Energy Storage, Electric Vehicles & EV Charging 21st Century Strategic Direction Comprehensive Study and Key Considerations March 31, 2020 Prepared For Fayetteville PWC Officers and Commissioners Prepared By Fayetteville PWC Development & Marketing NC Clean Energy Technology Center, NCSU Energy Storage and Electric Vehicles: Detailed Report Page | 0 The following individuals provided research and/or contributed content to this document: Fayetteville Public Works Commission, Development & Marketing Kathy Miller, Marketing Manager Maureen O’Connor, Market Planning Specialist Josie Titus, Customer Programs Analyst Janelle Rockett, Key Accounts Agent Kimberly Rodriguez, Key Accounts Agent North Carolina Clean Energy Technology Center, NCSU Heather Brutz, Clean Transportation Finance and Operations Manager Kimberly Conley, Project Manager Qinling Li, Duke University, Master's Environmental Management '19 Isaac Panzarella, P.E., Assistant Director for Technical Services Autumn Proudlove, Senior Manager of Policy Research Danny Sodano, NC State University, Student, Master's Environmental Engineering '20 Ted Spencer, Senior Extension Specialist Alexander Yoshizumi, NC State University, Student, Ph.D. Geospatial Analytics '22 This document is intended for PWC Chief Officers and PWC Commission to provide information and share key elements for consideration. Although the information and materials are carefully prepared and are believed to be reliable and accurate, the Fayetteville Public Works Commission (PWC) and the North Carolina Clean Energy Technology Center (NCCETC) do not accept any legal responsibility for the contents herein or for any consequences, including direct or indirect liability, arising from reliance on the information or use thereof. The information set forth in this document may be revised or withdrawn at any time without prior notice. In no event shall PWC, its employees, officers, or commissioners be liable for any direct, indirect or incidental damages, injury, loss, costs or expenses related to reliance on the information provided or its use, however caused, including but not limited to, special or consequential damages, lost revenue, business interruption, lost or damaged data or any other commercial or economic loss howsoever caused irrespective of whether PWC is advised of the possibility of such damages, injury, loss, cost or expense. PWC does not provide any legal advice and users of the information should consult with their own lawyer for legal advice. The information contained herein does not have the force of law. In the event of a conflict between this information and any applicable legislation or regulation which may apply, the relevant law prevails. Energy Storage and Electric Vehicles: Detailed Report Page | 1 Contents Executive Summary ......................................................................... 4 • Process • Current Situation • Drivers of Transformation • Key Considerations for Strategic Direction Detailed Report - Energy Storage ................................................ 11 • Energy Storage Applications and Services • Lithium-Ion Batteries • Water Heater Storage • Ice Storage • What is Duke Doing? • Policy and Contractual Obligations • Grid Impact • Codes and Standards • Incentives • Tariffs Detailed Report - Electric Vehicles and EV Charging .................... 29 • Current Status and Market Trends • Electric Vehicle Models Available in North Carolina • Local Dealership Information • Cost to Own and Operate an Electric Vehicle • Electric Vehicle Charging • Electric Vehicle Readiness in North Carolina • What is Duke Doing? • What are the North Carolina Cooperatives Doing? • Electric Fleets & Buses • Policy and Contractual Obligation • Grid Impact • Incentives • Tariffs • Load Profile Study Design Recommendations Energy Storage and Electric Vehicles: Detailed Report Page | 2 Appendix of Supporting Documents • Appendix 1: Butler Farm Microgrid, SREMC 2020 • Appendix 2: North Carolina Battery Storage Installations, Collected by NCCETC, 2019 • Appendix 3: CALMAC/Trane Ice Storage Estimation, Mark Johnson, CALMAC Portfolio of Ingersoll Rand, December 2019 • Appendix 4: North Carolina and Federal Regulatory Activity, Collected by NCCETC, 2020 • Appendix 5: North Carolina Municipal Rate Structures, Collected by NCCETC, October 2019 • Appendix 6: EV/EV Charging Rebates and Incentives, Collected by NCCETC, November 2019 • Appendix 7: Pilot Programs of EV Managed Charging, 2020 • Appendix 8: Other Residential EV Rates, Collected by NCCETC, 2019 • Appendix 9: Non-Residential EV Rates, Collected by NCCETC, 2019 • Appendix 10: Data Collection, Collected by NCCETC, 2020 • Appendix 11: Education & Marketing EVs Referenced Sources Energy Storage and Electric Vehicles: Detailed Report Page | 3 Executive Summary Process In the preparation of this document, Fayetteville Public Works Commission (PWC) Development & Marketing created an open and inclusive process to engage community stakeholders and industry experts. Participants included subject matter experts from Sustainable Sandhills, local car dealerships, North Carolina Auto Dealers Association (NCADA), ElectriCities of North Carolina, Plug-In NC, energy storage vendors, community leaders, internal authorities, and customers. The North Carolina Clean Energy Technology Center (NCCETC) assisted with written content and research. Research from the NC Clean Energy Plan, NC ZEV Plan, and Motor Fleet ZEV Plan completed in October 2019 as directed by NC Executive Order No. 80 and Energy Storage Options for North Carolina completed November 2018 tasked under House Bill 589 were used as technical references. American Public Power Association (APPA) Electric Vehicle Blueprint for Your Community Public Power Strategies produced 2018, APPA Behind-the-Meter Energy Storage produced 2019, and APPA Getting Involved in Fleet Electrification produced November 2019 provided examples of factors, programs, and resources to consider. Current Situation PWC understands the value of storage technology and has led the way with the recent installation of the first municipally owned solar/battery storage site in North Carolina. While solar doesn’t operate at its peak capacity during coincident peak (CP) hours, an effectively managed battery can provide CP capacity at its rated nameplate capacity. To date, the PWC output summary from the 1 MWAC solar/ 500kWAC battery site is as follows: Butler Warner Generation Plant Community Solar & Battery Storage Panel CP Battery Battery CP CP Day/Hr. Month Panel kWh kW kWh kW 9/12 @1700 Battery controls not Sep-19 120,913 440 -2,849 -4 complete 10/3 @1600 Battery controls not Oct-19 122,810 584 -1,208 -6 complete Nov-19 108,053 1 -2,980 248 11/14@0700 260 kW module inoperable Dec-19 92,399 11 -3,752 480 12/20 @0800 Jan-20 101,157 12 -3,954 499 1/22@0800 Feb-20 111,324 58 -3,965 499 2/22@0800 Adding storage capacity to the PWC distribution grid makes economic sense; however, PWC is bound by a full-requirements Power Supply and Coordination Agreement (PSA) with Duke Energy Progress (DEP). The current PSA allows PWC to install, own and operate up to 2 megawatts (MW) battery storage together with a solar facility to store and discharge the solar energy. Energy storage ownership benefits not only PWC but also customers when rates are designed to reflect the hourly and seasonal variability of the cost of electric service. Pricing that reflects actual cost variability encourages customers to efficiently time their electricity use. DEP’s PSA does not limit PWC’s ability to design rates that send a price signal to encourage customer response, nor does it limit demand response activities; yet, it does limit signaling a customer and it appears to limit a Energy Storage and Electric Vehicles: Detailed Report Page | 4 customer’s ability to export to the grid. Commercial and industrial customers who value renewable procurement, heightened reliability with back-up generation, electrification of fleet services, and demand response storage systems could take advantage of tariff offerings to meet their needs and/or environmental goals. Residential customers who desire a plug-in electric vehicle (EV) or want to pair their rooftop solar with battery storage may also see advantages from rates that reflect the variable cost of energy. Variable rates can offer benefit to individual customers without requiring subsidization from non-participating customers, if correctly structured. Across the state, utility-scale energy storage development is expected to rise quickly. Since 2011, investor owned, municipal and cooperative utilities in NC have installed 2,287 kW of battery storage capacity. The 2018 latest Integrated Resource Plans (IRPs) filed by NC investor owned utilities (IOUs) indicated that the capacity of IOU operated energy storage is planned to increase from the current level of 1 MW to 246 MW by 2025 (NCDEQ 2019). Likewise, state-wide EV sales are expected to exceed 80,000 electric and hybrid vehicles in the next five years. In contrast to these trends, there has been little interest in behind-the-meter (BTM) energy storage or EVs in this service territory despite the rate variability offered by our current retail time-of- use and coincident peak rates. Some of the larger industrial customers are considering peak shaving Tier IV compliant diesel generation assets but have not approached PWC about energy storage options. According to local area auto dealers, the penetration of EVs in this area is extremely low. In Fayetteville, the sale of plug-in