participating utilities to share assets in the event of deliberate destruction.
SpareConnect provides an online tool for participating utilities to network with other SpareConnect members to share transmission, generation step-up (GSU) transformers, and related equipment— including bushings, fans, and auxiliary components.
Grid Assurance is a newly-proposed, utility-based initiative that plans to establish a pool of critical spare equipment, including transformers.
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National Response Event (NRE) Structure and Functions
EEI Utility Member CEOs
National Response Executive Committee (NREC)
National Mutual Assistance Resource Team (NMART)
Regional Mutual Assistance Groups (RMAGs)
• Provide general NRE oversight• Resolve issues identified by the NREC• Interface with industry and government partners
• Initiates the NRE and resource allocation process• Manages the issue resolution process • Reports to the EEI CEOs• Chair co-locates with the NRE EEI Liaison during NRE
• Conducts the resource allocation process • Lead co-locates with the NRE EEI Liaison and NREC Chair
during NRE
• Maintains baseline resource availability information• Gathers and consolidates participating utility information in
support of the allocation process• Matches allocated resources to specific requesting utilities
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Currently illegal to commercially fly Unmanned Aircraft Systems (UAS or Drones) without securing a Section 333 Exemption from the FAA
Currently illegal to commercially fly UAS Beyond Visual Line Of Sight (BVLOS)
EEI Members have interest in using BVLOS for: Transmission and Distribution line inspections Damage assessment after storms Security
What is EEI Doing? UAS Workroom Met with FAA Administrators Section 333 Exemption Template; 14 members filed; 13 granted; 1 pending Coordination with EEI, APPA, & NRECA Whitepaper With Sharper Shape created the EEI Sharper Utility BVLOS Demo Project
EEI’s Unmanned Aircraft Systems
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The ESCC is the principal liaison between the electric sector and the federal government for coordinating efforts to prepare for, and respond to, national-level disasters or threats to critical infrastructure.
The ESCC facilitates and supports policy and public affairs-related activities and initiatives designed to enhance the reliability and resilience of the electric grid. The ESCC is not operational.
The ESCC is considered a model for how critical infrastructure sectors can more effectively partner with the federal government.
Electricity Subsector Coordinating Council (ESCC)
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Supply Chain Cyber Risk Management
On July 21, FERC issued an order directing NERC to develop a reliability standards that addresses supply chain risk management for industrial control system hardware, software, and computing and networking services associated with BES operations (Order No. 829) Standard must address:
(1) software integrity and authenticity; (2) vendor remote access; (3) information system planning; and (4) vendor risk management and procurement controls
Sets the goals (“what”) with flexibility on “how” to achieve goals
NERC has one-year from effective date to submit a standard (Rule effective Sept. 27)
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FAST ACT
Signed into law Dec. 4, 2015 SEC. 61002. RESOLVING ENVIRONMENTAL AND GRID RELIABILITY
CONFLICTS – resolves conflicts between orders to maintain reliability and federal, state and local environmental laws and regulations
SEC. 61003. CRITICAL ELECTRIC INFRASTRUCTURE SECURITY AUTHORITY TO ADDRESS GRID SECURITY EMERGENCY - Following
Presidential declaration, Secretary of Energy may issue orders for emergency measures to protect or restore reliability of critical electric infrastructure or defense critical electric infrastructure – 180 days to establish rules for exercise of authority
DESIGNATION OF CRITICAL DEFENSE FACILITIES – 180 days for DOE to identify and designate facilities
PROTECTION AND SHARING OF CRITICAL ELECTRIC INFRASTRUCTURE INFORMATION – FOIA exemption – FERC has one year to promulgate a rule
SEC. 61004. STRATEGIC TRANSFORMER RESERVE – Submit a plan to Congress within one year
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FAST Act – CEII
FERC issued NOPR June 16, 2016 (RM16-15) Comments due Aug 19)
What is Critical Electric Infrastructure Information? Proposed regulation now covers Critical
Electric/Energy Infrastructure Information (CEII) Procedures for FERC determining that documents are
in fact CEII Procedures for FERC protecting that information Procedures for FERC sharing the information and
determining who to share with Sanctions for unauthorized release of CEII
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FAST Act – Other
SEC. 61003. CRITICAL ELECTRIC INFRASTRUCTURE SECURITY AUTHORITY TO ADDRESS GRID SECURITY EMERGENCY
- Following Presidential declaration, Secretary of Energy may issue orders for emergency measures to protect or restore reliability of critical electric infrastructure or defense critical electric infrastructure – 180 days to establish rules for exercise of authority – awaiting publication of draft procedures
SEC. 61004. STRATEGIC TRANSFORMER RESERVE – Submit a plan to Congress within one year DOE progressing Analytical study by Oak Ridge National Lab EEI spare transformer survey Non-public workshop
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Access to NERC Databases
Issued June 16, 2016 (RM15-25) Over objections of industry, FERC requires NERC to
provide Commission and Commission Staff with access, on a non-public and ongoing basis, to certain databases compiled and maintained by NERC (1) the Transmission Availability Data System, (2) the Generating Availability Data System, and (3) the protection system misoperations database
Implementation stayed until effective data of CEII rule
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DERs + Bulk Power System = ?
NERC held a workshop 8/2 – 8/3 Emphasis needs to be on information exchange and
transparency across the transmission/distribution interface: Transmission Planner can plan (impact is on load estimates
as seen by the transmission system; load characteristics for dynamic studies, understanding net impact of underfrequency and undervoltage load shedding from the point of view of the Bulk Power System)
Transmission Operator can operate (DA and RT load forecasts)
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Increased Requests to Interconnect Renewables
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Some policy objectives
Preserve the safety, reliability, and service quality of electric power system.
Treat all customers equally in a non-discriminatory manner.
Provide transparent and consistent technical requirements, procedures, and agreements to make interconnections as predicable, timely, and reasonably priced as possible.
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Tech Conference Issues
Current state of interconnection queues. Transparency and timing in generator interconnection
study process. Certainty in cost estimates and construction time. Other interconnection coordination and management
issues. Interconnection of storage devices.
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Individualized Customer Services
PAST
PRESENT
Source: The Edison Foundation Institute for Electric Innovation, Thought Leaders Speak Out: Key Trends Driving Change in the Electric Power Industry, December 2015
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Drivers for Utility Automated Communications
Key Drivers Changing Customer Needs and Expectations
(e.g. greater control of energy use and costs, independence and resiliency)
Increasingly, customers are giving up landlines in favor of wireless options
Utilities need to use advanced communications technologies to contact their diverse customers with time sensitive information
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Curtailment calls Used to alert customers of curtailments due to power/natural gas
availability. Outage callbacks Used to deliver outage updates and service restoration confirmation Fieldwork Used to notify customer about work activity. Collection calls Used to alert customers with past-due accounts and that they are in
danger of disconnection Time-of-use and critical peak alerts Used to provide price signals to customers General customer notifications Used to provide price signals to customers
Utility Uses of “Robo Call” Technologies
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Per EEIs Petition, FCC clarifies energy utilities can generally send automated, non-telemarketing calls/texts to customer’s wireless number that are “closely related to” utility service. - FCC interprets “closely related” narrowly. - Scope of consent determined upon facts of each situation.
Did not reach question of whether utility calls covered by emergency exception as requested.
8/4 Declaratory Order
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Conclusion
The integrated grid is the backbone of our economy. Electric utilities are making investments for a modern reliable grid to meet the growing demands of our digital society.
Electric utilities are empowering customers with more choices and control, while ensuring that our electric supply is safe, reliable, affordable, and clean.
Regulation is evolving to ensure a diverse and resilient integrated electric grid, as well as the deployment of new technology and innovation that will benefit ALL customers.
Grid security is a top industry priority!
The Edison Electric Institute (EEI) is the association that represents the U.S. investor-owned electric industry. Our members provide electricity for 220 million Americans, operate in all 50 states and the District of Columbia, and directly employ nearly 500,000 workers. Safe, reliable, affordable, and clean electricity powers the economy and enhances the lives of all Americans.
The EEI membership also includes dozens of international electric companies as International Members, and hundreds of industry suppliers and related organizations as Associate Members.
Since 1933, EEI has provided public policy leadership, strategic business intelligence, and essential conferences and forums for the energy industry.
For more information, visit our Web site at www.eei.org.