20171220IPC to Sierra Club Attachment 2 - EE_TD_Deferral.pdf

T&D Investment
Deferral Value
August 30, 2016
Dave Angell
Survey of Calculation
Methodologies
2
•Average of a selection of similar utilities
•Use T&D marginal cost of service data from most
recent rate case
•Determine deferrable projects based on load forecasts
Data Gathering
3
•Identified 36 growth-driven projects
–Distribution circuits, substations, and transmission lines
•Information on growth-driven projects in the 2016
budget
–7 year load growth forecast
–Load composition by rate class
–Asset capacity
•Energy Efficiency projections by rate class
–Both average energy and energy at peak
Growth Project Locations
4
Example Growth Project
5
6.6
6.7
6.8
6.9
7.0
7.1
7.2
7.3
2016 2017 2018 2019 2020 2021
Lo
a
d

P
r
o
j
e
c
t
i
o
n

(
M
W
)
Year
Without EE
Asset Capacity
2017 In-Service
Date
Example Growth Project
6
6.6
6.7
6.8
6.9
7.0
7.1
7.2
7.3
2016 2017 2018 2019 2020 2021
Lo
a
d

P
r
o
j
e
c
t
i
o
n

(
M
W
)
Year
Without EE
With EE
Asset Capacity
2017 In-Service
Date
Deferred 3 years
with Energy
Efficiency
Assumptions
7
•Individual project deferrals will be based on actual
load growth and cannot be predicted
•Projects in the present budget are representative of
future projects
–The T&D deferral value can be revisited when needed
•Energy efficiency projections are applied evenly
across the service territory based on peak demand by
rate class
•Energy efficiency projections for system peak demand
align with feeder and transformer load peaks
Calculation Assumptions
8
•Projects within three year window considered for
deferral
•Energy efficiency ranges from <1 to 10 times
projected
•Projects’ future cost inflated at 2.64%
•Present value determined by cost of capital of 7.86%
(aka discount rate)
Calculation Method
•Indentify and determine projected savings of each
project deferral
–Expressed in present value using inflation and discount
rate
•Calculate the forecasted energy saved on our entire
system from 2016-2018
9
Sensitivity of Project Deferrals
10
0
5
10
15
20
25
30
35
0 1 2 3 4 5 6 7 8 9 10
Nu
m
b
e
r

o
f

P
r
o
j
e
c
t
s
Energy Efficiency Forecast Multiplier
0
1
2
3
4
5
6
0 1 2 3 4 5 6 7 8 9 10
De
f
e
r
r
a
l

Va
l
u
e

(
$
/
k
W
-ye
a
r
)
Energy Efficiency Multiplier
Deferral Value Relative to Energy
Efficiency
11
Energy Efficiency
Forecast
More
than
projected
0
1
2
3
4
5
6
0 1 2 3 4 5 6 7 8 9 10
T&
D

D
e
f
e
r
r
a
l

V
a
l
u
e

(
$
/
k
W
-ye
a
r
)
Energy Efficiency Forecast Multiplier
Sensitivity of T&D Deferral Value
12
$3.76/kW-year
average
Questions?
•Please send comments to Tami White at
[e-mail]
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