BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA ) ) ) ) ) ) ) ) ) ) ) ) ) )

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1 BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Order Instituting Rulemaking Regarding Policies, Procedures and Rules for Development of Distribution Resources Plans Pursuant to Public Utilities Code Section 769. And Related Matters (NOT CONSOLIDATED In the Matter of the Application of PacifiCorp (U901E Setting Forth its Distribution Resource Plan Pursuant to Public Utilities Code Section 769. And Related Matters Rulemaking (Filed August 14, 2014 Application Application Application Application (Filed July 1, 2015 Application Application COMMENTS OF PACIFIC GAS AND ELECTRIC COMPANY (U 39 E, SAN DIEGO GAS & ELECTRIC COMPANY (U 902 E, AND SOUTHERN CALIFORNIA EDISON COMPANY (U 338 E ON BEHALF OF ITSELF AND: JONATHAN J. NEWLANDER Attorney for SAN DIEGO GAS & ELECTRIC COMPANY 8330 Century Park Court, CP32D San Diego, California Phone: Fax: jnewlander@semprautilities.com CHRISTOPHER WARNER Attorney for: PACIFIC GAS AND ELECTRIC COMPANY 77 Beale Street San Francisco, California Telephone: ( Facsimile: ( CJW5@pge.com MATTHEW DWYER Attorney for SOUTHERN CALIFORNIA EDISON COMPANY 2244 Walnut Grove Avenue Rosemead, California Telephone: ( Facsimile: ( Matthew.Dwyer@sce.com July 10, 2017

2 BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Order Instituting Rulemaking Regarding Policies, Procedures and Rules for Development of Distribution Resources Plans Pursuant to Public Utilities Code Section 769. And Related Matters (NOT CONSOLIDATED In the Matter of the Application of PacifiCorp (U901E Setting Forth its Distribution Resource Plan Pursuant to Public Utilities Code Section 769. And Related Matters Rulemaking (Filed August 14, 2014 Application Application Application Application (Filed July 1, 2015 Application Application COMMENTS OF PACIFIC GAS AND ELECTRIC COMPANY (U 39 E, SAN DIEGO GAS & ELECTRIC COMPANY (U 902 E, AND SOUTHERN CALIFORNIA EDISON COMPANY (U 338 E Pursuant to the Administrative Law Judge s Ruling Requiring Investor-Owned Utilities to File Assumptions and Framework Addendum, and For Parties to File Comments, dated June 22, 2017 (the Ruling, San Diego Gas & Electric Company (U 902-E (SDG&E, on behalf of itself and Pacific Gas and Electric Company (U 39-E (PG&E and Southern California Edison Company (U 338-E (SCE, and collectively with SDG&E and PG&E, the IOUs, hereby submits the attached responses to questions posed therein. I. INTRODUCTION AND SUMMARY OF RESPONSES The IOUs appreciate the opportunity to respond to the questions posed in the Assigned Commissioner Ruling issued June 22, As discussed in the IOUs revised Distributed Energy Resources (DER Growth Scenarios Assumptions and Framework document, each of the IOUs places a high value on consistency between DER adoption projections that are used in distribution planning studies and statewide planning assumptions. As reflected in the revised 1

3 DER Growth Scenarios Assumptions and Framework document, and in the responses to the questions posed in the Ruling, below, the IOUs proposed methodologies are designed to reliably plan the distribution system and minimize inconsistencies between the planning processes. Each of the IOUs proposals attempts to align with either the most recently adopted IEPR projections or the IEPR projections that are most likely to be adopted in the next cycle. As described in the response to Question 2, the choice of which IEPR to align with is dependent upon the timing of the IOUs distribution planning process. PG&E aligns its distribution planning assumptions with the most recently adopted Transmission Planning Process (TPP assumptions because its distribution planning studies are undertaken largely in the period between September and December (immediately after the TPP studies are completed. SCE and SDG&E attempt to align their distribution planning assumptions with anticipated IEPR/TPP assumptions for the next cycle because their distribution planning studies are undertaken largely in the period between September and April (immediately prior to the next cycle's TPP studies. II. QUESTIONS ON 2017 GROWTH SCENARIOS Question 2: What are the implications, if any, of the IOUs aligning their DER growth scenario forecast with different Transmission Planning Process cycles? The IOUs recognize that it is important to align the DER growth scenario forecast with the TPP forecast to ensure continuity from the transmission system to the circuit level. The IOUs distribution planning timeline is based on the timing of each year s summer peak (driven largely by weather, which differs by utility. PG&E typically peaks earlier in the summer whereas SCE and SDG&E typically peak later. Therefore, the IOUs are seeking to align their DER growth scenarios with the IEPR/TPP process which most closely matches that timeline. Based on these timing differences, PG&E is seeking to align its Distribution Plan with the TPP while SCE and SDG&E are seeking to align their Distribution Plans with the

4 TPP. Given that the TPP relies on DER growth forecasts from the latest adopted IEPR forecast according to CPUC s annual Assigned Commissioner s Ruling (ACR, the IOU s choice of which TPP cycle to align its DER growth scenario forecast with does not impact the total magnitude of DERs modeled in the TPP. Differences between IOUs with respect to DER adoption assumptions, due to alignment of different vintage TPPs, is likely inconsequential. Regardless of the vintage of DER adoptions assumed in the IOUs distribution planning studies, each IOU adopts and adjusts the load growth and DER estimates it uses for transmission planning studies consistent with the assumptions and scenarios agreed to in the final transmission planning assumptions and scenarios document published by the CAISO. Any impacts would therefore be second-order because the different choices would only have a marginal impact on the relative allocation of DER adoptions across local areas. Question 4b: Please comment on the IOU s approach to locational disaggregation of their DER forecasts. What are the implications, if any, of the IOUs application of different disaggregation methodologies? As evidenced by the IOUs revised DER Growth Scenarios Assumptions and Framework document, as well as the accompanying working group sessions, there is no consensus as to industry best practices with respect to DER forecast allocation. Indeed, California and its IOUs are at the forefront of the real world application of these forecasts to distribution planning. At this point, the IOUs do not believe uniformity will create higher quality. In fact, uniformity may be counter-productive, as the testing of different allocation methods may actually lead to learnings about best practices that can be implemented in a more coordinated manner among the IOUs in the future. 3

5 The IOUs have independently developed methodologies to allocate DER forecasts from the system level to the feeder level based on a number of factors, including the maturity/penetration of the particular DER within the IOU service territory, the analytic platforms available, the data available and the best professional judgement and resource constraints of the IOU forecasting team. While the relative maturity / level of penetration for each DER may be relatively consistent across IOUs, the other factors could vary significantly, yielding different methods of allocation among different IOUs. Despite the different allocation methods, there are some general similarities in approach. For instance, each IOU starts with the system-level forecast for each DER and disaggregates that to the feeder level, rather than building bottom-up models. Given that the nascent state of DER forecasting (and the allocation of forecasts to the feeder level, along with the fact that IOUs bear the risk and responsibility for designing the distribution system to maintain reliability for each and every customer, it is reasonable and prudent to allow IOU distribution planners some latitude in selecting preferred distribution disaggregation forecast methods for the purposes of distribution planning. III. QUESTIONS ON FUTURE GROWTH SCENARIO UPDATES Question 1: Please comment on the process for future updates to the growth scenario forecasts. Do updates need to be formally or informally vetted? What issues need to be considered? The approach proposed in the IOUs revised DER Growth Scenarios Assumptions and Framework document does not need to be updated each year. This is because the IOUs have not proposed to develop new forecasts specifically for distribution planning. Rather, they have proposed an approach for selecting the most appropriate forum that has been, or will be, vetted in 4

6 other forums that are focused on developing forecasting methodologies. Thus, the outcome may vary, but there is no fundamentally new process that needs to change from year to year. The IOUs have not proposed any new forecasts (or forecast updates to be created and used in isolation in the DRP. To the contrary, the IOUs have proposed to use forecasts for distribution planning that have either already been developed in other forums, or will be used in other forums. In the IOUs revised DER Growth Scenarios Assumptions and Framework document, the IOUs have not proposed to develop new forecasts independent of other planning processes. Rather, the IOUs have proposed an approach to select the most appropriate forecast from those already finalized, already in development, or already planned to be developed. The specific approach proposed in the IOUs revised DER Growth Scenarios Assumptions and Framework document (i.e., 1. Select the appropriate public forecast. 2. Determine whether a new forecast provides more accurate information. 3. Provide rationale for selecting the most appropriate forecast does not need to change from year to year. The outcome of this process may vary, but the approach itself does not. Critically, it is important to note that regardless of which forecast is selected, that forecast will have been, or will be, vetted in other forums, such as the IEPR, PRG groups, etc. Question 2: Are consistent methodologies necessary across IOUs for system forecasts? If so which method should be adopted? The IOUs have sought to maintain consistency with ongoing statewide forecasting processes through the approach presented in the IOUs revised DER Growth Scenarios Assumptions and Framework document. Each IOU s application of this approach may be unique due to differences in each IOUs electrical system, service territory, the analytic platforms available, and distribution planning timeline. However, the IOUs are not developing any new system level DER forecasting methodologies exclusively for distribution planning purposes. 5

7 Rather, the IOUs are using methodologies consistent with methodologies either under development or proposed in the IEPR process. The IOU s system forecasts are developed for use in a variety of forums (such as ERRA, GRC, LTPP, FERC Rate Case, etc. in addition to DRP and the underlying methodologies are well documented and reviewed in those forums (IEPR, PRG groups, etc.. Therefore, IOU s should continue to utilize the approach proposed in the IOUs revised DER Growth Scenarios Assumptions and Framework document to select the appropriate forecast for that utility in each planning cycle. Question 3: What are the implications if the DER growth scenario forecasts used in DRP differ from the forecast used in TPP? The IOUs recognize that it is important to align the overall forecasted DER capacity with the TPP forecast to ensure consistency from the transmission system down to the circuit level. The IOU s distribution planning timeline is based on historical peak (driven largely by weather. Therefore, the IOUs are seeking to align their DER growth scenarios with the TPP process which most closely matches that timeline. Based on timing differences, PG&E is seeking to align its Distribution Plan with the TPP while SCE and SDG&E are seeking to align their Distribution Plans with the TPP. The IOUs believe that any impact from using different system level DER forecasts in the DRP and TPP are de minimis. The specific reasons are described in the above answers to 2017 Growth Scenarios Question 2. Question 4: Are consistent methodologies necessary IOUs f or locational disaggregation of the forecast? In section H of the IOUs revised DER Growth Scenarios Assumptions and Framework document, the IOUs describe their vision for the evolution of DER forecasting, and the principles that will guide that evolution. The principles are reiterated below: Utilize statistically appropriate, data-driven methodologies for each DER, customer segment, and level of disaggregation 6

8 Develop approaches to manage uncertainty associated with granular allocation of DER Periodically re-assess the modeling approach for each DER as increased adoption leads to better data Share best practices and leverage learning process to strive for continuous improvement, both in forecasting and in using the forecasts for distribution planning Integrate data from DER industry partners to enhance forecasting accuracy The application of these principles by the joint IOUs along with increased coordination through the DRP processes will lead to increased alignment among the IOUs in their methodological approaches. However, as with any evolutionary system, diversity (of methodologies in this case is critical to long-term success. As each IOU learns from its application of forecasting methods, they will share and integrate lessons learned and, as a result, make modifications, or improve methodologies that facilitate greater alignment. Prescribing uniform modeling approaches at this nascent stage could lead to suboptimal outcomes. Question 5: Under what conditions should the IOUs use different sources than the IEPR demand forecast to inform the DER growth scenarios? Address both the IEPR forecast year and the IEPR update year. The IOUs have laid out a framework in Section III to select the sources of system level DER assumptions (i.e., 1. Select the appropriate public forecast; 2. Determine whether a new forecast provides more accurate information; 3. Provide rationale for selecting most appropriate forecast. In application of this framework for the distribution planning process, the IOUs are seeking to align their forecasts with the latest IEPR. Given the nascent state of DER forecasting, and the impact from state and federal policy, regular updates of these DER forecasts is critical. Currently modeling of DER assumptions is only performed in the full IEPR update years (e.g IEPR with only a limited refresh performed in the interim update years (i.e. evennumbered years such as When seeking to align with the IEPR, timing causes differences for the IOUs. In some cases, it is more appropriate to align with the previous IEPR. In other cases, assumptions have changed significantly since the previous IEPR, and so it is more 7

9 important to align with the current IEPR in development or utilize the latest developed forecasts from utilities. Question 6: If the IOUs use different sources or develop new methodologies for the DER growth scenarios, what parameters are necessary to ensure that the forecasts are reliable? The IOUs are not proposing to use different sources or develop new methodologies for the DRP, and the DRP should not attempt to evaluate the merits of forecasting approaches that are reviewed at length by stakeholders in other forums. Rather, the DRP should simply evaluate whether the IOUs proposed approach for selecting the appropriate forecast is reasonable. The following response addresses different parts of the question in greater detail. a. If the IOUs use different sources: The IOUs are not using fundamentally different sources. The IOUs seek to align their distribution planning forecasts with the IEPR. The difference is one of timing: in some cases, it is more appropriate to align with the previous IEPR. In some cases, assumptions have changed significantly since the previous IEPR, and so it is more important to align with the current IEPR in development. Thus, it is not a question of different sources, per se. Rather, it a question of which IEPR forecast the IOUs are choosing to align their DER forecast with. b. If the IOUs develop new methodologies: The IOUs are not developing any new DER forecasting methodologies exclusively for distribution planning purposes. Rather, the IOUs are updating methodologies consistent with methodologies either under development or proposed in the IEPR process. As noted previously, any new methodologies are fully vetted not in the DRP (which is not a proceeding focused on developing forecasting methodologies but in the IEPR (which is a proceeding focused on developing forecasting methodologies. c. If the IOUs ensure that the forecasts are reliable: The DRP is not well-positioned to assess the merits of any particular forecasting methodology. The DRP has not developed a record to support any particular forecasting approach, nor have forecasting experts necessarily attended DRP events. The merits of a forecasting approach are discussed in the IEPR forum; this is the venue that captures forecasting expertise. The DRP proceeding should not attempt to evaluate a forecasting methodology. This should remain the realm of other more focused forums. 8

10 In summary, the IOUs have proposed an approach to select the appropriate DER forecast, not create new DER forecasting methodologies. The DRP should not attempt to review forecasts that are already subject to stakeholder review in other forums. IV. CONCLUSION The IOUs appreciate the opportunity to submit the foregoing comments. Respectfully submitted, /s/ Jonathan J. Newlander Jonathan J. Newlander Attorney for SAN DIEGO GAS & ELECTRIC COMPANY 8330 Century Park Court, CP32D San Diego, CA Phone: Fax: On Behalf of the IOUs: San Diego Gas & Electric Company (U 902-E, Pacific Gas and Electric Company (U 39-E, and Southern California Edison Company (U 338-E. July 10,

11 /s/ Darleen Evans

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