Austin Energy’s Renewable Energyand

Demand Side Management

Reza Alaghehband, P.E.Power System Consulting Engineer, Austin Energy

EMS Users ConferenceSeptember 9, 2008

Atlanta, GA

Austin Energy

• Municipally Owned Electric Utility• 9th Largest Public Power• Serves > 388,000 Customers

(population of 900,000)• Area > 437 sq. miles• Serving COA (Travis Co. and

portion of Williamson Co)

Austin

Austin Energy

• No increase in base rates since 1994

• Generation 2,760 MW

• Peak Load ~2,500 MW

• ERCOT Member

Austin

Generation Capacity Ratio

• Coal (2 units) – 23%• Gas (12 units) – 52%• Nuclear (2 units) – 15% • Renewable – 10%

Austin

Transmission Portfolio

• 633 Miles Transmission

- 345 KV

- 138 KV

- 69 KV

Distribution Portfolio

• 10,560 Miles Distribution

- 35 KV

- 12.5 KV• 11 transmission substations• 57 distribution substations

ERCOT Market

• Non-Opt-In Entity (NOIE) – NO part in retail Market

• Qualified Scheduling Entity (QSE) – Submit bids, dynamic/static gen schedules, settle retail/wholesale gen resources with ERCOT according to EPS meters at tielines and gen. terminals

• Power Generation Entity (PGE)• Transmission and Distribution Service Provider

(TDSP)

Renewable Portfolio (Current)

• Wind (5 farms) – 274 MW (96%)• Biomass (2 Landfill site) – 12 MW (4%)• Solar – 2 MW

Total = 288 MW

Wind Provides 8% of

AE Power)

ERCOT New Generation Capacity

116

978 1,175

1,857

2,878

4,788

9,293

116

1,021470212197161

701

4,505

1,910

1,387817

0

2,000

4,000

6,000

8,000

10,000

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Year

Win

d C

ap

acit

y I

nsta

lled

(M

W)

Incremental Wind Capacity Installed (MW)

Cumulative Wind Capacity Installed (MW)

Austin Climate Protection Plan

Will make Austin the national leader among cities in the fight against global warming.

Austin Climate Protection Plan

• Municipal Plan - Makes all COA facilities/fleets carbon neutral

• Homes and Buildings Plan - Makes Austin building codes most EE in nation

• “Go Neutral” Plan - Mechanisms for business to reduce carbon footprint to zero

• Community Plan – Develop complete plan for reducing GHG emissions from sources community-wide

• Utility (Austin Energy) Plan

• 30% renewables by 2020

• 700 MW of energy savings by 2020

• CO2 cap and reduction plan

• New generation carbon-neutral

• Enhance building codes for zero energy-capable homes by 2015

Utility (Austin Energy) Plan

Load Forecast & Conservation

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Capacity (MW)

Nuclear Coal Nat. Gas Wind Solar Purch.Pwr PEAK LOAD FORECAST

238 MW short

Projected New Resources (in MW)

Year Coal/Nuclear Gas Biomass Wind Solar

2008 1,029 1,444 12 274 2

2009   100   165  

2010         30

2011       (77)*100  

2012     100    

2013   200      

2014       50 20

2015       100  

2016     100    

2017       (126)*200 20

2018          

2019       50 30

2020       110  

Total 1,029 1,744 212 (203) 1,049 102

Total Additional Resources 1,376 MW*Expiring wind contracts

Generic Load Shape Changes

Peak ClippingStrategic

Conservation Load Shifting

AE DSM Programs

DSM Cumulative Savings

Peak Clipping• Power

Partner

• A/C Cycling

• W/H Cycling

• Load Co-Op

• Aggregator

AE DSM Programs

Represent 35% of new DSM program mix

Power Saver Program

• FREE Energy Saving Products• Lower energy costs• 70,000 installed in homes, apartments• 10,000 installed in commercial buildings

Cycling A/C Thermostats Cycling Session, June 15, 2005

Forecast vs Actual Load

2100

2150

2200

1500 1600 1700 1800 1900 2000

Hour

MW

Forecast

Act Load

Curtailment Session Start

Curtailment Session Finish

2193-MW

2174-MW

Demand Response Program

Customer Type and Strategy• Residential A/C

– SuperStat®; 33% & 50% Cycling Strategy• Multi-Family A/C

– SuperStat; 33% Cycling Strategy• Multi-Family Water Heating

– Vaughn; 100% (digital timer)• Commercial A/C

– SuperStat®; 33% Cycling Strategy• Municipal & Government A/C

– SuperStat®; 33% Cycling Strategy & Set Point Limits

DR Program Implementation

• Power Partner - Automatic AC cycling by radio controlled thermostats.  Participant AC’s are cycled for a 10 minute block per half hour.  Total continuous MW reduction with full deployment ranges from 20-54 MW depending on temperature.

Availability:

June through September, Non-Holiday, weekdays from 1600 – 2000 with a target of 15 events per season  

DR Program Implementation

• Load Coop - ~2.5 – 3 MW of load response.  Load Coop customers are paid a capacity availability charge of $1.25/kW month and a curtailed energy charge of $0.15/kW based on deployment

Availability:

June through September, between 1200 – 2000 limit for a fixed block of 3 hours per day, up to 15 days or 45 total hours per season with no more than 3 consecutive activations

Demand Response Program

DR Events

0

2

4

6

8

10

12

14

2000 2001 2002 2003 2004 2005 2006 2007

Peak Day: June 2, 2005

Demand Response June 15, 2005

June 15, 2005

Demand Response Program Impact on AE System Load

AE Load Curve July 2004

1850

1870

1890

1910

1930

1950

1970

1990

2010

2030

2050

15:3

0:0

0

15:3

8:2

8

15:4

6:5

6

15:5

5:2

4

16:0

3:5

2

16:1

2:2

0

16:2

0:4

8

16:2

9:1

6

16:3

7:4

4

16:4

6:1

2

16:5

4:4

0

17:0

3:0

8

17:1

1:3

6

17:2

0:0

4

17:2

8:3

2

17:3

7:0

0

17:4

5:2

8

17:5

3:5

6

18:0

2:2

4

18:1

0:5

2

18:1

9:2

0

18:2

7:4

8

18:3

6:1

6

18:4

4:4

4

18:5

3:1

2

19:0

1:4

0

19:1

0:0

8

19:1

8:3

6

19:2

7:0

4

MW

6-Jul / No Cycling

7-Jul / Cycling

8-Jul / Cycling

Demand Response Program Impact on AE System Load

AE Load Load Curve Aug 2004

2050

2100

2150

2200

2250

2300

15:3

015

:40

15:5

016

:00

16:1

016

:20

16:3

016

:40

16:5

017

:00

17:1

017

:20

17:3

017

:40

17:5

018

:01

18:1

118

:21

18:3

118

:41

18:5

119

:01

19:1

119

:21

MW

2-Aug / Cycling

3-Aug / Cycling

4-Aug / No Cycling

Demand Response Program Impact on AE System Load

AE Load Curve June 2005

1900

1950

2000

2050

2100

2150

2200

2250

15:0

0:00

15:1

3:00

15:2

6:00

15:3

9:00

15:5

2:00

16:0

5:00

16:1

8:00

16:3

1:00

16:4

4:00

16:5

7:00

17:1

0:00

17:2

3:00

17:3

6:00

17:4

9:00

18:0

2:00

18:1

5:00

18:2

8:00

18:4

1:00

18:5

4:00

19:0

7:00

19:2

0:00

19:3

3:00

19:4

6:00

19:5

9:00

MW

June 14 / Cycling

June 15 / No Cycling

Aggregator Program

Types of Participants• Energy management companies• Large chain stores – central energy management

systems• Minimum 3 sites bundled

– 10 kW per site minimum– Self-aggregator 30 kW minimum

Aggregator Program

Curtailment Events• 4 events per summer minimum (once/month)• 15 events per summer - anticipated

Time Period • June 01 – September 31• Monday - Friday only• No holidays or weekends• Between 3 pm to 8 pm• Event maximum duration – 3 hours

Aggregator Program

Set-Up Incentive

• If no automation equipment/software exists, – $40/ton up to $10,000 for existing HVAC or

refrigeration equipment• Ex: $40/ton x 150 tons = $6,000

If automation equipment/software does exist,– $20/ton up to $5,000 for existing HVAC or

refrigeration equipment• Up to 50% and 500 tons

Aggregator Program

Performance (Energy) Incentive

• $0.24 per delivered kWh– Ex: 20 kW x 3 hours x $0.24/kWh = $14.40

• AE’s energy incentive not to fall below the $0.24 per kWh

• Minimum 4 energy payments per summer

Demand Side Management (DSM)

Daily Peaks - 2006

1200

1400

1600

1800

2000

2200

2400

1 5 9 13 17 21 25 29 3 7 11 15 19 23 27 31 4 8 12 16 20 24 28 1 5 9 13 17 21 25 29

Ne

t to

Sy

ste

m L

oa

d (

MW

)

Projected Peak 60 MW

Peak

Peak Reduction17th ERCOT Peak, 2420

Strategic Conservation•Total Home Efficiency•Small Business Efficiency•Green Building•Appliance Efficiency•Multi-family Rebates•Commercial Rebates•Refrigerator Recycling•Free Weatherization•Municipal Conservation•Air Duct Sealing

AE DSM Programs

Represents 65% of new DSM program mix

Promoting Energy Efficiency

• Cash rebates that pay 20 – 30% of cost • Up to 70% buy-down incentives for Small Business• Direct install measures• Free home and business energy audits• Low-income Free Weatherization• Engineering Feasibility studies• Inter-agency agreements• Utility Key Account representatives• Newsletter / Mail outs

Commercial Rebates Summary of Technologies

• EE Lighting retrofits• Air Conditioning Unit• Solar Film/Screens • Ceiling/Roof

Insulation• Reflective Roof

Coatings

• Premium Efficiency Motor

• Variable Frequency Drives (VFD’s)

• Retro commissioning• Thermal Cool Storage• Custom technologies

Commercial Rebates Summary of Lighting Technologies

• T-8 & T-5 High Efficiency Lighting Systems • Compact Fluorescent Lamps (CFL’s) • LED (Light Emitting Diode) Exit Signs • Incandescent to Fluorescent Conversions • New building designs• Re-lamping & Re-ballasting of Existing Fluorescent Fixtures • High-Bay Fluorescent Systems • Lighting Controls (occupancy sensors)

Electronically Commutated Motors (ECM)

• Emerging Technology for Refrigeration Fans– Replaces Shaded Pole and Permanent Split

Capacitor• Reduced energy consumption to 60%• Relatively Simple Retrofit• Typical Paybacks Range from 2 to 3 years

Large Grocery Chain Retrofit

Retrofit currently under way

– 22 Locations in Austin area

– Fans per location store ~ 200 fan/motors

– Energy Cost Savings ~$10,000 /location/yr

High Bay Fluorescent Retrofit

Manufacturing Facility

Converted (514) 400-watt HID lamps to 4-lamp 240-watt T5 HO Fluorescents

Annual Cost Savings: $43,812

Project Cost: $122,800

Utility rebate: $33,153 (27% of job cost)

Payback was 2 years

Solar Rebate Program

Up to 30% Savings

• 100 Mega-watts of solar by

2020

• Rebates among the largest• Encourage installations on

homes & businesses.• Demonstrations in Schools• Demonstrations in City buildings

Free Home Weatherization

Energy Improvements:

• Attic Insulation• Duct Sealing• Install CFLs• Installing Solar Screens• Caulking and Weather-stripping• Free Smoke & Carbon Monoxide Detector • Minor Energy Related Repairs

Energy Conservation in Public Facilities

Senate Bill 5 Energy Use vs. Energy Cost

295

300

305

310

315

320

325

330

335

340

345

350

Base Year2001

2002 2003 2004 2005 2006

Gig

aw

att-h

ours

22.0

23.0

24.0

25.0

26.0

27.0

28.0

29.0

30.0

Mill

ion D

olla

rs

Million kWh Cost

Strategic Conservation

• Municipal Energy Conservation Program

• Traffic Signal Conversion to LED

• 5,500 traffic signals

Existing incandescent lamps 135 watts New LED lamps 15 watts Energy savings per lamp 120 watts

90% energy reduction

Load Shifting

•Time-of-Use Rate

•Thermal Cool Storage Systems

AE DSM Programs

Load Shifting - Thermal Storage Austin-Bergstrom International Airport - July 1999

12 AM2 AM

4 AM6 AM

8 AM10 AM

12 PM

2 PM

4 PM

6 PM

8 PM

10 PM

1

4

7

10

13

16

19

22

25

28

31

0

500

1000

1500

2000

2500

Day of Month

Time of day

Central Plant Demand (kW)

0

500

1,000

1,500

2,000

2,500

0% 10% 20% 30% 50% 60% 70% 80% 90%

% of Yearly Hours

MW

s G

en

erat

ed

Top 160 MW is used 40 hours per year

DSM OpportunityAE System Duration Curve -2004

Program Area ExpendituresCost / kW

Saved

Commercial $ 6,406,040 $ 327

Residential $ 6,205,155 $ 483

Demand Response $ 4,852,074 $ 295

Free Weatherization $ 600,084 $ 953

Solar $ 2,637,453 $ 4,221

Grand Total $ 20,532,076 $ 410

2007 DSM Expenditures

Capital Cost – New GenerationCapital Cost – New Generation

Power PlantPower Plant Cost/kWCost/kW

• Natural Gas – Combined Cycle $750

• Pulverized Coal

$1,549

• Nuclear $3,000 $3,000

Source – National Energy Technology Lab (NETL)Source – National Energy Technology Lab (NETL)

Residential Power Saver15% Energy Savings

Typical Home Size: 2,000 Sq. Ft.Pre-Retrofit = 17,960 kWhPost- Retrofit = 15,360 kWh kWh Savings = 2,600 kWh Cost Savings = $273

Cash Flow Projection of DSM

FY05 Forecast DSM Analysis 2007 2008

Base Revenue Reduction $12,000,000 $16,000,000

Fuel Revenue Reduction $13,000,000 $15,000,000

Customer Savings (Bill Reduction) $25,000,000 $31,000,000

Cash Flow Projection of DSM

DSM Analysis 2007 2008

Customer Savings (Bill Reduction) (25,000,000) (31,000,000) Fuel Cost Reduction 13,000,000 15,000,000 Potential Off-system Capacity Sales 9,000,000 TCOS Expense Reduction 900,000 1,000,000 GFT Reduction 2,000,000 3,000,000 Program Cost (23,000,000) (23,000,000) Recovery through Base Rates 15,000,000 15,000,000

AE's Net Income Impact (8,100,000) (20,000,000) Deferred Cost of Capacity 12,000,000 AE's Net Cash Impact (8,100,000) (8,000,000)

2005 Forecast

Cost-Effectiveness Tests (Benefits $ / Costs $ > 1)

• The Participant Test = NPV ofSavings on electric bill + financial rebateCustomer’s additional cost incurred to participate

• The Utility Test = NPV ofAvoided (fuel + power plant operating & maintenance + capacity cost)DSM program administrative cost + financial rebates

• Ratepayer Test = NPV ofAvoided (fuel + power plant operating & maintenance + capacity cost)DSM program administrative cost + financial rebates + revenue losses

• The Total Resource Test = NPV ofAvoided ( fuel + power plant operating & maintenance + capacity cost)DSM administrative cost + Customer’s additional cost incurred

Thank You!!!