Projects & Case Studies

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Resource assessment, economic benefit analysis, and expert testimony | Sunrise Powerlink, 2007–10

E3 Managing Partner Ren Orans provided expert testimony on behalf of the California ISO in San Diego Gas & Electric Company’s successful application to build the Sunrise Powerlink, a 500 kV transmission line that delivers renewable energy from the Salton Sea and Imperial Valley areas to San Diego. Our analyses demonstrated both the need for the proposed line and a net economic benefit. We performed a resource assessment and created a supply curve, including transmission costs, for each major renewable energy basin in the Western Electric Coordinating Council region. We quantified benefits in generation cost savings from reduced economic congestion across the region, reliability improvement and capacity market savings from increased firm-transfer capability into the San Diego area, and renewable procurement savings from improved access to low-cost renewable resources. Energized in June 2012, Sunrise helped prevent blackouts that summer by allowing replacement power to flow from Arizona when wildfires in the San Diego area shut down local infrastructure.

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Residential, commercial, and industrial rate design | BC Hydro

Our work for Vancouver-based BC Hydro began with the design and implementation of an innovative multipart rate structure that included customized baselines for each of its 100 largest industrial customers. In 2008, E3 began assisting the utility with developing and implementing inclining block rate structures to encourage conservation. These ranged from a simple, two-step residential inverted block rate to more-complex baseline structures for commercial customers. Our process included surveying default rates for large general service and residential customers in other markets, analyzing usage characteristics, examining class segmentation options, and ensuring that our proposed rates adhered to BC Hydro’s cost of service principles and regulatory rate-making framework. E3 also developed materials for customer engagement, solicited feedback through moderated customer sessions, and provided expert witness testimony.

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Regulatory strategy for EV infrastructure pilot | Southern California Edison, 2014

E3 assisted Southern California Edison (SCE) in developing the policy case for its successful application to the California Public Utilities Commission to pilot a ratepayer-funded plug-in electric vehicle (PEV) infrastructure program and education effort. Envisioned as the first phase of a five-year program, the Charge Ready initiative will accelerate the buildout of charging infrastructure by preparing host sites and providing rebates to defray the cost of charging equipment. SCE will recruit hosts in multifamily buildings, workplaces, and disadvantaged communities to ensure that charging is available to a broad spectrum of potential PEV owners. E3 provided supporting analysis, which showed that increasing PEV adoption by 2030 is essential to achieving California’s long-term GHG mitigation goals. SCE also relied on E3’s cost-benefit analysis to show that PEV adoption yields net economic and ratepayer benefits. In January 2016, the CPUC authorized SCE to proceed with the pilot program.

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Litigation and regulatory support for large-scale solar thermal plant development | BrightSource Energy, 2010

The Ivanpah Solar Electric Generating System (ISEGS) is the largest commercial solar thermal plant in the world. Built in California’s Mojave Desert by BrightSource Energy, the plant produces a maximum output of almost 400 MW and cost more than $2 billion. E3 supported its development with strategic and regulatory consulting, plant valuation, site and transmission valuation, and other services. BrightSource relied on E3’s reports and testimony to gain site permits and transmission interconnection; utilities relied on our work in signing power purchase agreements. E3 partner Arne Olson’s testimony was key to BrightSource’s successful application to the California Energy Commission (CEC) to construct the ISEGS, as opponents claimed that distributed solar photovoltaic projects would negate the need for it. Olson’s rebuttal reinforced the BrightSource proposal, and the CEC approved the site license in 2009. Construction began in 2010, and Ivanpah came online in February 2014.

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Litigation: pipeline toll restructuring proposal | Canadian Association of Petroleum Producers, 2013–14

The Canadian Association of Petroleum Producers (CAPP) retained E3 to develop regulatory strategy and testify before the Canadian National Energy Board (NEB) in proceedings opposing TransCanada’s proposal to restructure tolls on the Mainline, which transports natural gas from western Canada to eastern markets.  TransCanada had proposed restructuring tolls to maintain the line’s economic viability, as throughput declined due to soaring shale gas production in the northeastern U.S. The proposed change shifted fixed costs away from shippers, who were direct customers of the Mainline, toward producers, who were supplying gas to TransCanada’s own distribution network. Our alternative on behalf of CAPP offered a performance-based incentive with some pricing flexibility and balancing accounts that allowed TransCanada a reasonable opportunity to increase throughput and revenues and recover its investment. The NEB ultimately rejected TransCanada’s proposal in favor of CAPP’s, averting a shift of $300 million per year in fixed costs to western Canadian gas producers.

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Litigation: managing electricity procurement risk | KCP&L Greater Missouri Operations Co., 2011–12

E3 supported KCP&L Greater Missouri Operations Company (GMO) in its successful opposition to a $14 million disallowance proposed by the regulatory staff of the Missouri Public Service Commission (MPSC). GMO had purchased NYMEX natural gas futures to hedge against possible wholesale electricity price increases, but the spot and futures prices for natural gas plummeted, resulting in a $14 million loss to GMO. The MPSC staff contended that GMO’s hedge amounted to placing a bet in the stock market and should be disallowed. E3 founding partner C. K. Woo provided direct and surrebuttal testimony to the MPSC, explaining the role of cross-hedging in managing electricity spot-price risk and countering claims that GMO had misused natural gas futures. The MPSC denied its regulatory staff’s imprudence allegation, allowing GMO to fully recover its costs.

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Litigation: assessing solar resources value | Oregon PUC staff, 2016–17

The Oregon Public Utilities Commission (OPUC) staff retained E3 to develop a methodology for calculating the value of customer-owned solar photovoltaic resources to ratepayers of investor-owned electric utilities, with the aim of informing regulatory policy. E3 partner Arne Olson served as an expert witness on behalf of the commission staff in a litigated case before the OPUC. Our methodology received broad support from stakeholders, including utilities, environmental groups, solar industry advocates, and consumer advocates. The commission is expected to rule on the proposed methodology in early 2017.

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