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REV CONNECT Utility Profile: Consolidated Edison Revised November 2017

Prepared by: Navigant Consulting, Inc. 77 South Bedford Street Suite 400 Burlington, MA 01803 781.270.8300 navigant.com

REV CONNECT Utility Profile: Consolidated Edison

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DISCLAIMER This report was prepared by Navigant Consulting, Inc. (Navigant) for the New York State Energy Research and Development Authority. The work presented in this report represents Navigant’s professional judgment based on the information available at the time this report was prepared. Navigant is not responsible for the reader’s use of, or reliance upon, the report, nor any decisions based on the report. NAVIGANT MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESSED OR IMPLIED. Readers of the report are advised that they assume all liabilities incurred by them, or third parties, as a result of their reliance on the report, or the data, information, findings and opinions contained in the report.

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TABLE OF CONTENTS

1. Introduction to Con Edison ...................................................................................... 1

1.1 Approach to Reforming the Energy Vision (REV) ......................................................................... 1 1.1.1 REV Strategy .................................................................................................................... 1 1.1.2 REV Organization ............................................................................................................. 2

1.2 System and Territory ..................................................................................................................... 3 1.3 Resources ..................................................................................................................................... 5

1.3.1 Relevant Filings ................................................................................................................ 5 1.3.2 Available Data .................................................................................................................. 6

2. Plans and Programs .................................................................................................. 7

2.1 Distribution System Implementation Plan (DSIP) ......................................................................... 7 2.1.1 Capabilities ....................................................................................................................... 7 2.1.2 Technology Roadmap ...................................................................................................... 8

2.2 Efficiency Transition Implementation Plan (ETIP) ....................................................................... 10

3. Projects .................................................................................................................... 12

3.1 REV Demonstration Projects ...................................................................................................... 12 3.1.1 Building Efficiency Marketplace ...................................................................................... 12 3.1.2 Connected Homes .......................................................................................................... 13 3.1.3 Clean Virtual Power Plant (On Hold) .............................................................................. 14 3.1.4 Commercial Battery Storage .......................................................................................... 14 3.1.5 Storage on Demand ....................................................................................................... 14 3.1.6 Smart Home Rate ........................................................................................................... 15

3.2 Non-Wires Alternative (NWA) Projects ....................................................................................... 15

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1. INTRODUCTION TO CON EDISON

1.1 Approach to Reforming the Energy Vision (REV)

Consolidated Edison (Con Edison) is an investor-owned energy company with approximately $12 billion in annual revenue and $22 billion in assets. The company provides electric and gas service to the residents and businesses of New York City and Westchester County, and steam service to businesses in Manhattan.

1.1.1 REV Strategy

Con Edison is focused on four key objectives: customer empowerment, reliability, operational excellence, and safety. These objectives were developed before REV and then adapted to better align with REV. Table 1 compares Con Edison’s key strategy pillars to its REV objectives as a distributed system platform (DSP) provider.

Table 1. Alignment of REV Goals with Con Edison’s Strategic Objectives

REV Goals Utility Strategy

Engage customers and provide them with more information and opportunities to control their energy usage

Increase customer empowerment by providing control of energy bills and tracking energy usage

Deliver safe and reliable service to all customers

Increase reliability by integrating advanced technologies and testing new concepts in a way that maintains the high standards of delivery for customers

Accelerate the company’s learning to maximize the value of the DSP

Pursue operational excellence by outlining near-term capability enhancements and discuss potential future needs as distributed energy resource (DER) penetration increases

Protect customers from cybersecurity threats, which are prevalent with greater amounts of data and an increase in the number of devices connected to the system

Improve safety by applying the latest tools and techniques to counter any emerging cybersecurity threats for both the safe and reliable operation of the distribution system and the protection of all customer personally identifiable information

Con Edison’s approach to REV places emphasis on customer engagement and keeping costs reasonable for customers. The company is developing new customer engagement tools such as the Digital Customer Experience (DCX), which has been launched to more than 275,000 customers in the Brooklyn and Westchester territories. Con Edison’s approach to developing demonstration ideas uses a request for information (RFI) process rather than prescriptive requests for proposals. Through RFIs, Con Edison articulates specific interests or needs and invites market partners to help develop the solutions.

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Con Edison recognizes the value of DER, including to meet the need for system expansion through investments in energy efficiency (EE), demand response (DR), distributed generation (DG), and storage solutions instead of through traditional infrastructure builds. The Brooklyn Queens Demand Management (BQDM) Program is Con Edison’s largest non-wires alternative (NWA) effort to date; it will continue soliciting DER solutions through 2018.

1.1.2 REV Organization

Con Edison’s Distributed Resource Integration (DRI) organization, formed in May 2015, is a proactive response to the evolving energy distribution markets in New York. Con Edison deems this new department critical to address customer needs, move forward on REV, and adapt to the changing energy environment. DRI integrates infrastructure planning, innovative technical options, EE, and creative solutions to ensure continued reliability while serving customers in the future. The Utility of the Future and EE/DR, Distributed Resource Planning, and Demonstration Project teams all report to the VP of DRI.

Figure 1. Con Edison’s DRI Organization

Two committees provide direction and oversight to the DRI organization: the REV Advisory Committee and the REV Steering Committee.

1. The REV Advisory Committee is made up of leaders from Con Edison’s functional areas—Information Resources, Corporate Accounting, Corporate Strategy, Corporate Communications, Engineering and Planning, Energy Policy and Regulatory Affairs, Government Relations, and Customer Operations. These areas will be impacted by or will need to provide resources to support REV initiatives. This committee provides guidance and input on strategic priorities, policy, and decisions; reviews REV project schedules and deliverables to ensure alignment of business unit priorities; secures resources to support REV work streams; resolves cross-functional issues with peers; serves as a champion for REV priorities within respective business units; and makes decisions as delegated by the REV Steering Committee.

2. The REV Steering Committee consists of key members from Con Edison’s senior executive leadership team. The role of the Steering Committee is to set strategic priorities for Con Edison with respect to REV, make critical policy and strategy decisions, set the standard for REV-related deliverables, and approve overall resourcing for the effort. Con Edison’s senior leaders will have full visibility on REV demonstrations.

VP, DRI

Manager, Project

Management Office (PMO)

Director, Demonstration

Projects

Director, EE and DR

Director, Utility of the

Future

Director, DRI Distribution

Planning

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1.2 System and Territory

Con Edison’s distribution system serves almost 40% of New York State’s electric demand, while only covering about 1% of the state’s geographic footprint. Its system serves customers in five boroughs of New York City and Westchester County located directly north of New York City. Its customer base is mostly residential and commercial customers, with less than 1,000 industrial customers.

Figure 2. Con Edison’s Service Territory

Source: New York State Energy Research and Development Authority

Table 2. Con Edison Customer Base: 2015

Customer Type Customers Energy (MWh)

Residential 2,918,595 14,377,614

Commercial 525,929 43,458,221

Industrial 760 662,526

Total 3,445,284 58,498,361 Source: US Energy Information Administration (EIA)-861

Energy use is forecasted to stay constant in Con Edison’s service territory, with 2020 value within 1% of the 2015 value, while peak demand is expected to continue increasing. However, peak demand inclusive of DER will remain relatively flat with only minor increases from 2015 to 2020.

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Figure 3. Con Edison Energy and Peak Demand Forecast: 2015-2020

Source: Con Edison

Con Edison’s system is different than other utilities in New York State because it has an extensive underground distribution system. Characteristics of the underground network and overhead system are summarized in Table 3.

Table 3. Underground Network vs. Overhead System

Underground Network Non-Network Overhead System

Serves 86% of Con Edison’s customers Serves 14% of Con Edison’s customers

62 area substations 219 unit substations

64 networks and 19 non-network load areas 168 auto loops

2,300 primary voltage distribution feeders 13 multibank substations

251,500 manholes and service boxes Approximately 198,400 poles

95,800 miles of underground cable 34,200 miles of overhead wire

41,200 underground transformers 50,800 overhead transformers

Second contingency design (Designed to sustain the loss of any two feeders in a network under peak load conditions without any feeder or transformer overloads or an adverse effect on service to customers)

First contingency design (Designed to sustain the loss of one feeder under peak load conditions without any feeder or transformer overloads or an adverse effect on service to customers)

This networked underground system poses unique challenges to DER implementation, as listed below and described in greater detail in Con Edison’s Distribution System Implementation Plan (DSIP).

• The network system requires special consideration when integrating DER to provide load relief at the distribution level as compared to non-network systems.

13,300 13,400 13,500 13,600 13,700 13,800 13,900 14,000 14,100 14,200 14,300

-

10,000

20,000

30,000

40,000

50,000

60,000

2015 2016 2017 2018 2019 2020

Peak

Dem

and

(MW

)

Ener

gy (G

Wh)

Year

Energy (GWh) Peak Demand (MW) Peak Demand With DER (MW)

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• High load density and network design can absorb DG interconnection more readily than non-network systems by spreading the power in multiple directions, but the efficacy of the relief provided by such DER is lessened for these same reasons.

• The cost of the portfolio of DER solutions for networked systems is higher to meet load relief needs.

The extremely dense nature of the Con Edison service territory makes it difficult to build new generation or transmission facilities close to the demand areas, making DER and EE extremely important to meet the growing demand. The high load density places a greater emphasis on assessing the efficiency and reliability of the DER providing load relief to prevent overloading system assets.

1.3 Resources

1.3.1 Relevant Filings

Table 4 includes an abbreviated list of the relevant filings from Con Edison. To access each filing, visit the NYS Department of Public Service (DPS) web page (www.dps.ny.gov) and view filed documents in the Case Number provided.

Table 4. Con Edison’s Relevant Filings

Document Name Date of Filing Link

DSIP 06/30/2016 CECONY Initial DSIP [PDF] in Case # 14-M-0101

Supplemental DSIP 11/01/2016 Joint Utilities Supplemental DSIP [PDF] in Case # 14-M-0101

Efficiency Transition Implementation Plan (ETIP) 06/01/2017 Con Edison 2017-2020 ETIP [PDF] and

Budget [PDF] in Case # 15-M-0252

Connected Homes Platform Demo 02/01/2016 Implementation Plan [PDF] and Quarterly

Reports in Case # 14-M-0101

Building Efficiency Marketplace Demo 11/20/2015 Implementation Plan [PDF] and Quarterly

Reports in Case # 14-M-0101

Clean Virtual Power Plant (VPP) Demo (On Hold) 12/11/2015

Implementation Plan [PDF], Quarterly Reports, and Temporary Suspension Notice [PDF] in Case # 14-M-0101

Commercial Battery Storage Demo 06/15/2017 Implementation Plan [PDF] and Quarterly

Reports in Case # 14-M-0101

Storage on Demand Demo 06/23/2017 Implementation Plan [PDF] and Quarterly Reports in Case # 14-M-0101

Smart Home Rate Demo 02/01/2017 Smart Home Rate Project Concept [PDF]

Electric Rate Case Filing 01/25/2017 Order Approving Electric and Gas Rate Plans in Case 16-E-0060

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1.3.2 Available Data

Table 5 presents the system data available to stakeholders. For further detail on available data, visit the Con Edison Distributed System Platform web portal or the Joint Utilities of NY Utility-Specific System Data web page.

Table 5. System Data Available to Stakeholders

Data Availability

Customers

Load Forecast Con Edison Distributed System Platform web portal

Load Data Con Edison Distributed System Platform web portal

Total Sales US EIA 861 – Power Sales, Revenue and Energy Efficiency data files

Demographics US EIA 861 – Power Sales, Revenue and Energy Efficiency data files

DER

Penetration Rates 2016 DSIP [PDF]: Forecast of Demand and Energy Growth

Stage 2 Hosting Capacity map

Con Edison Hosting Capacity platform by signing into a Con Edison account or ARCGIS account

Beneficial Locations Con Edison Distributed System Platform web portal

NWA Opportunities Con Edison Non-Wires Solutions web page

Standardized Interconnection Requirements (SIR) Pre-Application

Con Edison Private Generation Application

Queued DG and Installed DG Monthly SIR Inventory Report available on the NYS DPS – SIR Inventory Information web page

Infrastructure

Capital Investment Plan Con Edison’s Capital Investment Plan can be found in their 2016 Capital Expenditures Report under Case # 13-E-0030

Reliability Statistics 2015 Annual Report on Electric Service and Power Quality filed with the NYS Public Service Commission

Substations 2016 DSIP: Reliability Planning Criteria

Voltage 2016 DSIP: Reliability Planning Criteria

Poles and Manholes 2016 DSIP: Overview of Con Edison's Service Territory

Circuit Capacity and Design Criteria 2016 DSIP: Reliability Planning Criteria

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2. PLANS AND PROGRAMS

2.1 Distribution System Implementation Plan (DSIP)

Con Edison’s DSIP:

• Describes its plans to continuously improve its capabilities in distribution system planning, distribution grid operations, and customer data and engagement, as well as the IT systems that will enable such improvements

• Outlines its plan to efficiently integrate DER and promote the company’s goals of customer engagement, reliability, and operational excellence

• Includes a plan for encouraging technological innovation and stakeholder engagement

• Emphasizes that key planning information included in the DSIP, such as the electric demand and energy forecast and the capital budget, will be updated and shared with stakeholders to provide timely and actionable information about potential market opportunities

2.1.1 Capabilities

To achieve the company’s corporate strategies of customer engagement, reliability, and operational excellence under REV, Con Edison has developed three key plans to support the transition to its role as a DSP provider.

Table 6. Focus Areas for DSP Development

Focus Area Outline Key Points

5-Year Roadmap

• Integrate approximately 800 MW of DER by 2020

• Build on the growth of solar energy

• Enable the steady growth of combined heat and power to enhance resiliency

• Provide greater opportunity to benefit from Con Edison’s EE and DR programs

• As peak electric demand has increased, the importance of EE and DER in the service territory has become vital

• The BQDM Program is Con Edison’s first experience using EE, DG, and DR to meet increasing demand rather than traditional infrastructure upgrades

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Focus Area Outline Key Points

Grid Modernization Investment Plans in Support of DER

• Build adaptability and increase grid-edge monitoring so the grid benefits from increasing amounts of DER

• Implement advanced metering infrastructure (AMI) to provide the cybersecure backbone and metering information needed for the new marketplace

• Seek strategic transmission investments to enable large-scale renewables

• The system would be unable to support high levels of DER and DR implementation without grid modernization

• Con Edison is examining the current system for potentially impactful locations based on peak load relief or to avoid infrastructure investments

Multi-Pronged Plan to Stimulate DER Growth

• Outline opportunities in the capital investment plan for NWAs including the ongoing BQDM Program

• Present new candidates for NWAs at the distribution level

• Promote innovation and inform future DSP investments

• Monitoring peak loads and hosting capacity of circuits will become more important as the amount of DER in the system increases

• This monitoring will be heavily reliant on AMI to monitor the electric system in real time

• The data will be used to perform load flow analyses and create a map that indicates to consumers whether or not they are located on a circuit where DER would be beneficial

2.1.2 Technology Roadmap

The initial technology roadmap relies heavily on IT investments to complement existing planning and operations needs by providing more information to system planners. Con Edison's transmission and distribution (T&D) service provider technology roadmap examines the following:

• Current IT and communications capabilities

• AMI and DCX initiatives

• Required near-term DSP functionalities

• Gaps in meeting near-term DSP functionality requirements

• How to close those gaps to achieve the DSP functionalities over the next 5 years Table 7 lists some of the near- and long-term initiatives of the DSIP and highlights opportunities for market partner involvement.

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Table 7. Near- and Long-Term DSIP Initiatives

Functional Category

Near-Term Focus (2017-2018)

Long-Term Focus (2019+)

Forecasting

• Upgrade Metrix IDR • Utilize additional analytical tools such

as advanced forecasting models • Interface AMI and DER management

system (DERMS) with additional analytical tools

• Accommodate increased data volume • Utilize analytical tools like

advanced/customized SAS forecasting

Planning

• DERMS • Expansion of, or similar program

to, integrated demand-side management (IDSM) with a more granular view

• DER metering infrastructure • Inclusion of DER performance data into

the DER database • Visualization and transient analysis

enhancements to the Load Flow model • IDSM enhancements • Incorporate probability calculations into

the DER database

Hosting Capacity (HC)

• Presentation of HC for non-network systems, as well as enhancement in HC for network systems

• Standardization and consistency of HC maps in alignment with the Joint Utilities

• Mapping solutions

• GIS to replace discrete mapping tools • Real-time tracking of DER • Integration with modeling software,

DERMS, and the interconnection portal • Dynamic system tool that is integrated

with the DERMS, interconnection queue, and mapping system

Monitoring and Control

• DERMS • Outage notifications • GIS • Additional meters at the source • Dashboard for actual DR use

• Expanded metering infrastructure • DERMS integrated with operating tools • Automated connection (or a process

change) to integrate with the control room

Interconnection

• Interconnection portal • Project center replacement (may

be subsumed by DCX) • Manual screens • Expected changes to SIR • Link to DCX to display the queue • SQL servers • Continued interconnection process

and technology enhancements

• GIS • Link between the project center (or

replacement)/CPMS and the operating and planning tools (PVL)

• Add-on reporting solutions

Volt/Volt-Ampere Reactive Optimization (VVO)

• New tap changing transformers, local capacitors, and SCADA controls to remotely manage conservation voltage optimization (CVO) functions

• Data analytics/programming tools • Dynamic implementation of VVO • Management software platform to

integrate granular AMI data • Management system for distributed

reactive power using smart inverter technology

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Functional Category

Near-Term Focus (2017-2018)

Long-Term Focus (2019+)

Customer Data Sharing

• Green Button Connect (GBC) • DCX • Revised electronic data

interchange (EDI) protocols for data transfer or new RESTful application program interfaces (APIs)

• Registration portal for interactive maps

• Access and subscription management solution

• Enhanced solutions as data exchange needs are further defined

• Encryption, secure storage, and other privacy and cybersecurity solutions

• GIS to replace many discrete mapping tools

• Real-time tracking of DER • Integration with PVL modeling

software, CPMS, DERMS, and the interconnection portal

Con Edison is working to determine the best process for identifying beneficial locations for DER deployment. The company has identified a list of possible locations where NWAs could be used to offset infrastructure upgrades, including identifying the need for load relief at 10 of its 62 substations. Microgrids have the potential to be highly valuable in the Con Edison service territory, as they could replace traditional storm-hardening measures. The next round of storm-hardening/resiliency programs will be implemented after the completion of the post-Hurricane Sandy projects. In the near term, implementing AMI is the main distribution system change envisioned by the DSIP. From 2017 to 2022, Con Edison expects to provide smart meters and a communications network to all of its customers. The company states this will allow the system to successfully integrate high levels of DER and large, intermittent sources of power without negatively affecting the grid.

2.2 Efficiency Transition Implementation Plan (ETIP)

Con Edison’s ETIP highlights the importance of continuing and enhancing EE programs, integrating a test-and-learn (T&L) process, and coordinating EE with peak-demand reduction efforts. In addition to its ETIP portfolio, Con Edison manages energy efficiency initiatives through REV demonstration projects, current and planned non-wires alternatives, and new energy efficiency, system peak reduction, and electric vehicle programs as authorized in the Company’s Rate Case. Con Edison also is working with the New York State Energy and Research Development Authority (NYSERDA) to best complement each organizations’ efficiency offerings, advance market-based initiatives, and maximize value to customers.

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Table 8. REV Enhancements

2017 ETIP Highlights Implementation Strategies

Increase customer engagement and choice

Among the numerous ways in which the Company accomplishes this objective are through providing energy audits and access to information on efficient products and services, enabling shopping directly through the Online Marketplace, and promoting controllable technologies

Support a self-direct program for large commercial and industrial customers

Large energy users can apply to participate in the initial offering of the self-direct program (over 2017-2019), giving these customers an additional choice in how they interact with Con Edison’s EE programs.

Establish a customer-driven T&L process for new programs and delivery mechanisms

Beginning in 2016, Con Edison implemented an ongoing T&L strategy and implementation process to be used to identify new measures, uses, and delivery mechanisms for existing offerings and to identify and test new programs and initiatives before full-scale implementation.

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3. PROJECTS

3.1 REV Demonstration Projects

Con Edison’s demonstration projects include the following:

• Building Efficiency Marketplace: An energy insights platform to increase commercial customer awareness and participation in energy savings programs

• Connected Homes: Targeted, multichannel customer engagement that combines home energy reports with advertising of DER products and services

• Clean Virtual Power Plant (On Hold): 1.8 MW/4 MWh of aggregated solar plus storage capacity, combined to form a virtual power plant (VPP) that Con Edison can control

• Commercial Battery Storage: Four energy storage systems installed in front of the meter at customers’ facilities for a combined 4.2 MW/4.4 MWh of battery storage

• Storage on Demand: A 1 MW/4 MWh portable energy storage system that can be easily moved to address issues throughout Con Edison’s service territory

• Smart Home Rate: Tests how participating residential customers manage their energy usage by using price-responsive home automation technologies that interact with smart home rates.

3.1.1 Building Efficiency Marketplace

Con Edison is using this demo to enhance their commercial EE program offering by:

• Offering a web-based portal to engage customers with details on how their building consumes energy today, as well as their potential energy savings and demand reduction opportunities

• Connecting customers with market partners using a standard bid process including workflows, terms and conditions, documentation, templates, forms, and timelines

• Virtual, automated savings measurement and verification (M&V) to provide customers with visibility into savings and to ensure that implemented projects continue to perform over time

Con Edison is partnering with Retroficiency (now Ecova), which is sharing in the project development costs. Con Edison also is engaging EE providers that bid on projects through the web-based portal. The program is being targeted at approximately 2,100 medium to large commercial buildings that currently have interval metering.

Table 9. Building Efficiency Marketplace Specifics

Utility Market Partner Customer

Provides • Virtual energy audits

and targeted inspections

• M&V services

• Fees to Con Edison for ads and leads

• Efficiency services to customers

• Data and participation in online audits

• Pays (or finances) for EE projects

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Receives • Advertising revenue

from partners • Revenue from leads

generated

• Easier access to project leads and customers

• Access to building energy data analytics platform

Unique Value Proposition

• More easily reach EE and demand management objectives

• Reduced customer acquisition costs relative to traditional outreach methods

• A new method to identify, evaluate, procure, and track EE projects

• Improvement from the current, slow, manual, and fragmented market

3.1.2 Connected Homes

Through the Connected Homes platform, Con Edison is providing customers with personalized offers for DER and energy products/services. The goal is to increase DER adoption by tailoring offers to customer segments based on energy use profiles and demographic, psychographic, and behavioral data. Con Edison is partnering with Opower and Enervee to develop the data analysis, customer communications, and marketplace platform. Since the platform’s launch in Q2 2016, customers in Con Edison's Brooklyn and Westchester territories have received customized print and digital home energy reports, which are complemented with a web portal for a more detailed analysis of customers’ energy use. The initiative has created qualified leads for partner companies: SunPower, Nest, ecobee, and HomeServe are among the initial energy service providers advertising through the platform. Targeted campaigns to date include offerings for Sealed home services, Wi-Fi thermostats, SunPower modules, and heat pumps with Mitsubishi Electric. In early 2017, Con Edison updated the online marketplace design and expanded marketing.

Table 10. Connected Homes Specifics

Utility Market Partner Customer

Provides

• Raw data on customer energy usage

• Funding for the platform and data analysis

• Energy services for end-use customers

• Portal and market segment analysis for Con Edison

• Access to their energy usage information

• Payments for services acquired

Receives • Advertising revenue

from energy service providers

• Fees for services provided to the customer and Con Edison

• Customized DER recommendations

Unique Value Proposition

• Receive fees for product advertising

• Reduced customer acquisition costs through targeted marketing

• Utility-endorsed platform for advertising

• Reduce non-relevant advertising

• Improved information and products to help manage energy costs

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3.1.3 Clean Virtual Power Plant (On Hold)

This project will create a VPP by aggregating energy storage systems placed at the homes of customers who also have solar photovoltaic systems. The systems will individually provide resiliency services to customers, while collectively providing network benefits to the grid. Approvals for installation of the proposed energy storage system from the NYC Department of Buildings and the NYC Fire Department have taken longer than anticipated; to date, Con Edison and NYC have not come to an agreement that would allow the system to be installed in a manner consistent with its original design. Consequently, Con Edison terminated the contract with a market partner and placed the project on hold until a clear path is established for permitting installations of residential battery systems.

3.1.4 Commercial Battery Storage

This REV demonstration project is designed to demonstrate how aggregated front-of-the-meter (FTM) energy storage can provide network benefits to the grid. This is in contrast to the behind-the-meter (BTM) installations in the Clean VPP demonstration project noted in Section 3.1.3. This demonstration program will validate the ability for FTM storage to address grid-level issues and bid into the wholesale energy market. It will also be used to evaluate the potential revenue that could have been earned if the systems were located BTM or if it was allowed to bid into either the frequency regulation or capacity markets. Con Edison is partnering with GI Energy to develop the project and with Smarter Grid Solutions for the communications integration. GI Energy will obtain third-party financing for the systems and procure the battery units from NEC Energy Solutions and Urban Electric Power (UEP). The project will include four project sites, each containing a 1 MW/1 MWh NEC lithium ion battery system. One site will also include a UEP 200 kW/400 kWh zinc manganese dioxide battery system.

Table 11. Commercial Battery Storage Specifics

Utility Market Partner Customer

Provides • Payments for control of

the systems • Payments for customer

siting

• Owns, installs, and operates the systems

• Provides space for the systems

Receives • Control of the systems • Financial benefits from

market transactions

• Receives payments from the utility for providing the service

• Receives a fixed monthly fee for providing space for the storage system

Unique Value Proposition

• Captures value from grid-related services in congested areas

• Demonstrates the potential of FTM energy storage systems

• Ability to own and finance customer-sited storage with a guaranteed revenue stream from the utility

• Receives payments for hosting storage without having to modify their BTM operations

3.1.5 Storage on Demand

This demonstration project centers on a 1 MW/4 MWh energy storage system that is mounted on transport trucks so it can be easily relocated. The system will be deployed as needed for transmission deferral, distribution deferral, and system emergencies. When not deployed, it will participate in the

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wholesale electricity, frequency regulation, and operating reserves markets depending on its location and the applicable New York Independent System Operator (NYISO) rules. The 1 MW/4 MWh system will consist of two mobile battery trailers and one mobile electrical switchgear trailer. It will be provided by NRG Energy and connected to the grid at NRG’s existing Astoria Generating Station when not deployed remotely. NRG will partner with LG Chem and Greensmith to design, build, and deliver the mobile storage solution. Con Edison anticipates engaging Power Edison to assist with the transportation and deployment logistics.

Table 12. Storage on Demand Specifics

Utility Market Partner Customer

Provides • Capital costs • Operations and

maintenance payments to NRG for system operation

• Mobile energy storage system

• Storage space and electrical interconnection

• N/A*

Receives • Share of market revenues • Control over storage

system

• Payments from Con Edison • Share of market revenues

• N/A*

Unique Value Proposition

• Ability to quickly deploy and re-deploy storage as needed

• Ability to test technology as a mobile solutions platform

• N/A*

*Customers are involved indirectly through Con Edison but do not participate directly in this demonstration project.

3.1.6 Smart Home Rate

Con Edison and its subsidiary Orange & Rockland will test how participating residential customers manage their energy usage by using price-responsive home automation technologies that interact with one of two different smart home rate structures. In summer 2017, the Companies issued an RFI seeking partners who could acquire customers and implement turnkey solutions for either one of two demonstration tracks: (1) home energy management systems that actively manage homes' central A/C and other loads, or (2) home energy storage systems paired with solar.

3.2 Non-Wires Alternative (NWA) Projects

Non-wires alternatives have the potential to reduce customers’ electric bills, improve reliability, and defer capital infrastructure. As Con Edison’s largest NWA effort to date, the BQDM Program was initially designed as a three-year effort to reduce peak load by 52 MW in the BQDM area through a combination of customer-sited solutions (41 MW) and non-traditional utility-sited solutions (11 MW). Auctions were held in July 2016 to procure demand management resources for 2017 and 2018. In July 2017, the BQDM Program was extended indefinitely, to allow for further infrastructure deferral within the original budget caps. Con Edison is likely to use a similar procurement framework for future NWAs and is considering all future infrastructure upgrades as potential NWA opportunities. The company has determined that, in general for its service territory, NWA opportunities are most impactful at the area substation level.

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Con Edison has identified multiple additional NWA opportunities, including area substation-level projects and distribution-level projects. The latest information regarding opportunities and their status is available on the Con Edison Non-Wires Solutions web page at https://www.coned.com/en/business-partners/business-opportunities/non-wires-solutions.