Delaware Electric Cooperative 2009 Energy Plan CONFIDENTIAL

Delaware Electric Cooperative 2009 Energy Plan CONFIDENTIAL
Delaware Electric Cooperative
2009
Energy Plan
Confidential
Executive Summary
As a not-for-profit member-owned cooperative Delaware Electric has provided reliable
service at competitive rates for its member-owners in Kent and Sussex counties since 1936. The
success of that simple but effective business model has not been realized by chance or luck, but
rather with the hard work of dedicated employees over the years, and a Plan. The Cooperative
manages the energy supply side of the business on two fronts, first our ownership in a Generation &
Transmission Cooperative jointly owned and managed by ten other member cooperatives in
Maryland and Virginia provides DEC the leverage necessary to gain a financial advantage in the
market place. Secondly, once DEC “takes possession” of that electricity at specific delivery points
we, and our member-owners, manage and utilize that energy in a cost conscious way.
Certainly the Cooperative business model goes a long way in providing the foundation for
providing reliable cost effective service, but more importantly it is the development and execution
of plans and processes that effectuate the cooperative business model. This Energy Plan provides a
general overview of the Cooperatives goals and objectives in providing low cost power. The real
work, the real driving force, comes in the specific plans of action not included in this document but
are an integral part of the initiatives some of which may be considered confidential and proprietary.
The Plan incorporates three major components: 1) Generation, Transmission and Power Supply, 2)
Distribution Delivery System, and 3) Member Conservation and Energy Education.
For many of the same reasons an investment advisor would recommend a diverse retirement
portfolio DEC minimizes price and volatility risk by having a diverse mix of owned generation
including base load and peaking units combined with short term and long term energy contracts. In
other words we don’t “have all of our eggs in one basket”. The goal is long term price stability.
Short term risks may mean DEC may not be the lowest cost provider but over the long term we
believe that diverse ownership assets and market instruments and sound energy policies provide the
best opportunity to providing low cost power.
This Plan is a continuous work in progress. It evolves and changes constantly as local,
regional and world events impact the foundation of our business. Political and economic forces can
significantly impact the course of our plan though our end focus remains the same – to provide long
term cost effective power to our member-owners. The Plan, and the execution of the Plan, has
proven successful by a single measurement; not a single member-owner has left the Cooperative for
a third party supplier since standard offer service was unregulated and opened to competition some
eight years ago.
If you would like more information or have questions regarding this plan please contact us
at:
J. William Andrew
President/CEO
Delaware Electric Cooperative
P.O. Box 600
Greenwood, DE 19950
(302) 349-3174
[email protected]
Mark A. Nielson
V.P. Staff Services
Delaware Electric Cooperative
P.O. Box 600
Greenwood, DE 19950
(302) 349-3147
[email protected]
Delaware Electric
Cooperative, Inc.
"Owned By Those We Serve"
Table of Contents
I. Generation, Transmission and Power Supply Plan
a. Utilize a managed portfolio philosophy for supplying wholesale energy
products.
b. Supply a significant portion of energy from ODEC owned assets within
our supply portfolio.
c. Maintain a diverse mix of generation products to assure price and supply
flexibility and mitigate risk associated with single source generation.
d. Identify and investigate ownership / contractual relationships with new
and existing generation facilities capable of meeting our energy and
capacity needs within our managed portfolio.
e. Develop and update long range generation and transmission plans capable
of supplying the peninsula to assure a safe, reliable and cost competitive
supply for a minimum 20 year period.
f. Work with and provide technical, political and public relations support for
the design and installation of new bulk transmission paths (MAPP and
others) into our service area.
g. Continue the development of congestion mitigation plans to assure
efficient operation of the transmission system on the peninsula.
h. Monitor and develop analytics identifying proper hedging tactics for
wholesale power products within our supply area.
i. Update and extend our wholesale power contract to assure long term safe,
reliable and cost competitive energy supply for our members.
j. Provide renewable power supply options to members maintaining our
power supply philosophies.
k. Continue to foster and develop transmission delivery point
interconnections and operating coordination among peninsula electric
utilities through the Delmarva Peninsula Planning Association (DPPA).
II. Distribution Delivery System Plan
a. Develop, implement and utilize system voltage control options to reduce
peak energy requirements.
b. Extend cycle times for demand side management appliances to reduce
peak energy requirements.
c. Reduce distribution system losses.
d. Continuously review and redesign and re-program capacitor controls and
installations to maximize power factor and system delivery efficiencies.
e. Continue to deploy residential load management switches to manage peak
energy usage.
f. Continue to deploy interruptible load management switches for
agricultural and commercial members to manage peak energy usage.
g. Continue to review and refine design practices to capture infra-structure
and equipment efficiencies.
i. Transformer utilization
ii. Transformer and streetlight locations
h. Continue the deployment of our AMR/AMI to minimize field trips saving
energy and delivery costs and reducing losses.
i. Continue to utilize our information technology systems to promote
operational efficiencies across the enterprise.
j. Investigate and develop opportunities to utilize time of use rates to shift
energy and demand usage patterns.
k. Provide real time energy usage to homes using smart meter technology.
III. Member Conservation and Energy Education Plan
a. Promote the “Beat the Peak” program to encourage members to join in
reducing energy during peak energy periods to mitigate demand expense
and improve load factor.
b. Support member-owners in the installation of renewable energy and
conservation projects through grants from our Renewable Resource Plan.
c. Continue investment and support of our compact fluorescent light bulb
program.
d. Promote and encourage the smart use of energy to our membership and the
media with an emphasis upon energy conservation and energy efficiency
education programs to include lighting and Energy Star appliances.
e. Encourage additional membership participation in residential load
management programs.
f. Continue the development of efficiency and cost savings education of our
commercial members including energy management options.
g. Continue the expansion of our out-reach education programs to all
members of the Cooperative through speakers bureau opportunities.
h. Investigate energy management with developers including the utilization
of smart house concepts and Energy Star homes.
i.
Commercial Account Representative reviews with major accounts
regarding their energy management programs and development of
commercial Beat The Peak programs.
j. Develop energy and environmental management programs to maximize
energy efficiencies at the DEC corporate facilities.
k. Develop and maximize opportunities at the State and Federal level to
utilize stimulus dollars to support efficiency, conservation and renewable
programs.
Generation,
Transmission
And
Power Supply
Plan
I. a. Utilize a managed portfolio philosophy for supplying wholesale energy
products.
The energy marketplace has been very volatile and that trend appears to be
continuing into the future. The price of energy in the market is largely driven by the
price of fuels such as natural gas and oil, which have recently continued to move upward.
A business strategy which employs a single source contract, supply or strategy limits its
options and flexibility with respect to cost, reliability of supply, and / or market changes.
A widely accepted concept regarding a de-regulated electric marketplace was one
of purchasing all energy and capacity from the market because supply and demand would
create the most cost effective market. Delaware Electric Cooperative (DEC) had a long
term all-requirements contract in place which included a diverse managed portfolio
consisting of owned generation assets. Through our relationship with Old Dominion
Electric Cooperative (ODEC), DEC has been able to maintain a supply cost advantage as
compared to the wholesale market for the following reasons:
1) The Cooperative Business model operates as a non-profit entity
2) DEC’s long term contract combines the buying power of 11 Cooperatives.
3) The managed energy portfolio includes:
a. Owned generation facilities
i. Base load
1. Nuclear
2. Coal
ii. Peaking
1. Gas fired
2. Diesel
b. Long term contracts
i. Base load
ii. Mid-merit (heat rate)
c. Day ahead purchases
d. Real time purchases
e. Fuel purchases/Fuel Hedges
f. Renewable energy products
4) Owned and market capacity purchases
5) Demand-side management options
6) Purchase decisions are made to balance long term price stability and limit short
term market volatility. The DEC load is not exposed to the market through a
single point in time RFP process
7) Hedging programs and philosophies
8) Low cost goals verses maximized profitability
9) Transmission delivery and congestion mitigation programs
The managed portfolio model for purchasing energy and capacity has optimized
the ability to minimize the cost of supply by providing options for supply type, timing,
fuel, magnitude of purchases and multiple suppliers.
I. b. Supply a significant portion of energy from ODEC owned assets within our
supply portfolio.
The best hedge against escalating and volatile energy prices is asset ownership
and managing the purchase of energy from your owned units verses the cost of power
purchased from the market. With the cooperative structure in place, the ODEC
generating units are producing energy and capacity for their members at an at cost basis.
The cost of energy purchased from these units consists of the cost of fuel, operations,
depreciation and interest, plus a 1.2 TIER (interest coverage requirements and patronage
capital contribution). This is a function of the Cooperative Business Model that is
employed at ODEC for their members which includes DEC.
When the market prices are less costly than the price of generation purchased
from our owned generating units we shift our purchases to the market. This occurs more
often during the non-peak times when the cost of power is lower and allows ODEC to
manage the average cost downward. In addition, ODEC owns approximately 1350 MW
of peaking capacity which provides a cap on the price we must pay for the majority of the
energy we need to purchase during peak periods.
As we manage our owned generation portfolio with other market instruments we
have been able to provide price flexibility to benefit our members. We need to practice
and continually review and adjust hedging policies to maximize our cost and reliability
performance in the market. That includes target ranges for energy and / or capacity
supplied from owned assets or long term contracts minimizing our exposure in the market
and maximizing our options to make a controlled decision on purchases or run options. A
ten year plan outlining our managed portfolio options and assets is outlined in the
Delaware Electric Cooperative Annual Planning Report on file at the Cooperative.
Reference:
DEC Annual Supply Planning Report
I. c.
Maintain a diverse mix of generation products to assure price and supply
flexibility and mitigate risk associated with single source generation.
Single sourcing of any product exposes the purchaser/owner to the risk of price
in-flexibility. Our strategy includes one of a combination of diverse resources and
purchasing instruments which allows us to manage our average cost lower. Some
examples of our owned generation and resource mix are outlined as follows:
Plant
Fuel
North Anna
Clover
Rock Springs
Marsh Run
Louisa
Total
Nuclear
Coal
Gas
Gas/oil
Gas/oil
Capacity
214 MW
441 MW
336 MW
504 MW
504 MW
1,999 MW
ODEC also incorporates long and short term contracts utilizing various designs
including base load, off peak wraps, heat rate, slice of system, load following and call
options to name a few. In addition, we purchase energy in the day ahead and in the realtime markets. Finally, we purchase fuels, natural gas, oil and coal to effectively reduce
the cost of energy generated by our power plants.
North Anna
Old Dominion Electric Cooperative owns an 11.6 percent interest in Virginia
Power's North Anna Nuclear Power Station in central Virginia's Louisa County. The
station's two generating units have a combined capacity of about 1,800 megawatts. The
first unit began commercial operation in June 1978, the second in December 1980. The
station was named for the North Anna River, dammed to form the 13,000-acre lake that
supplies cooling water to the station.
North Anna plays a vital role in supplying the needs of Old Dominion Electric
Cooperatives member's. The station cost approximately $1.3 billion to build and Unit 1
became operational in 1978 and Unit 2 in 1980.
The North Anna station continues to be among the lowest-cost nuclear generating
stations in the nation. The nuclear program at North Anna is rated as one of the safest and
most productive in the nation by the Nuclear Regulatory Commission and the Institute of
Nuclear Power Operations.
Clover Power Station
The Clover Power Station is the flagship of Old Dominion Electric Cooperative.
Old Dominion owns half of this 880-megawatt, advanced-technology coal-fired electric
generating station in south-central Virginia's Halifax County. The station was designed
and constructed by Old Dominion beginning in the late 1980s, and culminating with the
commercial start-up dates for Unit One in October 1995 and Unit Two in March 1996.
Virginia Power also owns half of the station, and is responsible for operating the station.
Of the station's $1.2 billion cost nearly one third – around $400 million – went to
advanced pollution controls, including scrubbers for removing 94 percent of sulfur
dioxide and baghouses with a 99.9 percent removal efficiency for fly ash. Clover was the
first base-load plant after the Clean Air Act Amendments of 1990 to be begin operations.
Today it remains one of the cleanest coal-fired power plants in the United States.
When its 50 percent ownership in the coal-fired Clover Power Station in southcentral Virginia is combined with its 11.6 percent ownership stake in North Anna Nuclear
Power Station, Old Dominion owns about 54 percent of the generating needs of its 11
member distribution systems. The other 46 percent is purchased from other utilities
through contractual arrangements, in which Old Dominion shops the energy marketplace
for the best deal for its member cooperatives.
April, 1992 marked the groundbreaking for the Clover Power Station, a joint
effort of Old Dominion Electric Cooperative and Virginia Power. When the first unit of
the two-unit, 880-megawatt, coal-fired power station went on-line in 1995, Clover
became the jewel of Virginia's utility industry. The second unit began commercial
operation in 1996. The joint ownership of Clover is but one of the station's many unique
characteristics. In a 50/50 partnership, Old Dominion was responsible for building the
station and Virginia Power for operating it once the station was complete. The utilities
share the generated power.
Clover power is transmitted throughout Virginia to meet the ever-increasing
electricity needs of the Commonwealth's growing population. Old Dominion provides its
share of Clover power to its 11 member cooperatives in Virginia, Maryland & Delaware.
Combined, these distribution co-ops serve more than 500,000 rural consumers. Old
Dominion's service area includes about one-third of Virginia's land mass and 10 percent
of its population. Because Clover is a "baseload" station, it runs 24-hours a day, seven
days a week to ensure a reliable supply of electricity to homes, farms and businesses.
Besides providing the electricity so vital to Virginia's future economic and
population growth, the Clover Power Station is providing a critical boost to the
economies of the areas surrounding the station. And, by committing $400 million to
pollution-control and other environmental technologies, Clover is enhancing the
environment by replacing power from older stations.
Once brought on-site, coal is burned to heat water to create steam. At Clover, this
means burning 314 tons of coal each hour to heat the water and create steam in the two
boilers that will reach 1,000 F. At the Clover Station, steam is collected in a 220-ton
steam drum located at the top of the boiler at a pressure of 2,400 pounds per square inch.
The steam is injected into the turbine causing the rotors to turn at 3,600 revolutions per
minute, creating mechanical energy. This energy is transformed into electricity by a huge
electromagnetic generator. Once created, the electricity voltage is increased by
transformers before it is sent out via the transmission system.
At its peak, the Clover Power Station generates about 880 megawatts -- 880,000
kilowatts -- of electricity. This could provide over 200,000 households with, reliable
electrical energy.
Clover Power Station ranked second lowest among U.S. coal-fired power plants
in sulfur-dioxide emissions, according to a report published by Power magazine. Clover
was also ranked in the top 50 U.S. coal-fired plants in efficiency and lowest nitrogenoxide emissions.
Rock Springs
The decision to proceed with power plant construction at Rock Springs came after
nearly four years of study and review regarding possible site selections. Old Dominion
focused on several different sites in Virginia and Maryland, before deciding to explore
constructing this peaking plant in Cecil County, Md.
Construction on the plant began in October of 2001. The Rock Springs facility
was completed in June 2003 and accepted by Old Dominion for commercial operation
shortly thereafter.
The facility is located on approximately 114 acres, 98 in Rock Springs, Md., and
16 in Lancaster County, Pa., All of the development is on approximately 30 acres of the
Cecil County portion of the property.
This is a 680-megawatt power station consisting of four combustion turbines
(CTs), equipped with the best available emission-control technology. Old Dominion and
North American Energy Alliance, Inc. own two CTs each. The remainder of the facility is
jointly owned by the two companies.
The station is designed to provide cost-effective, environmentally friendly and
reliable electric capacity for the three Old Dominion member distribution cooperatives on
the Delmarva peninsula during the hottest and coldest days of the year, when electricity
usage is at its peak.
These three distribution cooperatives, Choptank Electric Cooperative (Denton,
Md.), Delaware Electric Cooperative (Greenwood, Del.), and A&N Electric Cooperative
(Parksley, Va.) serve approximately 170,000 homes, businesses and farms in one of the
fastest-growing regions on the East Coast.
Marsh Run
In April 1999, Old Dominion Electric Cooperative announced that it was
exploring power-plant construction options at Marsh Run, located in Fauquier County,
near the town of Remington. This decision came after nearly four years of study and
review regarding possible site selections. The Marsh Run facility helps to meet future
peak-electric generation requirements for Old Dominion’s distribution cooperatives.
Peak-electric generation usually is needed by utilities when electric demands are at their
highest, likely on the hottest and coldest days of the year.
The Marsh Run site is located about 2 miles east of Remington, Va., in Fauquier
County. Dominion Virginia Power’s Remington Project is approximately 1 mile from the
cooperative project. The Marsh Run site was chosen because of its close proximity to
natural gas and electrical transmission lines.
Work on the Marsh Run project began June of 2003 and has been operational
since the summer of 2004. The facility consists of three simple-cycle combustion turbines
capable of producing 510 megawatts of electricity. A simple-cycle combustion turbine
consists of a compressor, turbine and generator. Ambient air is compressed to a higher
pressure in the compressor, mixed with fuel and ignited in the combustors, the resulting
expanded gas drives the turbine. The turbine turns the generator and electricity is
produced.
The generation units burn natural gas as the primary fuel, with low-sulfur fuel oil
as a backup source. Gas-fired combustion turbines are ideal because they are able to
produce electricity quickly to meet peak-power requirements with low emissions when
the demand for electricity is the greatest, like on the hottest and coldest days of the year.
Because this facility is a peak-generation power plant, it will run only the equivalent of
57 days a year. The plant site consists of three combustion turbines (each with its own
stack, generator, and step-up transformer), water storage tank, fuel oil storage tanks,
electrical substation, maintenance/office building and other ancillary facilities. The plant
is unique in its use of the brown water discharged by the Fauquier County Water and
Sanitation Authority. Rather than using ground water, the plant will evaporate the
wastewater to increase the output of the turbine and therefore benefit the water quality of
the Rappahannock River.
As a generation cooperative serving eleven member distribution cooperatives in
Virginia, Maryland and Delaware Old Dominion’s peak demand on the Virginia
Mainland is expected to more than double by 2017, according to integrated resourceplanning studies. Because the generation component in the utility market is deregulated,
Old Dominion strongly believes it must secure reasonable and cost-efficient energy
sources through contracts, alliances or generating stations to meet its future power supply
needs. With more than 362,000 metered cooperative customers on the Virginia mainland,
Old Dominion must focus on meeting future peak-generation capacity needs today.
Otherwise, individual electric cooperative customers could face a future of higher electric
bills and decreased power reliability.
The peaking power generated from the Marsh Run facility will be dedicated to the
needs of Old Dominion’s eight distribution cooperatives on the Virginia mainland.
Louisa County
The decision to proceed with power-plant construction in Louisa County came
after nearly four years of study and review regarding possible site selections. Old
Dominion focused on different sites in Virginia and Maryland before deciding to explore
building a peaking plant in Louisa County.
Construction began on the Louisa County facility in June of 2002, and it began
commercial operation in June of 2003. This plant consists of five simple-cycle
combustion turbines with a total potential output of 510 megawatts. A simple-cycle
combustion turbine consists of a compressor, turbine and generator. Ambient air is
compressed to a higher pressure, mixed with fuel and ignited in the combustors, the
resulting expanded gas drives the turbine. The turbine turns the generator, which
produces electricity.
The plant site includes the five combustion turbines (each with its own stack,
generator, and step-up transformer), a water storage tank, fuel oil storage tanks, an
electrical substation, a maintenance/office building and other ancillary facilities.
These combustion turbine units burn natural gas as the primary fuel, with lowsulfur fuel oil as a backup source. Gas-fired combustion turbines are ideal because they
are able to produce power quickly with low emissions when the demand for electricity is
the greatest, like on the hottest and coldest days of the year. Because this facility is be a
peak-generation power plant, it only operates approximately 75 days a year, typically on
the hottest and coldest days of the year.
As a generation cooperative serving eleven member distribution cooperatives in
Virginia, Maryland and Delaware, Old Dominion’s peak demand on the Virginia
Mainland is expected to more than double by 2017, according to integrated resourceplanning studies. Because the generation component of the electric utility market is
deregulating, Old Dominion strongly believes it must secure reasonable and cost-efficient
energy sources through contracts, alliances or generating stations to meet its future power
supply needs. With more than 362,000 metered cooperative customers on the Virginia
mainland, Old Dominion must focus on meeting future peak-generation capacity needs
today. Otherwise, individual electric cooperative customers could face a future of higher
electric bills and decreased power reliability.
The peaking power generated from the Louisa County facility is added to the Old
Dominion power grid to serve its nine member distribution cooperatives on the Virginia
mainland.
I. d. Identify and investigate ownership / contractual relationships with new and
existing generation facilities capable of meeting our energy and capacity needs
within our managed portfolio.
Generating sites, generation and long term contracts are limited commodities.
Anytime one of these resources is made available ODEC will engage in a valuation of the
asset and take appropriate steps to place a bid if it fits into our generation plans. ODEC
typically does not own and develop facilities on its own but works very well as a partner.
Developing strategic alliances with potential business partners will be necessary to make
the investment in and management of generation assets economically viable.
Several of the ODEC generating assets are jointly owned.
Sites for future generation within our service territory have additional value in
increasing reliability of service and reduction of additional costs due to the limited
transmission infrastructure to deliver power from the market. New generating stations on
the peninsula may never be developed due to the environmental and physical barriers.
The re-powering of existing sites to accommodate cleaner and larger facilities appears to
be a logical option.
In early 2008 ODEC confirmed it is reviewing the feasibility of constructing a
base load power generation facility on either a 1,600-acre site in Surry County, Va. or a
1,200-acre site in Sussex County, Va. ODEC, which has previously built generation
facilities in Halifax, Louisa and Fauquier counties in Virginia, has identified the need for
a base load facility to meet the around-the-clock electricity needs of ODEC’s nearly
390,000 member-owners in Virginia. In addition to the 10 Virginia electric cooperatives
ODEC provides with wholesale power, it also supplies power to an electric cooperative in
Delaware and another on the Eastern Shore of Maryland. ODEC expects the electricity
needs among its member-owners to double in the next 10 to 15 years. Wholesale
contracts help ODEC meet 55 percent of its members-owners’ energy demands.
However, wholesale prices are driven by the price of natural gas, which has risen by 75
percent during the past five years. “With the average cost of wholesale power purchases
increasing significantly during the past few years, and with every indication this trend
will continue in the future, there is a clear need to provide Virginians with a more costefficient and predictable source of electricity through base load generation,” David
Hudgins explained.
“It can take eight to 10 years to bring a new base load generation facility on-line.
Consequently, we have an obligation to take steps now to plan for long-term electricity
needs,” said Hudgins. “We are in the very early stages of an 18-month environmental
study to determine if these sites are suitable to support a generation facility and have not
identified the technology or determined the optimum size of such a generation facility.”
After the preliminary environmental studies are completed and a site is chosen, ODEC
will work closely with local officials, businesses and residents throughout various phases
of the facility’s development. ODEC also plans to hold open house meetings to explain
the studies’ findings and address any questions that local residents might have about the
potential project. “Our organization has a proven track record of building power
generation capacity that balances the need for additional electricity for our growing
Virginia economy with being a responsible partner in the communities where we
operate,” stated Hudgins. “ODEC is committed to working with our member-owners on
continued efforts toward energy efficiency and peak load reduction and is focused on
developing future generation that will provide reliable and economical electricity in an
environmentally responsible and safe manner. This includes our continued examination
of renewable energy and emerging technologies to address energy and environmental
issues.” Both sites were chosen for final assessment after ODEC conducted an extensive
siting study of potential locations in the Mid-Atlantic region. The study found that these
two sites meet important criteria such as access to transmission lines and rail
transportation, and provide a large enough footprint to accommodate a plant without
encroaching upon environmentally sensitive areas.
DEC continues to investigate new generation ownership and/or power purchase
options as a result of recent modifications to the wholesale power contract that permits up
to 5% of capacity and energy may purchased/generated directly by the Cooperative. DEC
owned assets could take the form of renewable projects, small base load generation or
peaking units.
Additionally the Cooperative continues to evaluate the potential for growing the
Cooperative by expanding its distribution service territories outside current certificated
areas. The addition of industrial load to our customer base should significantly improve
our load factor and reduce our overall cost of power.
North Anna 3
As noted earlier Old Dominion Electric Cooperative has a 11.6% ownership of
the North Anna Nuclear Power Station. Dominion has filed an application with the
Nuclear Regulatory Commission for a Combined Operating License (COL) for North
Anna Unit 3. ODEC has partnered with GE Hitachi Nuclear Energy and Bechtel Corp. on
the 1,520-megawatt project, which could generate enough electricity for 375,000 homes
at peak demand. The GE ESBWR is an advanced Generation III+ design that
incorporates a combination of reactor passive safety features, plant security and
economic, reliable operation. The North Anna site will be the reference site for
demonstrating the ESBWR technology.
The Nuclear Regulatory Commission on November 20, 2007 granted an early site
permit to Dominion for North Anna, deciding that the site is suitable to support an
additional reactor. An Early Site permit provides a 20-year option for Dominion to
consider nuclear among other potential generation sources. Dominion Energy is one of
the nation’s largest energy producers, the company currently owns and operates four
nuclear power stations with a capacity to produce 5,726 megawatts of emissions-free
energy.
The ODEC/DEC 11.6% ownership of North Anna 3 represents 176 megawatts of
additional capacity.
Reference: Old Dominion Press Release January 2, 2008 ‘Old Dominion Electric
Cooperative To Investigate New Electric Generation Sites in Surry, Sussex Counties”
I. e. Develop and update long range generation and transmission plans capable of
supplying the peninsula to assure a safe, reliable and cost competitive supply for a
minimum 20 year period.
Old Dominion Electric Cooperative has an extensive long term power supply
planning process titled Future Resources for Energy and Demand (FRED). The FRED
process provides an integrated power supply planning model which evaluates load
forecasts, generation additions and retirements as well as contract and purchase
agreements. This plan is reviewed annually and adjusted when a change in the resource
requirements occur.
This process provided the foundation for the Old Dominion Board of Directors to
make decisions regarding the best long-term approach of meeting the requirements of tis
members. The 2007 FRED process provided the information necessary to assist the
Board in approving ODEC’s participation in the North Anna nuclear station expansion as
proposed by Virginia Power.
In order to accurately and efficiently plan for new generation, transmission and
distribution requirements DEC, as well as the 10 other cooperative members of ODEC,
annually engage in an extensive Power Requirements Study (PRS). The study, unique to
each individual cooperative provides a comprehensive 15 year projection for consumers,
seasonal peak loads, and energy sales. The annual forecast provides the foundation for
DEC’s financial forecast and revenue requirements.
Reference:
Future Resources for Energy and Demand (FRED)
DEC Power Requirements Study
I. f.
Work with and provide technical, political and public relations support for
the design and installation of new bulk transmission paths (MAPP and others) into
our service area.
DEC and ODEC have been supporters of the MAPP 500KV Transmission project
designed by the PHI companies to provide a new power pathway onto the peninsula. The
project utilizes existing rights of ways through most of Delaware and where ever possible
through the remaining sections of the transmission line. The path provides for a greater
transfer of power including renewable energy sources from off the peninsula onto the
peninsula. The 500-230 kV step down transformers at Vienna and Indian River and the
affiliated 230kV lines are also critical to utilizing this additional transfer capability from
off the peninsula to on the peninsula. DEC and ODEC will continue to support the need
for these affiliated projects since they will provide economic and reliability benefits to
our member-owners.
More specifically, the path allows for more direct access to nuclear assets at North
Anna, Calvert Cliffs, Hope Creek and Salem. At this time, an application for the North
Anna 3rd Reactor has been filed with the NRC and two of the other plants have also
announced expansion plans. The project will not only allow for the more efficient
transfer of power onto the peninsula but it will improve reliability for all customers on
the peninsula.
Based on preliminary studies on the impact of MAPP to ODEC and its members
in energy costs savings could exceed $13 million on an annual basis. This equates to
energy savings of just over 6% for ODEC and DEC.
DEC’s support of the MAPP project will extend to our legislature and regulatory
authorities as necessary to see the transmission project succeed and the Cooperatives
members and the customers on the Delmarva Peninsula acquire additional reliability and
price stabilization.
DEC continues to offer support and participate in public and community meetings
held within our service territory and have the potential to impact our membership.
Reference:
Communications to PJM in support of MAPP
I. g. Continue the development of congestion mitigation plans to assure efficient
operation of the transmission system on the peninsula.
ODEC and DEC work together to analyze, design, and implement congestion
mitigation plans throughout all of the Cooperative Service Territory to assure reliable,
cost efficient transfer of power to the end user.
The cooperatives were very successful in a 2001 ruling at the Delaware Public
Service Commission which set standards for levels of congested hours of operation on
the Delmarva Transmission system. In addition, the settlement provided for the analysis
and treatment to reduce congested operations through economic upgrades including relay,
equipment ratings and operational changes. ODEC believes that this settlement has not
only reduced the cost of power on the peninsula, but has also improved reliability.
Old Dominion’s future resource plans are continually evaluated. A major factor
included in such evaluations is the congestion risk. Old Dominion has paid congestion
costs amounting to approximately $83 million from 2000 through 2007 (net of FTR
values). DEC’s savings in congestion costs amount to almost $7 million over the same
period.
Congestion within the Delmarva Transmission zone improved with the reduction in
the number of hours of congestion as outlined below:
Year
2002
2003
2004
2005
2006
2007
2008
Total Hours Congestion
Delmarva Peninsula
1,041
692
716
652
405
414
275
Old Dominion Electric Cooperative actively monitors congestion points and
facilities on the Delmarva Peninsula and performs analytical studies to identify potential
solutions that might reduce or eliminate congestion. The economic transmission program
at PJM is the mechanism for bringing economic transmission facilities from the study
arena to being in service. This program is still in its infancy with the cost allocation issue
the biggest remaining hurdle to its full implementation.
I. h. Monitor and develop analytics identifying proper hedging tactics for
wholesale power products within our supply area.
DEC through our association with ODEC monitor pricing for numerous power
supply instruments including fuels, long term block purchases, wraps, day ahead, and
real-time or spot market purchases. We have contracted with ACES Power Marketing to
support our purchase/hedging decisions helping the Cooperatives provide a cost efficient
portfolio of power purchases.
ODEC staff continually monitors the day ahead and real time markets developing
trends as to when and how to cost effectively purchase power in those markets and the
economic dispatch of our generating resources. ODEC has established a detailed hedging
model and risk evaluation to facilitate purchases at the more cost efficient times through
the most cost effective instruments. ODEC continuously marks our performance to
market and makes adjustments to our philosophies and practices according to the goals
and mission of the Cooperatives.
During the volatile energy markets of the late 1990s, several generation and
transmission cooperatives, including ODEC, envisioned the creation of a new energy
marketing company. The purpose of this new energy marketing company would be to
provide wholesale energy risk management services. The Alliance for Cooperative
Energy Services Power Marketing, or ACES Power Marketing (APM), is the direct result
of the dedicated efforts of these forward thinking energy cooperatives.
Since its formation in February 1999, APM has become a nationally recognized
wholesale energy trading and risk management firm that has maintained its customer
oriented focus of providing quality service. Today, APM is one of the largest physical
electricity traders in the nation.
Although APM was originally created by and for cooperatives, its energy risk
management services are applicable to and will provide value for a broad range of
customers including Independent Power Producers, Investor-Owned Utilities, Merchant
Energy Firms, Municipal Power Utilities, and other energy industry participants.
I. i.
Update and extend our wholesale power contract to assure long term safe,
reliable and cost competitive energy supply for our members.
DEC presently maintains an all requirements long term contract with ODEC for all
of power supply needs. The contract provides power to DEC and other member
cooperatives at its cost of providing power. This contract provides ODEC with the
financial support to build, and operate power generation and transmission facilities as
well as purchase power on the open market. Long term all requirements contracts are
viewed very favorably by lending institutions and can have an enormous impact on cost
of debt and a positive impact on retail rates.
We recently concluded negotiating a re-stated and extended contract to provide for
the construction and purchase of energy supply through the year 2054. This will enable
ODEC to obtain cost effective financing to build future generation plants. As ODEC
moves forward in partnership with Dominion Virginia Power in the expansion of the
North Anna Nuclear facility the extension of the all-requirements contract should result
in favorable credit arrangements.
ODEC continually negotiates with power suppliers, developers and generation
owners to procure future power supply options and facilities which we feel will meet our
supply needs.
By virtue of a restated wholesale power agreement DEC now has the ability to
procure up to 5% of capacity and energy needs through owned generation and/or bilateral
purchase agreements with wholesale suppliers creating additional independent
opportunities for DEC.
Reference:
Summary of Changes to 2007 Wholesale Power Contract
Crossroads II Accord
DRAFT Second Amended and Restated Wholesale Power Contract
Policy on Addition of Non-Native Load
I. j.
Provide renewable power supply options to members maintaining our power
supply philosophies.
DEC developed a process with our Legislators to provide member options for the
purchase of renewable energy credits on a monthly basis. DEC has contracted with
renewable energy suppliers to provide these options at a below market price for the
renewable credits or tags. As of December 2008 148 members have subscribed to our
Renewable Energy Rider. Since the programs inception in 2006 the Cooperative has sold
in excess of 3,000,000 kWh of renewable energy credits.
ODEC and DEC’s long term strategy is in fostering the creation and development
of a national cooperative whose objective is to enable the Cooperative program to
broadly pool the ownership and benefits of renewable resources in order to meet
renewable portfolio legal requirements, and goals and to create an entity that provides ongoing opportunities for accessible and competitively priced renewable resources for all
Cooperatives in a cost effective manner. This Cooperative will bundle the buying power
of all of the cooperatives who elect to participate and they will develop these resources
where they make operational and financial business sense. We will be looking at wind,
bio-mass, solar, and hydro to name a few and will have the funding and sales channels to
make this a viable business opportunity for our members.
Alternative options may involve direct ownership or joint ownership of small
scale renewable generation projects located in Delaware or on the peninsula.
In addition to offering renewable energy DEC participates in the Department of
Energy’s Voluntary Reporting of Greenhouse Gases Program by completing Form EIA1065 annually.
In July of 2008 Old Dominion Electric Cooperative (ODEC) signed a long-term
contract under which ODEC will purchase up to 70 megawatts (MW) of wind-generated
power.
ODEC, the primary power provider for 11 member electric distribution
cooperatives in Delaware, Maryland and Virginia, will purchase the energy output and
renewable energy credits (RECs) from AES’s Armenia Mountain Wind Energy Project in
north central Pennsylvania.
Plans call for the first phase of the Armenia Mountain Wind Energy Project to be
completed by November 2009 and to initially produce 100.5 MW of electricity utilizing
67 General Electric 1.5sle wind turbines. AES may add an additional 26 turbines in a
second phase of construction that would boost the output of the project to 140 MW.
AES Corporation was chosen as one of the winning bidders following a request for wind
power proposals issued by ODEC and Delmarva Power earlier this year. The contractual
agreement between AES and ODEC was approved by ODEC’s board of directors in June.
Under the terms of the contract, delivery of wind energy and renewable energy credits to
ODEC could begin as early as November 2009.
“This contract with AES for wind generated energy is part of ODEC’s long-term
plan to further diversify our portfolio of power supply resources for our member
distribution cooperatives and the over 500,000 consumer-members they serve,” said
Jackson E. Reasor, ODEC president and CEO. “Economically viable renewable
resources, such as this project, will play a growing role in our power supply
diversification efforts.”
In 2008 ODEC continued expanding its portfolio of renewable energy resources
through the purchase of power from two new generation projects in Maryland and
Virginia.
ODEC has contracted to purchase all of the electricity generated by the Worcester
County gas-to-energy project in Worcester County, Md. and by the Falling Spring
Hydroelectric Project in Alleghany County, Va.
Located in Newark, Md., about 15 miles southwest of Ocean City, the Worcester
County gas-to- energy project will utilize the methane produced at the 200-acre
Worcester County Central Landfill Facility to initially produce 1 megawatt (MW) of
electricity. The landfill is operated by the Worcester County Department of Public Works
while the gas-to-energy project is being developed by Curtis Engine and Equipment Co.
of Baltimore and owned by Worcester County Renewable Energy LLC. Methane, which
is naturally produced as landfill waste decomposes, is collected via a series of collection
pipes and burned in a reciprocating engine to generate electricity.
In addition to using a renewable fuel source, the project’s capture of methane
significantly reduces the net emissions of greenhouse gases from the landfill. Plans are to
add generating units over the next year to generate up to 3 MW of electricity from the
facility by 2009.
ODEC will also obtain up to 1 MW of energy from a newly reconstructed facility
at the base of the 150-foot Falling Springs waterfall near Route 220 in Alleghany County,
Va., approximately 12 miles south of the Homestead Resort. The Falling Springs
Hydroelectric Project consists of twin pipes which transport the water a mile downhill
from the base of the falls where turbines have been installed to produce electricity.
Significant work was performed by Hydro FS, LLC to refurbish this facility, which dates
back to the early 1900s.
“Community-based renewable energy projects are important to ODEC and its
member distribution cooperatives as we strive to continue providing our memberconsumers with reliable, affordable and environmentally responsible power,” said Lisa
Johnson, ODEC’s senior vice president for power supply.
“While these two projects can provide only a small percentage of our total
generation requirements, they provide additional resource diversity for us. ODEC will
continue to look for such renewable energy projects for inclusion in our portfolio of
generation resources throughout the three-state territory we serve,” Johnson added, noting
that both new facilities are located within the areas served by two of its member
distribution cooperatives.
Reference:
Draft National Renewables Cooperative Business Plan
DEC Renewable Energy Rider (RER)
DOE/EIA Recognition
ODEC Press Release
I. k. Continue to foster and develop transmission delivery point interconnection
and operating coordination among peninsula electric utilities through the Delmarva
Peninsula Planning Association (DPPA).
DEC and other local utilities have fostered the idea to develop joint planning
groups to meet our transmission planning needs through the most efficient and cost
effective processes. Working under a Charter the peninsula utilities meet on a regular
basis to mutually discuss and develop transmission plans and work on distribution
delivery-point facility upgrades and additions for our service areas. The group is called
the Delmarva Peninsula Planning Association (DPPA), and consists of the Cooperatives,
investor owned utility and municipal utilities on the peninsula.
Members meet to discuss transmission expansion plans, maintenance issues,
interconnection of delivery point facilities, reliability, operations and congestion to
formulate ways which we can work together to more efficiently operate the entire
transmission system on the peninsula. Additionally members participate in the PJM
Regional Transmission Expansion Plan (RTEP) process and the Transmission Expansion
Advisory Committee (TEAC) to recommend and support transmission upgrades through
PJM as these are the PJM committees that drive new transmission throughout PJM.
Reference:
Delmarva Peninsula Planning Association Charter
II. Distribution Delivery
System Plan
II. a. Develop, implement and utilize system voltage control options to reduce peak
energy requirements.
DEC has implemented a system voltage reduction plan to help reduce peak load
and energy usage during peak periods. Utilizing existing technology capabilities DEC
operations programmed the reduction of system voltage at our substation transformers in
a range of 2.5% to 5%. At the same time DEC is freezing existing line regulators in place
to not allow them to adjust the voltage upward during voltage control periods. The
effective savings from this program average approximately 8 MW monthly and an annual
savings approaching $1,000,000.
The reduction of voltage up to 5% has shown no negligible impact on DEC’s
member-owners. The Cooperatives maintains a voltage bandwith of +/- 5% of 120 volts
and this plan would be constructed such that the low end of the bandwidth would not be
violated. Installing controls for the remote freezing of line regulators is continuing with
more than 50% of the first regulators out from the substations completed at this time.
II. b. Extend cycle times for demand side management appliances (central air units
& hot water heaters) to reduce peak energy requirements.
DEC presently cycles its load management central air conditioning units off on
cycle times of 15 minutes every half hour during the load control period and water
heaters 35 to 60 minutes every two hours during the load control period.. The air
conditioning cycle times were increased in 2008 from 7½ minute that we have employed
since the beginning of the program in 1988.
This has reduced the peak capacity and energy requirements and saved an
additional 50% in the program. DEC had believed that there will only be a minimum
number of members who even notice the increased cycle times. Surprisingly, during the
2008 increased cycle times, DEC did not receive any complaint calls on the increased
times. This program has saved our members an additional $500,000 annually in reduced
capacity costs from our power supplier.
II. c.
Reduce distribution system losses - Losses are the decrease in usable power or
the energy lost through the delivery system of wires, transformers, meters, etc to
member/owners.
•
Utilize energy savings designs for exit feeders - By using DEC’s engineering
analysis software, Windmil, we plan to determine losses at ½ mile and 1 mile
from each station exit. By replacing the current conductor with a larger one, on
Windmil, the losses can be calculated and a determination on whether it is cost
effective and what the payback to upgrade the conductor would be.
•
Utilize low loss transformers - Since 1995, DEC has been performing loss
evaluations for the purchase of distribution transformers. Loss evaluations
determine the economic benefit of purchasing a more efficient transformer. Very
efficient low loss transformers have a higher-first-cost versus a standard “off the
shelf” unit which has a lower first cost. A standard transformer has much higher
losses and is not as efficient. Even though a low loss transformer is more
expensive to purchase, it delivers lower losses to the electrical system and
provides much greater economic savings over the life of the transformer. Loss
evaluations also enable DEC to compare the offerings of competing
manufacturers during a transformer “bid”. This aids in making the best purchase
choice among competing transformer manufacturers.
The U.S. Department of Energy (DOE) has recognized that energy
conservation standards for most distribution transformers will result in significant
conservation of energy. Because of this, in October of 2007, the DOE adopted
conservation standards for distribution transformers which mandate the use of
higher efficiency transformers. The applicable date for the more stringent
requirement is January 1, 2010. This means that in 2010, standard “off the shelf”
transformers with higher losses will no longer be available to electric utilities.
It is important to note that DEC’s current loss evaluation technique either
meets or exceeds the new DOE requirements.
•
Continuously review and balance circuit and transformer loading - DEC
continuously monitors phase and circuit loadings to minimize losses and
maximize reliability. Seasonally, and as loadings change, DEC rebalances phases,
circuits and substations.
Engineering continuously refines transformer loading requirements and monitors
loading of commercial accounts with respect to their transformer size thereby
limiting losses associated with oversized transformers and assuring reliability is
maintained with correctly sized transformers.
•
Continue the deployment of our electronic metering program - Technological
advances in the area of metering have evolved from the traditional electromechanical meter to an electronic solid state meter. With no moveable parts (disc,
gears, etc.) these new electronic meters can save as much as two percent in losses.
While DEC has utilized electronic meters for its largest commercial accounts for
years we embarked on an ambitious project several years ago to replace all
electromechanical meters with new electronic solid-state meters. The impact of
limiting losses on the system can be significant. DEC’s 30 year system average
loss is 8.21 %. Due in part to the conversion to electronic meters, as well as other
distribution system improvements, our most recent three year average is 6.05%.
Depending on DEC’s cost for power the annual savings can exceed $1,000,000
and eliminate the waste of 25,000,000 kWh’s per year.
kWh Saved
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Savings
Losses/kWh
Losses/%
Annual
Cumulative
Annual
Cumulative
42,831,983
56,204,373
64,043,423
54,200,304
66,555,247
47,531,982
68,872,858
73,377,354
79,477,089
66,385,503
59,351,538
87,699,676
82,342,232
5.97%
7.76%
8.36%
6.68%
7.76%
5.39%
7.16%
7.16%
7.32%
5.64%
5.20%
7.01%
6.65%
16,117,441
3,274,937
(1,151,161)
12,411,744
3,864,084
24,843,516
10,089,715
10,749,484
9,677,825
30,324,631
34,468,261
15,134,459
19,382,525
14,233,196
17,508,133
16,356,972
28,768,715
32,632,799
57,476,315
67,566,029
78,315,513
87,993,338
118,317,969
152,786,230
167,920,689
187,303,213
$ 847,261
$ 169,769
$ (59,663)
$ 614,765
$ 204,782
$ 1,392,514
$ 537,717
$ 589,924
$ 543,508
$ 1,848,577
$ 2,412,173
$ 1,133,336
$ 1,567,311
$
747,193
$
916,962
$
857,299
$ 1,472,064
$ 1,676,846
$ 3,069,360
$ 3,607,077
$ 4,197,001
$ 4,740,509
$ 6,589,085
$ 9,001,258
$ 10,134,594
$ 11,701,905
II. d. Continuously review, redesign and re-program capacitor controls and
installations to maximize power factor and system delivery efficiencies.
DEC monitors its power factor
and uses computer modeling tools to
forecast the need for line capacitors to
compensate for poor power factor on a
delivery point basis. Capacitors improve
delivery efficiency in several ways:
1. Reduction of Line Losses by
lowering the reactive current
flowing in the distribution
system,
2. Reduction of KVA demand on
substation transformers thereby
allowing the transformers to
serve a greater ‘real’ load,
3. Improvement of the voltage
profile along a circuit which
minimizes the number of line
regulators that need to be
installed and,
4. Avoid “power factor charge”
from ODEC by keeping power
factor above their billing level.
To date we have installed over 200
switched capacitor banks that operate
locally based on the operational data
from their controls.
This data is
monitored on a bi-annual basis with the
control settings revised in order to adapt
to the changing customer profile of our
system. For 2009, DEC has purchased a
computer program that allows control of
a capacitor bank from SCADA data
based on responses to the associated
substation power factor. To date five
banks are being switched utilizing this
program with an additional fifteen more
being controlled by mid year, 2009.
II. e. Continue to deploy residential load management switches to control peak
energy usage.
For our residential members DEC offers a Load Management Rate that permits
the Cooperative to install a switch on the member’s water heater and/or central air
conditioning unit at no cost to the member. DEC actively controls this switch turning the
member’s water heater and/or air conditioner off, for brief periods (35 to 60 minutes per
hour for water heaters and 15 minutes per hour for air conditioners) during peak load
periods. In return the member receives a $2 credit on their monthly bill for each appliance
controlled.
Through 2008 DEC has installed 19,699 switches controlling 24,659 appliances
(air conditioners & water heaters) and continues to promote, market and install
approximately 1,000 additional switches annually.
The total number of appliances under control represents approximately 15,477
kW of load that the Cooperative can reduce during peak demand or high price periods
and represents approximately 4.4% of the total DEC summer peak system load.
From a broader prospective DEC’s demand side management programs allow the
Cooperative to operate and manage the distribution system in such a way that maximizes
reliability thereby extending the benefit of favorable rates to enhanced reliability through
system operations. DEC utilizes the active load management system in response to peak
demand periods, requests from the regional transmission operator PJM, to reduce demand
during emergency conditions on the bulk transmission system on the Peninsula thereby
helping to preserve the integrity of the system and minimize the need to resort to rolling
blackouts during emergency conditions.
II. f. Continue to deploy interruptible load management switches for agricultural
and commercial members to control peak energy usage.
The nature of DEC’s service area and the demographics of our membership
compel DEC to offer rates for our agriculture community that provide for members
willing and able to alter their usage patterns during peak periods in exchange for a lower
rate.
The cooperative offers one specific load management rate for irrigation systems
and a second rate that is available to irrigators, poultry farmers, and other qualifying
commercial accounts. Both rates offer economic incentives for restricting operations and
energy consumption to off peak periods.
As an alternative to several traditional rate designs DEC offers the Irrigation –
Demand Off Peak (IR-DOP) rate for irrigators who are willing and able to restrict their
electric usage to pre-determined non-peak times. This particular rate requires that the
member react to restrict operation during preset periods or be billed at a higher rate. DEC
does not actively manage control periods.
Through 2008 DEC has 43 members signed up for the IR-DOP rate representing
an estimated annual average monthly peak demand of 138 kW.
DEC also offers an active program for our irrigation, poultry farms, as well as
other agriculture and non-agriculture commercial accounts with the Large Commercial –
Controlled Load (LC-CL) rate. Here, DEC installs a switch on the member’s equipment
that remains under the control of DEC. The Cooperative turns off such equipment during
peak, high priced periods utilizing the same technology employed with our residential
load management program. Through 2008 DEC has 408 members signed up for the LCCL rate and representing approximately 10,723 kW of load under control.
approximately
Together the total load managed under DEC’s rates and programs is
17,904 kW/month or 5.1% of DEC’s historical peak load.
II. g. Continue to review and refine design practices to capture infra-structure and
equipment efficiencies.
1.
Transformer utilization
2.
Transformer and streetlight locations
Each new three phase service is evaluated by supervision to determine the best
transformer size. We will develop an automated feature for the field engineers to use, in
Stakeout, to automatically size transformers based on industry criteria.
DEC continues to refine the process of development infrastructure design to
minimize the number of transformers used, thereby minimizing capital investment, and
no load losses.
DEC has reviewed the tariff regarding street lights. One of the issues that was
raised was the need for placing lights closer to a transformer, to eliminate our exposure to
cuts as well as cost of installing lights at a distance away from the source.
II. h. Continue the deployment of our AMR/AMI to minimize field trips saving
energy and delivery costs and reducing losses.
DEC has developed and is in the process
of implementing the installation of smart
meters on every single phase 200 and
320 amp small commercial and
residential locations, within our service
territory. At the present time we have
smart meters at 60,000 member locations
and plan on completing the installation
of the targeting member group of 80,000
by the end of 2009. There is no separate
charge for the program and there will not
be any rate recovery increase to our
membership for this program.
The Smart Meter program also
known as Automated Meter Reading
(AMR) is fully cost justified base on the
operational efficiencies achieved from
the program. Some of the savings are
achieved as outlined:
•
•
•
•
•
Increased efficiency of the meter
in recording actual kWh usage.
Decreased meter reading
resources required to read
meters.
Reduced vehicles required to
read the meters.
Improved load management
signals for our demand side
management program.
Improved reliability achieved
through the fine tuning of the
•
•
•
•
distribution system to transmit
the signals to and from the AMR.
Reduced field trips for meter rereads and succession readings.
On demand readings for
members.
On demand voltage and current
profiles.
Outage management and
momentary reporting
capabilities.
The Smart Meter system we
selected works on the same platform that
our SCADA and Load Management
systems work on and provide for the
ability to utilize existing infra structure,
technology and provide for an upgrade
in technology in some instances.
Finally, the other two systems as well as
our OMS system is enhanced through
the integration of the Smart Meter
system.
II. i. Continue to utilize our information technology systems to promote
operational efficiencies across the enterprise.
DEC has set a goal to utilize our information technology systems to improve
operational efficiencies across our entire enterprise. Programs which have been
implemented include voltage reduction, demand side management capacity
improvements, outage management, inventory control, and delinquent account
management to name a few. In addition, the savings must be quantified and reported
monthly.
II. j. Investigate and develop opportunities to utilize time of use rates to shift
energy and demand usage patterns.
DEC has had time of use rates and interruptible rates in place in the past. Our
interruptible rate program consists of dropping commercial systems during peak periods,
while our residential program consists of controlling over 24,000 appliances. We are
continuing with the development and implementation of these programs.
We have recently started the development for new time of use rate programs for
both commercial and residential members. In the past we have had zero participation
with our residential population in shifting load to off peak periods. However, we will try
again to achieve a value for our members as they request options.
Currently DEC has a majority of the poultry growers and irrigators participating
in off-peak rates that provide significant and direct savings to those participating
members as well as reducing capacity charges to the Cooperative thus providing savings
to all member-owners.
II. k. Provide real time energy usage to homes using smart meter technology.
DEC has asked our load management and smart meter manufacturer to investigate
the development of an energy monitor for the home which could poll the smart meter to
record and notify the member when and how much power they are using. The monitor
would be equipped to provide real time and estimated monthly information regarding
usage, cost, peak periods and possible monthly savings achieved. The program is in the
development stages and is designed as a both a demand side management tool and would
serve as the foundation for exploring time-of-use rates and off-peak rates.
Member
Conservation
And
Energy Education
Plan
III. a Promote the “Beat the Peak” program to encourage members to join in
reducing energy during peak energy periods to mitigate demand expense, improve
load factor and reduce the average cost per kWhr. Develop sustainability to defer
long term capacity additions and help mitigate the environmental impacts during
peak times.
Identify the merits of a “Beat the Peak” Program marketed to our membership
through the monthly newsletter, our website and bill stuffers. Peaks typically occur daily
from 7 to 9 am and 4 to 6 pm when our members use the greatest amount of electricity at
any one time. Our “Peak” Program will educate and inform our members about the
benefits of such a program. The “Beat the Peak” program will be a voluntary program in
which members will be asked and encouraged to conserve or limit energy usage during
peak times when the Cooperative may be purchasing wholesale power on the market
when prices exceed certain thresholds. By limiting the amount of wholesale power
purchased during these peak, high-priced periods, the Cooperative can reduce its total
wholesale power costs and minimize potential increases in our power cost adjustment
(PCA).
What is the “Beat the Peak” program?
The “Beat the Peak” program is an economical way to engage utility rate-payers
to increase the value of their energy consumption, while reducing their cost and helping
the environment. The program focuses on education, information and conservation to
assure that the utility workforce and its users can easily understand how their actions
increase and / or decrease the use of energy, cost of energy and impact on the
environment. The goal is to provide actionable information in preparation for and in real
time to users so they can modify their usage habits, mitigate the negative impacts of
wasteful energy practices and capitalize on the smart use of energy.
The most important part of the Smart Electric Grid is the end user. When we can
provide them with actionable information from which they understand what they need to
do to increase the value of their energy purchase or mitigate the negative impacts of bad
decisions, they will respond. We have proven that fact with our evolving “Beat the Peak”
program and we have educated our users to increase their energy purchase value and save
themselves money.
Using technology to support our efforts is not hard. At Delaware Electric
Cooperative we have installed smart grid equipment that supports our efforts to provide
the most up–to-date practices which support our members ability to use energy more
efficiently. Our smart grid applications are growing everyday as the existing applications
are listed below:
• Smart meter applications- 100% residential completion by the end of 2009
• 20,000 Switch and Save load management switches in our homes
• 27,000 email addresses which we communicate important peak information to our
members.
•
•
•
406 interruptible members receiving signals to turn-off their commercial
equipment or turn on their generator.
SCADA smart grid technology monitoring all electrical equipment operating
characteristics like loads, voltage, reactive power, blinks and interruptions.
Voltage control technology to reduce our voltage during peak periods which in
turn reduces our load.
We have also taken another giant step in the utilization of our existing smart grid to
communicate real time information to our members so they can react immediately to
market and system load peaks and emergencies. Delaware Electric Cooperative along
with Cooper Power Systems has designed, manufactured and delivered 30 proto-type
“Beat the Peak” Indicator Lights which, when plugged into the kitchen counter wall
socket, provides real time pricing signals to our members through the smart grid infrastructure. In short, the Indicator Light signals them to cut back on their power usage for
the selected period of time. This idea has been adopted nationally by the National Rural
Electric Cooperative Association and has been introduced to the DOE as a Smart Grid
Development Project. This device can be implemented at no cost to our members and
provide a maximum 6 month payback on the investment.
The “Beat the Peak” program at Delaware Electric Cooperative provides more than
just energy savings during these tough economic times. By keeping our rates low we are
able to provide more disposable income for our members so they can support the
economy with more real dollars immediately. Last year the “Beat the Peak” program
saved Delaware Electric Cooperative members more than $2 million and our goal is to
double that savings in 2009.
III. b. Support member-owners in the installation of renewable energy and
conservation projects through grants from our Renewable Resource Plan.
Working with our Legislature the Cooperative created the Renewable Resource
Plan that provides grants to members of the Cooperative that install renewable energy
projects such as solar, wind, geothermal heating and cooling systems and fuel cells. The
Plan is funded through a small charge to all members on each kWh sold. Since its
inception in 2006 the plan has provided over $700,000 in grants for 120 geothermal
heating and cooling systems, 49 solar installations, 9 solar hot-water heating systems and
4 small wind turbine projects. In addition the funds may also be utilized to support DEC’s
demand side management programs.
The program is designed partly as a demand side management tool that provides
benefits to all member-owners through reduced capacity costs as well as empowering
member-owners a greater control over their energy usage and reducing their “carbon
footprint” on the environment.
Reference: Delaware Electric Cooperative Renewable Resource Plan
III. c. Continue investment and support of our compact fluorescent light bulb
program.
As part of our energy conservation initiatives DEC purchased and gave to the
membership 14,000 compact fluorescent bulbs (CFL’s). Compared to a conventional bulb
these CFL’s will save 705,180 kWh’s annually, saving our members over $81,000 per
year in electric costs.
Two CFL’s ( 60 watt/14 watt ) were given to each of our 968 registered members at
our ’08 Annual Meeting. We have recently purchased 5,000 (75 watt/19 watt) and will
give each registered member at our ’09 Annual Meeting two of these CFL’s.
DEC will continue to encourage and promote the use of energy saving compact
fluorescent light bulbs and review advancements in energy efficient light emitting diode
(LED’s) lights as part of our ongoing lighting program.
III. d. Promote and encourage the smart use of energy to our membership and the
media with an emphasis upon energy conservation and energy efficiency education
programs to include lighting and appliances.
Recommend and encourage that members replace standard incandescent lighting,
wherever possible, with compact fluorescent lighting (CFL) which is four times more
energy efficient than incandescent lighting while providing the same light. Although
CFL bulbs are more expensive to purchase they pay for themselves over their lifetime.
Recommend and encourage that members consider replacing older, less energy efficient
appliances with more energy efficient ones, especially those that have earned the
ENERGY STAR label. ENERGY STAR appliances have been identified by the
Department of Energy as being the most energy-efficient products in their classes. The
promotion of this initiative is through our monthly newsletter, the website, bill stuffers
and booths at the annual meeting and the State Fair. Our website contains energy savings
tips with a link to compute CFL savings and we periodically identify energy tips in our
monthly member newsletter. Additionally, we send seasonal (winter/summer) energy
tips to the media in our area for publication in our daily and weekly newspapers as well
as making energy savings presentations throughout the area to civic clubs and other
groups and often supplement our presentations with the distribution of our CFL bulbs.
We also provide energy savings booklets prepared by the United States Department of
Energy. This energy booklet is also on our website. We also periodically remind our
membership about some Grant Funding monies that we have available for Geothermal,
Wind and Solar applications and Fuel Cells.
III. e. Encourage additional membership participation in residential load
management programs.
DEC will continue to market, promote and advertise our residential load
management $witch & $ave Program targeting specific delivery points and residential
subdivisions. As of December 31, 2008 we were controlling 16,281 water heaters and
8,378 central air units with 19,699 switches. Our goal for switch installations is 1,000 for
’09.
III. f. Continue the development of efficiency and cost savings education of our
commercial members including energy management options.
We have a monthly electronic newsletter sent to our commercial members and we
have periodic site visits by our Member Accounts Manager all aimed at educating and
informing our commercial members about their energy options.
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III. g. Continue the expansion of our out-reach education programs to all members
of the Cooperative through speakers bureau opportunities.
2009 will see an enhanced comprehensive media communications plan that
educates and informs our members of energy efficiency, conservation initiatives and
programs.
•
Energy efficient appliance information: Provide information regarding the savings
available in the installation and operation of energy efficient appliances and
equipment through various media.
•
Energy efficiency improvements to their homes and businesses: Provide
information through media sources for residential and commercial energy
efficient programs and applications.
o Utilize Web pages to promote energy efficiency for members. DEC currently
has the following links to various web sites directed at energy savings and
efficiencies:
Energyguide – Smart Energy Choices
Home Energy Saver – a home energy audit tool
US Department of Energy (DOE) – Energy Information Administration
EnergyHog – a energy conservation site for kids
o Provide tools to help member quantify energy conservation and savings.
Evaluate the potential of placing on our web site a compact florescent light
bulb savings calculator.
Enhanced communication tools will utilize radio talk show opportunities to
showcase existing programs and benefits and member education.
III. h. Investigate energy management with developers including the utilization of
smart house concepts and Energy Star homes.
Develop and implement a strategy to impact our developers especially regarding
the benefits of total electric homes, smart house concepts and Energy Star homes.
Consider membership in the Home Builders Association in Kent and Sussex Counties.
III. i. Commercial Account Representative reviews with major accounts regarding
their energy management programs.
This is a continuing program whereby our Member Account Manager stays in touch
with this very important member segment.
Periodic visits with our larger members includes an analysis of their rates and an
analysis of their kWh usage, billed kW, kVar, power factor and any rate options that may
be available.
III. j. Develop energy and environmental management programs to maximize
energy efficiencies at the DEC corporate facilities.
DEC is committed to a program of continuous energy conservation by all
employees. Although DEC already utilizes an energy efficient geothermal
heating/cooling system, DEC management encourages further development of
internal and external energy efficiencies and innovative technologies in support of
Cooperatives and national energy efficiency policies.
To this end, our objective is to operate the corporate facilities as an example of
energy and environmental stewardship to our employees and member-owners
alike. We will:
•
Continue to monitor the corporate building geothermal HVAC system, track
usage and investigate ways to operate more efficiently.
•
Evaluate efficiency of lighting in DEC’s facilities and develop a strategy to
increase efficiency through hardware, software and technology.
•
Investigate the potential for utilizing renewable generation to serve a portion
of the Cooperate facility requirements.
•
Expand our recycling program. DEC currently recycles the following
products (lbs. recycled in 2008):
° Aluminum – 66,129 lbs.
° Copper – 2,575 lbs.
° Steel – 3,080 lbs.
° Dirty Steel – 25,620 lbs.
° Wood pallets – 18,200 lbs.
° Cardboard – 52,200 lbs.
° Wood poles – 38,240 lbs.
•
Continue use of biodiesel in vehicle fleet and investigate energy efficiencies
in our gasoline powered vehicles.
•
Identify and evaluate alternative energy vehicles for fleet upgrades and
replacements.
•
Evaluate the potential for upgrades to existing distributed generation assets
that might permit use as a demand side management tool.
III. k. Develop and maximize opportunities at the State and Federal level to utilize
stimulus dollars to support efficiency, conservation and renewable programs.
DEC has actively participated in analyzing and reviewing the American
Reinvestment and Recovery Act to identify opportunities that might maximize federal
stimulus dollars allocated to the State. DEC believes these monies directly benefit our
member-owners and all citizens of Delaware when directed towards specific and targeted
energy efficiency, conservation and small scale renewable generation projects.
Reference Documents
These documents may be considered confidential and / or proprietary. Upon written
request limited access to these documents may be granted by the CEO/President.
a. Delaware Electric Cooperative Annual Supply Planning Report
b. Delaware Electric Cooperative 2007 Power Requirements Study
c. Old Dominion Electric Cooperative Crossroads II Accord
d. Old Dominion Electric Cooperative Second Amended and Restated Wholesale
Power Contract (Draft)
e. Old Dominion Electric Cooperative Policy on Addition of Non-Native Load
f. Delmarva Peninsula Planning Association Charter
g. Correspondence to PJM re: MAPP
h. Delaware Electric Cooperative Renewable Energy Rider (RER)
i. National Renewables Cooperative Business Plan
j. Demand Side Management (DSM) Annual Report
k. Delaware Electric Cooperative Renewable Resource Plan
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