DTE Electric s Demand Response Resources October 10, 2017
Amid growing capacity constraint concerns in the state, key stakeholders believe expansion of DR is a good option for meeting future capacity needs Demand response resources, which are essentially users agreeing to use less electricity when demand is spiking, are likely to be both cost-effective and can be put in place before the summer of 2018 it seems that it will be necessary for Michigan LSEs to follow through with their current plans for demand response development. The demand response programs become increasingly important when the system is stressed due to high demand and/or unexpected plant outages. - Michigan Capacity Resource Assessment 1/31/2017 -Sally Talberg, chairman of the MPSC 1/31/2017 Regulators and utilities searching ways to bring down electricity costs in the state should take this report's findings to heart and implement effective demand reduction programs. - Liesl Clark, president of the Michigan Energy Innovation Business Council 2/17/2017 2
DR programs focus on lowering customer usage during times of high energy demand Average Usage for Residential Interruptible A/C Customer (kw) 3 Control Group Continues Use of A/C 5 2.0 1.5 1.0 1 Temperatures and Usage Increase 2 DR Customer IA/C Units Shutdown 4 DR Customer IA/C Units Turn On 0.5 0.0 August 11, 2016 Event 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Heat Index ( F) 88 90 95 98 86 88 98 103 100 98 99 94 92 90 89 89 Heavy Rain 3
These programs are intended for use during times when capacity needs are the greatest which accounts for very limited hours each year 12,000 1 DR is appropriate for meeting the absolute highest peak of customer demand ~15 hours a year on 3 to 4 days, (less than 0.2% of the year) DTE Electric Annual Load Duration (MW) 10,000 8,000 6,000 2 The remainder of customers energy needs are best met with traditional generation (more than 99.8% of the year) 4,000 2,000 0 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Energy needs best served by traditional generation Energy needs best served by demand response 1. 630 MW of market capacity credit 4
DTE Electric is already one of the largest utility demand response providers in the country 2015 EIA Top 100 DR Programs - Peak Demand Savings 1 (MW) 4,250 4,000 1,750 1,500 1,250 1,000 750 500 250 0 DTE Electric Top-decile = 183MW Quartile DR Savings: Q1: 52 MW Q2: 13 MW Q3: 4 MW Overall DTE Electric is a leading participant in the demand response sector with active involvement on the Boards of the Peak Load Management Alliance (PLMA) and the Smart Electric Power Alliance (SEPA) 1. Includes commercial, industrial, transportation and residential programs. Based on 2015 EIA reported data. 2017/18 DTE Electric value is self-reported since it is not listed in the EIA database, Claimed capacity value for DTE Electric 5
In addition to a top-decile C&I program 2015 EIA Top C&I DR Programs - Peak Demand Savings 1 (MW) 4,000 3,750 1,500 1,250 C&I Quartile DR Savings: Q1: 55 MW Q2: 10 MW Q3: 3 MW 1,000 750 500 250 Top-decile = 205MW 0 Southern California Edison Alabama Power Commonwealth Edison TVA (TN) Florida Power & Light TVA (MS) Duke Energy Indiana TVA (AL) DTE Electric Duke Energy Florida Pacific Gas & Electric Duke Energy Carolinas (NC) Wisconsin Public Service Corp Gulf Power Indiana Michigan Power Sulphur Springs Valley E C Inc Idaho Power North Carolina Eastern M P A Public Service Co of Colorado Interstate Power and Light Duke Energy Progress - (NC) Georgia Power Co MidAmerican Energy Co Great River Energy Consolidated Edison Co-NY Inc The Toledo Edison Co 21 Others Choptank Electric Coop, Inc Omaha Public Power District New York State Elec & Gas Corp Consumers Energy Colquitt Electric Membership Corp Oklahoma Gas & Electric Co Caddo Electric Coop, Inc Westar Energy Inc Duke Energy Ohio Inc San Diego Gas & Electric Co Austin Energy 180 Others with Less than 55MW 1. Based on 2015 EIA reported data. DTE value is self-reported since it is not listed in the EIA database; Claimed capacity value for DTE Electric 6
Navigant has stated that DTE Electric provides its commercial and industrial customers with a wide array of the best-in-class DR options Navigant Best-in-Class Demand Response Options Direct Load Control C&I Curtailment Dynamic Pricing Behavioral DR $ $$ $$$ $$ DTE Electric product 7
DTE Electric s 572 MW of demand response program capacity accounts for approximately 6% of our 10,000 MW peak demand in MISO 273 DTE Electric Demand Response Programs (MW 2017/18 Planning Year 1 ) 98 91 75 23 12 0 R-10: Interruptible Supply (Industrial) D-1.1: Interruptible Air (Residential) D-8: Interruptible Service (Industrial) R-1.2: Electric Heat D-3.3: Interruptible Service (Commercial) R-1.1 Metal Melting & D-5 Hot Water Heating D-1.2 & D-1.8 Dynamic Peak Pricing & Time of Use Customers 60 287,000 156 193 119 53 10,000 1. 630 MW of market capacity credit 8
Current and Potential Commercial and Industrial Tariff Offerings D3.3 Interruptible General Service - Available to no more than 300 customers desiring interruptible service in conjunction with service taken under the general service rate. Service to interruptible load shall be taken through separately metered circuits. D8 Interruptible Primary Supply - All power delivered shall be subject to curtailment on order of the Company. Customers may be ordered to interrupt only when the Company finds it necessary to do so either to maintain system integrity or when the existence of such loads shall lead to a capacity deficiency by the utility. R1.1 Alternative Metal Melting / R1.2 Electric Process Heat - Customers operating electric furnaces or customers using electric heat as an integral part of a manufacturing process can take interruptible supply at the above rates. The customers must provide separate circuits so that the Company may install necessary meters for only these processes. R10 Interruptible Supply Rider - Customers desiring interruptible service for a total of not less than 50,000 kilowatts of contracted interruptible service at a single location. Used in conjunction with D11 Primary Supply Rate. R12 Capacity Release - Available to customers desiring a voluntary capacity release payment for loads not less than 250 kw at a single location. The Company and the customer will mutually agree on the prices, terms, and conditions for load reductions R13 Dispersed Generation - Available to customers who have on-site generators desiring a voluntary dispersed generation payment for operating their generation at the request of the Company. The customer must have on-site generation of at least 250 kw capacity at a single location. The Company and the customer will mutually agree on the prices, terms, and conditions for dispersed generation power. 9
DTE Electric currently plans on expanding its residential interruptible air conditioning program by approximately 125 MW Cumulative Planned Demand Response 1 (MW) 800 ~125 MW (35%) 700 600 33 75 104 125 125 125 Planned DR - Interruptible Air Conditioning 500 572 572 572 572 572 572 572 Current DR - In Use 400 2017 2018 2019 2020 2021 2022 2023 Nearly $14 million approved in U-18014 to begin the 125 MW of DR investment 10
For any additional expansion of DR, DTE Electric will evaluate and select programs based upon cost-effectiveness Levelized Cost of Capacity ($/kw-year) DR Programs $92 $95 Gas-fired Generation $75 $60 $18 Interuptible A/C 1 Programmable Communicating Thermostats 1 Home Energy Reports with Peak Reductions Component 1 Bring-yourown-Thermostat 1 Combustion Turbine 2 The levelized cost of capacity for DR programs compares favorably to the cost of a combustion turbine 1. Internal Analysis of Levelized Program Costs 2. MISO Cost of New Entry (CONE) for Planning Year 2016/17 11
Next Steps for DTE Electric and Demand Response 2017: 2018: Review of State DR potential study for potential programs and suggested actions to be evaluated Monitor proceedings on filed joint comments with Consumers on FERC Notice of Proposed Rulemaking on storage and distributed energy resource aggregators Development of Residential Dynamic Peak Pricing and Programmable Communicating Thermostat program as approved in U-18014 Pending filed Rate Case with requests in U-18255 for - $4.4 million for 11MW of T-Stat - $5.1 million for 25MW of IA/C Program rebuild and expansion - $1.4 million for new pilot projects to evaluate additional programs / technologies File Supply Adequacy Report with MPSC Implement Interruptible Rate marketing campaign and demand response outreach including demand response primer and education materials Development of compliance plan for U-18369 reporting 12