Great River Energy’s Demand Side Management

Programs

Jeff Haase

MN EE & LM Symposium | October 12, 2012

Great River Energy

• Not for profit generation & transmission cooperative providing wholesale electricity to 28 distribution cooperatives in Minnesota and into Wisconsin.

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and into Wisconsin.• Second largest utility in

Minnesota, our member cooperatives distribute electricity to families, farms and businesses servings almost 1.7 million people.

CIP Impact on the Utility Business Model

• Regulatory compact• We are granted monopoly rights…

• In exchange for:• Regulation by governing body (Board or PUC)• Regulation by governing body (Board or PUC)• Obligation to serve• Now Obligation to Conserve

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CIP Impact on the Utility Business Purpose

• Before:We are in the business to sell electricity, not reduce sales.

• Now:• Now:We are in the business to help members manage their electric bill.

“We exist as an advocate for our members”

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Small Commercial

16%

GRE’s end -use members

Large Commercial

21%Residential

57%57% of GRE’s end-use member energy sales are residential

2011 Portfolio Top Ten

Program Demand Savings (kW) Energy Savings

(kWh)Percent of Total Energy Savings

Com Retrofit Lighting 4,225 17,523,312 15.4%Com Custom 1,732 14,206,816 12.5%Residential Measurable Behavior Modification

0* 13,995,636 12.3%

Res Geothermal 3,789 11,927,650 10.5%

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Res Lighting 751 9,073,142 8.0%Com Motors and Drives 572 8,690,063 7.6%Res ASHP 738 5,799,114 5.1%Com GSHP 247 5,467,392 4.8%Com New Const. Lighting

1,062 4,473,149 3.9%

ES Appliance 660 3,951,203 3.5%Total 13,776 95,107,477 83.6%

2011 GRE Coop CIP Spending (Conservation & Load Management)

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Total 2011 Spending $22,699,002

Cost -EffectivenessIt’s a function of your perspective

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Total GRE CIP Cost per kWh Saved (First year kWh)

Average portfolio cost per first year kWh saved

$0.139/kWh

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Energy Efficiency is a Long -Term Utility Resource Investment

• Average portfolio lifetime is 12 years

• Utilities spend money only in the first year, representing a fraction of the total project cost.representing a fraction of the total project cost.

• This investment continues to provide benefits for the duration of the measures lifetime.– 2011 CIP Portfolio, $0.139/kWh_1st yr,

~$0.0116/kWh_lifetime

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MISO Costs Compared to CIP Costs

MINN.HUB MISO Prices2012 YTD Averages ($/MWH):– 7 x 24 | $24.11 – 5 x 16 | $29.40– 5 x 16 | $29.40– 2 x 24 & 5 x 8 | $19.33

Average May – July– 5 x 16 | $36.13– 2 x 24 & 5 x 8 | $22.40

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2011 Portfolio Average$13.86/Lifetime kWh

The Pro’s & Con’s of CIP

• Pro’s• Helps members manage energy costs in times of

rising prices• Comments from many Business Owners

You need to help me find ways to save on my energy costs

• Wholesale Cost Avoidance (WCA)

• Con’s• Reduces energy sales (aka billing units)• Rate Impact, especially when sales are flat

Monthly Residential Energy Use

900

920

940

960

980

Usa

ge

Monthly Residential Energy Use • Residential energy use is flattening…– Economy – Efficiency improvements– Appliance standards

780

800

820

840

860

880

900

Mon

thly

U

sage

– Appliance standards– Popularity of conservation– Better informed consumers– Emergence of substitute

energy systems

Natural Transformation to Greater Efficiency | Refrigerators

1.0

1.2

1.4

Num

ber

of H

ouse

hold

s (M

illio

ns)

Age of Most-Used RefrigeratorWest North Central Census Division | 2009 RECS

14

0.4

0.9

1.3

0.9

0.30.2

0.0

0.2

0.4

0.6

0.8

Less than 2 Years

2 to 4 Years 5 to 9 Years 10 to 14 Years 15 to 19 Year s 20 Years or More

Num

ber

of H

ouse

hold

s (M

illio

ns)

An Energy Efficient System

• Realizing an efficient energy supply system requires looking at all aspects of generation and consumption:– Energy Efficiency at Supply & Demand– Load Management– Load Management– Conservation– Renewables– Complementary Technologies

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GRE’s seasonal load curves

2200

2400

2600

2800

Summer

Meg

awat

ts

1400

1600

1800

2000

2200

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

Winter

Meg

awat

ts

July 18 th 2011

C&I with GensetWater heaters

IrrigatorsInt. C&I

Air Conditioning

2,000

2,200

2,400

Impact of Demand Response on a Hot Summer Day

2168 MW

11 Hours

1,200

1,400

1,600

1,800

2,000

AC

& P

SW

H 1

100

C&

I 130

0

Irr.

1600

Res

tore

210

0

5 year control review

July

Billing peakJuly 2nd

Member Load

Est. Control

-Temp -DA LMP

Financials

• Member savings– Monthly demand charges

• GRE– Market Energy– Market capacity 200MW– Market capacity 200MW– Long term avoided capacity cost

Redefine Advanced Technologies

• Managing variable system resources, e.g. wind, will become a key characteristic of utility operations.

• Identifying technologies that are complementary to a utilities generation resources can help to drive down the overall system costs, and the costs to the end user.

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Thank you!

Jeff HaaseJeff Haase

jhaase@grenergy.com | 763.445.6106