September 9, 2010 Advice Letter 2482-E

Transcription

1 STATE OF CALIFORNIA ARNOLD SCHWARZENEGGER, Governor PUBLIC UTILITIES COMMISSION SAN FRANCISCO, CA September 9, 2010 Advice Letter 2482-E Akbar Jazayeri Vice President, Regulatory Operations Southern California Edison Company P O Box 800 Rosemead, CA Subject: American Recovery and Reinvestment Act Cost Share Recovery: Tehachapi Wind Energy Storage Project Dear Mr. Jazayeri: Advice Letter 2482-E is effective August 12, 2010 per Resolution E Sincerely, Julie A. Fitch, Director Energy Division

2 Akbar Jazayeri Vice President of Regulatory Operations June 10, 2010 ADVICE 2482-E (U 338-E) PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA ENERGY DIVISION SUBJECT: American Recovery and Reinvestment Act Cost Share Recovery: Tehachapi Wind Energy Storage Project PURPOSE In compliance with Ordering Paragraph 3 of Decision No (Decision), Southern California Edison Company (SCE) respectfully seeks the approval of the California Public Utilities Commission (Commission or CPUC) to recover SCE s cost share in the Tehachapi Wind Energy Storage Project (TSP). This cost share will be matched by federal stimulus funding awarded by the United States Department of Energy (DOE) for TSP under the American Recovery and Reinvestment Act (ARRA). TSP will evaluate utility-scale lithium-ion battery technology for purposes of improving grid performance and integrating renewable wind energy generation resources into the grid. By executing the TSP, SCE will evaluate a wide range of applications for lithiumion batteries that could spur broader demand for the technology, bringing production to a scale that will make this form of large energy storage more affordable. SCE received the stimulus award following a highly competitive nationwide selection process for Smart Grid projects under ARRA. BACKGROUND On December 19, 2007, the President signed the Energy Independence and Security Act of 2007 (EISA) into law. Title XIII of the EISA is titled Smart Grid, and Section 1302 includes the following statement: It is the policy of the United States to support the modernization of the Nation s electricity transmission and distribution system to maintain a reliable and secure electricity infrastructure that can meet future demand growth P.O. Box Walnut Grove Ave. Rosemead, California (626) Fax (626)

3 ADVICE 2482-E (U 338-E) June 10, 2010 EISA-imposed amendments to the Public Utility Regulatory Policies Act (PURPA) require that states consider imposing certain requirements and authorizing certain expenditures pertaining to the Smart Grid. On December 18, 2008, the Commission issued its Order Instituting Rulemaking (R.) (Rulemaking). The Commission issued the Rulemaking pursuant to federal legislation as well as the Commission s own motion to consider policies for California investor-owned electric utilities (IOUs) to enhance the ability of the electric grid to support important policy goals. Those policy goals include: (i) reducing greenhouse gas emissions, (ii) increasing energy efficiency and demand response, (iii) expanding the use of renewable energy, and (iv) improving electric system reliability. Following issuance of the Rulemaking, the federal government, pursuant to the terms of ARRA, appropriated $4.5 billion to modernize the electric grid. Pursuant to this appropriation, DOE issued two Funding Opportunity Announcements (FOAs), establishing a Smart Grid Investment Grant Program (DE-FOA ) and a Smart Grid Demonstration Program (DE-FOA ). These two Programs were designed to foster a competitive process and award federal stimulus funds to successful candidates (electric utilities and others) to build and support proposed Smart Grid projects. Consequently, in a Ruling dated May 29, 2009, the scope of the Rulemaking was amended to address procedures for IOUs seeking ARRA funding through either of the two referenced FOAs. Following extensive commentary by parties to the Rulemaking, on September 10, 2009, the Commission approved the Decision. The Decision s full title is Decision Establishing Commission Processes for Review of Projects and Investments by Investor-Owned Utilities Seeking Recovery Act Funding. The Decision adopted a Tier 3 advice letter process to review Smart Grid project costs and to consider cost recovery for projects receiving DOE Smart Grid awards under the two FOAs referenced above. For such projects, the Commission will review Smart Grid project costs by applying the specific criteria identified in Section 5.2 of the Decision. The Tier 3 advice letter process is not available to a Smart Grid project that has received DOE Smart Grid funding if any of the following conditions, listed in Section 5.2, apply to the project: A California Environmental Quality Act (CEQA) review is necessary. A Certificate of Public Convenience and Necessity (CPCN) is necessary. A Permit to Construct (PTC) is necessary. A Smart Grid project requires incremental ratepayer contributions greater than $30 million. A Smart Grid project requires incremental ratepayer contributions greater than fifty (50) percent of total project costs.

4 ADVICE 2482-E (U 338-E) June 10, 2010 SCE s TSP project meets the requirements needed to file a Tier 3 advice letter. As a follow up to inquiries by the CPUC Energy Division regarding whether SCE's TSP is subject to review under CEQA, it should be noted that the TSP: (1) is proposed to be built within SCE's existing Monolith Substation; (2) does not involve an activity that will increase the substation voltage rating; and (3) does not involve expanding the fence line of the substation. Accordingly, the TSP constitutes a "substation modification" and not a "substation upgrade" under Section III.B of CPUC General Order (GO) 131-D. In accordance with Decision (D.) , dated June 8, 1994 (as modified by D dated August 11, 1995) and GO 131-D, no CPUC or local discretionary permits or approvals are required. Therefore, the TSP is not a "project" for purposes of CEQA and no CEQA review is triggered (California Public Resources Code Section 21065). SCE is requesting a maximum of $25,978,264 for the project, which is below the $30 million and 50 percent thresholds. For projects that do qualify for the Tier 3 advice letter process, Ordering Paragraph 3 of the Decision states that Energy Division shall review such advice letters to determine whether: 1. The DOE has selected the project to receive an award; 2. The project furthers one or more of the benefits to IOU ratepayers identified in Section 5.2 [of the Decision]; 3. The requested incremental ratepayer funding for the project does not exceed $30 million; 4. The utility attests that ratepayer funding does not exceed 50 percent of the total project costs; 5. The utility attests or otherwise demonstrates that it has sought third-party funding, in addition to DOE funding, and indicates what third-party co-funding it has received; 6. The utility has provided a detailed itemized budget for the project and included a reasonable explanation of how the budget was developed; and 7. The utility attests or otherwise demonstrates that the costs are necessary for the project. If the above-referenced conditions have been met, Energy Division will prepare a resolution approving the project for consideration by the Commission. Any party protesting the advice letter must demonstrate that the advice letter fails to meet the conditions set forth above. 1 1 D , page 26, Paragraph 1.

5 ADVICE 2482-E (U 338-E) June 10, 2010 On August 26, 2009, SCE submitted an application under DE-FOA to receive funding for TSP. On November 24, 2009, DOE announced that it had preliminarily awarded SCE $24,978,264 for the project. On January 29, 2010, the Energy Division approved Advice 2389-E, which proposed establishment of a Smart Grid American Recovery and Reinvestment Act Memorandum Account (SGARRAMA) in compliance with Ordering Paragraph 2 of the Decision. On February 8, 2010, the DOE provided SCE with an Undefinitized Agreement for TSP. Importantly, pursuant to the terms of the Undefinitized Agreement, SCE has 120 days from the date of receipt of the Undefinitized Agreement to secure matching funds for the DOE s $24,978,264 award. Such matching funds include the ratepayer funding sought in this Advice Letter. As part of the negotiations with the DOE, SCE has requested a 60 day extension to the initial 120 days. As of the date of this filing, the DOE has indicated a preference to pursue an expedited definitization process with an expected completion date of June 23, SCE will continue to work with the DOE to satisfy both SCE and DOE requirements to achieve a timely conclusion to the definitization process. Accordingly, SCE requests the Commission approve SCE s ratepayers match for the DOE s award no later than July 29, 2010 to demonstrate financial commitment to the DOE. PROPOSAL SCE hereby requests approval for a maximum of $25,978,264 for TSP, which represents estimated project costs of $23,616,604 and a 10 percent ($2,361,660) contingency for unforeseen events. SCE will use the contingency funds only if they are needed to successfully complete the project and only in compliance with the requirements of the Decision. As described above, SCE is requesting this amount pursuant to the procedures set forth in Ordering Paragraph 3 of the Decision. Each of the Decision s specified criteria that govern Energy Division s review of this Advice Letter are addressed below: 1. The DOE has selected the project to receive an award. Attached hereto as Appendix A is the Project Selection and Evaluation Letter that SCE received for the TSP. 2. The project furthers one or more of the benefits to IOU ratepayers identified in Section 5.2 of the Decision. Section 5.2 of the Decision states that the goal of projects awarded under DE-FOA is to collect and provide information to: Reduce system demands and costs; Increase energy efficiency; Optimally allocate and match demand and resources to meet that demand; and Increase the reliability of the grid.

6 ADVICE 2482-E (U 338-E) June 10, 2010 SCE has designed the TSP to demonstrate the performance of an 8MW-4 hour (32MWh) lithium-ion battery system when used for the 13 operational uses listed in the table below: Category Transmission-Related Uses System-Related Uses ISO Market-Related Uses Operational Use 1. Voltage Support & Grid Stabilization 2. Decreased Transmission Losses 3. Diminished Congestion 4. Increased System Reliability (Load Shed Deferral) 5. Deferred Transmission Investment 6. Optimize Size and Cost of Renewable Energy Related Transmission 7. Provide System Capacity & Resources Adequacy 8. Renewable Energy Integration (Smoothing) 9. Wind Generation Output-Shifting 10. Frequency Regulation 11. Spin/Non-Spin Replacement Reserves 12. Deliver Ramp Rate 13. Energy Price Arbitrage As described in the Project Narrative of the TSP application submitted to DOE, 2 SCE selected these operational uses because it believes they best meet the stated priorities of both DOE and the Commission for Smart Grid Demonstration Projects. Specifically, evaluating the TSP s energy storage system for these uses will produce valuable information regarding: 1) optimally allocating and matching demand and resources to meet that demand; 2) increasing reliability of the grid; and 3) reducing system demands and costs. Optimal Allocation And Matching Of Demand And Resources To Meet That Demand The TSP will test the ability of the lithium-ion electricity storage system to shift wind and conventional power across time to meet peak load and other electricity system needs with stored electricity. In California, wind generation is often highest at night and in the early morning when demand for power is lowest. 3 If SCE could effectively store this excess energy produced during off-peak, overnight hours, and shift that output to meet higher system demand during the day, we could reduce energy costs and optimize the use of existing transmission assets. Under operational use #9, SCE will test the ability of the project s lithium-ion battery system to store energy produced during non-peak 2 Please refer to Appendix B for a copy of the TSP Project Narrative. 3 California Independent System Operator, Integration of Renewable Resources, November 2007.

7 ADVICE 2482-E (U 338-E) June 10, 2010 hours and dispatch the stored energy to meet system demand as needed, including during peak periods. The project team will also work with the California Independent System Operator (CAISO) to assess the potential economic viability of energy arbitrage associated with these output shifts. Increasing Reliability Of The Grid The TSP will demonstrate the use of the lithium-ion battery storage system to increase grid reliability. The TSP will be located on a portion of SCE s Antelope/Bailey 66 kv transmission system, which has a high penetration of wind generation. Wind generation output is inherently intermittent and highly variable, which causes voltage instability on the electricity grid. The TSP will gather data to determine how lithium-ion storage technologies can provide needed voltage support and improve grid reliability. The TSP will also test the storage system for the 13 operational uses described in the preceding table, which should provide information to support additional grid reliability improvements. Reducing System Demands And Costs The TSP will demonstrate the use of the lithium-ion battery storage system to reduce system demands and costs. The Antelope/Bailey system on which the TSP will be sited often experiences conditions of high wind generation output coupled with low local demand for power. These conditions force system operators to curtail local wind generation to avoid overloading the transmission lines. When this curtailment occurs, power that might otherwise have been utilized is lost (i.e., the wind is spilled ). Through the TSP, SCE will determine if and how the energy storage system might relieve transmission congestion, which will reduce demand on the existing system, and the need to curtail intermittent generation. The Project Narrative of TSP Application submitted to DOE (at pages 9-11, and 32-33) provides a more detailed discussion of how the project s energy storage system will produce information about load shifting, grid stability issues, and reduction of system demands and costs. 3. The requested incremental ratepayer funding for the project does not exceed $30 million. SCE hereby requests approval for a maximum of $25,978,264 for TSP, which represents estimated project costs of $23,616,604 and a 10 percent ($2,361,660) contingency for unforeseen events. SCE will use the contingency funds only if they are needed to successfully complete the project and only in compliance with the requirements of the Decision. SCE s request does not exceed $30 million in incremental ratepayer funding for the TSP. Therefore, SCE is in compliance with this requirement.

8 ADVICE 2482-E (U 338-E) June 10, The utility attests that ratepayer funding does not exceed 50 percent of the total project costs. SCE s maximum request of $25,978,264 represents 45.4 percent of the total TSP project cost of $57,218,155. Therefore, SCE is in compliance with this requirement. 5. The utility attests or otherwise demonstrates that it has sought third-party funding, in addition to DOE funding, and indicates what third-party co-funding it has received. SCE has actively sought third-party funding for TSP. We have received third-party funding from the following parties in the following amounts: Party Contribution to TSP Status of Request California Energy Commission $1,000,000 A123Systems, Inc. $5,261,627 Received a Notice of Proposed Award on December 30, Received quotation on August 14, The utility has provided a detailed itemized budget for the project and included a reasonable explanation of how the budget was developed. Please refer to Appendix D for the TSP s itemized budget. As a result of ongoing negotiations with the DOE, which impacted original assumptions, SCE has added an additional $1,346,288 for increased administrative and project management expenses and a contingency of $2,361,660 for unforeseen events. As stated previously, SCE will use the contingency funds only if they are needed to successfully complete the project and only in compliance with the requirements of the Decision. SCE developed this budget based on rigorous cost analysis of: the battery system; the equipment and materials needed to safely interconnect the battery system; the communications infrastructure needed to control, operate and measure the battery system; and the labor, consulting and contracting resources needed to successfully complete the project. SCE possesses a great deal of experience in estimating costs associated with construction of electric and communications systems. SCE leveraged this experience, its expertise in energy storage technologies and its experience managing other research, development and demonstration projects to determine a reasonable project budget. 4 Please refer to Appendix C for a copy of the California Energy Commission Notice of Proposed Award.

9 ADVICE 2482-E (U 338-E) June 10, The utility attests or otherwise demonstrates that the costs are necessary for the project. SCE has developed its Project Management Plan 5 and Project Budget in accordance with project management best-practices, as identified by the Project Management Institute (PMI), the leading authority in project management practices. SCE has adopted these best practices on other projects that have been recognized for project management excellence by PMI. 6 We can therefore attest that these costs are necessary to complete the project. Upon completion of the project, further use or disposition of the battery system will occur pursuant to DOE procedures and directions. This advice filing will not increase any rate or charge, cause the withdrawal of service, or conflict with any other schedule or rule. TIER DESIGNATION Pursuant to Ordering Paragraph 3 of the Decision, this advice letter is submitted with a Tier 3 designation. EFFECTIVE DATE This advice filing will become effective upon Commission approval. NOTICE Anyone wishing to protest this advice filing may do so by letter via U.S. Mail, facsimile, or electronically, any of which must be received no later than 20 days after the date of this advice filing. Protests should be mailed to: CPUC, Energy Division Attention: Tariff Unit 505 Van Ness Avenue San Francisco, California jnj@cpuc.ca.gov and mas@cpuc.ca.gov Copies should also be mailed to the attention of the Director, Energy Division, Room 4004 (same address above). In addition, protests and all other correspondence regarding this advice letter should also be sent by letter and transmitted via facsimile or electronically to the attention of: 5 Please refer to Appendix E for the TSP Project Management Plan. 6 The Edison SmartConnect project received the 2006 and 2007 Project of the Year Awards from the Orange County Chapter of the Project Management Institute (OC-PMI).

10 ADVICE 2482-E (U 338-E) June 10, 2010 Akbar Jazayeri Vice President of Regulatory Operations Southern California Edison Company 2244 Walnut Grove Avenue Rosemead, California Facsimile: (626) AdviceTariffManager@sce.com Bruce Foster Senior Vice President, Regulatory Affairs c/o Karyn Gansecki Southern California Edison Company 601 Van Ness Avenue, Suite 2040 San Francisco, California Facsimile: (415) Karyn.Gansecki@sce.com There are no restrictions on who may file a protest, but the protest shall set forth specifically the grounds upon which it is based and shall be submitted expeditiously. In accordance with Section 4 of General Order (GO) 96-B, SCE is serving copies of this advice filing to the interested parties shown on the attached GO 96-B service list and R Address change requests to the GO 96-B service list should be directed by electronic mail to AdviceTariffManager@sce.com or at (626) For changes to all other service lists, please contact the Commission s Process Office at (415) or by electronic mail at Process_Office@cpuc.ca.gov. Further, in accordance with Public Utilities Code Section 491, notice to the public is hereby given by filing and keeping the advice filing at SCE s corporate headquarters. To view other SCE advice letters filed with the Commission, log on to SCE s web site at For questions, please contact John Minnicucci at (626) or by electronic mail at john.minnicucci@sce.com. Southern California Edison Company AJ:jm:sq Enclosures Akbar Jazayeri

11 CALIFORNIA PUBLIC UTILITIES COMMISSION ADVICE LETTER FILING SUMMARY ENERGY UTILITY MUST BE COMPLETED BY UTILITY (Attach additional pages as needed) Company name/cpuc Utility No.: Southern California Edison Company (U 338-E) Utility type: Contact Person: James Yee ELC GAS Phone #: (626) PLC HEAT WATER Disposition Notice to: EXPLANATION OF UTILITY TYPE ELC = Electric GAS = Gas PLC = Pipeline HEAT = Heat WATER = Water (Date Filed/ Received Stamp by CPUC) Advice Letter (AL) #: 2482-E Tier Designation: 3 Subject of AL: American Recovery and Reinvestment Act Cost Share Recovery: Tehachapi Wind Energy Storage Project Keywords (choose from CPUC listing): Compliance AL filing type: Monthly Quarterly Annual One-Time Other If AL filed in compliance with a Commission order, indicate relevant Decision/Resolution #: D Does AL replace a withdrawn or rejected AL? If so, identify the prior AL: Summarize differences between the AL and the prior withdrawn or rejected AL 1 : Confidential treatment requested? Yes No If yes, specification of confidential information: Confidential information will be made available to appropriate parties who execute a nondisclosure agreement. Name and contact information to request nondisclosure agreement/access to confidential information: Resolution Required? Yes No Requested effective date: Upon Commission approval Estimated system annual revenue effect: (%): Estimated system average rate effect (%): No. of tariff sheets: -0- When rates are affected by AL, include attachment in AL showing average rate effects on customer classes (residential, small commercial, large C/I, agricultural, lighting). Tariff schedules affected: None Service affected and changes proposed 1 : Pending advice letters that revise the same tariff sheets: 1 Discuss in AL if more space is needed.

12 Protests and all other correspondence regarding this AL are due no later than 20 days after the date of this filing, unless otherwise authorized by the Commission, and shall be sent to: CPUC, Energy Division Attention: Tariff Unit 505 Van Ness Ave., San Francisco, CA and Akbar Jazayeri Vice President of Regulatory Operations Southern California Edison Company 2244 Walnut Grove Avenue Rosemead, California Facsimile: (626) Bruce Foster Senior Vice President, Regulatory Affairs c/o Karyn Gansecki Southern California Edison Company 601 Van Ness Avenue, Suite 2040 San Francisco, California Facsimile: (415)

13 Appendix A

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17 Appendix B

18 Tehachapi Wind Energy Storage Project Narrative Recovery Act Smart Grid Demonstrations; Area of Interest 2.1 Battery Storage for Utility Load Shifting or for Wind Farm Diurnal Operation sand Ramping Control Applicant: Southern California Edison Company 8/26/2009 Submitted To: U.S. Department of Energy National Energy Technology Laboratory In Response To: Funding Opportunity Number: DE-FOA CFDA Number: Electricity Delivery and Energy Reliability Research, Development and Analysis Area of Interest 2.1: Battery Storage for Utility Load Shifting or for Wind Farm Diurnal Operations and Ramping Control Applicant Information: Southern California Edison Company Advanced Technology Organization 2131 Walnut Grove Avenue Rosemead, CA Edward Kjaer, Director Tel: Fax: Tehachapi Wind Energy Storage Project Page 1 of 56

19 Table of Contents 1. Project Objectives Merit Review Criterion Discussion Project Approach Comprehensiveness and completeness of the Statement of Project Objectives (SOPO) that describes the proposed interrelated tasks and of the Project Management Plan that includes a schedule with milestones and explains how the project will be managed to achieve objectives on time and within budget Completeness of the proposed demonstration approach to effectively address all goals of the Energy Storage Competitiveness Act Adequacy of the proposed demonstration approach to quantifiably advance program metrics Validity of the proposed approach and likelihood of success based on current technology maturity and regulatory/stakeholder acceptance of the technology innovativeness of the project, including introduction of new technologies and creative applications of new and state-of the practice energy storage Appropriateness and completeness of the demonstration plan including performance objectives of the demonstration, the criteria and requirements used in selecting the demonstration site(s), the data collection and evaluation plan, the metrics for success, and the measurements that will be made to confirm success Adequacy and completeness of the project approach in delivering demonstration project data and information to the Department and the Public Suitability and Availability of the Proposed Project Site Adequacy of plans for data collection and analysis of project costs and benefits The degree of the proposed estimates of project benefits Significance and Impact Significance of the Proposed Demonstration Application vs. Current Practices Degree to which the demonstration project is broadly applicable and adaptable throughout the region or the nation, including the completeness and adequacy of the deployment plan for largescale deployment in and/or beyond the proposed region Completeness of the proposed commercialization strategy for the technologies being demonstrated Extent to which demonstration advances research and demonstration objectives of the program goals of the Energy Storage Competitiveness Act Viability and practicality of the proposed technology to meet the needs of the target market in a cost effective manner Interoperability and Cyber Security Adequacy and completeness of approach to address interoperability Tehachapi Wind Energy Storage Project Page 2 of 56

20 2.3.2 Adequacy and completeness of approach for cyber security concerns and protections and how they will be addressed throughout the project Project Team Completeness and qualifications of the proposed project team, with defined roles and responsibilities for each team member and with appropriate members committed to the demonstration or technology verification Demonstrated level of corporate commitment to the proposed project and proposed cost share as evidenced by letters of intent from all proposed team members Demonstrated level of corporate commitment to commercialization of the proposed technology by providing convincing examples of the Applicant s efforts to commercialize the technology in addition to the proposed project Estimate of Jobs Created Relevance and Outcomes/Impacts Utility Load/Output Shifting Dispatchability Ramp Rate Control Monitoring and Performance Reporting Baseline data Performance Testing Data Energy Storage System Efficiency Energy Storage System Availability and Reliability Predicted economic payback Societal and Environmental Outcomes and Impacts Decreased Manufacturing Costs of Large Scale Energy Storage Reduced Greenhouse Gas Emissions Best Practices in Energy Storage Project Readiness Other Selection Factors Job Creation and Economic Recovery Roles of Participants Project Performance Site Street address of proposed site. (If a street address is not adequate to locate the site, provide additional location description such as latitude and longitude) A brief description of the site and its surroundings (e.g., topography, geology, etc.) Access to transportation, utilities, or other amenities necessary to execute the project Evidence of ownership or legal right to utilize the site for the duration of the project (e.g., deed or lease agreement) or plans to obtain legal rights to utilize the site for the duration of the project Statement of Project Objectives (SOPO) Tehachapi Wind Energy Storage Project Page 3 of 56

21 6.1 Project Objectives Project Scope (Scope of Work) Tasks to be Performed (Divided into appropriate phases/budget periods) Phase I Project Definition and NEPA Compliance Phase II Final Design, Construction, and Baselining Phase III Operations, Measurement, and Testing Phase IV Decommissioning Detailed Work Breakdown Structure Phase I Work Breakdown Structure Phase II Work Breakdown Structure Phase III Work Breakdown Structure Phase IV Work Breakdown Structure Deliverables Reporting, Briefings and Technical Presentations Appendix A Bibliography and References Cited Appendix B Equipment Needed Tehachapi Wind Energy Storage Project Page 4 of 56

22 List of Figures Figure 1. TSP Targeted Uses... 7 Figure 2. Tehachapi Wind Energy Storage Project Test Requirements and Metrics... 9 Figure 3. TSP Operational Uses Test Plan Figure 4. Project Benefit Categories and Estimates Figure 5. Miller, T. Hybrid Battery Technology and Challenges. MIT Technology Review s Emerging Technology Conference, (September 28, 2006) Figure 6. Tehachapi Storage Project - System Architecture...25 Figure 7. Project Tasks and Team Members Figure 8. Kandler Smith, A123Systems Cell (ANR 26650M1) Thermal Characterization Test Plan & Preliminary Results, (October 2, 2007) Figure 9. Project Governance Structure Figure 10. Key TSP Project Officers and Positions Figure 11. Monolith Substation Plot Plan Figure 12. Property Inventory Figure 13. Monolith Substation Deed Figure 14. Monolith Substation Deed Figure 15. TSP Phases Duration, Scope, and Budget...46 Figure 16. Phase I Tasks Figure 17. Phase II Tasks Figure 18. Phase III Tasks Figure 19. Phase IV Tasks Figure 20. TSP Non-Federal Reporting Requirements...54 Tehachapi Wind Energy Storage Project Page 5 of 56

23 1. Project Objectives The objective of the Tehachapi Wind Energy Storage Project (TSP) is to evaluate the performance of utility scale lithium-ion battery technology in improving grid performance and integrating wind generation. The results of this evaluation will help accelerate the advancement of reliable, clean, secure, renewable energy resources and technologies for smart grid applications. In 2008, through a California Energy Commission/Public Interest Energy Research (CEC/PIER)-funded project, Southern California Edison Company, (SCE), Quanta Technology and wind power developer Oak Creek Energy began studying the potential benefits of using existing energy storage devices to address issues associated with integrating intermittent renewable resources such as wind generation. The Antelope-Bailey 66kV system was one of three SCE sites chosen for this CEC/PIER Wind-Storage- Enhanced Transmission Research and Development Study due to the large number of wind farms installed there. For the proposed energy storage demonstration under this application, the TSP team will site the project s battery system at SCE s Monolith substation on the Antelope-Bailey system in order to leverage the results of the ongoing CEC/PIER study to maximize the benefits of this project. In fact, the CEC/PIER project team identified key issues at Antelope-Bailey 66kV system that could be incorporated into the federal demonstration project. SCE is the principal applicant for the proposal and is one of the nation s largest electric utilities, serving a population of more than 13 million via 4.8 million customer accounts in a 50,000-square-mile service area covering central and Southern California. SCE currently serves between 16 and 17 percent of its customers needs with renewable energy, and is working toward a goal of having at least 20 percent of its power supplied by renewable generators. SCE leads the nation in renewable power delivery, procuring more than 13 billion kilowatt-hours of renewable energy per year, more than any U.S. utility or state except for California. SCE s renewable portfolio currently can deliver more than 2,700 MW of electricity. Recent contracts added to the portfolio will further increase renewable capacity upon operation. The TSP team will also include the California Independent System Operator (CAISO) and A123Systems (A123), the manufacturer of the battery system and associated technologies, as project participants. Quanta Technology (Quanta) and California State Polytechnic University, Pomona (Cal Poly Pomona) will play a significant role in providing engineering support, measurement and reporting services. The project team will design and build an 8 MW 4 hour (32 MWh) lithium-ion battery system and smart inverter, and connect it to SCE s Monolith substation near the Tehachapi Wind Resource Area (TWRA). The team will demonstrate the ability of the installed system to enhance grid operations and wind power integration by measuring performance under 13 specific operational uses. These functions will help achieve the Department of Energy s (DOE) stated goals in this Funding Opportunity Announcement of utility load shifting, increasing the dispatchability of wind generation, and enhancing ramp rate control to minimize the need for fossil fuel-powered back-up generator operation. Tehachapi Wind Energy Storage Project Page 6 of 56

24 The project s 13 planned operational uses of the battery system are listed in Figure 1. Transmission-Related Uses System-Related Uses ISO Market-Related Uses Figure 1. TSP Targeted Uses Voltage Support & Grid Stabilization Decreased Transmission Losses Diminished Congestion Increased System Reliability (Load Shed Deferral) Deferred Transmission Investment Optimize Size and Cost of Renewable Energy-Related Transmission Provide System Capacity & Resources Adequacy Renewable Energy Integration (Smoothing) Wind Generation Output-Shifting Frequency Regulation Spin/Non-Spin Replacement Reserves Deliver Ramp Rate Energy Price Arbitrage Once the TSP team has conducted its testing of these operational uses, secured the appropriate data, and concluded its analysis, it will publish its recommendations for use by various stakeholders such as government and regulatory agencies, other utilities, and industry and academic research institutions. For SCE and CAISO, the catalyst for this project is the need to meet California s ambitious Renewables Portfolio Standard (RPS). California has set RPS goals that procurement from renewable resources reach 20 percent of retail electricity sales by 2010 and potentially 33 percent by SCE has long been a national leader in renewable power delivery. In 2008, SCE delivered more than 12.6 billion kilowatt hours (kwh) of renewable energy about 16 percent of its total power deliveries more than any utility in the country. The company is therefore well-equipped to take a leadership position in driving greater understanding of renewable resource integration. A significant part of SCE s renewable energy efforts are directed toward cultivating Southern California s wind resources. Wind resources currently make up 21 percent of SCE s renewable generation, and the utility is investing $2.1 billion in its Tehachapi Renewable Transmission Project (TRTP) located 100 miles north of Los Angeles. TRTP alone is expected to deliver up to 4,500 MW of wind energy by While wind generating facilities are the fastest renewable resource to install and interconnect to the power grid, they also present the greatest operational challenges. 1 Issues include frequency and voltage control, wind generation curtailment, transmission line loading, grid instability, low power quality, substantial fossil-fuel based backup system requirements, and lack of ramp rate control. Secretary of Energy Steven Chu has said, If we want to get 30 percent of our electricity from sources like wind or solar energy, we need to solve the energy storage problem. 2 SCE and CAISO also have long recognized the possibility of advanced energy storage systems as a solution to challenges with renewable power integration, and believe this project will help the industry better understand this opportunity. SCE also intends to use this demonstration project to advance core battery technology for use throughout the electric energy industry. This demonstration will help establish the necessary best practices and 1 California Independent System Operator (CAISO), Integration of Renewable Resources: transmission and operating issues and recommendations for integrating renewable resources on the California ISO-controlled grid, (November 2007). 2 NOVA, The Big Energy Gamble, Public Broadcasting Service, Tehachapi Wind Energy Storage Project Page 7 of 56

25 commercialization strategies for deploying large-scale energy storage: a) across SCE s grid; b) throughout California s grid; c) across a national smart grid by providing cost benefit reports that can be disseminated by the DOE. It also plans to use this demonstration to advance electric transportation because commercialization of lithium-ion in utility applications will reduce the cost for automotive applications. The data gathered in this project will determine which of the team s anticipated benefits are attainable, measure the performance of the energy storage technologies in grid applications, and ascertain the storage requirements that will lead to better use of renewable resources. Finally, SCE is committed to leveraging as part of TSP its knowledge and experience in smart grid standards development, and specifically its involvement in both NIST s interoperability framework and the DOE-sponsored Advanced Security Acceleration Project for the Smart Grid (ASAP-SG). The integration of the proposed energy storage solution with wind resources in the TWRA requires special attention to performance and control considerations. Several tests of the project s proposed operational uses will take into account the low latency communications performance requirements for managing and dispatching large battery storage installations. In addition, interoperability and cyber security will be foundational elements in the design of the project s the end-to-end solutions for integrating the energy storage system into SCE s grid operations. These efforts will demonstrate the role of advanced, largescale energy storage in the creation of a smarter, more efficient and secure electricity grid. Tehachapi Wind Energy Storage Project Page 8 of 56

26 2. Merit Review Criterion Discussion 2.1 Project Approach The TSP team will operate an 8 MW 4 hour (32 MWh) lithium-ion battery system on SCE s Antelope- Bailey 66kV sub-transmission system in the TWRA to evaluate the ability of this type of battery system to provide grid stability and integrate wind power. To conduct this evaluation, the team will put the battery system to 13 operational uses identified in Figure 2 below. The Antelope-Bailey system is ideal for the demonstration of these uses because the site faces all of the challenges attributable to intermittent wind generation. This demonstration project is for testing only and electricity from the project s storage system will not be dispatched into the CAISO market. The test results will be made publicly available through the DOE and CPUC reporting requirements, and the demonstration will be fully compliant with FERC standards of conduct. Figure 2. Tehachapi Wind Energy Storage Project Test Requirements and Metrics Operational Uses Required Conditions Relevant Metric Transmission Uses Energy Storage Charge/Discharge Timeframe 1. Voltage support/grid stabilization High wind generation and low local load System voltage profile 20 ms to 1 min 2. Decreased transmission losses High wind generation or high load Real time transmission line loading 4 hours 3. Diminished congestion Antelope-Bailey stability problems Reduced wind generation curtailment or frequency of curtailment events 4 hours 4. Increased system reliability by load shed deferral High load Increased power flow into area and reduced number of load shedding events 4 hours 5. Deferred transmission investment Successful demonstration of uses 1-4 Dollars saved through potential investment differed n/a 6. Optimized size and cost of renewable energy-related transmission Successful demonstration of uses 1-4 Projected cost differential between original and reduced transmission line capacity n/a System Uses Tehachapi Wind Energy Storage Project Page 9 of 56

27 Operational Uses Required Conditions Relevant Metric Energy Storage Charge/Discharge Timeframe 7. Provide system capacity/resource adequacy Successful demonstration of uses 1-4 MW of reserves relative to total generation before and after installation n/a 8. Renewable energy integration (smoothing) High variability of wind output Power output and voltage fluctuation pre and post installation 20 ms to 15 min 9. Wind generation output shifting High off-peak wind generation Output shifted from off peak to peak periods ISO Market Uses 4 hours 10. Frequency regulation Functional communication with CAISO CAISO frequency data variation to verify the storage system s ability to follow ISO market signal 20 ms to 15 min 11. Spin/non-spin replacement reserves Functional communication with CAISO Financial value of displaced spinning reserves pre and post installation 4 hours 12. Deliver ramp rate Functional communication with CAISO System output to verify the storage system ability to follow ISO market signal 15 min 13. Energy Price Arbitrage Functional communication with CAISO Difference between cost of electricity during discharge and charge 4 hours The TSP team selected the operational uses listed in Figure 2 because it believes they best demonstrate the ability of lithium-ion energy storage systems to meet the benefits prioritized by the DOE for grid-scale energy storage projects. Most of the identified operations are aimed at either shifting wind and conventional power across time to meet peak load and other electricity system needs with stored electricity, or resolving grid instability and capacity issues that result from the interconnection of wind generation resources. Operational uses aimed at meeting electricity system needs with stored energy include wind generation output shifting (9) and the first three ISO market uses (10, 11 and 12). Each of these functions will demonstrate the ability of the project s storage system to provide power to the grid in ways that meet particular needs of system operators. Testing the first four transmission uses (1-4) will demonstrate the ability of the battery storage system to resolve capacity and stability issues on transmission systems, especially those with wind resources interconnected. Some of these uses will address particular problems that exist on the Antelope-Bailey system, and all will be broadly applicable to wind integration problems in general. Finally, uses 5, 6, 7 and 13 will help the project team analyze the business impacts and costeffectiveness of grid connected lithium-ion battery systems. Tehachapi Wind Energy Storage Project Page 10 of 56

28 To ensure the project team effectively tests each of its prioritized operational uses, the team has designed a comprehensive testing plan that will proceed through two phases. Phase one will involve baselining the demonstration and will have several goals. First, testing certain operational uses of TSP s lithium-ion battery system require that the Antelope-Bailey 66kV system exhibit the conditions listed in the second column of Table 2. The baselining process will identify the timing and magnitude of these conditions in the absence of the battery system to inform test design once the system is installed. For instance, since the voltage support/grid stabilization use requires high wind and low local loading, the project team will identify when these events occur during baselining so that this operational use can be evaluated at the appropriate time during the project s testing phase. The baselining process will also help the project team establish control scenarios for several of the operational uses and better define system problems that the project will study. SCE and the project participants will baseline the project by collecting data about the Antelope-Bailey 66kV system using existing and new measurement equipment. This effort will also be informed by existing data about Antelope-Bailey collected by SCE through its separate ongoing CEC/PIER-funded study of wind integration issues on this particular system. SCE s experience with this study will make baselining, data collection and analysis for the TSP extremely robust. Once the energy storage system is installed, the project team will begin testing the 13 operational uses. During this testing period, the TSP team will continue gathering control data by leaving the battery system inactive for certain periods. When the battery system is in use, the project team will calculate the metrics indicated in the third column of Table 2 and evaluate the performance of the battery system under each operational use by comparing this data to control data collected during the baselining and testing periods. The project team has a thoughtful battery system deployment plan for testing each of these operational uses independently and, where possible, testing them simultaneously with other uses (stacking). Understanding an operator s ability to stack these operational uses will be an important factor in determining the cost-effectiveness of the battery system. The TSP team believes that it can stack uses that differ with respect to the length of the periods during which the battery system has to provide power to, or absorb it from, the grid. For example, shifting wind generation output will require the storage system to charge over a period of hours when wind is blowing, and discharge during peak demand periods which are also typically hours long. This function can be stacked with, for instance, the voltage support use, which will require charge and discharge events measured in fractions of seconds. The project team will test each lithium-ion battery system function independently and in conjunction with other functions when required conditions permit. Once data gathered during the testing phase is processed and compared with appropriate baseline and control data, the project team will use this analysis to estimate the benefits requested by the DOE in this Funding Opportunity Announcement (FOA). The project team expects that the results of the demonstration will provide measureable and quantifiable benefits in the economic, reliability and power quality, and environmental categories identified by the FOA Comprehensiveness and completeness of the Statement of Project Objectives (SOPO) that describes the proposed interrelated tasks and of the Project Management Plan that includes a schedule with milestones and explains how the project will be managed to achieve objectives on time and within budget The proposed tasks of SCE s energy storage project are fully described in the Statement of Project Objectives (SOPO), section 6 of this project narrative. SCE s Project Management Plan (attached in Field 12) includes a schedule with a milestone log and explains how the project will be managed to achieve objectives on time and within budget. Specifically, the Project Management Plan (PMP) outlines Tehachapi Wind Energy Storage Project Page 11 of 56

29 oversight groups who will receive project updates, ensure project goals are met, and provide a structure to hold the project manager accountable. This PMP fits with project management best-practices, as identified by the Project Management Institute (PMI), the leading authority in project management practices. SCE has adopted these best practices on other projects that have been recognized for project management excellence by PMI Completeness of the proposed demonstration approach to effectively address all goals of the Energy Storage Competitiveness Act 3 SCE s energy storage demonstration addresses multiple goals of EISA 2007, including promoting greater energy independence and security and protecting consumers. More specifically, the energy storage project will address the following objectives based on Section 641, Part 4 (Objectives) of the Energy Storage Competitiveness Act: (D) Integration with a renewable energy production source, at the source. The storage unit will integrate with the wind production source at a sub-transmission substation supporting the integration of at least ten wind farms in the Tehachapi Wind Resource Area. The presence of multiple wind farms maximizes the value of the demonstration to measure and validate a wider range of operational benefits consistent with the findings of the Utility Wind Integration Group. According to Paul Denholm of the National Renewable Energy Laboratory (NREL), the use of dedicated energy storage is not warranted except for possibly co-locating wind generation and storage to reduce transmission demands and overcome transmission constraints. 4 (F) Advancement of power conversion systems to make the systems smarter, more efficient, able to communicate with other inverters, and able to control voltage. The smart inverter will communicate and coordinate with other devices in the system. As part of its advanced control functionality, the inverter will manage its output based on global system knowledge rather than only local information. System-wide knowledge and output management will make for a more efficient and effective inverter. (G) Use of energy storage to optimize transmission and distribution operation and power quality, which could address overloaded lines and maintenance of transformers and substations. One of the demonstration project goals is to reduce existing transmission line constraints and other assorted distribution problems on the Antelope-Bailey system that result from overloaded lines. A specific sub-transmission line, the Goldtown-Lancaster 66 kv, regularly faces congestion, resulting in wind generation curtailment. The TSP will demonstrate the effectiveness of energy storage to reduce the amount of wind generation curtailment. Detailed descriptions of approaches to mitigate curtailment or T&D maintenance are listed in Section 2.1. (I) Use of energy storage devices to store energy during nonpeak generation periods to make better use of existing grid assets. The TSP project s energy storage system will be used to support shifts of wind energy supply to meet peak demand. Wind generation is often highest at night or the early morning, while peak demand occurs late in the day. 5 This project will store energy produced non-peak hours and 3 U.S. Congress, Public Law : Energy Independence and Security Act of 2007, (110th Cong., 2007, Committee Print). 4 Paul Denholm, National Wind Coordinating Collaborative Wind and Storage Webcast Summary, (National Wind Coordinating Collaborative, April 8, 2008). 5 California Independent System Operator (CAISO), Integration of Renewable Resources: transmission and operating issues and recommendations for integrating renewable resources on the California ISO-controlled grid, (November 2007). Tehachapi Wind Energy Storage Project Page 12 of 56

30 dispatch it to meet system demand as needed, including during peak periods. The project team will also work with CAISO to assess the economic viability of energy arbitrages associated with these output shifts. By helping to meet energy needs during peak demand, energy storage can reduce the need for fossil-fueled peaker plants and facilitate a cleaner power grid Adequacy of the proposed demonstration approach to quantifiably advance program metrics Testing the TSP s 13 operational uses will advance specific metrics identified by the DOE for grid-scale energy storage demonstrations. This testing will feed into the quantification of the project s benefits, and this process is depicted graphically below Figure 3. TSP Operational Uses Test Plan The analysis of the system performance data will be conducted by SCE, Quanta, Cal Poly Pomona, and system-operations analysts at CAISO, and receive guidance from the project s technical advisory council. These results will be translated into quantifiable benefits by the TSP s process of data capture and analysis, and will adhere to the DOE s cost-benefit methodology. Specific DOE program metrics that will be quantifiably advanced include: Lower electricity costs Lower T&D losses Lower O&M costs Greater transmission capability Tehachapi Wind Energy Storage Project Page 13 of 56

31 Reduced costs of power interruptions Better power quality Lower GHG/carbon emissions The project will also keep track of commercialization recommendations and progress and jobs-creation information Validity of the proposed approach and likelihood of success based on current technology maturity and regulatory/stakeholder acceptance of the technology innovativeness of the project, including introduction of new technologies and creative applications of new and state-of the practice energy storage SCE believes that the technology selected for this project will deliver grid benefits for a variety reasons. First, lithium-ion technology chemistry used in this project s battery system is well suited to the scope of uses that will be tested in this demonstration. Second, utilizing a smart inverter with dynamic reactive and real power capability will enable the project team to exploit the full benefits of the battery system. SCE expects its future storage needs to include widely variable event duration, frequency, and overall battery performance requirements. Lithium-ion batteries can meet these requirements because of their: High energy and power density High power capability and high efficiency Speed and accuracy of response to control signals Capability for continuous rapid dynamic oscillation between charge/discharge mode and full access to charge/discharge range Long cycle and calendar life These benefits have been proven by a wide range of academic studies. Moreover, lithium-ion batteries have been tested by customers outside the lab. The largest use of large format lithium-ion technology is in the automotive industry and several customers (e.g., GM, Nissan, Mercedes) have validated the technology. As another example, AES Corporation is in the process of deploying lithium-ion battery systems for use in grid stabilization applications in several of their facilities across the world. The diverse uses of the technology testify to its versatility, usefulness, and success in commercialization. The lithium metal phosphate-based chemistry used in the A123 battery system has been widely studied and independently verified by the national labs. Results from an independent test conducted by Sandia National Labs show that when exposed to high heat, cells made with this chemistry do not generate as much heat as cells made with conventional materials. 6 The project s battery system use of metal phosphate-based chemistry makes it unique and applicable to the high stress grid applications in the demonstration. In addition to the advantages related to the composition of the battery, the project will incorporate a smart inverter that is designed to facilitate the battery system s integration into grid operations. The smart inverter will communicate with the utility, not only for programming of voltage and frequency response, but also for self identification, status reporting and reprogramming. The inverter will also have four quadrant capability to inject or receive real and reactive power as needed to support the grid. The California Public Utilities Commission (CPUC) and the CEC have been among the most progressive 6 Peter Roth, Thermal Ramp Abuse Test Evaluation of Baseline A123 Cells, (Sandia National Laboratories, September 7, 2007): 6. Tehachapi Wind Energy Storage Project Page 14 of 56

32 energy policy bodies in the country and have acknowledged the challenges of wind integration and the potential role for solutions/mitigation offered by energy battery storage as a mitigating technology. As such, the CEC provided a research grant in 2008 to SCE and the engineering consulting firm Quanta Technology to begin studying the benefits of using existing energy storage devices for the integration of wind generation in the Tehachapi region to help meet California s renewable energy goals. SCE will work with Quanta and graduate students from Cal Poly Pomona to further this research in the course of this project, and is fortunate to have the support of CAISO. Finally, as for the batteries themselves, the cells have passed all applicable regulatory standards, including UN DOT, UL 1642, SAE J Appropriateness and completeness of the demonstration plan including performance objectives of the demonstration, the criteria and requirements used in selecting the demonstration site(s), the data collection and evaluation plan, the metrics for success, and the measurements that will be made to confirm success Each of the 13 operational identified for demonstration in the TSP is associated with specific conditions and metrics that will be used to evaluate the battery system s performance. In addition, the project s test plan includes a baselining period that together with data from ongoing control activities and SCE s CEC/PIER study, will allow for the development of robust benchmarking upon which the project team will base its analysis and conclusions. SCE s demonstration site was selected based on the presence of the problems that could be resolved or mitigated by the battery system operation uses that the TSP team will evaluate. The Antelope-Bailey 66kV sub-transmission system experiences poor frequency and voltage stability resulting from local wind generation, periodic curtailment of wind resources and sub-transmission line congestion. The presence of these conditions creates an ideal setting to evaluate the project s energy storage system s performance Adequacy and completeness of the project approach in delivering demonstration project data and information to the Department and the Public SCE has a detailed plan to present the data to the DOE and other key stakeholders. The objective of these efforts is to increase the DOE s body of knowledge, improve the effectiveness of integrating wind energy, and promote commercialization of energy storage technology nationally. SCE expects to make demonstration project data and information available to the DOE and to the public at regular intervals and in conjunction with DOE FOA #36 reporting procedures Suitability and Availability of the Proposed Project Site As indicated above, SCE s demonstration site was selected because of site-specific issues that enable evaluation of the battery system s operational uses. The Antelope-Bailey 66kV system is part of the TWRA, housing one of the two largest wind generation installations in SCE territory with a spring-time coincident peak wind generation of 310 MW. The system is also where the Tehachapi Renewable Transmission Project (TRTP) is occurring. It is projected that 4,500 MW of wind generation will interconnect by about 2015, and the findings from this demonstration project will help SCE, CAISO, CPUC and CEC to understand and refine the overall system requirements for energy storage in the TWRA integrating this new capacity. The Antelope-Bailey 66kV system was one of the first major wind generation developments in the nation. Since initial operations began, the system has suffered from a variety of wind generation issues including poor power quality, voltage fluctuations, frequency excursions, curtailment, and overloaded transmission lines. Through the years SCE, in collaboration with other stakeholders, has conducted studies attempting Tehachapi Wind Energy Storage Project Page 15 of 56

33 to resolve some of these and other wind generation issues. These efforts have resulted in a number of technical papers 7 published on the subject, which have provided SCE with the data necessary to prove that the site suffers from the issues that can be addressed by the demonstration. The Antelope-Bailey 66kV system is also the site of an SCE s existing CEC/PIER funded study run in conjunction with Quanta Technologies, and Oak Creek Energy. The study aims to determine the ways in which energy storage can address wind integration issues to help meet California s renewable energy goals. One of the key early findings produced by this study is that a 32 MWh energy storage device located at the Monolith 66kV substation can prevent overloaded transmission lines. These types of findings will give the project team a head start on understanding the appropriate uses of the energy storage system. SCE owns the Monolith substation, and the area to be developed is within the substation fence and property line. Complete SCE ownership will minimize time-consuming environmental regulations. The full ownership and existing substation infrastructure make for a location that is both technically and economically viable for the interconnection of the proposed energy storage device Adequacy of plans for data collection and analysis of project costs and benefits Once installed, the system will be equipped with the appropriate monitoring equipment to evaluate the energy storage system s performance. This monitoring equipment will be connected to the SCE Supervisory Control and Data Acquisition (SCADA) system to analyze the impact of the energy storage system s performance on the grid. Computer simulation analysis (load flow, transient stability, electromagnetic transients) of the system will be conducted based on the collected data and what-if scenarios performed under different system conditions. The demonstration project team has already allocated resources for obtaining the data and results according to DOE reporting requirements. SCE has identified several specific data collection and analysis technologies for use in the TSP, including the Real Time Digital Simulator (RTDS), the latest device in modeling and simulation of power systems. RTDS uses a parallel multiprocessor computer to simulate the power system in real time. It also allows for the testing of advanced inverter controls by connecting the controls to the simulated power system network, called Hardware-In-The-Loop. This technique allows for the fine tuning of control parameters by simulating system scenarios and testing the reaction of controls. SCE will work with the inverter manufacturer to obtain a second set of controls that can be installed in the RTDS laboratory. Part of the TSP s data collection plan is to utilize a technology with great potential: Synchronized Phasor Measurement Systems (SPMS). SCE has been working with this technology since 1995 and considers it one of the keys to increasing transmission capacity and stability. Synchrophasor measurements provide real-time and simulated data to help measure potential impact and benefits of the storage system on the transmission system. The team believes that this technology could be a great asset in the collection and analysis of project data, and SCE plans to install equipment specifically for use in this demonstration. The TSP team will also have two of SCE s phasor measurement applications at its disposal: Power System Outlook (PSO) and Synchronized Phasor Measurement and Analysis in Real-Time (SCE SMART ). The PSO software can monitor and analyze a wide array of network conditions such as system stress, dynamic power swings, modal oscillations and damping, and load responses to voltage and frequency variations. Off-line applications can provide post disturbance analysis, telling operators where 7 See National Renewable Energy Laboratory (NREL), Energy Storage and Reactive Power Compensator in a Large Wind Farm, (October 2003). Tehachapi Wind Energy Storage Project Page 16 of 56

34 the system operated well and where it performed poorly or failed. SCE SMART provides real-time display and analysis of phasor information and is currently being used at SCE s Grid Control Center. Some potential applications for PMU in the TSP are: Monitoring location of system constraints Acquiring the necessary data for the energy storage control algorithm Analyzing data records to determine system voltage stability and power quality performance Thoroughness of the discussion of data requirements (including what types of data and their availability) and how that data will be provided to the DOE so that project costs and benefits can be properly analyzed The anticipated project data requirements are discussed in Section 9 of the PMP. SCE expects that the DOE will have other suggestions and/or recommendations to be added during Phase 1 of the project, which should leave adequate time to make modifications as needed Logic and completeness of the discussion of how the data can be used by the DOE to develop estimates of project costs and benefits, including the discussion of the Applicant s quantified estimates of project benefits SCE will provide DOE with data in accordance with the requirements presented in Appendix A of the FOA. SCE can accommodate technology transfers requested by the DOE. As provided by Section 1.1 of the FOA, SCE expects to conduct its own cost/benefit analysis utilizing estimates of project benefits similar to those being utilized by the DOE Comprehensiveness of the plan for determining the baseline against which the costs and benefits will be assessed SCE plans to utilize the full twenty-four months during which battery design and manufacturing and site construction will take place to establish baseline data describing operations of the Antelope-Bailey 66kV system. Additionally, the team has a key advantage in gathering this information: the ongoing CEC/PIER study of the Antelope-Bailey system. This study provides extensive data on curtailments and loading. The TSP team will leverage this data, and will install extensive monitoring systems that collect very high resolution data to establish a baseline based on the operational uses listed in section 2.1. After installation, we will test the battery system in the scenarios necessary to provide these benefits The degree of the proposed estimates of project benefits The TSP can produce results that are beneficial to lithium-ion manufacturers, utilities, independent system operators, and renewables operators. The project will support an increase in lithium-ion manufacturing and improve expertise in this green-tech industry within the United States. To generate detailed estimates of the project benefits, SCE and CAISO have analyzed and designed the project s test plan to target the categories of benefits. Within each category, research and analysis can support general estimations or approximations of values. An effort between SCE and DOE will be made during the course of this project to estimate quantifiable benefits. Figure 4 describes the benefits that the project will target and identifies the metrics the project team will use to quantify each of these benefits. Tehachapi Wind Energy Storage Project Page 17 of 56

35 Figure 4. Project Benefit Categories and Estimates DOE Benefit Category 1. Lower electricity costs 2. Lower T&D losses Benefit Details Reduced need for curtailment Reduced need for excess capacity and firming sources Supply shifted to compete in higher price periods Optimized T&D network Metric Overall average market price of Tehachapi Wind Resource Energy wind energy. Measures: curtailment costs, potential for reducing excess firming, load shifting price differences Cost of generation for lost energy Pollutant emissions from lost energy 3. Lower O&M costs 4. Greater transmission capability 5. Reduced costs of power interruptions 6. Better power quality 7. Lower GHG/carbon emissions Reduced O&M activity Lower equipment failure Increasing transfer capability without building additional transmission capacity Fewer outages Shorter outages Fewer momentary outages Fewer severe sags and swells Lower harmonic distortion Lower T&D losses Lower emissions from generation Capital cost of replacing equipment O&M cost from repair Cost efficiencies from automated operations and maintenance Avoided curtailment costs Avoided costs of building additional transmission Cost savings of avoided cascading outages Cost savings to customers or equipment associated with fewer disturbances Cost savings to utilities from longer equipment life due to less exposure to fault current Cost of generation for lost energy Pollutant emissions from lost energy Cost of central generation avoided Pollutant emissions from central generation and lost energy avoided Cost of generation for lost energy Cost of ancillary services avoided 2.2 Significance and Impact The merit review sub-criteria related to the significance and impact of SCE s proposed demonstration are individually addressed in the following sections. Tehachapi Wind Energy Storage Project Page 18 of 56

36 2.2.1 Significance of the Proposed Demonstration Application vs. Current Practices It is important to note that our proposed project is unique in scale. While SCE and CAISO have been forward-thinking about the potential benefits of energy storage, the technology available was insufficient to achieve the anticipated benefits. SCE has been using and evaluating lithium-ion batteries for potential use in its extensive electric vehicle fleet for years, but the technology had not been available to extend to grid scale use. For those grid energy storage uses, SCE has used traditional lead-acid batteries for years including a 40MWh, 10MW battery plant installation in conjunction with the DOE in Chino, California. The commercialization of lithium-ion batteries has presented SCE and CAISO with the opportunity to realize benefits on a grid scale. The higher energy and power density, speed and accuracy of response to control signals, capability for rapid dynamic oscillation between charge/discharge, full access to charge/discharge range, and long calendar and cycle life make the imagined benefits of grid scale energy storage real. It is these two factors the scale of the demonstration and the novelty of lithium-ion grid scale technology that make this project so significant when compared to current practices. The project will produce a number of performance improvements and cost savings over current practices. SCE has provided a full list of these benefits in section 1, but believes there are four impact categories which stand above the rest, and testify to the significance of the demonstration against current practices: 1. Reduce wind curtailment due to transmission constraints Currently, when transmission systems cannot handle the power generated by wind farms, the wind generation is reduced (curtailed) and the power that might otherwise have been generated is lost (i.e., the wind is spilled ). By employing energy storage, more wind energy will be utilized. 2. More effective utilization of transmission infrastructure / investment deferral In addition to boosting the amount of energy captured by wind generation, energy storage helps use the existing transmission infrastructure more effectively. 3. Voltage control and reactive power management, to increase load factor and efficiency of system By adding reactive power capability to the system, it is possible to increase the load factor and the efficiency of the system. Unlike capacitor banks which can only be used in discrete levels, the smart inverter that is part of the energy storage system can offer infinitely variable levels of reactive power, achieving full four-quadrant capability up to hardware limitations. In addition, the voltage can be maintained in a tighter (lower) range, further increasing efficiency. 4. Significant environmental/societal benefits Energy storage helps mitigate the intermittency challenge of renewables such as wind and solar. By adding reactive power capability to the system, it is possible to increase the load factor and the efficiency of the system. By managing the intermittency of renewable energy, SCE may have a reduced need for backup fossil-fuel power generation. More renewable energy and less fossilfueled backup power means less greenhouse gas emissions. The key challenge for current grid energy storage is cost. In order to achieve widespread deployment, energy storage must be available at a substantially lower cost. In recognition of this reality, many battery manufacturers have started a comprehensive effort to reduce cost. The biggest cost driver of the system is the lithium-ion cells. As part of the cost reduction effort, this program will use prismatic cells, which offer a lower starting cost ($/Wh) than cylindrical cells. The prismatic cell will bring down the cell cost by reducing the amount of packaging and inert material. In addition, the prismatic cells will use lower cost materials. This cost trend parallels battery cost-production efficiencies in the transportation arena, which has similar cost reduction targets. The following chart demonstrates the relationship between cost and volume in battery manufacturing: Tehachapi Wind Energy Storage Project Page 19 of 56

37 Figure 5. Miller, T. Hybrid Battery Technology and Challenges. MIT Technology Review s Emerging Technology Conference, (September 28, 2006). 8 Li-ion Battery Cost Curve Extrapolation Unit Cost ($/kwh) y = 9460x R² = ,000,000 10,000,000 15,000,000 20,000,000 25,000,000 Production Volume (packs/year) Longer-lasting energy storage systems offer more value and effectively reduce the total cost of ownership. Thus, a longer-lasting system is the superior technological choice for the Tehachapi Wind Energy Storage Project (TSP). Since the current cylindrical cells have the required life, and the prismatic cells proposed in this project use the same chemistry, the life-expectancy of the prismatic cells are likely to be sufficient. Combined, the auto industry and utility industry applications for this battery technology could result in production volumes that reach cost effective levels. This demonstration project will measure and validate the operating performance range of lithium-ion technology for utility scale application Degree to which the demonstration project is broadly applicable and adaptable throughout the region or the nation, including the completeness and adequacy of the deployment plan for large-scale deployment in and/or beyond the proposed region This demonstration intends to solve a difficult but very common set of operational problems: how to deal with the intermittency of wind energy. Therefore, the results of the project, as well as the core technology, can be applied to virtually any region that has similar problems. With significant wind generation due to come online in the western mountain states, in West Texas, the Great Plains and Midwest, SCE believes its findings will have direct relevance to those regions of the country with significant wind generation. Since the project has a detailed list of metrics and data gathering approach, 8 T. Miller, Hybrid Battery Technology and Challenges, MIT Technology Review s Emerging Technology Conference, (September 28, 2006). Tehachapi Wind Energy Storage Project Page 20 of 56

38 SCE expects to establish which energy storage benefits are achievable, and the scale of those benefits. SCE expects this data to refine energy storage models both locally and nationally, providing guidelines on how much storage is needed and a set of best practices to develop grid wide systems that incorporate energy storage. Moreover, SCE believes that our project may be relevant to other, non-wind renewable energy sources. After all, curtailment of intermittent energy sources due to transmission constraints is not specific to wind generation. Therefore, our findings should address whether energy storage is a technology that can address the issue of transmission constraints whether a utility is using wind or other renewable sources. Further, the core technology of the smart inverter can be used for project unrelated to wind generation. In the Southern California region, SCE has significant wind generation capacity (4,500 MW) due to come online in the region of our demonstration project (TWRA) by SCE expects that the project will have immediate and significant regional impacts by illustrating how energy storage can maximize utilization of this forecast wind generation. In addition, SCE has a history of sharing intellectual information related to the development of a smart grid. In addition to meeting its reporting requirements, SCE plans on facilitating knowledge transfer gained by this project for wide-scale use and has proposed a Technology Advisory Council including PG&E, Sempra, Idaho Power, CAISO and the Utility Wind Integration Group. SCE will also leverage its web-based project knowledge share site to further disseminate project lessons learned Completeness of the proposed commercialization strategy for the technologies being demonstrated SCE has long been a leader in commercializing cutting-edge technology. This is evidenced by the company s extensive use of developing renewable energy technology. This includes purchasing more than 80% of all U.S. solar generation, managing $2.3 billion in long-term renewable and alternative power contracts, negotiating the world s largest solar deal in February 2009, and investing $2.1 billion in the TRTP. Today, SCE delivers more renewable energy than any utility in the nation and will be required to deliver significantly more not only to our customers, but also to other California and western utilities as SCE s service area includes several of the best wind and solar development sites in the nation. Moreover, SCE has substantial experience in advancing battery technology. SCE joined with EPRI to be one the original funders of the United States Battery Consortium (USABC) in partnership with the DOE. SCE has maintained a continuing relationship with the technical committee of USABC. The investment by SCE, EPRI and DOE in the 1990 s resulted in the development of the lithium-ion chemistries that are prevalent today. SCE established the Electric Vehicle Technical Center (EVTC) as one of the premier facilities for battery evaluation and testing. SCE conducts state-of-the-art testing and evaluation of battery storage technologies in electric drive and stationary applications at its EVTC. In 2001, the EVTC received a certificate of registration from the Quality Management Institute by fulfilling requirements for the International Standard Organization (ISO) 9001:1994 standard of quality. Today, the EVTC is an ISO 9001:2008 registered testing facility for all forms of electro-drive and advanced energy storage systems. SCE s engineers have extensive testing experience with recent technologies, including conducting continuous lithium-ion battery life cycle testing for over five years. Earlier this year during a visit, President Obama recognized SCE for its research in this field. SCE has commercialized grid-specific applications as well. One prominent example is Phasor Measurement Unit (PMU) technology. PMUs are the industry s main analysis tool for use in Wide Area Monitoring System (WAMS) and examine the state of the electrical system in real-time. PMUs originated from an early 1990s project between the Bonneville Power Authority, the Electric Power Research Institute, and SCE. SCE purchased two phasor data concentrators from BPA in the early 1990s Tehachapi Wind Energy Storage Project Page 21 of 56

39 and developed software to utilize the devices. SCE then built a network of PMUs on the 500kV system. After the infamous New York City blackouts of 2003, the National Electric Reliability Council (NERC) called for increased PMUs use to prevent similar blackouts. SCE s history proves that it does not view this project as merely a demonstration, but instead as a critical first step for deploying energy storage across its territory and beyond. SCE s commercialization experience is borne out of a highly successful systems engineering approach to deploying advanced technologies. SCE will use its strength and experience in commercialization to deploy energy storage and help resolve intermittency issues associated with existing wind power in the Tehachapi region. In addition, SCE s project participant A123Systems has a fully-fledged commercialization approach to deploy energy storage to current and future customers Extent to which demonstration advances research and demonstration objectives of the program goals of the Energy Storage Competitiveness Act SCE s energy storage demonstration addresses multiple goals of EISA 2007, including promoting greater energy independence and security and protecting consumers. More specifically, the energy storage project will address the following objectives based on Section 641, Part 4 (Objectives) of the Energy Storage Competitiveness Act: (D) Integration with a renewable energy production source, at the source. The storage unit will integrate with the wind production source at a sub-transmission substation supporting the integration of at least ten wind farms in the Tehachapi Wind Resource Area (TWRA). The presence of multiple wind farms maximize the value of the demonstration to measure and validate a wider range of operational benefits consistent to the findings of the Utility Wind Integration Group. According to Paul Denholm of the National Renewable Labs (NREL), the use of dedicated energy storage is not warranted except for possibly co-locating wind generation and storage to reduce transmission demands and overcome transmission constraints. 9 (F) (G) (I) Advancement of power conversion systems to make the systems smarter, more efficient, able to communicate with other inverters, and able to control voltage. The smart inverter will communicate and coordinate with other devices in the system. As part of its advanced control functionality, the inverter will manage its output based on global system knowledge rather than only local information. System-wide knowledge and output management will make for a more efficient and effective inverter. Use of energy storage to optimize transmission and distribution operation and power quality, which could address overloaded lines and maintenance of transformers and substations. One of the demonstration project goals is to reduce existing transmission line constraints and other assorted distribution problems on the Antelope-Bailey system that result from overloaded lines. A specific sub-transmission line, the Goldtown-Lancaster 66 kv, regularly faces congestion, resulting in wind generation curtailment. The TSP will demonstrate the effectiveness of energy storage to reduce the amount of wind generation curtailment. Detailed descriptions of approaches to mitigate curtailment or T&D maintenance are listed in Section 2.1. Use of energy storage devices to store energy during nonpeak generation periods to make better use of existing grid assets. The TSP project s energy storage system will be used to support shifts of wind-energy supply to 9 Paul Denholm, National Wind Coordinating Collaborative Wind and Storage Webcast Summary, (National Wind Coordinating Collaborative, April 8, 2008). Tehachapi Wind Energy Storage Project Page 22 of 56

40 meet peak demand. Wind generation is often highest at night or the early morning, while peak demand occurs late in the day. 10 This project will store energy produced non-peak hours and dispatch it to meet system demand as needed, including during peak periods. The project team will also work with CAISO to assess the economic viability of energy arbitrages associated with these output shifts. By helping to meet energy needs during peak demand, energy storage can reduce the need for fossil-fueled peaker plants and facilitate a cleaner power grid Viability and practicality of the proposed technology to meet the needs of the target market in a cost effective manner For quite some time, both SCE and CAISO have recognized the potential benefits of energy storage. In fact, SCE has tested energy storage with lead-acid batteries in conjunction with the DOE in Chino, California. Yet the key barrier to achieving the hoped-for benefits was the absence of a technology that could perform the many functions required for grid-scale storage. This includes providing substantial MWs of storage, voltage stability, fast response time (<20ms), and smart inverters that have the ability to follow highly random and rapid control signals to smooth intermittent renewables. With the recent commercialization of lithium-ion technology, the expertise of SCE s project participant A123 in lithiumion technology, and the development of smart inverters, the imagined benefits of energy storage are finally becoming real. Indeed, CAISO, in a recent report on energy storage, has said that lithium-ion batteries appear to be cost-effective for use with intermittent renewable resources. 11 In addition to energy storage itself, the smart inverter has the potential to be an important element of the overall renewable strategy and a smarter grid. Specifically, the ability of the inverter to communicate with SCE for self identification, status reporting, and reprogramming makes for a more intelligent grid. Other features include the ability to inject or absorb real and reactive power (i.e., four quadrant capability), and the ability to ride through momentary faults by maintaining grid connection. This will provide more reliable supply management to the grid. Further, the scale of the storage device (32MWh), in addition to the accompanying smart inverter and the voltage control provided by the device, are specifically designed for the needs of a utility challenged by the curtailment inherent in wind energy. The novel system will address the transmission, distribution, and interconnection issues faced by a utility with millions of customers, a large geographic area, and diverse sources of power generation. Lithium-ion batteries have been developed to date with over six different chemistries by many companies competing around the globe. While SCE s battery systems supplier in this project is A123Systems which uses lithium metal phosphate-based chemistry, it is SCE s opinion that other lithium chemistries could perform in a similar manner. Lithium-ion technology overcomes the shortcomings of other energy storage technologies by addressing the following: High power. The lithium-ion battery chemistry and design enable high electric power comparable to that available from ultra capacitor technology, a non-battery form of energy storage device. High power translates to high efficiency for grid products. High efficiency. Lithium-ion batteries have the highest efficiency 85-90% at the system level of any battery in grid application. Efficiency can be significantly superior to conventional batteries such as sodium sulfur (NaS). 10 California ISO (CAISO), Integration of Renewable Resources: transmission and operating issues and recommendations for integrating renewable resources on the California ISO-controlled grid, (November 2007). 11 Ibid. Tehachapi Wind Energy Storage Project Page 23 of 56

41 Long cycle and calendar life. Lithium-ion batteries are designed to retain their power and energy over thousands of deep charging and discharging cycles and for up to ten years of overall usage time, allowing them to meet or exceed customer requirements in target markets. The long life means that the system can be operated at higher utilization, thus providing a faster return on investment (ROI) both for merchant power producers, as well as utilities. Reduced size and weight. Lithium-ion batteries high power and usable energy allows for a smaller and lighter design using fewer batteries to meet an application s energy needs. This is useful when only a small footprint is available, or when the physical constraints favor a lighter system, such as an installation in a building with floor loading restrictions. Environmental benefits. Lithium is a recyclable material and it may be possible to re-purpose the batteries for other applications, which maximizes the use of raw materials and resources. Capacity for constant operation. Lithium-ion batteries can be operated continuously without the need for rest periods between charge and discharge cycles that are usually required by other technologies, such as sodium sulfur (NaS), to mitigate thermal excursion. Improved safety. Many lithium-ion chemistries address failures such as fire and explosion under certain conditions, including overcharge, overheating and physical damage. This is particularly important for utility applications in non-industrial settings, such as substations in urban environments. 2.3 Interoperability and Cyber Security SCE is committed to leveraging our knowledge and experience in smart grid standards development and specifically our involvement in NIST s interoperability framework and the Department of Energysponsored Advanced Security Acceleration Project for the Smart Grid (ASAP-SG) as part of our Tehachapi Wind Energy Storage Project (TSP). SCE s proposed solution takes into account the low latency communications performance requirements for managing and dispatching large battery storage installations. The integration of our proposed energy storage solution with the Tehachapi Wind Farm requires special attention to performance and control considerations when designing interoperability and cyber security into the end-to-end solution Adequacy and completeness of approach to address interoperability SCE s technical approach to interoperability on this demonstration project is to use the NIST 16 low hanging fruit standards and the 83 standards specified in the NIST s Interim Roadmap where possible. Specifically, within the substation, SCE is proposing to use the IEC communications protocol to communicate from the smart/secure inverter to the communications gateway where the information will be transmitted to SCE s Control Center via fiber using Internet Protocol across the wide area network. This process is detailed in the System Architecture figure below. A large part of this project includes integration of smart grid standards-compliant equipment designed specifically to support large battery implementations with existing sub-station legacy equipment. The proposed design includes key points of interoperability that enable the legacy equipment to evolve to new emerging smart grid standards without impacting the battery facility. This is accomplished by loosely coupling substation equipment through a communications gateway capable of multi-standard translation. Our approach to interoperability allows for investment in new smart grid technologies that can co-exist and interoperate with legacy equipment bypassing. We believe the architectural principles such as loose coupling, upgradability, and openness are critical to the success of large battery integration within the Tehachapi Wind Energy Storage Project Page 24 of 56

42 context of the smart grid. The completeness of any interoperable design must accommodate security, performance, and reliability requirements across the entire solution. A good example of this is reflected in SCE s approach to securing large battery control and monitoring across diverse communications channel protocols. SCE s design for ensuring interoperability with security across diverse networks allows common security services to control devices and systems across heterogeneous environments. Figure 6. Tehachapi Storage Project System Architecture SCE End to End Secured System California ISO SCE Monolith Substation ICCP Network Human Machine Interface (HMI) SCE Grid Control Center EMS Intelligent End-Devices Control Path EMS/SCADA Control Network Data Acquisition Collection Services ICCP Switching Equipment Real-Time Unit (RTU) Unified Security Services Confidentiality Services User Interface Services Audit Services Secured Clients* Authentication and Registration Service Security Monitoring Services Filtering and Firewall Services Grid Operator Communications Gateway Monitoring Path Measurement and Monitoring Network Measurement Collection Services Power Measurement System (Historian) Smart Inverter Digital Fault Recorder and Battery Monitor Phasor Data Concentrator Databridge for external access to M&V data Battery Facility Phasor Measurement Units (PMU) *Secured Clients are physically secured and feature sophisticated audit and cryptographically enabled authentication confidentiality functionality External Users of Storage Measurement and Validation Data External Users of Storage Measurement and Validation Data Automation component interfaces (devices and systems) The automation component interfaces depicted in the diagram above, the legacy equipment, and the new large battery storage facility are organized in a feedback loop that separates control from monitoring. The EMS/SCADA control network will manage and dispatch the energy storage, and uses the DNP3 protocol. The key to achieving interoperability between these two widely available communications protocols, IEC and DNP3, is the use of a communication gateway within the substation. The communications gateway is single point of transformation within the system architecture, located locally in the substation and designed for high speed performance. The communications gateway approach is modular and allows for a cost-effective migration of legacy equipment from one standard to another over time. Tehachapi Wind Energy Storage Project Page 25 of 56

43 How integration is supported to achieve interoperability The two primary information exchange paths across the system are the control and measurement and monitoring path. In the measurement and monitoring path the A123 smart/secure inverter is monitored by a digital fault recorder and supplemental battery monitoring equipment. These two monitoring devices store data locally and are retrieved back through the communications gateway over the measurement and monitoring network to the power measurement system. That system functions as a data historian that stores the data. The data is then accessed to authorized external parties for analysis through a data bridge supported by Virtual Private Network (VPN) technology. Data accessibility is necessary to monitor the battery performance data, and provide visibility into other key topics such as interface specifications. The second information exchange path is the control path. The grid operators place the storage unit into an on or off state to operate the storage unit. The design allows for operation in the existing state to continue in the case of communications failure. The information exchange for the control path provides for commands to flow down from the grid control center through the communications gateway to the storage facility. The storage facility will also communicate with Intelligent End Devices (IEDs), the Human Machine Interface (HMI) and other equipment locally through the communications gateway How interoperability concerns will be addressed throughout all phases of the engineering lifecycle, including design, acquisition, implementation, integration, test, deployment, operations, maintenance, and upgrade SCE has published a whitepaper on the standards interoperability lifecycle. 12 This paper shows that true interoperability can be achieved only through a comprehensive approach to standards development. The paper presents an interoperability framework, and makes a case that all standards should follow a similar and sustainable process. Most organizations see interoperability as simply the standards development process. SCE s framework shows that validation, enforcement, certification and accreditation are also needed. Certification and enforcement are critical elements of the lifecycle. Certification defines test cases that clarify standards interpretation in products by vendors. In this manner, any ambiguity in standards interpretation is quickly identified and remedied in a closed loop process. Without such a process, vendors will interpret standards differently and interoperability will not be achieved. SCE plans to take all lessons learned and demonstration artifacts to feed these back to organizations responsible for developing and maintaining the underlying standards. SCE will use real-world data to refine the procurement and certification processes. This lifecycle data is used to refine the internal design and procurement processes and will be presented externally to several industry forums and standards development groups. Additionally, SCE will make the measurement and validation data from the TSP available to relevant stakeholders through the data bridge Adequacy and completeness of approach for cyber security concerns and protections and how they will be addressed throughout the project SCE s approach to cyber security for this demonstration is to comply with the developing ASAP-SG Smart Grid Security requirements appropriate to the level of risk to operations. That risk is based on the vulnerabilities, threat environment and proportional to the attack surface of the operational footprint of the Tehachapi Wind Energy Storage Project. SCE uses a risk adaptive design process which focuses on implementing a defense designed to protect the overall system and the local device. For this demonstration, SCE has expanded the risk profile of this demonstration to design a security solution as if it were participating in a large network of battery storage facilities in a maturing smart grid environment. 12 Southern California Edison (SCE), A Lifecycle Framework for Self-sustaining Implementation of Smart Grid Interoperability and Cyber Security Standards, Tehachapi Wind Energy Storage Project Page 26 of 56

44 The adequacy of the discussion of the integration of the new smart grid application into the existing environment The vulnerabilities and threats to this demonstration project are similar to other conductive equipment devices attached to the grid control network in a substation. As such, SCE s risk adaptive design process evaluates proposed designs to determine the vulnerabilities resulting from that design. These vulnerabilities and associated threats are matched to corresponding security requirements cataloged in the emerging NIST and DOE ASAP-SG security standards. The design mitigation is a response to these riskdriven requirements and can be traced back to the original threat. This risk adaptive approach is comprehensive and extends to cover the operations and ongoing security monitoring and updating How any new cyber security vulnerabilities will be mitigated through technology or other measures The Tehachapi Wind Energy Storage Project (TSP) system architecture shows how SCE s proposed security design addresses confidentiality, integrity and availability of device and system data. Our proposed security solution includes the following: Private networks, segmented by firewalls to ensure the trust domain integrity of any particular trust level are preserved. Separate paths for control commands versus measurement and monitoring data. This feedback loop allows for continued situational awareness if one of the communications paths fails and preserves data availability. Lightweight cryptographic services. SCE will design hardware based on high speed cryptographic services. These services will enforce the security policies associated with the operations of the system. As part of the design, the system will leverage the most advanced forms of key management and incorporate the most robust, NIST-approved, cryptographic algorithms. The proposed design includes the use of Elliptic Curve Cryptography (ECC) as the basis for the authentication service and AES as basis for all confidentiality services. This, combined with the implementation rigor specified in FIPS-140-2, will produce a very robust and capable security subsystem. SCE plans to secure all transactions and protect data during processing while in transit and storage. Robust logging, monitoring, alarming and notification will be included as part of the audit services in the grid control center. This would also include intrusion detection functionality. Identity management and authorization mechanisms for all applications both in the substation and the grid control center. Proactive compliance with existing and emerging security standards such as NERC-CIP, NIST, and ASAP-SG smart grid security requirements and profiles. As part of SCE s unified and comprehensive security approach, the company plans to enhance the security of the end points in the system. The new end points, such as the smart inverter, shall be designed with security in mind and each will feature a dedicated security client supported by a robust set of policybased security services in the grid control center. These security clients will be configurable and will enforce the security and key management policies set by the control center. Where high speed communications are required, the security client will include hardware accelerated cryptographic functions in order to meet the performance requirements associated with the operations. SCE will conduct periodic design reviews and security tests to ensure that implementation follows the security design specifications and we are able to validate the effectiveness of our proposed solution. The SCE risk adaptive process includes a robust validation of the verification process. The process includes third party vulnerability assessments and internal specification verification and testing. Vulnerability Tehachapi Wind Energy Storage Project Page 27 of 56

45 testing is used at a product and component level validation while the specification testing validates that the products and system meet the stated system requirements. SCE s comprehensive test approach produces the necessary assurances for sensitive and mission critical operations. In addition, SCE has implemented robust security policies, processes, procedures, and awareness programs that are continuously updated in keeping with evolving technologies and threats. These will be fully leveraged throughout the lifecycle to maintain cybersecurity. 2.4 Project Team The TSP team consists of national leaders in energy storage technology, renewable resource integration and power systems operations. SCE, CAISO and A123Systems form the core project team and Quanta Engineering and California State Polytechnic Institute, Pomona will provide measurement and reporting support services as contractors. Together, these parties deliver a complete skill set to the execution of this project Completeness and qualifications of the proposed project team, with defined roles and responsibilities for each team member and with appropriate members committed to the demonstration or technology verification SCE is putting together an experienced team of multi-industry experts that has successfully worked together on other ventures and is ideally-suited to conducting the effort. As the Applicant, SCE is a national leader in the areas of increased renewable resources, reduced dependence on foreign oil, improved safety and reliability for electric customers, more efficient use of energy, a global green-tech edge for the U.S., and durable jobs for Americans. The roles of each team member are described in the figure below and the following sections detail each team member s qualifications and demonstrated commitment to completion of the TSP. Figure 7. Project Tasks and Team Members Project Task Category Team Members 1. Project Management and Oversight Committee SCE 2. Regulatory and Reporting SCE 3. Budget, Accountability and Contract Management SCE 4. Battery and Inverter Systems SCE, A Siting, Construction, and Substation and Grid Preparations SCE, A Baselining SCE, Quanta, Cal Poly, CAISO 7. Grid Operations SCE 8. Communications and Cybersecurity SCE 9. Study, Measurement and Validation SCE, Quanta, Cal Poly, CAISO 10. Decommissioning SCE, A123 SCE is the project leader and serves as the electric transmission and distribution operating entity on the TSP team. SCE will have primary responsibility for all project tasks and will direct the activities of other team members. Southern California Edison Tehachapi Wind Energy Storage Project Page 28 of 56

46 SCE, a subsidiary of Edison International (EIX), is an investor owned electric utility operating in the State of California, covering over 50,000 square miles and serving 13 million people. SCE brings to the project comprehensive experience in all relevant technological and operational areas. SCE has long been a national leader in renewable power and, in 2008, delivered more than 12.6 billion kilowatt hours (kwh) of renewable energy 16% of its total power deliveries. Wind resources currently make up 21% of this renewable generation and the company will invest $2.1 billion in the Tehachapi Renewable Transmission Project (TRTP), demonstrating SCE s experience with and commitment to solving operational challenges associated with wind power. SCE is a member of the Utility Wind Integration Group (UWIG) and the Western Energy Industry Leaders (WEIL) R&D Collaborative both of which focus on the opportunities for energy storage to mitigate intermittent renewable energy on grid operations. Furthermore, SCE joined with EPRI to be one the original funders of the United States Battery Consortium (USABC) in partnership with the US DOE. SCE has maintained a continuing relationship with the technical committee of USABC. The investment by SCE, EPRI and DOE in the 1990 s resulted in the development of the lithium-ion chemistries that are prevalent today. SCE established the Electric Vehicle Technical Center (EVTC) as one of the premier facilities for battery evaluation and testing. SCE conducts state-of-the-art testing and evaluation of battery storage technologies in electric drive and stationary applications at its EVTC. In 2001, the EVTC received a certificate of registration from the Quality Management Institute by fulfilling requirements for the International Standard Organization (ISO) 9001:1994 standard of quality. Today, the EVTC is an ISO 9001:2008 registered testing facility for all forms of electro-drive and advanced energy storage systems. SCE s engineers have extensive testing experience with recent technologies, including conducting continuous lithium-ion battery life cycle testing for over five years. Earlier this year during a visit, President Obama recognized SCE for its research in this field. California Independent System Operator The CAISO will help develop performance measurement methodologies for the project and will be involved in the analysis of all data collected during operation. CAISO will co-publish all system benefits and performance reports produced by the project team. The CAISO has implemented several significant initiatives to facilitate the development and integration of renewable resources. In 2002, the CAISO put into place its Participating Intermittent Resource Program (PIRP) to better integrate wind generators into its Hour-Ahead markets. This program was a major breakthrough, providing an opportunity to forecast and schedule energy production from intermittent generating resources. It enables wind generators to participate in the CAISO market without being penalized for the inherent intermittency of their supply. In 2006 the CAISO led a new FERC initiative called the Remote Resource Interconnection Program. This program supports the integration of renewable generation resources by facilitating the construction of transmission to remote areas where the resource is prevalent. In 2007, CAISO completed its Integration of Renewable Resources Report, which addresses the transmission and operational impacts of interconnecting up to 20% of renewable generation resources. The report analyzes the issues, documents the results, and recommends steps that should be implemented to reliably integrate the planned intermittent resources. A123Systems: A123Systems will design and manufacture the 8MW, 32MWh Energy Storage System and the smart inverter that will connect the storage unit to the Antelope-Bailey system. A123 will also provide storage system and inverter maintenance services during the project. Tehachapi Wind Energy Storage Project Page 29 of 56

47 A123 is a recognized leader battery technology and the largest US-based manufacturer of lithium ion batteries. The company develops modular systems that scale from 2Ah to 120Ah and from 12V to 1,000V with power ranging from 3kW in its smallest packs to over 2MW in the case of its grid products. In addition, A123 has a full pipeline of new technology under development supported by significant investment in R&D since the company s inception. A123 products are used in private and public transportation vehicles. A123 employs the largest team dedicated to lithium-ion battery R&D and manufacturing of any company in the US. Over the past eight years A123 has recruited a world class team of 1,900 employees including battery and manufacturing experts from a cross-section of global technology companies such as Intel, TI, APC, Panasonic, Sanyo, Samsung, LG, Toyota and Ford among others. Quanta Technology: Quanta Technology will support the measurement and validation function of the project by analyzing data collected from the battery system. Quanta Technology is an independent business unit of Quanta Services one of the largest suppliers of infrastructure services to electric power industry in the United States. Quanta Technology assembles top experts in cross-functional teams to address virtually any technical issue of concern to regulators and utilities. The firm has extensive experience with electric power systems issues. Quanta performed renewable energy generation interconnection studies for ComEd in Chicago, Illinois. These studies reviewed steady-state system impact on wind turbines desiring to connect to the ComEd transmission system. Quanta has also performed studies applying the ComEd planning criteria to the delivery of energy for wind units in the generation queue. California State Polytechnic University, Pomona: Cal Poly Pomona will provide graduate level engineering students and resources to the project and will support Quanta s data analysis efforts. The Cal Poly Pomona College of Engineering has a 50-year reputation for producing engineers and engineering technologists, whose skills will be a valuable contribution to the project s data analysis function. The school has a demonstrated commitment to renewable energy development, evidenced by its founding of a Renewable Energy Institute on campus. Involving the university in the TSP will add a useful academic perspective and allow the project team to leverage campus resources including student and equipment. The qualifications of the proposed project team, with defined roles and responsibilities for each team member are described further in the Section 4 of this narrative and in Section 3 of the PMP Demonstrated level of corporate commitment to the proposed project and proposed cost share as evidenced by letters of intent from all proposed team members The letters of intent from all proposed team members and their proposed cost shares are attached in Field 12 and summarized in Section 4 of this narrative Demonstrated level of corporate commitment to commercialization of the proposed technology by providing convincing examples of the Applicant s efforts to commercialize the technology in addition to the proposed project SCE has long been a leader in commercializing cutting-edge technology. This is evidenced by SCE s substantial experience in advancing battery technology. SCE joined with EPRI to be one the original funders of the United States Battery Consortium (USABC) in partnership with the US DOE. SCE has maintained a continuing relationship with the technical committee of USABC. The investment by SCE, Tehachapi Wind Energy Storage Project Page 30 of 56

48 EPRI and DOE in the 1990 s resulted in the development of the lithium-ion chemistries that are prevalent today. SCE established the Electric Vehicle Technical Center (EVTC) as one of the premier facilities for battery evaluation and testing. SCE conducts state-of-the-art testing and evaluation of battery storage technologies in electric drive and stationary applications at its EVTC. In 2001, the EVTC received a certificate of registration from the Quality Management Institute by fulfilling requirements for the International Standard Organization (ISO) 9001:1994 standard of quality. Today, the EVTC is an ISO 9001:2008 registered testing facility for all forms of electro-drive and advanced energy storage systems. SCE s engineers have extensive testing experience with recent technologies, including conducting continuous lithium-ion battery life cycle testing for over five years. Earlier this year during a visit, President Obama recognized SCE for its research in this field. SCE has evaluated and helped commercialize lithium-ion technologies. Indeed, SCE s EVTC research center in Pomona, CA is designed for these purposes. More recently, in conjunction with the DOE and EPRI, SCE has tested lithium-ion batteries both at the research center and in the field. While the initial research efforts were focused on mobile applications, SCE began evaluating utility stationary applications several years ago. Demonstrations include smaller units at customer premises and the purchase of a 1 MWh lithium-ion battery system for distribution system applications. The TSP project will extend the battery research into large-scale applications to integrate wind generation. In addition to utilizing second generation lithium-ion battery technology, this program will leverage over twenty years of advanced battery research. SCE s history proves that it does not view this project as merely a demonstration, but instead as a critical first step for deploying energy storage across its territory and beyond. Given SCE s strong history of commercialization, DOE funding will derive significant value from investing in the program that has: the leading technology, a track record of using government funds wisely, a history of working collaboratively with academic and government partners, and the ability to address many of the nation s vital interests. 2.5 Estimate of Jobs Created At SCE, we directly employ around 16,000 people, many of them union-represented, 51% are minority and female employees, representing the diversity of the customers we serve. SCE has established breakthrough partnerships with community colleges and universities throughout our service territory to train and retrain young people (often largely minority) to fill the well-paid jobs demanded by the power industry in the future from linemen to electrical engineers to the information technology worker of the future. The TSP project is just one example of how SCE plans to link the worker of today with the technology of tomorrow. The project will create jobs in key industries, including construction, engineering, and manufacturing, and it will also lead the way in introducing energy storage and windintegration jobs to the broader economy. The project will set precedents for the green job creation that will take place as the country develops a smarter, more efficient electrical grid. Tehachapi Wind Energy Storage Project Page 31 of 56

49 3. Relevance and Outcomes/Impacts 3.1 Utility Load/Output Shifting Throughout California, wind generation output is often highest at night and in the early morning, when demand for power is lowest. 13 If SCE could better store the excess energy produced off-peak, and shift the output of this energy to meet system demand during the day, it would reduce energy costs and defer future transmission and generation investments required to support peak demand. This demonstration project will do exactly that: use wind power to charge the energy storage system off-peak and then discharge the energy during peak or other periods when the grid requires the energy. This goal is very relevant for SCE and also has important national implications. Wind energy output shifting can have enormous economic and environmental benefits. Meeting peak demand with renewable energy produced during off-peak periods can reduce the need to construct and operate fossil-fueled peaker plants. Using energy storage to deploy renewable power generated during peak periods would help avoid the cost of these investments, and the green house gas emission associated with operating fossil-fueled peaker plants. SCE and CAISO selected lithium-ion energy storage technology because it has 85-90% efficiency which will allow for effective shifting wind energy output from off peak production to peak demand periods. This capability is enabled by the high energy density of the batteries, which allows for a significant amount of energy (32MWh) to be stored in a minimal footprint and released onto the grid. In addition, the long life cycle of lithium-ion batteries can allow this action to be repeated over long periods of time. 3.2 Dispatchability The need for dispatchability results from the intermittent nature of wind energy. Unlike conventional generation (e.g. coal, natural gas, hydro, nuclear) whose output can be controlled by varying fuel input, wind generation is dependent on the availability of wind, which is unpredictable and varies continuously. System operators cannot, therefore, control output from wind generators to meet system demand or load, and must rely on conventional power plants to ensure adequate supply to the system. The SCE proposed installation will address dispatchability issues in the Antelope-Bailey 66kV system by storing wind energy when generated, and allowing the system operator to dispatch it when needed. This functionality will be enabled in part by the incorporation of a smart inverter. The smart inverter will feature an advanced control system employing a one-of-a-kind technique similar to the one used on the Static VAR Compensator (SVC), at SCE s Rector Substation. The SVC takes a remote voltage signal to control the inverter output. The inverter will have a two- way communication system with solid cyber security systems in place. The smart inverter advanced controls will receive its feedback signals (e.g., voltage, current, power flow) from remote locations on the system. The speed of communication, and the ability to incorporate information from remote locations, allows the energy storage device to self adjust in real time to system conditions. The inverter s knowledge of the system conditions enables the device to optimize its input/output energy to meet dispatchability set requirements without human intervention. The benefits associated with greater dispatchability include reduced use of fossil fuel-powered back up plants that offset the environmental benefits of wind power generation. 13 California Independent System Operator (CAISO), Integration of Renewable Resources: transmission and operating issues and recommendations for integrating renewable resources on the California ISO-controlled grid, (November 2007). Tehachapi Wind Energy Storage Project Page 32 of 56

50 3.3 Ramp Rate Control The TSP team will demonstrate the ability of lithium-ion battery storage to provide nearly instantaneous (<20 milliseconds) maximum capacity for supply-side ramp rate control, similar to ramping support often provided by conventional coal, natural gas or hydro generation. Although the inverter size was optimized for the 13 operational uses, the lithium-ion battery has the capability of providing a large amount of power (>100MW) for the duration required in ramp rate control. This power is significantly greater than that offered by other technologies such as sodium sulfur. Like dispatchability, this functionality will be enabled by the battery system s incorporation of a smart inverter which will vary the battery system s ramping support. One of the team s most important goals for this project to assess the longevity and performance of lithium ion batteries to provide ramping as SCE expects extensive benefits in this area. For instance, SCE s project participant CAISO dispatches ramping resources in an hourly schedule. SCE expects that, within a given hour, the ability to increase or decrease the TSP s ramping support could provide lower-cost and cleaner ramping support. Ramp rate support and the resulting instantaneous energy delivery from wind energy will help SCE use its entire renewable portfolio more effectively. The demonstration team s ability to achieve this goal is supported by research conducted by CAISO on energy storage s ability to mitigate large ramps. Storage systems, the report states, can quickly supply energy to the system when needed and help with the mitigation of large load and/or wind generation energy ramps. 14 In addition, this is done in an environmentally responsible way. Storage technology, the research points out, has the advantage of not using fossil fuel, so storage facilities do not directly contribute to greenhouse gas production. If the energy in storage comes from renewable resources, they are simply storing the green energy and delivering it back to the system when it is needed. If load is ramping up as wind is ramping down, storage can provide the added energy to mitigate the resulting net energy ramp Monitoring and Performance Reporting Baseline data As the DOE requires, SCE and its project participants will provide six months of economic and technical data to baseline the application proposed for the energy storage installation. The data will be gathered as part of the 24-month baseline process described as part of the project test plan. The particular method for providing the data will follow the DOE s guidance in Appendix A. The approach to finding a baseline for each metric will vary depending on the conditions required to generate useful observations of the battery system s performance relative to the metrics that project team plans to gather. SCE has outlined its baselining approach in detail in section 2.1. For further details on the approach to baseline data, please see section Performance Testing Data Once the energy storage system is installed, SCE will gather twenty-four months of economic and technical data to evaluate the performance of lithium-ion battery systems according to the 13 operational uses identified for this project. More specifically, the project team will gather the appropriate data for the 14 Ibid. 15 Ibid. Tehachapi Wind Energy Storage Project Page 33 of 56

51 metrics indicated in the third column of Figure 2 to evaluate the performance of the battery system under each operational use. The TSP team will then compare this data to control data collected during the baselining and testing periods Energy Storage System Efficiency The energy storage system is extremely efficient, due to the low impedance and high power capability of the product. National Renewable Energy Lab (NREL) has studied products closely related to those used on this demonstration project. Under aggressive HEV cycling (high power, short pulses), A123 s cylindrical cell demonstrated 95% round trip efficiency. 16 Under the type of cycling expected for the proposed wind integration usage, the efficiency will be over 99% for the cells alone. The system efficiency, however, also includes conversion losses, thermal management loads, and parasitic loads. In this case, the efficiency should be in the range of 85-90%, depending on usage and environmental conditions. This is higher than other energy storage systems that are proposed for grid applications. Figure 8. Kandler Smith, A123Systems Cell (ANR 26650M1) Thermal Characterization Test Plan & Preliminary Results, (October 2, 2007). Heat Round-trip efficiency Heat efficiency Q (calorimeter) 8520 J (2.37 Wh) E in -E out (P in, P out integration) 8293 J (2.30 Wh) η RT = 1 Q E in (using Q from calorimeter) η RT E = E out in η E = out in RT, INL Ein Ahout (INL s correction for Ah imbalance) ηh = 1 E 94.46% 94.61% 94.49% 97.16% Ah in Q + E out Energy Storage System Availability and Reliability Given the need to provide reliable and consistent service, the grid stabilization systems have been designed for maximum uptime. The racks use a fully-redundant, modular architecture. Specifically, each rack consists of several modules which are all connected in parallel (electrically). Individual modules can be removed while the system is in operation, without disrupting any functions, as the remaining modules can still support the load. This allows replacement or repair of individual modules, without requiring a shutdown or loss of functionality. This allows the system to be operational nearly 100% of the time. The cells and modules used in this program are the same as those used in automotive applications. Thus, they have undergone, and continue to be subjected to, rigorous testing and validation. This testing is geared toward the auto industry, which has rigorous specifications far beyond what is needed for the wind integration application described in this proposal. Given the large numbers of cells required, this validation testing is extremely expensive. By leveraging the strict requirements and cell validation 16 Kandler Smith, A123Systems Cell (ANR 26650M1) Thermal Characterization Test Plan & Preliminary Results, (October 2, 2007). Tehachapi Wind Energy Storage Project Page 34 of 56

52 procedures of the auto industry (which are funded separately from this program), the technical risk is significantly lower on this program Predicted economic payback The project is to test the potential range of uses and quantify the benefits of system performance to develop a robust set of benefit streams that can be subsequently used in cost-benefit analyses. These quantified benefit numbers and frameworks will be applicable to other utilities and when combine with the improving manufacturing cost economies as described in section will allow for positive business cases (NPV, or other investment metric). As such this project itself is not expected to be NPV positive and will be used to generate revenues. The energy services provided will be for testing and demonstration only, no actual financial transactions will move through the CAISO s market clearing house Societal and Environmental Outcomes and Impacts SCE and its project participants will produce a variety of excellent societal and environmental outcomes as a result of this demonstration project. While the primary purpose of the project is to accelerate the transition to clean energy by applying energy storage, SCE and its project participants seek to maximize their social impact by creating jobs, sharing information, and showing regard for the environment during every step of the process Decreased Manufacturing Costs of Large Scale Energy Storage The diagram in section depicts the relationship between costs and production. In short, the relationship is not linear. A given increase in production will generate an even larger decrease in per-unit costs. This will benefit all market participants who hope to use and integrate energy storage Reduced Greenhouse Gas Emissions The Tehachapi Wind Energy Storage Project will demonstrate the potential to reduce Greenhouse Gas Emissions in three basic ways: 1) reduce curtailment of wind energy due to grid constraints, 2) reduce grid losses from inefficient system operations, and 3) reduced reliance on fossil-fired generation to backup wind energy. Energy storage addresses the problem of congested transmission lines. These lines, when placed under conditions of high generation and low local load, cause curtailment. When clean wind energy is curtailed and cannot be distributed throughout the grid, non-renewable, greenhouse gas emitting sources often take the clean energy s place. By reducing congestion in transmission lines and increasing the amount of clean wind energy available to the grid, this project will reduce the need for and use of non-renewable, greenhouse gas emitting generation sources. The demonstration project will reduce grid losses. During periods of high generation, energy is often lost when transmitting on overloaded lines. Energy storage will reduce the energy loss incurred, thus resulting in the delivery of more renewable energy to the grid. Energy storage is an alternative to fossil-fueled generation to provide back-up to intermittent wind energy. This demonstration will quantify the effectiveness of battery storage as a back-up source and the viability of reducing the use of fossil plants as back-up. Tehachapi Wind Energy Storage Project Page 35 of 56

53 To summarize, the cutting-edge nature of the energy storage technology makes it difficult to predict its effect on greenhouse gases precisely but SCE anticipates the effect to be significant. This is due to the effects storage has across the grid; increasing the proportion of renewable energy transmitted and distributed to end users, and reducing non-renewable, greenhouse gas emitting sources. The potential to reduce greenhouse gases is part of the reasons why SCE, the CPUC, the CEC and CAISO have been researching energy storage and supporting its demonstration Best Practices in Energy Storage SCE has extensive experience in battery development (see 2.4.3). SCE joined with EPRI as one of the original funders of the United States Battery Consortium (USABC) in partnership with the DOE. SCE has maintained a continuing relationship with the technical committee of USABC. The investment by SCE, EPRI and DOE in the 1990 s resulted in the development of the lithium-ion chemistries that are prevalent today. SCE established the EVTC as one of the premier facilities for battery evaluation and testing. SCE and project team members are measuring a wide range of operational uses (see section 2.1) that provide potential benefits, because the project intends to use these results to inform further investments in energy storage across Southern California and beyond. Specifically, the project will: Establish real-world data on the cost, benefits, and effectiveness of energy storage Use this data to improve current energy storage cost/benefit models Validate the performance and effectiveness of Lithium-ion technology Better determine how much storage is required in SCE s grid, and make these findings applicable to other regions Develop a best practices approach to further energy storage deployments across the grid SCE expects that the rigor of its data gathering approach, past success in commercializing cutting edge technology, and willingness to share information derived from this demonstration, will cause others to learn from SCE s approach. This could provide many millions of dollars in savings over the next years Project Readiness In 2008, through a CEC/PIER-funded project, SCE, Quanta Technology and Oak Creek Energy began studying the potential benefits of using existing energy storage devices to address integration issues associated with intermittent renewable resources such as wind generation. Antelope-Bailey was one of three SCE sites chosen for the CEC/PIER Wind-Storage-Enhanced Transmission Research and Development Study due to the large number of wind farms installed there. The TSP team has selected Antelope-Bailey 66kV system for this energy storage demonstration because using the same location will make it possible for the team to leverage the results of the ongoing CEC/PIER study to maximize the benefits of this project. In fact, the CEC/PIER project team identified key issues at Antelope-Bailey 66kV system that could be incorporated into the federal demonstration project. For instance, the initial CEC/PIER study revealed that a 32 MWh energy storage device with 20 MVAR of reactive power (shunt capacitors) located at the Monolith substation could sufficiently prevent overloaded transmission lines. The study concluded that energy storage devices are important to reducing the impact of wind generation on system voltage, frequency control, dispatchability and ramp rate. SCE s site evaluation for the Monolith system found it to be the best bus for installing the type of energy storage required for the proposed project. In addition, an available installation area exists for installation Tehachapi Wind Energy Storage Project Page 36 of 56

54 within the substation fence and property line. (Avoiding expansion of the substation line means the project is not subject to Permit-to-Construct requirements (or the exemptions thereof). As a substation modification it is not subject to any noticing, posting or advice letter requirements. To ensure the project maintains all relevant compliance standards, the team has been instructed by the committee to work closely with SCE s Environmental Health and Safety, Public Affairs/Public Involvement Team, and Substation Construction and Maintenance divisions. In short, SCE s extensive technical and regulatory preparation in regards to the proposed site means that the project can begin immediately while avoiding any tradeoffs between the speed of implementation and its effectiveness. Moreover, the ability to begin the project quickly aligns with the Obama Administration s goals of job creation and economic recovery. With so many key elements of the study already in place, the Tehachapi Wind Energy Storage Project is capable of having an immediate and significant impact Other Selection Factors Job Creation and Economic Recovery At SCE, we directly employ around 16,000 people, many of them union-represented. 51% are minority or female employees, reflecting the diversity of the customers we serve. We estimate that about 20,000 wellpaid jobs will be created by SCE for many years to build the massive transmission facilities needed to transport renewable power throughout the western grid. Our energy efficiency programs create over 1,100 jobs, many of them in the low-income communities that we serve. Tehachapi Wind Energy Storage Project Page 37 of 56

55 4. Roles of Participants As described in Section 2.4, SCE will direct the activities of project team members A123, CAISO, Quanta Technology and California Polytechnic Institute, Pomona. Each of these project participants, as well as external entities that will provide technological advisory services to the project have signed letters of support that are attached in Field 12. Business Arrangements SCE and A123 have agreed to a set of deal terms that will be negotiated into a contract that will govern A123 s design and manufacturing of the project s battery system and related inverter. SCE will also enter into contracts with Quanta Technology and Cal Poly Pomona to procure data analysis services from each entity. Project Governance Per the figure below, two governance committees, the Project Oversight Committee and the Technology Advisory Council, will oversee TSP progress and ensure its compliance with internal goals and statutory requirements. In addition, a qualified team of project officers will direct the day to day operations of the project. Figure 9. Project Governance Structure. Legend SCE Co-Participant Vendor Oversight Committee Paul DeMartini (SCE) Principal Investigator Ed Kjaer (SCE) Technology Advisory Council Project Management Jeanne Boyce (SCE) Overall Project Management Paul Multari (SCE) Grid Operations Michael R. Montoya (SCE) Study, Measurement, Validation and Valuation Juan Castaneda (SCE) Battery and Inverter Systems Naum Pinsky (SCE) Siting, Construction, and Substation and Grid Preparations Ken Varnell (SCE) Communications and Cyber-security Jeff Gooding (SCE) Ali Chowdhury (CAISO) Johan Enslin (Quanta) Andy Chu (A123) Ed Hohmann (Cal Poly Pomona) The Project Oversight Committee is chaired by Paul De Martini, Vice President, Advanced Technology, Southern California Edison, and consists of the senior leadership of SCE related to Smart Grid development (within SCE this steering team is called the Smart Grid Integration Council). This committee will monitor project progress and ensure accountability. The Technology Advisory Council will monitor the technical progress and progress of the project, ensuring the technical goals of the project are met Its membership will be comprised of senior technical leads from SCE, CAISO, Pacific Gas and Electric, Sempra Energy, Idaho Power, and the Utility Wind Integration Group. Tehachapi Wind Energy Storage Project Page 38 of 56

56 The TSP is structured to be managed by a small group of functional team leaders who all report to an overall project manager. The project manager reports to the Principal Investigator who, in turn, reports to the Project Oversight Committee, the DOE, and the Technology Advisory Council. The key project officers and their positions are described in figure 10 below. Figure 10. Key TSP Project Officers and Positions. Executive Sponsor Paul De Martini, Vice President Advanced Technology Principal Investigator Ed Kjaer, Director Electric Transportation, SCE Functional Team Leaders Functional Area Project Officer, Position 1. Construction Management Paul Multari, Director, Project Management, Transmission & Distribution, SCE 2. Regulatory Compliance, Budget and Reporting Jeanne Boyce, Manager Advanced Technology, SCE 3. Battery and Inverter Systems Development Naum Pinsky, Manager Electric Transportation, SCE Andy Chu, Director Automotive Product Line, A Siting, Construction, and Substation and Grid Kenneth Varnell. Director Preparations Engineering, SCE 5. Grid Operations Michael Montoya. Director Advanced Technology, SCE 6. Communications & Cybersecurity Jeff Gooding. Manager Advanced Technology, SCE 7. Study, Measurement and Validation Juan Castaneda, Senior Engineer Advanced Technology, SCE Ali Chowdhury, Director Market & Infrastructure Division, CAISO Ed Hohmann, Dean College of Engineering, Cal Poly Pomona Dr. Johan Enslin, Vice-President Quanta Services 8. Decommissioning Kenneth Varnell. Director Engineering, SCE Andy Chu, Director Automotive Product Line, A123 Tehachapi Wind Energy Storage Project Page 39 of 56

57 5. Project Performance Site 5.1 Street address of proposed site. (If a street address is not adequate to locate the site, provide additional location description such as latitude and longitude) The project will be located inside Monolith Substation and is located approximately 200 north of E. Tehachapi Blvd. on Williamson Rd. in the city of Tehachapi, CA. 5.2 A brief description of the site and its surroundings (e.g., topography, geology, etc.) Figures 11a and 11b depict the project site at Monolith Substation. The substation itself is a flat area covered with rock dust and is fenced in with a chain link and barbwire on top of the fence. Beyond the substation boundary the terrain is flat, with rolling hills in the distance. The vegetation is typical of high desert plant life in the Antelope Valley. Project area is immediately adjacent to a rail line and is just west of a cement plant. The area near the project site is sparely populated. 5.3 Access to transportation, utilities, or other amenities necessary to execute the project The project has easy road access from E. Tehachapi Blvd and Williamson Rd. The project site is less than two miles from CA-58 and four miles from a small municipal airport. The city of Tehachapi proper is 4 miles from the project site which can provide meals and lodging. The A123Systems prismatic cells and modules will be manufactured in Novi, Michigan and shipped to the installation location in the Tehachapi region. The racks in which the modules will be housed and secured will be assembled in Hopkinton, MA and shipped to the installation location where the system will be assembled. The site can support shipments from delivery trucks and can temporarily warehouse some of the components. No special transportation, utilities or other amenities are required, with the exception of usual and ordinary lighting, electricity and water/plumbing that will be planned for in the building that will house the energy storage system. A forklift will be required to remove the racks and pallets of battery modules from delivery trucks and placing them inside the building. 5.4 Evidence of ownership or legal right to utilize the site for the duration of the project (e.g., deed or lease agreement) or plans to obtain legal rights to utilize the site for the duration of the project The attached document validates that SCE is the rightful owner of Monolith Substation. Monolith is the site of the proposed Tehachapi Energy Storage Demonstration. Tehachapi Wind Energy Storage Project Page 40 of 56

58 Figure 11. Monolith Substation Plot Plan Tehachapi Wind Energy Storage Project Page 41 of 56

59 Figure 12. Property Inventory Tehachapi Wind Energy Storage Project Page 42 of 56

60 Figure 13. Monolith Substation Deed y Tehachapi Wind Energy Storage Project Page 43 of 56

61 Figure 14. Monolith Substation Deed Tehachapi Wind Energy Storage Project Page 44 of 56

62 6. Statement of Project Objectives (SOPO) 6.1 Project Objectives The objective of the Tehachapi Wind Energy Storage Project (TSP) is to evaluate the performance of utility scale lithium-ion battery technology in improving grid performance and integrating wind generation. Positive project results will initiate energy storage commercialization that will accelerate the advancement of reliable, clean, secure, renewable energy resources and technology for wind integration and other smart grid applications. To do so, the TSP will implement a test plan to assess the energy storage system s performance and impact in three operational use areas: 1. Transmission Uses grid stability, operations, and power movements 2. System Related Uses renewables integration and capacity needs 3. Power Market Integration Uses energy applications procured through energy markets and operated in conjunction with the Independent System Operator. Lithium-ion is the only battery technology currently ready for demonstration that can perform the range of duties needed to support the breadth of the TSP s study. The results of the project will fulfill the objectives of the Energy Storage Area of Interest within the Smart Grid Funding Opportunity Announcement. These objectives include: Demonstration of major, utility-scale energy storage installations or demonstrations of promising utility-scale storage technologies that will rapidly advance the market readiness of the technology Verification of energy storage system costs and benefits Verification of the technical performance of energy storage systems in specific or multiple applications Validation of system reliability and durability Demonstrate promising utility-scale storage technologies in order to rapidly advance their market readiness. 6.2 Project Scope (Scope of Work) The TSP project will design, build, install, and test one of the largest and most advanced lithium-ion energy storage systems ever made. The project will involve a rigorous test plan that produces data on system and substation performance in conjunction with thirteen operational use applications for an energy storage system. In the test plan, the operational uses will be applied individually and in batches. Baseline metrics will be established against which the demonstration operational data will be compared to determine performance results and operational benefits for determining the overall cost-effectiveness of individual or batches of operational uses. The performance analysis will also yield recommendations on optimal application of the technology and commercialization pathways. The project scope includes validation of the storage system s ability to integrate intermittent windresources in a remote transmission-constrained area. These characteristics of the project site typify the operational challenges of an increasing renewable energy requirement. The project s results and recommendations will be highly scalable to other areas of California and the United States that are seeking to expand the production of renewable power. Tehachapi Wind Energy Storage Project Page 45 of 56

63 6.3 Tasks to be Performed (Divided into appropriate phases/budget periods) The TSP is divided into four sequential phases that steer the project and provide critical milestones and decision-making junctures. Figure 15. TSP Phases Duration, Scope, and Budget Project Phase 1. Project Definition & NEPA Compliance 2. Final Design, Construction, and Baselining 3. Operations, Measurement, and Testing Timeline and Duration Months 0 2 Months 3 27 Months Decommissioning Months Objectives and Scope Refine project plan Finalize Battery and Inverter system design. Finalize Permitting and NEPA requirements Manufacture, deliver, install and validate the lithium-ion energy storage system Manage substation construction system interconnection Conduct ongoing measurement to establish operational baselines Execute test plan and collect data on system performance and energy system impacts. Analyze data and produce regular reports on system performance and benefits, including benefit quantification Analyze system components to assess technology longevity and usage degradation Conclude project analysis and provide final project results, value-benefits, and recommendations for large-scale and commercial technology. Potentially disassemble the energy storage system, recycle batteries and refurbish substation. Budget $45,948 $44.7 million $8.2 million $541, Phase I Project Definition and NEPA Compliance Task 1.1 Update Project Management Plan At the time of the project award and again at each project decision point, SCE will update its Project Management Plan (PMP) to reflect changes in scheduling, resources, key technical drivers, partnerships and its technical approach. These changes will reflect any input received from DOE prior to such PMP updates. Tehachapi Wind Energy Storage Project Page 46 of 56

64 Task 1.2 National Environmental Protection Act (NEPA) Compliance SCE has conducted a preliminary review of the potential environmental impacts of its proposed demonstration project and sees little likelihood of the need for an Environmental Assessment (EA) or for an Environmental Impact Statement (EIS). SCE expects a number of local jurisdictional permits will be required in order to construct and deploy various aspects of the proposed demonstration. Should the DOE or any local governing authority decide either an EA or EIS is required, SCE expects to comply with such decision as hastily as possible. Task 1.3 Finalize Energy Storage System Manufacturing Plan A123 will oversee manufacture of the lithium-ion batteries and procurement of the inverter. System and performance requirements will be reviewed and the manufacturing plan will be finalized to ensure timely delivery and provide adequate time for bench testing and validation. Cash flow concerns with the battery manufacture will also be addressed at this time. Task 1.4 Finalize Plan for Baseline Measurements The TSP test plan lays out specific metrics necessary for comparison against baseline performance. This plan will be reviewed and finalized. Benefit calculations will require additional measure of baselines system costs for O&M, system monitoring, curtailment, transmission upgrades, and GHG and air quality compliance from excess system capacity Decision Point 1 Preliminary Design and NEPA Compliance Review (go/no-go decision point): Approval to proceed with Final Design and Construction Phase II Final Design, Construction, and Baselining Task 2.1 Battery and Inverter Systems Development, Manufacture, Assembly and Installation SCE and A123 will implement the plans for energy storage system manufacture. SCE and A123 will develop acceptance testing plans. Samples of the manufactured product will be shipped to SCE for bench-testing and lab verification. Upon verification the system components will be assembled and installed at the Monolith substation. Successful acceptance tests will conclude this set of tasks. Task 2.2 Siting, Construction, and Substation and Grid Preparations Site preparation for the energy storage system will involve a stepped construction and interconnection process. The construction process will involve the construction of an 8,000 square foot air-conditioned room to house the energy storage system. Monitoring and measurement devices will be installed at the site. Transformers, capacitor banks, and other interconnection equipment will be installed as the site is reengineered for system operations. Commission testing and grid interconnection in conjunction with CAISO will conclude this set of tasks. The Project Management task assumes responsibility for the overall management of all phases of the project. The Project Management team approach is based on SCE s Project Management Offices processes and procedures that have been established over many complex development and demonstration projects. Specific areas of interest in this task include schedule management, staffing, contractor management, milestone tracking and DOE communication. Task 2.3 Baselining Baselining equipment will be installed and connected into SCE s Synchronized Phasor Measurement in Real Time (SCE SMART ) system which will accumulate and route the data to SCE s measurement and validation operations center. Through the final nineteen months of phase II, this operations data will be Tehachapi Wind Energy Storage Project Page 47 of 56

65 accumulated and prepped for later analysis. The project management team will also gather data on financial metrics such as O&M, system monitoring, curtailment, transmission upgrades, and GHG and air quality compliance from excess system capacity. Task 2.3 assumes the responsibility for tracking the regulatory requirements, manages the quarterly and annual reports and support project management in ensuring appropriate and timely communication with the Department of Energy. Decision Point 2 Operational Readiness Review (go/no-go decision point): Approval to proceed with Operations, Measurement, and Testing Phase III Operations, Measurement, and Testing Task 3.1 System Operations and Data Collection Execution of the TSP s test plan will occur over twenty-five months. SCE, in collaboration with CAISO, will operate the energy storage system to test operational use applications and effects. Manage the system in coordination with CAISO and other operational entities, such as SCE s power systems controls. SCE will corroborate system performance data with the specific operational use tests. Frequent and ongoing data extractions will be routed to SCE for analysis as well as to the DOE for data collection and verification. Task 3.2 Communications, Interoperability and Cybersecurity SCE intends to operate and monitor the TSP system remotely. Communications capability will require advanced communications infrastructure currently in place at the Monolith substation. SCE will integrate the system s operation with current grid protocols, notifications, and power systems controls by managing interoperability capabilities of the system. SCE will protect the data with ongoing cybersecurity validation, according to system requirements. Task 3.3 Study, Measurement, Validation and Valuation SCE will oversee project contractors Quanta and Cal Poly Pomona to measure and analyze the data. Quanta will support with the design of analysis, incorporation of system data into system wide models for energy storage impacts, and the creation of periodic reports. Cal Poly Pomona will analyze the data. Three system performance reports will be released. The final report will include recommendations for utility scale applications of lithium-ion storage technology and commercialization pathways. Reports will be vetted and reviewed by SCE and CAISO before being published Phase IV Decommissioning The site maybe selected for decommissioning based on the system s performance or to examine system components. Decommissioning tasks that will take place upon completion of the operations phase. Not all equipment and structures installed for the demonstration will be removed depending on serviceability and remaining life expectancy. To the extent such equipment may be left at the substation, legal issues will need to be resolved relating to ownership, liabilities, and on-going maintenance. Any costs associated with these planned decommissioning activities have been included in the program budget, but will not be included in the CBA, since they are added costs specifically related to the experimental nature of the demonstration. Tehachapi Wind Energy Storage Project Page 48 of 56

66 6.4 Detailed Work Breakdown Structure Phase I Work Breakdown Structure Figure 16. Phase I Tasks WBS TASK NAME DURATION START FINISH 1 1. Project Management 1200 days 12/2/2009 7/8/ Start Project 60 months 12/2/ /2/ Project Scheduling 60 months 12/2/2009 7/8/ Milestone Reviews 60 months 12/2/2009 7/8/ Staffing 60 months 12/2/2009 7/8/ Resources 60 months 12/2/2009 7/8/ Quality Assurance 60 months 12/2/2009 7/8/ Business Partner Integration 60 months 12/2/2009 7/8/ Project Scheduling 60 months 12/2/2009 7/8/ Milestone Review 60 months 12/2/2009 7/8/ Ensure that project deliverables are on time, within budget, and meet the quality levels expected by the SCE's internal and external customers. 1 day 12/2/2009 7/8/ MILESTONE 1: Complete Pre-Project Management Plan 1 day 2/17/2010 2/17/ MILESTONE 2: Finalize Contractual Obligations with ARRA/DOE, CEC, CPUC, and A123 1 day 2/17/2010 2/17/ MILESTONE 3: Complete Plan for Baselining Projects Performance. Solidify Precise Funding Needs for A123 Manufacturing to begin 1 day 2/17/2010 2/17/ Regulatory, Reporting, and Governance 1200 days 12/2/2009 7/8/ CPUC Quarterly Reports 60 months 12/2/2009 7/8/ ARRA Quarterly Reports 60 months 12/2/2009 7/8/ CEC Quarterly Progress Reports 60 months 12/2/2009 7/8/ Quarterly Federal Financial Interim Reports 60 months 12/2/2009 7/8/2014 Assist in communicating with internal client teams to collect key quantitative and qualitative information 60 months 12/2/2009 7/8/ CEC Technology Transfer Report 1 day 12/2/ /2/ CEC Production Readiness Plan 1 day 12/2/ /2/ Budget, Accountability, and Contract Management 1200 days 12/2/2009 7/8/ Finance and Accounting 1200 days 12/2/2009 7/8/ Manage project budget 60 months 12/2/2009 7/8/ Create and update project cost estimates and plans 60 months 12/2/2009 7/8/2014 Tehachapi Wind Energy Storage Project Page 49 of 56

67 WBS TASK NAME DURATION START FINISH Program Funding Sources and Use 60 months 12/2/2009 7/8/ Vendor/Contracts 1200 days 12/2/2009 7/8/ Develop and integrate contract management tools, templates, methods and processes for the project 60 months 12/2/2009 7/8/ Draft and assist with negotiations for complex contractual arrangements; negotiate terms of letters of understanding. 60 months 12/2/2009 7/8/ Analyze contracts and proposed contract revisions and confer with the team and various department heads to detect ambiguities, inaccurate statements, omissions of essential terms, and conflict with possible legal prohibitions. 60 months 12/2/2009 7/8/ Act as liaison between project team and vendor(s) 60 months 12/2/2009 7/8/ Evaluate and monitor contract performance to determine necessity for amendments or extensions of contracts and compliance to contractual obligations. 60 months 12/2/2009 7/8/ Partner Relations 60 months 12/2/2009 7/8/ Secure Contractual Obligations from ARRA, DOE, CEC, CPUC, and A123 3 months 12/2/2009 2/23/ Phase II Work Breakdown Structure Figure 17. Phase II Tasks WBS TASK NAME DURATION START FINISH 4 4. Battery and Inverter System 542 days 2/24/2010 3/22/ Design / Engineering 65 days 2/24/2010 5/25/2010 Develop Battery & Inverter System Performance Specs 3 months 2/24/2010 5/18/ Develop Acceptance Test Plan 1 wk 5/19/2010 5/25/ Procurement Process 360 days 2/24/2010 7/12/ Battery & Inverter System 18 months 2/24/2010 7/12/ Obtain bench test battery sample 12 months 5/26/2010 4/26/ Lab Bench Testing 230 days 5/26/2010 4/12/ Perform battery test and assess results 11 months 5/26/2010 3/29/ Prepare bench test report 2 wks 3/30/2011 4/12/ Pre-Construction 360 days 5/19/ /4/ Coordinate with SC&M (Review Plans) 18 months 5/19/ /4/ Construction (Site) 61 days 7/13/ /5/ Supervise Battery & Inverter installation 3 months 7/13/ /4/ MILESTONE 7: Complete Installation of Battery & Inverter 1 day 10/5/ /5/2011 Tehachapi Wind Energy Storage Project Page 50 of 56

68 WBS TASK NAME DURATION START FINISH 4.6 Acceptance Testing in Collaboration with Grid Operations & SC&M 120 days 10/6/2011 3/21/ Perform acceptance test plan 5 months 10/6/2011 2/22/ Prepare Final Acceptance Test Report 1 month 2/23/2012 3/21/ MILESTONE 8: Complete System Validation 1 day 3/22/2012 3/22/ Siting, Construction, and Substation and Grid Preparations 397 days 12/2/2009 6/9/ Project Process Clarification 121 days 12/2/2009 5/19/ Schedule Meeting to Decide how the Project Will Be Processed Internally 1 day 12/2/ /2/ Power Flow Studies 3 months 12/3/2009 2/24/ Antelope - Bailey - Windhub 66 kv System Split Studies 3 months 12/3/2009 2/24/2010 Dynamic Transient study with Battery in Different Operation Modes 3 months 12/2/2009 2/23/2010 Define What Data and Sampling Rate for Data Acquisition 3 months 12/2/2009 2/23/ T&D System Technical Analysis 3 months 2/25/2010 5/19/ Grid Planning Committee Approval 1 day 12/2/ /2/ Develop Battery Control Algorithms 3 months 2/25/2010 5/19/ Site Preparation and Final Operational Models 140 days 12/2/2009 6/15/ Pre-Engineering Job-Walk 5 days 12/2/ /8/ Prepare Design Space Standards 1 wk 12/2/ /8/2009 Budget (Cap Banks, Materials: Transformer, CB, Racks, Relays) 1 wk 12/9/ /15/ Electrical Eng 3 months 12/16/2009 3/9/ Substation Automation Upgrade (SAS) 4 wks 3/10/2010 4/6/ Civil / Structural Design 4 wks 4/7/2010 5/4/ Protection (Review / Study) 3 wks 5/5/2010 5/25/ Grounding: Ground Grid Study 1 wk 5/26/2010 6/1/ Preliminary Substation Design 2 wks 6/2/2010 6/15/2010 Metering Device Specifications for Control Algorithms 1 wk 6/2/2010 6/8/ Complete Design 115 days 6/16/ /23/ QA / QC 1 wk 11/17/ /23/ Issue for Contraction 1 wk 6/16/2010 6/22/ Issue Near System Operating Bulletin (SOB) 1 wk 6/23/2010 6/29/ Final Substation Engineering and Design 20 wks 6/30/ /16/ Construction 81 days 11/24/2010 3/16/ Project Management / Overhead 4 months 11/24/2010 3/15/ Overhead 4 months 11/24/2010 3/15/ Checker 4 months 11/24/2010 3/15/2011 MILESTONE 6: Complete Construction of Energy Storage Warehouse 1 day 3/16/2011 3/16/ Test 60 days 3/17/2011 6/8/ Commission Testing 3 months 3/17/2011 6/8/2011 Tehachapi Wind Energy Storage Project Page 51 of 56

69 WBS TASK NAME DURATION START FINISH 5.6 Preparation Complete 1 day 6/9/2011 6/9/ Baselining 480 days 2/24/ /27/ Install PMU and Data Measurement Devices 3 months 2/24/2010 5/18/ MILESTONE 4: BEGIN BASELINING DATA 1 day 5/19/2010 5/19/ Install Cybersecurity and Communications Equipment 6 months 5/19/ /2/ Ongoing Baselining 21 months 5/19/ /27/ MILESTONE 5: Validate Data Capture, Transfer, Communications, and Cybersecurity 1 day 1/27/2011 1/27/ Phase III Work Breakdown Structure Figure 18. Phase III Tasks WBS TASK NAME DURATION START FINISH 7 7. Grid Operations 934 days 11/17/2010 6/16/ Conduct Grid Operations 582 days 3/23/2012 6/16/ Complete individual testing of scenarios for the Energy Storage System & Report to DOE 13 months 3/23/2012 3/21/ MILESTONE 9: Complete individual testing of scenarios 1 day 3/22/2013 3/22/ Complete testing of stacking scenarios & Report to DOE 13 months 3/25/2013 3/21/ MILESTONE 11: Complete Testing of Stacking Scenarios 1 day 3/24/2014 3/24/ Additional testing and operations 3 months 3/25/2014 6/16/ Substation Training and Maintenance 225 days 11/17/2010 9/27/ Conduct training needs analysis (ID contractor) 5 wks 11/17/ /21/ Review of vendor specification documents 4 wks 12/22/2010 1/18/ Design Training 4 wks 1/19/2011 2/15/ Develop program manuals (training, operations & maintenance, technical) and equipment training 4 wks 2/16/2011 3/15/ Work with line management (e.g., safety and environmental) regarding new business processes, policies and procedures 8 wks 3/16/2011 5/10/ Training Delivery/Deployment 4 wks 5/11/2011 6/7/ Evaluation of training 10 wks 6/8/2011 8/16/ Video documentation for initial, ongoing and future training needs (e.g., new employees) 4 wks 8/17/2011 9/13/ Rewrite/edit/update program manuals (training, operations and maintenance, technical) 2 wks 8/17/2011 8/30/2011 Tehachapi Wind Energy Storage Project Page 52 of 56

70 WBS TASK NAME DURATION START FINISH Documenting and sharing of best practices with other utilities - video vignettes 4 wks 8/31/2011 9/27/ Communications and Cybersecurity 540 days 3/23/2012 4/17/ Ongoing Operations and Validation 27 months 3/23/2012 4/17/ Study, Measurement, Validation, and Valuation 661 days 3/23/ /3/ Data Gathering 27 months 3/23/2012 4/17/ Report Preparation 27 months 3/23/2012 4/17/ Computer Simulation Analysis 27 months 3/23/2012 4/17/ Report Review 27 months 3/23/2012 4/17/ Complete Analysis for Report#1 3 months 3/22/2013 6/13/ MILESTONE 10: Complete Analysis and Report #1 for publication 1 day 6/14/2013 6/14/ Complete Analysis for Report #2 3 months 3/24/2014 6/13/2014 MILESTONE 11: Complete testing of stacking 9.8 scenarios & Report to DOE 1 day 6/16/2014 6/16/ Final Analysis and Conclusions 6 months 4/18/ /2/ MILESTONE 13: Send Summary and Final Report and Recommendations to DOE 1 day 10/3/ /3/ Phase IV Work Breakdown Structure Figure 19. Phase IV Tasks WBS TASK NAME DURATION START FINISH Decommissioning 222 days 1/27/ /2/ Contract Closure 120 days 1/27/2014 7/11/ Legal Review of Obligations 6 months 1/27/2014 7/11/ Sub-Contracts 6 months 1/27/2014 7/11/ Remove Battery and Recycle It 3 months 6/17/2014 9/8/2014 MILESTONE 14: Battery Removed and 10.3 Recycled 1 day 9/9/2014 9/9/2014 Remove Interconnections and Devices (kcmr, etc) 1 month 6/17/2014 7/14/ Disconnect From Grid Communications 1 month 6/17/2014 7/14/ Remove Control Systems (Software, etc) 1 month 6/17/2014 7/14/ Remove Project Assets 1 month 6/17/2014 7/14/ Reassign / Demo Building Completed 3 months 9/9/ /1/ MILESTONE 15: Demo / Reassign Building 1 day 12/2/ /2/2014 Issue Updated Standard Operating Bulletins (SOBs) 1 wk 9/9/2014 9/15/ Issue Updated Substation / SAS Drawings 1 wk 9/9/2014 9/15/2014 Tehachapi Wind Energy Storage Project Page 53 of 56

71 WBS TASK NAME DURATION START FINISH Remove Battery Storage System from EMS / Harris 1 wk 9/9/2014 9/15/ Deliverables The periodic, topical, and final reports will be submitted in accordance with the Federal Assistance Reporting Checklist. Should the DOE identify the need for additional reporting, SCE will make every attempt to accommodate such need. SCE will also provide periodic reports to the CPUC and CEC. Figure 20. TSP Non Federal Reporting Requirements Agency Report Timing CPUC CEC Notification of DOE award (if necessary) Periodic status reports Periodic status reports Critical project review Final project report Technology transfer report Upon award Quarterly Quarterly TBD Upon project completion Upon project completion 6.6 Reporting, Briefings and Technical Presentations All reports and other deliverables will be provided in accordance with the Federal Assistance Reporting Checklist. In addition, annual detailed briefings will be presented to the Project Officer at the Project Officer s facility located in Pittsburgh, PA; Morgantown, WV; or Washington, DC, to explain the plans, progress and results of the technical effort. The first briefing (kick-off meeting) will be presented within 30 days of the effective date of the Award. Additional briefings will be presented at least 30 days before completion of each budget period. A final briefing will be presented at least 30 days prior to expiration of the award. SCE understands that this project is also subject to periodic DOE Peer Reviews, and a Reasonableness Review conducted by the DOE during the first budget period. Tehachapi Wind Energy Storage Project Page 54 of 56

72 7. Appendix A Bibliography and References Cited 1. California Independent System Operator, Integration of Renewable Resources: transmission and operating issues and recommendations for integrating renewable resources on the California ISOcontrolled grid. (November 2007). 2. Denholm, Paul. National Wind Coordinating Collaborative Wind and Storage Webcast Summary, (National Wind Coordinating Collaborative, April 8, 2008). 3. Miller, T. Hybrid Battery Technology and Challenges, MIT Technology Review s Emerging Technology Conference. (September 28, 2006). 4. National Renewable Energy Laboratory (NREL). Energy Storage and Reactive Power Compensator in a Large Wind Farm. (October 2003). 5. NOVA. The Big Energy Gamble, Public Broadcasting Service. (accessed August 20, 2009). 6. Roth, Peter. Thermal Ramp Abuse Test Evaluation of Baseline A123 Cells. (Sandia National Laboratories, September 7, 2007): Smith, Kandler. A123Systems Cell (ANR 26650M1) Thermal Characterization Test Plan & Preliminary Results. (October 2, 2007). 8. Southern California Edison (SCE). A Lifecycle Framework for Self-sustaining Implementation of Smart Grid Interoperability and Cyber Security Standards Southern California Edison (SCE). Southern California Edison Company (U 338-E) Response to OIR to Consider Smart Grid Technologies. (February 9, 2009). 10. U.S. Congress. Public Law : Energy Independence and Security Act of (110th Cong., 2007, Committee Print). Tehachapi Wind Energy Storage Project Page 55 of 56

73 8. Appendix B Equipment Needed Equipment list does not include battery and inverter system and an approximate combined cost of $35.2 million as detail in the R&R Subaward Budget Attachment(s) Form. Equipment* Total Capabilities Bench Test Equipment $60,000 Tests equipment Building Construction Materials $391,109 Self explanatory Supervisory Control Unit $9,304 Utilized for the monitoring of system variables Three phase 7.5 MVA, 480V/12kV pad mounted transformers $63,828 Used for interconnecting energy storage to sub-transmission system Three phase 28 MVA, 12/66kV, $450,000 Same as above delta-wye transformer bank Conductor (Bus) $9,608 Connects energy storage to subtransmission system Digital Protection Relays $8,409 Protects energy storage from faults 12 kv Vacuum Type Circuit Breaker $9,049 Same as above 14.4 MVAR, 66 kv Shunt Capacitor $65,000 Controls voltage Bank Real Time Unit (RTU) $35,000 Measures system variables Digital Fault Recorder (DFR) $35,000 Records system faults Communications Gateway $60,000 Self explanatory Network $120,000 Same as above Phasor Measurement Unit and Phasor Data Concentrator Unit $38,950 Monitors voltages and current phasor in real time Gateway $12,300 Self explanatory Computer Server $15,000 Same as above Program Training Manuals $10,000 Same as above Tehachapi Wind Energy Storage Project Page 56 of 56

74 Appendix C

75 STATE OF CALIFORNIA NATURAL RESOURCES AGENCY ARNOLD SCHWARZENEGGER, Governor CALIFORNIA ENERGY COMMISSION DIVISION OF FINANCIAL SERVICES GRANTS & LOANS 1516 NINTH STREET, MS-1 SACRAMENTO, CA (916) NOTICE OF PROPOSED AWARDS American Recovery and Reinvestment Act of 2009 Cost Share PON (DE-FOA , , , , , , , , , ) December 30, 2009 On June 18, 2009 the California Energy Commission (Energy Commission) released a Program Opportunity Notice (PON) and Grant Solicitation and Application Package PON entitled American Recovery and Reinvestment Act (ARRA) of 2009 Cost Share under the Public Interest Energy Research (PIER) Program. The solicitation announced that the Energy Commission plans to allocate up to 21 million of electricity funds for Cost Share. The grant solicitation was released to offer cost share funding to those applying and receiving ARRA grant funding from the federal government under one or more of the following federal opportunity announcements (herein collectively referred to as FOAs): FOA : Carbon Capture and Sequestration from Industrial Sources and Innovative Concepts for Beneficial Carbon Dioxide Use FOA : Smart Grid Demonstrations FOA : Solid State Lighting- Product Development FOA : Solid State Lighting U.S. Manufacturing- Round 1 FOA : Smart Grid Investment Grant Program FOA : Advanced Research Projects- Energy (ARPA-E) FOA : Solid State Lighting- Core FOA : Energy Efficient Information and Communication Technology FOA : Advanced Energy Efficient Building Technologies FOA : Training Program Development for Commercial Buildings Equipment Technicians, Building Operators In accordance with the grant solicitation and application package, each proposal was screened for completeness and reviewed by the Energy Commission staff. The letters of intent for cost share were issued to the successful pre-applicants, who were directed to submit final applications to the Energy Commission. The Energy Commission s Technical Advisory Committee (TAC) reviewed, evaluated, and scored final applications, using the criteria prescribed in the application package, including requirement of receiving ARRA award from the federal government. Based on the TAC s scores and directions from the RD&D Committee, the proposed matching funding is recommended for the FOAs.

76 The attached table Notice of Proposed Awards and Results of Submitted Proposals identifies applicants selected to receive funding, the project title, the amount of recommended funding by the RD&D Committee, and scoring information. Under Score status, applicants who did not receive ARRA funding from the federal government, did not meet the requirements of an eligible project or did not receive a passing score are shown as not awarded. For applicants that did not pass this PON, but subsequently received ARRA funding from DOE, the Energy Commission plans to release a new PON in December to provide a second chance to interested parties. The new PON (PON ) will be posted on the Energy Commission Web Site: If the applicant receives ARRA funding from the federal government, the Energy Commission s cost share is contingent upon the approval of the requested funding during a Commission Business Meeting. This notice is being mailed to all parties who submitted a proposal to this solicitation and is also posted on the Energy Commission Web Site: Persons wishing further information about this matter may contact Pedro Gomez at (916) or by pgomez@energy.state.ca.us.

77 Rank Prime Applicant Title 1 C6 Resources, LLC California Energy Commission Public Interest Energy Research Program (PIER) Notice of Proposal Awards and Results of Submitted Proposals Solicitation PON ** (DE-FOA , , , , , , , , , ) American Recovery and Reinvestment Act of 2009 Cost Share FOA : Carbon Capture and Sequestration from Industrial Sources and Innovative Concepts for Beneficial Carbon Dioxide Use Northern California Carbon Dioxide Reduction Project PIER Funds Requested PIER Funds Recommended DOE Funding Requested Score Status* $300,000 $300,000 $3,000,000 Awarded Kimberlina Zero Emissions Power 2 Clean Energy Systems Plant with Carbon Dioxide ide Capture $300, $0 $1,671, Not Awarded d and Sequestration 3 Calera Corporation Carbon Mineralization by Aqueous Precipitation for Beneficial Use of CO2 from Flue Gas $300,000 $0 $3,062,754 Not Awarded OriginOil Carbon Capture Pilot 4 Origin Oil Project Total Funds Recommended FOA : Smart Grid Demonstrations Rank Prime Applicant Title $191,606 $0 $786,064 Not Awarded $1,091,606 $300,000 $8,519,991 PIER Funds Requested PIER Funds Recommended DOE Funding Requested Score Status 1 Pacific Gas & Electric Advanced Underground CAES Demonstration Project $1,000,000 $1,000,000 $25,000,000 Awarded 2 Southern California Edison Irvine Smart Grid Demonstration $1,000,000 $1,000,000 $40,134,700 Awarded 3 Southern California Edison Tehachapi Wind Energy Storage Project $1,000,000 $1,000,000 $24,978,264 Awarded 4 Los Angeles Department of Smart Grid Regional Demonstration Water and Power Project $1,000,000 $1,000,000 $60,280,000 Awarded 5 Primus Power Wind Firming EnergyFarm $1,000,000 $1,000,000 $14,000,000 Awarded

78 0 Fluidic Energy Inc. 0 Utility Savings & Refund, LLC 0 Sacramento Municipal Utility District Multi-Site Demonstration of Promising Energy Storage Technology Demonstration of Vanadium Redox Flow Battery with On-Site Generation Distributed Energy Storage Pilot at Anatollia $475,000 $0 $4,750,000 Not Awarded $150,000 $0 $1,500,000 Not Awarded $1,000,000 $0 $5,948,499 Not Awarded 0 UC San Diego Smart Grid Demonstation Area 2.2 $500,000 $0 $5,000,000 Not Awarded 0 UC San Diego Smart Grid Demonstation Area 2.3 $500,000 $0 $5,000,000 Not Awarded 0 CSU Sacramento Active Management and Integration of Smart Grid Resources with Dynamic Pricing for Electricity $1,000,000 $0 $22,500,000 Not Awarded 0 San Diego Gas & Electric Secure End-to-End Smart Green Grid Demonstration $1,000,000 $0 $100,000,000 Not Awarded 0 CSU Office of the Chancellor Smart Grid Demonstration Program $1,000,000 $0 $60,000,000 Not Awarded 0 Eurticity, Inc. 0 Seeo, Inc. Total Funds Recommended FOA : Solid State Lighting- Product Development Rank Prime Applicant Title 0 Progressive Cooling Solutions, Inc. 0 Eutricity, Inc. Networked Intelligent Energy Optimized Building Integration Platform $1,000,000 $0 $18,000,000 Not Awarded Solid State Batteries for Grid-Scale Energy Storage $1,000,000 $0 $6,196,060 Not Awarded $12,625,000 $5,000,000 $393,287,523 Novel Cooling Technology Enables Metal Halide Replacement with LED Off-Grid Reactive LED Smart Lamps PIER Funds Requested PIER Funds Recommended DOE Funding Requested Score Status $200,000 $0 $1,800,000 Not Awarded $100,000 $0 $400,000 Not Awarded 0 Eutricity, Inc. Grid Reactive LED Smart Lamps $200,000 $0 $800,000 Not Awarded Total Funds Recommended $500,000 $0 $3,000,000

79 FOA : Solid State Lighting U.S. Manufacturing- Round 1 Rank Prime Applicant Title PIER Funds PIER Funds DOE Funding Requested Recommended Requested Score Status 1 Atomic Precision Systems, Inc. Technology to manufacture Low- $499,900 $499,900 $1,499,995 Awarded Total Funds Recommended FOA : Smart Grid Investment Grant Program $499,900 $499,900 $1,499,995 Rank Prime Applicant Title PIER Funds PIER Funds DOE Funding Requested Recommended Requested Score Status 1 San Diego Gas and Electric(Sempra Energy) Advanced Metering Infrastructure $1,000,000 $1,000,000 $28,115,052 Awarded 1 Electric Power Group, LLC SynchroPhaser Technology Investments and Implementation $270,000 $270,000 $2,700,000 Awarded 3 Pacific Gas & Electric Electric Transmission Systems $1,000,000 $1,000,000 $22,000,000 Awarded 4 Sacramento Municipal Utility Integrated and Crosscutting District Systems $1,000,000 $1,000,000 $127,506,261 Awarded 5 City of Anaheim Integrated and Crosscutting Systems $590,000 $589,603 $5,896,025 Awarded 0 City Electric Utility, Silicon Valley Power Advanced Metering Infrastructure $1,000,000 $0 $10,000,000 Not Awarded 0 Pacific Gas & Electric Advanced Metering Infrastructure $1,000,000 $0 $80,000,000 Not Awarded 0 Joint Ventures: Silicon Valley Network Customer Systems $900,000 $0 $9,000,000 Not Awarded 0 UC San Diego Customer Systems $1,000,000 $0 $20,000,000 Not Awarded 0 Southern California Public Power Authority Equipment Manufacturing $1,000,000 $0 $38,000,000 Not Awarded 0 City of Glendale Water and Power Advanced Metering Infrastructure $1,000,000 $0 $20,000,000 Not Awarded Total Funds Recommended $9,760,000 $3,859,603 $363,217,338

80 FOA : Advanced Research Projects - Energy (ARPA-E) Rank Prime Applicant Title 1 Porifera, Inc. 0 Stanford University 0 One-Cycle Control, Inc. 0 UC Santa Cruz 0 EnerVault 0 Seeo, Inc. 0 Porifera, Inc. 0 Amprius, Inc. 0 Directed Technologies 0 Calera Corporation 0 E-Solar Total Funds Recommended Carbon Nanotube Membranes for Energy-Efficient Carbon Sequestration Large Scale Energy Reductions through Sensors, Feedback and Information Technology Hexagram Variable Speed Drive for Multi-MW Motors Luminescent Solar Concentrators Using Existing US Manufacturing Technology High Efficiency, Low Cost, Grid- Scale Energy Storage System Lithium Batteries with Solid State Electrolytes Carbon Nanotube Membranes for Osmotic Power Generation Doubling the Energy Density of Lithium-Ion Batteries Electro-Hydrothermal Spallation Drill for Widespread EGS Deployment Aqueous Carbornate Mineral Precipitation: Multi-Level Pollution Control Option Solar Air Receiver and Gas Turbine System PIER Funds Requested PIER Funds Recommended DOE Funding Requested Score Status $110,000 $107,790 $1,080,000 Awarded $500,000 $0 $5,400,000 Not Awarded $300,000 $0 $3,000,000 Not Awarded $260,000 $0 $2,900,000 Not Awarded $416,000 $0 $4,160,000 Not Awarded $500,000 $0 $7,200,000 Not Awarded $144,766 $0 $1,447,660 Not Awarded $500,000 $0 $5,000,000 Not Awarded $500,000 $0 $5,991,000 Not Awarded $422,166 $0 $5,277,081 Not Awarded $500,000 $0 $5,476,940 Not Awarded $4,152,932 $107,790 $46,932,681

81 FOA : Solid State Lighting- Core Rank Prime Applicant Title 1 Lightwave Photonics, Inc. Improved LED Performance Via Purcell Effect and Photon Recycling PIER Funds Requested Total Funds Recommended FOA : Energy Efficient Information and Communication Technology Rank Prime Applicant Title PIER Funds Requested 1 UC San Diego Renewable Bio-Fueled 400 VDC Modular Data Center 0 Clustered Systems Development of Very Dense Liquid Cooled Compute Platform 0 Federspiel Controls Demonstration of Energy Efficient Cooling Scheme - Dynamic Datacenter Cooling Control Total Funds Recommended FOA : Advanced Energy Efficient Building Technologies Rank Prime Applicant Title 1 Davis Energy Group, Inc. 2 Davis Energy Group, Inc. 3 TIAX LLC 4 Nrgtek, Inc. 5 Redwood Renewables LLC Development, Testing, and Commercialization of Advanced Residential Cooling Technologies Development and Commercialization of Perimeter Insulation for Residential Slabs Modeling Miscellaneous Electric Loads (MELs) in Commerical Buildings Unitized Residential Solar Thermoelectric Power-Hot Water Systems Redwood Renewables Cool-Roof Manufacturing Process PIER Funds Recommended DOE Funding Requested Score Status $200,000 $200,000 $1,200,000 Awarded $200,000 $200,000 $1,200,000 PIER Funds Recommended DOE Funding Score Status $250,000 $250,000 $5,750,000 Awarded $250,000 $0 $2,250,000 Not Awarded $250,000 $0 $500,000 Not Awarded $500,000 $250,000 $8,500,000 PIER Funds Requested PIER Funds Recommended DOE Funding Requested Score Status $180,000 $180,000 $2,000,000 Awarded $220,000 $220,000 $1,100,000 Awarded $400,000 $400,000 $800,000 Awarded $400,000 $400,000 $2,000,000 Awarded $300,000 $300,000 $1,100,000 Awarded

82 6 Agilewaves 7 Viridity Energy, Inc. 0 0 Pyramid Solar Renewables, LLC Pyramid Solar Renewables, LLC 0 Glumac 0 Thrive Power 0 Joule Energy, Inc. 0 Solar Sense 0 Eutricity, Inc. 0 Pyramid Solar Renewables, LLC 0 ASR Systems Performance Measurement and Benchmarking for Net-Zero Buildings Advanced Energy Storage Management and Optimization Solar Building Materials for Thermal, Photovoltaic, and Lighting Solar Building Materials for Commercial Space Conditioning, and Water Barton Memorial Hospital Central Plant Replacement R&D with Prototype of Solar CHP- A/C Emerging Technologies Refrigerated Warehouse Projects Solar Panel Installation, Maintenance, and Repair LED Smart Lamp-Based Building Energy and Sensor Network Solar Building Materials for Commercial Space Conditioning, and Water Model Based Design and Control of Buildings for Minimizing Energy $358,297 $358,297 $1,433,188 Awarded $400,000 $400,000 $2,000,000 Awarded $400,000 $0 $2,000,000 Not Awarded $400,000 $0 $2,000,000 Not Awarded $400,000 $0 $450,000 Not Awarded $350,000 $0 $1,800,000 Not Awarded $260,000 $0 $560,000 Not Awarded $100,000 $0 $200,000 Not Awarded $400,000 $0 $2,000,000 Not Awarded $400,000 $0 $2,000,000 Not Awarded $400,000 $0 $700,000 Not Awarded 0 California Lighting Technology Center- UC Davis Capitol Rotunda Efficient LED Lighting $250,000 $0 $350,000 Not Awarded 0 Green Design Systems Straw Building Panel Project $96,500 $0 $483,000 Not Awarded 0 Ecological Building Network Research and Promote Straw- Based Insulation Systems $400,000 $0 $800,000 Not Awarded Total Funds Recommended $6,114,797 $2,258,297 $23,776,188

83 FOA : Training Program Development for Commercial Buildings Equipment Technicians, Building Operators Rank Prime Applicant Title PIER Funds PIER Funds DOE Funding Requested Recommended Requested Score Status Integrated Training & Resource 1 Pacific Gas & Electric Packages for Small and Medium Commercial Building Audits $120,000 $120,000 $380,000 Awarded 2 Laney College 3 0 Portland Energy Conservation, Inc. Institute for Sustainable Building Performance (SuPerB) Green Re-modeling of Community College Curriculum for Commercial Building Operators Curriculum for Developing Energy Efficient Buildings For Equipment Technicians: PBCS Scenarios for Low Energy Buildings $120,000 $120,000 $380,000 Awarded $120,026 $120,026 $1,455,063 Awarded $120,000 $0 $625,000 Not Awarded 0 Institute for Sustainable For Building Operators: PBCS Building Performance (SuPerB) Scenarios for Low Energy Buildings $120,000 $0 $563,000 Not Awarded 0 Institute for Sustainable Building Performance (SuPerB) For Commissioning Agents/Auditors: PBCS Scenarios for Low Energy Buildings $120,000 $0 $592,000 Not Awarded 0 Sacramento City College Program for Commercial Building Energy Commissioning Agents/Auditors $120,000 $0 $600,000 Not Awarded Total Funds Recommended $840,026 $360,026 $4,595,063 *Applicants who did not receive ARRA funding from the federal government, did not meet the requirements of an eligible project or did not receive a passing score are shown as "not awarded". **All Pier awards identified in this NOPA are contingent on applicant receiving ARRA funds from DOE and approval of the proposed agreement at an Energy Commission Business Meeting. Actual award amounts depend on actual DOE funding amounts (Energy Commission contribution restricted to limits set in PON as specified by FOA#) Dated: December 30, 2009 Expires: January 6, 2010

84 Appendix D

85 Budget Justification for SF-424 R&R Budget Award Number: Award Recipient: Instructions and Summary Date of Submission: Form submitted by: Please read the instructions on each page before starting. If you have any questions, please ask your DOE contact. It will save you time! (May be award On this form, provide detailed support for the estimated project costs identified on the SF-424 R&R form (Budget). X The dollar amounts on this page must match the amounts on the associated SF-424 R&R. The award recipient and each sub-recipient with estimated costs of $100,000 or more must complete this form and a SF-424 R&R form. The total budget presented on this form and on the SF424 R&R must include both Federal (DOE), and Non-Federal (cost share) portions, thereby reflecting TOTAL PROJECT COSTS proposed. For costs in each Object Class Category on the SF-424 R&R, complete the corresponding worksheet on this form (tab at the bottom of the page). All costs incurred by the preparer's sub-recipients, vendors, contractors, consultants and Federal Research and Development Centers (FFRDCs), should be entered only in section f. Contractual. All other sections are for the costs of the preparer only. SUMMARY OF BUDGET CATEGORY COSTS PROPOSED (Note: The values in this summary table are from entries made in each budget category sheet.) CATEGORY Budget Period 1 Costs Budget Period 2 Costs Budget Period 3 Costs Budget Period 4 Costs Budget Period 5 Costs Total Costs Project Costs % Comments (Add comments as needed) a. Personnel $2,286,750 $751,965 $671,703 $649,597 $389,893 $4,749, % Budget Justification Not Required by SF424(R&R) b. Fringe Benefits $0 $0 $0 $0 $0 $0 0.0% Budget Justification Not Required by SF424(R&R) c. Travel $6,250 $16,250 $18,750 $13,410 $0 $54, % d. Equipment $1,418,843 $242,300 $0 $10,000 $0 $1,671, % e. Supplies $138,231 $1,129,200 $0 $20,500 $285,962 $1,573, % f. Contractual Sub-recipient $15,303,330 $13,293,505 $672,582 $672,582 $0 $29,941, % In-kind contribution $2,689,214 $2,336,032 $118,191 $118,191 $0 $5,261, % Vendor $1,755,453 $665,000 $365,000 $457,891 $365,000 $3,608, % Total Contractual $19,747,997 $16,294,537 $1,155,773 $1,248,664 $365,000 $38,811, % g. Construction $0 $0 $0 $0 $0 $0 0.0% Budget Justification Not Required by SF424(R&R) h. Other Direct Costs $0 $0 $0 $0 $0 $0 0.0% i. Indirect Charges $3,348,049 $2,615,416 $261,939 $275,552 $147,675 $6,648, % Total Project Costs $26,946,120 $21,049,669 $2,108,165 $2,217,723 $1,188,530 $53,510, % Additional Explanations/Comments (as necessary)

86

87 Budget Justification for SF-424 R&R Budget PLEASE READ!!! a. Personnel 0 List costs solely for employees of the entity completing this form (award recipient or sub-recipient). All other personnel costs (of subrecipients or other contractual efforts of the entity preparing this) must be included under f., Contractual. This includes all consultants and FFRDCs. Identify positions to be supported. Key personnel should be identified by title. All other personnel should be identified either by title or a group category. State the amounts of time (e.g., hours or % of time) to be expended, the composite base pay rate, total direct personnel compensation and identify the rate basis (e.g., actual salary, labor distribution report, technical estimate, state civil service rates, etc.). Add rows as needed. Formulas/calculations will need to be entered by the preparer of this form. Please enter formulas as shown in the example. Task # and Title Position Title Time (Hours) Budget Period 1 Budget Period 2 Budget Period 3 Pay Rate ($/Hr) Total Budget Period 1 Time (Hours) Pay Rate ($/Hr) Total Budget Period 2 Time (Hours) Pay Rate ($/Hr) 1. Project Definition Project Manager 2 - Program (MPP2) 246 $59.57 $14, $14,639 Actual Project Analyst 3 - Program (APP3) 347 $41.83 $14, $14,500 Actual Project Analyst 2 - Program (APP2) 347 $32.02 $11, $11,100 Actual Total Budget Period 3 Time (Hours) Budget Period 4 Pay Rate ($/Hr) Total Budget Period 3 Time (Hours) Budget Period 5 Pay Rate ($/Hr) Total Budget Period 3 Project Total Hours Project Total Dollars Rate Basis 2. Design, Construction, and Baselining Project Manager 2 - Program (MPP2) 1,506 $61.85 $93, $63.13 $110, $64.87 $28, $232,180 Actual Project Analyst 3 - Program (APP3) 1,405 $43.54 $61, $44.33 $77, $45.55 $19, $158,811 Actual Project Analyst 2 - Program (APP2) 1,405 $33.33 $46, $32.02 $59, $32.02 $15, $121,572 Actual Project Analyst 2 (APP2) 920 $33.07 $30, $33.93 $8, $34.86 $9, $48,310 Actual Engineer 2 (ENG2) 5040 $44.39 $223, $44.39 $18, $44.39 $35, $277,500 Actual Engineer 3 (ENG3) $52.88 $544, $52.88 $136, $680,655 Actual Engineer 4 (ENG4) 980 $62.41 $61, $61,166 Actual Contracts Manager 2 (MPC2) 360 $ $17, $17,744 Actual Project Manager 1 (MPP1) $ $49.75 $15, $ $124, $140,063 Actual Project Manager 2 (MPP2) $61.52 $17, $17,226 Actual Technical Research Specialist 3 (TSR3) 640 $ $33, $33,717 Actual Technical Project Specialist 3 (TSP3) 320 $48.56 $15, $49.82 $19, $51.20 $14, $ $68, $118,295 Actual 3. Operations, Measurement, and Testing Project Manager 2 - Program (MPP2) 1314 $64.87 $85, $ $116, $68.65 $90, $292,404 Actual Project Analyst 3 - Program (APP3) 1314 $45.55 $59, $ $82, $48.21 $63, $205,320 Actual Project Analyst 2 - Program (APP2) 1314 $34.87 $45, $ $62, $36.90 $48, $157,176 Actual Application Developer 3 (ADV3) $47.22 $82, $82,739 Actual Project Analyst 2 (APP2) 280 $34.86 $9, $9,763 Actual Systems Application Analyst 2 (ASY2) $40.66 $40, $41.72 $41, $82,391 Actual Engineer 2 (ENG2) 4940 $44.39 $219, $219,272 Actual Engineer 3 (ENG3) 3609 $52.88 $190, $55.75 $60, $251,044 Actual Engineer 4 (ENG4) 292 $62.41 $18, $64.04 $112, $65.80 $115, $245,747 Actual Information Technologist 5 (ITS5) $60.92 $60, $62.51 $62, $123,436 Actual Manager 1 (MGR1) 1132 $53.92 $61, $61,037 Actual Manager 2 (MGR2) 797 $63.90 $50, $50,928 Actual Project Manager 2 (MPP2) $61.52 $61, $63.12 $63, $124,643 Actual IBEW Union 3221 $39.75 $128, $128,044 Actual Technical Project Specialist 1 (TSP1) 1780 $31.28 $55, $32.10 $57, $ $30, $143,350 Actual Technical Project Specialist 3 (TSP3) $48.56 $166, $49.82 $104, $51.20 $36, $308,341 Actual Technical Project Specialist 4 (TSP4) 280 $56.85 $15, $ $113, $128,943 Actual 4. Decommissioning Project Manager 2 - Program (MPP2) 438 $64.87 $30, $30,069 Actual Project Analyst 3 - Program (APP3) 438 $45.55 $21, $21,114 Actual Project Analyst 2 - Program (APP2) 438 $34.87 $16, $16,163 Actual Engineer 2 (ENG2) 1080 $49.53 $53, $53,489 Actual Technical Project Specialist 1 (TSP1) 320 $34.90 $11, $11,168 Actual Technical Project Specialist 3 (TSP3) 620 $54.18 $33, $33,592 Actual Technical Project Specialist 4 (TSP4) 360 $61.83 $22, $22,257 Actual Total Personnel Costs $2,286, $751, $671, $649, $389, $4,749,909 Additional Explanations/Comments (as necessary) Assumptions: - Direct Labor is estimated by using SCE 2009 Base Salary market reference points from Human Resources. Labor is identified for Job Family and Level or IBEW union code. Excludes Fringe benefit costs. - 1 FTE = 1752 hours per year (based on excluding labor paid absenses - avg SCE uses 18.7% of 2,080 annual work hours of paid leave). - Annual Labor Escalation Rate for Salaried Employees (2010: 3.27%; 2011: 2.61%; 2012: 2.76%; 2013: 2.90%) - Excluded labor costs from the budget for all SCE Senior/Key Persons. SCE is not requesting matching federal funds for these employees. It is estimated that each Senior/Key Person will devote 15% of time to the leadership of the project. a. Personnel Page 3 of 16

88 Budget Justification for SF-424 R&R Budget b. Fringe Benefits 0 Rate applied: Total fringe requested: Budget Period 1 Budget Period 2 Budget Period 3 Budget Period 4 Budget Period 5 Total 0.0% 0.0% 0.0% 0.0% 0.0% $0 $0 $0 $0 $0 $0 A federally approved fringe benefit rate agreement, or a proposed rate supported and agreed upon by DOE for estimating purposes is required if reimbursement for fringe benefits is requested. Please check (X) one of the options below and provide the requested information. Calculate the fringe rate and enter the total amount in Section B, line 6.b. ( Fringe Benefits ) of form SF-424A. A fringe benefit rate has been negotiated with, or approved by, a federal government agency. A copy of the latest rate agreement is included with this application, and will be provided electronically to the Contracting Officer for this project. *In the area designated below, identify the full calculations used to derive the total fringe costs. See further information below. There is not a current, federally approved rate agreement negotiated and available. When this option is checked, the entity preparing this form shall submit a rate proposal in the format provided at the following website, or a format that provides the same level of information and which will support the rates being proposed for use in performance of the proposed project. Go to and select PMC Sample Rate Proposal. * In the area designated below, identify the full calculations used to derive the total fringe costs. See further information below. Additional explanation/comments (as necessary) INCLUDED IN INDIRECT COST RATE. SEE INDIRECT RATE PROPOSAL b. Fringe Benefits

89 Budget Justification for SF-424 R&R Budget PLEASE READ!!! c. Travel 0 Provide travel detail as requested below, identifying total Foreign and Domestic Travel as separate items. Purpose of travel are items such as professional conference, DOE sponsored meeting, project management meeting, etc. The Basis for Estimating Costs are items such as past trips, current quotations, Federal Travel Regulations, etc. All listed travel must be necessary for performance of the Statement of Projecct Objectives. Add rows as needed. If rows are added, formulas/calculations may need to be adjusted by the preparer. Purpose of travel No. of Travelers Depart From (not required for domestic travel) Destination (not required for domestic travel) No. of Days Cost per Traveler Cost per Trip Basis for Estimating Costs Budget Period 1 Domestic Travel Design Engineering - Develop Battery & INVerter System Performance 1 1 $5,000 $5,000 internet pricing estimates Pre-Construction - Coordinate with SC&M (Review Plans) 1 $1,250 $1,250 internet pricing estimates $0 Domestic Travel subtotal $6,250 International Travel $0 International Travel subtotal $0 Budget Period 1 Total $6,250 Budget Period 2 Domestic Travel Pre-Construction - Coordinate with SC&M (Review Plans) 1 $1,250 $1,250 internet pricing estimates Project Manager visit to Construction Site 1 2 $15,000 $15,000 (180Mi X $0.55per mile) + $200 hotel once per week for one year $0 $0 Domestic Travel subtotal $16,250 International Travel $0 International Travel subtotal $0 Budget Period 2 Total $16,250 Budget Period 3 Domestic Travel Acceptance Testing in Collaboration with Grid Ops & SC&M 1 $6,250 $6,250 internet pricing estimates Supervise Battery & Inverter installation 1 $12,500 $12,500 internet pricing estimates $0 Domestic Travel subtotal $18,750 International Travel $0 International Travel subtotal $0 Budget Period 3 Total $18,750 c. Travel Page 5 of 16

90 Purpose of travel No. of Travelers Depart From (not required for domestic travel) Destination (not required for domestic travel) No. of Days Cost per Traveler Cost per Trip Basis for Estimating Costs Budget Period 4 Domestic Travel $0 Conduct Training Needs Analysis 1 $1,350 $1,350 internet pricing estimates Conduct Training Needs Analysis (SCE SME) 1 $900 $900 internet pricing estimates Design Training (SCE SME) 1 $1,350 $1,350 internet pricing estimates Design Training (MPP1 Review) 1 $450 $450 internet pricing estimates Develop program manuals (SCE SME) 1 $1,350 $1,350 internet pricing estimates Develop program manuals (MPP1 Review) 1 $450 $450 internet pricing estimates Work with Line Management regarding new business processes, 1 $900 $900 internet pricing estimates Work with Line Management regarding new business processes, 1 $900 $900 internet pricing estimates Training Delivery/Deployment (SCE Trainers) 1 $900 $900 internet pricing estimates Training Delivery/Deployment (SCE Trainers) 1 $900 $900 internet pricing estimates Evaluation of training (SCE Eval SME) 1 $900 $900 internet pricing estimates Evaluation of training (MPP1 input and review) 1 $450 $450 internet pricing estimates Video documentation for initial, ongoing, and future training needs (video 1 $900 $900 internet pricing estimates Video documentation for initial, ongoing, and future training needs 1 $450 $450 internet pricing estimates Rewrite/edit/update program manuals 1 $180 $180 internet pricing estimates Rewrite/edit/update program manuals (SCE SME) 1 $180 $180 internet pricing estimates Rewrite/edit/update program manuals (MPP1 Review) 1 $900 $900 internet pricing estimates $0 Domestic Travel subtotal $13,410 International Travel $0 International Travel subtotal $0 Budget Period 4 Total $13,410 Budget Period 5 Domestic Travel $0 $0 Domestic Travel subtotal $0 International Travel $0 International Travel subtotal $0 Budget Period 5 Total $0 PROJECT TOTAL $54,660 Additional Explanations/Comments (as necessary) c. Travel Page 6 of 16

91 Budget Justification for SF-424 R&R Budget PLEASE READ!!! d. Equipment 0 Equipment is generally defined as an item with an acquisition cost greater than $5,000 and a useful life expectancy of more than one year. Further definitions can be found at 10 CFR 600 found on the PMC Recipient Resources Forms page at List all proposed equipment below, providing a basis of cost such as vendor quotes, catalog prices, prior invoices, etc., and briefly justifying its need as it applies to the Statement of Project Objectives. If it is existing equipment, and the value of its contribution to the project budget is being shown as cost share, provide logical support for the estimated value shown. If it is new equipment which will retain a useful life upon completion of the project, provide logical support for the estimated value shown. For equipment over $50,000 in price, also include a copy of the associated vendor quote or catalog price list. Add rows as needed. If rows are added, formulas/calculations may need to be adjusted by the preparer. Equipment Item Qty Unit Cost Total Cost Basis of Cost Justification of need Budget Period 1 Bench Test Equipment 1 $60,000 $60,000 Engineering Estimate Used in lab bench testing to perform battery test and assess results Building Construction Materials 1 $391,109 $391,109 Engineering Estimate To construct facility to house the energy storage system Supervisory Control Unit 1 $9,304 $9,304 Engineering Estimate Needed for remote system operation Small Transformers 2 $63,828 $127,656 Engineering Estimate Needed to step the voltage up from the inverter (480V) to the 12kV bus Large Transformer 1 $450,000 $450,000 Engineering Estimate Needed to step the voltage up from 12kV to the 66kV subtransmission system Conductor (Bus) 1 $9,608 $9,608 Engineering Estimate Needed to make connections between different system components Relays 2 $8,409 $16,818 Engineering Estimate Needed for system protection Circuit Breaker 2 $9,049 $18,098 Engineering Estimate Needed for system protection Short Capacitor Banks 2 $65,000 $130,000 Engineering Estimate Needed for system voltage control and VAR support Real Time Unit 1 $35,000 $35,000 Engineering Estimate Real-time unit to tie battery to SCADA for control Communications Gateway 1 $60,000 $60,000 Engineering Estimate Engineering Equipment to translate IEC 6185 for smart inverter to modbus over ethernet in substation and to DNP3 for SCADA communications Phasor Measurement Unit 1 $38,950 $38,950 Engineering Estimate PDC (6 PMU'S) Gateway 1 $12,300 $12,300 Engineering Estimate SMP/16 CP (gateway) - Phasor gateware for data collection of phasor data Power Quality Metering Equipment 1 $60,000 $60,000 Engineering Estimate Data Gathering (harmonics, current, voltages) $0 Budget Period 1 Total $1,418,843 Budget Period 2 Digital Fault Recorder 1 $35,000 $35,000 Engineering Estimate Needed for analysis of system transients Communications Gateway 1 $60,000 $60,000 Engineering Estimate Engineering Equipment to translate IEC 6185 for smart inverter to modbus over ethernet in substation and to DNP3 for SCADA communications Network 1 $120,000 $120,000 Engineering Estimate Circuit from Monolith to Moorpark (Network) Gateway 1 $12,300 $12,300 Engineering Estimate SMP/16 CP (gateway) - Phasor gateware for data collection of phasor data Server 1 $15,000 $15,000 Engineering Estimate Security Server < 100 IED's: Needed to host cyber security services and device integration $0 Budget Period 2 Total $242,300 d. Equipment Page 7 of 16

92 Equipment Item Qty Unit Cost Total Cost Basis of Cost Justification of need Budget Period 3 $0 Budget Period 3 Total $0 Budget Period 4 Program Manuals 1 $10,000 $10,000 Engineering Estimate Develop Program Manuals (training, O&M, technical) and equipment training $0 $0 Budget Period 4 Total $10,000 Budget Period 5 $0 $0 Budget Period 5 Total $0 PROJECT TOTAL $1,671,143 Additional Explanations/Comments (as necessary) d. Equipment Page 8 of 16

93 Budget Justification for SF-424 R&R Budget PLEASE READ!!! e. Supplies 0 Supplies are generally defined as an item with an acquisition cost of $5,000 or less and a useful life expectancy of less than one year. Supplies are generally consumed during the project performance. Further definitions can be found at 10 CFR 600 found on the PMC Recipient Resources Forms page at List all proposed supplies below, providing a bases of cost such as vendor quotes, catalog prices, prior invoices, etc., and briefly justifying the need for the Supplies as they apply to the Statement of Project Objectives. Note that Supply items must be direct costs to the project at this budget category, and not duplicative of supply costs included in the indirect pool that is the basis of the indirect rate applied for this project. Add rows as needed. If rows are added, formulas/calculations may need to be adjusted by the preparer. General Category of Supplies Qty Unit Cost Total Cost Basis of Cost Justification of need Budget Period 1 Control & Monitoring device 1 $1, $1,591 Catalog price Data Gathering Foundations 1 $14, $14,777 Catalog price Used to construct facility to house energy storage system Potenial Transformer 1 $3, $3,012 Catalog price Used to step up voltage Current Transformer (QTY:7) 1 $2, $2,603 Catalog price Used to step up voltage Disconnects (QTY:21) 1 $8, $8,946 Catalog price Substation Equipment Grounding (2850 sqft) 1 $45, $45,230 Catalog price Substation Equipment Trenches (18 ft) 1 $ $799 Engineering estimate Substation Equipment Riser 1 $59.00 $59 Catalog price Substation Equipment Steel 1 $7, $7,409 Catalog price Substation Equipment Fuse 1 $1, $1,182 Catalog price Substation Equipment Control cable (10090 sqft) 1 $17, $17,842 Catalog price Substation Equipment Fence (185 sqft) 1 $1, $1,667 Catalog price Security Conduit (1280 sqft) 1 $13, $13,114 Catalog price Electricity Bench Test Materials & Supply 1 $20, $20,000 Engineering estimate Project must maintain testing facilities to record performance. $0 Budget Period 1 Total $138,231 Budget Period 2 edna enhancement (software) 1 $50,000 $50, Catalog price Cyber Security Databridge for external access to M&V data 1 $50,000 $50, Catalog price Measurement and Valuation Key Management 7 CA 1 $500,000 $500, Engineering estimate Cyber Security Device Security 1 $100,000 $100, Catalog price Cyber Security Intrusion detection 1 $125,000 $125, Engineering estimate Cyber Security Security installation and maintenance 1 $150,000 $150, Engineering estimate Cyber Security Network Attached Storage (66 GB in test 1 $150,000 $150, Catalog price Data Storage environment) SMP/16 CP (gateway) 1 $2,100 $2, Catalog price Phasor gateware for data collection of phasor data Code Synch Workbench 1 $2,100 $2, Catalog price Cyber Security $0.000 Budget Period 2 Total $1,129,200 e. Supplies Page 9 of 16

94 General Category of Supplies Qty Unit Cost Total Cost Basis of Cost Justification of need Budget Period 3 $0 $0 Budget Period 3 Total $0 Budget Period 4 $0 Operations / Policy Manual 1 $4, $4,000 Engineering estimate Training Purposes Training Video Vignettes 1 $4, $4,500 External Engagement Training Purposes Communication/Policy Video Vignettes 1 $4, $4,500 External Engagement Training Purposes Customized Equipment Training Manuals 1 $4, $4,500 External Engagement Training Purposes Other Training Support 1 $3, $3,000 External Engagement Training Purposes $0 Budget Period 4 Total $20,500 Budget Period 5 Reassign / Demo Building 1 $285, $285,962 Engineering Estimate End of project deconstruction or re-assignment of location $0 Budget Period 5 Total $285,962 PROJECT TOTAL $1,573,893 Additional Explanations/Comments (as necessary) e. Supplies Page 10 of 16

95 Budget Justification for SF-424 R&R Budget PLEASE READ!!! f. Contractual 0 The entity completing this form must provide all costs related to sub-recipients, vendors, contractors, consultants and FFRDC partners in the applicable boxes below. Sub-recipients (partners, sub-awardees): For each sub-recipient with total project costs of $100,000 or more, a separate SF-424A budget and PMC123.1 budget justification form must be submitted. These sub-recipient forms may be completed by either the sub-recipients themselves or by the preparer of this form. The budget totals on the sub-recipient's forms must match the sub-recipeint entries below. The preparer of this form need only provide further support of the completed sub-recipient budget forms as they deem necessary. The support to justify the budgets of sub-recipients with estimated costs less than $100,000 may be in any format, and at a minimum should provide what Statement of Project Objectives task(s) are being performed, the purpose/need for the effort and a basis of the estimated costs that is considered sufficient for DOE evaluation. Vendors (includes contractors and consultants): List all vendors, contractors and consultants supplying commercial supplies or services used to support the project. The support to justify vendor costs (in any amount) should provide the purpose for the products or services and a basis of the estimated costs that is considered sufficient for DOE evaluation. Federal Research and Development Centers (FFRDCs): For FFRDC partners, award recipient will provide a Field Work Proposal (if not already provided with the original application), along with the FFRDC labor mix and hours, by category and FFRDC major purchases greater than $25,000, including Quantity, Unit Cost, Basis of Cost, and Justification. The award recipient may allow the FFRDC to provide this information directly to DOE. Add rows as needed. If rows are added, formulas/calculations may need to be adjusted by the preparer. Sub-Recipient Name/Organization Purpose/Tasks in SOPO Budget Period 1 Costs Budget Period 2 Costs Budget Period 3 Costs Budget Period 4 Costs Budget Period 5 Costs Project Total A123 Systems Battery & Inverter $15,303,330 $13,293,505 $672,582 $672,582 $0 $29,941,999 Separate budget forms required for this sub- $0 Sub-total $15,303,330 $13,293,505 $672,582 $672,582 $0 $29,941,999 Vendor Name/Organization Product or Service, Purpose/Need and Basis of Cost (Provide additional support at bottom of page as needed) Budget Period 1 Costs Budget Period 2 Costs Budget Period 3 Costs Budget Period 4 Costs Budget Period 5 Costs Project Total Cal Poly Pomona Advisory $265,000 $265,000 $265,000 $265,000 $265,000 $1,325,000 TBD Final Substation Engineering & Design $0 $300,000 $0 $0 $0 $300,000 TBD Building Construction $1,390,453 $0 $0 $0 $0 $1,390,453 TBD Rewrite/edit/update program manuals (training, O&M, technical) (ID $0 $0 $0 $1,500 $0 $1,500 Contractor) TBD Conduct Training Needs Analysis (ID Contractor) $0 $0 $0 $16,500 $0 $16,500 TBD Design Training (ID Contractor) $0 $0 $0 $16,500 $0 $16,500 TBD Develop Program Manuals (training, O&M, technical) and equipment $0 $0 $0 $16,500 $0 $16,500 training (ID Contractor) Rewrite/edit/update program manuals (training, O&M, technical) (ID $0 $0 $0 $2,200 $0 $2,200 Contractor) TBD Conduct training needs analysis (ID contractor) $0 $0 $0 $11,233 $0 $11,233 TBD Design Training (ID contractor) $0 $0 $0 $11,233 $0 $11,233 TBD Develop program manuals (training, operations & maintenance, $0 $0 $0 $11,233 $0 $11,233 technical) and equipment training (ID contractor) TBD Rewrite/edit/update program manuals (training, operations and $0 $0 $0 $1,492 $0 $1,492 maintenance, technical) (ID contractor) Quanta Technology Advisory $100,000 $100,000 $100,000 $100,000 $100,000 $500,000 T BD Documenting and sharing of best practices with other utilities $0 $0 $0 $4,500 $0 $4,500 $0 $1,755,453 $665,000 $365,000 $457,891 $365,000 $3,608,344 In-Kind Name/Organization Purpose Budget Period 1 Costs Budget Period 2 Costs Budget Period 3 Costs Budget Period 3 Costs Budget Period 3 Costs Project Total A123 Systems Indirect Costs to be reimbursed by Vendor (In-Kind Charges) $2,689,214 $2,336,032 $118,191 $118,191 $0 $5,261,628 $0 $0 $2,689,214 $2,336,032 $118,191 $118,191 $0 $5,261,628 Total Contractual $19,747,997 $16,294,537 $1,155,773 $1,248,664 $365,000 $38,811,971 AdditionalExplanations/Comments (as necessary) f. Contractual Page 11 of 16

96 Budget Justification for SF-424 R&R Budget 0 PLEASE READ!!! Overall description of construction actiivities: N/A g. Construction General Description Cost Basis of Cost Justification of need Budget Period 1 Budget Period 1 Total $0 Budget Period 2 Budget Period 2 Total $0 Budget Period 3 Budget Period 3 Total $0 Budget Period 4 Budget Period 4 Total $0 Budget Period 5 Additional Explanations/Comments (as necessary) Budget Period 5 Total $0 PROJECT TOTAL $0 g. Construction Page 12 of 16

97 Budget Justification for SF-424 R&R Budget PLEASE READ!!! h. Other Direct Costs 0 Other direct costs are direct cost items required for the project which do not fit clearly into other categories, and are not included in the indirect pool for which the indirect rate is being applied to this project. Examples are meeting costs, postage, couriers or express mail, telephone/fax costs, printing costs, etc. Basis of cost are items such as vendor quotes, prior purchases of similar or like items, published price list, etc. Add rows as needed. If rows are added, formulas/calculations may need to be adjusted by the preparer. General description Cost Basis of Cost Justification of need Budget Period 1 Budget Period 1 Total $0 Budget Period 2 Budget Period 2 Total $0 Budget Period 3 Budget Period 3 Total $0 Budget Period 4 Budget Period 4 Total $0 Budget Period 5 Budget Period 5 Total $0 PROJECT TOTAL $0 Additional Explanations/Comments (as necessary) h. Other Direct Costs Page 13 of 16

98 Budget Justification for SF-424 R&R Budget 0 Rate applied: Total indirect costs requested: i. Indirect Costs Budget Period 1 Budget Period 2 Budget Period 3 Budget Period 4 Budget Period % 14.19% 14.19% 14.19% 14.19% $3,348,049 $2,615,416 $261,939 $275,552 $147,675 Total $6,648,631 A federally approved indirect rate agreement, or rate proposed supported and agreed upon by DOE for estimating purposes is required if reimbursement of fringe benfits is requested. Please check (X) one of the options below and provide the requested information if it has not already been provided as requested, or has changed. Calculate the indirect rate dollars and enter the total in the Section B., line 6.j. (Indirect Charges) of form SF 424A. There is a federally approved indirect rate agreement. A copy is provided with this application and will be provided electronically to the Contracting Officer for this project. *In the area designated below, identify the full calculations used to derive the total indirect costs. See further information below. X There is no current, federally-approved indirect rate agreement. When this option is checked, the entity preparing this form shall submit an indirect cost rate proposal in the format provided at the following website, or in a format that provides the same level of information and which supports the rate(s) being proposed for use in estimating the project. Go to and select PMC Sample Rate Proposal. *In the area designated below, identify the full calculations used to derive the total indirect costs. See further information below. Additional Explanations/Comments (as necessary) SEE INDIRECT RATE PROPOSAL ATTACHMENT. i. Indirect Costs

99 SOUTHERN CALIFORNIA EDISON - INDIRECT RATE PROPOSAL FOR DISCUSSION ONLY 8/18/09 Indirect Loading Group (BU) TDBU - Transmission & Distribution IT - Information Technology CSBU - Customer Service Business Unit Indirect Cost Type R (R*b) (R*a) Indirect Cost Rate (%) Indirect Cost Base Type Indirect Cost Base ($) Indirect Cost TOTAL ($) FEDERAL ($) NON-FEDERAL ($) Labor Loadings ALL Paid Absence 18.7% Direct Labor Cost $ 4,208,655 $ 787,018 $ 407,794 $ 379,225 TDBU Tool Expenses 11.8% Craft (IBEW) Labor $ 128,044 $ 15,109 $ 6,967 $ 8,142 Material Loaders TDBU Supply Expense 1.0% "A" Materials $ - $ - $ - $ - Chargebacks TDBU Material Management Services - T&D 21.5% Warehouse Issued Material $ 1,272,593 $ 273,607 $ 141,770 $ 131,838 TDBU Procurement Services - T&D 0.57% Purchase Order Charges $ 34,369,250 $ 200,265 $ 92,347 $ 107,918 IT Material Management Services - IT 9.1% Warehouse Issued Material $ - $ - $ - $ - IT Procurement Services- IT 0.75% Purchase Order Charges $ 388,550 $ 2,914 $ 60 $ 2,854 CSBU Material Management Services - CS 10.3% Warehouse Issued Material $ - $ - $ - $ - CSBU Procurement Services - CS 0.57% Purchase Order Charges $ - $ - $ - $ - Division Overheads (TDBU includes automotive allocation) IT Division Overhead - IT 30% Applied to IT Labor $ 413,211 $ 123,964 $ - $ 123,964 TDBU Business Unit Overall - T&D 3.2% Applied to Business Support Labor plus 36% of Contract $ 5,507,659 $ 176,246 $ - $ 176,246 TDBU Distribution & Transmission/Substation Overall Support - T&D 7.5% Applied to Construction Labor plus 36% of Distribution Contract TDBU Distribution Construction - T&D 16.0% Applied to Construction Labor plus 36% of Distribution Contract TDBU Distribution Line & Staff - T&D 56.5% Applied to Construction Labor plus 36% of Distribution Contract TDBU Transmission/Substation Construction - T&D 15.3% Applied to Construction Labor plus 36% of Transmission / Substation Contract TDBU Transmission/Substation Line & Staff - T&D 21.3% Applied to Construction Labor plus 36% of Transmission / Substation Contract Corporate Loadings $ 5,507,659 $ 413,076 $ - $ 413,076 $ - $ - $ - $ - $ - $ - $ 5,507,659 $ 842,673 $ - $ 842,673 $ 5,507,659 $ 1,173,133 $ 607,859 $ 565,274 ALL Administrative & General 2.5% All expenditures (excl in-kind) $ 41,599,948 $ 1,039,992 $ - $ 1,039,992 ALL Ad Volorem Tax 0.5% All capital expenditures $ - $ - $ - $ - ALL Injuries & Damages 1.0% All capital expenditures $ - $ - $ - $ - ALL AFUDC - Debt 2.4% Capital 50% $ - $ - $ - $ - ALL Pension & Benefits 21.0% Direct Labor Plus Paid Absences $ 5,676,000 $ 1,191,960 $ - $ 1,191,960 ALL Payroll Tax 7.2% Direct Labor Plus Paid Absences $ 5,676,000 $ 408,672 $ - $ 408,672 $ 6,648,631 $ 1,256,797 $ 5,391,834 Total Project Expenditures (incl In-kInd) $ 46,861,576 Indirect Cost Rate 14.19%

100 Budget Justification for SF-424 R&R Budget PLEASE READ!!! Cost Share 0 A detailed presentation of the cash or cash value of all cost share proposed for the project must be provided in the table below. Identify the source & amount of each item of cost share proposed by the award recipient and each sub-recipient or vendor. Letters of committment must be submitted for all third party cost share (other than award recipient). Note that cost-share" is not limited to cash investment. Other items that may be assigned value in a budget as incurred as part of the project budget and necessary to performance of the project, may be considered as cost share, such as: contribution of services or property; donated, purchased or existing equipment; buildings or land; donated, purchased or existing supplies; and/or unrecovered personnel, fringe benefits and indirect costs, etc. For each cost share contribution identified as other than cash, identify the item and describe how the value of the cost share contribution was calculated. Funds from other Federal sources MAY NOT be counted as cost share. This prohibition includes FFRDC sub-recipients. Non-Federal sources include private, state or local Government, or any source not originally derived from Federal funds. Documentation of cost sharing commitments must be provided, if not already provided with the original application and they have not changed since its submission. Fee or profit will not be paid to the award recipients or subrecipients of financial assistance awards. Additionally, foregone fee or profit by the applicant shall not be considered cost sharing under any resulting award. Reimbursement of actual costs will only include those costs that are allowable and allocable to the project as determined in accordance with the applicable cost principles prescribed in 10 CFR , 10 CFR or 10 CFR Also see 10 CFR relative to profit or fee. Add rows as needed. If rows are added, formulas/calculations may need to be adjusted by the preparer. Organization/Source Type (cash or other) Cost Share Item Budget Period 1 Cost Share Budget Period 2 Cost Share Budget Period 3 Cost Share Budget Period 4 Cost Share Budget Period 5 Cost Share Total Project Cost Share A123 Systems Other Project Partner A123 Systems will not charge indirect costs to the project. $2,689,214 $354,370 $118,191 $2,099,854 $0 $5,261,628 $0 $0 $0 $0 $0 $0 $0 $0 $0 Totals $2,689,214 $354,370 $118,191 $2,099,854 $0 $5,261,628 Total Project Cost: $53,510,207 Cost Share Percent of Award: 9.8% Additional Explanations/Comments (as necessary) Cost Share Page 16 of 16

101 Appendix E

102 Tehachapi Wind Energy Storage Project Project Management Plan Recovery Act Smart Grid Demonstrations Applicant: Southern California Edison Company 8/26/2009 Submitted To: U.S. Department of Energy National Energy Technology Laboratory In Response To: Funding Opportunity Number: DE-FOA CFDA Number: Electricity Delivery and Energy Reliability Research, Development and Analysis Applicant Information: Southern California Edison Company Advanced Technology Organization 2131 Walnut Grove Avenue Rosemead, CA Edward Kjaer, Director Tel: Fax: SCE Project Management Plan for DOE Energy Storage Project (DE-FOA ) i

103 Table of Contents 1. Project Summary/Abstract 1 2. Risk Management Program Risk Identification, Analysis, Prevention, and Mitigation Processes Risk Identification Risk Analysis Risk Prevention Risk Mitigation and Response Discussion of Specific Risks Project Personnel and Consumer Health, Safety, and Security Program Execution and Management Vendors, Sub-Recipients and Other Program Participants Energy Technology Development and Capability Network Interoperability and Security Intellectual Property Measurement and Analytical Validity Equipment and Property Security Accounting, Financial Management, and Funding Legal, Regulatory, and Reporting Compliance Crisis Management Risk Management Conclusion Organizational Breakdown Structure Project Oversight TSP Organizational Structure and Functional Teams and Leaders Leadership Team Project Participants Work Breakdown Structure Milestone Log Funding and Costing Profile Project Timeline Success Criteria at Decision Points Success Criteria for Decision Point #1 25 SCE Project Management Plan for DOE Energy Storage Project (DE-FOA ) ii

104 8.2 Success Criteria for Decision Point # Plans for Data Analysis Establishing Performance Baselines Cost and Benefit Analysis Deployment of equipment, instrumentation and processes Data collection, validation and analysis 32 List of Tables Table 1: Federal Funding Recipients for the TSP Table 2: Costing Profile for the TSP shows projected expenditures of government funds for the first budget period and yearly costs thereafter Table 3: Phase I Milestones Table 4: Phase II Milestones Table 5: SCE Tehachapi Wind Energy Storage Project Benefit Categories and Analytical Calculations/Approaches Table 6: SCE Tehachapi Wind Energy Storage Project: Data Collection Devices and Functionality Table 7: SCE Tehachapi Wind Energy Storage Project: Test Requirements and Metrics Table 8: Phase III Milestones List of Figures Figure 1. SCE Tehachapi Wind Energy Storage Project: Organizational Structure of Functional Team Leaders... 1 Figure 2. SCE Tehachapi Wind Energy Storage Project: Work Breakdown Structure Figure 3. SCE Tehachapi Wind Energy Storage Project: Milestone Log Figure 4. SCE Tehachapi Wind Energy Storage Project: WBS Project Management and Phase I... 1 Figure 5. SCE Tehachapi Wind Energy Storage Project: Operational Test Plan feeds data for analysis, resulting in quantification of benefits Figure 6 SCE Tehachapi Wind Energy Storage Project: Operational Test SCE Project Management Plan for DOE Energy Storage Project (DE-FOA ) iii

105 1. Project Summary/Abstract This proposal is submitted in response to the U.S. Department of Energy s (DOE) Funding Opportunity Announcement DE-FOA Southern California Edison (SCE) is applying for $25 million in match funding from the DOE program Area of Interest 2.1, Grid Scale Energy Storage Demonstrations: Battery Storage for Utility Load Shifting or for Wind Farm Diurnal Operations and Ramping Control. The proposed Tehachapi Wind Energy Storage Project (TSP) will be led by SCE. A123Systems and the California Independent System Operator (CAISO) will be project participants. SCE, a subsidiary of Edison International (EIX), is an investor owned utility operating in the State of California, covering over 50,000 square miles and serving over 13 million people with an energy portfolio that includes 12.6 billion kwh of renewable energy. SCE has over twenty years experience in large scale wind generation integration and in the development and testing of battery technologies for grid applications. As such, SCE brings to the project comprehensive experience in all relevant technological and operational areas. The objective of the project is to evaluate utility scale lithium-ion battery technology in improving grid performance and integrating wind generation. By executing the proposed project, SCE will evaluate a wider range of applications for lithium-ion batteries that will spur broader demand for the technology, bringing production to a scale that will make this form of large energy storage more affordable. Costeffective energy storage will allow for a smarter grid, facilitate integration of intermittent renewable resources, and encourage job growth in the energy sector. In 2008, through a California Energy Commission (CEC) funded project, SCE, Quanta Technology and Oak Creek Energy began studying the potential benefits of using energy storage devices to address integration issues associated with intermittent renewable resources such as wind generation. Antelope- Bailey was one of three SCE sites chosen for the CEC study and it was selected due to the large number of wind farms installed there. The TSP team has selected the Antelope-Bailey 66kV system for this demonstration because using the same location will allow the team to leverage the results of the ongoing CEC study and maximize the benefits of this project. In fact, the CEC project team has already identified issues at Antelope-Bailey 66kV system that could be incorporated into the federal project. Antelope-Bailey is part of the Tehachapi Wind Resource Area (TWRA), where up to 4,500 MW of wind resources will come online by SCE s service area is home to the state s most productive sites for wind and solar generation including the TWRA. The effective cultivation of these resources enabled in part by energy storage will help SCE meet state Renewables Portfolio Standard (RPS) goals and establish replicable methods for broader national utilization. The TSP storage system will consist of an 8 MW 4 hour (32 MWh) lithium-ion battery and inverter that are cutting-edge in scale and application. To demonstrate the system s effectiveness in improving grid performance and wind integration, the team will test the battery under 13 specific operational uses derived from the Electric Power Research Institute s (EPRI) energy storage market research. These targeted uses are in line with the DOE s stated goals of refining utility load shifting, increasing dispatchability of wind generation, and enhancing ramp rate control to minimize fossil fuel-powered back-up generator operation. The project involves 24 months of data collection to establish baselines for system operation, followed by 24 months of study, data collection and analysis. The energy storage system applications will be evaluated under real-time and simulated operational scenarios. Project analysis will be managed by SCE in collaboration with CAISO, leading energy engineering firms and research institutions. A Technology Advisory Council involving peer utilities Pacific Gas & Electric, Sempra Energy, and Idaho Power, along with the Utility Wind Integration Group will oversee performance testing and evaluate results. The TSP team will release regular reports detailing project progress and findings on the effectiveness of lithium-ion storage systems in mitigating transmission, distribution and other grid challenges. SCE Project Management Plan for DOE Energy Storage Project (DE-FOA ) 1

106 2. Risk Management Introduction In a project of this scope and nature there exists a host of technical, human, management, cost, and process unknowns that could adversely affect the timely completion and achievement the Tehachapi Wind Energy Storage Project (TSP) objectives. There is also a small risk that project activities could result in injury to people, property or equipment if the technology does not perform as expected. SCE and the TSP team have taken a proactive approach to minimizing these risks. Preliminary risk assessments have been made as required by the DOE and using prior experience with projects of this scope, the team has thoroughly analyzed the DOE Energy Storage Demonstration Program goals to prepare a comprehensive work breakdown structure (WBS). As a result, SCE has identified the following areas of potential program risks: 1. Project Personnel and Consumer Health, Safety, and Security 2. Program Management 3. Program Execution 4. Vendors, Partners and Other Program Participants 5. Energy Technology Development and Capability 6. Network Interoperability and Security 7. Measurement and Analytical Validity 8. Intellectual Property 9. Equipment and Property Security 10. Accounting, Financial Management and Funding 11. Legal, Regulatory and Reporting Compliance 12. Crisis Management Should SCE be awarded the stimulus funding to proceed with this energy storage demonstration, the utility plans on establishing a highly efficient program management team to oversee all aspects of the project. Many of the program management team were responsible for the award-winning management approaches involved in the Edison SmartConnect advanced metering infrastructure program. This management team will consist of experienced personnel whose primary responsibilities will be to ensure effective risk identification, analysis, prevention, and mitigation. SCE Project Management Plan for DOE Energy Storage Project (DE-FOA ) 2

107 2.1 Program Risk Identification, Analysis, Prevention, and Mitigation Processes The basic risk management activities of the Tehachapi Wind Energy Storage Project will be performed by SCE s Program Management Organization (PMO). The processes employed are likely to vary somewhat during the various project stages since risks also vary during the program definition, design, construction, demonstration, and decommissioning stages. SCE also plans on working closely with the DOE contracting officer assigned to the project to refine its risk approach as part of the contract negotiation process to ensure: The TSP approach is in alignment with DOE s risk management expectations All reporting obligations required by DOE are satisfied Risk Identification Risk identification will reveal any specific issues that could delay or adversely affect the project s outcome, cause injury to people, property or the SCE system. The PMO will also determine the severity and likelihood of each risk. Key risk identification activities to be handled by the PMO include: Anticipating and documenting general program risk situations based on specific project tasks, sub-tasks, the work breakdown structure, and program objectives. Reviewing task/sub-task work plans and expected issues with experienced risk management personnel to learn from past challenges; identify prevention, mitigation, and response efforts that proved successful; and to secure recommendations regarding risk management for the TSP. Working with TSP program participants to refine the results of this preliminary review, identify any additional risks not previously considered, and document the likelihood and severity of any anticipated risk. Documenting processes for detecting risk conditions or situations not included in the initial identification of general program risks and conducting ongoing reviews of task and sub-task work plans Risk Analysis The TSP will define how any occurrence of risky issues will be analyzed, detected, responded to, resolved, and reported. These activities are expected to continue throughout the duration of the project and the project management team will have regular visits to the work site to be fully apprised of and take the appropriate actions necessary for resolving issues that have the potential for delaying or adversely affecting project outcomes, or causing harm to people, property or equipment. Key risk analysis activities to be handled by the PMO team include: Working with program participant technical and management experts, project management personnel (primarily those involved with financial, legal, and regulatory compliance), and the project s advisory council to refine and document the processes for handling early warning, firstresponse mitigation, resolution, and reporting procedures. SCE Project Management Plan for DOE Energy Storage Project (DE-FOA ) 3

108 Defining and coordinating implementation of a risk mitigation strategy should any risk be identified. Preparing alternative plans for deployment in the event of a technology, system failure or other event likely to have a significant impact on project schedules, costs or outcomes. Involving other project participants (including the appropriate partners and vendors) and delegating responsibility for specific risk prevention activities and response efforts should issues arise Risk Prevention Any risks presented in this Tehachapi Wind Energy Storage Project application, emerging from on-site discussions, or arising from general conditions that threaten to delay the project, cause injury or adverse impacts on the project results will be assessed and appropriate prevention measures documented. The project management team will then ensure that the principal investigator, other project team members, all vendor and sub-recipient participants, and internal SCE project participants are able to perform prevention, early warning, first-response mitigation, resolution, and reporting procedures. Communication and training methods will include: Initial project team briefings Dissemination to the appropriate state and federal government entities for publication and use in other relevant guideline documents Production of manuals and job aids Publication of information on the internal project management Web site Training the workforce Monthly calls to on-site risk managers to discuss project conditions and issues that could trigger risk situations, and to determine additional prevention or mitigation activities Monthly s to the entire program team providing general risk prevention information on activities specific to tasks and sub-tasks Risk Mitigation and Response On-site risk managers will be expected to identify early warning situations, handle first-response mitigation, and report the situation to the PMO in accordance with the TSP s risk prevention guidelines, manuals, job aids, and training. The PMO risk managers will then be responsible for: Notifying the appropriate technical, management, financial, legal, and other specialists and meeting with the on-site risk managers at their facilities to determine appropriate resolution steps. Facilitating the prompt and thorough resolution of the issue(s) to be addressed, and ensuring that prompt reporting and documentation occurs. Distributing issue resolution information and best practices to the larger project team via the program Web site and . SCE Project Management Plan for DOE Energy Storage Project (DE-FOA ) 4

109 Apply learning to the existing library of risk prevention, mitigation, and resolution plans and to subsequent risk analyses conducted throughout the course of the program. The sections that follow describe each of these risk areas in greater detail and present the various mitigating actions SCE is exploring as potential ways to prevent, identify, analyze, and manage risk situations. 2.2 Discussion of Specific Risks Project Personnel and Consumer Health, Safety, and Security Risks: SCE s primary concern is the health, safety and security of anyone involved either directly or indirectly in the TSP. Construction will be performed at an SCE substation and manufacturing activities will occur at the sub-recipient and vendor facilities in order to build the components necessary to the project. While this project does not involve inherently high-risk activities, best practices will assure that any interaction between an individual and a piece of equipment being built or installed as part of the TSP project will be considered an inherent safety risk. Prevention and Mitigation: SCE will enlist training and industrial/organizational development professionals from within the organization for the planning and development of personnel and communication task/job aids, training, and other support activities to address impacts to the safety of the workforce and/or customers. The PMO will publish internally and externally on its public Web site information on preventative measures to be taken in the unlikely event of a health or security issue Program Execution and Management Risks: Even with a project management team in place the complexity of the proposed TSP demonstration presents some inherent risks. The number of participants involved and the need to address the concerns of numerous other stakeholders (including regulators) further magnify the projects management risk. With a project of this scope there is an additional risk of unexpected changes to its goals or scope for example, a battery or inverter technology identified for use as part of the TSP, unexpectedly not being ready for deployment. The American Recovery and Reinvestment Act (ARRA) and Smart Grid Demonstration FOA identify a wide range of significant public policy objectives: stimulation of the economy, job creation and preservation, reduced emissions of greenhouse gasses, lower consumption of imported oil, reduced electric power system demand and cost, the capacity to integrate new energy technologies into the grid, technical system interoperability and security, and scalability of the energy storage solution. Because the TSP requires certain new technologies, the integration of independent systems, and the efforts of approximately five project participants and vendors working in concert, it can be difficult to gauge the extent of anticipated benefits and how, when and where such benefits will be realized. Additional program execution and management risks exist for the possibility that new or refined technologies cannot work as expected, full interoperability is not achieved, or program results fall below SCE Project Management Plan for DOE Energy Storage Project (DE-FOA ) 5

110 expectations. Other unpredictable and unintended consequences such as the demonstration having an adverse impact on SCE s electrical power grid, could require, depending on severity, either termination of Tehachapi Wind Energy Storage Demonstration Project or a modification of its scale or scope. Additional risks exist in the form of work completion dependencies and the potential impacts of external projects on the proposed Tehachapi Wind Energy Storage Project demonstration. Prevention and Mitigation: SCE expects that the aforementioned risks as well as others can be prevented or mitigated through a combination setting realistic expectations; clarifying the project mission, vision, and goals; thorough identification of roles and responsibilities; effective management of the integration points between program participants and vendors, tasks, and sub-tasks; maintaining activity transparency; and facilitating a continual flow of information between these key program participants: DOE CAISO and the TSP Project Oversight Committee A123Systems California State Polytechnic University, Pomona Quanta Technology Electric Power Research Institute (EPRI) National Institute of Standards Technology (NIST), Federal Inspectors General, and other federal agencies California Public Utilities Commission (CPUC), California Energy Commission (CEC) Vendors, Sub-Recipients and Other Program Participants Risks: Because the TSP energy storage system will be the first of its size and application manufactured and assembled by A123Systems and could present management and communication challenges, each participant and contributor must understand their specific roles and responsibilities as they pertain to the DOE s expectations regarding deliverables. In addition, most participants will be required to work as part of a larger team where their individual actions impact the critical-path assignments of others. In particular, integration points among co-participants may be the source of misunderstandings, disagreements, gaps, and/or overlaps in communication or assignments. Another potential risk is that the commitment or capabilities of a co-participant or significant contributor may change during the course of the project due to external forces, and this could impact the ability to satisfy technical deliverable requirements, schedules or budgets. Furthermore, there is always the risk of a merger or acquisition affecting the ability of a participant to meet specified requirements. Occurrences of this type could require replacing a participant or the addition of new participants. Prevention and Mitigation: SCE has selected its TSP participants with care, and the project will be supported by SCE s Project Management Organization (PMO) which has extensive experience managing complex projects including the type of substation and grid integration project scope included in this demonstration. Also, SCE s Advanced Technology group has experience demonstrating emerging technologies and related project data analysis. SCE Project Management Plan for DOE Energy Storage Project (DE-FOA ) 6

111 SCE has extensive experience in working with contractors and vendors to achieve business goals, meet stakeholder expectations and assure assignments are completed within deadline and cost requirements. In this case, as further discussed below, SCE plans to establish a project management team that will work with SCE communication specialists who will among other things distribute information to TSP project participants on project status, upcoming activities and deliverables, and learning and best practices emerging from completed tasks. This active communication process is highly effective in preventing misunderstandings. SCE and A123Systems will execute extensive battery system pretesting and analysis prior to delivery, and SCE will execute system benching testing prior to substation system installation. An external Project Oversight Committee will provide technical peer review input and an internal Technology Advisory Council group will establish accountability among TSP team senior management Energy Technology Development and Capability Risks: The development and integration of both new and existing technology as contemplated by the TSP presents a risk that design, development, integration, security, and/or testing and data acquisition activities may take longer than planned; be more difficult than expected; or damage the grid. These risks may be due to the insufficient availability of materials or devices, problems with new technologies, and/or a combination of new and existing systems not operating together as desired. Prevention and Mitigation: SCE has considerable experience with the individual elements/technologies of the TSP. For the most part, the equipment to be used has been field tested or is an emerging technology on the threshold of deployment. The inverter control system, cyber-security and execution plan are all applicable to other (non lithium-ion) energy storage systems already in use, and SCE s nationally recognized battery evaluation expertise and bench testing of these types of systems further helps mitigate the risk. Although there are risks associated with the manufacture of the selected equipment SCE has made every attempt possible to mitigate this risk by selecting a large, highly capable, and well-known battery manufacturer that has delivered first generation utility-scale battery systems to utilities and energy services firms internationally. SCE also plans to manage the risk of equipment failures through contractual terms, equipment testing, ongoing communication, and other quality assurance efforts Network Interoperability and Security Risks: It is possible that there will be network interoperability risks involved in the adaptation of existing communications, control and cyber-security systems for electric industry application. The TSP will likely involve the first commercial application of security requirements currently under development by NIST, DOE and National American Electric Reliability Corporation (NERC). As such, there is a small possibility of an interoperability or security failure, or perhaps more likely, technical requirements delaying commissioning of the system. Prevention and Mitigation: To address interoperability on the Tehachapi Wind Energy Storage Project, SCE will be actively involved in data exchange and transfer of knowledge to help establish the standards and protocols necessary for a fully integrated smart grid with all technologies, existing and new, working together as intended. The integration of SCE s existing Supervisory Control and Data Acquisition (SCADA) system and SCE Project Management Plan for DOE Energy Storage Project (DE-FOA ) 7

112 private high-speed fiber optic network will be connected to the Monolith substation to provide the end-toend interoperability and cyber-security required for this project. SCE has more than a decade of experience with one of the largest regional fiber-optic networks in operation and will apply this experience to minimize the degree of risk affecting its proposed TSP demonstration. SCE will use a robust risk-adaptive process from inception of the project through decommissioning to address, interoperability, performance, security and functionality. This process has been designed to identify risks at the earliest possible time in the system development lifecycle providing the ability to design mitigations methods that are sustainable, manageable and take the overall system design into account. The proposed TSP has been designed to provide a high degree of protection from predictable, random or intentional acts of cyber-security breaches, vandalism, and/or terrorism. While detailed interoperability and security risk identification, analysis and prevention planning will officially commence upon the TSP being selected as the funding recipient, the project team has included details for the specific program management criteria in the proposal s narrative, Section Adequacy and Completeness of Approach to Address Interoperability and Section Adequacy and Completeness of Approach for Cyber Security Concerns and Protections as required by the FOA Intellectual Property Risks: DOE requirements call for intellectual property (IP) developed as a result of the project to be shared with DOE. SCE has asked its other project participants to identify any concerns they have with this requirement. In response, A123Systems has identified IP rights in certain energy storage system technology that was developed by A123Systems prior to this project. SCE has not heard from other project participants on this matter. SCE expects there may also be concerns about system execution and control IP that is developed as a part of this project, to the extent the DOE requires ownership of this IP or restricts the use of this information for other purposes. Because of these concerns, it is possible that either SCE, A123Systems, or other program participants or vendors may not agree to the DOE award s IP requirements. Prevention and Mitigation: As noted above, A123Systems has provided SCE with a description of its energy storage system technology that was developed prior to this project. This information is included in the proposal (with appropriate legends regarding use and disclosure). If SCE s proposal is selected for funding by the DOE, SCE will seek to negotiate an appropriate agreement with the DOE regarding IP rights. In addition, SCE will continue to pursue information from other project participants on this subject and will supplement its proposal or otherwise provide this information to DOE when additional information is known. The DOE has indicated it will issue a class patent waiver after successful applicants are selected, and SCE plans to negotiate the language of this waiver with the DOE based on input from co-participants in this project. SCE will also seek to negotiate appropriate agreements with A123 Systems and other project participants and vendors that will include provisions regarding IP rights, consistent with the terms of the award and the class patent waiver to be granted by the DOE Measurement and Analytical Validity Risks: There exist any number of potential events that could affect the validity of data collection and SCE Project Management Plan for DOE Energy Storage Project (DE-FOA ) 8

113 analysis. These include misunderstandings regarding measurement and analytical needs, timing, and formats; programming errors; communication glitches or interruptions; technology or interoperability failures; and, of course, human error. Prevention and Mitigation: The first step in assuring that all required data and analytics are delivered to the DOE as expected is to create a shared understanding of the precise information, formats and timing of deliverables expected by the DOE. This will enable the project team to work with other project participants to ensure the DOE s data and analytic needs are met. Clearly understanding DOE data needs in the design, construction, and base-lining phases will help to reduce the risk of invalid or incomplete data generation since participants in the project will be able to devise alternative ways to assure design and testing activities produce the most complete and accurate data. During the operations, measurement and testing stage of the project, the TSP team is expected to generate test data suited for periodic validation and quality assurance purposes. SCE and members of the TSP Project Oversight Committee have collaborated with CAISO previously and will again use their extensive experience in the collection of wind load data and technical electric energy characteristics, both at the supply-end as well as at the consumption-end of the distribution circuit for the Tehachapi Wind Energy Storage Project. The team will determine the accuracy of all test data and cleanse any missing and/or erratic results prior to a thorough analysis using proven validation techniques and algorithms. Validation will take place as the data are collected in order to address any issues a timely manner. Wherever reasonable SCE expects to incorporate redundancies in data collection and make comparisons between the different data sources to validate results. Many of the data collection and analysis processes and techniques that SCE expects to use for the TSP are already fully operational in other applications and can therefore be fairly viewed as tried and tested. Where applicable, sampled data will be analyzed using generally accepted statistical techniques. Sample results will then be presented in context with the statistical probability for error determined by the number of observations and standard deviations actually observed. The team expects that much of the data it collects for use by this project will be from a phasor measurement unit (PMU) which it believes will be a great asset to the project. SCE is recognized as the leader in synchrophasor measurement system (SPMS) advances it has been working with this technology since PMU can provide real-time and simulated data to monitor the location of system constraints, acquire the necessary data for the energy storage control algorithm, and analyze data records to determine system voltage stability and power quality performance. The TSP will also have at its disposal, two of SCE s phasor measurement applications, Power System Outlook (PSO) and Synchronized Phasor Measurement and Analysis in Real-Time (SCE SMART ). The PSO software can monitor and analyze a wide array of network conditions such as system stress, dynamic power swings, modal oscillations and damping, and load responses to voltage and frequency variations. Off-line applications can provide post disturbance analysis, telling operators where the system operated well and where it performed poorly or failed. SCE SMART provides can real-time display and analysis of phasor information and is presently being used at SCE s Grid Control Center where the software monitors voltage, frequency, power imports, and path flows. Event power data are then compressed and stored for later viewing. SCE Project Management Plan for DOE Energy Storage Project (DE-FOA ) 9

114 2.2.8 Equipment and Property Security Risks: The TSP proposes installing equipment on SCE owned property and within the existing fence line. Permits must be executed, but risks in this area are commensurate with any other construction permit. There are risks for equipment damage or theft during development and deployment, but based on the team s experience, these risks appear to be minimal since most of the staging and construction work is on secure SCE property. Prevention and Mitigation: SCE has considerable experience in safely and securely deploying batteries and battery systems. The system will be monitored regularly to quickly detect any equipment failures and make the necessary repairs. It will also be monitored for safety and protection using video surveillance at the site, already installed by SCE. According to the PMO risk response protocol, the issue and its resolution will be documented, communicated, and applied to downstream program activities. The project management team, in conjunction with the PMO risk management office, expects to draw on SCE s existing best practices to better understand what will work best for the installation, commissioning, and operation of TSP equipment. SCE will execute extensive operational safety training, and has detailed those plans as a separate task within the work breakdown structure (WBS). SCE will require manufacturers to provide information on the proper and safe operation of the energy storage system, lithium-ion battery and inverter technologies being used for this demonstration. This information will be made available to employees and contractors at the time of installation. SCE has processes and procedures to train SCE and non-sce employees to ensure safety and security for people and infrastructure. SCE Project Management Plan for DOE Energy Storage Project (DE-FOA ) 10

115 2.2.9 Accounting, Financial Management, and Funding Risks: Both manual and electronic accounting systems can be subject to errors that impact the recording or reporting of costs and payments. SCE has implemented controls and processes to detect and correct these errors and would expect to use similar controls and processes as part of the TSP. SCE is mindful of the fact that additional paperwork and delays in the reimbursement process and payment flow-down to vendors and sub-recipients could be an issue. With respect to the project s financial management and funding SCE has established 15 project milestones it will recommend to the DOE for payment actions upon completion. As such, financial risk exists in the form of the ultimate cost incurred (by all parties); the valuation of in-kind cost share on equipment, facilities, and labor; and the cash flow needs of the businesses participating in the project. Consequently, the potential exists for costs to rise above sub-recipient investment plans or for cost sharing and reimbursement cycle times to be inadequate to meet business operational needs. There is also the risk that for a variety of possible reasons, the DOE chooses to end or reduce the scope of the project while SCE, its vendors, and/or sub-recipients have accumulated costs that are not covered at the point of project change. Prevention and Mitigation: Of course, since the Tehachapi Wind Energy Storage Project will be using ARRA funds, the project also needs to comply with DOE requirements for the use of such funds. SCE s accounting and financial management systems comply with requirements for regulated electric utilities. The TSP was designed under the assumption that SCE will be able to use its existing accounting and other systems to report data required for the project. Should SCE be awarded funding in response to this application, the utility will be open to discussions regarding adapting of its existing systems for management of the TSP. SCE has a long history of successful management of DOE research and demonstration awards and expects to leverage that experience to manage an award for this project. Edison SmartConnect is an advanced metering infrastructure project successfully managed in phases by SCE along with the CPUC. SCE took this $56 million project from research and development to a fully functioning system that is being expanded throughout the Edison service territory. The management approach for Edison SmartConnect received the DOE s 2007 Smart Grid Leadership Award and the TSP team will model its management approach according to the same successful standards. As a regulated electric utility, SCE has successfully used its existing accounting and financial systems to manage large-scale projects. Assuming SCE is able to use these systems for the TSP, the project management team will work with SCE s office of the CFO and controller, office of the general auditor, program managers for other large programs, and key project participants to identify likely risks, their relative severity, and how to prevent, mitigate and respond to risk situations should they arise in the use of these systems. Once this risk assessment is completed, the project s financial manager will work closely with the DOE s contract manager to develop the accounting, cash-flow, funding, and disbursement plans incorporated into the work breakdown structure so the data gathered complies with TSP reporting and data collection requirements. These plans will then provide an important means of ensuring that reporting, cash flow and payments to co-participants are occurring within the TSP s defined parameters. SCE Project Management Plan for DOE Energy Storage Project (DE-FOA ) 11

116 Legal, Regulatory, and Reporting Compliance Risks: While SCE is a regulated electric utility with significant experience in working with regulators, this project involves a number of government agencies, regulations, requirements, and reporting mandated as part of conducting the demonstration effort. SCE takes compliance with applicable requirements very seriously and will instruct the program management office to set up a compliance review process to periodically evaluate whether the TSP is continuing its compliance to applicable DOE requirements. This review is particularly important since pertinent laws and regulations often change during the course of the program, and this review process can also assess whether additional compliance activities are needed. The specific requirements for this program are included in ARRA, Energy Independence and Security Act of 2007 (EISA), National Energy Policy Act of 2005 (NEPA), the Davis Bacon Act, the California Building Code, the DOE grant award, Occupational Safety and Health Administration (OSHA), and others. SCE is presently evaluating how best to meet these requirements in a manner consistent with SCE s obligations as a regulated electric utility. Legal risks for the Tehachapi Wind Energy Storage Project include potential liability associated with nonperformance of vendors, sub-recipients, and their respective contractors; harm to the health or safety of project workers and liability for correctly identifying and obtaining necessary certifications and permits. Prevention and Mitigation: As noted above, SCE is committed to ensuring that compliance and reporting requirements for the TSP project are met. SCE is currently reviewing this issue and expects to provide the DOE with a compliance plan for the TSP project at an appropriate point in the process. One of the criteria SCE used in selecting its project participants is their compliance experience with DOE funding requirements. Furthermore, the major project co-participant, A123Systems, is well versed with these requirements. In particular, the project management team is expected to work closely with program participants to: (a) identify likely legal, regulatory and reporting compliance risks, and their relative severity; (b) determine ways to prevent, mitigate and respond to risk situations should they arise; and (c) memorialize the results of this fact gathering effort in the form of a TSP compliance plan that can be reviewed with the DOE. SCE is also exploring the possibility of creating a TSP contracts, legal, and regulatory compliance manager who will provide oversight over the implementation of this compliance plan and related compliance efforts by: Developing checklists of regulations and laws, certifications and permits, intellectual property guidelines, and reporting requirements that must be met as part of planning, design, testing, commissioning, and decommissioning of the TSP. Preparing and disseminating (within SCE and to Program co-participants) information about compliance matters. Monitoring and reviewing TSP compliance issues for consistency with the overall project compliance plan. SCE Project Management Plan for DOE Energy Storage Project (DE-FOA ) 12

117 SCE confirms that, should the DOE award funding to the TSP project, it will comply with the Davis Bacon Act and all laborers and mechanics employed by SCE, a sub-recipient or vendor funded directly by or assisted in whole or in part by and through funding appropriated by the Recovery Act, will be paid wages at rates not less than those prevailing on projects of a character similar in the locality as determined by subchapter IV of Chapter 31 of title 40, United States Code (Davis-Bacon Act). In addition, SCE has obtained signed acknowledgements from each sub-recipient and vendor stating their assurance complies with all applicable ARRA provisions, including, and without limit, the Buy American provision (ARRA Section 1605) and the Davis-Bacon wage requirements (ARRA Section 1606). These types of compliance activities are expected to continue on a regular basis throughout completion of the TSP Crisis Management Risks: Crisis management is generally considered to involve situations or events requiring an extremely speedy response. In order to respond effectively to a crisis, advanced planning is essential. SCE has already begun to identify situations that could require this type of a quick response. The events presently identified are: the loss of key co-participants or expertise within the co-participant organization, natural or made-made disasters, and equipment malfunction causing damage to the substation or the grid. Prevention and Mitigation: SCE has more than 125 years of experience operating an electricity grid. The company has experience responding to an array of disaster events, man-made and natural, such as fire, earthquake or storms. SCE s experienced project management team, in conjunction with the PMO s risk management office, will benchmark current practices to understand recommended preparations, interactions with emergency services, emergency safety and repair procedures, and emergency communications to the TSP project team and participants. The project management team will rely on standard risk identification, analysis and prevention processes such as conducting on-site, in-person risk analyses with technical, safety, and public relations personnel directly involved in equipment deployment, operations, and maintenance activities. Risks identified in advance of the project s launch and others being determined by conducting on-site discussions will be assessed for appropriate prevention measures and specific mitigation plans developed for rapid deployment should anticipated risks be realized. Specific individuals will be identified as first responders and provided with the necessary information and training on how to detect, report and provide initial mitigation support for any risk situations that may occur. SCE Project Management Plan for DOE Energy Storage Project (DE-FOA ) 13

118 2.3 Risk Management Conclusion While the details of this risk management plan appear complex several core principles provide the foundation of the TSP plan: Seek to identify the risks early in the process and locate the expertise necessary to address these risks. Focus resources on prevention of potential problems. Work with people who have experience similar situations, as well as those who will be implementing any corrective actions, to help develop detailed detection, prevention, firstresponse, and issue resolution plans. Involve TSP participants as necessary for identifying and addressing all project risks. Assign risk detection, prevention and mitigation duties to those best-suited to perform these responsibilities. Clearly define program deliverables, roles, responsibilities, timing, and performance expectations. Keep activities transparent and share information. Focus on team integration points to avoid miscommunication, misunderstandings, and activity gaps and overlaps make contractual wording clear and specific. Establish a program management team to create an environment that is as trouble-free and productive as possible. SCE Project Management Plan for DOE Energy Storage Project (DE-FOA ) 14

119 3. Organizational Breakdown Structure 3.1 Project Oversight Two governance committees, the Project Oversight Committee and the Technology Advisory Council, will oversee the TSP s progress and ensure its compliance with internal and external goals and statutory requirements. A qualified project management team under the supervision of the project s principal investigator will direct the TSP s day-to-day operations. The Project Oversight Committee will be chaired by Paul De Martini, Vice President of Advanced Technology at SCE. It may consist of representatives from the DOE, the CPUC and the CEC. This committee will monitor the project s progress and ensure accountability. The Technology Advisory Council will monitor the technical aspects of the project, ensuring the technical goals of the project are met. Its membership will be comprised of senior managers from SCE, CAISO, A123Systems, the Western Electricity Coordination Council (WECC), Pacific Gas and Electric (PG&E), Sempra Energy, Idaho Power, and the Utility Wind Integration Group (UWIG). 3.2 TSP Organizational Structure and Functional Teams and Leaders The TSP is structured to be managed by a set of functional team leaders who report to an overall project manager. This project manager reports to the principal investigator who, in turn, reports to the Project Oversight Committee, DOE, and the technical advisory council. This structure is effective because it allows experienced subject-matter experts and area leaders to manage field teams in functional areas while ensuring project cohesion and coordination through the project manager. Regular reporting meetings with the oversight groups will serve to monitor project progress, troubleshoot problems and ensure frequent communications among the entire project team. Individuals placed in TSP leadership positions will have a successful management track record in their respective areas of expertise and will be thoroughly informed of the project s intent and potential. The biographies validating the extensive experience of key individuals on the oversight groups and functional team leaders are provided in accordance with FOA guidelines. SCE Project Management Plan for DOE Energy Storage Project (DE-FOA ) 15

120 Figure 1. SCE Tehachapi Wind Energy Storage Project: Organizational Structure of Functional Team Leaders Legend SCE Co-Participant Vendor Oversight Committee Paul DeMartini (SCE) Principal Investigator Ed Kjaer (SCE) Technology Advisory Council Project Management Jeanne Boyce (SCE) Construction Management Paul Multari (SCE) Grid Operations Michael R. Montoya (SCE) Study, Measurement, Validation and Valuation Juan Castaneda (SCE) Battery and Inverter Systems Naum Pinsky (SCE) Siting, Construction, and Substation and Grid Preparations Ken Varnell (SCE) Communications and Cyber-security Jeff Gooding (SCE) Ali Chowdhury (CAISO) Johan Enslin (Quanta) Andy Chu (A123) Ed Hohmann (Cal Poly Pomona) 3.3 Leadership Team Sponsor Paul De Martini, Vice President Advanced Technology, Southern California Edison Company Organizational Roles, Responsibilities, Authorities, and Task Assignments As the sponsor of the Tehachapi Wind Energy Storage Project, Mr. De Martini s roles include owning and overseeing project strategy; assuring project alignment with DOE goals; securing the project s necessary resources; and representing the project s interests by interacting with various stakeholders (government, trade, academic, etc.). Lines of Communication Mr. De Martini is expected to lead the Project Oversight Committee; advise SCE s principal management, the project s lead investigators and program participants leadership. Principal Investigator Edward Kjaer, Director of Electric Transportation, Southern California Edison Company SCE Project Management Plan for DOE Energy Storage Project (DE-FOA ) 16

121 Organizational Roles, Responsibilities, Authorities, and Task Assignments As principal investigator of the Tehachapi Wind Energy Storage Project, Mr. Kjaer s roles include assuring that SCE resources and the four functional team leaders maintain integrated, productive communication among themselves and with other project co-participants; that they work effectively toward achieving DOE and ARRA goals; and that program performance quality, budget, schedule, compliance, data collection, and reporting objectives are achieved in the following specific areas throughout program design, development, testing, commissioning, operation, and decommissioning stages: - Regulatory, Reporting, and Governance - Budget, Accountability, and Contract Management - Battery and Inverter Systems - Siting, Construction, and Substation and Grid Preparations - Base-lining - Grid and System Operations - Interoperability, Communications and Cyber-security - Study, Measurement, Validation, and Valuation - Decommissioning Lines of Communication Mr. Kjaer is expected to work closely with the functional team leaders, lead investigators from coparticipant organizations, and the program s sponsor, oversight committee, and other advisors. 3.4 Project Participants All project co-participants will work closely with the project manager, relevant functional team leaders, with one another, and to a lesser extent with the principal investigator: A123Systems is providing expertise in battery storage technologies. A123Systems is the world s leading supplier of high-power lithium metal phosphate-based chemistry designed to deliver a new combination of power, safety and battery life. The California Independent System Operator (CAISO) will perform three critical roles in the Project. The CAISO will guide and advise the project in the interconnection process, provide expertise in data collection, analysis, and analytical review, and facilitate operational use tests and simulations that require CAISO oversight or market interaction. SCE Project Management Plan for DOE Energy Storage Project (DE-FOA ) 17

122 4. Work Breakdown Structure The TSP is structured to conform to the project s four phases. Some functional teams, however, operate across phases of the project. Resources for each task are bundled under functional teams and categorized as direct labor, other labor (contractors), equipment, travel, and materials and supplies. Project team members have confirmed the adequacy and availability of staffing resources to meet the project s requirements or Phase II: Design, Construction, and Base-lining. As stated in section B, Risk Management, Execution Risks, these resource adequacy risks will be reduced through careful planning, and the depth and breadth of the project team s experience and capabilities. Resources are estimated in job-years, one job-year amounts to one full time job for one year. Figure 2. SCE Tehachapi Wind Energy Storage Project: Work Breakdown Structure Stage / Task Planned Equipment and Materials Planned SCE, CAISO, A123, QUANTA, Cal Poly Pomona Staffing (Job Years) Planned Investment Resources Provided By Phase I Project Definition and NEPA Compliance Task 1 Update Project Management Plan (PMP) Task 2 National Environmental Protection Act (NEPA) Compliance Task 3 Finalize Energy Storage System Manufacturing Plan Planning, analysis, and coordination activities Research and analysis activities Analysis and testing activities 2.9 $46 thousand DOE, SCE, CAISO, A123 DOE, SCE, A123 DOE, SCE, A123 Task 4 Finalize Plan for Baseline Measurements Research and analysis activities SCE Project Management Plan for DOE Energy Storage Project (DE-FOA ) DOE, SCE, CAISO, A123, Quanta, Cal Poly Pomona 18

123 Stage / Task Planned Equipment and Materials Planned SCE, CAISO, A123, QUANTA, Cal Poly Pomona Staffing Planned Investment Resources Provided By (Job Years) * Phase II Final Design, Construction, and Baselining Task 5 Battery and Inverter Bench test equipment, building Systems Development, construction materials, Manufacture, Assembly, and supervisory control unit, three- Installation phase 7.5 MVA, 480 V/12kV pad-mounted transporters, Task 6 Siting, three-phase 28 MVA, 12/66kV, Construction, and Substation delta-wye transformer bank, and Grid Preparations conductor (bus), digital protection relays, 12 kv Task 7 Baselining for vacuum type circuit breaker, Evaluating Project 14/12kV pad-mounted Performance transporters, three-phase 28 MVA, 12/66kV, delta-wye bank, conductor transformer (bus), digital protection relays, 12 kv vacuum type circuit breaker, 14.4 MVAR, 66 kv shunt capacitor bank, real time unit, digital fault recorder, communications gateway, network, Phasor Measurement U nit, Phasor Data Concentrator Unit, Gateway, Computer Server, Program Training Manuals 39.2 $44.7 million DOE, SCE, CAISO, A123, Quanta, Cal Poly Pomona Phase III Operations, Measurement, and Testing Task 8 System Operations and Data Collection Test Plan Implementation, Data Collection, and Validation 27.1 $8.2 million DOE, SCE, CAISO, SCE Project Management Plan for DOE Energy Storage Project (DE-FOA ) 19

124 Stage / Task Planned Equipment and Materials Planned SCE, CAISO, A123, Q UANTA, Cal Poly Pomona Staffing Planned Investment Resources Provided By (Job Years) * Task 9 Communications, Interoperability and Cyber Security Ongoing Operations and Validation A123, Quanta, Cal Poly Pomona Task 10 Study, Measurement, Validation, and Valuation Data Analysis and Reporting Activities Phase IV Decommissioning Task 11 Decommissioning De-installation and wind-down activities 4.1 $541thousand DOE, SCE, A123, CAISO SCE Project Management Plan for DOE Energy Storage Project (DE-FOA ) 20

125 5. Milestone Log The TSP Milestone Log ( Figure 3) ties in with the project s four phases. All milestones are reflected in the project s WBS. Figure 3. SCE Tehachapi Wind Energy Storage Project: Milestone Log Phase Tasks Milestone Completion Date Phase I Project Definition and NEPA Compliance Phase II Final Design, Construction, and Baselining Task 1 Update Project Complete Pre-Project Management 2/17/2010 Management Plan (PMP) Plan Task 2 National Finalize Contractual Obligations with Environmental Protection ARRA/DOE, CEC, CPUC, and A123 Act (NEPA) Compliance Task 3 Finalize Energy Storage System Manufacturing Plan Task 4 Finalize Plan for Baseline Measurements Task 5 Battery and Inverter Systems Development, Manufacture, Assembly, and Installation Complete Plan for Baselining Projects Performa nce. Solidify Precise Funding Needs for A123 Manufacturing to begin Validation and Approval from Project Participants Complete Installation of Battery & Inverter Complete System Validation 2/17/2010 2/17/ /5/2011 3/22/2012 Task 6 Siting, Complete Construction of Energy Construction, and Substation Storage Warehouse 3/16/2011 and Grid Preparations Task 7 Baselining for Evaluating Project Performance Begin Baselining Data Validate Data Capture, Transfer, Communications, and Cybersecurity 5/19/2010 1/27/2011 SCE Project Management Plan for DOE Energy Storage Project (DE-FOA ) 21

126 Phase Tasks Milestone Completion Date Phase III Operations, Measuremen t, an d Testing Task 8 System Operations and Data Collection Task 9 Communications, Interoperability and Cyber Security Task 10 Study, Measurement, Validation, and Valuation Complete Individual Testing of Scenarios Complete Testing of Stacking Scenarios (Ongoing Validation) Complete Analysis and Report #1:Individual Operational Uses for publication Complete Analysis and Report #2: Stacking Operational Uses for publication Send Summary and Final Report and Recommendations to DOE 3/22/2013 3/24/2014 6/14/2013 6/16/ /3/2014 Phase IV Decommissioning Task 11 - Decommissioning Battery Removed and Recycled 9/9/2014 Demo / Reassign Building 12/2/2014 SCE Project Management Plan for DOE Energy Storage Project (DE-FOA ) 22

127 6. Funding and Costing Profile Table 1: Federal Funding Recipients for the TSP Government Funding to Each TSP Participant Project Funding Profile Total Southern California E dison Company $ 4,719,926 $ 2,394,117 $ 881,787 $ 925,141 $ 709,799 $ 9,630,770 A123 Systems $ 7,859,674 $ 6,800,981 $ 354,288 $ 354,288 $ - $ 15,369,230 TOTAL FEDERAL FUNDS REQUESTED $ 12,579,600 $ 9, 195,097 $ 1,236,075 $ 1,279,429 $ 709,799 $ 25,000,000 Table 2: Costing P rofile for the TSP shows projected expenditures of government funds for the first budget period and yearly costs thereafter Project Costing Profile for TSP Budget Period 1 Federal Funds Budget Period 1 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 TOTAL $ 40,636 $ 40,636 $ 6,127,618 $ 222,676 $ 298,720 $ 427,290 $ 621,767 $ 773,854 $ 877,076 $ 1,049,165 $ 1,049,165 $ 1,050,996 $ 12,579,600 Budget Periods $12,5 79,600 $9,195,097 $1,236,075 $1,279,429 $709,799 TOTAL $25,000,000 SCE Project Management Plan for DOE Energy Storage Project (DE-FOA ) 23

128 7. Project Timeline The project timeline is provided in the condensed version below. Figure 4. SCE Tehachapi Wind Energy Storage Project: WBS Project Management and Phase I SCE Project Management Plan for DOE Energy Storage Project (DE-FOA ) 24