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Capturing Distributed Benefits

Factoring customer-owned generation into forecasting, planning, and operations.

Fortnightly Magazine - August 2012

plan to the PSC for approval, setting rates for both supply and delivery. Under deregulation, the utility’s primary responsibility is ensuring the adequacy of its distribution system under the PSC’s jurisdiction. Transmission and resource supply adequacy, under the jurisdiction of both the FERC and the PSC, is governed by the New York Independent System Operator (NYISO) planning process, which principally uses the market to send signals to facilitate a robust energy and capacity market, and oversees resource planning. The retail supply market is lightly regulated and retail suppliers compete in the NYISO marketplace. The increasing ability for customers to actively control their own energy supply might prove to be the linchpin in enabling the long-term sustainability of New York’s deregulated retail energy market.

The increasing focus on demand-side management (DSM) is a key development that reflects the shift in electric planning toward downstream solutions. Con Edison is re-examining the methods and associated costs of meeting load growth and is exploring satisfying system capacity needs through advanced modeling, improved asset utilization, and DSM approaches to defer capital expenditures.

Under the traditional utility model, each year the utility develops a load forecast based on past years’ experience adjusted for weather, expected economic developments, and other contributing factors. The distribution and transmission planning departments then run load-flow models to indentify pinch points, based on one-, five-, 10- and 20-year load-change expectations, and plan system upgrades to meet expected load growth. Such system upgrades include lower-cost measures such as transformer cooling or load transfers to less-burdened feeders or networks, and higher-cost investments like new substations or transmission lines. Each year this plan is revised to incorporate new information about load changes, including new and retiring businesses; changing customer demographics, equipment, and behavior; weather; improved modeling, etc.

Technical analysis has expanded the options for Con Edison engineers to use in meeting load growth beyond traditional T&D build-out, to include downstream customer resources and behaviors that prove less costly than traditional T&D. EE was the first of these options and it has recently been joined by more-complex DSM options.

Con Edison has incorporated EE programs into system planning since the company’s 1970s “Save-a-Watt” educational campaign, and a 1980s “Enlightened Energy” program that achieved a 740MW reduction in demand. EE programs have reliably demonstrated a viable alternative to costly capital improvements. Con Edison’s Targeted DSM program was launched in 2004 and has been targeted toward 30 of 64 networks. Under Targeted DSM, Con Edison issues competitive RFPs for customer-sited demand reductions in specific areas where T&D upgrades would otherwise be required. Such upgrades can be deferred by DSM that lowers loading on the distribution system by reducing peak demands on equipment.

DR has traditionally only been used in network emergencies, but has recently been built into system planning and forecasting and relied upon as a peak-shaving resource, improving asset utilization to prevent overbuilt distribution assets.

A vast, underutilized DR resource exists in the form of mostly diesel-fired emergency back-up generation. In New York City this resource represents more than 1.5 GW of potential generation. These back-up generators are eligible