1. Integrating Distributed
Energy Resources with
the Electric Grid of the
Future
balancing reliable, affordable
safe, power with clean energy
ambitions

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MORE ENERGY IS BEING SUPPLIED BY
A PORTFOLIO OF LOCAL, DISTRIBUTED
RESOURCES (GENERATION AND LOAD)
CUSTOMERS RECEIVED ELECTRICITY
VIA CENTRAL GENERATION,
TRANSMISSION AND DISTRIBUTION
The Grid is undergoing a massive transformation
Decentralized is becoming the new normal…
HISTORY TODAY

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3
OWNERSHIP
Typically owned by customers or
developers
POWER FLOW
Most DERs are designed to inject
power back into the grid. Some
have even more dynamic
operations (e.g., energy storage)
SIZE
Typically too small to participate in
the wholesale market on a
standalone basis
LOCATION
Interconnected with the distribution
system, most often behind-the-
meter of a utility customer
Driven by a new class of distributed assets
You might be a DER if…
…However most of these resources are “invisible” to utilities

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575%
GROWTH IN DISTRIBUTED
SOLAR FROM 2012 TO 2015 IN
NEW YORK STATE
Which have grown exponentially in recent years
We’re not in California anymore…
57
132
158
73
43
20
Central
Hudson
Con Ed Niagara
Mohawk
NYSEG O&R RG&E
 >450 MW of PV
 INTERCONNECTED TODAY

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And we’re just getting started…
More than 3,000 MW of distributed solar is in the interconnection queue
727
58
1,418
1,123
502
78
Central
Hudson
Con Ed Niagara
Mohawk
NYSEG O&R RG&E
Legacy Net Metering Caps
(6% of 2005 Peak Demand)

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So how did we get here?
The evolution of an industry transformation
2014
The 2014 New York State
Energy Plan called for “a vibrant
private sector market with
communities and individual
customers to create a dynamic,
affordable clean energy
economy.”
New York State
Energy Plan
In 2014, the New York State Public
Service Commission opened the
“Reforming the Energy Vision”
proceeding which had the
objectives of:
• Enhancing customer knowledge.
• Animating markets
• Improving system efficiency
• Diversifying fuel mix
• Reducing emissions
Introducing REV
Regulatory Policy
Clarified that utilities will serve as
Distributed System Platform (DSP)
Providers and the functions that the
DSPs will provide
REV Track 1 Order
Plans filed by each of the
investor-owned utilities detailing
the capital and operating
expenditures required to provide
DSP functionality
Distributed System
Implementation Plans
2015
Ratemaking and Utility Revenue
Clarified the way utilities, serving as
Distributed System Platform Providers, will
earn revenues through Platform Service
Revenues, Earnings Adjustment Mechanisms
and Traditional Cost Recovery
REV Track 2 Order
2016
2014
Joint DSIP

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…and what does the path forward look like in New York?
How the parts fit together
Keeping the lights on today
Grid Operations
Providing accurate pricing signals
and incentives for investments which
keep the lights on
Market Operations
Ensuring the lights stay on in the future
Integrated System Planning1
2 3
The Distributed System Platform
and its three core functions
are integral to achieving
REV’s objectives…

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Doing so requires changing a paradigm
In a period of increasing uncertainty
<60%
OF THE GRID IS UTILIZED
TO ITS FULL CAPABILITES
PEAK DEMAND only occurs a few days
each year, for a few hours on each day
TODAY

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The traditional distribution planning process
Revision or renaissance?
Develop peak load forecast for each
distribution system component taking
into account load growth and load
reductions (e.g., DERs)
Forecasting
1
Recommend cost-effective system
enhancements which may include
operational measures, short-range
projects, or long-range projects to
address any shortfall in capacity
Recommendations
3
Evaluate future ability of those
components to meet peak load reliably
and safely
Analysis
2

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Planning for distributed energy
New factors to consider in the planning process
The degree to which a resource is
available on a distribution system component
during a period of peak demand
Coincidence
The degree to which a resource can be
relied on - either through historical
observation or modelling (e.g., backcasting)
to meet peak demand
Availability

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Considering DERs in the load forecast
Not every resource is equal
1
Which element of the power delivery system are you planning to?
Peak demand occurs at varying times on different components, which compose the
distribution system (e.g., substations, transformers, and circuits). Utilities typically
plan for the ‘non-coincident’ peak on each piece of equipment.
2
What is the rating of that equipment?
Distribution planners must ensure that there is adequate capacity on each
component to prevent overloads during both normal operations and contingency
situations.
3
How much DER capacity is interconnected with that component?
It is important to consider not only sources of new load when conducting a load
forecast (e.g., new development, but also load reductions which may occur from
DERs (e.g., demand response, distributed generation, and energy efficiency).
4
How much DER capacity should be counted in the load forecast?
In some instances, such as with solar PV, not all capacity should be considered
equally. For example, on an evening peaking circuit, solar provides limited benefit for
meeting peak demand.

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TODAY
Most small PV does not
require dedicated metering
and telemetry or smart
inverters – utilities therefore
have limited visibility into
operations
BACKCASTING
Allows planners to simulate
production of PV by
modelling output based on
historical sky conditions to
determine how much PV
should be counted in the
load forecast
1%
9%
24%
38%
49%
59%
62% 62%
59%
51%
40%
27%
14%
2%
How do you forecast what you can’t see?
Backcasting and other new tools in the toolkit

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This is just the beginning of a long journey
That will present new challenges and opportunities
VISIBILITYUNCOORDINATED
TIME
CONTROL
As DER penetration increases it will be more critical to Integrate Grid Operations and System Planning
Grid Operations
Integrated System Planning
DERPENETRATION

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@ZDPOLLOCK
Zach.Pollock@PAConsulting.com
paconsulting.com/our-thinking/next-generation-utility/