UNITED STATES DEPARTMENT OF ENERGY ELECTRICITY ADVISORY COMMITTEE MEETING Arlington, Virginia Tuesday, June 30, 2015 2 1 PARTICIPANTS: 2 STEPHANIE AYERS IMCOR 3 RAKESH BATRA 4 Department of Energy 5 DENIS BERGERON Maine Public Utilities Commission 6 ANJAN BOSE 7 Washington State University 8 MERWIN BROWN California Institute for Energy & Environment 9 MARILYN BROWN 10 Georgia Institute of Technology 11 CARLOS COE Millennium Energy 12 LELAND COPLIANI 13 Lewis-Burke 14 RICHARD COWART Regulatory Assistance Project 15 ROBERT CURRY 16 CurryEnergy 17 KEN DONOHOO Oncor Electric Delivery Company 18 JAMES GALLAGHER 19 New York State Smart Grid Consort 20 CLARK GELLINGS Electric Power Research Institute (EPRI) 21 HONORABLE PATRICIA HOFFMAN 22 Department of Energy 23 3 1 PARTICIPANTS (CONT'D): 2 JULIET HOMER Pacific Northwest National Laboratory 3 PATRICK HUGHES 4 National Electrical Manufacturers Association 5 EDWARD KRAPELS Anbaric Holding LLC 6 MARK LAUBY 7 North American Electric Reliability Corporation 8 KEVIN LYNN Department of Energy 9 MAUREEN MALLOY 10 ICF International 11 ELI MASSEY Department of Energy 12 DAVID MEYER 13 Department of Energy 14 GRANGER MORGAN Carnegie Mellon, Engineering & Public Policy 15 TIMOTHY MOUNT 16 Cornell University 17 DOUG OBEY Inside EPA 18 JOSEPH PALADINO 19 Department of Energy 20 NANCY PFUND DBL Investors 21 JAMES PEDERSON 22 Federal Energy Regulatory Commission 23 4 1 PARTICIPANTS (CONT'D): 2 SONNY POPOWSKY EAC Vice Chair 3 WANDA REDER 4 S&C Electric Company; IEEE 5 PAUL ROBERTI Rhode Island Public Utilities Commission 6 MATT ROSENBAUM 7 Department of Energy 8 HEATHER SANDERS California Independent System Operator 9 PAM SILBERSTEIN 10 National Rural Electric Cooperative Association 11 RAMTEEN SIOSHANSI Ohio State University 12 JULIE SMITH 13 Department of Energy 14 SAMIR SUCCAR ICF International 15 ROY THILLY 16 Independent 17 DAVID TILL Tennessee Valley Authority 18 DAVID TREICHLER 19 Oncor Electric Delivery LLC 20 GORDON VAN WELIE Independent System Operator of New England 21 5 1 PARTICIPANTS (CONT'D): 2 ANDREA WAGNER ICF International 3 REBECCA WAGNER 4 Nevada Public Utilities Commission 5 CARL ZICHELLA Natural Resources Defense Council 6 7 * * * * * 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 6 1 P R O C E E D I N G S 2 (8:01 a.m.) 3 CHAIRMAN COWART: Good morning everyone. 4 As we always state at the beginning of these 5 sessions I will remind people that a transcript is 6 being prepared so your remarks are being recorded 7 for posterity and if there's no other business 8 before the committee we can turn this over to 9 Wanda Reder the Microgrids panel. Thanks Wanda. 10 MS. REDER: All right between now 8:30 11 and 10:00 we'll have the opportunity to hear from 12 four guests on our Microgrid panel this morning 13 and this anticipation for coming up for a work 14 product in 2016 on where we need to take 15 Microgrids and understand what the recommendations 16 are to remove barriers et cetera. The focus of 17 this panel is really on financing, the commercial 18 aspects but I thought before diving into that is 19 probably worth it to get grounded a bit on what is 20 Microgrid just to make sure we'll all on the same 21 page before we move into that space. Microgrid is 22 a localized grouping of distributed electricity 7 1 sources, loads and storage mechanisms that can 2 either operate in conjunction with the central 3 grid or can isolate and operate independently as 4 an island. I think that part is really, really 5 key. Sometimes we get kind of confused in the 6 discussion but that island aspect is really, 7 really important. There are a lot of different 8 types of Microgrids; an individual sports stadium 9 for example can be a Microgrid. It can get a 10 larger and include multiple consumers at a 11 particular geographic area that's always 12 electrically bounded like a military base, a 13 university that type of thing and those tend to be 14 more community oriented where they're taking on 15 the owness themselves for various reasons which 16 I'll talk about. The other respect is utility 17 Microgrids. So the utility might decide I might 18 want to get into the Microgrid space, provide some 19 supplier resources on the consumer side, manage 20 that control activity and so right now the jury is 21 still out on which direction the Microgrids are 22 going to go, how the markets are going to evolve. 8 1 Having these three approaches in mind is probably 2 useful as we get into the conversation on how the 3 market advances. Typically three major buckets of 4 why Microgrids start evolving. Once is looking at 5 the resourcing in energy security aspects so the 6 extent that consumers need more reliability in the 7 grid, there's more increased dependency on it. 8 That can be a driver to provide local power during 9 outages, increase the reliability, serve really 10 critically loads, address cyber security aspects 11 and just be more independent relative to being 12 energy aspect. Another driver is efficiency and 13 optimization which is inscribed on the next slide 14 and here talking about peak reduction, offsetting 15 energy, often solar is a part of this as are many 16 other local generation sources to the extent that 17 you're generating locally there's less losses 18 because you don't have to go through the delivery 19 aspect into the extent that markets are evolving 20 there's an opportunity to provide ancillary 21 services back to the grid. Often times some 22 interaction with combine storage to get that 9 1 increased sufficiency and optimization. I think 2 one of things that's important to think about 3 which is described on the next slide is that 4 storage often is coupled with these Microgrids. 5 This talks a bit about how solar prices have come 6 down over time and actually crossed on a per kilo 7 watt hour with diesel so we are seeing solar as 8 one of the sources that are often incorporated in 9 the Microgrid space and with that often time 10 batteries can then smooth the intermittency and 11 manage the reverse power flow aspect, keep voltage 12 within limits, control ramp rate, that type of 13 thing. So these technologies are converging and 14 actually part of the scope typically. And of 15 course the last slide here in terms of drivers is 16 the green integration aspect so just being able to 17 manage the variability that comes out of renewable 18 and making sure that easily integrates back into 19 the grid. So three big chunks of why folks are 20 moving forward but again as described on the next 21 slide is how are these things getting paid for and 22 that's really what we want these folks to talk 10 1 about is the commercial aspects. What are the 2 barriers to kind of move Microgrids forward? In 3 many respects the technology is there, I think we 4 are learning but it often times is more of a 5 market aspect than it is a technology aspect so 6 that's what we're here to learn more about. So 7 the objective of the panel is to discuss 8 quantifying intangibles such as the resiliency and 9 the reliability aspects. What types of market 10 designs are really most demeanable to facilitate 11 Microgrids and create an environment that's 12 receptive to them to the extent that there are 13 barriers or challenges and what we can do to 14 overcome and understand them so ultimately we can 15 have higher deployments and then lastly what is 16 the utilities role in this face? To the extent 17 that there's consumer community type Microgrids 18 that want to interconnect, how do you facilitate 19 that change and the flip is also true to the 20 extent that utilities want to become more involved 21 in this area; what's required in order to allow 22 them to do that and strategically what the 11 1 advantages are. So that is really the background 2 of why we are having this discussion today with 3 our four esteemed panelists. We will have 4 comments in order of James Gallagher will start, 5 Ed Krapels, Nancy and then David Treichler and 6 then after that we'll open it up with some 7 questions. But before they get started I'll just 8 provide some introductory comments for each of 9 them and then we'll have some slides and go into 10 discussion. Jim Gallagher will be our first 11 speaker. He is currently the executive director 12 of the New York State Grid Consortium. Jim was 13 named executive director of the organization in 14 April 2013, has many years of experience in energy 15 policy and industry as well. He oversees the 16 consortium and as members as they work towards a 17 broad statewide implementation of a safe, secure 18 and reliable smart grid to modernize New York's 19 energy infrastructure. He has a lot of experience 20 beyond that; he was involved in strategic planning 21 at the New York ISO, director of energy policy for 22 the city of New York. He was the director of the 12 1 office of electricity environment for the New York 2 public service commission and prior to that was 3 even involved in TVA so he has a broad range of 4 experience.