MINNESOTA AND SYSTEM-WIDE ENERGY CONSUMPTION

Transcription

1 @ MINNESOTA AND SYSTEM-WIDE ENERGY CONSUMPTION As part of ths Application, the Commission required Applicants to provide for each utility Minnesota MWh consumption and system-wide PlWh consumption and to include totals that assume 1% and 1.5 '10 conservation (Exemption Order Point 7F). The required information is set out below for each utility.

2 Figure 1.01 Xcel Energy Minnesota & Systemwide Energy Consumption & Number of Customers Appendix C-7 (Revised ~ovt2007)

3 @ Figure 1.02 Great River Energy Minnesota & System-Wide Energy Consumption

4 Figure 1.03 Minnesota Municipal Power Agency Minnesota & System-Wide Energy Consumption

5 Figure 1.04 Southern Minnesota Municipal Power Agency Minnesota & System Wide Energy Consumption Appendix C-7 ( ~evi~d NOv. 2007) Application lor Three 345 kv Projects

6 Figure 1.05 Dairyland Power Cooperative Minnesota & System-Wide Energy Consumption Data From 2006 IRP Forecast 6 E-002iCN

7 @ Figure 1.06 Central Minnesota Municipal Power Agency Minnesota & System-Wide Energy Consumption & Number of Customers

8 Figure 1.07 Otter Tail Power Minnesota & System-Wide Energy Consumption

9 @ Figure 1.08 Minnesota Power/ALLETE Minnesota & System-Wide Energy Consumption

10 Figure 1.09 Missouri River Energy Services Minnesota & System-Wide Energy Consumption

11 Figure 1.10 Alliant Minnesota & System-Wide Energy Consumption '

12 Figure 1.11 Minnkota Power Cooperative, Inc. Minnesota & System-Wide Energy Consumption

13 Figure 1.12 Wisconsin Public Power Inc. Minnesota & System Wide Energy Consumption & Number of Customers MN lllwh System MWh # of MN # of System Notes: WPPl does not provide electric service in Minnesota. During the period 1997 to 2006, WPI added 16 new members: new Wisconsin members new Wisconsin members new Wisconsin members new members: 1 Wisconsin, 1 Iowa and 4 Michigan Number of System Customers based on ETA-861 reports to DOE. 13

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15 CapX2020 Group 1 Projects Effect of Demand Side Management on Capacity In its Staff Briefing Papers for the October 30,2007 Commission hearing regarding completeness of the CapX2020 Certificate of Need Application, Commission Staff recommended that the Applicants provide information that discusses the potential impact on capacity requirements of conserving 1.5% of annual electric energy sales. Following is a discussion on the potential impact on capacity requirements assuming a 1.5% reduction in Minnesota Enerqv Conservation Policv Goal The Minnesota Legislature passed the Energy Conservation Policy Goal during the 2007 legislative session. The purpose of the legislation is to encourage utilities to achieve annual energy savings equal to 1.5% of annual retail sales of electricity through conservation and rate design. The statute reads: "It is the energypoliq oftbe state ofminnesota to achieve annztal energy savings equal to 1.5percent of annual retail energy sales ofelectni-iiy and naturalgas direct4 tbrozagh energy conservation iinprovementprograms and rate desgn, and indirect4 through energy codes and appliance standards, programs deskned to tranq5oc-z the market or change consmer behatior, energy savings resulting from ejkieny iinprovements to the utiliiy infrastrztcture and ysstem, and to promote and energv ionservati~n.'~ Minn. Stat. $21 6B Demand Side Management (DSM) Energy conservation, as defined by statute, means demand-side management of energy supplies resulting in a net reduction in energy use. Typical DSM efforts employed by utilities include energy conservation promotional campaigns and providing rebates for purchases of such items as high efficiency industrial motors, home appliances and fluorescent light bulbs. To varying degrees, some of the CapX2020 participating utilities have been implementing demand side management--or energy conservation techniques-for many years prior to enactment of the 2007 legislation. * in Forecast Embedded DSM Applicants stated in their CON application that peak demand in the region is expected to increase by 4,000 to 6,000 MW by the year This estimate does not explicitly quantify the effects of DSM; however, energy conservation efforts are indirectly embedded in the estimate. The energy forecasts provided Appendix C-7 were extrapolated from historical consumption data which includes the effects of conservation programs by some of the participating Application for Three 345 kv Projects le-0021cn

16 utilities. These effects are carried through to the forecast as "embedded DSM". That is to say the forecasts do not assume that no new DSM programs are implemented, instead the assumption is that DSM programs continue to be implemented at approximately the same rate as they had been in the historical data. e In light of the new conservation legislation, several of the participating utilities were contacted to ascertain whether they had generated empirical methods to determine the impact of conservation on peak demand. To date, none of the utilities have done so. Indications are that some of the utilities are waiting for guidance from the Commission to help formulate acceptable methods for determining the impact of conservation efforts on peak demand. Estimatin~ Demand Reduction Because the new conservation legislation is energy based, there is no explicit demand reduction target that can be used to reduce the demand forecast. It is difficult to translate the energy standard to a peak impact because the hourly pattern of conservation impacts and conservation load factors are uncertain. Further, the proposed Group 1 transmission projects must be capable of meeting the forecasted summer peak demand. The primary driver of summer peak demand in the region is air conditioning load. Energy savings from incrementally more efficient air conditioning are unhkely to be cost effective when compared to other energy savings opportunities that may be achieved regardless of season. As a result, the effect on the need for the Group 1 lines is not likely to be materially affected by the conservation legislation. Nonetheless, the Applicants can offer one way the legislation might be translated to estimate some demand savings. One approach to estimate conservation effects on peak demand is to apply an average load factor to the estimated energy savings. A load factor is a quantitative expression (ratio) of the percentage of kwh used by an entity relative to how many kwh would be sold if operating at its peak electric demand around the clock (Load Factor = kwh/(8760 x max peak kw). This expression can be rearranged to estimate the peak impact given total energy and estimated load factor (peak kw = kwh / (8760 x Load Factor). The energy conservation forecast for the participating utilities is estimated at approximately 1,500,000 MWh in the year The average annual load factor for the CapX.020 group is approximately 66%. Given a factor of 66%, the peak demand savings would be approximately 259 MW (1,500,000 MWh energy savings /(8760 his per yr. x 66% load factor = 259 MW), which is relatively small in comparison to the predicted 4,000 to 6,000 MW of demand Application for Three 345 kv Projects le-0021cn

17 @ growth. Table 1 shows the impact on demand given various load factors. Table 2 shows the load factors for each utility. The impact on demand is slightly overstated in the above example because, as previously discussed, some DSM is imbedded in the energy forecast. The DSM target of 1.5% was then applied to the forecast number (which already includes some DSM) to arrive at the 2020 savings requirement of 1,500,000 MWh (this has the effect of "double-dipping7'). Summary As utilities begin to implement DSM programs, and others continue to improve on their existing programs, more accurate and beneficial data will become available. In the mean time, based on high-level analysis, it does not appear that the Energy Conservation Policy Goal will have a significant impact on the incremental peak demand forecast for The greatest effect on peak demand will occur through continued promotion and expansion of the utilities' existing load management programs. The incremental demand forecast of 4,000 to 6,000 n/fw by 2020 does include some imbedded DSM, although the exact number would be difficult to quantify. Applying the new energy savings goal of 1.5% to the CapX2020 demand forecast is made difficult because the hourly pattern of conservation impacts and conservation load factors are uncertain. Based on a high-level analysis, it appears that the impact of conservation on demand would be in the neighborhood of 200 to 400 R/IW in Table 1 shows the impact of energy conservation on demand assuming a range of load factors. Appendix C-7 (Revised NOV. 2007) le-0021cn

18 Table 2 shows the load factors for the participating utihties. Application for Three 345 kv Projects le-0021cn

19 EXPLANATION OF MINNESOTA UTILITY SERVICE AREAS MAP AND DISCUSSION OF TYPES OF UTILITIES SERVING CUSTOMERS IN MINNESOTA In its October 30,2007 decision on Completeness, the Commission directed that Applicants provide an explanation of the Minnesota Utility Service Areas map contained in Appendix D-3 and to provide a discussion of the types of utilities that serve customers in Minnesota, which is set forth below. In Minnesota, there are three types of utilities: private investor-owned utilities, cooperatives and municipally owned utilities. Private investor-owned utilities are privately owned and their stock is publicly traded. The Commission regulates the rates that can be charged by these utilities for services and authorizes each utility to earn an approved rate of return. In Minnesota, the largest investor-owned utility is Xcel Energy. The other investorowned utilities are Alliant Energy, Minnesota Power and Otter Tail Cooperatives are organizations that are owned by their members. The Commission does not regulate the service rates of cooperatives. The generation and transmission owning cooperatives that serve Minnesota are Basin Electric Power Cooperative, Dairyland Power Cooperative, East River Electric Power Cooperative, L&O Power Cooperative, Minnkota Power Cooperative and Great River Energy. These cooperatives, in turn, are owned by distribution cooperatives that deliver the power to the end customer. Distribution cooperatives include Dakota Electric Association and Minnesota Valley Electric Cooperative. Municipal utilities are owned and operated by the cities that they serve. Municipal utilities include Marshal Municipal Utilities and Rochester Public Utilities. There are 126 municipalities that operate their own electric utility. Groups of municipal utilities have organized themselves into joint-action agencies to provide generation and transmission services to their members. The Minnesota Utility Service Area map shown on Appendix D-3 is a map of Minnesota and parts of South Dakota and North Dakota. It contains colored areas which depict the service area territories of the private investor-owned utilities, the generation and transmission-owning cooperatives, and the municipal utility service areas. Each utility has an exclusive service territory in Minnesota. The Minnesota Utility Service Area map also shows, with hashed gray markings, the project areas for each of the three 345 kv Projects. Appendix D-3A (Revised Nov Supplemental) Application for Three 345 k'd Projects

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