More Effective Energy Use In Our Region

Transcription

1 More Effective Energy Use In Our Region MARAMA September 22, 2008 Charles L. Driggs Manager, Demand Side Management 1

2 Energy Market Prices Are Again Accelerating Change in US Energy Use $30 $28 Price per million BTU of energy $26 $24 $22 $20 $18 $16 $14 $12 $10 $8 $6 $4 California Energy Crisis Warmest Winter in 112 Yrs 5% Colder than Average Winter Katrina & Rita $2 $0 Nov-00 Feb-01 May-01 Aug-01 Nov-01 Feb-02 May-02 Aug-02 Nov-02 Feb-03 May-03 Aug-03 Nov-03 Feb-04 May-04 Aug-04 Nov-04 Feb-05 May-05 Aug-05 Nov-05 Feb-06 May-06 Aug-06 Nov-06 Feb-07 May-07 Aug-07 Nov-07 Feb-08 May-08 Aug-08 Gas Commodity Cost, per dt #2 Oil Price, per MMBTU DP&L GCR Price, per dt Gas Delivered to City Gate, per dt Propane Price, per MMBTU * 3% colder than 112 yr average, 11% colder than 15 yr a erage Equivalent Average DP&L Residential Electric Space Heat Rate, July 08 = $44.72 per million BTU 2

3 Smart Grid Attributes Energy Independence and Security Act of 2007 The Smart Grid will: Enable active participation by consumers think ebay and 2-way electricity flow Accommodate all generation and storage options plug & play, standards and interoperability needed Enable new products, services and markets all stakeholders residential, commercial, industrial, aggregators, etc. Provide cleaner power quality for a digital economy finds problems, dispatches solutions Optimize distribution equipment utilization and operations less conservative operation, extended life of components Anticipate and respond to system disturbances enhanced sensing, disturbance avoidance, automated prevention, containment, and restoration Operate resiliently against attack and natural disaster including cyber attack 3

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5 Why Would PHI Promote More Effective Use of Energy? This country uses more energy than we are willing to produce, making us dependent upon markets where: The national government or major sectors of the local population are hostile to the US Other nations or economic groups are willing to outbid us for the energy we seek We have a pressing need to maintain a high-cost military presence to protect our interests Recent research indicates that fossil fuel use at current levels may contribute to global warming in multiple ways The economic cost of our present mix of energy is greater than we as a nation, and our service areas, can competitively support 5

6 Annual Heating Degree Day History Wilmington, Delaware Mean HDD Actual HDD Mean + 1 Std Dev Mean - 1 Std Dev

7 PHI-Wide Blueprint Initiative Blueprint embraces the Smart Grid concept, and will make it a reality in our operating region Creates conditions that support not only traditional energy efficiency programs, but also advanced demand response programs and renewable energy Creates the ability of customers (any who desire it) to better manage their energy use interactively in realtime Improves both electric service reliability and security of the distribution system 7

8 DSM is part of the Blueprint Approach Reality: Today, our Local Distribution Companies Don t generate power only distribute it Focus on better management of the distribution system, as well as the energy coursing through it Are working to implement new technology to transform how the system serves customers better reliability better system security Are looking to provide tools customers can use to manage their own energy Are building on what we have, to make it an integrated system, make it better 8

9 Demand Side Management Focuses on Changing Actual Energy Needs Simple Examples Megawatts Conservation Impacts Meg awatts Impact of Direct Load Control Megawatts 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, Combined Effect of Conservation & DLC Unadjusted Loads Load with Conservation Unadjusted Loads Direct Load Control Unadjusted Loads Combined Conservation and Load Control 9

10 Decoupling Traditional electric & gas utility ratemaking is geared towards encouraging growth of sales Rates are set presuming a mix of operating efficiency improvements will be achieved The industry matured decades ago sales growth is now primarily driven by population growth usage per customer in response to price A large portion of fixed costs are usually recovered in a volumetric rate Fixed costs are growing, and may grow faster than sales Under this approach, it is difficult for a utility to meet its costs of capital with average weather Decoupling is rate restructuring, not a rate increase Fixed costs are covered by fixed revenue Variable costs are covered by sales / variable revenue 10

11 Decoupling Under the historical rate structure approach High usage customers tend to be charged more than their cost of service Low usage customers are often not charged enough to recover the costs to serve them Significance Absent Decoupling, conservation & energy efficiency actions by customers typically cause earnings losses for a utility Losses are only ended if the next rate case increases rates to offset losses High usage customers will tend to overinvest to capture false savings Solution Restructure rates to eliminate the benefit of the utility doing nothing, allowing recovery of operating costs consistent with the way they are incurred Eliminates existing fiduciary conflict of interest in helping customers to cost-effectively achieve greater energy efficiency 11

12 Blueprint DSM Proposals in PHI Service Areas proposed / active Energy Awareness / Public Education Program (DE, MD, DC) Solar Program (NJ, MD) Financing Assistance Company Facility Installations Renewable Energy Demonstration Program (DC) Smart Thermostat / Residential DLC (DE, MD, DC, NJ) Comprehensive Residential Energy Savings Pilot (NJ) Home Performance / Energy Star (DE, MD, DC) Residential HVAC Efficiency (DE, MD, DC) Residential Lighting [CFLs at reduced prices] (DE, MD, DC) Building commissioning & O&M program (DE, MD, DC, NJ) C&I HVAC efficiency (DE, MD, DC) Electric motors & lighting program (DE, MD, DC) Custom incentives program (DE, MD, DC) C&I smart thermostat / DLC (DE, MD, NJ) Internet-based PJM market response program (DE, MD, DC, NJ) Dynamic pricing of energy with AMI support (DE, MD, DC, NJ) Smart Metering / Dynamic Pricing pilot program (DC) 12

13 Just Getting Started Maryland Decoupling approved May 2008 Compact Fluorescent Light program Nov 2007 Sep 9, 2008 interim stage to LED lighting transition CFLs -> ~75% less energy vs. incandescent lighting LEDs -> ~90% less energy vs. incandescent 1,060,000 CFL bulbs sold thru TrueValue, Ace, Home Depot & others Using EPA factors => 25 million tons of CO 2 & 80 GWh displaced over bulbs lifetime Direct Load Control Program approved May 2008 First step to Smart Grid in MD 2008 to 2012 buildout RFP for system development & support going out this week District of Columbia Demand Response demo program real-time / peak pricing & smart meters Delaware Decoupling, AMI & Demand Response approved September 16 th New Jersey Deliberations continue 13

14 PHI Blueprint AMI Technology Overview Home AMI System Collector IP Addressable Central Operations Electric / Gas Operations Thermostat Refrigerator Zigbee RF Repeater RF PHI Substation or Other Facility Option Fiber M D M S AMI Head End C I S Smart Stat / Appliances A Zigbee HAN Meter / Gas Module AMI LAN PHI WAN Backhaul B C D Meter Collector Customer Operations PHI HQ 14

15 PHI Smart Grid - Key Components Putting decision making in the hands of customers Provide improved information, programs and pricing options that will allow customers to make informed energy choices Give customers better information about their service and use Automatically accommodating changing conditions Isolate circuit fault, expeditious automatic restoration Reroute power flows, change load patterns, improve voltage profiles Minimal workforce intervention, auto-notification for corrective actions and maintenance activities Design and operate with greater efficiency Better asset management optimize distribution grid design Optimized grid operations Greater reliability and security Promote green energy initiatives and enable distributed, renewable energy resources to more easily participate Many of these key components focus on energy efficiency and conservation while improving customer service. 15

16 Impact of Making a High SEER Affordable to the Consumer Residential air conditioning unit replacement impact Existing is an 8 SEER unit operating at 5 SEER due to normal performance degradation over unit s lifetime 13 SEER minimum = 13 / 5 improvement 21 SEER upgrade = 21 / 5 improvement Factor in 30-40% fuel efficiency at power plant and 93% transmission efficiency (generating plant-to-meter) Difference? => 13 / (5 x.65 x.93) vs. 21 / (5 x.65 x.93) overall improvement factor 4.3 vs. 7.0 What is the impact on fuel use?.. emissions?.. heat to atmosphere?.. bill? 16

17 US DOE Energy Information Agency 2008 Forecast of Future Energy Use U.S. Energy Consumption by Fuel ( ) (quadrillion Btu) Accelerated adoption of technology (not shown above) is projected to reduce energy use per person by 7% by

18 How Can We Accelerate Results? Normal replacement rates on appliances reflect their long lives new purchases should be as efficient as the customer can afford Normal replacement rates on housing reflect very long lives renovations & upgrades could improve efficiency if cost justified & affordable Show customers how to use the tools available to them to be more energy efficient and save $$ 18

19 Blueprint DSM Proposals in PHI Service Areas proposed / active Energy Awareness / Public Education Program (DE, MD, DC) Solar Program (NJ, MD) Financing Assistance Company Facility Installations Renewable Energy Demonstration Program (DC) Smart Thermostat / Residential DLC (DE, MD, DC, NJ) Comprehensive Residential Energy Savings Pilot (NJ) Home Performance / Energy Star (DE, MD, DC) Residential HVAC Efficiency (DE, MD, DC) Residential Lighting [CFLs at reduced prices] (DE, MD, DC) Building commissioning & O&M program (DE, MD, DC, NJ) C&I HVAC efficiency (DE, MD, DC) Electric motors & lighting program (DE, MD, DC) Custom incentives program (DE, MD, DC) C&I smart thermostat / DLC (DE, MD, NJ) Internet-based PJM market response program (DE, MD, DC, NJ) Dynamic pricing of energy with AMI support (DE, MD, DC, NJ) Smart Metering / Dynamic Pricing pilot program (DC) 19