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1
Review of Data & Modeling for Revenue Allocation1st Workshop for Expected Parties to PG&E’s2014 GRC Phase 2 Filing
April 12th, 2012
2
DRAFT
As part of the settlement, it was agreed that PG&E would hold two workshops for parties to its 2011 GRC Phase 2 application, prior to entering its 2014 filing
Introductions and Overview
• To agree on modeling requirements that will be used to develop positions for the 2014 GRC Phase 2
• To agree on methodologies and simplifications to increase the transparency of the 2014 Revenue Allocation and Rate Design model.
Workshops’ Objectives
3
DRAFT
Topic Presenter Time
Welcome and introductions Dan Pease/Mareijke Weidemann
1:30-1:45pm
1 GRC Phase 2 Revenue Allocation & Rate Design (RARD) Model enhancements
a Simplification of the RARD Model Patricia Gideon 1:45-2:00pm
bAlternative allocation results for miscellaneous revenue and marginal costs
Patricia Gideon 2:00-2:30pm
cCapping mechanism and alternative approaches to class level capping
Patricia Gideon 2:30-3:00pm
Break 3:00-3:15pm
d Alternative approaches to CARE discount calculation Dan Pease 3:15-3:45pm
2Using Smart Meter (SM) Data in Class Load Research
Zeynep Yucel 3:45-4:25pm
3 Wrap up 4:25-4:30pm
Workshop Agenda
4
DRAFT
Items for June workshop agenda
• Rate Design component clean up of the RARD model
• Customer Generation and its Impact on Diversity to the Distribution System
• Provide copies of RARD model for party review
5
DRAFT
1. GRC Phase 2 Revenue Allocation & Rate Design (RARD) Model Enhancements
Discussion topics:
a) Recap of model flow- flow diagram
b) Simplifying the revenue allocation model
c) Alternative allocation options for miscellaneous revenue and marginal costs
d) Class level capping mechanism
e) Alternate approaches to calculating the CARE discount
6
DRAFT
Revenue Allocation and Rate Design Model High-Level Data Flow
Inpu
ts
Loads
Marginal Costs
Billing Determinants
Present Rate Revenue
Revenue Allocation
Rate Design
Residential-Non Care and
CARE
Agricultural
Sm and Med Commercial
Industrial
Streetlights
Standby
Outputs
Proposed Rates
Proposed Rate Revenue
Feedback loop required due to the iterative nature of the residential
CARE rates calculation.
7
DRAFT
Simplifying the revenue allocation model
PG&E has made significant progress to date toward simplifying the revenue allocation components of the RARD model for 2014
• Increasing uniformity of formats
o Outputs from generation and distribution marginal cost files will match inputs from the RARD model
• Distribution and Generation EPMC multipliers
o Calculated on a separate tab in the revenue allocation file
• Reduced number of separate files
• Elimination of duplicate data
8
DRAFT
Simplifying the revenue allocation model
More work remains to be done
• Consistent use of color coding will be applied
• Further reduction in the number of separate files
o Streetlighting files in particular
• Further elimination of duplicate data
9
DRAFT
Reduced number of separate files
Current Consolidated
Loads_GRC
MargCost_GRC
MCRev_GRC
MCRev_GRC
Res E6 2011 GRC
Res E9 2011 GRC
Res E9 Off-Peak RD 2011 GRC
RD_RES_E6-E9_GRC
RD_RES_GRC
RD_CARE Discs_GRCRD_RES_GRC
RD_SM_GRC
RD_MED_GRC
RD_E19-E20_GRCRD_CI_GRC
RD_CARE_Discs_GRC
Proposed Rate Revenue_GRC
Summary_RARD_GRCProposed Rate Revenue_GRC
Model also includes the following files which have not yet been consolidated: Model_Master.xls, RA_ Rev Alloc_GRC.xls, RD_AG_GRC.xls, RD_RES_GRC.xls, RD_STANDBY_GRC.XLS, Summary Prop Rates_GRC.xls, Streetlight files.
10
DRAFT
Revised Phase 2 model includes 7 pre-defined and 3-user defined allocators for miscellaneous distribution revenues*
Pre-defined allocators:
1. Equal percent distribution marginal cost revenue (default methodology)
2. Distribution system average percent (SAP)
3. Total revenue with DA/CCA imputed
4. Generation with DA/CCA imputed
5. Equal cents per kWh
6. 12 coincident peak
7. Top 100 hours
*Allocation methodologies may be selected from a drop-down box on the Dist_Alloc tab of the Revenue Allocation file (RA_Rev Alloc_GRC.xls)
Alternative Allocation Options for Miscellaneous Revenue
11
DRAFT
Balancing Account Name Balancing Account Name
Self Generation Incentive Program Cornerstone Improvement Project Account
Environmental Enhancement Advanced Metering Initiative / Smart Meter Balancing Account
Hazardous Substance Mechanism Customer Energy Efficiency Incentive Account
Non-Tariffed Products and Services Balancing Account - Electric
Demand Response Revenue Balancing Account / Air Conditioning Cycling
Smart Grid Memorandum Account Dynamic Pricing Memorandum Account
CPUC Fee. California Solar Initiative
Funding of E-BIP Discounts
Current list of Miscellaneous Distribution Revenues from the 2012 AET
12
DRAFT
Alternative Allocation Options for Marginal Costs
Two user-defined alternate marginal cost scenarios for each cost type*• Generation energy, generation capacity, distribution capacity and distribution
customer marginal costs
• Marginal distribution capacity cost includes NERA regression option
*If additional marginal cost methodologies are agreed upon in the marginal cost workshops, PG&E will incorporate those into the RARD model while retaining the user-defined options for each marginal cost type
**Marginal cost methodologies may be selected from a drop-down box on the Summary tab of the Marginal Cost Revenue file (MCRev_GRC.xls)
Cost Type User Defined NERA Regression
Generation Energy ● N/A
Generation Capacity ● N/A
Distribution Capacity ● ●
Distribution Customer ● N/A
13
DRAFT
Class Level Capping Mechanism
Principles underlying class level capping
• In addition to a cap on revenue, there should be a floor
• The cap/floor will be on the percentage change in class level bundled rate
• Revenue shortfalls arising from capping will
1) be applied to distribution component of revenue, and
2) spread using the Distribution EPMC allocator
• Before capping occurs, the currently applied "movement to marginal cost" adjustment will remain in effect
14
DRAFT
BREAK
15
DRAFT
Alternative Approaches to CARE Discount Calculation
Responsible for content:•Dan Pease
•Nancy Breckenridge
•Patricia Gideon
•Hallam Stanton
Items currently for inclusion:•Workshop to focus on a review of PG&E and Edison’s approach.
•Discussion to be invited as to the core issues and possible solutions.
•Consideration to be given as to using Goal Seek within the PG&E model.
•Pictorial representation of CARE rates calculation to be developed.
Enhancements made
•CARE discount and funding of CARE discount shown separately on Run Model tab of Model_Master.xls file
•All components necessary to balance model consolidated on one page
•Balancing of model now automated
16
DRAFT
2. Using Smart Meter (SM) Data in Class Load Research
Discussion topics:
a) PG&E’s class load research studies.
b) PG&E’s current capabilities in making use of SM data in enhancing class load research samples - Load research software (LRS).
c) The impact of sample enhancement on the precision levels of the estimated load profiles – Example: Enhancing AGA class load research sample by including SM data.
17
DRAFT
PG&E’s class load research studies
PG&E carries out annual class load studies that produce hourly load profiles by customer class at the system level (CLASSKW Report), and also hourly load profiles by customer class at the DPA (Distribution Planning Area) and Division level (AREALOAD Report).
• The load profiles by customer class are estimated based on the profiles of the customers in the load research sample for that class.
• For 2010 CLASSKW study, there were 5,955 customers in the load research sample, where the sample data are collected from MV90 meters. 2010 CLASSKW study included load research samples that converted from MV90 meters to Smart Meters.
18
DRAFT
PG&E’s class load research studies
Example CLASSKW Profile – Average Residential, July 2009
Jul
0
0.5
1
1.5
2
2.5
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47
Time
Lo
ad
(kW
)
7/1/2009
7/2/2009
7/3/2009
7/4/2009
7/5/2009
7/6/2009
7/7/2009
7/8/2009
7/9/2009
7/10/2009
7/11/2009
7/12/2009
7/13/2009
7/14/2009
7/15/2009
7/16/2009
7/17/2009
7/18/2009
7/19/2009
7/20/2009
7/21/2009
7/22/2009
7/23/2009
7/24/2009
7/25/2009
7/26/2009
7/27/2009
7/28/2009
7/29/2009
7/30/2009
7/31/2009
19
DRAFT
PG&E’s class load research studies
Example AREALOAD Profile – DPA E1, July 2009
July
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Time
Lo
ad
(k
W)
7/1/2009
7/2/2009
7/3/2009
7/4/2009
7/5/2009
7/6/2009
7/7/2009
7/8/2009
7/9/2009
7/10/2009
7/11/2009
7/12/2009
7/13/2009
7/14/2009
7/15/2009
7/16/2009
7/17/2009
7/18/2009
7/19/2009
7/20/2009
7/21/2009
7/22/2009
7/23/2009
7/24/2009
7/25/2009
7/26/2009
7/27/2009
7/28/2009
7/29/2009
7/30/2009
7/31/2009
20
DRAFT
PG&E’s class load research studies
The load profiles are estimated from a random sample of customers where the sample size is determined to ensure desired precision levels. After a certain point, increasing the sample size does not significantly improve the precision levels.
21
DRAFT
PG&E’s current capabilities in making use of SM data in enhancing class load research samples.
PG&E has started making use of SM data in enhancing load research samples in estimating class load profiles within the current systems. PG&E is also using a Load Research System (LRS) software for effective sampling and load profile estimation in carrying out future class load studies .
• Some of the benefits of SM data and LRS software in carrying out effective class load studies are:
– LRS software allows us to quickly assess the sample precision levels, calculate how many samples are needed to achieve desired precision levels, select customers to the sample, and estimate the load profiles.
– The availability of SM data enables us to effectively select samples eliminating the dependency to the process of MV90 meter installation
– LRS software allows flexibility in producing load profiles by desired stratification.
22
DRAFT
Load Research System (LRS) Software
The Load Research Life Cycle
Preliminary
Plan
SampleDesign
Analysis
Data Collection
• LRS is a comprehensive SAS based software system for sample design and analysis in load research and program evaluation.
• LRS is designed around the load research life cycle. The system integrates preliminary project planning, detailed sample design and analysis.
• Visualize IT, a companion to LRS, a graphical tool, enables quick validation of load data, examination of the the load profiles from LRS, presenting results in graphical and tabular forms.
23
DRAFT
Impact of sample enhancement on the precision levels of the estimated load profiles
For 2011 class load studies, PG&E is using the Load Research System (LRS) software to review the current sampling designs, to assess the precision levels with current load research samples, and to enhance the sample sizes with SM data to achieve desired precision levels at the strata cell and class levels.
Example: AGA Sample Enhancement for Class Load Studies
Current AGA Stratification:Class Rate Schedule Usage Climate Zone AGA AG1A 0 - 20 KW R - Outer ValleyAGA AGRA OVER 20 KW T - CoastAGA AG4A X - HillsAGA AGVA S - Inner ValleyAGA AG5A
Climate Zone# of AGA
Customers# of Cust
with SM (*)Percent with SM
R-OuterValley 25,854 10,501 41%
S-InnerValley 14,879 5,015 34%
T-Coast 2,940 224 8%X-Hills 7,501 2,293 31%
Total 51,174 18,033 35%(*): Includes customers with complete 2011 SM data.
24
DRAFT
Impact of sample enhancement on the precision levels of the estimated load profiles
• There are currently 247 available MV90 samples with an expected relative precision of ±17% at the class level.
• Enhancing the AGA class load research sample with SM data improves the current sample size from 247 to 1,996 resulting in an expected relative precision of ± 6% at the class level.
• In the future, with the availability of more SM data, our desire is to further enhance the AGA class sample size to 5,700 as determined by the LRS software to achieve the desired precision levels at strata cell level.
Example: AGA Sample Enhancement for Class Load Studies
AGASample
SizePrecision
Current (MV90) 247 0.17
LRS (MV90, SM) 1,996 0.06
25
DRAFT
Impact of sample enhancement on the precision levels of the estimated load profiles
Example: Sample Enhancement for AG5A and AG1A
ClassRate
ScheduleUsage
Climate Zone
Number of Accounts
Required Sample Size (*)
Existing Sample
Size
Enhanced Sample
Size
AGA AG5A 0-20KW R 1,456 228 7 41
AGA AG5A 0-20KW T 222 122 0 0
AGA AG5A 0-20KW X 356 154 2 5
AGA AG5A 0-20KW S 682 194 3 67
AGA AG5A OVER20KW R 499 175 5 8
AGA AG5A OVER20KW T 50 42 0 0
AGA AG5A OVER20KW X 65 52 0 0
AGA AG5A OVER20KW S 240 127 1 9
Total 3,570 1,094 18 130
AGA AG1A 0-20KW R 13,811 265 68 265
AGA AG1A 0-20KW T 1,873 236 6 158
AGA AG1A 0-20KW X 5,267 257 10 256
AGA AG1A 0-20KW S 7,472 261 33 261
AGA AG1A OVER20KW R 1,191 221 8 217
AGA AG1A OVER20KW T 261 133 3 20
AGA AG1A OVER20KW X 554 182 1 124
AGA AG1A OVER20KW S 806 203 3 198
Total 31,235 1,758 132 1,499
(*) As determined by LRS to ensure ± 10% relative precision at 90% level of confidence at strata cell level.
26
DRAFT
Using Smart Meter (SM) Data in Class Load Research
In Summary:
• For 2011 class load studies, PG&E is reviewing the current sampling designs by customer classes, and enhancing the load research samples with the SM data to achieve the desired precision levels in estimating class load profiles within the current systems.
• PG&E is also using a Load Research System (LRS) software for effective sampling and load profile estimation in carrying out future class load studies.
27
DRAFT
Wrap up
• Set next workshop date
• Next steps
• Other?