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CDM Study

Explore CDM study objectives, findings, impacts, and aligning with OPA for load forecasting. Discover stakeholder recommendations and methodologies for incorporating CDM.

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CDM Study

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  1. CDM Study Stan But Manager, Economics & Load Forecasting October 19, 2011

  2. Agenda • OEB Directive • Stakeholder Recommendations • CDM Study Objectives • Study Findings • Preliminary CDM Impacts for 2011-2013 • Summary

  3. OEB Directive • In its Decision with Reasons for EB-2010-0002, the Board noted the following: • “there does not appear to be a broadly accepted methodology in place to identify reasonably anticipated effects of any CDM program on the throughput of the respective distribution or transmission systems.” • “For the purposes of establishing credible load forecasts, much more acuity than is currently available is needed.” • The Board accepted Hydro One’s CDM estimates used in the load forecast, but directed Hydro One to “work with the OPA in devising a robust, effective and accurate means of measuring the expected impacts of CDM programs.”

  4. Stakeholder Recommendations • Hydro One held two stakeholder consultations in February and March 2011 • Below is a summary of recommendations from the above sessions: • An in-house study prepared by Hydro One staff instead of an external study by consultant • A review of CDM categories and methodologies to incorporate the CDM impacts into the load forecast used by utilities in other jurisdictions • CDM categories should be comprehensive and can be tracked • Hydro One should work closely with the OPA to better define and measure CDM impacts for use in its load forecast • CDM impacts should be presented by customer class

  5. CDM Study Objectives • Objective 1: Develop a robust methodology to forecast CDM impacts using comprehensive and well-defined categories • Objective 2: Develop a methodology to incorporate the CDM impacts into Hydro One’s load forecast

  6. Study Findings Literature Review • Utilities reviewed: • British Columbia, New York and California as recommended by stakeholders • Other major utilities in North America with CDM experience • Tools used: web-search and personal communication

  7. Study Findings Load Forecast Survey • A web-based survey was sent to about 100 utilities/organizations in North America and 41 responses were received • The literature review and the survey provided a list of well-defined and comprehensive CDM categories: • Programs initiated by the utility • Program initiated by other organizations • Building codes and appliance efficiency standards • Rate structures • Increased conservation effect

  8. Study Findings Load Forecast Survey (Contd…) • Three methods are commonly used to incorporate CDM impacts in the load forecast: Method 1: Forecast using actual load (without any CDM adjustment) Method 2: Forecast CDM impacts as an explanatory variable on the right hand side of the econometric equation Method 3: Add back historical CDM impacts to the actual load and then forecast forward

  9. Study Findings Review of load forecast methodologies for incorporating CDM in the load forecast • Hydro One undertook a review of the three methods to evaluate the advantages and challenges associated with each method • The review results suggested that: • Method 3 is the most robust, technically sound and efficient and it produces reliable and accurate load forecasts • Method 3 addresses the OEB directive to apply a methodology that is less primitive and that provides more acuity • Hydro One has adopted Method 3

  10. Study Findings • Alignment with the OPA

  11. Study Findings • Alignment with the OPA (Contd…) • Hydro One worked closely with the OPA to better understand the savings assumptions used in their current conservation forecast Step 1 Obtain detailed savings assumptions for each CDM category Step 2 Determine Hydro One specific annual CDM savings by sector Step 3 Derive monthly CDM savings using Hydro One specific load shapes Step 4 Derive CDM savings by rate class

  12. Preliminary CDM Impacts for 2011-2013

  13. Summary • The literature review provided a list of well-defined and comprehensive categories • The survey results helped Hydro One better understand the methodologies used by utilities to incorporate CDM impacts into the load forecast • The comparative review of methodologies helped identify an effective and efficient method to incorporate CDM in the load forecast • Hydro One worked closely with the OPA to derive CDM forecast specific to Hydro One • Hydro One believes that the CDM study incorporates all recommendations from stakeholders and meets the Board’s Directive

  14. Thank You

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