Utility Issues And The Site Selection Process Webinar

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Utility Issues and the Site Utility Issues and the Site Selection ProcessSelection Process

Basic Training for our Economic Development AlliesBasic Training for our Economic Development Allies

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Utilities – A Brief HistoryUtilities – A Brief HistoryThe Early DaysThe Early Days

Independent Generators and Distributors Independent Generators and Distributors Competition for customers Competition for customers A tangled web of power linesA tangled web of power lines

Read a detailed history at the Read a detailed history at the Edison Electric Institute web site http://www.eei.org/industry_issues/industry_overview_and_statistics/history/index.htmhttp://www.eei.org/industry_issues/industry_overview_and_statistics/history/index.htm

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Utilities – A Brief HistoryUtilities – A Brief HistoryConsolidation came in the 1920sConsolidation came in the 1920s• Large electric power holding companies were formedLarge electric power holding companies were formed• By 1932, eight holding companies controlled 73% of U.S. By 1932, eight holding companies controlled 73% of U.S.

investor-owned electric businessinvestor-owned electric business

There was:There was:• little effective state regulationlittle effective state regulation• no federal regulationno federal regulation• holding companies overcharging subsidiariesholding companies overcharging subsidiaries• expenses being passed on to customers expenses being passed on to customers

What followed is known as “The Regulatory Compact”What followed is known as “The Regulatory Compact”• Abuses were corrected with the passage of the 1935 Federal Abuses were corrected with the passage of the 1935 Federal

Power Act and the Public Utility Holding Company Act Power Act and the Public Utility Holding Company Act (PUHCA).(PUHCA).

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Utilities – A Brief HistoryUtilities – A Brief HistoryThe Regulatory CompactThe Regulatory Compact

Is a covenant or contract between the authority of state Is a covenant or contract between the authority of state governments, represented by public utility commissions (i.e. NYS governments, represented by public utility commissions (i.e. NYS Public Service Commission), the Federal Energy Regulatory Public Service Commission), the Federal Energy Regulatory Commission (FERC) and in some cases local governments and Commission (FERC) and in some cases local governments and investor owned utility companies investor owned utility companies

In exchange for the obligation to provide service to all customers in In exchange for the obligation to provide service to all customers in a particular “territory”, investor owned electric utilities are given a a particular “territory”, investor owned electric utilities are given a territorial monopoly on service and allowed to earn a limited profit. territorial monopoly on service and allowed to earn a limited profit. State regulators have historically set prices at rates that reflect the State regulators have historically set prices at rates that reflect the cost of building power plants and putting up transmission and cost of building power plants and putting up transmission and distribution systems (the wires). Profits have reflected the cost of distribution systems (the wires). Profits have reflected the cost of capital. capital.

This established the current structure of the industry. In addition to This established the current structure of the industry. In addition to investor-owned utilities, public utilities and co-ops operate in this investor-owned utilities, public utilities and co-ops operate in this system.system.

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Utility RegulationUtility Regulation

The FERC The FERC

The Federal Energy Regulatory Commission The Federal Energy Regulatory Commission regulates and oversees energy industries in the regulates and oversees energy industries in the economic, environmental, and safety interests of the economic, environmental, and safety interests of the American public. FERC is the federal agency that American public. FERC is the federal agency that regulates electricity transmission and wholesale regulates electricity transmission and wholesale electricity sales in interstate commerce. FERC electricity sales in interstate commerce. FERC implements the laws of Congress through orders and implements the laws of Congress through orders and rulemakings on electricity policy. For detailed rulemakings on electricity policy. For detailed information use this link information use this link http://www.ferc.gov/about/about.asphttp://www.ferc.gov/about/about.asp

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State RegulatorsState Regulators Under State law, Public Service (or Utility) Under State law, Public Service (or Utility)

Commission members have the obligation to ensure Commission members have the obligation to ensure the establishment and maintenance of utility services the establishment and maintenance of utility services as may be required by the public convenience and as may be required by the public convenience and necessity, and to ensure that such services are necessity, and to ensure that such services are provided at rates and conditions that are just, provided at rates and conditions that are just, reasonable and nondiscriminatory for all consumersreasonable and nondiscriminatory for all consumers

In New York State the regulator is the New York State In New York State the regulator is the New York State Public Service Commission Public Service Commission http://www.dps.state.ny.us/ http://www.dps.state.ny.us/

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DeregulationDeregulation Is the elimination of some or all regulations from a previously Is the elimination of some or all regulations from a previously

regulated industry or sector of an industry. regulated industry or sector of an industry.

In the 1990s the New York State Public Service Commission In the 1990s the New York State Public Service Commission (PSC) opened the State's electric industry to competition. (PSC) opened the State's electric industry to competition.

Utilities divested their generation assets and a spot market for Utilities divested their generation assets and a spot market for electricity was established.electricity was established.

Changes in the electric market allow customers to choose their Changes in the electric market allow customers to choose their

supplier of electricitysupplier of electricity. . Utilities deliver power to customers, under Utilities deliver power to customers, under

regulation by the NYS-PSC regulation by the NYS-PSC

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Utility RegulationUtility RegulationNot all states have implemented deregulationNot all states have implemented deregulation

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Prior to deregulation the Utility operated as a Prior to deregulation the Utility operated as a vertically integrated, regulated monopoly that: vertically integrated, regulated monopoly that:

Built and operated power plants Built and operated power plants (hydro-electric, nuclear, gas combined cycle, coal-fired)(hydro-electric, nuclear, gas combined cycle, coal-fired)

Transmitted energy over long distances Transmitted energy over long distances (transmission towers and wires)(transmission towers and wires)

Distributed energy to homes and businesses Distributed energy to homes and businesses (electric (electric poles and wires)poles and wires)

Provided ancillary services Provided ancillary services (balancing of generation supply, managing the grid)(balancing of generation supply, managing the grid)

Provided metering, billing and customer servicesProvided metering, billing and customer services

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Utility RegulationUtility RegulationAfter RestructuringAfter RestructuringUnregulatedUnregulated RegulatedRegulated

Independent Power ProducersIndependent Power Producers Energy Delivery CompaniesEnergy Delivery Companies

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Electric Delivery SystemElectric Delivery System

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Overhead Electric Distribution SystemOverhead Electric Distribution System

OverheadTransformer

PrimaryDistribution

Feeders

SecondaryDistribution

Lines

Telephone

CATV

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Basic Power TermsBasic Power Terms

Amp = the number of electrons movingAmp = the number of electrons movingalong a conductor path (flow)along a conductor path (flow)

Voltage = the ‘force’ at which energy flows Voltage = the ‘force’ at which energy flows (pressure)(pressure)

Watt = one AMP at a pressure of one VOLT Watt = one AMP at a pressure of one VOLT (Watts = Volts x Amps)(Watts = Volts x Amps)

Kilowatt (kW) = 1,000 WattsKilowatt (kW) = 1,000 Watts

Megawatt (mW) = 1,000,000 Watts =1,000 kWMegawatt (mW) = 1,000,000 Watts =1,000 kW

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Basic Power TermsBasic Power Terms

Demand = rate of energy consumption (kW)Demand = rate of energy consumption (kW)

Kilowatt Hour = quantity of energy (kWh)Kilowatt Hour = quantity of energy (kWh)

Load Factor = the ratio of average load to peak load in a Load Factor = the ratio of average load to peak load in a

periodperiod

Power Factor = ratio of ‘true power’ to ‘total power Power Factor = ratio of ‘true power’ to ‘total power PF = PF = kW kW kVakVa

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Information Needed for a Capacity Assessment and Information Needed for a Capacity Assessment and Rate Quote/Bill EstimateRate Quote/Bill Estimate

Basic Information Needed Basic Information Needed

Site Location (address, intersection or map)Site Location (address, intersection or map)

Peak Demand in Kilowatts (kW)Peak Demand in Kilowatts (kW)

Energy Consumption in Kilowatt Hours (kWh)Energy Consumption in Kilowatt Hours (kWh)

Hours of Operation/Days per WeekHours of Operation/Days per Week

Delivery Voltage at Site(s)Delivery Voltage at Site(s)

Distribution - Distribution - Secondary @ 2.2 kV or Primary @ 13.2 kVSecondary @ 2.2 kV or Primary @ 13.2 kV

Transmission - Transmission - Sub-transmission @ 34.5 kV or Sub-transmission @ 34.5 kV or Transmission Transmission @ 69 kV, 115 kV@ 69 kV, 115 kV

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Information Needed for Energy Intensive OperationsInformation Needed for Energy Intensive Operations

MORE DETAILED INFORMATIONMORE DETAILED INFORMATION

Load Characteristics Load Characteristics (type of operation)(type of operation)

Type of Equipment to be Used Type of Equipment to be Used (motor sizes)(motor sizes)

Power Quality Needs Power Quality Needs (is a dual feed required?)(is a dual feed required?)

Connected Load Connected Load (kilovolt amperes - kVa)(kilovolt amperes - kVa)

Power Factor Power Factor (PF = kW x kVa)(PF = kW x kVa)

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Why does the Utility need this information?Why does the Utility need this information?

To Determine the Cost to ServeTo Determine the Cost to Serve

Short TermShort Term

Determine Available Capacity Determine Available Capacity and In-Service Dateand In-Service Date

Measure Impact on SystemMeasure Impact on System

Snapshot of DemandSnapshot of Demandon Systemon System

Plan for GrowthPlan for Growth

Short TermShort Term

Determine Available Capacity Determine Available Capacity and In-Service Dateand In-Service Date

Measure Impact on SystemMeasure Impact on System

Snapshot of DemandSnapshot of Demandon Systemon System

Plan for GrowthPlan for Growth

Long TermLong Term

Determine Upstream ImpactDetermine Upstream Impact

Determine Downstream’ ImpactDetermine Downstream’ Impact

Anticipate System DemandsAnticipate System Demands

Make the best use of timeMake the best use of time

Long TermLong Term

Determine Upstream ImpactDetermine Upstream Impact

Determine Downstream’ ImpactDetermine Downstream’ Impact

Anticipate System DemandsAnticipate System Demands

Make the best use of timeMake the best use of time

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Why Bring Utility in on Why Bring Utility in on Retention/Expansion Opportunities?Retention/Expansion Opportunities?

Determine if impending change will effect serviceDetermine if impending change will effect service Manage Customer and Community ExpectationsManage Customer and Community Expectations

Review by engineers and plannersReview by engineers and plannersManage Customer and Community ExpectationsManage Customer and Community Expectations

Determine best way to serveDetermine best way to serve Manage Customer and Community ExpectationsManage Customer and Community Expectations

Determine potential customer chargesDetermine potential customer chargesManage Expectations and Address with ProgramsManage Expectations and Address with Programs

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What is an “Electric-Ready Site”?What is an “Electric-Ready Site”?

It matches electric facilities to the proposed useIt matches electric facilities to the proposed use

Heavy Industrial/High Tech - Sub-transmission or transmission on-site or Heavy Industrial/High Tech - Sub-transmission or transmission on-site or nearby, dual feed capability, high reliabilitynearby, dual feed capability, high reliability

Data Centers - Sub-transmission or transmission on-site or nearby, Data Centers - Sub-transmission or transmission on-site or nearby, redundant service capabilities, high reliabilityredundant service capabilities, high reliability

Light Industrial/ Distribution – Primary or secondaryLight Industrial/ Distribution – Primary or secondary

Office - Primary or secondary, underground preferredOffice - Primary or secondary, underground preferred

Proximity to Electric Facilities - The Closer the Better Proximity to Electric Facilities - The Closer the Better

Low or no Customer Charges for Line Extension CostsLow or no Customer Charges for Line Extension Costs

Time Requirements for System Upgrades/ Line ExtensionsTime Requirements for System Upgrades/ Line Extensions

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Who’s Responsible for What?Who’s Responsible for What?

Overhead Distribution Electric Extension (Rule 15)

NG will install, at its cost, up to 300 feet for a three- phase extension and 500 feet for a single-phase extension

Customer pays NG costs for footage in excess of 300/500 feet (costs per foot)

Customer provides right-of-way (ROW) or agrees to pay NG for ROW acquisition

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Service Laterals - Below 15,000 Volts (Rule 21)

For overhead service laterals from overhead distribution, NG will install service laterals up to 100 feet

Customer pays for the portion of service lateral in excess of 100 feet that requires intermediate support

For underground service laterals from overhead distribution lines

Customer installs, owns and maintains at their expense the entire service connection (riser pole may or may not be chargeable)

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For underground service laterals from underground distribution lines or network areas (2400 to 15,000 Volts)

NG will install, own, and maintain, at its expense, the conduit from distribution system to just inside the curb; to the end of the service lateral.

Customer is responsible for all conduit on it’s premises, from their distribution facilities.

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Who’s Responsible for What?Who’s Responsible for What? Service Laterals above 15,000 volts

Customer is responsible for all work and costs to install, operate and maintain the lateral

Special Services Performed By NG for a Customer

Customer shall reimburse NG for all costs incurred for requested relocations of NG equipment or facilities to suit the convenience of the customer

Customer requested additions to NG equipment or facilities beyond those necessary or normally used to serve customer

Customer pays NG for all costs for the work. Payment can be made by upfront payment or via a monthly surcharge of 1.5% on electric bill for 10 years

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Underground Distribution Extensions for Non-Residential Developments

Customer makes advance payment contribution to NG for the amount of the company’s estimated underground extension costs (maximum payment will be the delta of underground estimates to overhead extension estimates)

If overhead extension cost estimates exceed underground estimates, applicant will pay underground costs.

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Rule 4.2 – Expansions

If a customer requests added or enlarged electric facilities to accommodate load increase of 150 kW or greater, for their sole use, NG may require the customer to make a reasonable contribution to the cost of adding or enlarging facility (CIAC – Contribution In Aid to Construction)

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The Natural Gas SystemThe Natural Gas System

Production Interstate Pipeline Distribution

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Natural Gas Delivery SystemNatural Gas Delivery System

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Gas Utilities Prior to DeregulationGas Utilities Prior to Deregulation

A single, vertically integrated utility company that: A single, vertically integrated utility company that:

Produces natural gas Produces natural gas

(owns and operates production)(owns and operates production)

Transmits natural gasTransmits natural gas(owns and operates large transmission pipelines)(owns and operates large transmission pipelines)

Distributes natural gas Distributes natural gas

(owns and operates local distribution pipeline system)(owns and operates local distribution pipeline system)

Provides ancillary servicesProvides ancillary services(scheduling and balancing of gas supply)(scheduling and balancing of gas supply)

Provides metering & billing servicesProvides metering & billing services

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Deregulated Natural Gas Utilities Deregulated Natural Gas Utilities

Production Interstate Pipeline Distribution

UNREGULATED REGULATED

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Natural Gas TermsNatural Gas Terms Gas Load:Gas Load: rate of gas consumption, usually measured in cubic feet or rate of gas consumption, usually measured in cubic feet or

therms (National Grid bills customers in therms consumed) therms (National Grid bills customers in therms consumed)

Pressure:Pressure: expressed in PSI – pounds per square inch or PSIG - expressed in PSI – pounds per square inch or PSIG - pounds per square inch gaugepounds per square inch gauge

Volume:Volume: expressed in cubic feet expressed in cubic feet

Flow:Flow: expressed in cubic feet per hour expressed in cubic feet per hour

British Thermal Unit (Btu):British Thermal Unit (Btu): The quantity of heat required to raise the The quantity of heat required to raise the temperature of 1 pound of liquid water by 1 degree Fahrenheit at the temperature of 1 pound of liquid water by 1 degree Fahrenheit at the temperature at which water has its greatest density (approximately 39 temperature at which water has its greatest density (approximately 39 degrees Fahrenheit).degrees Fahrenheit).

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Equivalent ValuesEquivalent Values

1 cf = 1,000 Btu = .01 Therm1 cf = 1,000 Btu = .01 Therm

1 cf = 0.02832 cubic meters1 cf = 0.02832 cubic meters

1Ccf = 100 cf = 100,000 Btu = 1 Therm1Ccf = 100 cf = 100,000 Btu = 1 Therm

1Mcf = 1,000 cf = 1,000,000 Btu = 10 Therms1Mcf = 1,000 cf = 1,000,000 Btu = 10 Therms

1Mcf =10 Therms = 1 decatherm (dt) = MMBtu = 1.054615 gigajoules (GJ) 1Mcf =10 Therms = 1 decatherm (dt) = MMBtu = 1.054615 gigajoules (GJ)

1Mcf = 1,000 cf = 1,000,000 Mcf1Mcf = 1,000 cf = 1,000,000 Mcf

1Bcf = 1,000,000 Mcf1Bcf = 1,000,000 Mcf

This table assumes that one cubic foot of gas contains 1,000 Btu. If one cubic foot of gas has a different Btu This table assumes that one cubic foot of gas contains 1,000 Btu. If one cubic foot of gas has a different Btu content, the above table would require a correction factorcontent, the above table would require a correction factor

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Information Needed for a Capacity Assessment and Information Needed for a Capacity Assessment and Bill EstimateBill Estimate

MinimumMinimum

Site(s) Location (address, intersection or map)Site(s) Location (address, intersection or map)

Connected Load (Mcf/hr)Connected Load (Mcf/hr)

Maximum Hourly Load (Mcf/hr)Maximum Hourly Load (Mcf/hr)

Delivery Pressure RequiredDelivery Pressure Required

Annual Load (Mcf or therms per year)Annual Load (Mcf or therms per year)

Time Frame for ResponseTime Frame for Response

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Information Needed for Energy Intensive Information Needed for Energy Intensive Operations (i.e. glass manufacturing)Operations (i.e. glass manufacturing)

More DetailedMore Detailed

Type of BusinessType of Business

Type of Equipment Type of Equipment

Equipment Use (hours of operation)Equipment Use (hours of operation)

Site PlansSite Plans

Actual Site LocationActual Site Location

Service Required DateService Required Date

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Short TermShort Term Determine Available CapacityDetermine Available Capacity Determine Flow DateDetermine Flow Date Measure Impact on SystemMeasure Impact on System Snapshot of Demand on SystemSnapshot of Demand on System Plan for GrowthPlan for Growth

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Long TermLong Term

Determine Upstream ImpactDetermine Upstream Impact Determine Downstream’ ImpactDetermine Downstream’ Impact Anticipate System DemandsAnticipate System Demands Make the best use of timeMake the best use of time

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Why Bring Utility in on Why Bring Utility in on Retention/Expansion Opportunities?Retention/Expansion Opportunities?

Determine if impending change will effect serviceDetermine if impending change will effect service Manage Customer and Community ExpectationsManage Customer and Community Expectations

Review by gas engineeringReview by gas engineeringManage Customer and Community ExpectationsManage Customer and Community Expectations

Determine how best to serveDetermine how best to serve Manage Customer and Community ExpectationsManage Customer and Community Expectations

Determine potential customer chargesDetermine potential customer chargesManage Expectations and Address with ProgramsManage Expectations and Address with Programs

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Extension of Gas Mains (Rule 10)

For non-residential customers, NG provides:

Material and installation costs related to 100 feet of main and appurtenant facilities

Service line, service connections and appurtenant facilities located in the public right-of way

Amounts legally imposed for working permits and repairing or replacing disturbed pavement

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Applicant is responsible for:

Costs associated with extending gas main beyond 100 feet; and,

A surcharge which would include return, depreciation, taxes and maintenance of 20% per year of the actual reasonable costs; or

See next two slides for revenue justification optionsSee next two slides for revenue justification options

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Who’s Responsible for What?Who’s Responsible for What? A surcharge which shall be paid ratably from time of receiving gas

service for ten years

Surcharge will be reduced annually as a credit based on 50% of adjusted gas revenues

Surcharge will be adjusted if more customers are added to the extension, based on allowed footages per customer

Surcharges will cease if Adjusted Gas Revenue (AGR) from all customers on extension equal 40% of main costs for two consecutive years

No surcharge if estimated AGR equals 40% of actual reasonable cost of extension

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Customer may elect contribution in lieu of surcharge, which is extension cost in excess of allowance, less estimated two year AGR

When more than one customer is initially connected to an extension, the contribution will be reasonably allocated to all customers

If customers are added within five years of an extension, a pro-rata refund will be made for that portion of main extension

If AGR from all customers served by main extension exceed carrying costs of entire extension, any surcharges or contributions paid by such customers during preceding five years will be refunded

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Resources Resources

Glossary of Utility Terms Glossary of Utility Terms http://www.utilityeda.com/utility_term_glossary.asp http://www.utilityeda.com/utility_term_glossary.asp

Utility Usage WorksheetUtility Usage Worksheethttp://www.utilityeda.com/UEDA_EnergyWorksheet.pdf http://www.utilityeda.com/UEDA_EnergyWorksheet.pdf

Electric and Gas Industry Electric and Gas Industry

Federal Energy Regulatory Commission Federal Energy Regulatory Commission http://www.ferc.gov/http://www.ferc.gov/ Electric Power Research Institute Electric Power Research Institute http://my.epri.com/ http://my.epri.com/

Edison Electric Institute (EEI) Edison Electric Institute (EEI) http://www.eei.org/ http://www.eei.org/

American Gas Association American Gas Association http://www.aga.org/http://www.aga.org/ Energy Information AdministrationEnergy Information Administration http://www.eia.doe.gov/http://www.eia.doe.gov/ Natural Gas Supply Association http://www.ngsa.org/Natural Gas Supply Association http://www.ngsa.org/ Public Utilities Reports Public Utilities Reports http://www.pur.com/http://www.pur.com/

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Contact National Grid’s Economic Development DepartmentContact National Grid’s Economic Development Department

Art HamlinArt HamlinDirector, Economic Director, Economic DevelopmentDevelopment(315) 428 6543(315) 428 6543

Linda HillLinda Hill(518) 433 3691(518) 433 3691

Brian AndersonBrian Anderson(315) 428 5140(315) 428 5140

Joe RussoJoe Russo(315) 428 6798(315) 428 6798

Dan MurphyDan Murphy(315) 428 5198(315) 428 5198

Linda ClarkLinda Clark(315) 428 6891(315) 428 6891

300 Erie Boulevard West300 Erie Boulevard WestSyracuse, NY 13202Syracuse, NY 13202

www.ShovelReady.com www.ShovelReady.com

Utility Issues And The Site Selection Process Webinar

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Transcript of Utility Issues And The Site Selection Process Webinar