Transmission and Distribution
LEI has a wealth of experience creating integrated wholesale electricity market simulations to identify beneficiaries and quantify the costs and benefits from proposed transmission lines. In addition to our array of proprietary quantitative models, LEI’s staff has in-depth industry experience across North America, with a strong focus on the United States and Canada. Members of our team have also testified for state policymakers, regulators, and siting organizations on transmission rate-setting, and transmission policy design.
Non-Wires Alternatives (NWAs)
An NWA, also known as a Non-Transmission Alternative (NTA) is a solution (or group of solutions) that addresses an identified need on the electric system that does not involve the construction of traditional transmission infrastructure. NWAs may include supply-side resources (e.g., conventional generation, distributed generation, and advanced technologies such as lithium-ion batteries and other energy storage technologies), demand-side resources (e.g. demand response and energy efficiency), or a combination of the two. More recently, the term “NWA” has been expanded to include smart grid distribution technologies that are designed to displace or delay investments in wires solutions (building transmission or distribution lines).
Siting Boards in various states across the US require utilities to explore the development of a non-wires alternative when a new “wires” project is proposed. LEI offers technical assistance to utilities in their siting procedure by assessing the technical and operation relevance of NWAs as alternatives to the proposed transmission project. We have developed a proprietary NWA assessment methodology that aims at systematically comparing the technical feasibility and the cost of deploying a supply-side NWA (both thermal and renewables) or a demand-side NWA (energy efficiency and demand reduction programs) on behalf of the proposed transmission project. The underpinning goal of the analysis is to answer the following questions:
- What NWA can be proposed on behalf of a given transmission project?
- Are these NWAs feasible in the proposed context?
- What would be the associated direct costs to ratepayers?
In Massachusetts, LEI was engaged by Eversource and National Grid (collectively referred to as the “Utilities”) to conduct an NTA analysis for the Merrimack Valley Reliability Project (MVRP) project. The MVRP was one of the three components of the larger transmission solution known as the “AC Solution,” proposed by the Utilities to address identified reliability needs in the Boston metropolitan area and surrounding suburbs. LEI deployed its integrated NTA analysis to evaluate the viability and suitability of a suite of supply-side and demand-side resources for replacing the proposed transmission project at all locations of concern. Further under this engagement, LEI experts delivered written and oral testimonies on the analysis conducted before the MA Energy Facilities Siting Board (EFSB). DPU 15-44/45.
Similar engagements have been carried out for numerous transmission projects across New England.
Transmission Planning
Valuing Transmission:
LEI combines fundamental economic and statistical analytical expertise with an exhaustive knowledge of electricity markets to create meaningful simulations of investment impact using a suite of proprietary integrated wholesale electricity models. Our Valuation of Transmission Augmentation Links (ViTAL) modeling framework was specifically designed for regulators and transmission system owners and operators.
Other tools employed in our cost-benefit analysis include our network simulation model, PoolMOD, which is used to forecast electricity prices and quantify benefits of new transmission capacity. In addition, LEI provides advice and analysis related to the valuation of congestion contracts across North America using real options coupled with PoolMOD. Our team has also frequently utilized large-scale macroeconomic models to demonstrate the value of new transmission projects to the economy as a whole.
Transmission Tariff Design:
LEI has significant global experience in analyzing transmission market rules, developing new transmission tariffs, assessing demand elasticity, and undertaking comprehensive market analysis for transmission companies and regulators.
Procurement Process and Contract Design:
LEI applies fundamental economic principles and an exhaustive knowledge of electricity markets to help governments, regulators, and private companies create effective, rational, and transparent procurement processes, including competitive solicitations for transmission capacity. Our support for procurement processes includes proposing selection criteria, drafting contracts, publicizing the procurement, communicating with stakeholders, monitoring the opening and examination of bids, and creating analytic and modeling frameworks to evaluate bids.
LEI has experience acting in the role of Independent Evaluator for transmission Open Solicitation or Open Season processes, soliciting transmission customers following FERC’s guidelines and requirements. LEI can notably work with transmission developers or transmission owners to design a custom process that meets their needs, including:
Similar engagements have been carried out for numerous transmission projects across New England.
- Identification of potential customers
- Outreach to potential customers
- Review of draft legal documents such as the FERC Application to Sell Transmission Rights at Negotiated Rates, Non-Disclosure Agreement, Precedent Agreement, Transmission Service Agreement, etc.
- Design of process documents such as Information Memorandum, FAQ document, or Expression of Interest form
- Design and administration of website
- Administration of communications with Interested Parties, including organization of in-person or virtual Information Sessions
- Transmission customer selection criteria and process
- Preparation of a report for FERC documenting the process and outcomes