Conservation Improvement Program Approval Letters 2018-2032 Integrated Resource Plan

APPENDIX E CONSERVATION IMPROVEMENT PROGRAM APPROVAL LETTERS 2018-2032 INTEGRATED RESOURCE PLAN

Submitted to the Minnesota Public Utilities Commission Docket No. ET2/RP-17-286 April 28, 2017

April 7, 2015

Jeffrey Haase Energy Efficiency Coordinator Great River Energy 12300 Elm Creek Blvd. Maple Grove, MN 55369

RE: All-Requirements Members 2013 CIP Results and 2015 Plan

Dear Mr. Haase:

Thank you very much for Great River Energy’s (GRE) efforts to report 2013 Conservation Improvement Program (CIP) results and a 2015 CIP plan in ReportingESP on behalf of GRE’s all-requirements members. My staff has finished reviewing this information.

2013 CIP RESULTS

Each utility and association has an annual energy savings goal equal to 1.5 percent of gross annual retail sales.1 Based on the information provided, GRE’s all-requirements members saved a total of 99,134,162 total savings kWh at the generator in 2013, equivalent to 1.17 percent of average 2009-2011 retail sales, excluding sales to any CIP-exempt customers.2 We appreciate GRE’s energy efficiency and conservation achievements in 2013 and those of its members.

A summary of energy savings by member is as follows:

Table 1: 2013 Energy Savings Results Member Organization Energy Savings (kWh) % of Retail Sales Arrowhead 359,054 0.55 % BENCO 5,855,115 2.33 % Brown 974,294 0.94 % Connexus 20,297,090 1.04 % Cooperative 332,227 0.37 % Dakota 26,430,124 1.42 % East Central 8,004,124 0.89 % Elk River 2,378,097 0.96 % Goodhue 929,016 1.06 %

1 See Minn. Stat. §216B.241 subd. 1c (b). 2 Minnesota Statutes 216B.241 subd. 1c(b) states that the energy savings goal is to be calculated based on the most recent three-year weather-normalized average. This review was based on 2009-2011 retail sales as reported in ESP®. Great River Energy – All-Requirements Coops Page 2

Itasca Mantrap 2,898,673 1.45 % Kandiyohi 1,599,660 1.04 % Lake Country 9,340,364 1.52 % Lake Region 4,474,716 1.07 % McLeod 1,233,949 0.88 % Mille Lacs 1,319,006 0.69 % Nobles 1,443,338 1.25 % North Itasca 1,310,148 2.63 % Runestone 1,638,085 0.76 % Stearns 5,967,501 1.22 % Steele Waseca 1,360,850 0.68 % Todd Wadena 988,730 0.64 % TOTAL 99,134,162 1.17 %

Each cooperative electric association and municipality utility is required to invest a minimum of 1.5 percent of its Minnesota gross operating revenues (GOR), excluding revenue from any CIP-exempt customers, on CIP.3

For 2013, 2011 revenues were the baseline for establishing these minimum spending requirements. Based on the information provided, Great River Energy Co-ops - All- requirements’s members invested a total of $15,575,524 in 2013, approximately 1.73 percent of 2011 Minnesota GOR, excluding revenue from any CIP-exempt customers.

Additionally, Minnesota Statutes require each electric utility and natural gas municipal utility to invest a minimum of 0.2 percent of its residential Minnesota GOR on CIP programs that directly serve the needs of low-income persons, including renters.4 For 2013, 2011 revenues were the baseline for establishing the low-income spending requirements.

Each member utility is responsible for meeting the low-income spending requirement. While Department policy currently allows cooperatives and municipalities to count a portion of general residential spending as low-income, the Department strongly encourages all utilities to meet their low-income spending requirements through programs that directly serve the needs of low-income persons, including renters.

3 See Minn. Stat. §216B.241 subd. 1b. 4 See Minn. Stat. §216B.241 subd. 7(a) and (c). 5 Minn. Stat. §216B.241 subd. 1c (d) allows a utility or associated to include in its energy conservation plan energy savings from electric utility infrastructure projects. 6 Minn. Stat. §216B.241 subd. 1b (b) requires each electric cooperative association and electric municipal utility to spend 1.5% of gross operating revenues annually on energy conservation improvements. Minn. Stat. Great River Energy – All-Requirements Coops Page 3

reflect any EUI spending. The Department is supportive of EUI projects that increase generation and distribution efficiencies and appreciates that utilities are reporting information about these investments through ReportingESP.

A summary of CIP investments by member is as follows:

Table 2: 2013 Actual Expenditures Member Total CIP Low-Income Organization Total CIP (% of GOR) Low-Income (% of Res GOR) Arrowhead $112,744 1.36 % $12,373 0.22 % BENCO $514,337 1.81 % $49,585 0.24 % Brown $124,124 1.24 % $9,252 0.14 % Connexus $2,476,346 1.19 % $371,377 0.27 % Cooperative $137,576 1.36 % $17,908 0.28 % Dakota $3,852,053 2.10 % $391,043 0.37 % East Central $1,652,068 1.60 % $90,865 0.13 % Elk River $417,267 1.46 % $28,629 0.30 % Goodhue $221,321 2.16 % $15,529 0.16 % Itasca Mantrap $449,339 2.27 % $22,159 0.17 % Kandiyohi $270,685 1.57 % $7,345 0.06 % Lake Country $1,322,757 1.87 % $148,191 0.26 % Lake Region $788,367 1.83 % $71,867 0.21 % McLeod $372,637 2.50 % $22,499 0.18 % Mille Lacs $379,527 1.77 % $40,798 0.28 % Nobles $134,284 1.19 % $18,833 0.20 % North Itasca $107,504 1.58 % $8,797 0.15 % Runestone $543,281 2.40 % $45,147 0.23 % Stearns $947,148 2.09 % $59,495 0.27 % Steele Waseca $358,141 1.62 % $13,337 0.10 % Todd Wadena $394,018 2.50 % $26,246 0.21 % TOTAL $15,575,524 1.73 % $1,471,277 0.25 %

In addition to meeting the energy savings goal and the total and low-income spending requirements, Minnesota Statutes §§216B.241 and 216B.2411 contain provisions that utilities must meet, including the following:

Research and Development (R&D): Each utility and association may spend up to 10 percent of a utility’s minimum spending requirement on R&D (§216B.241, subd. 2(c)).

§216B.241 subd. 1(e) specifically excludes electric utility infrastructure projects from the definition of energy conservation improvements. Great River Energy – All-Requirements Coops Page 4

Distributed and Renewable Generation (DRG): Each utility and association may spend up to 5 percent of a utility’s minimum spending requirement on DRG (§216B.2411, subd. 1). Utilities may not use green pricing programs to achieve CIP requirements.

Green Building Standards: Each utility and association must offer one or more programs that support green building certification of commercial buildings and that support goals consistent with Sustainable Buildings 2030 (SB 2030) standards (§216B.241, subd. 1f(c) and §216B.241, subd. 9(e)). We recommend that at a minimum, utilities offer subsidies for design assistance and/or certification expenses on a case by case basis within their commercial and industrial program(s).

Load-Management Activities: Each utility and association may use load-management activities to achieve up to 50 percent of a utility’s minimum spending requirement (§216B.241, subd. 1b(e)).

Electric Utility Infrastructure (EUI): As stated above, energy savings from EUI projects count towards CIP energy savings goals. However, according to the Minnesota Statutes, spending on EUI projects may not be counted towards CIP spending requirements.

For 2013, GRE’s all-requirements members:

• Collectively did not achieve the statutory energy savings goal of 1.5 percent of gross annual retail energy sales excluding sales to any CIP-exempt customers, equivalent to 127,479,516 kWh in 2013. • Collectively met the statutory minimum spending requirement of 1.5 percent of gross operating revenue, excluding revenue from any CIP-exempt customers, equivalent to $13,525,223 in 2013. • Collectively invested $0 on DRG. This amount complies with the statutory spending cap, equal to $676,261 in 2013. • Collectively invested $11,321,734 on conservation programs, equivalent to 83.71 percent of the total CIP minimum spending amount of $13,525,223. This amount complies with the minimum spending amount on conservation programs (programs designed to save energy rather than reduce peak demand and/or shift energy use to off-peak hours), 50 percent of a utility's total minimum spending amount.

The following member organizations invested at least 0.2 percent of their Minnesota residential GOR on low-income customers through CIP: • Arrowhead • BENCO • Connexus • Cooperative • Dakota Great River Energy – All-Requirements Coops Page 5

• Elk River • Lake Country • Lake Region • Mille Lacs • Nobles • Runestone • Stearns • Todd Wadena

The following member organizations did not invest at least 0.2 percent of Minnesota residential GOR on low-income persons through CIP: • Brown • East Central • Goodhue • Itasca Mantrap • Kandiyohi • McLeod • North Itasca • Steele Waseca

2015 PLAN REVIEW

For 2015, the savings goal and minimum spending requirements are calculated as follows:

• Savings Goal = 1.5 percent of 2011-2013 annual average retail energy sales, excluding sales to any CIP-exempt customers • Minimum Total Spending = 1.5 percent of 2013 GOR, excluding revenue from any CIP-exempt customers • Minimum Low Income Spending = 0.2 percent of 2013 residential GOR

Because GRE had not obtained internal approval of its 2015 budgets and goals by member by the September 5, 2014 deadline, GRE was granted approval to initially enter its 2015 plan at the aggregator-level, with the understanding that budgets and goals would be entered for each member following plan approval. GRE’s total energy savings goal, budget, and low-income budget for its all-requirements members are indicated below.

Table 3: Total Energy Savings Goal for All-Requirements Members Energy Savings (kWh) % of Retail Sales 131,070,165 1.50 %

Great River Energy – All-Requirements Coops Page 6

Table 4: 2015 Total CIP and Low-Income Budget for All-Requirements Members Total CIP Total CIP Low-Income Low-Income (%) Portfolio Portfolio (%) $15,768,120 1.60 % $1,929,115 0.29 %

The CIP plan for 2015 presented by Great River Energy Co-ops - All-requirements:

• Collectively meets the statutory energy savings goal of 1.5 percent of gross annual retail energy sales excluding sales to any CIP-exempt customers, equivalent to 130,711,596 kWh in 2015. • Collectively meets the statutory minimum spending requirement of 1.5 percent of gross operating revenue, excluding revenue from any CIP-exempt customers, equivalent to $14,826,909 in 2015. (As discussed in the 2013 Results section, EUI expenditures do not count as CIP expenditures.) • Collectively invests $0 on DRG. This amount complies with the statutory spending cap, equal to $741,345 in 2015. • Collectively invests $11,254,981 on conservation programs, equivalent to 75.91 percent of the total CIP minimum spending amount of $14,826,909. This amount complies with the minimum spending amount on conservation programs (programs designed to save energy rather than reduce peak demand and/or shift energy use to off-peak hours), 50 percent of a utility's total minimum spending amount. • Collectively invests at least 0.2 percent of Minnesota residential GOR on low-income customers.

FUTURE REPORTING Annual one-year plans and one-year status reports are due on June 1 of each year. The next scheduled report will be on June 1, 2015, when GRE will be required to submit expenditures and savings for 2014, budgets and goals for 2016, and updated program designs in ReportingESP for 2016. Program designs will persist from one year to the next so that it will not be necessary to reenter those programs that have not changed. The baseline periods for each program year are shown below in Table 5.

Please note that there is a change to the low-income spending requirements beginning in 2016. Legislation passed in 20137 changed the calculation of the minimum low-income spending requirements to use a three-year average of residential GOR. Similar to how the 1.5 percent savings goal is calculated, low-income spending requirements will be calculated using average residential GOR over the most recent three-year period prior to the year in which the plan is filed. Therefore, for the 2016 plans filed in 2015, the low-income spending requirements for associations and municipalities will be calculated as 0.2 percent

7 Minn. Laws 2013 Ch. 132 Sec. 2 Great River Energy – All-Requirements Coops Page 7

of 2012-2014 average residential GOR. 8 ReportingESP will be updated to use the new low- income formula beginning with 2016 program totals.

Table 5: Baseline Periods for Cooperatives and Municipalities Savings Goal Total Spending Rqmt Low-Income Spending Rqmt Program Year 1.5% of: 1.5% of: 0.2% of: 2015 2011-2013 average sales 2013 GOR 2013 residential GOR 2016 2012-2014 average sales 2014 GOR 2012-2014 average residential GOR 2017 2013-2015 average sales 2015 GOR 2013-2015 average residential GOR 2018 2014-2016 average sales 2016 GOR 2014-2016 average residential GOR … … … …

DECISION With this letter, I accept GRE-All Requirements’ results for the 2013 program year and approve GRE-All Requirements’ CIP plan for 2015. Please note that approval for GRE’s electric utility infrastructure projects is provisional pending the outcomes of the upcoming policy development process planned by the Department. Also, please complete entry of the 2015 plan at the member-program level by May 1, 2015.

Thank you for your organization and members’ continued contributions to Minnesota’s energy efficiency and conservation goals. Please contact Jessica Burdette at [email protected] or 651-539-1871 or Laura Silver at [email protected] or 651-539-1873 with any questions or concerns.

Sincerely,

WILLIAM GRANT Deputy Commissioner

WG/LNS

8 Since associations and municipalities have already developed and filed 2014 and 2015 plans under the old low- income formula, the Department will apply the new low-income formula beginning in 2016.

April 7, 2015

Jeffrey Haase Energy Efficiency Coordinator Great River Energy 12300 Elm Creek Blvd. Maple Grove, MN 55369

RE: Fixed Members 2013 CIP Results and 2015 Plan

Dear Mr. Haase:

Thank you very much for Great River Energy’s (GRE) efforts to report 2013 Conservation Improvement Program (CIP) results and a 2015 CIP plan in ReportingESP on behalf of GRE’s fixed members. My staff has finished reviewing this information.

2013 CIP RESULTS

Each utility and association has an annual energy savings goal equal to 1.5 percent of gross annual retail sales.1 Based on the information provided, GRE’s fixed members saved a total of 27,418,152 kWh at the generator in 2013, equivalent to 0.96 percent of average 2009- 2011 retail sales, excluding sales to any CIP-exempt customers.2 We appreciate GRE’s energy efficiency and conservation achievements in 2013 and those of its members.

A summary of energy savings by member is as follows:

Table 1: 2013 Energy Savings Results Member Organization Energy Savings (kWh) % of Retail Sales Agralite 1,054,532 0.67 % Crow Wing 2,578,668 0.47 % Federated 1,201,025 0.61 % Meeker 1,018,461 0.60 % Minnesota Valley 10,942,595 1.57 % Redwood 299,304 0.55 % South Central 1,396,273 1.01 % Wright-Hennepin 8,927,294 1.01 % TOTAL 27,418,152 0.96 %

For 2013, 2011 revenues were the baseline for establishing these minimum spending requirements. Based on the information provided, GRE’s fixed members invested a total of $4,277,865 in 2013, approximately 1.56 percent of 2011 Minnesota GOR, excluding revenue from any CIP-exempt customers.

Also, while utilities may claim energy savings that result from EUI projects on top of a minimum savings goal of one percent from conservation improvements, provided the EUI projects results in energy efficiencies greater than what would occur through normal maintenance activity,5 Minnesota Statutes do not allow spending on EUI projects to count towards the CIP spending requirement.6 Therefore, total 2013 CIP spending does not reflect any EUI spending. The Department is supportive of EUI projects that increase generation and distribution efficiencies and appreciates that utilities are reporting information about these investments through ReportingESP.

A summary of CIP investments by member is as follows:

Table 2: 2013 Actual Expenditures Member Total CIP Low-Income Organization Total CIP (% of GOR) Low-Income (% of Res GOR) Agralite $539,669 3.63 % $18,775 0.21 % Crow Wing $474,023 0.83 % $29,686 0.07 % Federated $283,382 1.88 % $14,645 0.22 %

3 See Minn. Stat. §216B.241 subd. 1b. 4 See Minn. Stat. §216B.241 subd. 7(a) and (c). 5 Minn. Stat. §216B.241 subd. 1c (d) allows a utility or associated to include in its energy conservation plan energy savings from electric utility infrastructure projects. 6 Minn. Stat. §216B.241 subd. 1b (b) requires each electric cooperative association and electric municipal utility to spend 1.5% of gross operating revenues annually on energy conservation improvements. Minn. Stat. §216B.241 subd. 1(e) specifically excludes electric utility infrastructure projects from the definition of energy conservation improvements. Great River Energy – Fixed Coops Page 3

Meeker $312,016 1.74 % $13,570 0.10 % Minnesota Valley $1,232,948 1.84 % $63,015 0.15 % Redwood $245,977 4.10 % $9,666 0.19 % South Central $134,968 1.00 % $6,425 0.09 % Wright-Hennepin $1,054,881 1.27 % $126,909 0.23 % TOTAL $4,277,865 1.56 % $282,692 0.15 %

Research and Development (R&D): Each utility and association may spend up to 10 percent of a utility’s minimum spending requirement on R&D (§216B.241, subd. 2(c)).

Load-Management Activities: Each utility and association may use load-management activities to achieve up to 50 percent of a utility’s minimum spending requirement (§216B.241, subd. 1b(e)).

For 2013, GRE’s fixed members:

• Collectively did not achieve the statutory energy savings goal of 1.5 percent of gross annual retail energy sales excluding sales to any CIP-exempt customers, equivalent to 42,630,414 kWh in 2013. • Collectively met the statutory minimum spending requirement of 1.5 percent of gross operating revenue, excluding revenue from any CIP-exempt customers, equivalent to $4,117,920 in 2013. Great River Energy – Fixed Coops Page 4

• Collectively invested $0 on DRG. This amount complies with the statutory spending cap, equal to $205,896 in 2013. • Collectively invested $2,698,900 on conservation programs, equivalent to 65.54 percent of the total CIP minimum spending amount of $4,117,920. This amount complies with the minimum spending amount on conservation programs (programs designed to save energy rather than reduce peak demand and/or shift energy use to off-peak hours), 50 percent of a utility's total minimum spending amount.

The following member organizations invested at least 0.2 percent of their Minnesota residential GOR on low-income customers through CIP: • Agralite • Federated • Wright-Hennepin

The following member organizations did not invest at least 0.2 percent of Minnesota residential GOR on low-income persons through CIP: • Crow Wing • Meeker • Minnesota Valley • Redwood • South Central

2015 PLAN REVIEW

For 2015, the savings goal and minimum spending requirements are calculated as follows: • Savings Goal = 1.5 percent of 2011-2013 annual average retail energy sales, excluding sales to any CIP-exempt customers • Minimum Total Spending = 1.5 percent of 2013 GOR, excluding revenue from any CIP-exempt customers • Minimum Low Income Spending = 0.2 percent of 2013 residential GOR

Table 3: Total Energy Savings Goal for Fixed Members Energy Savings (kWh) % of Retail Sales 47,624,161 1.51 %

Great River Energy – Fixed Coops Page 5

Table 4: 2015 Budgets Total CIP Total CIP Low-Income Low-Income (%) Portfolio Portfolio (%) $4,769,847 1.51 % $544,566 0.27 %

The fixed member CIP plan for 2015 presented by GRE:

• Collectively meets the statutory energy savings goal of 1.5 percent of gross annual retail energy sales excluding sales to any CIP-exempt customers, equivalent to 47,392,913 kWh in 2015. • Collectively meets the statutory minimum spending requirement of 1.5 percent of gross operating revenue, excluding revenue from any CIP-exempt customers, equivalent to $4,753,929 in 2015. (As discussed in the 2013 Results section, EUI expenditures do not count as CIP expenditures.) • Collectively invests $0 on DRG. This amount complies with the statutory spending cap, equal to $237,696 in 2015. • Collectively invests $3,595,237 on conservation programs, equivalent to 75.63 percent of the total CIP minimum spending amount of $4,753,929. This amount complies with the minimum spending amount on conservation programs (programs designed to save energy rather than reduce peak demand and/or shift energy use to off-peak hours), 50 percent of a utility's total minimum spending amount. • Collectively invests at least 0.2 percent of Minnesota residential GOR on low-income customers.

FUTURE REPORTING Annual one-year plans and one-year status reports are due on June 1 of each year. The next scheduled report will be on June 1, 2015, when Great River Energy Co-ops - Fixed will be required to submit expenditures and savings for 2014, budgets and goals for 2016, and updated program designs in ReportingESP for 2016. Program designs will persist from one year to the next so that it will not be necessary to reenter those programs that have not changed. The baseline periods for each program year are shown below in Table 5.

7 Minn. Laws 2013 Ch. 132 Sec. 2 Great River Energy – Fixed Coops Page 6

of 2012-2014 average residential GOR. 8 ReportingESP will be updated to use the new low- income formula beginning with 2016 program totals.

DECISION With this letter, I accept GRE-Fixed’s results for the 2013 CIP program year and approve GRE-Fixed’s CIP plan for 2015. Please note that approval for GRE’s electric utility infrastructure projects is provisional pending the outcomes of the upcoming policy development process planned by the Department. Also, please complete entry of the 2015 plan at the member-program level by May 1, 2015.

Sincerely,

WILLIAM GRANT Deputy Commissioner

WG/LNS

8 Since associations and municipalities have already developed and filed 2014 and 2015 plans under the old low- income formula, the Department will apply the new low-income formula beginning in 2016. APPENDIX F LADCO SCENARIO ANALYSIS 2018-2032 INTEGRATED RESOURCE PLAN

Submitted to the Minnesota Public Utilities Commission Docket No. ET2/RP-17-286 April 28, 2017 Conservation Plan Scenario Analysis -

Benefit/Cost Results and Rate Impact

Prepared for

Great River Energy

Prepared by

LADCO Services, LLC 7820 Galway Cove Eden Prairie, MN 55347 (952) 913-3465

March 24, 2017 Table of Contents

Section 1 -Introduction 1

Section 2 - Method of Analysis 2

Section 3 - Great River Energy's 2015 Conservation Plan 3

Section 4- Scenario Definition and Associated Input Parameters 4

Section 5 - Scenario Results 6

Appendix 1 - Program Incremental Costs and Incentives by Scenario

Appendix 2 -Annual Plan Savings and Costs

Appendix 3- Total Meter Savings by Program and Scenario

Appendix 4 - Individual Program Costs by Scenario

Appendix 5 - Benefit/Cost Results by Program

LADCO Services, LLC March 24, 2017 Section 1

Introduction

Great River Energy's (GRE) conservation Improvement Plan (CIP) contains both conservation and load management projects. Over the past several years, conservation projects saved energy at a rate of approximately 1% of its annual sales. An additional 0.5% level of savings was realized through supply side efficiency projects. This level of achievement is challenging for rural electric cooperatives, owing to the greater proportion of residential customers, compared to that of investor owned utilities (IOU). Among utilities, the largest conservation savings are attributed to the commercial and industrial classes. Since GRE has a lower proportion of commercial and industrial customers than the IOUs, its savings percentage would be expected to be lower, given the same effort of implementation.

While it would be possible to increase the magnitude of the conservation program, this increased size would be accompanied by increased costs. These costs could be in the form of greater incentives to customers and greater program administrative costs. The measures implemented in more aggressive plans could be the same measures currently implemented, other identified measures or future measures not currently identified. One measure of cost-effectiveness for more aggressive plans would be the standard DSM cost-effectiveness tests, i.e. Participant, Utility, Ratepayer Impact and Societal tests. Resource plans are generally evaluated using the Utility test, which is also known as the Revenue Requirements test. While aggressive conservation may lower revenue requirements and look attractive from that perspective, it does not address the rate impacts caused by the additional conservation. In theory, the Ratepayer Impact test does address the rate impact. Unfortunately it does so in a manner that is not intuitively obvious. A calculation of projected rate impact is required.

This study addresses the cost-effectiveness of various levels of conservation both in terms the cost-effectiveness tests and projected rate impact.

LADCO Services, LLC March 24, 2017 Section 2

Method of Analysis

The conservation portion of GRE's projected 2017 CIP is used as the basis for this study. The conservation portion of the 2017 plan is 1.0% of weather normalized sales. This plan was constructed based on the average levels of achievements across distribution cooperatives for past years combined with known kWh reductions from those measures that are known to have increased baselines and reduced kWh savings. It does not include load management programs that also provide some kWh savings. Three additional plans are constructed by increasing participation. The three plans correspond to 1.25% of sales, 1.5% of sales and 2.0% of sales. Costs are escalated in a manner consistent with the Utility Net Benefit correction factors originally agreed to with the DER and other utilities in Docket No. E, G999/CI-08-133. Since a 1. 0% of sales plan for GRE is consistent with a 1.5% of sales plan for the IOUs, the factors used to increase an IOU plan from 1.5% to 3% are the same factors used to escalate the GRE plan from approximately 1% to 2%. Although the existing measures are used in the analysis, they are proxies for whatever measures would be implemented to obtain the greater level of savings. Any new measures used to escalate a plan would be expected to require greater incentives than those currently offered, have lower unit savings or both. The focus of this study is the level of savings and costs and not the actual measures.

Each plan is assumed to be implemented from 2018 through 2032, the end of the IRP study period. Since the IRP is filed in 2017, it is reasonable to assume that any scenario variations would not occur until 2018. To simplify the analysis, measures are examined at the program level. For example, Residential lighting encompasses all lighting components, such as LED, CFL and holiday lighting. The program loadshapes are proportioned by the projected 2018 components to obtain a reasonable loadshape. Program lives are determined in the same manner.

Each plan is evaluated for cost-effectiveness over the period from 2018 through 2051 to include a complete lifecycle of the plan implemented in 2032, the last year of the IRP study period. Cost effectiveness results are computed for the Participant, Utility, Ratepayer Impact and Societal tests. Finally a calculation of relative rate impacts between plans is calculated for the year 2022, the last year of the IRP action plan.

LADCO Services, LLC 2 March 24, 2017 Section 3

Great River Energy's 2017 Conservation Plan

GRE's projected 2017 conservation plan is shown in Table 3.1 below. The participant incentives, administrative costs and savings at the meter were supplied by GRE. The savings at the generator are a result of the modeling that considers loadshapes and system losses. Costs and savings associated with GRE's load management programs are not included, as these are not expected to vary significantly over time.

The savings at the generator of 122,228,338 kWh represent 1.0% of annual sales without opt-out customers. This plan is the basis for the scenario analysis. The report includes assumptions and results for the Commercial/Industrial/Agricultural, Residential and Income Eligible classes as well as for the total plan. Details for the individual programs are shown in the various appendices. These are noted in the upcoming sections. To simplify the analysis, the actual numbers of program participants are not used. Rather participant escalators are used for each scenario. The 2017 plan is assumed to have an escalator of 1.0.

LADCO Services, LLC 3 March 24, 2017 Section 4 Scenario Definition and Associated Input Parameters

Four scenarios are developed for this analysis. These scenarios are defined as:

Base Case Scenario

This scenario is identical to the 2017 conservation portion of the CIP. Costs are escalated by the Consumer Price Index (CPI) each year, beginning in 2018. The measures from the 2017 CIP are used as proxies for measures to be implemented in the future. While the actual measures may vary, the overall spending level and savings level are expected to be representative of the scenario. The Income Eligible programs are not varied by scenario, but are kept at the 2017 level, except for the annual inflation cost escalations, beginning in 2018. The Income Eligible Project is based on customer need and is not easily varied. Increases to the Program are not reasonable. This scenario is used as the basis for determining the other scenarios.

1.25% Scenario

With the exception of the Income Eligible project, incentives are increased 50% from the Base scenario. Administrative costs increase 121%. Participation increases 25.6908%. The Income Eligible project does not change from the Base Case. Savings represent 1.25% of sales.

1. 5% Scenario

With the exception of the Income Eligible project, incentives increase 125%, administrative costs increase 180% and participation increases 51.4459%. Again, all are with respect to the Base. The Income Eligible project does not change from the Base. Savings represent 1.50% of sales.

2. 0% Scenario

With the exception of the Income Eligible project, incentives increase 234% to equal full incremental cost. Administrative costs increase 273% and participation increases 102.9559%. The Income Eligible project does not change from the Base Case. Savings represent 2.0% of sales. All percentages are relative to the Base scenario.

Table 4.1 below lists the per-measure incentives for each customer class, of each scenario. Individual measure incentives are shown in Appendix 1 along with the incremental costs GRE assumed. The incentives are set to 30% of assumed incremental cost for the Base Case.

LADCO Services, LLC 4 March 24, 2017 Table 4.2 below lists the participant escalators assumed for each customer class of each scenario. The participation for all programs within a class is escalated using the class escalator.

Table 4.3 below lists the annual administrative costs for each customer class, under each scenario. Administrative are not allocated to individual programs within a class.

Each plan assumes implementation at a constant level through the year 2032 for all scenarios, including the Base. Plans projecting impacts this far out are suspect in terms of achievable impacts in the later years. Program costs are escalated at the CPI escalator for each year beginning in 2018.

LADCO Services, LLC 5 March 24, 2017 Section 5

Scenario Results

Each of the Plans is evaluated for cost-effectiveness over a period from 2018 through 2051, with implementation extending through 2032. It is necessary to consider program life past the year of implementation to balance the costs incurred in the first year with benefits in later years. Table 5.1 below lists the 2018 annual energy and peak savings, at the generator, for each project in each scenario. The year 2018 is the first year that the scenarios vary. The cumulative savings for each plan in 2022, the last year of the action plan, are also shown. The cumulative savings include 2018 - 2022 impacts and also factor in losses due to end of measure life. Annual plan level savings and costs are shown in Appendix 2. Individual program savings at the meter are shown in Appendix 3.

Total plan spending for each scenario in 2018 is shown in Table 5.2 below. Individual program costs are shown in Appendix 4.

Benefit/cost results for each scenario are shown in Table 5.3 below. Program level benefit/cost results are shown in Appendix 5.

LADCO Services, LLC 6 March 24, 2017 TABLE 5.3: Benefit/Cost Results by Scenario

The benefit/cost results indicate the following:

• The Societal, Utility, and Participant tests indicate that the overall program portfolio is cost effective for all scenarios. This suggests that the effects of varying budget, incentives, and participants do not cause a plan to become not cost-effective;

• For the Utility test, the program portfolio becomes less cost effective when going from the Base to the 2% scenario. This suggests diminishing returns when increasing the incentive and administrative cost levels. Participation rates do not increase in proportion to the funding and incentive levels;

• In the Societal test, there is also a decrease in the cost effectiveness as the amount of spending increases. This is caused by the increasing administrative costs;

• The Ratepayer Impact Measure test is not cost effective for any scenario. The present value of the revenue loss and program costs is greater than the present value of the energy and capacity savings;

• The larger incentives in the 1.25%, 1.6% and 2% scenarios increase the cost effectiveness of the Participant test;

LADCO Services, LLC 7 March 24, 2017 Examining the results of the Ratepayer Impact Measure Test can provide additional insight. An approximation of relative rate impacts caused by each scenario can be calculated from the results of the cost-effectiveness evaluations. Figure 5.1 below illustrates the impact on average system rate in the year 2022, relative to the Base Scenario.

1.2

1 2.0% 1.01¢/kWh 0.8

~ -3:;0.6 1.25% .!II: 0.23¢/kWh :!DA Base t) 0.00¢/kWh as0.2 c. ~ 0 +------+~----~------~------~------~ .! $17,020 $32,691 $49,707 $84,770 ~0.2 -0.4 -0.6 Annual DSM Spending ($1,000)

The rate impacts assume program costs are expensed in the year incurred and also account for energy and capacity savings realized. They represent the change in rates in the year 2022, in 2022 dollars, due to the various scenarios. The rate of the 2% Scenario is 1.01 ¢/kWh greater than the Base Case rate in 2022. This is in addition to the 0.49¢/kWh increase associated with the Base plan, as opposed to no additional conservation after 2018.

Of the 1.01 ¢/kWh differential rate impact due to the additional conservation of the 2% scenario, compared to the Base scenario, 0.62¢/kWh is due to the program incentives and administrative costs in 2022. The remaining 0.39¢/kWh is due to the lower sales caused by the increased conservation. While the rate impact caused by the increased program spending remains relatively flat over time, the rate impact due to the lower sales associated with the 2% scenario continues to increase each additional year the scenario is implemented.

Figure 5.2 below shows historical sales, sale under the Base scenario and sales under the 2% scenario, beginning in 2018.

LADCO Services, LLC 8 March 24, 2017 ,-·-- ...... f!g~r~-~-~~:._ .. ;!f~.~t~f~~~-~~-~~~~~-..:y~~!~~~-~--~~~-~!! ---··----- .. 13000 .,...---- 1 1 ::::: ;1==~===~==5=~===·:-===:::::~=: 10000 +------GWh 9000 +------=-History 8000 +------Base 7000 +------2% Scenario 6000 +------5000 +I~'~'~'"'r1 ••~•~•~•~'''"'r•••~·~'''~'''"' ''''~'~''''' ~ m ~ m ~ ~ m ~ m ~ ~ m ~ 0 0 ~ ~ ~ ~ ~ N N N N N M 0 0 0 0 0 0 0 0 0 0 0 0 0 N N N N N N N N N N N N N Year

Existing conservation efforts, combined with naturally occurring conservation caused by more strict equipment efficiency standards and personal choice, along with other factors, resulted in relatively flat sales growth over the past several years. Increasing conservation efforts above the current level may likely result in negative load growth and higher rates for customers.

LADCO Services, LLC 9 March 24, 2017 Appendix 1

Program Incremental Costs and Incentives by Scenario

LADCO Services, LLC March 24, 2017 Appendix 1: Program Unit Incremental Costs and Incentives by Scenario -- - Unit Incremental Costs ($) Unit Incentives ($) 2,017 2,018 2017 2018 Plan All scenar1os All Scenarios Base - 1.0% 1.25% 1.50% 2.00%

Residential

Residential Appliances $1,266,666.67 $1 ,298,333.33 $380,000.00 $389,500.00 $584,250.00 $876,375.00 $1 ,298,333.33 Hot Water Savings $44,000.00 $45,100.00 $13,200.00 $13,530.00 $20,295.00 $30,442.50 $45,100.00 Air Source Heat Pump $1,550,000.00 $1,588,750.00 $465,000.00 $476,625.00 $714,937.50 $1,072,406.25 $1,588,750.00 Residential Cooling $2,666,666.67 $2,733,333.33 $800,000.00 $820,000.00 $1 ,230,000.00 $1 ,845,000.00 $2,733,333.33 GSHP - Residential (Ton) $2,833,333.33 $2,904,166.67 $850,000.00 $871 ,250.00 $1,306,875.00 $1,960,312.50 $2,904,166.67 Res Home Energy Savings $523,333.33 $536,416.67 $157,000.00 $160,925.00 $241,387.50 $362,081.25 $536,416.67 AC Tune-u!) - Residential $150,000.00 $153,750.00 $45,000.00 $46,125.00 $69,187.50 $103,781.25 $153,750.00 Residential Lighting $1,233,333.33 $1,264,166.67 $370,000.00 $379,250.00 $568,875.00 $853,312.50 $1,264,166.67 Electrically Com mutated Motor (ECM) $823,333.33 $843,916.67 $247,000.00 $253,175.00 $379,762.50 $569,643.75 $843,916.67 Residential Measure Behavior Modification $66,666.67 $68,333.33 $20,000.00 $20,500.00 $30,750.00 $46,125.00 $68,333.33 Water Heat $1 '133,333.33 $1 '161 ,666.67 $340,000.00 $348,500.00 $522,750.00 $784,125.00 $1,161 ,666.67

CI&A

Commercial Agricultural $150,863 $154,635 45,259.00 46,390.48 69,585.71 104,378.57 154,634.92 Commercial Custom $3,133,333 $3,211,667 940,000.00 963,500.00 1 ,445,250.00 2,167,875.00 3,211 ,666.67 Commercial Building Engineering & Design Assistance $470,000 $481,750 141,000.00 144,525.00 216,787.50 325,181.25 481,750.00 Commercial GSHP $800,000 $820,000 240,000.00 246,000.00 369,000.00 553,500.00 820,000.00 Commercial HVAC $1,210,000 $1,240,250 363,000.00 372,075.00 558,112.50 837,168.75 1 ,240,250.00 Commercial Motors and Drives $1,260,000 $1,291,500 378,000.00 387,450.00 581 '175.00 871,762.50 1,291,500.00 Commercial New Construction Lighting $1,766,667 $1,810,833 530,000.00 543,250.00 814,875.00 1,222,312.50 1,810,833.33 Commercial Retrofit Lighting $4,250,000 $4,356,250 1,275,000.00 1,306,875.00 1,960,312.50 2,940,468.75 4,356,250.00

Income Eligible $1,400,000.00 $1,435,000.00 $1,400,000.00 $1,435,000.00 $1,435,000.00 $1,435,000.00 $1,435,000.00 Appendix 2

Annual Plan Savings and Costs

. LADCO Services, LLC March 24, 2017 Appendix 2: Annual Plan Savings and Costs Page 1 of4

Great River Energy Base Scenario - Plan Impacts and Costs

•·;iii;·;~. ; tF '"·ir:~:,\PUio\E:i·Q~tsz:·.•· .•.. ::; •. : c•.;;;;: r~~i~;:;L~ lsi!~. ~~ ,,;,,,·:~i·.~arnia:j '"0~~r".. ;;~:.~,rt:~ ·:sa~~~ 1 ·,: 0\~~~l ... . ; '? [Tf($)'.'1~ ?.• ~;.

2017 8,999,459 6,043,846 15,043,305 2018 9,224,445 6,194,942 15,419,388 2019 9,455,057 6,349,816 15,804,872 2020 9,691,433 6,508,561 16,199,994 2021 9,933,719 6,671,275 16,604,994 2022 10,182,062 6,838,057 17,020,119 2023 10,436,613 7,009,008 17,445,622 2024 10,697,529 7,184,234 17,881,762 2025 10,964,967 7,363,839 18,328,806 2026 11,239,091 7,547,935 18,787,027 2027 11,520,068 7,736,634 19,256,702 2028 11,808,070 7,930,050 19,738,120 2029 12,103,272 8,128,301 20,231,573 2030 12,405,854 8,331,508 20,737,362 2031 12,716,000 8,539,796 21,255,796 2032 13,033,900 8,753,291 21,787,191 2033 13,359,747 8,972,123 22,331,871 2034 13,693,741 9,196,426 22,890,168 2035 14,036,085 9,426,337 23,462,422

Savings are at the generator Peak on July weekday Appendix 2: Annual Plan Savings and Costs Page 2 of4

Great River Energy 1.25% Scenario - Plan Impacts and Costs

Savings are at the generator Peak on July weekday Appendix 2: Annual Plan Savings and Costs Page 3 of4

Great River Energy 1.5% Scenario - Plan Impacts and Costs

Savings are at the generator Peak at 1600 hrs on July weekday Appendix 2: Annual Plan Savings and Costs Page4 of4

Great River Energy 2.0% Scenario - Plan Impacts and Costs

Savings are at the generator Peak at on July weekday Appendix 3

Total Meter Savings by Program and Scenario

LADCO Services, LLC March 24, 2017 Appendix-- 3: Total Meter Savings- by Program and Scenario Annual KWh Savings (KWh} 2017 2018 Plan Base -1.0% 1.25% 1.50% 2.00% I Total Residential 41,034,000 41,034,000 51,575,980 62,144,293 83,280,919

Residential Appliances 4,290,000 4,290,000 5,392,137 6,497,027 8,706,808 Hot Water Savings 1,400,000 1,400,000 1,759,672 2,120,242 2,841,382 Air Source Heat Pump 2,500,000 2,500,000 3,142,271 3,786,146 5,073,897 Residential Cooling 1,622,000 1,622,000 2,038,705 2,456,452 3,291,944 GSHP- Residential (Ton) 10,700,000 10,700,000 13,448,920 16,204,707 21,716,280 Res Home Energy Savings 750,000 750,000 942,681 1,135,844 1,522,169 AC Tune-up - Residential 150,000 150,000 188,536 227,169 304,434 Residential Lighting 7,500,000 7,500,000 9,426,813 11,358,439 15,221,692 Electrically Commutated Motor (ECM) 2,122,000 2,122,000 2,667,160 3,213,681 4,306,724 Residential Measure Behavior Modification 9,000,000 9,000,000 11,312,176 13,630,127 18,266,030 Water Heat 1,000,000 1,000,000 1,256,908 1,514,459 2,029,559

Total CI&A 66,675,000 66,675,000 83,804,368 100,976,525 135,320,838

Commercial Agricultural 1,500,000 1,500,000 1,885,363 2,271,688 3,044,338 Commercial Custom 14,500,000 14,500,000 18,225,172 21,959,649 29,428,604 Commercial Building Engineering & Design Assistance 1,825,000 1,825,000 2,293,858 2,763,887 3,703,945 Commercial GSHP 5,000,000 5,000,000 6,284,542 7,572,293 10,147,794 Commercial HVAC 2,750,000 2,750,000 3,456,498 4,164,761 5,581,287 Commercial Motors and Drives 11,000,000 11,000,000 13,825,993 16,659,044 22,325,148 Commercial New Construction Lighting 15,000,000 15,000,000 18,853,626 22,716,878 30,443,383 Commercial Retrofit Lighting 15,100,000 15,100,000 18,979,317 22,868,324 30,646,339

Total Income Eligible 3,322,000 3,322,000 3,322,000 3,322,000 3,322,000

Total Conservation Plan 111,031,000 111,031 ,000 138,702,348 166,442,817 221,923,757

Total Plan at Generator 122,228,338 122,228,338 152,690,307 183,228,368 244,304,491 Appendix 4

Program Costs by Scenario

LADCO Services, LLC March 24, 2017 Appendix 4: Total Costs by Scenario and Program

Total Costs ($) I 2017 2018 Plan Base -1.0% 1.25% 1.50% 2.00%

Total Residential $7,637,038 $7,827,964 $16,072,872 $24,214,392 $40,669,466 I Incentives $3,687,200 $3,779,380 $7,125,502 $12,878,357 $25,568,247 Residential Appliances $380,000 $389,500 $734,349 $1,327,234 $2,635,044 Hot Water Savings $13,200 $13,530 $25,509 $46,104 $91,533

Air Source Heat Pump $465,000 $476,625 $898,611 $1,624,115 $3,224,462 1 Residential CoolinQ $800,000 $820,000 $1,545,997 $2,794,176 $5,547,461 I GSHP- Residential (Ton) $850,000 $871,250 $1,642,622 $2,968,812 $5,894,177 Res Home EnerQv SavinQs $157,000 $160,925 $303,402 $548,357 $1,088,689 AC Tune-up - Residential $45,000 $46,125 $86,962 $157,172 $312,045 Residential Lighting $370,000 $379,250 $715,024 $1,292,306 $2,565,701 Electrically Commutated Motor (ECM) $247,000 $253,175 $477,327 $862,702 $1,712,779 Residential Measure Behavior Modification $20,000 $20,500 $38,650 $69,854 $138,687 Water Heat $340,000 $348,500 $657,049 $1,187,525 $2,357,671 Administrative $3,949,838 $4,048,584 $8,947,371 $11,336,035 $15,101,218

Total CI&A $5,848,467 $5,994,679 $11 ,946,423 $19,221,342 $34,531 ,487

Incentives $3,912,259 $4,010,065 $7,560,428 $13,664,425 $27,128,880 Commercial Agricultural $45,259 $46,390 $87,463 $158,077 $313,841 Commercial Custom $940,000 $963,500 $1,816,547 $3,283,157 $6,518,267 Commercial Building Engineering & Design Assistance $141,000 $144,525 $272,482 $492,474 $977,740 Commercial GSHP $240,000 $246,000 $463,799 $838,253 $1,664,238 Commercial HVAC $363,000 $372,075 $701,496 $1,267,857 $2,517,160 Commercial Motors and Drives $378,000 $387,450 $730,484 $1,320,248 $2,621,175 Commercial New Construction LiQhtinQ $530,000 $543,250 $1,024,223 $1,851,142 $3,675,193 Commercial Retrofit LiQhtinQ $1,275,000 $1,306,875 $2,463,933 $4,453,218 $8,841,266 Administrative $1,936,208 $1,984,613 $4,385,995 $5,556,917 $7,402,607

Total Income Eligible $1,557,800 $1,596,745 $1,596,745 $1,596,745 $1,596,745 Incentives $1,400,000 $1,435,000 $1,435,000 $1,435,000 $1,435,000 Administrative $157,800 $161,745 $161,745 $161,745 $161,745

Total Conservation Plan $15,043,305 $15,419,388 $29,616,040 $45,032,480 $76,797,698 Incentives $8,999,459 $9,224,445 $16,120,929 $27,977,783 $54,132,127 Administrative 6,043,846 6,194,942 13,495,111 17,054,697 22,665,570 Appendix 5

Benefit Cost Results by Program

LADCO Services, LLC March 24, 2017 Appendix 5: Benefit/Cost Results by Program Page 1 of4

BenelltiCost Results - Base Scenario Benefit/Cost Results - Base Scenario Benefit/Cost Results - Base Scenario

········.·,,:;,';.··iitfr;0\t?Jlii;;i6~ •••~~=~,~~~=~"'\:i~.~~~d~t~ ·•H:'i[~;~~~ct\ve >;~;~~~~~~,!~~~~?~~~~,:.~~::;:i:;i ~~~~~~ ~~lt~~~~·~~::~~r~~fili~. Commercial Aaricultural Residential Aoollances Total Plan Societal $19,926 $2,267 $17,659 8.79 Societal $54,026 $19,031 $44,995 3.36 Societal $1,982,976 $492,427 $1.490,549 I 4.03 Utility Cost $8,323 $573 $7,750 14.53 Utility Cost $28,904 $4,811 $24,093 6.01 Utility Cost $897,347 $190,470 $706,877 I 4.71

Rat~r Impact Measure $21,448 $31,155 $9,707)1 0.69 Ratepayer Impact Measure $71515 $114,642 $43, 127) I o.62 Rat_~payerlm~ct Measure $2,120,732 $2,944,383 .$823.65111 0.72

Participant $18,030 $1,910 $16,120 9.44 Parttctoant $96,815 $19,031 $77 784 5.09 Parti<;~p_ant $1,916.285 $370,809 $1,545.476 I 5.17 Commercial Custom Residential AIC & ASHP Tune-up Societal $245,585 $47,076 $198,509 5.22 Societal $700 $2,254 1$1,554)1 0.31 UIII~Cost L $107,407 $11,9021 $95,505 1 9.o2 Utility Cost $481 $570 ($89)1 0.84 Rateoaver lmoact Measure $260618 $351,984 $91,366)1_ 0.74 Ratepay~rImpact Measure $1,023 $1,569 $546)1 0.65 Participant $198,773 $39,672 $159101 5.01 Participant $1,221 $2,254 $1 ,033)1 0.54 Commercial Eng[neertng & Design Assistance Residential Air Source Heat Pump Societal $44,539 $7,061 $37,478 6.31 Societal $46,859 $23,288 $23,571 2.01 UtilitYCost $19 359 $1,785 $17,574 10.85 Utilitv Cost $18,903 $5,888 $13,015 3.21 Ratepayer Impact Measure $44,143 $55 002 $10,859)1 0.80 Ratepayer Impact Measure $50,206 $86,242 $36,036)1 0.58 Participant $30 219 $5,951 $24,268 5.08 Partie! ant $77,123 $23,288 $53,835 3.31 Commercial Ground Source Heat Pump Residential Behavortal Societal $140,912 $12,019 $128,893 11.72 Societal $7,771 $1,002 $6,769 7.76 Utility Cost $65 492 $3,039 $62,453 21.55 Utility Cost $3,741 $253 $3,488 14.79

Rat~QIII'EirImpact Measure $141,855 $157,302 $15,447 0.90 Ratepayer Impact Measure $11,580 $22 092 $10,512 0.52 Participant $80,939 $10,129 $70,810 7.99 Participant $16,795 $1002 $15,793 16.76 Commercial HVAC Residential Cooling Societal $95 321 $18,179 $77,142 5.24 Societal $74,806 $40,065 $34,741 1.87 Utilnv cost $47,784 $4,596 $43,188 10.40 Utility Cost $42,464 $10,129 $32,335 4.19 Ratepayer Impact Measure $93,425 $93,082 $343 1.00 Rateoaver lmoact Measure $79,905 $79,395 $510 1.01 Participant $47,441 $15,320 $32,121 3.10 Participant $57,524 $40,065 $17,459 1.44 Commercial Motors & Drives Residential ECM Motors Societal $176,397 $18,931 $157,466 9.32 Societal $36,920 $12,370 $24,550 2.98 Utility Cost $74,456 $4 786 $69,670 15.56 Utllnvcost $16.414 $3,127 $13,287 5.25 Ratepayer lmpacl Measure $184,717 $256,811 $72,094 0.72 Ratepayer Impact Measure $40,181 $63,715 $23,534)1 0.63 Parti~nt $146,550 $15,953 $130,597 9.19 Participant $54,713 $12,370 $42,343 4.42 Commercial Lighting -New Construction Residential Ground Source Heat Pumo Societal $270 507 $26,543 $243,964 10.19 Societal $261,578 $42,569 $219,009 6.14 Ulility Cost $122,803 $6,711 $116,092 18.30 UlilnyCost $113,858 $10,762 $103,096 10.58 Rateoaver lmoact Measure $293,141 $370,363 $77,222\1 0.79 Rate~mrImpact Measure $270,093 $391,442 $121,349 0.69 Participant $200,026 $22,369 $177.657 8.94 Participant $340,343 $42,569 $297,774 8.00 Commercial Lighting -Retrofit Residential Home Energy Savings Societal $272,745 $63,853 $208,892 4.27 Societal $15,946 $7,863 $8,083 2.03 Ulllitv Cost $123,934 $16,143 $107,791 7.68 UlilitvCost $7,837 $1,988 $5,849 3.94 Ratepayer Impact Measure $294,597 $381,411 $86,814) I 0.77 Ratepayer lmoact Measure $17,465 $24,629 $7164 0.71 Particlpanl $210,747 $53,811 $156,936 3.92 Participant $20,385 $7,863 $12,522 2.59 Commercial Administrative Costs Residential Hot Water Savin s Societal $0 $29,090 $29,090)1 0.00 Societal $16,185 $661 $15,524 24.49 Utii~Cost $0 $24,515 $24,515)1 0.00 Utility Cost $7,606 $167 $7,439 45.54 Rat-Impjlct Measure $0 $24,515 $24,515)1 0.00 Ratepayer Impact Measure $20,679 $31,238 $10,559 0.66 Participant $0 $0 $0 #DIV/01 Partie! ant $23,784 $661 $23,123 35.98 Total Commerclai!Industrtai!Agrtcultural Residential Lighting Societal $1,265,932 $225,019 $1,040 913 5.63 Societal $109 933 $18,530 $91,403 5.93 Utilitv Cost $569,558 $74,050 $495,508 7.69 UtilityGost $49,103 $4,685 $44,418 10.48 Ratepayer Impact Measure $1,333,944 $1,721,625 $387,681)1 0.77 Ratepayer Impact Measure $128,255 $201,354 $73,099 0.64 Participant $932,725 $165,115 $767,610 5.65 Partici ant $164,835 $18,530 $146,305 8.90 Residential Water Heaters Discountedto 2018 Societal $23,266 $17,027 $6,239 1.37 UtilitvCost $11,897 $4,305 $7,592 2.76 Ratepayer Impact Measure $30,916 $40,675 $9,759 0.76 Partici ant $29,143 $17,027 $12,116 1.71 BenelltiCost Results - Base Scenario Residential Administrative Costs Societal $0 $59,343 $59,343 0.00 Utii~Cost $0 $50,011 $50,011 0.00 '·· Ratepayer lmoact Measure $0 $50,011 $50,011l I o.oo Partlci ant $0 $0 $0 #DIV/01 Total Residential Societal $59,054 $23.405 $35,649 2.52 Societal $657,990 $244,003 $413,987 2.70 Utility_Cost $26.581 $19,724 $6,857 1.35 UtllnyCost $301,208 $96,696 $204,512 3.11 Ratepayer Impact Measure $64,970 $115,754 $50,784' 0.56 Ratepay.l'r Impact Measure $721,818 $1,107,004 $385, 186) 1 0.65

Participant $100,879 ~$21,034 $79,845 4.80 Partici ant $882,681 $184,660 $698,021 4.78

Discountedto 2018 Discountedto 2018 Appendix 5: Benefit/Cost Results by Program Page 2 of4

Benefit/Cost Results -1.25% Scenario Benefit/Cost Results -1.25% Scenario Benefit/Cost Results -1.25% Scenario

18 .fiffl!;:-~::i01!$>Yf,.·:,·;:;p::':-:·l''ii.~~18:$~=~D~II=i:~;'~~~:~j~ ~i;······.:::r:r~':~f;;~~1=~eN'!;;;~:,;;_r~~~~ !11,'~lfti~~~:t :;:~,:~.:::.~~ ~=~~~~::~::~: ~\~1~ Commercial Aaricultural Residential Aoollances Total Plan Societal $25,045 $2,849 $22,196 8.79 Societal $80,469 $23,920 $56,549 3.36 Societal $2,475,325 $697,207 $1,778,118 I 3.55 UtilityGost $10,462 $1,080 $9,382 9.69 Utility Cost $36,324 $9,071 $27,253 4.00 Utility-Cost $1,119,705 $365,834 $753,871 I 3.06 Rateoaver lmoact Measure $26 957 $39,518 $12 561ll 0.68 Ratepayer lmoact Measure $89 877 $147,113 $57 23Jill 0.61 Ratepayer Impact Measure $2,646,297 $3,801,353 $1,155,05611 0.70 Participant $23,022 $2,401 $20,621 9.59 Participant $125,275 $23,920 $101,355 5.24 Participant $2,448.624 $460,669 $1,987,955 I 5.32 Commercial Custom Residential A/C & ASHP Tune-up Societal $308,678 $59170 $249,508 5.22 Societal $879 $2 833 $1,954 0.31 Utility Cost $135,001 $22,439 $112,562 6.02 UtilitYCost _L $605 $1,0741 ($469)] 0.56 Rateoaver lmoact Measure $327,572 $449,891 $122,319)1 0.73 Ratepayer Impact Measure $1286 $2,330 $1,04411 0.55 Participant $257 319 $49,865 $207,454 5.16 Participant $1,960 $2,833 $873 0.69 Commercial Enalneerlna & Destan Assistance Residential Air Source Heat Pump__ Societal $55,902 $8,876 $47,026 6.30 Societal $58,892 $29,270 $29 622 2.01 Utility Cost $24,280 $3,366 $20,914 7.21 Utility Cost $23,756 $11,100 $12,656 2.14 Ratepayer Impact Measure $55,387 $70,211 $14,824)1 0.79 Ratepayer Impact Measure $63,084 $112,081 $48,997 0.56 Particijlant $39,104 $7,480 $31,624 5.23 ParticiPant $101,327 $29,270 $72,057 3.46 Commercial Ground Source Heat Pump Residential Behavortal Societal $177113 $15,107 $162,006 11.72 Societal $9,767 $1259 $8,508 7.76 Utility Cost $82,317 $5,729 $76,588 14.37 Utility Cost $4,702 $477 $4,225 9.86 Rateoaver lmoact Measure $178,298 $199,623 $21,325 0.89 Ratepayer ImPactMeasure $14,555 $27 926 $13,371 0.52 Participant $103,642 $12,731 $90,911 8.14 Participant $21,299 $1259 $20,040 16.92 commercial HVAC Residential Cooling Societal $119,809 $22,850 $96,959 5.24 Societal $93,867 $50,358 $43,509 1.86 Utilitv Cost $60,060 $8,665 $51,395 6.93 UtilltvCost $53,262 $19,097 $34,165 2.79 Ratepayer Impact Measure $117,426 $119,884 $2,458 0.98 Ratepayer Impact Measure $100,234 $106,070 $5,836 0.94 Participant $62,518 $19,256 $43,262 3.25 Participant $79,856 $50,358 $29,498 1.59 Commercial Motors & Drives Residential ECM Motors Societal $221,625 $23,794 $197,831 9.31 Societal $46,405 $15,548 $30,857 2.98 Utility Cost $93,515 $9,023 $84,492 10.36 UtilitYCost $20,630 $5,896 $14,734 3.50 Ratepayer Impact Measure $232,043 $325,736 $93,693)1 0.71 Ratepayer Impact Measure $50,504 $82,049 $31,545 0.62 Participant $187,208 $20,052 $167,156 9.34 Partlcioant $71,102 $15,548 $55,554 4.57 commercial Lighting - New Construction Residential Ground Source Heat Pump Societal $339,625 $33 362 $306,263 10.18 Societal $328,320 $53,505 $274,815 6.14 Utility_Cost $154,084 $12,652 $141,432 12.18 Utility Cost $142,802 $20 291 $122,511 7.04 Ratepayer Impact Measure $367,910 $469,457 $101,54711 0.78 Rateoaver lmoact Measure $338,894 $498,489 $159,59§11 0.68 Participant $255,631 $28,115 $227,516 9.09 Participant $435,806 $53,505 $382,301 8.15

Commercial Llg~tlllg- Retrofit Residential Home Energy Savl~gs Societal $342,077 $80 257 $261,820 4.26 Societal $20,D43 $9,883 $10,160 2.03 Utility Cost $155,247 $30436 $124,811 5.10 Utility Cost $9,851 $3,748 $6,103 2.63 Ratepayer Impact Measure $369,307 $489,095 $119,788)1 0.76 Ratepayer Impact Measure $21,952 $32,205 $10,253)1 0.68 Particijlant $275,035 $67,636 $207,399 4.07 Partlcjjl;lnt $27,105 $9,883 $17,222 2.74 Commercial Administrative Costs Residential Hot Water Savings societal $0 $64,289 $64,289)1 0.00 Societal $20,343 $831 $19,512 24.48 Litility_Cost $0 $54179 $54, 179)1_ 0.00 Utility Cost $9,560 $315 $9,245 30.35 Rateoaver lmoact Measure $0 $54,179 $54, 179)1 0.00 Rateoaver lmoact Measure $25,991 $39,368 ($13,37DJ 0.66 Participant $0 $0 $0 #DIV/01 Participant $30,019 $831 $29,188 36.12 Total CommercJalllndustrlalljlgrtculturaJ Residential Lighting Societal $1,589,874 $310,554 $1,279 320 5.12 Societal $138,169 $23,290 $114,879 5.93 Utility Cost $714,966 $147,570 $567,396 4.84 UtilitvCost $61,713 $8,832 $52,881 6.99 Ratepayer Impact Measure $1,674,900 $2,217,594 $542,6941 I o. 76 Ratepayer Impact Measure $161,193 $256,021 $94,828)1 0.63 Part!Q!~t______l_$1,203,47~~0~ $995,943_L__MO __ Partic_lmlnt $210 676 $23,290 $187,386 9.05 Residential Water Heaters Discounted to 2018 Societal $29,243 $21,402 $7,841 1.37 Utility Cost $14,953 $8,116 $6,837 1.84 Ratel'l'Y!lr Impact Measure $38,857 $53,830 $14,973)1 0.72 Participant $39,841 $21,402 $18,439 1.86 Benefit/Cost Results -1.25% Scenario Residential Administrative Costs Societal $0 $131,149 $131,14911 0.00 Utllitv Cost $0 $110,523 $110 52:!)1 0.00

I'::c' !(t~st PiiiSP<>C!J'~•- :>J :;>~:-!!': ;,:,~Of8·:fuii!iilani:f,I>O!!Jii': · .. ·:: :,:;j:: . ::' :-,:... Ratepayer Impact Measure $0 $110,523 $110,52311 0.00 1:;·;p:i C:: > , ·C"::.:: : ;EJZJ .·eenliii\J5lllff'-(;l(st&'':: ::['Net Bii'rii!fltli:::OIBICRatio Participant $0 $0 $0 #D\V/0\ Income Eligible Total Residential Societal $59,054 $23,405 $35,649 I 2.52 Societal $826,397 $363,248 $463 149 2.28 Uti!!!Y_Cost $26,581 $19,724 $6,857 I 1.35 Uti!!!Y_Cost $378,158 $198,540 $179 618 1.90 Ratepayer Impact Measure $64,970 $115,754 '$50,784)1 0.56 Rateoaver lmoact Measure $906,427 $1,468,005 $561,57811 0.62 Particip_ant $100,879 $21.034 $79,845 I 4.80 Participant $1,144,266 $232,099 $912,167 4.93

Discountedto 2018 Discountedto 2018 Appendix 5: Benefit/Cost Results by Program Page 3 of4

Benefit/Cost Results -1.5% Scenario Benefit/Cost Results -1.5% Scenario Benefit/Cost Results - 1.5% Scenario

1 ,~,::~g.;~-i/:~;f'~h~ I~~~~~~~~;~~~f1!t:~;::~~~:r::::t-~~~~~f:~a:~; MJitt~ iCommerclal Agricultural ISacletal 1 $3o,trrl __j3,433l $26,744 1 8.79 Societal $2.~~7.686$847,401 $2,120,285 I 3.50 Utility-Cast $1,341,775 $556,270 $785,505 I 2.41 ~-~~ U.OI Ra~r Impact Measure $3,171,596 $4,674,356 '$1,502,760) I 0.68 9.81 Participant $3,048,882 $550,751 $2,498,131 I 5.54

LSacietal I $371,9291 $71,2951 $300,6341 5.22

Jtil~yCast I $162,6631 $40,5561 $122,1071 4.01 ~atepayerImpact Measure I $394,694 I $555,595 I ($160,901)1 ·0

?artlcipant 1 _ $323,!i6_11 ~0.0821 __ $263,482 1 5.3~ :::ommerclalEnalneertna & Destan Assistance lacletal I $67,277 I $10,694 $56,583 I 6.29 Jtility Cast I $29,202 I $6,083 $23,119 1 4.ao latepayei.iiiiPact_~asure_L__$66,640 l __ $86,5~ ($19,943)1 >artlcipant I $49,145 I $9.012 $40,133 I 5.45

~ommerclalGround Source Heat Pump lacietal I $213,4Q§ _$_18,203 $195,202 1 tt.72 Jtil~vcast__ ___L_ $99,184 $10,355 $88,829~ !Ratepayer Impact Measure I $214,8< $243,979 ($29,147)1 0.88 !Participant 1 $128,331 $15,340 $112,991 I 8.37 ttHVAC Lsacietal $144.359 $27.532 $tt6,a21 1 5.24 IUtilitvCast $72,36> $15,661 $56,706 I 4.62 IRatepayer Impact Measure $141.48> $149,669 ($8,182)1 0.95 IPartlciJl.llll! $80,548-: _12;!,202 $57,346]___M7- Icommercial Motors & Driv !Societal 1266,91 $28,669 $238,248 I 9.31 Utii~Cast 12,588 $16,309 :t Measure 1279,420 $397,837 Participant 1231,005 $24,161 $206,844 I 9.56 Commercial Lighting- N.. ___ _ Societal =r J408,419 _140,198 $368,221 I__!Q.16 Utility Cast I $185,092 $22.866 $162,226 1 a.o9 IRatepayer Impact Measure I $442,268 $572,810 ($130,542)1 o: !Participant I_ $31M~ _133,876_ $2Bt,I58 1 9.~ lCommercial Lighting - Retrofit :ietal I $411,038 $96,703 $314,335 I 4.25 ltv Cast I $186,: $55,009 $131,261 I 3.39 tepayer Impact M_llasurej_ $443,491l' _j§06,95~_-c$tsM59ll on >artlclpant I $349,728 $81.495 $268,233 I 4.29 :ommerclal Administrative Cosl )ocietal _10 _j81,452 -:-I 0.1 $0 $0 $0 I #DIV/01

[Societal $1,91! $378.179 I $1.535,342 I 5.06 !Utilitv Cost $851 $237,434 I $622,537 I 3.62 I RatePayerImpact Measure $2,0H $2,730,338 1 ($715,0t8JI o.74 jParticlpan $1,501 $25o.o6t 1 $1,256,285 1 6.o:r

Discounted to 2018

Benefit/Cost Results - 1.5% Scenario

I':;::-tfliri'Peii!P!Ii;i!ve·c: ·:.:I'': '\':'.>-· 2018'ti\ciwiaiid'DOU$rs''\H<;;'.>h<.z:: ;: !'::;

Societal $59,054 $23,405 $35,649 2.52 Utjlity_Cost $26,581 $19,724 $6,857 1.35 Ratepayer Impact Measure $64,970 $115.754 '$50,784 0.56 Participant $100,879 $21,034 $79,845 4.80

Discountedto 2018 Discountedto 2018 Appendix 5: Benefit/Cost Results by Program Page4of4

Benefit/Cost Results - 2.0% Scenario Benefit/Cost Results - 2.0% Scenario Benefit/Cost Results - 2.0'/o Scenario

1 18 -~.-e;;~~~~~~·~::,~.~~:~:;:~~=f;~&,.,f![~,;·;~~~l?i~Ji'it;t, \~,:~~:: ~::~~~~~~::::-:t'l#¢;~~~ ,:,:&.::ZQ~!~=d~l~~~1~'~'~ Residential APPliances

~ocietal $40,440 $4,600 $35,840 I 8.79 Societal $129,918 $38,624 $91,294 3.36 $3,950,075 $1,125,684 $2,824,391 I 3.51 Jtility Cost _jt6,892 $~77 __!13,015T: 4.3B: Utility Cost $58,640 $32 550 $26,090 1.80 $1,784,300 $948,656 $835;644 I 1.88 IRatep~l~tMeasure $43,525 $65,940 {$22,415)1 0.66 Ratep!l}'l!r lm@ct Measure $145,100 $255.435 $110,33IDI 0.57 $4,219,037 $6,430,340 '$2,211,303)1 0.66 IParticipant $39,30 $3,81 $35,430 I 10.14 Participant $223,528 $38,624 $184 904 5.79 $4,282.274 $730,922 $3,551,352 I 5.86 Custom Residential AJC & ASHP Tune-up [So~lOial_-_ _L _$498~ $95,5~ __M02,885 1~2~ Societal $1,420 $4,574 $3,154)\ 0.31

IUtllityCost _ I $217,9871 $80,518 1 $137.469 I 2.11 Utility Cost $977 I $3,855 ~2.878)1 o.25 IRatepayer Impact Measure I $528,9< $770,729 ($241,796)1 0.69 Rateoaver lmoact Measure $2,077 $5,882 $3,805)1 0.35 I Participant I $459,78 $80,518 $379,266 I 5. Participant $5 680 $4,574 $1,106 1.24 l~merclai_E;nglneerimt~Deslan Assl .nee Residential Air Source Heat Pump !Societal I $89,98 $14,332 $75,651 I 6.28 Societal $95,070 $47,263 $47,807 2.01 Utility Cost $12,078 $26,938 I 3.23 Utilitv Cost $38,343 $39,831 $1.488)1 0. 96 Rate a er Jm act Measure $119,860 ($30,769)\ 0.74 Ratepayer Impact Measure $101,765 $202,805 $101 040)1 0.50

Partici ant 1,785 ~078 $57,707 1 5.78 Particlp~nt $189,610 $47 263 $142,347 4.01 Commercial Ground Source Hea •un Residential Behavorial Societal 85,' $24,394 $261,348 Societal $15,771 $2,033 $13,738 7.76 ;Utility Cost 32.' $20,558 $112,1!li M6 Utility Cost $7,592 $1 713 $5,879 4.43 ~e~ l~ct Measure 287, $333,545 ($45,905) __QJl§__ Ratepjly_er lm_11llctMeasure $23,502 $46,036 $22,534 0.51 larticipant 78,1 $20,558 $158, 8.69 Participant $35,509 $2,033 $33 476 17.47 mmerclal HVAC Residential Cooling

~ietal_ _!1_93, 182 . $36,896 __!156,286_ ~M_ Societal $151,159 $81,313 $69,846 1.86 lity Cost $96,796 $31,094 $65,702 ~ UtilityCost $85,712 $68,526 $17186 1.25 IRateoaver Impact Measure $189,314 $210,568 ($21,254) J.90 Rateoaver lmoact Measure $161,306 $208 710 $47,404 0.77 !Participant $118,050 $31,094 $86,956 3.80 Participant $173,668 $81 313 $92,355 2.14

11Motors & Driv Residential ECM Motors !Societal $357,479 $38,421 $319,058 I 9.30 Societal $74,929 $25,106 $49,823 2.98 Utility Cost $150 $32,378 $118,343 I 4.66 UtilltvCost $33,310 $21,157 $12,153 1.57 !Ratepayer Impact Measure ~74,1~ $5~515_

Ljghtlllll- R~ofll_ Residential Home Energy savings l§c>cietal I $548,282 I $129,593 $418,689 I 4.23 Societal $32,364 $15,958 $16 406 2.03 $247,817 $109,2 @- $138,604 2.: Utilitv Cost $15,906 $13,448 $2,458 1.18 $590,883 $847,2oo $256,355 o: Ratepayer Impact Measure $35.446 $59,399 $23,953 0.60 $504,173 $109,213 $394,960 4.62 Partie! ant $52,543 $15,958 $36 585 3.29 Residential Hot Water Savin s 1cietal I $0 I $108,506 ($108,506)1 0.1 Societal $32,848 $1,342 $31,506 24.48 ility Cost _j __!til_- _i!~f4~_i$91,442)1_jl.l Utility Cost $15.437 $1,131 $14 306 13.65 IBat~~r~ct Measure I $0 I $91,442 ($91 ,442l 1 o.1 Rat~er IIJlllact Measure $41,966 $64,189 $22,223 0.65 I Participant I $0 I $0 $0 I #DIV/01 Partici ant $49,211 $1,342 $47,869 36.67 Total• Residential Lighting lsoclet

.·•iJ::o::;:;:nJ:;;;2·· Ratepayer Impact Measure $0 $186,540 $186,540 0.00 · :.;•, i\\.1: _.;.- -· _-,:~y ,c~~IT!NiifBilneiltii7BICRIItloParticloant $0 $0 $0 #DIV/01 Income Eligible Total Residential Societal $59,054 $23,405 $35,649 I 2.52 Societal $1,332,177 $596,124 $736,053 2.23

Util~yCost $26,581 $19.724 $6,857 I 1.35 utility Cost $609,097 $502,376 $106,721 1.21

Rat~er Impact Measure $64,970 $115,754 $50,7~ 0.56 Rati!Jl!ly~rI1J1PactMeasure $1,460,562 $2,550,664 $1,090,102)\ 0.57 Participant $100,879 $21,034 $79,845 I 4.80 Partlcioant $2,053,797 $374,774 $1,679,023 5.48

Discounted to 2018 Discounted to 2018 APPENDIX G GRID MODERNIZATION CATALOG 2018-2032 INTEGRATED RESOURCE PLAN

Submitted to the Minnesota Public Utilities Commission Docket No. ET2/RP-17-286 April 28, 2017 SHAPING OUR FUTURE

Shaping our future The future grid initiative

Great River Energy and its members are excited about the around the country, including in Minnesota. Each process is opportunities that lie ahead for the cooperative members of unique, but the common thread is a commitment to assess all tomorrow. No one could be fully prepared for the speed of that is in play in today’s energy environment and rethink change we are experiencing in our industry, but with “what always has been” in terms of how the grid operates, thoughtful planning, an innovative workforce and strong what customers want from their electric utilities, what role relationships among us, we are shaping our future in a regulators should play in grid planning and how electric way that only cooperatives can. utilities operate their businesses. Distributed energy resources and the transition from a centralized electric system to one Future grid initiative that is far more integrated are central in these discussions. In 2014, a Great River Energy-member group called the The first phase Future Grid Committee was formed to facilitate The first phase of the future grid initiative focused on two collaboration among us and develop a common vision of primary objectives: 1) developing a shared vision of the the future. Through our future grid initiative, we are future among Great River Energy and its members, and planning, evaluating new technologies, learning from 2) moving toward shared technology platforms. Steps Great industry peers and leading conversations with other River Energy and its members took in the first phase: innovators to ensure the best future for our members, our employees and the industry. Facilitated a future grid strategy session for Great River Energy’s board of directors and member managers The future grid initiative complements grid modernization efforts underway at other electric utilities and in states

Distributed energy resources and the transition from a centralized electric system to one that is far more integrated are central to discussions about the evolving electric utility industry. Graphic courtesy of EPRI.

Powering what’s possible

PHASE I PHASE II

• Learn and assess • Continue • Develop a technology shared vision FUTURE implementation • Move toward • Maximize value sharing technology GRID • Provide member platforms forums • Member forums INITIATIVE • Leverage R&D • PUC grid relationships modernization process

Visited leading utilities around the country who are Pillars of technology further down the path of implementing advanced grid technologies Great River Energy and its members are well into updating critical systems and implementing advanced grid Participated in the Minnesota Public Utilities technologies. Over the last several years, we have made Commission’s grid modernization process, establishing significant progress toward updating and implementing a leadership position these key technology “pillars”: Progressed toward sharing technology platforms such AMI: Great River Energy’s members continue down the as demand response management systems (DRMS), path toward installing advanced metering infrastructure telecommunications, meter data management systems (AMI). AMI is an integrated system of meters, (MDMS) and advanced metering infrastructure (AMI) communication networks and data management

Hosted multiple Great River Energy-member forums to systems that enables two-way communication between facilitate learning and collaboration utilities and customers. By the end of 2017, approximately 30 percent of the meters on Great River The next phase Energy’s members’ systems are expected to have Activities in the second phase of the future grid initiative advanced functionality. will include: DRMS: Great River Energy is deploying a demand Maximizing the value of the advanced grid response management system because its one-way technologies being implemented load management system is reaching end of life. The new system will allow Great River Energy’s members to Providing forums that make it easy for Great River Energy and its members to collaborate adopt many new demand response technologies while still providing Great River Energy the simplicity of Leveraging research & development relationships, operating a single system. The DRMS brings enhanced such as with the Electric Power Research Institute analytics to demand response, creating an opportunity

Continuing to monitor industry trends to secure and increase the programs’ value via the wholesale power market.

Telecommunications: The fiber backhaul network, Getting value from new technologies 700 MHz wireless broadband and trunked mobile Now that Great River Energy and its members are working radio (TMR) systems are the three critical components more closely together to share technology platforms, the of Great River Energy’s telecommunications system. potential value of the technologies is growing exponentially. Employees completed an upgrade of the critical TMR A significant focus will be on getting the most value out of the radio system from analog to digital technology in early technologies. A few examples: 2017. Fifteen members use the system. Employees also worked to update the fiber backhaul and 700 MHz Currently 15 of Great River Energy’s members use our wireless broadband systems which are used by 13 two-way radio system (TMR) to communicate between and 23 of Great River Energy’s members, respectively. system operators and field staff. At a small cost, other members could use it as well, rather than managing their MDMS: Great River Energy implemented a new own systems. A common radio system enables greater MDMS system in November of 2015. In August of field coordination and mutual assistance, as well. 2016, we began to see savings as a result of more accurate data reported to MISO. Members continue to Great River Energy now has data analytics resources adopt MDMS systems. Fifteen members have or are available to help members who have AMI and MDMS installing MDMS systems. Thirteen of those are using get the most from the data their systems are collecting. the same vendor as Great River Energy (NISC). For example, Great River Energy worked with Minnesota Valley Electric Cooperative and LREC on a study related to its cycled air conditioning program. The study revealed an opportunity for members to target their marketing efforts more effectively.

SHARED TECHNOLOGY PLATFORMS

3.13.17

28 1 YUKON + LG 1 ACLARA 1 YUKON, ACLARA & OATI 28 5 11 13 15 4 N/A N/A N/A N/A N/A N/A 24 1 EATON COOPER RF 1 LANDIS & GYR PLX 25 1 LANDIS & GYR TURTLE 1/2 20 GRE’S 1 LANDIS & GYR TURTLE 2 YUKON 23 GRE’S 700 MHZ 6 ACLARA 16 1 MOTOROLA TRBO 900MHZ

2 SENSUS LOGIC 12 15 2 ELSTER MOTOROLA 4 LANDIS & GYR 13 13 GRIDSTREAM RF 8 NISC GRE

3 TANTALUS MEMBER COOPERATIVES 4

5 SENSUS

LOAD DEMAND WIRELESS TRUNKED METER DATA FIBER ADVANCED MANAGEMENT RESPONSE BROADBAND MOBILE RADIO MANAGEMENT BACKHAUL METER SYSTEM MANAGEMENT SCADA (TMR) SYSTEM INFRASTRUCTURE (LMS) SYSTEM NETWORK (MDMS) (AMI) (DRMS)

Great River Energy and its members have made significant progress in installing and implementing advanced grid technologies. For example, 15 members are either using or installing meter data management systems, which collect meter data and help co-ops be able to use the data to improve their operations.

Great River Energy plans to separate a major among its members through information-sharing teams, combined operating system, the energy management member workshops and other forums. Some groups system (EMS) and the distribution management system include: Member Services and Marketing Team, (DMS). All of Great River Energy’s members use the Advertising and Communications Team (ACT), Member DMS on some level. Separating the systems may open Engineering Group (MEG), Cooperative Automation & up a growing number of opportunities for new Technology Group (CATG), Energy Management System distribution automation capabilities in the future. Users Group and a Geographic Information Systems Group. As a result of the future grid initiative, new teams Making it easy to collaborate for data analytics, meter data management and AMI users Great River Energy facilitates collaboration with and also have been formed.

Future Grid Committee members

Member systems/MREA Great River Energy Greg Miller (co-chair), Dakota Electric Association Will Kaul (co-chair), vice president and Syd Briggs, Steele-Waseca Cooperative Electric chief transmission officer Ryan Hentges, Minnesota Valley Electric Cooperative Krista Benjamin, transmission strategic project specialist Jim Horan, Minnesota Rural Electric Association Jon Brekke, vice president and chief market officer Greg Ridderbusch, Connexus Energy Gary Connett, director, member services and marketing Steve Shurts, East Central Energy Mark Fagan, vice president and chief business Tim Sullivan, Wright-Hennepin Cooperative Electric Association development officer Tim Thompson, Lake Region Electric Cooperative Tessa Haagenson, principal planning analyst Adam Tromblay, Nobles Cooperative Electric Jim Jones, vice president and chief information officer Steve Wattnem, Cooperative Light & Power Association Therese LaCanne, manager, corporate communications Laureen Ross McCalib, director, resource planning Louy Theeuwen, director, executive services

Great River Energy greatriverenergy.com 12300 Elm Creek Boulevard Maple Grove, MN 55369 763-445-5000

3/28/2017 KEY TECHNOLOGIES

Future grid technologies

Technological advances are a key driver in the evolution of the electric utility industry. Great River Energy and its member cooperatives are laying the technological groundwork that will enable cooperatives to offer members more options allowing them to further customize their service.

Great River Energy describes the technology roadmap below as the five pillars.

Telecommunications infrastructure Demand response management system Great River Energy’s telecommunications system includes (DRMS) three critical components: the fiber backhaul system, the A modern DRMS will allow Great River Energy and its 700 MHz wireless broadband (SCADA) network and member cooperatives to better adapt to changes in the trunked mobile radio system. In partnership with technology, consumer expectations and market forces. member cooperatives, Great River Energy plans to build A DRMS is the analytics engine for demand response. a foundation for smarter energy and deliver solutions It will help cooperatives better understand the impact and services. of demand response, control electric loads at a more granular level and interconnect with other load control Advanced metering infrastructure (AMI) technologies. Modern meters fulfill an integral role in providing data to members and cooperatives. AMI automates metering Energy management system (EMS) and functions using communication networks and eliminates the distribution management system (DMS) need for field collection and on-demand polling of meters An EMS is a system of computer-aided tools to monitor, to verify an outage or restoration. Data collected through control and optimize the performance of the generation AMI can be used to identify customer consumption patterns and/or transmission system. A DMS is a collection of and identify maintenance needs. applications designed to operate the distribution network efficiently and reliably. Great River Energy and its member Meter data management system (MDMS) cooperatives use both systems to collect data and remotely An MDMS can help monitor line losses, transformer losses operate the transmission and distribution systems. and power theft, and help accurately bill accounts with intermittent generation, such as solar.

Powering what’s possible

Advanced metering infrastructure (AMI)

Measurements

Historically, electric meters’ primary function was to measure power consumed over time. With advances in metering, many other measurements are now available. Collecting additional units of measure (UOM) from smart meters enables business improvements and new opportunities. Some units of measure to consider beyond energy are:

Current – used to analyze losses, etc.

Voltage – used to analyze losses, outages and health of electric grid, etc.

Events – used to determine when electrical or physical meters issues occur.

Overview Frequency of data capture

Cooperatives have long depended on meters to monitor Today’s meters are capable of capturing data at intervals the electric system and measure the electricity being not available in the past. consumed at homes and businesses. Technological Hourly meter readings provide a 60-minute view of advancements in metering now allow the devices to do consumption measures (e.g., energy) and hourly snapshots more than just measure energy, fulfilling an integral role of instantaneous measures (e.g., voltage). About 8,800 in providing data to members and cooperatives. measurements are collected for a single meter in a year. Most digital meters contain chips that enable them to send Fifteen-minute readings provide four times more granularity kilowatt-hour (kWh) use readings and other data to electric than hourly meter readings, which is useful in cooperatives – what’s called automated meter reading, or understanding changes in consumption and demand AMR. Some units go a step further and can send and response. Nearly 35,000 measurements are collected for receive signals from a co-op, opening up a world of a single meter in a year. possibilities. This allows co-ops to install AMI, or advanced meter infrastructure systems. Benefits of AMI

AMI is an integrated system of meters, communication The primary function of AMI is to automate metering networks and data management systems that enables two- functions using communication networks. AMI also way communication between utilities and customers. eliminates the need for field collection and on-demand AMI is a foundational technology for the future grid polling of meters to verify an outage or restoration. enhancements planned by Great River Energy and its Data collected through AMI can identify customer member cooperatives. consumption patterns, identify maintenance needs, drive demand response strategies and much more.

Powering what’s possible

The two-way nature of AMI systems also makes them a A field guide to meters platform for executing demand response. This enables the electric utility to deploy demand response with an Electromechanical meter incremental investment (load control devices) versus having Invented in 1888, this meter tracks to install a separate communications network and load electricity use with spinning dials. control devices. It can only be used to measure To participate in Great River Energy’s demand response kWh consumed. programs, AMI systems should have the capability to control loads across the AMI system’s communication Solid-state electronic meter network by Jan. 1, 2026. An LED screen displays electricity Other AMI use cases use on this digital meter, which is accurate and inexpensive, but Better educating members about energy use lacks advanced features.

Providing more information for customer service representatives AMR smart meter

Identifying and tracking losses This meter sends information to a centralized database, and can Monitoring and improving distribution line voltages record and analyze electricity use. Improving load forecasting accuracy

Enabling rate and billing plan options AMI meter Improving outage identification and response This meter allows for two-way Contact information communication with the cooperative and offers enhanced John Aiton, leader, energy data and metering infrastructure options, such as time-of-use rates. Great River Energy [email protected]

Great River Energy greatriverenergy.com 12300 Elm Creek Boulevard Maple Grove, MN 55369 763-445-5000

3/28/2017 2

Demand response management system

Overview New system, new possibilities

Utilities have long understood that they can use the electric Great River Energy has established its demand response system efficiently and economically by reducing demand practice using a system that sends one-way signals to cycle at certain times. Great River Energy and its member certain devices off and on. As the technology nears the cooperatives are leaders in this discipline, known as end of its useful life, Great River Energy has installed a demand response. modern demand response management system. By controlling electric loads, Great River Energy can The new system will help Great River Energy better adapt reduce the amount of electricity it must purchase during to changes in technology, consumer expectations and periods of high energy prices, which saves everyone market forces. It will allow more precise control and allow money. This is particularly valuable for cooperatives, for interconnection with growing load control technologies, which provide electricity at cost. such as smart thermostats and Wi-Fi-enabled devices. With two-way communication, Great River Energy will be able to accurately monitor the effectiveness of its demand response and analyze data to continually improve its programs.

2,700

2,500 Summer 2,300

2,100 MW 1,900 Winter 1,700

1,500

1,300 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Hour

Demand response allows Great River Energy to avoid purchasing electricity when heightened demand drives up market prices, such as summer evenings.

Powering what’s possible

Project road map

In 2017, Great River Energy will begin transitioning existing demand response programs to the new system. The system will then be made available to Great River Energy’s member cooperatives, which can benefit from the system’s additional capabilities.

2016 2017 2018 2019 2020

Base System Communication Execution implementation

Integration with Communication MDMS; Members in Planning and Execution GRE Node

Yukon Integration Initial Member AMI & Load Control Other GRE System GIS Systems Integration Integrations Integration with GRE MDMS Integration Load Management Web Services

EMS SCADA Integration with DSMR Integration Additional Member Additional Co-op Integrations; MDMS and Integrations; MDMS Load Control MDMS phase 2; load and Load Control Tesla Integration events delivered to MDMS

Contact information

John Reinhart, demand response and technologies lead Great River Energy [email protected]

Great River Energy greatriverenergy.com 12300 Elm Creek Boulevard Maple Grove, MN 55369 763-445-5000

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Meter data management system

The decision to deploy advanced metering infrastructure brings about an increase in data coming into electric 30,000 cooperatives. Just how steep is the rise? Take, for instance, a cooperative with 10,000 members. With monthly meter readings, it would collect 10,000 meter readings per month. Meter

data accumulates quickly when that cooperative begins 20,000 collecting meter data hourly (7.3 million per month) or Every 15 minutes every 15 minutes (29 million per month). 35,040/year Establishing processes and systems early ensures cooperatives can keep up with growing data demands.

The system designed to handle this avalanche of data is interval reading Meter known as a meter data management system (MDMS). 10,000 Meter reading per year per member per year per reading Meter An MDMS collects meter data and subjects it to a continuous set of parameters to ensure the data is complete

and accurate. With an abundance of clean data, Hourly cooperatives can do many things. 8,760/year Monthly Great River Energy and two member cooperatives 12/year conducted an MDMS demonstration project that uncovered J F M A M J J A S O N D a wide variety of business applications to both Great River Month Energy and distribution cooperatives:

Monitoring line losses Contact information Monitoring transformer losses John Aiton, leader, energy data and metering infrastructure Identifying power theft Great River Energy Billing accounts with intermittent generation, [email protected] such as solar.

Analyzing energy data These applications deliver substantial monetary value to utilities and reap a return on the MDMS investment.

Powering what’s possible

Fiber backhaul network

Overview TELECOMMUNICATION S S Y S TEMS

Great River Energy’s fiber backhaul network connects its R K communication towers to the organization’s headquarters O W T building to transport or backhaul data from the field to its E N data centers. This system carries data from Great River L U A Energy’s trunked mobile radio system, 700 MHz wireless TRUNKED H MOBILE RADIO broadband (SCADA) network, load management system K C and member cooperative owned communication systems. A SUBSTATIONS B

The backhaul network is a critical component for Great F

I B B

River Energy and its member cooperatives to support I

E F

POWER LINE R important communication needs. The network is a

SWITCHES B

combination of telephone company leased circuits, Great A

DATA C

River Energy owned fiber and fiber shared with CENTER K H

neighboring utilities. A

700 MHZ L

WIRELESS

A fiber backhaul network is the backbone that supports N

other systems such as advanced metering infrastructure, O R

automated meter reading and distribution automation. This K network consists of two main components – the fiber optic cable buried in the ground or hanging on Great River Energy’s transmission lines and the electronics required to FIBER BACKHAUL 700 MHZ WIRELESS BROADBAND TRUNKED MOBILE RADIO move the data over the fiber.

Project update

Great River Energy is working to migrate the electronic equipment on its fiber backhaul network from SONET to multiprotocol layer switching (MPLS). This three-year project was started in conjunction with the trunked mobile radio system replacement, which was completed in early 2017, and the 700 MHz wireless broadband (SCADA) network replacement. The anticipated project completion date is March 2018. In conjunction with the MPLS upgrade, Great River Energy has been building out fiber to both transmission and distribution substations. So far, 70 transmission substations have been connected with fiber in addition to 60 member cooperative distribution substations. While bringing fiber to transmission substations has been a strategic goal, distribution substations have been added when it makes economic sense.

Powering what’s possible

Current state Accessing other members’ networks to fulfill after-hours dispatch responsibilities. Great River Energy is currently migrating the electronic equipment from SONET to MPLS on its fiber backhaul Connecting their mobile radio repeaters, distribution network. The fiber has an expected life span of 30-40 automation sites and Verizon downline automation years, while the life span of the electronic components is devices. only 7-10 years. Great River Energy’s upgrade will only Connecting member outpost service centers to one replace the electronics portion that is at end of life. This will another. prepare Great River Energy and others for future business needs in support of the future grid. How we’ll use it in the future

Great River Energy’s fiber backhaul is a combination of Great River Energy and its member-owners are excited leased telecommunication circuits, Great River Energy about the opportunities new technology and the changing owned fiber and shared fiber with neighboring utilities. industry provide. Years of planning and preparation have put Great River Energy in an excellent position to serve The network was originally installed in 2006 to support the 700 MHz wireless broadband (SCADA) members well into the future. The updated fiber backhaul network deployed at the same time. system will: Continue to support Great River Energy’s day-to-day It is a high-bandwidth fiber network extending across the majority of Great River Energy’s service territory. business operations. Support the backhauling of data as member Backhaul network transports 700 MHz wireless broadband (SCADA) network, trunked mobile radio, cooperatives expand deployment of future grid load management and business network traffic. technologies like advanced metering infrastructure, automated meter reading and distribution automation. Twenty-seven of Great River Energy’s 28 member territories have an entry point or node available for Allow Great River Energy to strategically add optical use which offers them access to the network. ground wire on all new transmission lines. Enable expansion of rural broadband in Great River Nearly all of Great River Energy’s telecommunication sites are covered with backup power generators to Energy’s member territories through strategic ensure system reliability in the event of a power outage. partnerships. Bring fiber connections to all 110 of Great River Thirteen member cooperatives currently take advantage of the network for other uses. Energy’s transmission substations, in preparation for future North American Electric Reliability Corporation Great River Energy’s lease for its fiber backhaul (NERC) requirements. network is valid through 2021. Assist in bringing fiber connections to distribution How we use it today substations to support member requirements. A number of Great River Energy member-owners are Contact information utilizing the network in various ways, including: Chris Leleux, manager, infrastructure services Advanced metering infrastructure needs. Great River Energy [email protected] Accessing offsite shared disk storage located at Great River Energy’s headquarters. This enables Great River Michael Tate, telecommunications engineer II Energy to remotely support and troubleshoot issues on Great River Energy their networks. [email protected]

Great River Energy greatriverenergy.com 12300 Elm Creek Boulevard Maple Grove, MN 55369 763-445-5000

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700 MHz wireless broadband (SCADA) network

Overview Current state

Great River Energy’s 700 MHz wireless broadband Great River Energy’s 700 MHz wireless broadband (SCADA) network connects to about half of its transmission (SCADA) network was originally installed in 2006 and substations and most of its members’ distribution includes 550 remote locations. The network requires two substations, and automated switches. Great River Energy components to operate: radio frequency spectrum and uses the broadband network primarily for SCADA electronics. The expected life span of electronic components communications, metering and network access including is typically 5-7 years. Great River Energy’s network Wi-Fi and voice over internet protocol (VoIP) phones. electronic components have reached their end of life. This multi-year network project will include the purchase of the spectrum license that is currently leased and the Project update replacement of the aging electronics.

Currently underway, Great River Energy’s multi-year The network consists of 64 tower locations throughout 700 MHz wireless broadband (SCADA) network Great River Energy’s service territory.

project will include the purchase of the spectrum Almost 75 percent of Great River Energy’s license and the replacement of the aging electronics. telecommunication sites are covered with backup The project will be done in two phases. Phase one power generators to ensure system reliability in the includes the installation of a Cisco router with cellular event of a power outage.

backup. This will allow SCADA traffic to failover to the 471 member distribution substations are connected cellular network during the cutover to the new system to this network. in phase two. Phase one is currently underway with Great River Energy leases radio frequency spectrum approximately 30 sites being installed each month. from a third party to operate the network. This lease The project is expected to be complete by the end of expires in 2019. The lease holder has approached 2019. Great River Energy about purchasing the spectrum for its territory after the lease expires.

Great River Energy’s 700 MHz wireless broadband (SCADA) network will enable its member cooperatives to use AMI and meter data management technologies that may not be otherwise possible.

Powering what’s possible

How we use it today The new network will:

Great River Energy’s 700 MHz wireless broadband Continue to support Great River Energy and (SCADA) network has become a critical component for participating member cooperatives’ day-to-day Great River Energy and its member cooperatives. business operations in transporting SCADA data communications. Great River Energy uses the broadband network primarily for SCADA communications, metering and Enable member cooperatives to use AMI and MDM network access including Wi-Fi and voice over internet technologies that may not be otherwise possible.

protocol (VoIP) phones. Leverage meter data for mutual benefits through the use of secure, shared systems. Twenty-three of Great River Energy’s member-owners

use the network to connect to more than 400 devices Broadband companies could utilize Great River for their own data communication needs. Energy’s towers to provide rural broadband to their customers. Great River Energy’s member-owners primarily use the network for advanced metering infrastructure (AMI) Contact information and advanced meter reading (AMR) systems. Chris Leleux, manager, infrastructure services How we’ll use it in the future Great River Energy In planning for the future, Great River Energy sought to [email protected] understand its member cooperatives’ plans for advanced Kathy Shaft, senior telecommunications engineer metering infrastructure (AMI) and meter data management Great River Energy (MDM), as well as other technologies they may be [email protected] considering.

Great River Energy greatriverenergy.com 12300 Elm Creek Boulevard Maple Grove, MN 55369 763-445-5000

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Trunked mobile radio system

Overview often used as a dispatching tool for those currently utilizing the system. The two-way radio system enables the Great Great River Energy and over half of its member River Energy system operations group to communicate cooperatives own and use the Motorola trunked mobile critical information to the field services crews and with radio (TMR) system for important two-way communications. each other. When line crews are dispatched to remote locations or Great River Energy and its participating cooperatives outage areas, they need to be able to talk to each other communicate with each other on the joint system. The two- and to system operators so they can identify where faults way radio system allows participating field crews to are located and fix the problems. To do that, they rely on communicate with each other and system operators during their TMR system. storms, outages or after being dispatched to remote In early 2017, Great River Energy and its members locations. They also rely on the system to notify Great River completed a major update to this system from analog to Energy’s system operations when safe entrance is needed digital technology. The new digital technology is critical to to secured locations in order to conduct work in a safe grid evolution as Great River Energy works to shape its manner. future and provide more options for its member cooperatives, as well as improve reliability and security. How we’ll use it in the future Technologies that allow information to flow back and Current state forth support the grid of the future by providing critical Great River Energy currently has a fully manufacturer two-way communications. The upgraded TMR system will supported, mission critical digital mobile radio system. The continue to support Great River Energy’s and its member system includes 81 communication tower sites across Great cooperatives day-to-day business operations using a highly River Energy’s service territory and areas of North Dakota reliable digital mobile radio system. During critical times where its field crews operate. The system supports of need, Great River Energy’s TMR system will continue to approximately 700 mobile radios used by Great River offer reliable communications when other tools, such as Energy and includes more than 500 radios owned by its cell phones, may be unavailable. 15 participating member cooperatives. The upgraded During the recent TMR upgrade, Great River Energy on system is fully redundant with automatic failover at Great behalf of its membership, negotiated lower cost subscriber River Energy’s backup control center to ensure continued pricing making it more cost effective for the remaining reliability and security. member cooperatives to participate in the joint system in How we use it today the future. Great River Energy encourages the use of the joint system by more member cooperatives as there’s a Great River Energy, its 15 participating member benefit for all member cooperatives to be on the system cooperatives and both groups of field crews use the TMR for mutual aid and switching. system for important two-way communications. The TMR is

Powering what’s possible

Participating member owners ★ Great River Energy system operations

Arrowhead North Itasca

Co-op Light & Power Lake Country Itasca-Mantrap Power

Todd- Mille Lacs Lake Region Wadena Crow Wing

East Central Runestone Energy

Stearns

Agralite Connexus

Kandiyohi Meeker Wright- Hennepin ★ McLeod Dakota

Redwood Minnesota Goodhue Brown Valley County County Steele- Waseca South Central BENCO Nobles

Federated

Trunked mobile

radio system (TMR)

Contact information

Chris Leleux, manager, infrastructure services Great River Energy [email protected] Kathy Nelson, principal telecommunications engineer Great River Energy [email protected]

Great River Energy greatriverenergy.com 12300 Elm Creek Boulevard Maple Grove, MN 55369 763-445-5000

3/28/2017 RESEARCH AND DEVELOPMENT

Upcoming projects

The process of researching, designing and implementing innovative new projects and programs to better serve Great River Energy members – and also prepare for the energy grid of the future – are an ongoing effort within every division at Great River Energy. The following are descriptions of pilot projects from Great River Energy’s generation and member services divisions that are in various stages of this process.

Dickinson Solar Project storage and tracking

Great River Energy partnered with member Wright- Hennepin Cooperative Electric Association on a savings on LED lighting, Wi-Fi thermostats, smart home 2.25-megawatt solar array that directly serves the products, and water saving products from popular brands distribution cooperative’s membership. The 8,000-plus like Nest, ecobee, Philips, GE and more. panels, 464 racks and three inverters went into service Aug. 22, 2016, marking the end of the project’s first phase. Those involved in the project wanted to make it easy and affordable for cooperative members to make significant The second phase, which would add tracking arrays, changes that can greatly increase their energy efficiency incorporate battery storage and include smart grid and comfort. The EnergyWise MN Store will be the first technologies, is currently in project development. Project marketplace of its kind to serve customers of multiple leaders hope to learn and understand the cost and energy cooperatives under a single platform and brand. benefits of fixed versus tracking arrays with and without battery storage. Contact information Tara Collins, senior marketing specialist Contact information Great River Energy Vince Herda, principal engineer, generation [email protected] Great River Energy [email protected] Zero-Net Energy dairy farm

Cole Funseth, engineer II, generation Great River Energy has joined EPRI’s Advanced Energy Great River Energy Communities Supplemental Project to evaluate the [email protected] application of a Zero Net Energy (ZNE) dairy farm EnergyWise MN Store affiliated with the University of Minnesota-Morris, West Central Research and Outreach Center. EPRI has conducted Great River Energy is partnering with Simple Energy, the extensive research into Advanced Energy Communities to No. 1 provider of utility-branded marketplaces, to launch better understand how customer-side systems enable utility a new EnergyWise MN Store. It will feature integrated customers as well as how they impact the electricity grid. instant rebates on smart home and energy efficiency Net Zero communities are typically envisioned as products. With a few clicks of a mouse, members across residential communities, but the same applies for the state can validate their eligibility and unlock significant commercial, industrial and agricultural institutions.

Powering what’s possible

The project will evaluate how ZNE works in reality with the farm and focus on understanding the thermal energy flows and opportunities for heat recovery and energy efficiency. It will also identify additional opportunities for energy efficiency at the farm, including the potential conversion of thermal loads from fossil heating systems to electric heating systems. It will conduct measurements of energy usage and develop a load-shape model using the operating schedules and functioning of the dairy farm as well as look at how applications of renewables, both solar and wind generation (currently at the farm and planned for 2017 installation) will impact net-load shape and distribution system impacts. Efforts on this project began in December 2016 and are estimated to continue through December 2018. Contact information Jeff Haase, strategic energy and efficiency program representative Great River Energy [email protected]

Great River Energy greatriverenergy.com 12300 Elm Creek Boulevard Maple Grove, MN 55369 763-445-5000

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Battery electric school bus pilot

Overview current base price of a dedicated BESB is about $325,000, compared to $100,000 to $125,000 for a diesel-fueled As part of Great River Energy’s commitment to innovation school bus. and minimizing its impact on the environment through reducing emissions, as well as responding to member Phase II will rely on more significant grant funding for the interest, it is seeking to demonstrate the performance of purchase of two additional BESBs to help subsidize battery electric school buses (BESB) on our system. participation costs for smaller, rural member cooperatives and their transportation providers. In all, Great River Energy The objectives of the BESB pilot are to showcase new is seeking a 50 percent cost share for the overall $1.2 energy-efficient technologies, demonstrate its performance in million BESB project, with $600,000 being cash from Minnesota’s cold-weather climate and on longer, suburban participants, and a goal of receiving $600,000 of the VW and rural routes due to the unique service territories of Great settlement funds. Having multiple BESBs on the system will River Energy’s 28 member cooperatives. The team also demonstrate how this technology works in more extreme would use the opportunity to document the regional northern Minnesota climates as well as the southern economics of the addition of BESBs, including operation Minnesota area and on suburban routes closer to the Twin and maintenances cost savings and also quantify associated Cities. Great River Energy believes funding a variety of emissions reductions directly in the communities that the emerging technologies across the state is the most prudent co-ops serve. use of the VW settlement funding. One model of BESB that is being evaluated is the “eLion” and is manufactured by the Lion Bus Company. It has a Schedule range of up to 100 miles with the optional fifth battery BESB pilot program development began in third quarter of module and takes approximately six-and-a-half hours 2016 with business models, the cost/benefit and funding overnight to charge. Currently, 29 eLions are on routes options following in the fourth quarter, continuing into the across North America and the company plans to produce beginning of 2017. Site selection, and securing 70 more in 2017. commitments from the participating member cooperative and student transportation service is slated to continue Project phases throughout second quarter. Following that, data gathering While in the process of mapping out key participants for this and analysis will carry on through until mid-2018 when pilot, the announcement came that Volkswagen would need state and federal grant application and award cycle to invest $2.7 billion in environmental mitigation efforts with begins. An evaluation report and recommendation is then eligible projects including replacing diesel vehicles with planned to be presented in the second quarter of 2019. electric. Of this amount, approximately $43 million was initially allocated to Minnesota. This created the opportunity Contact information to develop a phase II pilot for buses two and three in areas Sandra Broekema, director, corporate and requiring more significant grant funding. business development Great River Energy Knowing the VW settlement funding would not be available [email protected] for at least another year, the first phase is the purchase of one BESB that is being fully funded by the three major David Ranallo, leader, member services and marketing participants (Great River Energy, its local distribution Great River Energy cooperative and the student transportation provider). The [email protected]

Powering what’s possible

Conservation voltage reduction pilot project with ECE

Overview Description

Great River Energy and its members are researching how Great River Energy and East Central Energy are working members can use conservation voltage reduction (CVR), on a pilot project that will allow them to access the data in a term sometimes used interchangeably with demand their AMI to assess whether they can identify opportunities voltage reduction (DVR), to decrease energy use, lessen to lessen their peak loads and reduce demand charges. their peak loads and reduce demand charges while continuing to serve their members within established Why it matters voltage parameters. Great River Energy employees from IT and transmission are To that end, Great River Energy and East Central Energy in the midst of setting up the pilot project. Involvement is (ECE) are conducting a pilot project to retrieve end-of- required from a number of external parties to achieve the feeder data from the East Central AMI system to automate equipment installation, data integrations and software and enhance the performance of the CVR/DVR control. installation required to enable the capability. If successful, The initial phase includes two sites with four distribution this pilot will allow other co-ops the opportunity to learn substation transformers. about CVR and how it might impact their bottom line.

Sensus

Primary Datacenter

EOL EOL EOL EOL Recloser Voltage AMI Flex Net Regulator EOL Capacitor Mhz 00 9 Sub #2 Sub #n

Sub #1 EOL Legend East Central Energy Brahm EOL End of Line Device Meter Sensus Primary Site Control Devices Operation DR Consoles Multi-Speak Datacenter Distribution Substation GRE – Elk River Primary Site Computers/consoles SCADA Xchange SCADA EMS/ Control Center Xchange for DNP 3.0 Protocol SCADA Voltage levels, DA VVC DMA SCADA Communications signals from cap bank, foult etc. AMI Communications

Internet

Powering what’s possible

Tentative Schedule – the goal date for pilot start is a Project cost June/July timeframe. The feasibility of the schedule is being Great River Energy: Software license and implementation confirmed with the software vendor and other parties costs; Great River Energy internal labor and product user involved in the pilot. training. Work in progress: East Central Energy: Software license and implementation

Execution of non-disclosure agreements and software costs; internal labor and product user training; field contracts hardware and installation costs.

Set up work by Sensus Contact information ECE equipment installation Dick Pursley, manager, system operations Next Steps Great River Energy [email protected] Confirmation of schedule and execution of software Vern Johnson, vice president of operations and engineering contract East Central Energy Configuration and development activities [email protected]

Test planning and execution

Great River Energy greatriverenergy.com 12300 Elm Creek Boulevard Maple Grove, MN 55369 763-445-5000

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Data analytics

As advanced metering infrastructure (AMI) and meter data and 40 percent to the utility. A study conducted by the management systems (MDMS) are deployed, utilities are Electric Power Research Institute found that data analytics left with exponentially greater amounts of data. can spur improvements in many areas of utility operations.

Translating mass amounts of raw data into actionable Load shapes constructed from AMI interval data business intelligence is a challenge for cooperatives that contributed to better targeting of customers for utility may be unaccustomed to data analytics. With the proper programs. resources and strategy, data analytics can improve Analysis of distribution curves identified where energy operations, service to members and efficiency. efficiency and demand response programs would have Data analysis is already shedding new light on some of the the greatest impact to optimize distribution planning. nagging questions utilities have long faced: Where should Once accepted as a resource within an organization, we prioritize our investments? What types of end-use data analytics aided in decision-making. members give us the shortest payback for an energy efficiency program? Completed projects

Although this type of work is relatively new to utilities, it is To help members get the value out of business intelligence common in other industries. When data becomes available and data collected through AMI and MDMS systems, in abundance, statistical methods are used to identify a sub-team with three Great River Energy member trends and opportunities. cooperatives identified three data analytic projects of Analysis by Accenture suggests that the potential value of interest to their cooperatives to demonstrate how the use analytics could approach $40 to $70 per electric meter of data analytics could be used to improve the efficiency per year, with benefits divided 60 percent to the consumer of their distribution system. These member-driven projects

Powering what’s possible

were initiated with the condition they could be repeated are few methods in place to analyze the impact of and seamlessly integrated to other member cooperatives. the retail programs. To improve and aid in expansion Great River Energy, in collaboration with Lake Region of the program offerings, member distribution Electric Cooperative, Minnesota Valley Electric Cooperative cooperatives need to better understand the kW impact and Steele-Waseca Cooperative Electric have completed of the programs in relation to system peak and energy data analytics projects related to: sales, in addition to informing consumers of the potential impact and savings by participating in the KRTA data analytics* retail programs. Residential cycled AC response* Target marketing – Member distribution cooperatives Substation losses* have various retail programs that they use to aid in * To learn more about these projects, see the individual either controlling peak load (e.g. cycled AC, peak fact sheets within this book. shave water heating) or strategic energy growth (electric water heaters). Currently there are limited methods in place to target market these programs to Projects under consideration (1) maximize the benefit of the program, (2) avoid The following projects have been vetted and are under “free riders,” and (3) to ensure optimal program consideration as Great River Energy’s member cooperatives enrollment. To improve and aid in expansion of the determine if the projects are of interest and would add program offerings, member distribution cooperatives value to their cooperatives. need to better understand who are their customers who participate in their demand response program, Distribution line loss measurement – Develop a identify potential new participants and ensure program methodology that utilizes Great River Energy’s AMI marketing campaigns are targeting and enrolling the data and member owners’ AMI data and SCADA – proper end-use customers. connected reclosers to verify that an aggregation of a substation’s feeder data can be used to accurately Contact information measure substation losses. Nathan Grahl, principal data analyst Demand response program measurement – Member Great River Energy distribution cooperatives have various retail programs [email protected] that they use to aid in controlling peak load (e.g. cycled AC, peak shave water heating). Currently there

Great River Energy greatriverenergy.com 12300 Elm Creek Boulevard Maple Grove, MN 55369 763-445-5000

3/28/2017 S

Member and community solar initiative

A variety of solar technologies and configurations are being tested at Great River Energy’s headquarters site.

Background Headquarters project

Great River Energy began an effort in 2013 to develop The first in the series of solar installations was completed and demonstrate distributed generation technologies – at Great River Energy’s Maple Grove, Minn., headquarters including solar and other non-traditional technologies – in site in May 2014. The 250-kilowatt (kW) project has a collaboration with its member cooperatives across the state research and demonstration component that tests the and as direct Great River Energy resources with a goal of performance of solar panels from three different advancing internal skills and overall knowledge around manufacturers (Sharp, tenKsolar, Suniva) and three inverter these technologies. manufacturers (Solectria, tenKsolar, Advanced Energy). The array provides up to 325,000 kilowatt-hours (kWh) At this time, the state of Minnesota had enacted a solar of renewable energy annually, which is enough electricity energy standard for investor-owned utilities that would to power about 27 homes. require a specific percentage of retail electricity sales to be generated from solar energy. Great River Energy decided Member projects to participate in the solar market in response to member interest and needs as a matter of importance to prepare for Solar arrays were installed in 2014 and 2015 at sites a future in which solar generation is part of the generation owned by Great River Energy’s members with project portfolio for both utilities and consumers. management led by Great River Energy. The installations are part of a series of 19 projects, each with an electricity Great River Energy developed two action plans to meet its generating capacity of 20 kW. The solar projects are initial solar goals. helping Great River Energy and its member cooperatives

Powering what’s possible

evaluate the impact of solar energy while providing up to As a result of the projects completed so far, Great River 450,000 kWh of renewable energy annually, which is Energy firmly believes that community solar developed by equivalent to powering about 38 homes. the distribution cooperative is the best option for both the utility and end-use consumer. It provides the simplest, lowest The installations were managed by Great River Energy, cost solar solution and maintains the relationship between which worked with each participating member cooperative the distribution cooperative and end consumer. Great River to identify the ideal location for their project. Additionally, Energy continues to assist and support its member Great River Energy assisted the member cooperatives with cooperatives in their community solar garden ventures, with interconnection efforts and collecting and displaying key projects in development at Cooperative Light & Power, East information about energy production and system interaction. Central Energy, Cooperative, Runestone Electric Association Most of the solar arrays are a packaged system design and Steele-Waseca Cooperative Electric. from tenKsolar, while one installation includes panels made by Silicon Energy and another uses panels by SolarWorld. In 2016, Great River Energy partnered with member cooperative Wright-Hennepin Cooperative Electric Nine of the participating cooperatives chose to add solar Association to install a 2.25 MW solar array that serves arrays to serve as community solar gardens that were the co-op’s membership. The Dickinson Solar Project, installed at the same time as their 20-kW arrays in the named due its location at the Dickinson Converter Station same location, which was done at an incremental cost. site, provides the membership experience in the This partnership with Great River Energy saved members development, installation and ongoing operations of a nearly 40 percent on project installation costs and provides utility-scale solar installation. The array is the largest single up to 430,000 kWh of renewable energy annually, solar resource to date for both cooperatives, and is the equivalent to powering about 36 homes. largest solar array installed by a cooperative in Minnesota. Reflections and next steps Great River Energy staff continues to track and report on These demonstration and membership projects provided the long-term performance and maintenance of the Great River Energy an awareness and understanding of demonstration and membership solar projects. the variables tied to solar, which impact both the Opportunities to further explore the understanding and performance and economics along with the challenges involvement with distributed generation technologies, associated with development and implementation of including battery storage and smart inverters, are ongoing. smaller-scale distributive solar projects. To view the energy output from Great River Energy’s statewide solar projects, visit greatriverenergy.com/solar.

Contact information

Vince Herda, principal engineer, generation Great River Energy [email protected] Mark Rathbun, renewable energy lead Great River Energy [email protected] Nathan Domyahn, director, peaking and generation engineering Great River Energy The 2.25 MW Dickinson Solar Project serves Wright- [email protected] Hennepin Cooperative Electric Association’s membership.

Great River Energy greatriverenergy.com 12300 Elm Creek Boulevard Maple Grove, MN 55369 763-445-5000

3/28/2017 PROJECTS AND PROGRAMS C

Community storage

Energy and environmental stakeholders are uniting around A list of founding supporters and brief descriptions of their “community storage” to solve the electric industry’s energy community storage efforts is available on the Initiative’s storage challenge. The Community Storage Initiative has website: communitystorageinitiative.com. Initiative members received the support of key industry groups, including the are conducting a range of innovative community storage nation’s utility trade associations, environmental groups, programs, including grid-interactive water heating, electric manufacturers and more than a dozen individual utilities. vehicle charging, grid-interactive space heating, ice storage technology, and residential battery storage. Both Great River Energy and the Minnesota Rural Electric Association are members of the initiative. Community Research conducted by The Brattle Group and sponsored storage refers to a spectrum of utility-sponsored programs by the Initiative’s founding members recognized that the which aggregate electric storage resources available nation’s 50 million residential electric water heaters throughout the community, such as water heaters and collectively represent a significant and vastly underutilized electric vehicles, to improve the efficiency of electric energy energy storage resource capable of leveraging substantial services for consumers. Community storage programs offer environmental and cost benefits. An article in the November the industry the practical steps to rapidly increase the 2015 edition of Public Utility Fortnightly introduced the amount of energy storage available. community storage concept. Links to both the report and the article can be found on the Community Storage Initiative members have been implementing community Initiative’s website. storage programs and, through the Initiative, will work together to evolve those programs. Like community solar, The Initiative hosted a two-day forum in July 2016 at the community storage enables consumers and utilities to share University of Minnesota Law School campus where the system-wide benefits of energy storage – environmental attendees heard group members explain their mission benefits, lower costs and grid optimization – in communities and guiding principles. Those in attendance also discussed large and small across the country. Such programs where they fit into the growing collaborative and how to maximize the value of distributed energy resources, many help further its vision. of which are already available to participate in energy Connett participated in a summit at the White House storage programs through simple retrofits and program where federal and private sector organizations gathered design. to discuss scaling renewable energy and storage with The Initiative’s advisory council includes representatives smart markets and spoke about the Initiative. He also from the American Public Power Association, Edison educated those on Capitol Hill about the Initiative during Electric Institute, Natural Resources Defense Council, a congressional briefing about community storage, National Rural Electric Cooperative Association, and introducing the concept of how the energy industry can Peak Load Management Alliance. The Initiative is chaired use tried-and-true household technologies to help meet by Gary Connett, director of member services at Great consumer energy needs in a new era. River Energy.

Powering what’s possible

Electric thermal storage Electric vehicles water heating Electric vehicles provide another valuable form of Electric thermal storage (ETS) water community storage. Great River Energy continues to look heating is a load control strategy at ways to make it easier for consumers to drive electric that provides households with their vehicles and currently offers daily hot water needs by charging rebates for residential their water heaters only during the charging stations that lower-cost, off-peak hours. Member- encourage off-peak or time- consumers participating in the ETS of-use vehicle charging. This program heat their water from the strategy enables consumers to use more electricity during hours of 11 p.m. to 7 a.m. In night-time hours when prices are typically lower and when exchange for this level of control, the electricity is frequently produced from the region’s Great River Energy provides abundant wind resources. discounted wholesale energy to its Great River Energy in 2015 launched Revolt, a first-of-its member cooperatives for energy kind program that allows members of its 28 cooperatives sales associated with the ETS to upgrade the electricity they use to fuel their PEVs to wind program. The strategy requires that energy at no additional cost. While the PEVs enrolled in a household install a “large Revolt will be powered by wind energy, standard or capacity” storage water heater, offpeak rates still apply for the electricity used to charge which is typically between 85 and 105 gallons in size, them. with the larger water heaters provided to households that have more family members. This program extends to members who already own or lease a PEV and members who purchase or lease one by Great River Energy’s ETS resource Dec. 31, 2017.

Great River Energy is able to store a gigawatt of energy Contact information each night by controlling the ETS water heaters of more than 65,000 end-use members. This effective form of Gary Connett, director of member services community storage aggregates distributed energy Great River Energy technologies increases energy efficiency and allows for [email protected] better integrate renewable energy resources onto the grid and reduce customers’ monthly electric bill.

Great River Energy greatriverenergy.com 12300 Elm Creek Boulevard Maple Grove, MN 55369 763-445-5000

3/28/2017

Electric Thermal Storage water heating The battery in your basement

Electric Thermal Storage Household water heating (ETS) water heating Household water heating is one of the more predictable Electric thermal storage (ETS) water energy consuming activities in a household. The primary heating is a load control strategy that variable that dictates hot water consumption is household provides households with their daily hot size. According to the Water Heaters by Type water needs by charging their water Energy Information Million Households | IA, MN, ND, SD heaters only during the lower-cost, Administration’s 2009

off-peak hours. Member-consumers Residential End-Use Propane participating in the ETS program heat Consumption Survey, water 0.3 their water from the hours of 11 p.m. heating is responsible for to 7 a.m. In exchange for this level of approximately 15 percent control Great River Energy provides of total household Natural Gas Electricity 2.2 discounted wholesale energy to its consumption. 1.4 member cooperatives for energy sales Water heaters are often associated with the ETS program. The one of the more under- strategy requires that a household install a “large capacity” appreciated appliances in storage water heater, which is typically between 85 and a home. Typically located 105 gallons in size, with the larger water heaters provided in the basement, they tend to be ignored until there is to households that have more family members. an issue and you run out of hot water. The only thing a Great River Energy’s ETS resource homeowner expects from a water heater is hot water. A utility can utilize hot water heaters as a resource, but Great River Energy is able to store a gigawatt of energy only if this basic function is met. each night by controlling the ETS water heaters of more than 65,000 end-use members. A recent study from the Grid-interactive water heating | Can a global economic consulting firm The Brattle Group dubbed water heater provide grid benefit? this approach to energy storage as “community storage.” In response to the proposed water heating standards, By aggregating distributed energy technologies and home which would effectively have eliminated the manufacture appliances, electric cooperatives are developing community of electric resistance water heaters larger than 55 gallons, storage to increase energy efficiency, better integrate Great River Energy and the NRECA successfully pursued renewable energy resources onto the grid and reduce legislation that allows large capacity water heaters to customers’ monthly electric bill. be a component of utility demand response programs. Great River Energy, the National Rural Electric Cooperative In addition to strategies such as ETS and interruptible Association (NRECA), the Natural Resources Defense water heating, utilities across the country are beginning to Council and the Peak Load Management Alliance look at water heaters to interact with the grid and provide commissioned the study, “The Hidden Battery,” to launch ancillary services. Due to the variable nature of demand, a community storage initiative to aggregate battery-like which is now coupled with the variable nature of increased features of appliances. renewable generation, grid operators look at generators to

Powering what’s possible

provide ancillary service to the wholesale market. The Integration with renewable energy generator is turned up or down to provide regulation services which keep generation matched to load and help Steele-Waseca Cooperative to maintain voltage throughout the system. This same type Electric, based in Owatonna, of system regulation can occur through the variable control Minn., has packaged its of water heaters. By turning a number of water heaters on 102.5 kW community solar project with ETS water or off, or by dynamically increasing or decreasing the heating. A member can purchase a 410-watt solar panel current to those water heaters, the natural variations of for $170 when they join the ETS water heating program. supply and demand can be managed more effectively at Contact information the grid level. It is Great River Energy’s belief that as long as the hot water needs of a household are met, water Jeff Haase, heaters can effectively provide this type of service to the strategic energy and efficiency program representative grid. Successful execution of this type of dynamic control Great River Energy strategy can reduce the wholesale cost of energy or cause [email protected] it to be a revenue producer.

Demand/Trans. Type/Method Energy Cost Other Costs Total Cost

Uncontrolled $256 $50 - $200 $306 - $456 Grid-Interactive LMP Optimized $108 0 $108 Grid-Interactive with Regulation ($80) 0 ($80)

This is an estimate of potential market costs of a grid- interactive water heater vs. an estimate of market costs for a controlled water heater.

Great River Energy greatriverenergy.com 12300 Elm Creek Boulevard Maple Grove, MN 55369 763-445-5000

3/28/2017

Electric vehicles

As a cooperative, Great River Energy is motivated by listening to and providing services for its member-owners and their consumers. So when leaders noticed a growing interest in plug-in electric vehicles (PEVs), they decided to explore the technology and our potential role in that market. What they discovered after Great River Energy’s initial research efforts is the important role PEVs will play in increasing energy security, improving fuel economy, lowering consumers’ overall fuel costs and reducing emissions. Great River Energy also believes that electric utilities play an intrinsic role in consumers’ consideration of PEVs as a personal transportation option. Fleet electrification may also prove beneficial for business and industry. Electric vehicles play an important role in utility community storage efforts. Community storage refers to utility programs which aggregate electric storage resources available throughout the community, such as electric vehicles and water heaters, to improve the efficiency of electric energy services for consumers. Community storage programs offer the industry the practical steps to rapidly increase the amount of energy storage available. Great River Energy continues to look at ways to make it easier for consumers to drive electric vehicles and currently allowing cooperative members to fuel their vehicles with offers rebates for residential charging stations that wind energy at no additional cost. encourage off-peak or time-of-use vehicle charging. This strategy enables consumers to use more electricity during Renewable resources represent a growing portion of night-time hours when prices are typically lower and when Great River Energy’s power mix, and the Revolt program the electricity is frequently produced from the region’s provides a more direct connection between wind energy abundant wind resources. and the electric vehicle driver. To participate in Revolt, a cooperative member must own, purchase or lease a PEV SM Revolt takes renewables on the road or plug-in hybrid electric vehicle and register with their cooperative. Great River Energy is supporting the advancement of electric vehicles by embracing early adopters. Research Standard or off-peak rates still apply for the electricity used showed that electric vehicle drivers were motivated to charge them. This program extends to members who primarily by the cars’ reduced environmental impact. That already own or lease a PEV and members who purchase inspired Revolt. It is the first program of its kind in the world, or lease one by Dec. 31, 2017.

Powering what’s possible

It’s important to listen to a variety of stakeholders regarding vehicle suits their everyday driving needs. Great River this effort. Great River Energy participates in Drive Electric Energy’s sponsorship of this room continued in 2017 with Minnesota, a coalition of groups that work collaboratively the 44th Twin Cities Auto Show, where the Chevrolet Bolt to bring electric vehicles and plug-in charging infrastructure made its Midwest debut. here. Great River Energy also conducted a summit in 2015 Great River Energy and its member cooperatives will to learn more about PEVs from nonprofits, government and continue making an effort to increase PEV market stimulation environmental groups, subject matters experts, electric as well as go further down the paths of stakeholder engineers as well as PEV owners. Great River Energy held engagement, research, demonstration, infrastructure pilots training on PEV charging and infrastructure for member and partnerships. Great River Energy leaders believe they co-ops as well. can provide utility leadership in educating members and As part of its effort to promoting PEVs as a realistic transportation option. educate consumers on PEVs, Great River Energy Contact information and Revolt sponsored the David Ranallo, leader, member services and marketing, first all-electric display at and Revolt program manager the Twin Cities Auto Show in 2016. The Electric Room Great River Energy hosted about a dozen electric vehicles from different [email protected] manufacturers to help showcase and explain what Gary Connett, director of member services separates them from hybrids and other types of cars. It was Great River Energy also an opportunity to dispel misconceptions consumers [email protected] may have and show that, for a lot of people, an electric

Great River Energy greatriverenergy.com 12300 Elm Creek Boulevard Maple Grove, MN 55369 763-445-5000

3/28/2017

Energy Wise MN home

Background

Great River Energy and its 28 member cooperatives are committed to promoting energy efficiency, reducing environmental impact and educating member-consumers and communities on ways to use electricity wisely. A wide assortment of rebates and incentives are offered to help home and business owners become more energy efficient. Great River Energy believes that with the right information and opportunities, member-owners can maximize the value of electricity without sacrificing their lifestyle or a single degree of comfort. Great River Energy is now thinking beyond members participating in one program or taking advantage of a few There are different paths to different audiences in this rebates – but living in an entire Energy Wise MN home. strategy. Great River Energy’s approach includes educating builders on why building an Energy Wise MN is now a viable option through bundled program rebates and incentives as well as why this type of home would give them a distinct advantage in the market place. Builders are looking for a “contribution to construction.” Great River Situation and strategy Energy also needs to educate consumers on why they should specify Energy Wise MN when buying or building Great River Energy want to continue educating member- a new house and how it delivers a more comfortable, consumers that electricity is a smart choice. The current economical and sustainable living experience. market has created an opportunity for increased homebuilder activity on a national and local level, so it Goals is important to inform members about the benefits of Great River Energy’s short-term goals include creating electricity-based applications for the homes they reside in consumer-facing marketing and tools for cultivating now and the ones they may purchase or build in the future. relationships with builders as well as some of Great River The approach is to create a “bundle” of smart-home Energy’s member-owner cooperatives having a presence options – thermostats, LED lighting, electric thermal storage in 2016’s and this year’s Fall Parade of Homes event, water heaters, air source heat pumps, electric vehicle presented by the Builders Association of the Twin Cities service equipment, community solar, among others – to (BATC). Homes included in the service territories of make being energy efficient easier for homebuilders. member cooperatives Connexus Energy, Dakota Electric This bundle, or Energy Wise MN home, offers consumer Association, Minnesota Valley Electric Cooperative and appeal due to its green energy and high-tech components. Wright-Hennepin Cooperative Electric Association are on

Powering what’s possible

display for this event so that current and future homeowners Essentially, Great River Energy is developing a contribution and homebuilders could see these Energy Wise MN to the construction process for members that they can offer programs in use. Other cooperatives not in the BATC their builders that will bundle beneficial electrification territory can apply these tools to model homes or existing technologies with enhanced rebates for new homes. Great homes in their territories. River Energy will create and provide marketing and sales tools for builder meetings and program growth strategies. Long-term goals include developing enhanced relationships with builders and other key audiences. There may also Contact information be opportunities to blend in renewable attributes to the concept of a “near net-zero” home option in the future as David Ranallo, leader, member services and marketing well as other automated technological advancements made Great River Energy possible through the use of electricity. [email protected]

Great River Energy greatriverenergy.com 12300 Elm Creek Boulevard Maple Grove, MN 55369 763-445-5000

3/28/2017 G

Geographic Information Systems (GIS)

Overview Transmission assets uses GIS to keep track of vegetation management. Status updates on clearing work come in A geographic information system or geographical from the field real-time and reports and maps can then be information system (GIS) is a combination of hardware and generated from this data to keep the foresters up to date on software platforms designed to capture, store, manipulate, all vegetation clearing efforts. analyze, manage and present all types of spatial or geographical data. Land Rights agents use GIS for site and route acquisition. Using GIS data on a mobile device, agents can see all of How we use it today the parcel data in conjunction with the proposed route and any alternative routes. They can meet with landowners to Virtually every department in Great River Energy currently discuss and pinpoint where the easements will be located uses some facet of GIS. We developed a standard web- on their property and make any adjustments to the route based application for office employees to access GIS needed from the field device. Agents can also track the information from any Great River Energy facility. We also status of easement acquisitions and permitting using GIS. have both cloud based and mobile applications developed for viewing and capturing information real time from the A GIS dashboard and set of tools was developed for field. These applications are tied to almost every other System Operations. This included redesigning Great River business system at Great River Energy and provide the Energy’s system one-line which is now tied and driven foundation for the development of several targeted GIS completely by GIS data. Three widgets were developed solutions. Outlined below are few examples of GIS for the web viewer that allow the operators to view the solutions currently being used at Great River Energy: locations of all Great River Energy service vehicles on the

The GIS standard web viewer contains all of the functionality of our enterprise GIS system and allows the user to zoom into and out of key assets and locations and get information about the assets from other connected business systems as well as overlay additional layers of spatial information.

Powering what’s possible

map using data from our AVL system. They can view live • Great River Energy employees will have the ability to weather and lightning information on a map and EMS visualize and preform analyses on meter data from predicted faults by capturing data from the SCADA system these systems. GIS could show visually where the load and using that data to trace downstream a give distance is on the grid and with ties to DRMS; Great River and placing a dot on the line to mark the possible location Energy could make decisions on where to control the of the fault. load and also see visually if it was controlled or not by changing the color of the controlled meters in the map. Field crews are using the GIS application on mobile devices for navigation and situational awareness. • Developing GIS dataset and tools for the Transmission Combined with data from Great River Energy’s asset Construction and Maintenance Department which will management system, this mobile GIS application becomes include work order management, inspection tools, a very powerful tools in storm restoration efforts. It is also a time reporting and status updates from mobile devices. replacement for a paper map book which is outdated the This will help Great River Energy get into field force day you print it. Finance uses GIS to help with property tax automation and streamline several processes which calculations. All of the projects outlined were a part of would result in considerable cost savings. Great River Energy’s first enterprise GIS road map • In System Operations, GIS may become the front end designed to spatially enable all of Great River Energy’s of the EMS and SCADA system. Operators would use business systems. There are several more examples of uses GIS to perform their day-to-day work rather than the and plans for future development of GIS at Great River native software that comes with these two systems. Energy contained in GIS Road Map 2. These are a few of the proposed uses for GIS in the How we’ll use it in the future future there are more outlined in Road Map 2. Overall, the future of GIS at Great River Energy will put In the future, Great River Energy employees will be able tools and data into the hands of the end users allowing create their own maps from GIS data and their department them to visualize, maintain and preform analyses on data specific data to visualize and preform analyses. The they are charged with maintaining. possible uses for GIS solutions are endless. Here are a few possibilities in Road Map 2: Resources • Provide tools and dataset to manage transmission • ESRI.com asset projects from planning to close out. This will • Arcgis.com allow all employees and contractors that are working on these projects to collaborate with each other using • Road Map 1 an easy to use visual tool. We are looking to see • Road Map 2 where GIS can play a role in the development of future grid projects. Contact information

• Create ties to AMI and the meter data mart. Jeff Grussing, leader, GIS development Great River Energy [email protected]

Great River Energy greatriverenergy.com 12300 Elm Creek Boulevard Maple Grove, MN 55369 763-445-5000

7/5/2016

DryFining™ Fuel enhancement process

The DryFining™ fuel enhancement process developed by Great River Energy refines or beneficiates lignite coal through a thermal drying and mechanical segregation process. Drying utilizes residual or waste heat to raise the heating value of the coal per pound. The refining component segregates the lignite stream and removes the higher density compounds that contain higher levels of sulfur and mercury. Great River Energy has proven results at its Coal Creek Station, a 1,180-megawatt lignite coal-fired plant in North Dakota, which has used DryFine lignite since 2009. Through the DryFining fuel enhancement process, fuel quality is upgraded to its original design specifications. Fuel moisture is reduced from 38 to 28 percent, and higher heating value is increased from 6,200 to 7,100 BTU. This lignite could be dried further. However, returning the heating value to and the moisture in the coal had increased to about the original boiler design is the best operating condition 38 percent by weight. As a result, more fuel was required for this particular plant. DryFining drives off fuel moisture for the plant to achieve its nameplate capacity, which before combustion, reducing the total volume of flue gases increased the volume of flue gas and overworked the throughout the entire balance of plant and increasing induced draft fans. Plus, processing the additional coal overall plant efficiency while reducing operating cost. required all of the plant’s pulverizers to operate at full Increased efficiency capacity, leaving little opportunity for regular maintenance. It took up to 50 percent more hot air from the primary air Over 25 years of operation, the quality of the coal fans to dry the higher moisture coal and move it along the delivered to Coal Creek Station had deteriorated from the conveyors to the burners. This also limited the amount of 6,800 Btu/lb design specification to about 6,200 Btu/lb, available air for burner optimization for NOx control.

Reduces emissions: Increases overall Saves more than Sulfur dioxide >40% plant efficiency Mercury – up to 40% $20 million by ~4% Nitrogen oxide >20% in annual O&M Carbon dioxide ~4%

Powering what’s possible

Station east of Jamestown, N.D. That product is shipped over 150 miles in enclosed rail cars to prevent moisture from reentering the coal. At full capacity, Spiritwood Station uses approximately 610,000 tons of DryFine coal annually.

For more information on DryFine Technology commercialization

Business Contact Sandra Broekema Great River Energy 763-445-5304 Cell 612-280-8689 [email protected] Technical Contact Charlie Bullinger About Great River Energy Great River Energy Great River Energy dries and refines additional quantities 701-250-2162 of lignite at its Coal Creek Station near Underwood, N.D., Cell 701-219-9745 and then transports that DryFine coal to its Spiritwood [email protected]

DryFining at Coal Creek Station Reduced fuel moisture lowers: flue gas volume flue gas velocities exit gas temperature power for mills Less: power for FD & ID fans SO 40% 2 duct erosion & maintenance CO 4% 10% less 2 B NOx 20% DryFine O Hg 40% Feedstock I Ash 2.5% L E R Stack ESP or SO2 Baghouse Scrubber

INCREASED EFFICIENCY More MW/ton Less flue gas Less evaporation Lower velocities Lower stack temp

Great River Energy greatriverenergy.com 12300 Elm Creek Boulevard Maple Grove, MN 55369 763-445-5000

7/5/2016 GRID RESILIENCE

Cybersecurity

Overview

A safe, stable and resilient cyberspace and infrastructure is critical to protecting the reliability and security of the electric power system. Since the North American Electric Reliability Corporation (NERC) introduced cybersecurity standards in 2005, Great River Energy has continued its commitment to compliance and taken proactive measures to safeguard Great River Energy from cyber threats and vulnerabilities. By partnering with industry, government and other related organizations in a collaborative effort, Great River Energy is in a better position to prevent, protect against and respond to cyber incidents in a constructive manner.

Current state

Great River Energy has implemented a standards-based security model and policy framework to ensure compliance with NERC standards. Meeting NERC standards has always been a part of Great River Energy’s daily operations, and the organization continues to devote Electricity Information Sharing and Analysis Center resources to compliance as the standards evolve. (E-ISAC) – The E-ISAC acts as an information clearing house and coordinates information sharing about cyber incidents Great River Energy’s management regularly reports on for utilities. cybersecurity issues and risks to its board of directors. The organization conducts periodic cyber intrusion scenario Department of Energy Cyber Risk Information Sharing drills, which allows Great River Energy to test emergency Program (CRISP) – CRISP enables near real-time exchange response plans and communication protocols. of threat and incident data. Great River Energy volunteered in 2014 to participate in the pilot project originally Collaboration with others developed by the U.S. Department of Energy to protect highly sensitive government networks. Through the Great River Energy participates in the sharing of program, Great River Energy and others benefit by sharing actionable intelligence around cybersecurity, including: and obtaining valuable cyber threat data, analyzing that Electricity Subsector Coordinating Council (ESCC) – The data and receiving mitigation measures. Great River ESCC is made up of industry CEOs who set strategies for Energy was the first cooperative involved in the pilot addressing cybersecurity issues. The council works with project, which has now been extended to one of its US Government officials to coordinate and align utility member cooperatives, Minnesota Valley Electric efforts toward common national security, resilience and Cooperative. Great River Energy continues to explore preparedness related goals. options to bring other members into the program.

Powering what’s possible

NERC GridEx III – The two-day exercise, was designed to Energy has created a culture of security and risk enhance the coordination of cyber and physical security management. Employees understand that security is resources and practices within the industry, as well as everyone’s responsibility. Great River Energy has communication with government partners and other established a Security Policy Statement that guides stakeholders, including those in Canada and Mexico. employee actions. It reads: The biennial exercise gave participants, like Great River Energy, the opportunity to self-assess their emergency response and recovery plans through a simulated exercise Great River Energy recognizes the value of its physical, that took place across North America. cyber and information assets in the ongoing operation and success of its business and the potential for Cooperative collaboration opportunities significant harmful consequences should these assets be compromised or destroyed. As such, Great River Many cooperative collaboration opportunities exist through Energy is committed to the establishment and organizations like the Cooperative Research Network implementation of controls to protect its assets that (CRN), Electric Power Research Institute (EPRI) and the meet or exceed industry standards and practices. National Rural Electric Cooperative Association (NRECA). The protection and security of Great River Energy’s Other opportunities to consider include cooperative best assets is the responsibility of Great River Energy’s practice visits and participating in pilot projects. employees, contractors and agents. Great River Great River Energy hosted a one-day security summit for Energy will enforce compliance with its security its member cooperatives to showcase best practices and standards; violations may result in disciplinary actions, provide an environment to facilitate information sharing. termination of employment, legal prosecution and/or The idea took shape at the suggestion of members who other actions as warranted. underlined the importance of security issues facing all utility cooperatives. The agenda included member cooperative speakers, Great River Energy speakers, and external security experts. Helping to shape the future The NERC Grid Security Conference (GridSecCon) will be Great River Energy partnered with Thomas Edison State held in St. Paul, Minn., Oct.17-20, 2017. The conference University, Utilities Telecom Council and other top utility brings together cybersecurity and physical security experts cybersecurity professionals to design a master’s degree from industry and government to share emerging security program for students wanting to specialize in utility trends, policy advancements, and lessons learned related cybersecurity. The program, called the Graduate Certificate to the electricity sub-sector. in Cybersecurity – Critical Infrastructure, blends both information technology and operational technology, and Employee accountability focuses specifically on critical infrastructure sectors such Cybersecurity is not just about technology. Employee as energy, water, gas and transportation. accountability for maintaining and improving security is Contact Information critical at Great River Energy. Much like safety, security is everyone’s responsibility. Every Great River Energy Marc Child, information security program manager employee has responsibilities under the NERC compliance Great River Energy program. Through training and education, Great River [email protected]

Great River Energy greatriverenergy.com 12300 Elm Creek Boulevard Maple Grove, MN 55369 763-445-5000

3/28/2017 A

Aging infrastructure assessment tool

Great River Energy transmission leaders are researching How will the assessment tool change the how to best evaluate breakers, meters, remote terminal unit way Great River Energy does business? (RTU) and electro-mechanical relays to identify which ones are in need of being replaced and how to go systematically Projects will be funded based on best business cases and through the system to rank that equipment. Leaders are if they will help Great River Energy overall. looking at a focused plan and the development of a Leaders are looking at how to assess these projects prioritization tool that would dovetail into the budget cycle together. Oftentimes it’s comparing apples to oranges. For so that older equipment, which is prone to fail, would be example, a relay project doesn’t look the same as a line replaced before any system impacts occur. project nor do the costs align or are they similar. What Of note, older equipment often continues to perform the leaders are trying to do is come up with a uniform way for tasks it needs to. This process and tool would analyze the these projects to be standardized and then ranked, so that health of the system and the individual components, based the best projects really do come out on top and receive on age, condition criticality and obsolescence. The tool appropriate funding during the prioritization process. would help leaders understand which equipment to focus Which projects will receive funding? on and which need help. Leaders are looking at certain criteria to determine which What was Great River Energy doing projects should be funded. Most of these projects replace before creating the assessment tool? something already out on the system. They might be Before deciding to come up with an assessment tool, many “smarter” but essentially the equipment will perform the of the projects were replaced when they failed or when same basic function. there was a good case that they needed to be updated. It Transmission leaders are creating a standard evaluation was up to individual groups to make those business cases. that can be replicated for these very different projects, and Field services, system operations, relays and transmission so Great River Energy can determine how to rank them. line crews had a list of projects that they wanted to see The process is expected to be fully initiated by 2018. funded. They’d bring those projects forth during the capital Contact information budget prioritization process, and leaders would decide which projects should be funded. John Setala, manager, project management and engineering services, transmission Great River Energy [email protected] Kerry Livingston, principal engineer, transmission Great River Energy [email protected]

Powering what’s possible D

Energy Sector Climate Resilience Partnership

Overview

In early 2014, the Obama Administration released the first-ever Quadrennial Energy Review, which examines how to modernize the nation’s energy infrastructure. As part of the initial stage, the Energy Sector Climate Resilience Partnership was formed, with Great River Energy, the Department of Energy and 16 utilities as partners. CEOs from the 17 utilities that make up the partnership convened in April 2015 at the Department of Energy. The participating utilities represent a broad array of investor-owned, federal, municipal and cooperative utilities, including Great River Energy and Hoosier Energy. Great River Energy’s President and CEO David Saggau attended the meeting. The Partnership for Energy Sector Climate Resilience is an initiative to enhance U.S. energy security by improving the resilience of energy infrastructure to extreme weather and climate change impacts. The goal is to accelerate Great River Energy submitted this report to investment in technologies, practices, and policies that will the Department of Energy as part of the enable a resilient 21st century energy system. Under this Energy Sector Climate Resilience Partnership Partnership, owners and operators of energy assets will in February 2016. develop and pursue strategies to reduce climate and weather-related vulnerabilities. Collectively, these utility Initial stage partners and the Department of Energy (DOE) will develop resources to facilitate risk-based decision making and In the initial stage, Great River Energy submitted a report pursue cost-effective strategies for a more climate-resilient in February 2016 called “Assessments of Transmission U.S. energy infrastructure. Assets in Response to Climate Change.” The report looked specifically at Great River Energy’s transmission and This partnership is an opportunity for Great River Energy generation portfolio to determine how climate change to learn and share best practices as it relates to extreme might impact reliable service in the future. The report gave weather, climate change and energy security. In addition, Great River Energy an opportunity to engage with others this partnership will help Great River Energy enhance its in the industry to better understand the vulnerabilities response to major events and gain knowledge on planning climate change could impose on the electric system and to and transmission facility design. Transmission is a long-term find solutions. investment and historical weather patterns may not be a good indicator of what to expect in the future. Great River Great River Energy shared key findings including: during Energy needs to plan and design its systems to meet the the course of this century, climate change is expected to new challenges. increasingly impact the Northern Great Plains and

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Midwest region’s energy infrastructure. Great River 2. Inventory of benefits that could be considered in a Energy’s transmission system and generation facilities are cost-benefit analysis of resilience investments forecasted to see a rise in flooding events, increased ice 3. Outreach to regulators on various topics (e.g., standards, storms and warmer summers with prolonged heat waves. benefits of resilience investments, guidance, success Since weather is one of the greatest risks Great River stories) Energy faces in the generation and reliable delivery to its 28 member cooperatives, risks associated with climate Resources change will continue to be assessed and mitigated. http://energy.gov/epsa/partnership-energy-sector- The other utility partners also submitted their reports for climate-resilience review by the DOE. Assessments of Transmission Assets in Response to Second stage Climate Change

Great River Energy along with the other 18 utilities of the Contact information Partnership for Energy Sector Climate Resilience submitted Gordon Pietsch, director, transmission planning and operations their mitigation plans for Climate Resiliency in November. Great River Energy Great River Energy’s approach for addressing climate [email protected] change risk for the near term period will focus on the prevention and recovery- aspects of resiliency and Michael Brytowski, standards specialist evaluated for their impact on the reliability of electric Great River Energy system. Climate risks to generation have been reduced [email protected] through proactive projects at Coal Creek Station and winterization measures at the combustion turbine facilities. Partners forming the Partnership for Energy Great River Energy annually reviews its Transmission Sector Climate Resilience System Restoration Response Plan and evaluates the plan’s Consolidated Edison of New York performance against the previous restoration events. The Department of Energy evaluation currently does not contain a long term view for Dominion Virginia Power Dominion risks associated with climate change. - Entergy Corporation Future stages Exelon Corporation Great River Energy Partnership met in January of 2017 to discuss its mitigation Hoosier Energy plans and the future of the partnership. Based on the Iberdrola USA work plan priorities the results point to the following top National Grid three topics: New York Power Authority 1. Case studies and stories Pepco Holdings, Inc. Pacific Gas and Electric –Experiences (positive and negative) engaging with Public Service Electric and Gas internal departments, customers, regulators, Sacramento Municipal Utility District communities, suppliers, other stakeholders, etc. San Diego Gas and Electric –Regional impacts and resilience strategies Seattle City Light Southern California Edison –Best practices (e.g., developing climate scenarios, Tennessee Valley Authority screening resilience strategies, evaluating Xcel Energy investments)

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GridBallast research project

Great River Energy and Connexus Researchers will focus on defining control algorithms that Energy are taking part in a pilot will allow GridBallast devices to work together without a research project funded by the network. The research team assembled by NRECA includes Department of Energy (DOE) experts from Carnegie Mellon University, Eaton and focused on grid reliability. SparkMeter. Eaton will develop the water-heater controller. SparkMeter will build a smart circuit controller. NRECA The DOE will invest $1.3 and co-ops will pilot the devices on their systems in million in the GridBallast project partnership with cooperatives. to create low-cost, demand-side management tools for improving the NRECA recently drafted a “Technology To Market” (T2M) resiliency of the country’s electric grid and to better control document that outlines a strategy to move the technology as peak demand. The effort is led by the National Rural tested in the GridBallast program to a sustainable Electric Cooperative Association (NRECA). commercialized product. An Industry Advisory Board has been formed that includes representatives from participating NRECA and its research partners plan to create two cooperatives and NRECA leadership to provide guidance devices: a water heater controller and a smart circuit and support for the T2M portion of the project. breaker capable of controlling plug-in appliances. The project team will develop an algorithm to continuously By participating in this project, Great River Energy hopes monitor the voltage to further its knowledge on ways to help stabilize the grid and frequency of as it undergoes a period of transition. This project is an electricity feeds directly opportunity to better understand the impact renewable at the plug and energy resources will have on Great River Energy’s system automatically respond with rapid, low-scale adjustments. and how the cooperative can deploy autonomous The goal of the GridBallast project is to make load intelligent technologies to respond rapidly, without human management an inherent part of grid operations rather intervention, to maintain the power quality and reliability than a central control action, which is currently how its members expect. demand-response programs are managed. The GridBallast project will take place over a two-and-a-half Unlike traditional demand-response programs that manage year period with field demonstrations beginning in July devices from a central location, the new controllers will 2018 and concluding in April 2019. function autonomously, monitoring electrical anomalies in the field and making rapid, low-scale adjustments. Averting Contact information the need for communications infrastructure, GridBallast Gary Connett, director, member services could reduce load control costs by at least 50 percent, Great River Energy according to project’s leaders. [email protected] The devices will be deployed at homes and businesses in Tom Guttormson, principal technology engineer Connexus Energy’s service territory while Great River Connexus Energy Energy will support the research and share those findings [email protected] with its other cooperatives.

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ICE pilot project results

Context From those inputs, the ICE tool could determine the cost of outages and potential outage reduction savings by investing As interest in new generation sources increases, costs in either non-wire alternatives or traditional transmission for wind and solar power decrease and battery storage infrastructure. Using this information, customer socioeconomic becomes more feasible, adding distributed energy data and time of day/year data, the total annual cost of resources (DER) with battery storage to the electric system sustained interruptions was calculated for each substation. continues to become a more viable way to address There were 30 East Central Energy substations included in reliability issues on the electric system. the analysis. Great River Energy worked on a pilot project in 2016 to study the differences between the benefits of investments Why it mattered in transmission assets versus distributed generation and Great River Energy has been committed to serving its storage as a means for improving system reliability. In this members with a high standard of reliability since it was pilot project Great River Energy partnered with member formed and has consistently made reliability improvements cooperative East Central Energy to develop further when needed. This study proved that those investments have understanding of the members being served and if created a highly reliable system. The results showed that investments in non-wire alternatives (distributed generation deploying distributed energy resources as simply a way to and storage systems) would be more prudent than improve reliability did not make sense for a number of investments in Great River Energy’s transmission assets reasons. First, Great River Energy’s system is highly reliable. as a means to improve system reliability. Interruptions—sustained and momentary—aren’t so The pilot project served as a reference point for cost prolonged as to warrant extensive investment. Second, comparisons when considering replacement of neither the load nor customer base is dense enough in transmission lines or potential benefits of distributed any part of Great River Energy’s service territory to create energy resource additions to the transmission system or enough of an economic hardship that would drive the value to member distribution systems. proposition of non-wire alternatives such that investments would be worthwhile solely for reliability purposes. The pilot project idea emerged from Great River Energy’s involvement in the Department of Energy’s Energy Sector The study considered two types of DER technologies in the Climate Resilience Partnership, where participating utilities study—battery storage and diesel generators. Solar was not were introduced to a new Interruption Cost Estimator (ICE) considered in the cost of DER implementation due to the fact tool. The ICE tool helps estimate the cost of service that reliability was the driving aspect of the study. If Great River interruptions and/or the benefits associated with reliability Energy is looking to increase reliability with DERs, then the improvements. Great River Energy saw an opportunity to variable, non-dispatchable nature of solar wouldn’t increase leverage this tool to assist in planning efforts and identify reliability without accompanying storage, which would cost-effective non-wire alternative investments. increase the costs to a level that would preclude consideration. The analysis showed that the pay back period for adding Description diesel generators to the system would be 59 years, and for a Great River Energy partnered with member cooperative battery system the payback (only in terms of reliability) would East Central Energy to gather reliability data, which be 208 years. The cash flows on an annual basis represented accounted for a 10-year average in industry standard the ICE tool output for the value of a 40% improvement in metrics system average interruption duration index (SAIDI), SAIDI. Simply put, to install DER for reliability does not make system average interruption frequency index (SAIFI), and sense for Great River Energy at this time. Several assumptions customer average interruption duration (CAIDI). Data for were made throughout the study to give a best case scenario reliability at individual distribution substations and look at the non-wire alternatives, and to attempt to stress-test commercial and residential usage also were used. the numbers to see if a positive NPV would be possible.

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Ultimately, the annual benefits did not accrue to enough of 3. Utilize the ICE tool to compare the cost benefits for a cash flow to offset initial investments and annual costs. improved reliability/resilience of investment in non-wire The average battery project cost would have been $4.4 alternatives versus investment in transmission assets. million, and average diesel project cost at $1.2 million. A longer term goal would be to create a system that The investments were still borderline with a total elimination prioritizes existing transmission assets for replacement of interruptions, which would not be a realistic assumption. or upgrade in the capital projects process. There is potential for battery storage to become economic, 4. Inform the future grid steering committee, member but only if additional value propositions outside of managers, senior staff and board members on the reliability were ‘stacked’ such that the sum of the values study results, and provide recommendations to expand would create annual cash flows to offset the still large the analysis to other interested cooperatives. initial investments. Using DERs would not be a cost-effective alternative to transmission system upgrades to improve the 5. This project will additionally serve to inform the longer reliability of the system. term transmission and resource planning processes. The project may also serve as a reference for methods Great River Energy can continue to use the ICE tool in the to identify and compare the costs of transmission and future as members want to see the cost of an outage and distribution facility replacements to the cost of to use it in other areas. implementing targeted DER. The cost of battery storage is declining; the study used an aggressively optimistic cost estimate for installed costs of battery storage in 2020. For the economics to improve Project start date: May 27, 2016 for battery investments, other benefits such as ancillary Project end date: Nov. 17, 2016 services payments from the Midcontinent Independent System Operator (MISO) would need to be included, as well as additional payments for a storage unit as a generator, as load, and as a transmission asset. Stacking Participating Organizations payments could result in a cost-effective investment in Great River Energy battery storage technology. The MISO market is still lacking a defined construct for payments to storage assets, and East Central Energy Great River Energy will need to re-examine the assumptions Department of Energy (provided tool used) of this project when a more defined market construct is in place. Currently, there are no state or federal subsidies on Contact information batteries that might help their value proposition. Gordon Pietsch, director, transmission planning Goals and objectives and operations Great River Energy The objectives of the pilot project included: [email protected]

1. Identify the status and availability of the data that Michael Brytowski, standards specialist indicates the condition of Great River Energy’s Great River Energy transmission assets that serve a co-op. [email protected]

2. Develop a long term health/risk index for transmission Zac Ruzycki, senior resource strategist assets that serve that co-op’s load (another project is Great River Energy addressing health/risk for all Great River Energy [email protected] transmission assets), predicated upon: • Asset condition • Historical reliability indices • Customers being served • Criticality to operations

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Portfolio evolution

Great River Energy is crafting a dependable and economical portfolio through new resources and using existing generation in new ways.

A rise of dispersed and variable renewable generation called on to be the steadying force in the market. resources – primarily wind energy – has had major market To remain competitive in today’s power market, Great River effects that are shaking up the economics of conventional Energy adapted Coal Creek Station to the new market power plants. forces. Operational changes and minor modifications will Ten years ago, the Midwest energy market included 1,000 enable the 1,146-megawatt plant to ramp down to less megawatts of wind generation. Today, there are 15,000 than 300 megawatts. megawatts – and more development is expected. More wind on the way Using existing resources in new ways Great River Energy is taking advantage of favorable pricing Because there is more energy available, market prices have of renewable resource and market trends to strategically fallen. And, since the output of renewable resources swings expand its renewable portfolio. The 300-megawatt up and down depending on the wind, there is a growing Emmons-Logan project is scheduled to begin providing need for generation resources that can adjust their output. power to Great River Energy’s members in 2020. The project will bring Great River Energy’s renewable energy The roles of baseload and renewables have changed capacity to more than 1,000 megawatts. dramatically. Coal and natural gas power plants are now

Capacity Energy Fuel oil 3% Market Renewable 11 % 14% Renewable Coal 12% Hydro 8% 39% Hydro 8% Coal 66% Natural gas Natural gas 3% 36%

2016 capacity sources by fuel type 2016 energy sources by fuel type

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Reducing reliance on coal Solar rising

After serving Great River Energy’s members for more than Following its 2015 statewide buildout of solar arrays, 50 years, the Stanton Station power plant will be retired in Great River Energy applied its newfound knowledge to 2017. Retiring the plant was in the best interest of Great develop the largest cooperative-owned solar installation River Energy’s member-owner cooperatives. The plant’s in Minnesota. Great River Energy and Wright-Hennepin closure will reduce Great River Energy’s costs while also Cooperative Electric Association collaborated on the reducing the cooperative’s carbon dioxide emissions and Dickinson Solar Project, a 2.25-megawatt installation reliance on coal. The retirement of Stanton Station follows consisting of 8,352 panels on 13-acres in Buffalo, Minn. Great River Energy’s 2015 exit from a contract for half the output of a Wisconsin coal plant.

Great River Energy’s board of directors adopted a resolution in 2013 that includes the following provisions: Address potential base load stranded costs through the accelerated depreciation of Coal Creek Station and Stanton Station over the next fifteen (15) years, beginning in July 2013 Manage carbon dioxide emissions to 2005 levels or lower Implement cost effective opportunities to reduce greenhouse gas emissions now and develop and implement a plan to substantially reduce Great River Energy’s dependence on coal by 2028 Meet any future growth with conservation, energy efficiency, renewable energy, natural gas and market purchases

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Environmentally beneficial electrification

Technological progress is making appliances and other electric devices ever more efficient. Power plant retirements and renewable development will continue to reduce the environmental effect of the electric system.

These two converging trends are making one thing very In partnership with its member-owner cooperatives, Great clear: electricity is a smart choice. River Energy also works to attract economic development through financial support and unique energy solutions. As the electric system continues to become cleaner and more efficient, there is growing support for using electricity Cooperatives are also leading the charge on community in new ways. energy storage, which employs common household

SM appliances to provide critical services the electric grid needs. Great River Energy continues to offer its Revolt program, which allows electric vehicle drivers to charge their cars Benefits for co-ops entirely with wind energy at no added cost. Its member- owner cooperatives offer a catalog of programs that Electrification provides cooperatives with relief from incentivize energy efficiency retrofits ranging from LED financial pressure due to declining electric sales. It also lighting to ground-source heat pumps. builds member engagement by helping home- and business- owners save money and improve efficiency.

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Regional transmission leadership

The electric industry is in the midst of an evolution that began more than 20 years ago. In the first 10 years, gradual but radical change in the transmission industry was driven by the federal government. Modernizing the grid became a national priority with concerns focusing on reliability, national security, the environment and the need for more efficient markets to keep electricity affordable and serve customers better. Great River Energy and its members stayed ahead of the curve as:

A founder and leader of the CapX2020 grid expansion

Early members and market participants in the Midcontinent Independent System Operator (MISO)

Leading the CapX2020 grid expansion

Great River Energy was a founder and leader of There are five major CapX2020 projects that comprise CapX2020, a joint initiative of 11 investor-owned utilities, a $2 billion investment in 800 miles of 230-kV and generation and transmission cooperatives, and municipal 345-kV transmission lines. It is the largest development of new transmission in the Midwest in nearly 40 years. joint action agencies.

CapX2020 is upgrading and expanding the electric Prepared for today’s transmission transmission grid in Minnesota, North Dakota, South environment Dakota and Wisconsin to ensure continued reliable and affordable service; meet state and regional energy policy Great River Energy is prepared for today’s competitive goals; and support a diverse generation mix, including transmission environment. Great River Energy was accepted renewable energy. as a MISO-qualified transmission developer in late 2014, which allows the cooperative to compete for the right to A core objective of CapX2020 is collaboration in the build certain regional transmission projects. planning and execution of projects. A University of Minnesota Humphrey School of Public Affairs report in MISO created the qualified developer status in January 2016 said the CapX2020 organization ushered in a new 2014 in response to the Federal Energy Regulatory era of multi-state transmission planning and served as an Commission’s (FERC) Order 1000 that eliminated the “right example that other utilities can and should emulate as of first refusal.” Having the right of first refusal allowed they cooperate on regional projects. utilities the right to develop new transmission facilities

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more than 100 kV that connect to substations the utility retaining the right of first refusal (ROFR). Great River owns and, in FERC’s opinion, prevented competition in Energy, in collaboration with CapX2020, advocated for the market for transmission expansion projects. the Minnesota ROFR bill in 2012. Although Order 1000 eliminated the right of first refusal Also, Great River Energy is heavily involved in inter-utility on the federal level, a number of states exercised their and MISO transmission planning activities, working actively authority to address the issue at the state level. Minnesota, to help ensure appropriate regional-scale projects are North Dakota and South Dakota each passed state laws approved by MISO when they would benefit its members.

Continued grid evolution

While transmission continues to evolve, exponential change is expected over the next 15 to 20 years on the distribution side of the grid and in retail markets. This time, change is not being driven by government but instead by customers. Key drivers include:

High expectations of today’s consumers

Concerns about carbon and other emissions

Rapidly developing technologies for consumerization of energy

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3/28/2017