2. Topics Who is Bridge Energy Group Overview of Traditional Regulated Electric System Brief Overview of De Facto Energy Policy Electric System Economically Inefficient 8/19/2010
3. Topics (cont.) Causes of Reduced System Load Factor Peak Demand Drives System Investment Dynamic Pricing Best Solution to Combat Peak and Maintain Fairness in Rate Design Micro & Macro Economic Benefits of SG 3
9. Currently working on many Smart Grid ProjectsBRIDGE is Not Aligned with any Tool, Product or Technology Vendor Advantage: BRIDGE works for the client’s cause. BRIDGE coordinates as neutral third party with all vendors without conflict of interest. BRIDGE will be Your Trusted Advisor and Implementation Partner. 8/19/2010
10. The Traditional Regulated Utility Bundled Investment Made on Behalf of Consumers & Society Investment in Long Lived, Predictable Assets Retail Rates Expected to be Stable Utilities Manage a Centrally Controlled Network Utility Planners Focus on Stability and are Responsible for Reliability 5
11. The National Electric System Historically Central Station Driven Since Restructuring Focused on a National Transmission Superhighway Top Down Resource Planning via Utilities, Regulators and RTO’s Since 2003 Blackout Accountability for Reliability Raised Significantly 6
12. National Energy Policy Modern Foundation a Response to 1970’s Oil Embargoes PURPA in 1978, Efficiency & Resource Diversity (Beginning of “Renewables”) EPAct 1992 Increased Emphasis on EE, Launch of EWG’s, Seeds of Restructuring Since 2000 Increased Emphasis on Environmental Attributes, Climate Change BUT, Most Solutions are Instituted via Mandates to Utilities 7
14. Causes of Reduced Load Factor Reduced Concentration of Industrial Load Steady Increase in A/C Load, Flat Panels etc. Consumers Indifferent as to Price Current Energy Efficiency Programs Reduce Usage, Not Peak 9
15. Peak Demand Drives Capacity Need Since 2003 Blackout Heightened Emphasis on Reliability NERC Standards Now Enforceable with Real Financial Penalties for Non-Compliance N-2 is the Standard, if Load Growth Reaches a Critical Point Investment Has to be Made Consumers and Macro Economy Bear the Cost 10
16. Dynamic Pricing the Answer to Peak Demand Pilot Efforts Have Shown Reduced Demand with Just Information Alone Dynamic Pricing Introduces a Real Price Signal that Reflects True Cost to Serve Customers Can Shift Usage and Add Usage to Off-Peak Periods 11
19. SG Economic Benefits Economically Efficient Rate Design Enhanced Utilization of Utility Assets More Efficient Utility Business Model Places Downward Pressure on Electric Rates 14
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21. Final Thoughts Established Regulatory Regime not Economically Efficient Utility Revenues and Earnings Under Pressure Consumers Ultimately Pay for Legislative and Regulatory Mandates SG is a Suite of Enabling Technologies to Empower Consumers and Utility Managers 16
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25. “Rethinking ‘Dumb’ Rates, Achieving the Smart Grid’s Potential Requires a Revolution in Electricity Pricing.” Rick Morgan, Public Utilities Fortnightly, March 2009.http://www.fortnightly.com/exclusive.cfm?o_id=158 18
26. Questions ? David J. O'Brien Director of Regulatory Strategy & ComplianceBRIDGE Energy Group Inc. 508.281.7133 x210 | M: 802.522.0917 DOBrien@bridgeenergygroup.com www.BridgeEnergyGroup.com
Editor's Notes
18 years in Information Technology; focused network engineering, application, system and security implementation, program and project management12 years in program and project management roles supporting infrastructure deployment, application development and delivery, large-scale technology deployment/transition, and process development5+ years in the ISO/RTO business delivering projects and consulting in program and project management development and process definition
18 years in Information Technology; focused network engineering, application, system and security implementation, program and project management12 years in program and project management roles supporting infrastructure deployment, application development and delivery, large-scale technology deployment/transition, and process development5+ years in the ISO/RTO business delivering projects and consulting in program and project management development and process definition