Projects & case studies

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CASE STUDY

Cost-effective pathways to Hawai‘i’s 100 percent RPS goal

CASE STUDY

Modeling California’s 50 Percent Renewables Portfolio Standard

CASE STUDY

Assessing benefits and challenges of the Western EIM

Ratepayer benefit analysis | Delaney to Colorado River transmission line, 2012–14

E3 helped Berkshire Hathaway Transmission and Pinnacle West win approval from the board of the California ISO (CAISO) for a new 500 kV transmission project linking Arizona and Southern California. The Delaney to Colorado River (DCR) transmission line was the first economically driven transmission project approved by CAISO: Using CAISO’s Transmission Economic Assessment Methodology, E3 projected ratepayer benefits of $20 million to $30 million per year. E3 worked with CAISO staff to implement the correct network topology and provided information to help ensure that the CAISO’s GridView case included planned infrastructure additions needed for compliance with California’s clean energy policy. E3 also developed an approach for estimating capital cost savings based on the deferral of generation investments allowed by the DCR line; CAISO has adopted this approach in evaluating all future transmission projects.

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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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Non-wires alternatives in transmission planning | Bonneville Power Administration, 2001–present

In 2001, E3 helped Bonneville Power Administration (BPA) develop a groundbreaking transmission planning process in which we considered non-wires alternatives—energy efficiency, demand response, and distributed generation—alongside conventional investments. BPA was one of the first major transmission providers in North America to use an economic screening for every potential bulk transmission investment. Since then, we have studied non-wires alternatives for other BPA project proposals, including the Hooper Springs line in southeastern Idaho and the 500 kV I-5 corridor reinforcement project in Washington. For the latter, E3 evaluated deferral options, including energy efficiency and demand response, as well as redispatch of generators. BPA is evaluating proposals for implementation of the redispatch option, with potential savings of up to $750 million for its customers.

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Transmission planning support, strategy, and financial analysis | TransCanyon, 2014–present

Since 2014, E3 has supported TransCanyon, a joint venture between Berkshire Hathaway and Pinnacle West, in developing high-voltage transmission in the Western Interconnection. We provide strategic advice and analysis for investment opportunities, help curate and prioritize TransCanyon’s project portfolio, and articulate how electricity sector policies will impact its transmission development business throughout the western U.S. E3 draws on the knowledge base within all our practice areas and our most recent pricing forecasts to provide insights on TransCanyon’s investment outlook.

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Flexibility assessment for wind integration | Portland General Electric, 2014–15

After Oregon set renewable portfolio standard (RPS) goals of 25 percent by 2015 and 50 percent by 2040, Portland General Electric (PGE) turned to E3 to study the flexible generation capacity necessary to meet wind integration needs. Our studies considered the variability, uncertainty, and timing of renewable energy output, and we considered alternative resources such as flexible combined cycle gas turbine plants, frame and aero-derivative combustion turbines, reciprocating engines, and energy storage. Our analysis informed the resource procurement strategy in PGE’s 2016 integrated resource plan. The studies found that PGE’s need for within-hour operational flexibility is not a significant driver of the value or need for new gas resources, even at a 50 percent RPS.

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Least-cost planning for achieving Hawai‘i’s 100 percent RPS | HECO, 2015–present

With more than two decades of experience in Hawai‘i, E3 is now helping the Hawaiian Electric Company (HECO) plan for the grid transformation needed to reach 100 percent renewable generation by 2045. Our long-term analysis supported development of the utility’s Power System Improvement Plan (PSIP), with modeling centered on individual island plans and interisland transmission. The study develops least-cost expansion plans for each island using a variety of policy cases and fuel price forecasts. E3 used its Renewable Energy Solutions model (RESOLVE) to explore the economic trade-off between renewable curtailment and investments in storage, and to develop least-cost expansion plans consistent with each scenario. We also solicited and incorporated stakeholder input. HECO filed the PSIP, including testimony and support from E3, with the Hawai‘i Public Service Commission in December 2016.

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Investigating a higher RPS for California | LADWP, PG&E, SMUD, SDG&E, and SCE, 2013–14

On behalf of California’s five largest electric utilities, E3 evaluated the challenges, costs, and potential solutions for achieving a 50 percent renewables portfolio standard (RPS) by 2030. Using our Renewable Energy Flexibility Model (REFLEX), we performed detailed operational studies of power system dispatch flexibility constraints under high levels of wind and solar generation. We found that achieving a 50 percent RPS is feasible and that California’s power system can remain reliable as long as renewable resources can be dispatched in response to grid needs. Our study recommended strategies for integrating higher levels of renewables, including greater regional coordination, renewables portfolio diversity, flexible generation capacity, flexible loads, and energy storage. We found that deploying these strategies would reduce the need to curtail renewables, lowering the cost of reaching 50 percent RPS.

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Procurement and rate design | Lower Valley Energy, 2001–16

E3 has provided procurement and rate-making advice to Wyoming’s Lower Valley Energy (LVE) since 2001. Our long-term procurement plans have carefully addressed LVE’s need to mitigate cost increases due to changes in either market prices of energy or Bonneville Power Administration’s rates. We have also helped LVE assess the merits of different rate structures and compare the value of building generation in its own service territory with the costs of building new transmission facilities to access alternative power sources. Most recently, we provided an independent evaluation of the costs and benefits of a potential merger with a neighboring co-op utility.

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EV charging tariff design | San Diego Gas & Electric, 2014–15

E3 supported San Diego Gas & Electric (SDG&E) in its successful application to the California Public Utilities Commission to launch a pilot program that uses pricing to efficiently integrate electric vehicle (EV) charging in an increasingly renewable grid without contributing to local distribution capacity shortages. SDG&E devised a dynamic vehicle grid integration rate to encourage EV charging at times when high renewable generation depresses wholesale energy prices. The tariff also discourages charging during peak distribution hours. E3 used its EV Grid Impacts Model  to show that EV owners that shift their charging in response to the proposed rates would reduce their per-vehicle charging costs to under $600 annually from around $1,400 per year on the current time-of-use rate. The modeling used projected wholesale energy prices in high-renewable scenarios developed using E3’s stochastic production simulation tool, Renewable Energy Flexibility Model (REFLEX). The commission approved a modified version of the proposed program in 2016, and SDG&E is now implementing the pilot.

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Innovative rate design for energy reform | NYSERDA, 2015–16

E3, working with the New York State Energy Research and Development Authority (NYSERDA),  developed an innovative retail electric rate design to encourage beneficial customer investment in distributed energy resources (DERs), a leading goal of the New York Public Service Commission’s Reforming the Energy Vision initiative. Our conceptual full-value tariff (FVT) has three components: a customer charge, a size-based network subscription charge, and a time-varying kWh price. The network subscription charge may vary by location to reflect local transmission and distribution costs. We modeled customer response to the FVT to assess its impact on the value proposition of DER technologies, such as energy storage, smart thermostats, and smart vehicle charging. The analysis showed that the FVT can yield savings from measures that are not encouraged under existing rates, while still compensating solar PV and energy-efficiency measures in high-value locations. The FVT conceptual framework underpins the Smart Home Rate demonstrations that New York’s investor-owned utilities filed with the commission in February 2017.

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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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Residential rate design | Hawaiian Electric Company, 2005–present

E3 has supported electric rate design in Hawai‘i since 2005. Currently, E3 is assisting Hawaiian Electric Company (HECO) on next-generation retail pricing strategy and rate designs that align with the state’s goal of meeting its 100 percent renewable portfolio standard (RPS) requirements in a way that encourages cost-effective deployment of customer-owned distributed energy resources. HECO first retained E3 to recommend a strategy for developing rates that would encourage conservation to mitigate the impact of high electricity supply costs on its customers. We recommended a three-tier inclining block structure, which is still in place, to minimize increases on small customers and provide conservation incentives to large customers. We also helped get the rate approved, preparing direct testimony and presenting to the utility’s board of directors.

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Evaluating benefits of regional market participation | Multiple utilities, 2014–present

E3 has completed studies for more than 10 utilities on the costs and benefits of participating in the western energy imbalance market (EIM), a regional 5-minute balancing market that became operational in 2014. The EIM aims to lower costs for consumers and assist states in meeting renewable energy goals through more-efficient dispatch, which reduces the need to carry costly reserves and curtail renewable generation. For each study, we ran a production simulation grounded in a detailed representation of the utility’s system. Our work has informed decisions by PacifiCorp, Arizona Public Service, NV Energy, and other utilities to join the EIM, as well as Chelan County Public Utility District’s decision not to participate. Consistent with E3 findings, the California ISO estimated that participants saved more than $85 million in the 20 months after the EIM became operational. Several more studies for utilities are under way.

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Modeling benefits of the Western EIM | WECC, 2011

The Western Electric Coordinating Council (WECC) engaged E3 to model the benefits of implementing an energy imbalance market (EIM) across the Western Interconnection. Working with WECC staff and many stakeholders, we modeled and compared simulated production costs for a scenario that maintained existing operational arrangements and a second scenario with a consolidated regional balancing market. The analysis found benefits from improved system dispatch, as well as from reductions in operating reserves needed to accommodate wind and solar variability. E3 devised an innovative technique to more accurately estimate the potential impact of the EIM, and pioneered applying “hurdle rates” to calibrate the GridView production simulation base case so that it more accurately reflected bidding and dispatch practices in the West. Since presenting our findings to WECC in 2011, we have developed similar EIM cost-benefit studies for 10 additional utilities.

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Valuation case for potential natural gas power plant acquisition | Large equity holder, 2013

E3 provided independent, comprehensive valuation and due diligence services to a client considering the acquisition of a natural gas power plant in the Pacific Northwest. We examined transmission options and associated costs, energy market revenue projections under various regulatory and environmental scenarios, capacity values, ancillary services revenues, and potential off-takers. Based on our low-valuation case, the buyer made the prudent decision not to acquire this plant.

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Market assessment for wind project acquisition | Large equity holder, 2015

E3 advised a large private equity firm on a potential acquisition of nearly 1 GW of wind generation assets. This project tapped our deep understanding of the western grid, markets, and public policy. We applied our suite of models to project price trajectories for future renewable power purchase agreements, to assess the impact of renewable curtailment on asset values, and to weigh supply and demand for renewable energy credits under potential future regulation. Our analysis helped the company stress-test its internal valuation results and ultimately supported a successful bidding strategy and acquisition.

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Market and financial analysis for $200 million storage investment | Macquarie Capital, 2016

Macquarie Capital turned to E3 for analysis and strategic advice on a potential investment in a 50 MW distributed storage project developed by Advanced Microgrid Solutions (AMS) in the Los Angeles Basin. We performed simulations to verify AMS’s internal modeling of the benefits, costs, and value proposition of behind-the-meter, customer-sited storage assets. To understand potential revenue streams over a 20-year period, E3 analyzed the storage project and the underlying business model, forecasting wholesale and retail electric markets. Our financial analysis for the investors and potential lenders was a key element of the due diligence leading to Macquarie’s $200 million financing arrangement with AMS to take ownership of the project.

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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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Using a microgrid for renewables integration | U.C. San Diego, 2011–13

E3 worked closely with the University of California, San Diego (UCSD), to develop innovative business cases for utilizing UCSD’s microgrid to provide system-level renewables integration services and integrate UCSD’s onsite solar resources. The UCSD microgrid consists of a 30 MW combined heat and power system that includes natural gas generators, steam-driven chillers, and thermal storage. E3 benchmarked the UCSD microgrid and developed an optimal dispatch model that determines hourly dispatch scenarios for on-campus resources and cost-effective strategies to provide peak load shifting, grid support, and PV firming. Using the model’s results, E3 proposed new tariff designs and incentives that could motivate UCSD and similar customers to use their distributed resources to integrate variable renewable energy.

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Electricity cost reduction and sustainability support | Los Angeles MTA, 2015–present

We are helping the Los Angeles Metropolitan Transportation Authority (MTA), one of the largest public transit systems in the country, to reduce its electricity costs, and define and achieve its environmental goals. E3’s scope has encompassed guidance on MTA’s energy strategic plan and quantification of sustainability objectives. E3’s effort has included analyzing data for hundreds of monthly electric bills, assessing potential electricity cost savings, and investigating regulatory strategies to realize cost-reducing alternatives.

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Renewable procurement strategy for corporate sustainability | Large data center, 2016

E3 advised a global data center operator on renewable energy procurement in the western U.S. to support achievement of its corporate sustainability goals. We advised the client about factors impacting the long-run cost of the renewable attribute for wind and solar procurement, which is critical to understanding the economics of long-term renewable power purchase agreements. Our 20-year hourly price projections under various market and regulatory scenarios factored in natural gas and carbon price levels, the mix and quantity of renewable technologies on the system, the penetration of rooftop solar PV, and the deployment of renewable integration technologies and strategies. These scenarios supported transaction due diligence and provided a boundary for the ranges of potential renewable energy credit costs.

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Energy procurement plan | University of California, 2012–present

The University of California Office of the President (UCOP) retained E3 to develop an energy procurement plan for the six UC campuses served by competitive energy suppliers with total annual usage of over 250 GWh. We developed a model to compare the economic and environmental attributes of proposed purchase contracts against the university’s existing portfolio of contracts and retail electric rates. E3 projected each campus’s loads, operation profiles, and costs for existing combined heat and power facilities, and calculated the cost of new supply portfolios that included on-site generation, off-campus renewable power purchase agreements, and market electricity purchases. Our analysis, which found significant potential to make progress on sustainability goals while managing procurement costs and risk, formed the basis for UCOP’s procurement strategy. E3 continues to advise UCOP and individual campuses on the economics of renewable energy projects and procurement strategies for achieving the UC Sustainability Directive of zero carbon emissions by 2025.

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Electric rate discounts to support electrification| Port of Long Beach, 2007-2015

E3, as electric rate consultant to the Port of Long Beach, the nation’s second-busiest port, led negotiations with Southern California Edison (SCE) to achieve electric rate discounts in recognition of the Port’s electrification program and resulting reductions in emissions of GHGs and criteria pollutants. Negotiations led to the California Public Utilities Commission’s March 2014 approval of SCE’s Rate Schedule ME, which provides electric rate discounts and a program under which SCE installs major electric infrastructure at no cost to the port or its tenants. These measures support critical electrification and environmental improvement projects at the Port, which is expected to quintuple its electric usage by 2030. The projects will improve air quality in the region, and rate discounts are expected to yield more than $300 million in savings over the term of the agreement.

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Economic analysis of market-based carbon reduction | Oregon Department of Environmental Quality, 2016–present

E3 is working with the Oregon Department of Environmental Quality to evaluate the economic impacts of adopting a carbon market, per the directive of SB 5701, passed by the state legislature in March 2016. Our approach combines a detailed literature review and a quantitative economic analysis. We are analyzing complementary policies, which drive GHG emissions reductions outside the carbon market (for example, renewable portfolio standards and energy efficiency programs), and carbon market policies, which provide a market-based compliance mechanism. E3 will model the complementary policies in the energy-accounting LEAP model, and use the IMPLAN model to study the macroeconomic impacts of the carbon market.

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GHG scenario analysis | NYSERDA, 2016–present

E3 is supporting the New York State Energy Research and Development Authority (NYSERDA) in developing a detailed GHG analysis to quantify the infrastructure and policy changes necessary to meet state goals. We will evaluate the GHG and cost implications of a variety of scenarios that are consistent with New York’s goal of reducing statewide GHG emissions by 40 percent below 1990 levels by 2030 and 80 percent below 1990 levels by 2050. In this work, E3 is partnering with Evolved Energy Research to downscale E3’s PATHWAYS model for New York State and calibrate it to New York–specific assumptions. E3 will translate the model results into our user-friendly LEAP model for NYSERDA’s continued use.

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Strategic program development and consulting | DOE Technical Assistance to States, 2008–present

E3 has been a resource to the Department of Energy’s (DOE’s) Technical Assistance to States program through Lawrence Berkeley National Laboratory since 2008. Our projects help state governments better understand how to implement energy efficiency programs and how to make them cost-effective. E3 has advised utility commissioners and senior policy staff in Pennsylvania, Georgia, South Dakota, Illinois, Arizona, and other states on major aspects of their program designs. We provide accurate information, guidance, and background based on our knowledge of various states’ decisions, and share our expertise in standard industry practice.

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Decarbonizing pipeline gas to help meet GHG reduction goals | SoCalGas, 2014–15

E3 worked with the Southern California Gas Company (SoCalGas) to evaluate the potential of decarbonized pipeline gas fuels and the existing pipeline infrastructure to help meet California’s long-term climate goals. “Decarbonized pipeline gas” refers to gaseous fuels—including biogas—with a net-zero or very low GHG impact. E3 used its PATHWAYS model to evaluate two scenarios, one with heavy electrification of buildings and vehicles and one with a mix of electrification and decarbonized pipeline gas. Both were found capable of meeting the state’s 2050 climate goals with comparable total costs within the ranges of uncertainty that we evaluated. The results of the study suggest that the use of decarbonized gas distributed through the state’s existing pipeline network would complement a low-carbon electrification strategy. SoCalGas has used the results of this study to inform its energy and climate policy positions in California.

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California 2030 Target Scoping Plan update | CARB, 2016–present

E3 is helping the California Air Resources Board (CARB) update its scoping plan to meet its requirements under Assembly Bill 32 (Global Warming Solutions Act, 2006). E3’s statewide GHG mitigation analysis evaluates the GHG impacts and cost implications of different 2030 scenarios that are consistent with the California’s goal of reducing statewide GHG emissions 40% below 1990 levels by 2030. For this project, we are adapting prior work using our Pathways model, updated with scenarios and assumptions requested by CARB. The model results are translated into inputs for CARB’s macroeconomic analysis of economic and job impacts. The study results are part of a high-profile stakeholder process, which includes extensive public review and comment.

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Feasibility and cost of potential 2030 GHG reduction goals | CARB, CEC, CPUC, CAISO, 2014

The California Air Resources Board, California Energy Commission, California Public Utilities Commission, California ISO, and governor’s office engaged E3 to evaluate the feasibility and cost of potential 2030 GHG targets. We focused on emission reduction strategies through 2030, with an eye toward meeting the state’s 2050 GHG reduction goal. Using our PATHWAYS model, we developed several scenarios that varied the mix of low-carbon technologies and the timing of deployment. PATHWAYS is a stock-and-flow model that encompasses the entire state economy with detailed representations of the building, industrial, transportation, and electricity sectors. E3 team members briefed Gov. Jerry Brown and members of the legislature on the results. Our work informed the governor’s Executive Order B-30-15, which calls for a 40 percent reduction in statewide GHG emissions by 2030 relative to 1990 levels. California agencies are using our results in ongoing implementation analysis of the state’s climate goals.

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Transportation electrification assessment | CalETC, 2014–16

E3 analyzed the grid impacts of charging light-, medium-, and heavy-duty electric vehicles (EVs) for the California Electric Transportation Coalition (CalETC), a consortium of automakers and utilities. To quantify the distribution system upgrades needed to accommodate residential charging of light-duty EVs, we mapped vehicle registration data with utility distribution system and load data for more than 81,000 circuits and feeders and 2,200 substations; we then modeled costs under different rate and charging scenarios.

Even with clustered EV adoption, distribution impacts were modest, and we found that managed charging reduced distribution upgrade costs by 60 percent. For most technologies studied, we showed that EV adoption can actually reduce rates for utility customers while providing net economic, environmental, and societal benefits for California. CalETC’s member utilities used our study to educate regulators and stakeholders about the benefits of EV adoption prior to seeking authorization to invest ratepayer funds in charging infrastructure and customer outreach.

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Net energy metering tariff evaluation tool | CPUC, 2015

E3 created a public tool for the California Public Utilities Commission (CPUC) to inform the development of a successor to existing net energy metering (NEM) tariffs for eligible customer-sited renewable generators. This tool helped the CPUC and stakeholders balance legislative directives to design tariffs that maintain sustainable growth of such generation and ensure that total benefits to customers are approximately equal to total costs.

The tool lets users evaluate different rate designs, simulating their impact on adoption of customer-sited PV and on bills for all ratepayers, while accounting for feedback effects on future rates and life-cycle cost-effectiveness. Providing a common model to all parties allowed the CPUC and stakeholders to focus on fundamental differences in proposals and scenarios, rather than on disagreements and confusion over model differences.

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Time-dependent valuation for building codes | CEC, 1999–present

E3 supports the California Energy Commission (CEC) in implementing the state building energy code by maintaining the economic framework for energy standard requirements and allowed trade-offs for new construction. We have worked with the CEC and its stakeholders since 1999 to continually refine a time-dependent valuation (TDV) methodology, and we are now supporting the life-cycle cost analysis for measures proposed in the 2019 cycle. The TDV methodology uses a 30-year forecast of the social cost of energy that varies hourly and by location to account for shifts in system peaks over time, and regional variations in climate and grid utilization. In the 2019 code cycle, E3 is evaluating the cost-effectiveness of California’s goal to require that all new residential buildings be zero net energy by 2020 and that nonresidential buildings be zero net energy by 2030. We are also assessing the economic and GHG emission impacts of switching to all-electric housing and the value of integrating controllable thermostats and appliances into new buildings.

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Distributed resources planning tool development | Con Edison, 2014

E3 built on a collaboration with Con Edison going back to 2000 to develop an integrated demand-side management (IDSM) model that expands the utility’s distribution planning capabilities. Using detailed data on customer populations, the tool assesses market potential for dispatchable distributed energy resources (DERs) within local electric networks, enabling Con Edison to identify lower-cost ways to alleviate local distribution constraints.

Con Edison has integrated the IDSM tool into its distribution planning practices and is using it to help realize the New York State Public Service Commission’s Reforming the Energy Vision initiative. The E3 team continues to refine and enhance the tool, which won the 2014 Utility Analytics Institute Innovation Award.

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Avoided Cost Model for evaluating DER programs | CPUC, 2004–present

Since 2004, the California Public Utilities Commission (CPUC) has used E3’s Avoided Cost Model (ACM) to estimate the benefits of energy efficiency, distributed generation, energy storage, and other distributed energy resources (DERs). The ACM has evolved along with energy markets and policy in the West, and it currently projects avoided costs for energy, losses, generation capacity, ancillary services, subtransmission and distribution capacity, renewable portfolio standard purchases, carbon allowances, and other air permit costs. The 30-year hourly forecast is differentiated across California’s 16 climate zones.

The CPUC approves over $1 billion in annual funding for DERs using these avoided costs for its cost-effectiveness tests. The ACM is suitable for stakeholder processes and contentious regulatory proceedings because it uses robust methods and publicly available input data. E3 also allows the download of the ACM so that all stakeholders can audit any of the calculations.

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