Nrg Energy, Inc. · NYSE:NRG
Nrg Energy — Investor Presentation (May 2023)
16 slides from Nrg Energy's investor presentation, May 26, 2023
Slide 1: Why Is the Smart Grid So Dumb?
Why Is the Smart Grid So Dumb? Travis Kavulla Vice President of Regulatory Affairs, NRG California Public Utilities Commission R.22-07-005 Working Group 1 May 26, 2023 © 2021 NRG Energy, Inc. All rights reserved. / Proprietary and Confidential Information 1
Slide 2: Someone, Somewhere Should Be Exposed to a Fully Dynamic Price
Someone, Somewhere Should Be Exposed to a Fully Dynamic Price © 2021 NRG Energy, Inc. All rights reserved. / Proprietary and Confidential Information 2
Slide 3: Supply growing more volatile and peaky, even as demand growth returns
Supply growing more volatile and peaky …even as demand growth returns Demand has increasingly obvious role to play • “Retail rate design reduces the amount of capacity procured and triples the capacity contribution of solar in the electrification scenario.” ‒ PJM, Energy Transition in PJM: Emerging
Slide 4: AMI is widely deployed nationally and California uses it for retail pricing
AMI is widely deployed nationally… and California uses it for retail pricing Smart Meters Installed (%) 0 – 15% 15 – 50% 50 – 75% 75 – 100% TOU States TOU Opt-Out Adapted from: Cooper and Shuster, “Electric Company Smart Meter Deployments: Foundation for a Smart Grid,” Institute for Electric Innovat
Slide 5: Peakier TOU tariffs send a stronger price signal
Peakier TOU tariffs send a stronger price signal PG&E’s TOU-C is a relatively flat Illustrative TOU price spread of 3x TOU tariff for MA Nat Grid On-Peak Off-Peak Supply On-Peak Off-Peak Transmission • 4 3-month Capacity pricing seasons and on-peak hours 7am-11 Winter Winter pm. • The supply prices
Slide 6: Ontario's new, peakier TOU plan
Ontario’s new, peakier TOU plan • Time-of-use is the default plan Ontario's TOU and Ultra-Low for customers of a regulated Overnight Rates on Weekdays utility in Ontario 30 24 • Beginning May 2023, utilities are 25 TOU: 2x ULO: 10x allowed to offer a new, peakier 20 TOU plan called Ultra-Low Cents/k
Slide 7: What about a fully dynamic retail price?
What about a fully dynamic retail price? • Griddy (not to be confused with Gritty) offers a cautionary tale • Griddy, an ERCOT REP/LSE, offered to pass through wholesale energy pricing directly to retail customers for a small monthly subscription fee • Catastrophically failed during Winter Storm Uri
Slide 8: But someone should face/manage the full-strength price signal
But someone should face/manage the full-strength price signal (or pass it down to customers) • Devices to access and interact with price signals • “Automation service providers” (ASPs) to optimize device behavior • “Energy management service providers” to manage devices and optimize customer bills •
Slide 9: EMSPs can provide a broker-and-insurance role
EMSPs can provide a broker-and-insurance role EMSP Role © 2021 NRG Energy, Inc. All rights reserved. / Proprietary and Confidential Information 9
Slide 10: CalFUSE Recommendation #5: Monthly subscriptions
CalFUSE Recommendation #5: Monthly subscriptions • Subscriptions offered by LSE • EMSPs could evaluate offers and manage risk • Hedges • Comprehensive device management © 2021 NRG Energy, Inc. All rights reserved. / Proprietary and Confidential Information 10
Slide 11: CalFUSE Recommendation #6: Transactive features
CalFUSE Recommendation #6: Transactive features • Short term (hours or days) offers from LSEs • EMSPs could evaluate offers and manage risk © 2021 NRG Energy, Inc. All rights reserved. / Proprietary and Confidential Information 11
Slide 12: Billing All Elements
Billing All Elements © 2021 NRG Energy, Inc. All rights reserved. / Proprietary and Confidential Information 12
Slide 13: The other piece of the pie often isn't on the table
The other piece of the pie often isn’t on the table • The largest driver of Demand Response in Example of Texas supplier’s avoidance of 1 ERCOT is the savings that derive from kw of residential consumer use during each avoiding transmission costs through the of 4 highest-peak hours during summer 4CP
Slide 14: Customers need not be exposed to complex T&D charges... But Someone should be
Customers need not be exposed to complex T&D charges… But Someone should be • Demand flexibility related to time- Distribution differentiated network pricing can result from Transmission charges charges • a demand charge (3-part pricing) • allocation to peak energy pricing (TOU), or • dynamic T&D ra
Slide 15: Ensuring Incentives Exist for Demand Flexibility
Ensuring Incentives Exist for Demand Flexibility Utility ‘opt-out’ rate should be a default TOU with substantial differentials between tiers (or possibly a dynamic rate with some requirement for intermediation) Get to manage not just energy supply costs, Intermediaries can be positioned to but all r
Slide 16: Travis Kavulla
Travis Kavulla Vice President, Regulatory Affairs (406) 788-3419 travis.kavulla@nrg.com © 2021 NRG Energy, Inc. All rights reserved. / Proprietary and Confidential Information 16