Electric Industry Update

Transcription

1 Electric Industry Update David K. Owens Aryeh B. Fishman Associate General Counsel, Regulatory Legal Affairs Edison Electric Institute AGA/EEI Accounting Conference May 22, 2017 Newport Beach, CA

2 Our Industry Vision Is Customer- Driven Value- Focused More Dynamic, More Secure Energy Grid Cleaner Energy Innovative Energy Solutions

3 Hurricane Matthew Response Improvements help utilities respond quicker to hurricane storm damage 10 Days of Blackouts Cut to 2 After U.S. Utility Spends Billions Hurricane Matthew Tests Electric Grid s New Storm-Resistant Technology 3

4 1 Million+ Direct and Indirect Jobs 4

5 Industry Capital Expenditures Total Functional $120 B $100 B $80 B $60 B B 32% 26% B 35% 26% Generation Distribution Transmission $40 B $20 B $0 B % 17% 12% 15% 5% 3% 6% 4% 2015P 2016P Gas-Related Environment Other Actuals as of 9/2015 as of 8/2016 Projections (9/2015) Projections (8/2016) Notes: Total company spending of U.S. Investor-Owned Electric Companies, consolidated at the parent or appropriate holding company. Projections based on publicly available information and extrapolated for companies reporting fewer than three projected years (11% and 15% of industry for 2017 and 2018). 2015P total does not sum to 100% due to rounding. Source: EEI Finance Department, company reports, S&P Global Market Intelligence (August 2016). 5

6 Projected Functional CapEx $120 B 2015P 2016P as of September 2015 as of August 2016 $108.6 B $120.8 B $100 B $42.0B 35% $80 B $35.3B 32% Generation Distribution $60 B $28.7B 26% $32.0B 26% Transmission Gas-Related $40 B $20 B $0 B $19.3B 18% $20.8B 17% $13.3B 12% $17.9B 15% $5.7B 5% $3.4B 3% $6.2B 6% $4.7B 4% Environment Other Notes: Total company functional spending of U.S. Investor-Owned Electric Companies. 2015P total does not sum to 100% due to rounding. Projections based on publicly available information and extrapolated for companies not reporting functional detail (1.3% and 0.7% of the industry for 2015 and 2016, respectively). Source: EEI Finance Department, company reports, S&P Global Market Intelligence (August 2016). 6

7 Electricity Is a Great Value Sources: U.S. Department of Labor, Bureau of Labor Statistics (BLS), and U.S. Department of Energy, Energy Information Administration (EIA) 7

8 Industry Goal Strike a Balance Among Reliability, Sustainability, and Affordability Attain Customers Desired Level of Electric Reliability And Society s Clean Energy Policy Goals..... At as Low a Cost to Electricity Customers as Possible. Reliability Sustainability Affordability 8

9 Key Administration Players Reince Priebus Chief of Staff Steve Bannon Chief Strategist Kellyanne Conway Counselor Rex Tillerson Secretary of State Tom Price Secretary of Health & Human Services Steven Mnuchin Secretary of the Treasury Gen. James Mattis (Ret.) Secretary of Defense Sen. Jeff Sessions (R-AL) Attorney General Rep. Ryan Zinke (R-MT) Secretary of the Interior Sonny Perdue Secretary of Agriculture Wilbur Ross Secretary of Commerce Alex Acosta Secretary of Labor Ben Carson Secretary of Housing and Urban Development Elaine Chao Secretary of Transportation Michael Pompeo Director to the Central Intelligence Agency Rick Perry Secretary of Energy David Shulkin Secretary of Veterans Affairs Betsy DeVos Secretary of Education Gen. John Kelly (Ret.) Secretary of Homeland Security Scott Pruitt Administrator of the Environmental Protection Agency Lt. Gen. H.R. McMaster National Security Advisor Linda McMahon Administrator of the Small Business Administration Robert Lighthizer U.S. Trade Representative Gary Cohn Chair National Economic Council? Chair of the Council on Environmental Quality Nikki Haley U.S. Ambassador to the United Nations? Chair Council of Economic Advisors Mick Mulvaney Director of the Office of Management and Budget *Current as of March 3,

10 FERC Cheryl A. LaFleur Acting Chairman Colette D. Honorable Commissioner??? Commissioner Commissioner Commissioner

11 Industry Priorities Comprehensive Tax Reform Infrastructure Investments Grid Security Preserving Balanced Energy Mix

12 Industry Tax Reform Priorities Preserve Interest Deductibility Preserve Deductibility for State and Local Taxes - Largely Property Taxes Retain Normalization Provide Excess Deferred Tax Transition Rule Provide Dividend and Capital Gains Rate Parity 12

13 Approach To Grid Security 13

14 Grid Security: Industry-Government Partnership 14

15 Our National Fuel Mix Is Changing 2006 National Energy Resource Mix 2016 National Energy Resource Mix (Preliminary) Source: U.S. Department of Energy, Energy Information Administration Chart percentages are based on net generation data. 15

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18 Smarter Energy Infrastructure 18

19 Projected: $52.8 Billion Invested in the Energy Grid in 2016 (Transmission and Distribution) 19

20 Data Analytics 20

21 Energy Storage: Why Now? Energy storage can be deployed in all parts of the energy grid, and has applications in all parts of the value chain. Enhance Electric Company Operations Provide Grid Support Optimize Power System Enhance Customer Experience Alleviate high energy prices through time shifts Reduce the need for new generation Regulate frequency Reduce spinning, non-spinning, and supplemental reserve requirements Voltage support Black start electricity restoration Defer transmission and distribution upgrades Relieve electricity congestion Higher power quality and reliability Retail electric energy time shift FERC REGULATED STATE REGULATED T&D END USE Source: Adapted from DOE/EPRI Handbook, EEI (graphic) 21

22 Storage Growth The amount of deployed storage is projected to grow 687 percent over the next five years. Projected Deployment of Energy Storage Through 2021 Source: GTM/Market Storage Monitor, Q

23 Regulatory and Legislative Energy Storage Activity Legislative Activity Regulatory Activity Legislative & Regulatory Activity Source: EEI, Energy Supply Department, as of February

24 EVs: Leading the Charge Growing Role for Electric Companies $250 million in customer projects/programs underway to deploy charging infrastructure and accelerate electric transportation $1.5 billion new projects/programs proposed Leading by Example Fleet Electrification Committed $128 million in 2016 and increased number of PEVs in their fleets by 18% Employee Engagement Encouraging workforce to lead adoption and set example in their communities 24

25 Charging Infrastructure Evolving Charging time to add 250 miles (minutes) 350 kw-capable DCFC deployed in Fremont, CA Increasing power, decreasing charge time Power (kw) SOURCE: CharIN SOURCE: EVgo 25

26 Micro Grids Are Evolving and Utility Partnerships Are Emerging Source Data: GTM Research 26

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28 Rate & Regulatory Reform 28

29 Questions? 29