Grid Modernization Dan Lysaker Senior Grid Modernization Engineer

Grid Modernization Dan Lysaker Senior Grid Modernization Engineer September 26, 2016 1

XCEL ENERGY OVERVIEW Northern States Power Company Minnesota Northern States Power Company Wisconsin Public Service Company of Colorado Southwestern Public Service Company 3 Gas Customers 1. 9 M Electric Customers 3. 5 M

Emerging Opportunities Grid Modernization/ Battery Storage Renewable Energy Integration 4 Technical and Policy Solutions Smart Technologies to support customer choice

Trends in the Energy Industry Changing Economics Growing Customer Expectations Changing Policy Landscape 5 New regulatory framework

Wind Resources Wind speed is key to development location US Wind Electricity Net Generation 6

Global Solar Energy Growth 7

Challenges and Opportunities of Renewable Energy Integration 8 • • Variability of resources • • • Emissions reduction Capacity accreditation Integration costs Transmission capacity limits Distribution system impacts Frequency response System balancing Reduced fuel costs Price stabilization Economic development Energy storage potential Grid modernization

Elements of our Resource Plan -1, 362 MW Retirement of Sherco Unit 2 (2023) and Sherco Unit 1 (2026) +1, 800 MW Addition of 800 MW of wind by 2020 and 1, 000 MW of wind between 2020 and 2030 +1, 400 MW Addition of 400 MW of solar by 2020 and 1, 000 MW solar between 2020 and 2030 +786 MW New 786 MW natural gas combined cycle unit at Sherco by 2026 Coal Wind Large Solar Combined Cycle +230 MW Combustion Turbine 9 Maintain Nuclear New 230 MW of natural gas combustion turbine by 2025 Maintain 1, 100 MW Prairie Island Units 1 and 2 and 671 MW Monticello

GRID MODERNIZATION POLICY AND PROJECTS

Regulatory Process – Standard Rate Case Initial Filing Incoming Comments Reply Comments Briefing Papers Commission Hearing Commission Order Implementation Compliance Filing 11 A filing we are required to make in order to request authority to take some sort of action. Includes rate cases, new program proposals, Resource Plans, etc. Other parties comment on our initial filing, usually approximately 30 days after our filing. We respond and receive other parties’ comments, usually 10 days after incoming comments. Issued by Commission staff summarizing the filing and parties’ comments, as well as staff’s analysis and sometimes a recommendation for the Commission meets to discuss the request. Parties available to comment and answer questions. Commissioners deliberate and take a vote. After a decision at the hearing, the Commission issues a formal order memorializing the decision. This can be days or weeks after the hearing. Once the proposal has formal Commission approval, it can be implemented. Some Commission orders trigger the need for a compliance filing, updating a tariff, or filing schedules or additional information.

Emerging Technologies – New Opportunities Smart Thermostat Pilot Electric Vehicle Charging Rate Battery Storage Pilot Projects Community Solar Gardens Advanced Distribution Management System 12

CORE GRID MODERNIZATION PROJECTS Privileged and Confidential- Attorney / Client Work Product

Current State Of The Grid • Visibility primarily at the feeder level • Some Distribution Automation – For system reliability • Power Factor control system – For system efficiency WHAT’S COMING? • Enhanced visibility to the meter • Robust distribution automation • Centrally managed voltage control system • More ways to manage energy usage 14

Traditional Energy Management • Demand Response – Interruptible loads – Saver’s Switch (Air Conditioner Control) – On-site generation • At Other Utilities: – Peak pricing – Voltage control 15

Advanced Distribution Management System (ADMS) • What it is – Real-time network modeling – Enhanced visibility and control – Platform that enables high-value apps • Benefits ü Enhanced reliability ü Improved voltage control ü Enables more distributed resources 16

Fault Location, Isolation and Service Restoration (FLISR) • What it is: – Automated circuit switching – Reduces outage durations – Identifies faults, isolates and autores – Fault Location application calculates location of problems • Benefits ü Enhanced reliability ü Improved customer experience ü Improved employee safety 17

Integrated Volt-VAr Optimization (IVVO) • What it is: – – Better voltage control throughout the system Energy efficiency & peak shaving capabilities Powered by the ADMS software Enables higher penetration of Distributed Generation such as Solar Panels • Benefits ü Voltage control for better power quality ü Environmental stewardship ü Renewables integration 18

Advanced Metering Infrastructure (AMI) • What it is: – – – Powerful metering capability Accessible via two-way communication Provides more granular insight into use Enables more products and services Reliability and power quality insights • Benefits ü ü 19 Outage/restoration awareness Improved customer experience Awareness of energy use Improved products and services

Field Area Network (FAN) • What it is: – – High Speed Communications Network Ties it all together Standards-based, seeking interoperability Secure • Benefits ü Provides visibility and control path ü Enabler of field applications 20

Battery Storage “(Batteries will) fundamentally change the way the world uses energy” – Elon Musk 21

Why do we need storage? 22 Source: Meetmaslow. com

23 Source: Energyclub. stanford. edu

Energy Storage Projects - Overview • Planned pilots – – Belle Plaine, MN Capital deferment at substation Panasonic, Denver, CO Stapleton, CO • Status – Belle Plaine on hold – Panasonic – 2017 in-service – Stapleton – 2017 in-service • Benefits ü Renewables penetration ü Improved products and services 24

Main Operations for Battery Projects • Voltage Regulation • System Peak Demand Reduction • Energy Arbitrage • Compare and contrast utilitysited and Behind the Meter applications • Viewed as an enabler for more distributed generation 25

MN Belle Plaine Project • Grid deferral project – i. e. Using solar and batteries rather than upgrading other infrastructure – 2 MW, 6 MWH – 1. 0 MW Solar Generation • Proposed October 2015 • Commission feedback: – Need more details 26

Panasonic Microgrid Project • • Partnership with Panasonic Enterprise Solution & City of Denver 1 MW/2 MWh Li-Ion Younicos Bulk Energy Storage System(BESS) 1. 3 MW Carport PV & 250 k. W rooftop Distribution feeder approaching ~20% PV penetration 27

Panasonic - Main Operations • • • Microgrid Mode Voltage Regulation System Peak Demand Reduction Solar Ramp Rate Control Energy Arbitrage Frequency Response Battery storage system will be testing multiple operations. 28

Stapleton Project • Located in Stapleton neighborhood in Denver, Colo. • 6 utility-sited batteries • 6 customer sited/behind-themeter batteries – Utility-owned • 2015: ~18. 5% PV (solar panels) penetration 29

QUESTIONS?

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AMI • Advanced Metering Infrastructure (AMI) – Two-way communication – Interval data • Utilize for power quality improvements – Enables more products and services • Rates • Improved usage portals • Demand Response • Benefits ‒ Improved products and services ‒ Renewables integration ‒ Improved customer experience 32

FLISR • Fault Location, Isolation and Service Restoration – – Identifies faults / isolates and auto-restores Logic is within ADMS Will integrate existing systems Reduces outage durations and time to locate faults • Fault Location Application also enabled • Benefits ‒ Enhanced reliability ‒ Improved customer experience ‒ Improved employee safety 33

IVVO • Integrated Volt-VAr optimization (IVVO) – Enables voltage control for energy efficiency & peak shaving – Requires Capacitors, SCADA, LTC Control, ADMS, sensors (AMI is best) – Also enables higher penetration of DER • Benefits ‒ Environmental stewardship ‒ Renewables integration 34

Community Partnerships Minneapolis Clean Energy Partnership Rice Creek Commons Solar Project 35

Energy Vision: 2016 -2030 UPPER MIDWEST RESOURCE PLAN Wind 15% Coal 37% Solar 8% Coal 15% 63% Carbon- Hydro 6% Free Electricity Biomass 4% Wind 25% Gas 22% 55% Carbon- Free Electricity Nuclear 30% 36 Gas 8% 2015 Hydro 2% 2030 Nuclear 28%

Projected Carbon Reduction from 2005 Levels 26 15% 20% 25% 22 20 35% 18 40% 16 14 12 40 30% Reference Case 47% 45% 50% Current Preferred Plan 58%55% 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 60% Percent Reduction Million Tons of CO 2 24

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