The Distribution Resources Plan (DRP)

Meeting Notes The Distribution Resources Plan (DRP) Distributed Energy Resources (DER) Growth Scenarios Working Group (GSWG) Opera Plaza Conference Room 601 Van Ness Avenue, San Francisco, CA 94102 10am-2:30pm *DRAFT*

These notes summarize the Growth Scenarios Working Group (GSWG) meeting facilitated by More Than Smart. A total of 44 individuals attended the meeting representing 22 different organizations, both in person and via conference call. For meeting audio, stakeholder list and presentations for this meetings, go to www.drpwg.org . Documents from prior GSWG meetings, other working groups facilitated by More Than Smart and upcoming events are also available there, or contact Laura Wang at [email protected] for additional information.

Agenda: GSWG Meeting #5 (May 24): The purpose of this meeting was to review and summarize the growth scenario development process and methodology, discuss forecast methodology alignment with CEC and CAISO, and discuss plans for future updates.

 10:00-10:15: Introductions and Overview (Laura Wang, More Than Smart)

 10:15-12:00: Overview of Growth Scenario Process and System Results (IOUs) o Overview

. IOU distribution planning schedule . Background on forecasting for distribution resource planning . Use Cases for Growth Scenarios o Summary of System Level DER Growth Forecasts (IOUs) . Slide of system forecast relative to the IEPR . Changes to growth scenario methodology that differ from IEPR methodology  12:00-1:00: Lunch

 1:00-2:00: Discussion on Alignment of Forecasting Methodologies (Dina Mackin, CPUC)

o Separate IOU methodologies

. Why the IOUs are developing and using different methodologies? . Does is matter if they use separate methodologies? If so, what are the implications? . What elements of the methodology need to be aligned in the future and what elements are idiosyncratic to each IOU? o System/Transmission Distribution level alignment of forecasts

 Do we need alignment in the forecast assumptions for DRP and system level?  What are the potential impacts on the T&D interface if they are not?  How does the IRP need to use the DRP growth scenarios as an input into their process?  How might IRP impact the growth scenario results, and what would be the implications on DRP?

1 • 2:00-2:30: Plan for Future Updates

o Schedule for the next round of updates o Principle changes in methodology: will they be able to align with IEPR in the future? Is there a reason that IOUs should continue to develop methodology outside of IEPR? . Growth scenarios will include an IRP case?

Meeting Summary:

Background/Overview

On February 27, 2017, CPUC published an Assigned Commissioner’s Ruling (ACR) establishing several guiding principles and setting a schedule for the IOUs to develop DER growth scenarios for their 2017 Distribution Resource Plans.1 On April 7, 2017 the Joint IOUs submitted a draft document describing their proposed approaches for forecasting DER growth scenarios.2

This series of meetings is being held to publicly discuss, review, and eventually improve and/or better align the approaches (if needed), and will lead to a revised draft Assumptions and Scenarios document prepared and submitted by the IOUs on June 9, 2017 to CPUC R. 14-08-013 for public comment, resulting in a revised document in Q3, 2017. The GSWG meetings will also provide a basis for establishing next steps to improve DER growth scenario development and forecast integration in future cycles.

 Background/Overview – Discussion: Dina Mackin, CPUC provided an overview of GSWG work to date and alignment with other resource planning proceedings. o Energy Commission produces statewide demand forecasts, with local breakouts and planning scenarios. The “California Energy Demand (CED)” forecasts are produced in conjunction with Energy Commission’s biennial Integrated Energy Policy Report (IEPR)3 –in odd-numbered years, with some more limited updates in even numbered years. o In the past, Energy Commission forecasts fed CPUC resource planning/procurement, e.g., CPUC Long Term Planning and CAISO transmission planning. 4 Meanwhile, estimates of demand-modifying activities (e.g., energy efficiency) flowed at least in part from CPUC’s energy efficiency proceeding to Energy Commission for inclusion in the IEPR/CED forecasts (to develop

1 CPUC Distribution Resources Plan Proceeding (R.14-08-013), Track 3 – Policy, Subtrack 1 – DER and Load Forecasting, Assigned Commissioner Ruling (ACR), February 27, 2017. See: http://www.cpuc.ca.gov/General.aspx?id=5071 2 Assumptions and Framework Document Presented by Joint IOUs, April 7, 2017. Prepared for CPUC Distribution Resources Plan Proceeding (R.14-08-013), Track 3: Policy Sub-track 1: DER and Load Forecasting, Assigned Commissioner Ruling, February 27, 2017. 3 http://www.energy.ca.gov/energypolicy/ 4 https://www.caiso.com/planning/Pages/TransmissionPlanning/Default.aspx

2 “managed” scenarios for base forecasts – that is: base forecasts “managed” to reflect the influence of demand modifying activities, e.g., energy efficiency programs).

o Now, CPUC’s IRP proceeding 5 will subsume the previous “long term planning and procurement” proceeding and will encompass and/or coordinate with other CPUC proceedings. As a result, CPUC is examining opportunities for:

. Internal alignment of CPUC activities (e.g., alignment between the IRP proceeding and proceedings that affect particular resources like energy efficiency, renewable portfolios, storage, etc.) and:

. External alignment, e.g., between CPUC activities and proceedings and activities from sister agencies including Energy Commission, CAISO and CARB.6 o Energy Commission and CAISO forecasts/planning forecasts are disaggregated down to the service territory/transmission zone level (these planning areas are not fully contiguous, but enough so for this discussion). o The IOUs handle distribution planning – from transmission level voltage stepped down to various levels of the distribution system, arriving at end-use customers. o Two types of “process/methodology alignments” have been discussed for purposes of GSWG:

. 1. Alignment of total “service territory” level DER growth forecasts between statewide planning assumptions (e.g., Energy Commission’s CED forecasts) and IOU distribution plans; and

. 2. The methodology by which each IOU intends to disaggregate “service territory” level DER growth forecasts down to distribution level breakouts that have geospatial and temporal characteristics suitable for locational net benefits analysis (LNBA). o Since the CPUC’s IRP is a new, broad, encompassing proceeding, members of the Joint Agency Steering Committee (JASC) – management-level personnel from CPUC, Energy Commission and CAISO – have been working to re-think inter-agency information flow/process alignment suited to the IRP structure and purpose. o JASC has expressed an interest in understanding alignment/flow of information/forecasts between statewide planning processes, including DRP. JASC members have been keeping abreast of GSWG activities via internal

5 CPUC R. 16-02-007 http://www.cpuc.ca.gov/irp/ IRP is a new, overarching resource planning proceeding in response to SB 350 (2015). Energy Commission is responsible for IRP plans for the publicly owned utilities (POUs). http://www.energy.ca.gov/sb350/IRPs/ 6 See Ch. 7 Process Alignment. Proposal for Implementing Integrated Resource Planning at the CPUC -- An Energy Division Staff Proposal. California Public Utilities Commission, May 17, 2017. http://www.cpuc.ca.gov/irp_proposal/ 3 meetings, but several JASC members, e.g., staff from Energy Commission and CAISO, are attending today’s GSWG meeting in particular. o Since IRP is new, and the agencies are still sorting out information flows, as of May/June 2017, JASC is focusing more on the alignment between statewide planning assumptions for service-territory level DER forecasts (i.e., alignment with Energy Commission’s service-territory level forecasts) vs. the DER disaggregation methods proposed by each utility in their April 7, 2017 Assumptions and Framework document, and discussed in the April-May 2017 GSWG meetings. o CPUC and other state agencies recognize that the methods IOUs employ to disaggregate DER growth scenarios from the service territory level to circuit/feeder level forecasts for distribution planning are equally important as alignment with other state planning processes. . The IOUs described using various methodologies for developing disaggregated distribution forecasts different DERs, depending on data availability and quality, during the April 24, 2017 GSWG meeting. . While it may not be the case that the IOUs will always use the same methodology for disaggregation, the methodologies will be discussed/vetted by GSWG, and improved over the course of time and sharing of data, forecast methods, etc. In order for IRP to work properly, and compare resources on an equal footing, both the alignment with statewide forecasts and disaggregation methods need to be strong. . But for purposes of the June 9, 2017 revised Assumptions and Framework document, CPUC is focusing more on alignment with service-territory level forecasts for other statewide planning (i.e., Energy Commission/IEPR and CAISO’s transmission planning). o A theme from CPUC for the GSWG has been that GSWG scenarios and forecasts should convey the analysis methods and results for DER growth – not the ‘optimal’ amount(s) of DERs. The ‘optimization’ step occurs within IRP. An IRP input will be the GSWG estimates, based on methods/assumptions that are approved, and over the course of time continue to be discussed/improved/enhanced. But GSWG/DRP is not the setting for determining how the amount of DERs that should be in the procurement mix. o While it is important to understand these two distinct purposes/perspectives, of course in practice the processes have a dynamic effect on one another and are not wholly separate.

Overview of Growth Scenario Process and System Results (IOUs)

 Discussion: o CPUC has historically issued an ACR for assumptions and scenarios for the procurement proceeding that used to be the Long Term Procurement Proceeding (LTPP), which is now subsumed by IRP. That ACR also used to provide assumptions for TPP.

4 o In February, planning assumptions are established for TPP. The TPP studies are conducted over the course of a given year and approved the subsequent March. Meanwhile, the next cycle will have started already in February. o PG&E starts distribution planning in the September timeframe and SCE and SDG&E start distribution planning in the October timeframe. This is because PG&E system peak tends to occur in August for PG&E, so they can start analyzing data, but for SCE and SDG&E, peaks tend to occur in September or even October. o Currently, PG&E aligns distribution planning to the current/ongoing TPP whereas SCE and SDG&E prepare their distribution plans to align with the upcoming TPP. The Working Group all agree that this will be sufficient for the 2017 distribution planning, but need to determine which processes should align going forward. o In subsequent DPP cycles, there will be different scenarios for growth of each DER. Next cycle, the scenarios will be defined by IRP. However, since IRP has yet to be published (and is just beginning) for the 2017 DPP, the IOUs do not need to provide several scenarios for each DER. This year we are using the “expected” scenario. o CEC mentioned that, having reviewed the proposed PV growth scenarios, none of the current IEPR forecast scenarios come close to the level of growth that the IOU scenarios are predicting. The IEPR low electricity use forecast comes close, but this is only corrected for NEM 2.0 decision, not the ongoing tax credit. o SCE commented that DPP is largely focused on near term, 1-3 years. Given the impact of changing DER forecasts on first few years of plan, SCE prefers to use that information to align with the upcoming TPP cycle rather than the ongoing cycle – ideally this enables SCE to incorporate the most current information.

Discussion on Alignment of Forecasting Methodologies

. Discussion: o The CEC seeks forecasts “Forms/Submissions” in April of an IEPR year. One main purpose of the submissions is to enable CEC and IOU forecasters to review differences during CEC’s “preliminary forecast” review – in June or so of an IEPR cycle. CEC and IOU forecasters can identify any areas of difference or outcome and where possible come to agreement on key inputs or methods. If differences remain, then those differences can be explained. Then, CEC produces a “revised forecast” in August of an IEPR cycle (next cycle begins August 2017). The kinds of things that might change, for example, are growth estimates, estimates of commercial floorspace, etc.

o Ultimately, toward the end of the year (sometimes into January of the next year) the CEC adopts a forecast for that 2-year IEPR cycle. In almost every 5 instance the adopted forecast is Energy Commission staff’s forecast(s) – especially because in recent years IOU and Energy Commission forecasters work together to review data and methods. Also, note that in recent years and continuing forward, there is also an IEPR update during the interim year of an IEPR cycle. o It was inquired whether IOU forecasts are used by CEC. CEC clarified that it mainly uses historical data. CEC may or may not use the IOU DPP growth scenario forecasts in the IEPR forecast. The forecasts often, but not always, use the same economic/demographic data, growth rates, etc. Decisions are made based on discussions with IOUs, but ultimately the CEC forecasts make final decisions.

. Things that might differ, for example, could be a determination of whether a PV tax credit will be extended. o It was asked whether the IOUs are bound to use CEC’s adopted forecasts for planning. The CEC clarified that the IEPR forecast has high, medium and low scenarios, and demand modifiers also have different scenarios (perhaps hi, med, low – but could be more or fewer). The demand-modifying forecasts are combined with the base case forecasts to produce a ‘managed’ forecast (“managed” to reflect the impact of demand modifiers). It is possible to select from combinations of scenarios for different planning purposes. For example, the 2017 TPP ACR specifies low-mid AAEE for local planning but mid AAEE for system planning. o The CPUC inquired on the implications of divergence/variance between different outcomes. The IOUs mentioned that it’s hard to really understand, especially as you get to circuit level there is a lot of uncertainty. System forecast differences, if any, are swamped by uncertainty at the local/circuit level. o CPUC clarified whether the DRP ruling will have to clarify, whether for this IEPR round and/or going forward, if there needs to be consistency across forecasts or whether distribution planning is a situation in which IOUs having their own forecasts is more useful. SCE explained that there are many different considerations including timing, data availability, load shapes, rate and growth assumptions, etc. that affect consistency. The IOUs work closely with CEC forecasters as part of the IEPR and can use this relationship and the DAWG to continue coordination/discussion of DER forecasts as well. o CEC informed stakeholders that there is an ongoing CEC/EPIC project to develop load shapes including generation load shapes for solar PV, additional achievable energy efficiency (AAEE) and storage. o Multiple stakeholders asked when will the DER growth scenarios inform a GRC. PG&E clarified that the first PG&E GRC to reflect these inputs will be 2020.

6 . The different forecasts/planning processes have different purposes. DPP looks at distribution infrastructure, determine load (new or departed) due to DER, to determine whether there is sufficient infrastructure (e.g., replace aging equipment), etc. IRP, in comparison, looks only at high-level issues – e.g., if state wants to reduce GHG, what is the best way, from an IRP perspective, to develop supply/demand balance? Implemented policy solutions changes inputs into DPP, continuing an iterative process. The feedback loop flows between benefits/costs of different DERs established in DPP, leading to optimizing DERs in IRP, resulting in feedback into distribution plans. IRP does not offer the granularity that DPP does. Similarly, GRC has a different objective. GRC uses forecasts primarily to set rates.

Plan for Future Updates

. Discussion:

. The growth scenarios help define investments within a grid modernization and investment deferral context. These large decisions are impacted by how much DER is anticipated in the growth assumptions IOUs use to estimate needs. It is expressed that a framework should be developed so that each assumption doesn’t need individual, customized review as long as it is within the framework.

. Stakeholders asked if IOUs have visibility into how much DER showed up at the circuit level in the current year, and whether this is applied to next year. PG&E responded that this conceptualization would be possible if they only conducted year-to-year forecasts. However, distribution assets have a long lifetime (10-40 years). Conducting only year-to- year forecasts would not lead to efficient GHG reduction. For example, if it was identified that the best method to meet GHG goals is to double energy efficiency, that approach would not be identified via year-to-year historical data. CPUC/All -- do the IOUs know how many DERs showed up at the circuit level this year and apply that to next year?

. Stakeholders asked for more information and documentation regarding current methods and levels of granularity for locational forecasting, in order to understand and improve methods, data, and accuracy with each cycle. The IOUs iterated that forecasts and methods are constantly being evaluated and improved, and will continue improvements with DER forecasts within DPP. The IOUs would like to work with CEC on an ongoing basis to compare methods and share data regarding DER growth forecasts, as well as continue to identify means of collaboration – one example was using DMV data to track electric vehicles.

 It is reiterated that a framework is needed for DER growth scenarios so that each decision doesn’t need to be reviewed individually. Process and feedback loops between involved parties still need to be clarified. The appropriate levels of geospatial and temporal aggregation and disaggregation for specific resources must also be discussed. One IOU commented that the WECC bus level would be extremely useful for distribution planning. The CEC stated that it is tentatively planning to disaggregate below the system level, and will consider other viable options for further disaggregation going forward.

7  A general question regarding CCAs and levels of DER planning was asked. It was commented that many stakeholders have questions regarding DER growth within CCAs, as well as what levels of insight we currently have into CCA plans. . CPUC – still need to clarify the process and feedback loops. Discussions of the best processes/methods for forecasting DERs should probably be done in DAWG – including selecting an appropriate level of geospatial/temporal aggregation/disaggregation for that resource.  Regarding next steps: after the conclusion of the WG meetings, the IOUs will make revisions to the draft Framework and Assumptions document by June 9. Parties then can submit comments onto the docket before a final version is adopted. The CPUC may re- engage with the Working Group in Q3 2017, following approval of the Final Framework and Assumptions document.