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Energy Services Committee/TVA Energy Efficiency & Demand Response Cost Survey Carl Seigenthaler Update Report As o PowerPoint Presentation
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Energy Services Committee/TVA Energy Efficiency & Demand Response Cost Survey Carl Seigenthaler Update Report As of October 12, 2011. Greater Energy Efficiency Aligns with TVA’s 2020 Vision. Greater Energy Efficiency. Low Rates. High Reliability. Responsibility. Cleaner Air .

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Energy Services Committee/TVAEnergy Efficiency & Demand ResponseCost SurveyCarl SeigenthalerUpdate Report As of October 12, 2011

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Greater Energy Efficiency Aligns with TVA’s 2020 Vision

Greater Energy Efficiency

Low Rates

High Reliability

Responsibility

Cleaner Air

More Nuclear

  • Potential to be an economic engine for the Valley, creating thousands of jobsthrough investments in specific programs while utilizing local trade services ranging from basic construction to high technology.
  • Projected savings throughout the Valley has the potential to avoid 19.3 million tons of CO2, adding up to a 5% reduction in projected emissions for 2020. This is the equivalent of removing the amount of CO2 created by 350,000 cars.
  • A successful EEDR program is an important part of a balanced energy strategy necessary for achieving TVA’s vision for a cleaner energy future.

By 2015, TVA has an aspirational goal to reduce energy usage by 3.5%, which is the equivalent of approximately 5,500 GWh - enough to avoid building two new power plants! This will help keep rates low.

EEDR will reduce customer bills by approximately $350 million per year.

Lower overall demand means less strain on the power system,less in repair costs, more reliability and greater flexibility to offset wide-area power outages.

investing in energy efficiency today makes good business sense for tomorrow
Investing in Energy Efficiency today makes good business sense for tomorrow

$3.2 billion* net benefit for the TVA system

Distributors

End-users

Supply

  • Avoided capacity and energy savings of 2.2 times program and incentive costs
  • Avoided capital and energy costs of $6 billionthrough 2030
  • $2.8 billion program and incentive costs
  • Scalable, providing resource planning flexibility
  • Benefits to the Valley exceed all costs by approximately two times
  • $350 million per year levelized bill savings over next 20 years
  • Helping improve comfort, productivity and value in homes, business and industry
  • Peak load reduction
  • Annual estimated FCA reduction of $120 million in 2015
  • Deferred distribution investment of$40 millionbased on 2015 load
  • Greater customer satisfaction

*Net benefit equals 20 years net present value of total program benefits less total program costs

all power distributor august 30 meeting path forward items
All Power Distributor August 30 Meeting: Path Forward Items
  • Convene a sub-team of the Energy Services Committee to discuss potential power distributor margin mitigation strategies
  • Conduct the next All-Power Distributor in January 2012 to present the final plan document
  • TVA field staff are available to answer additional questions and to gather additional comments

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distributor margin impact subteam
Distributor Margin Impact Subteam
  • TVA/Distributor team chartered and first meeting held on October 12, 2011
    • Power Distributor members:
      • Jay Stowe, Huntsville Utilities
      • Randy Carroll, East Mississippi Electric Power Association
      • Greg Williams, Appalachian Electric Cooperative
      • Wes Kelley, PES Energize
      • Brian Covington, Nashville Electric Service
team objectives
Team Objectives
  • Determine a reasonable methodology for assessing distributor margin impact
  • Quantify the impact in aggregate by program
  • Assess the timing of impacts over the long-range time horizon
  • Assess margin impact mitigation options
  • Make recommendations to the Energy Services Committee

Goal is to have a proposed solution by January All-Power Distributor Meeting

themes from first meeting
Themes from First Meeting
  • Several key themes emerged during the first meeting
    • Need to understand how the EEDR system benefit is derived
    • Must consider both margin impact and distributor implementation costs
    • Must consider the cost/benefit analysis from the distributor perspective (as opposed to just TVA system costs)
    • Okay to do an aggregate look, but each distributor will be different, we will need to do a number of representative cases to understand the range of impact
    • Must consider rate structure changes as a mitigation strategy
    • Need to examine wholesale rate impact with, and without, EEDR
additional thoughts on delivery options
Additional Thoughts on Delivery Options

Pre All-Power Distributor Meeting

Post All-Power Distributor Meeting

  • Turnkey Approach –
  • TVA Developed, Managed, and Delivered
  • Individual Power Distributor Developed and Delivered
  • Power Distributor Aggregation Developed and Delivered
  • Power Distributor Chooses Not to Participate

Turnkey Approach – TVA Developed, Managed, and Delivered

1a. Power Distributor Delivered and TVA Developed and Managed

Individual Power Distributor Developed and Delivered

Power Distributor Aggregation Developed and Delivered

Power Distributor Chooses Not to Participate

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summary of power distributor delivery options
Summary of Power Distributor Delivery Options

1. Turnkey Approach – TVA Developed, Managed, and Delivered

  • TVA develops with Power Distributor input and administers delivery of full complement of program features
  • Minimal cost and involvement required from Power Distributor
  • Could be TVA branded or co-branded

1a. Power Distributor Delivered and TVA Developed and Managed

  • Power Distributor staff and/or contractors act as field delivery staff
  • TVA develops program features with Power Distributor input
  • Could be TVA branded or co-branded
  • Power Distributor develops programs; program design assistance available from TVA
  • Power Distributor pays all costs of program management, implementation, and marketing
  • Power Distributor branded

2. Individual Power Distributor Developed and Delivered

3. Power Distributor Aggregation Developed and Delivered

  • A group of Power Distributors jointly develop and implement the same programs within their service territories; program design assistance available from TVA
  • Power Distributor branded

4. Power Distributor Chooses Not to Participate

  • Power Distributor does not participate in any TVA energy efficiency program
proposed methodology for refining delivery options
Proposed Methodology for Refining Delivery Options
  • Hold one-on-one interviews with a cross-section of power distributors and conduct two to three regional workshops for all interested distributors
    • Conduct one-on-one interviews (late October through mid November)
      • Municipals and Cooperatives
      • Urban and Rural
      • Goal to refine “strawman” delivery options
    • Two to three regional workshops (Early December)
      • Open to all interested power distributors
      • Further refine “strawman” delivery options
potential five year plan and implementation timeline
Potential Five-Year Plan and Implementation Timeline
  • October – January
    • Complete Five-Year Plan
      • Develop Margin Recommendation
      • Refine Delivery Options
      • January – May
    • Hold All-Power Distributor Meeting
    • District-Level Meetings and Communications
    • Power Distributors Submit Option 2 Proposals
      • Submissions February and March
      • TVA Valuation and Analysis March through May
      • June – September
    • Open Enrollment for Options 1 and 1 a
    • Contracts Finalized with Individual Distributors (All Options)
survey objectives schedule
Survey Objectives & Schedule

Objectives

  • Quantify power distributor spending on EEDR over the last twelve months

Schedule

  • Survey launched – June 15, 2011
  • Survey closed – July 15, 2011
  • Originally Reported – July 20, 2011
  • Date of Last Response – August 19, 2011
aggregate cost data
Aggregate Cost Data

Costs Associated with TVA Programs (26)

Average: $181,384

Range of Revenue Percentage: 0.01% to 0.78%

Average Revenue Percentage: 0.15%

Costs Associated with Power Distributor Programs (8)

Average: $352,669

Range of Revenue Percentage: 0.00% to 0.27%

Average Revenue Percentage: 0.20%