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DG Cost Allocation and Benefits Study for Arizona Corporation Commission

This report, prepared by Clean Power Research, evaluates the costs and benefits of Distributed Generation (DG) in Arizona. The study focuses on cost causation and benefits allocation, utilizing the DGValuator evolution TM and fleet modeling studies. It emphasizes load match and loss savings, highlighting the marginal evaluation approach for DG cost and benefits. The study period spans from 2014 to 2034, with a focus on avoiding generation capacity costs through DG installations. The report provides recommendations and insights for decision-making in DG implementation.

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DG Cost Allocation and Benefits Study for Arizona Corporation Commission

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  1. Cost Causation and Benefits Allocation in DG • May 7, 2014 • Prepared for • Arizona Corporation Commission • Prepared by • Clean Power Research

  2. Clean Power Research DG cost/benefit and fleet modeling studies

  3. DGValuator evolution TM

  4. DG costs and benefits (1 of 2)

  5. DG costs and benefits (2 of 2)

  6. Load match and loss savingsMinnesota Dept. of Commerce, 2014

  7. Quiz! • Solar power reduces the fuel expense of: • Natural gas • Coal • Nuclear • All of the above • Customers pay the fuel expenses for: • Natural gas • Coal • Nuclear • All of the above  Right!  Right!

  8. DG costs and benefits are evaluated on a marginal basis (not average basis)

  9. Deciding DG study periodExample: Generation capacity Planned CCGT Planned CT How about this cost? 2014 2018 2034 Does DG avoid generation capacity costs if installed here?

  10. Cost study “Framework” recommendations

  11. Ben Norris • Sr. Consultant • Clean Power Research • ben@cleanpower.com

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