Avoided Cost Calculations for Utilities and Stakeholders

Avoided Cost Calculations for Utilities and Stakeholders

December 14, 2022 | Online :: Central Time

The rates for purchases from qualifying cogeneration facilities and qualifying small power production facilities under PURPA prohibit electric utilities from paying more than the “avoided cost” for such purchases. Utilities must estimate avoided energy and capacity costs for a variety of reasons, including PURPA contracts, demand side management program design, and proposal evaluations. In recent years the increase of low-cost renewables have substantially increased uncertainty in the avoided costs calculations.  Avoided cost analysis must now capture future states in ways that cannot be accommodated with traditional approaches.

This course will examine the process of how utilities have typically estimated their avoided cost in multiple contexts and recognize what is valuable in those analyses. It will explore the recent regulatory changes and provide a framework with best practices for calculating avoided cost to answer the ultimate question of what costs QFs enable utilities to avoid. 

Learning Outcomes

  • Discuss the role and importance of avoided costs
  • Review the various components/elements of avoided costs
  • Identify what avoided cost is supposed to reflect/capture including capacity value and renewable integration costs
  • Review the various methods for determining avoided cost
  • Explore incorporating new market dynamics in avoided cost calculations
  • Discuss state policies on renewable and clean energy standards
  • Examine the best practices for avoided cost calculations

Agenda

Wednesday, December 14, 2022 : Central Standard Time

8:45 – 9:00 a.m.
Log In and Welcome

12:30 – 1:15 p.m.
Lunch Break

9:00 a.m. – 4:15 p.m.
Course Timing

9:00 – 9:15 a.m. :: Overview and Introduction

Background on Avoided Costs

  • What are avoided costs
  • How regulations are changing
  • FERC principles on calculating avoided cost
  • Why avoided costs are so contentious
  • QF growth

What Avoided Cost Is Supposed to Reflect/Capture

  • Most common components of avoided cost
  • Value of energy from future resource
  • Capacity value
  • Renewable integration costs
    • Transmission upgrades
    • Ancillary service requirement increases

Traditional Methods for Avoided Cost Calculation

  • Proxy Method
    • The avoided cost of a wind or solar resource
  • Locational Marginal Pricing (LMP)
    • Cost of energy purchases that could be avoided
  • Differential revenue requirement (DRR)
    • Calculations of revenue requirement with/without the QF
  • Marginal cost to serve load
    • Similar to a DRR approach
  • Competitive Solicitations
    • Ensures a competitive price paid
  • Advantages and disadvantages of each approach

12:30 p.m. – 1:15 p.m. :: Lunch break

Incorporating New Market Dynamics in Avoided Cost Calculations

  • Increasing volatility and uncertainty in wholesale energy prices
  • Explosive growth of renewables
  • Influence of weather on load, renewable generation and prices
  • Changing load patterns
  • Technology changes

Best Practice for Calculating Avoided Cost

  • Connect avoided costs with resource plans
  • Defining the system operation conditions
  • Capturing market uncertainties
  • Defining ancillary services requirements

4:15 p.m. :: Program Adjournment

Workshop

Updates on Order No. 872 & 872-A

Thursday, December 15, 2022 : Central Time

Overview

In July 2020, FERC issues its final rule in Order 872. While much attention of Order 872 is focused on changes to numerous issues affecting the determination of avoided cost, certain revisions to qualification prerequisites for small power production facilities pose regulatory hurdles for behind-the-meter renewable distributed energy resources (DER). This ruling allows states to set the rates paid to qualifying facilities (QFs) at a variable wholesale rate rather than a fixed cost, reducing the size of a project that is subject to such rates from 20 MW to 5 MW, and modifying the one-mile rule to prevent aggregation.

Join us for this workshop to learn what is happening in several key states and the effect on stakeholders because of Order 872. The informative presentations provide valuable perspectives on key considerations and how best to move forward.

Learning Outcomes

  • Review PURPA implementation rules being considered by multiple states
  • Review policy actions that may have effects on PURPA-based development
  • Examine the dockets currently being presented in Montana
  • Discuss the controversial nature of the Final Rule
  • Discuss the latest developments in North Carolina
  • Review the legal challenges to Order 872 and possible outcomes

 

Agenda

8:45 – 9:00 a.m.
Log In

9:00 a.m. – 12:00 p.m.
Workshop Timing

9:10 – 10:40 a.m. :: PURPA Implementation Rules Being Considered by States

Even before Order 872’s changes, PURPA implementation on issues such as avoided cost calculation and contract terms differed across the states. With the recent FERC order allowing states to make further PURPA implementation changes, we continue to see further differences emerge among the states on PURPA. This presentation will look at changes to PURPA implementation rules being taken and considered by multiple states, as well as related policy actions that may have effects on PURPA-based development

Autumn Proudlove, Senior Policy analyst, NC Clean Energy Technology Center

Order 872 Updates in Montana

Trying to contain rising electricity rates, while promoting deployment of renewable energy resources at the same time presents quite a challenge for all parties involved. This presentation will share an update on some of the dockets currently being presented in Montana as a direct result of Order 872. 

Jason Brown, Attorney, Montana Consumer Counsel

10:40 – 10:55 a.m. :: Break

10:55 a.m. – 12:00 p.m. :: Order 872 Updates in North Carolina

North Carolina is one of the top states in the country for PURPA-qualified solar facilities. Many solar projects have been deployed under the law in recent years. It continues to be one of the most active states because of order 872 by addressing energy storage to existing projects as well as new avoided costs and standard offer terms adopted in late 2021. This session will provide updates on the latest developments in the state.

Brett Breitschwerdt, Partner, McGuireWoods

Legal Challenges to Order 872

The controversial nature of the Final Rule has led to significant litigation in the United States Court of Appeals for the Ninth Circuit this year. This session will review some of the legal challenges to this new FERC ruling as well as possible outcomes.

Kristen N. Edwards, Staff Attorney, South Dakota Public Utilities Commission

12:00 p.m. :: Workshop Concludes

Workshop Presenters

Autumn Proudlove, Senior Policy Program Director, NC Clean Energy Technology Center (NCCETC)

Autumn Proudlove is the Senior Policy Program Director at the Center, joining the Energy Policy team in 2014. She manages the Center’s energy policy team, overseeing all policy program activities, and providing strategic direction for the policy program. Directly leading policy research and consulting work, including the Center’s DSIRE (Database of State Incentives for Renewables and Efficiency) Insight subscription services). Autumn is the lead author of the 50 States of Solar, 50 States of Grid Modernization, and 50 States of Electric Vehicles quarterly policy tracking reports.


Jason Brown, Attorney, Montana Consumer Counsel

Mr. Brown is an attorney for the Montana Consumer Counsel in Helena, where he advocates for the interests of the consuming public in administrative and judicial proceedings, including in PURPA matters.  Prior to joining the Montana Consumer Counsel, Mr. Brown was an attorney for the Montana Public Service Commission for more than six years, where he advised five elected commissioners, drafted administrative orders, and represented the agency before courts and the legislature.  In 2009, he served as the Law Clerk for the 20th Judicial District Court in Lake and Sanders Counties.  He earned law and master’s degrees from the University of Montana and his bachelor’s degree from Tufts University.


Brett Breitschwerdt, Partner, McGuireWoods

Brett has experience representing electric utility clients in the growing area of renewable energy regulation, including PURPA implementation, renewable energy procurement and green tariff programs, generator interconnection standard approval and administration, as well as demand side management/energy efficiency program approval and cost recovery.  He has also represented clients in traditional base rate and rider cost recovery proceedings, certificate proceedings, affiliate approvals, and integrated resource planning cases. Brett also assists in representing the firm’s electric utility clients in proceedings before the Federal Energy Regulatory Commission. He has been board certified as a specialist in utilities law by the North Carolina State Bar since 2017 and is also licensed to practice in Ohio. He has a BA from the  University of North Carolina at Asheville, BA, cum laude and a JD from the University of North Carolina School of Law


Kristen N. Edwards, Staff Attorney, South Dakota Public Utilities Commission

Kristen Edwards joined the South Dakota Public Utilities Commission as a staff attorney in 2012, after beginning her legal career in private practice.  She is a native of rural Iowa and holds a bachelor’s degree in political science with an emphasis on public law from Minnesota State University, Mankato. Kristen earned her law degree from the University of South Dakota.

Instructor

Dr. Brandon Mauch, PhD, Senior Energy Analyst, Ascend Analytics

Brandon Mauch is a Senior Energy Analyst at Ascend Analytics. He provides modeling expertise and support in the integrated resource planning activities, energy markets, regulation and utility demand side management.  Dr. Mauch works in Ascend’s consulting group providing resources planning and regulatory support.  Prior to joining Ascend, Brandon was a Senior Program Manager for CLEAResult Consulting where he managed utility energy efficiency and demand response programs for Midwestern utilities.  Before that, he was a Utility Regulation Engineer for the Iowa Utilities Board where he worked on regional energy policy issues, resource planning and rate cases for Iowa’s investor-owned utilities.  Brandon holds a Ph.D in Engineering and Public Policy from Carnegie Mellon University where his research focused on wind power forecasting and risk assessment of wind forecasts. He also holds a master’s degree in Mechanical Engineering from the University of Wisconsin and a bachelor’s degree in Mechanical Engineering from the University of Kansas. 

Online Delivery

We will be using Microsoft Teams to facilitate your participation in the upcoming event. You do not need to have an existing Teams account in order to participate in the broadcast – the course will play in your browser and you will have the option of using a microphone to speak with the room and ask questions, or type any questions in via the chat window and our on-site representative will relay your question to the instructor.

  • IMPORTANT NOTE: After November 30 you will not be able to join a Teams meeting using Internet Explorer 11. Microsoft recommends downloading and installing the Teams app if possible. You may also use the Edge browser or Chrome.
  • You will receive a meeting invitation will include a link to join the meeting.
  • Separate meeting invitations will be sent for the morning and afternoon sessions of the course.
    • You will need to join the appropriate meeting at the appropriate time.
  • If you are using a microphone, please ensure that it is muted until such time as you need to ask a question.
  • The remote meeting connection will be open approximately 30 minutes before the start of the course. We encourage you to connect as early as possible in case you experience any unforeseen problems.

Register

Please Note: This event is being conducted entirely online. All attendees will connect and attend from their computer, one connection per purchase. For details please see our FAQ

If you are unable to attend at the scheduled date and time, we make recordings available to all registrants for three business days after the event

REGISTER NOW FOR THIS EVENT:

Avoided Cost Calculations for Utilities and Stakeholders

December 14, 2022 | Online
Individual attendee(s) - $ 895.00 each

Volume pricing also available

Individual attendee tickets can be mixed with ticket packs for complete flexibility

Pack of 5 attendees - $ 3,580.00 (20% discount)
Pack of 10 attendees - $ 6,265.00 (30% discount)
Pack of 20 attendees - $ 10,740.00 (40% discount)

RELATED WORKSHOPS:

Updates on Order No. 872 & 872-A

December 15
Individual attendee(s) - $ 495.00 each
- OR - I choose to attend remotely
Individual remote connections(s) - $ 495.00 each

Volume pricing available for remote connections

Individual attendee tickets can be mixed with ticket packs for complete flexibility

Pack of 5 attendees - $ 1980.00
Pack of 10 attendees - $ 3465.00
Pack of 20 attendees - $ 5940.00

Your registration may be transferred to a member of your organization up to 24 hours in advance of the event. Cancellations must be received on or before November 11, 2022 in order to be refunded and will be subject to a US $195.00 processing fee per registrant. No refunds will be made after this date. Cancellations received after this date will create a credit of the tuition (less processing fee) good toward any other EUCI event. This credit will be good for six months from the cancellation date. In the event of non-attendance, all registration fees will be forfeited. In case of conference cancellation, EUCIs liability is limited to refund of the event registration fee only. For more information regarding administrative policies, such as complaints and refunds, please contact our offices at 303-770-8800

CEUs

Credits

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EUCI is accredited by the International Accreditors for Continuing Education and Training (IACET) and offers IACET CEUs for its learning events that comply with the ANSI/IACET Continuing Education and Training Standard. IACET is recognized internationally as a standard development organization and accrediting body that promotes quality of continuing education and training.

EUCI is authorized by IACET to offer 0.7 CEUs for this event and 0.3 CEUs for the workshop

Requirements For Successful Completion Of Program

Participants must sign in/out each day and be in attendance for the entirety of the conference to be eligible for continuing education credit.

Instructional Methods

PowerPoint presentations and case studies will be used in program.


Upon successful completion of this event, program participants interested in receiving CPE credits will receive a certificate of completion.

Course CPE Credits: 7.5
Workshop CPE Credits: 3.0
There is no prerequisite for this Course.
Program field of study: Specialized Knowledge
Program Level: Basic
Delivery Methood: Group-Live
Advanced Preperation: None

CpeEUCI is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its web site: www.nasbaregistry.org

 

Those that would benefit from attending:

  • Distributed level renewable energy project developers
  • Grid level renewable energy project developers
  • Utility management
  • Rate design and pricing staff
  • Technical staff
  • Regulators
  • RTOs/ISOs
  • Consultants
  • Equipment manufacturers
  • Renewables systems
  • Solicitation / Procurement staff
  • Resource Planning staff
  • Legal Counsel

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