PURPA Position Statement

UEC Demand Response and Electric Vehicle Charging: Current Status and Future Plans

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Overview

The Public Utility Regulatory Policies Act (PURPA) of 1978, as amended by the Infrastructure Investment and Jobs Act of 2021, (“IIJA 2021”) established new standards for (1) Demand response practices, and (2) Electric Vehicle charging programs. The PURPA statute requires Umatilla Electric Cooperative (UEC) to determine whether or not it is appropriate to implement such standards to carry out the purposes of PURPA.

The goals of PURPA continue to be the same as those stated in the original 1978 Act which is to encourage (1) Conservation of energy supplied by electric utilities. (2) Optimal efficiency of electric utility facilities and resources. (3) Equitable rates for electric consumers. The first goal focuses on retail energy users and promotes conservation by end-use consumers. The second goal applies to electric utilities, their use of energy, and the facilities they utilize to deliver energy. The third goal recognizes the need for proper development and administration of retail rates, providing a check and balance relative to the other two goals, in order that the programs, policies, and rates employed by electric utilities to achieve the first two goals reflect their associated costs and are not arbitrary, unfair, or unduly discriminatory.

The federal legislation anticipates that non-regulated electric utilities such as UEC would need to consider utility-specific conditions and circumstances during their evaluation of the PURPA standards. In addition, each utility would determine its ability to accomplish the goals of PURPA via the implementation of the two new PURPA standards. For that reason, with respect to each of the two PURPA standards, the Board may decide to implement the standard as stated in IIJA 2021, implement a modification of the standard, or decline to implement the standard. Subject to the receipt and review of additional evidence, if any, the following comments, and recommendations address the general considerations regarding each of the two standards and specific issues and circumstances applicable to UEC.

The purpose of this outline is to provide information and recommendations to the UEC Board of Directors (Board) in making their determination on whether to implement each of the two new standards based upon findings that are appropriate for the members of UEC.

Key Topics

UEC has several organizational and operational characteristics that should materially influence the Board’s consideration of the PURPA standards.  First, UEC is member-owned and thus self-regulated.  UEC’s member-owners elect the Board that establishes and oversees UEC’s policies, rates, service rules, and regulations.  UEC is a not-for-profit organization.  Revenues collected in excess of operating expenses (margins) are assigned back to UEC members as capital credits.  Under this form of organization, all costs associated with the programs, policies, and rates adopted to implement the PURPA standards will be borne in full by the UEC membership.

The IIJA 2021 requires non-regulated utilities such as UEC to consider adopting standards on utility demand response and promoting greater transportation electrification.

For demand response, the standard requires a utility to “promote the use of demand-response and demand flexibility practices by commercial, residential and industrial customers to reduce electricity consumption during periods of unusually high demand.” The standard would allow a non-regulated utility to establish rate mechanisms to timely recover the costs of promoting such demand response practices.

For transportation electrification, the standard requires a utility to consider measures, including establishment of rates that:

  • Promote affordable and equitable electric vehicle charging options for residential, commercial, and public electric vehicle charging infrastructure;
  • Improve the customer experience associated with electric vehicle charging, including by reducing charging times for light-, medium-, and heavy-duty vehicles;
  • Accelerate third-party investment in electric vehicle charging for light-, medium-, and heavy-duty vehicles; and
  • Appropriately recover the marginal costs of delivering electricity to electric vehicles and electric vehicle charging infrastructure.
UEC obtains power supply energy resources for members through long-term contractual agreements and short-term market purchases that provide greater flexibility to implement demand-side management programs that can reduce loads during critical demand periods.

UEC serves a broad set of members that can be classified by their rate schedules. The rural system includes those members with peak demand not exceeding 10 MW. These include residential, small, and large commercial, irrigation, and industrial rate classes. Those members with peak demand greater than 10 MW and meet the requirements to be designated as New Large Single Load (NLSL) by Bonville Power Administration (BPA) are classified as “large industrial”.

UEC purchases the bulk of power and transmission services for the rural system through an all-requirements obligation with the Bonneville Power Administration (BPA). BPA’s cost structure for power has a small demand-based billing determinant that only accounts for 10% of the total cost, therefore UEC’s fixed costs remain consistent throughout the year regardless of peak demand. Beginning with the BPA 2024-2025 fiscal year UEC will purchase all power necessary to serve the rural system from BPA. Transmission services for the rural system members are purchased through network transmission service, which has a comparatively small demand-based billing rate ($/kW). The billing determinant (kW) is set based on the rural system’s actual retail peak load each month, thus, lowering demand in one month does not reduce the transmission cost in subsequent months. The “low” cost and difficulty in targeting a monthly system peak greatly reduce the ability of UEC to decrease its transmission costs through the implementation of DR programs.

For larger industrial members UEC purchases power through a long-term Power Supply Agreement (PSA) and on the open market. The power costs are directly passed to qualifying large industrial members. These purchases are based on forecasted energy use and have no demand-based billing determinant.

Implementation of a demand response program and rates would not significantly reduce UEC’s wholesale power supply or transmission costs which are passed through to its members. As a result, any demand response program and rate would be unlikely to reduce retail loads during critical demand periods.

UEC offers a variety of energy efficiency (EE) programs that align with UEC’s wholesale power determinates and member usage patterns. Energy Efficiency programs help members implement measures that reduce their overall electrical usage, including during peak demand periods. These EE programs primarily focus on reducing energy consumption related to space cooling and heating, water heating as well as large irrigation pumping costs. Typically, space conditioning and water heating account for most of the energy consumed by a residential consumer. Incentives are also targeted to save energy in the commercial and industrial sectors by targeting critical custom projects (i.e., pumps, compressors, evaporators, condensers, refrigeration, and lighting).

Under UEC’s current EE programs, UEC offers a two-fold solution portfolio by providing rebates that focus on the (1) mechanical aspect and the (2) structural aspect. The programs targeting the mechanical component include a Level 2 EV charger, smart thermostat, lighting and refrigeration systems, variable frequency drive (VFD) irrigation pumps, HVAC heat pumps, and heat pump water heater rebates. The programs targeting the structural element include weatherization rebates, energy-efficient manufactured home rebates, and access to free home energy assessments. If a member installs a heat pump or water heater that is more efficient than the base standard and/or utilizes a smart thermostat, it is likely those units are using less electricity during peak demand periods than they otherwise would. Ensuring that a member’s structural envelope is as tight as possible also reduces energy usage, potentially during peak demand times. UEC also encourages that a heat pump be installed as part of the manufactured home replacement program. The use of a heat pump will reduce usage associated with space heating that would have otherwise used resistance heat strips.

Additionally, UEC offers rebates to its commercial, industrial, irrigation, and agricultural members that incentivize choosing more efficient options when replacing or installing new equipment. This includes UEC continuing to incentivize the use of variable frequency drives (VFDs) for their irrigation members. Called the Scientific Irrigation Scheduling (SIS) Program, UEC recognized the benefits of the program and continued to offer and fund it to its members after federal funding was discontinued in 2018. In 2022 alone, the SIS program assisted 17 irrigators in reducing water usage by 8,761 acre-feet and produced 7,810,880 kWh savings on nearly 40,000 acres of land. That equates to nearly 3 billion gallons of water – enough to fill 4,602 Olympic-sized swimming pools – and the same energy needed to supply 565 all-electric homes for one year.

Lastly, UEC offers solar energy rebates and net metering for those members with distributed generation facilities. Solar photovoltaic systems are the dominant distributed energy resource within UEC’s service territory. The energy generation profile of solar photovoltaic systems aligns reasonably well with peak demand periods, helping to reduce the member’s usage, especially during peak demand periods.

UEC’s existing and expected future Energy Efficiency Measures operate to promote the use of demand-response and demand flexibility practices by commercial, residential and industrial customers to reduce electricity consumption during periods of unusually high demand. UEC’s existing practices are adequate and sufficient to promote demand response for its members and are consistent with the goals of PURPA.

UEC is actively engaged in advancing the electric vehicle (EV) charging options within its service territory. UEC has offered members who install a Level 2 charger at their home or business a $200 rebate since 2019. Beginning in 2023, UEC has solicited grant funding to offer an additional $1,000 rebate for up to 25 residential members that install a Level 2 charger. The cost to install a Level 2 charger, including the device and installation labor, ranges between $750 and $2,500 depending on the condition of the premise. UEC’s combined rebate of $1,200 provides a significant portion of the total cost to purchase and install a Level 2 charger.

UEC is also evaluating EV-specific rate tariffs to provide innovative options to members owning and operating Level 2 and 3 charging facilities. These rate options will be designed to help spur EV charging infrastructure while also ensuring these high-load installations properly recover the cost to serve them. Additionally, UEC has ordered EVs for use within its fleet operations and is considering the installation of Level 2 chargers at its headquarters. The chargers will be used to support its EV fleet vehicles and provide another charging point for the public. Beyond the light-duty EVs, UEC is also exploring how its fleet can benefit from adding Smart electrical PTO’s to operate the hydraulics for heavy-duty bucket trucks. These advanced bucket trucks use large batteries to power their stationary operations instead of using the internal combustion engine, saving fuel, reducing emissions, and extending the operating life of the trucks.

UEC’s service territory is well-positioned to advance investment in additional EV charging infrastructure. Two Interstate highways traverse the UEC territory. In Umatilla and Morrow counties, there are a combined 237 registered EVs according to Oregon Electric Vehicle Dashboard1. While there may only be a small number of UEC members that currently own EVs, it is highly likely that there are more EVs that travel through UEC’s service territory. UEC continues to investigate opportunities with state, regional, and federal agencies to identify additional locations for EV chargers and to obtain available grant dollars to help stimulate more local investment. UEC’s service area aligns with major transportation arteries which has brought many transportation hubs to the area. As the EV industry quickly expands beyond light-duty vehicles and enters the trucking industry, UEC has had an opportunity to work with these heavy truck manufacturers, distribution centers, and prospective travel centers to understand their goals of electrifying and servicing commercial fleets. UEC’s work with these commercial trucking businesses to prepare for adding large electricity-consuming commercial charging infrastructure allows UEC to understand the magnitude and timing of needed distribution system upgrades.

UEC is active in the EV charging sector and continues to grow its experience with EVs and opportunities to help members enter the EV market.

UEC’s existing and expected future electric vehicle charging programs operate to promote the greater electrification of the transportation sector impacting its members. The existing UEC programs specifically promote (a) affordable charging options, (b) improve customer experience with electric vehicle charging, and (c) accelerate third-party investment in electric vehicle charging. UEC’s existing practices are adequate and sufficient to promote transportation electrification for its members and are consistent with the goals of PURPA.

Umatilla Electric Cooperative continues to support its members with effective energy efficiency and electric vehicle charging programs that (a) incentivize the use of energy-saving tools proven to consistently reduce power usage, and (b) promote electrification of transportation sector impacting the membership. UEC does not recommend implementing additional standards or practices at this time.

1 Oregon Electric Vehicle Dashboard