Request for Information

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Consolidated Edison Company of New York, Inc. and Orange and Rockland Utilities, Inc.

Request for Information

Innovative Energy Storage Business Models

ISSUED:FEBRUARY 2,2016

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Consolidated Edison Company of New York, Inc. (“Con Edison”) and Orange and Rockland Utilities, Inc. (“Orange and Rockland” or “O&R”) together are referred to as “the Companies” or “we”, are requesting information from qualified vendors with the capability to deliver innovative energy storage solutions that provide value for key stakeholders including our customers, our shareholders, and our project partners.

1.1. Important statement regarding confidentiality

The Companies recognize that a respondent may wish to include information in its response to this RFI that the respondent considers proprietary, trade secret, or confidential to the respondent. If, in any response or information (initial or supplemental) that you provide to the Companies in connection with this RFI, you include information that you consider proprietary, trade secret or confidential, please identify such information by clearly marking both the top and bottom of each page that contains such information as “CONFIDENTIAL.” The

Companies will deem any such designated information as submitted to the Companies and its designees, including, any third party advisors retained by the Companies to assist the Companies in the RFI evaluation process, with the express understanding that, subject to any legally mandated disclosure requirements, such designated information will be held in confidence and will not be disclosed or used for any purpose other than the review and evaluation of the applicable respondent’s response to this RFI or otherwise in connection with any resulting proposal from the respondent or any resulting contract between one or more of the Companies and the respondent.

1.2. Background

Consolidated Edison Inc., the parent company of Con Edison and O&R, is one of the nation’s largest investor-owned energy companies, with approximately $13 billion in annual revenues and approximately $45 billion in assets. Consolidated Edison Inc. provides a wide range of energy-related products and services to its customers through its two regulated subsidiaries: Consolidated Edison Company of New York, Inc. (CECONY or Con Edison), which provides electric, gas and steam service to New York City and Westchester County and is regulated by the New York State Public Service Commission (NYSPSC); and Orange and Rockland Utilities, Inc. (“O&R”), which provides electric and gas service to Orange County, NY and Rockland County, NY and parts of Bergen, NJ and Pike County, PA. O&R is regulated by the NYSPSC and the regulatory commissions of New Jersey and Pennsylvania. Consolidated Edison Inc. also has three unregulated businesses: Con Edison Solutions, a retail services company; Con Edison Energy, a wholesale energy supply company; and Con Edison Development, an infrastructure

development company. Consolidated Edison, Inc. recently created a new subsidiary, Con Edison Transmission, Inc., to invest in electric and gas transmission projects. This Request for Information (RFI) is led by CECONY and O&R only and does not involve the unregulated businesses of Consolidated Edison, Inc.

The RFI solicits information from qualified parties (“respondents”) so that the Companies can develop and execute demonstration projects in accordance with the NYSPSC December 12, 2014 Memorandum and Resolution on Demonstration Projects (see Section 4). The Companies expect that both CECONY and O&R will file with the NYSPSC for approval of a demonstration project. Each demonstration project will receive separate and distinct approval and funding. To the extent possible, respondents should offer solution(s) that are suitable to both

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Companies. This RFI is a means by which the Companies are complying with both the letter and spirit of REV initiatives (see section 4.2 for further detail). However, in addition to regulatory compliance, the Companies have objectives for this effort that go beyond simply producing a demonstration project.

Specifically, the Companies seek to use the RFI process to increase transparency, broaden the potential solution set (particularly to those who lack a direct connection with those involved in the REV processes), improve the efficiency of the process for both vendors and the Companies, and to yield actionable projects that align with customer and shareholder interests. For these same reasons, we anticipate releasing RFIs later in 2016 on the topics of serving Low-to-Moderate Income (LMI) customers, and electrification of transportation. If the RFI process is successful, the Companies may continue to utilize it beyond 2016. Because this is a new process, we do not anticipate it to run perfectly the first time we are undertaking it. To that end, respondents or others are encouraged to send feedback on the RFI process to: [email protected]

All submissions made in response to this RFI will be evaluated by a committee (the “Evaluation Committee”) consisting of representatives of the Companies and other committee members designated by the Companies. The Companies may seek third party subject-matter experts and advisors to assist with the review and evaluation of the submissions received in response to this RFI. The Companies plan to screen any third party members of the Evaluation Committee to determine if they have any conflicts of interest in assisting with an objective evaluation of the any of the respondents’ submissions. The goal of the Evaluation Committee will be to identify one or more Qualified Vendors who have presented ideas and concepts for a demonstration project related to energy storage that, if implemented, would test the hypotheses outlined below and meet the other requirements set forth in this RFI.

1.3. Hypotheses being tested

A demonstration project, in some ways, is similar to an experiment. Experiments are designed to test a

hypothesis. The key, central hypothesis that Con Edison and O&R are trying to test in this demonstration project is: the Companies can derive significant Market-Based Earnings (MBE) from deploying energy storage on their respective electric systems. All respondents should seek to address this hypothesis – and design their

demonstration project “experiment” – to prove or disprove this hypothesis. Examples of MBE include utilities earning revenues from various value-added services, and from transaction and/or platform access fees. For greater detail and definition on MBE, please see NYSPSC’s Staff White Paper on Ratemaking and Utility Business Models, published July 28, 2015.

The Companies are intentionally not mandating or encouraging a particular demonstration experiment to test the hypothesis above. The Companies encourage respondents to provide creative approaches, potentially ones we have not imagined. Respondents can envision MBEs derived from energy storage that take a wide variety of forms. Examples include, but are not limited to, reducing operating expenses, reducing peak demand, integrating, optimizing, or scheduling DERs, providing value-added services to our customers such as enhanced power quality or improved reliability, enabling customers to better manage their bills, enabling wholesale market participation, etc. Any proposed demonstration project should offer the Companies the opportunity to derive significant MBE, and should generate sufficient information to prove whether MBE was derived and, if not, whether such MBE would be possible given a different business model or regulatory construct.

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Through the overarching hypothesis (“the Companies can derive significant MBE from deploying energy storage”), we hope to test a variety of related hypotheses. These include, but are not limited to:

 Storage can be deployed in such a way that satisfies the financial and operational interests of all key stakeholders (e.g., end-customers, regulators, utilities, business partners, non-participating customers, etc.)

 To what extent can energy storage access “stacked” or multiple value streams1

 What market or regulatory changes might enable additional value streams to be accessed over time  The demonstration project will provide the Companies and all potential market participants the necessary

learnings to accelerate the deployment, operation, and integration of storage at significant scale on the Companies’ system

 To what extent are storage solutions technically mature enough for large scale deployment  Real-time dispatch and operation is consistent with the assumptions in the business case  Storage can integrate and interoperate effectively with the existing power system

The detailed nature of this RFI intends to guide respondents to design a demonstration “experiment” that addresses these hypotheses. In addition, such an experiment should also adhere to the following three

conditions. First, the experiment should require no more than $25M of the Companies’ funding. Note that the total cost of the project can be higher than $25M, so long as the portion for which the Companies are responsible does not exceed $25M. This limit is necessary so that the Companies retain sufficient funding for future REV demonstrations. The Companies do not have a lower bound on project funding or size. While the overall dollar amount is important, respondents should focus on maximizing the value and impact, for every dollar spent, and not only the overall cost of the project.

Second, projects proposed should have a minimum capacity/energy of 100kW/400kWh per installation. Third, the total project size, including all storage deployments, should be at least 4MWh. The Companies have chosen these minimum sizes because, below these thresholds, the system impact is likely insufficient to warrant the level of investment, in both capital and human resources, the Companies intend to dedicate to this effort.

1.4. General guidelines

By responding to this RFI, respondents are deemed to accept and agree to these general guidelines. By

submitting a response to this RFI, the respondent acknowledges and accepts the Companies’ rights as set forth in this RFI, includes these general guidelines.

The Companies each reserve the right (a) to reject any respondent submission, (b) to request clarifications or additional information from a respondent regarding its submission, (c) to revise and re-issue this RFI or to revise any requirements of this RFI, (d) to extend any deadlines applicable to this RFI, (e) to hold discussions with any

1_{See The Economics of Battery Energy Storage, The Rocky Mountain Institute for a good explanation of “stacked” storage}

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Respondent and to correct any deficient responses which do not conform fully with the instructions set forth in this RFI, and/or (f) to file and implement REV demonstration projects without initiating an RFI process and on topics other than the topic that is the subject of this RFI. The Companies may exercise the foregoing rights at any time, without notice and without any liability to a respondent or any other party for expenses such respondent or other party incurred in the preparation of responses to this RFI. All costs and expenses associated with the submission of any initial or supplemental response to this RFI will be borne solely by the applicable respondent. The Companies may ask any or all respondents to elaborate or clarify specific points or portions of their

submission. Clarification may take the form of written responses to questions or phone calls or in-person meetings for the purpose of discussing the RFI, the responses thereto, or both.

It is the sole responsibility of each respondent to ensure that all pertinent and required information is included in its submission to this RFI. The Companies reserve the right to determine, in their sole discretion, whether a submission is incomplete or non-responsive.

Respondents should clearly state all assumptions they make about the meaning or accuracy of information contained in this RFI. If a respondent does not ask questions or clarify any assumptions, the Companies will assume that the respondent agrees with and understands the requirements of this RFI. While the Companies have endeavored to provide, and will endeavor to provide, accurate information to respondent firms, the Companies make no representations or warranties of accuracy.

In evaluating a respondent’s submission, the Companies may utilize any and all information available (including information not provided by the respondent).

The issuance of this RFI and the submission or a response by any person or entity does not obligate the Companies to qualify the person or entity in any manner whatsoever. A legal obligation on the part of Con Edison and/or O&R to engage in any business transaction with a respondent will only arise if and when a formal written contract is entered into between or among Con Edison and/or O&R and such respondent.

If a business transaction between a respondent and Con Edison and/or O&R were to be entered into in connection with this RFI, there are a number of terms and conditions and special conditions that may be applicable to any such transaction, depending on the nature of the respondents’ response. Current examples of the Companies’ disclosure form, standard terms and conditions and special conditions can be found using the following link: https://apps.coned.com/supplychain/APL/tc.aspx?lnk=terms%20and%20conditions. These forms and documents are subject to change by the Companies at any time after the date of this RFI.

By responding to this RFI, respondents are deemed to agree to keep confidential all information that is directly or indirectly provided by Con Edison or O&R to a respondent in connection with this RFI, provided that the foregoing confidentiality obligation shall not apply to any information that Con Edison or O&R has previously made generally available to the public.

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As part of this RFI, the Companies are making available a suggested response format, as a separate document, that respondents can use. While use of that format is encouraged, it is not required. Respondents are free to edit as necessary, particularly if a change or addition is necessary to explain a response. However, any submission should address each and every topic in Section 2. In addition to the submission itself, respondents are encouraged – but not required – to submit spreadsheet models that provide additional detail/support to the value propositions and financials required in the response.

Responses and supporting attachments are to be submitted electronically via email to [email protected]. Responses should be provided as .PDF documents with spreadsheets or models in .xlsx format.

*The Companies reserve the right to change any of the above dates.

The Companies are aware that a failure to communicate to respondents regarding the status of responses can be a source of frustration. To address that, we endeavor to provide every complete submission with a formal response. The timing will be dependent on the number of responses received, but we endeavor to provide that feedback as soon as we can.

The Companies anticipate pursuing at least one, and up to three, responses for the next stage of consideration. For those responses in which it is interested, the Companies will provide details on next steps and timelines when it notifies respondents of its interest.

RFI Milestones

Completion Date*

Issue RFI

February 2, 2016

Last day to submit clarification

questions

February 19, 2016 by 5:00 PM

EDT

The Companies Publish Responses

to Questions

March 11, 2016

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2. Demonstration Proposal

This section outlines the requirements for responses to the RFI. The Companies have provided a separate Word template that adheres to the format of topics addressed below. Respondents can use that template to populate their response, save as a PDF, and submit. Any additional information respondents would like to provide about the proposed demonstration can be included as separate attachments.

2.1. Executive Summary

Respondents should provide a brief summary of their proposal for a demonstration project focused on energy storage. This summary should include a brief description of the company proposing, any identified or participating customers and partners, a clear and concise explanation of the business model to be demonstrated, a basic overview of how value will be distributed between key constituents, a description of how success or failure will be measured at the end of the demonstration project, and address any other topics necessary for a basic

understanding of the proposal. Please note that the Companies ask for these items in greater detail later in this RFI, so respondents should focus on providing a concise high-level summary here.

2.2. Unique Value Proposition

Respondents should recall the key hypothesis that the Companies are testing as part of this RFI: That the

Companies can derive significant Market-Based Earnings (MBE) from deploying energy storage on their respective systems. The following section is therefore an important input in beginning to prove/disprove this hypothesis. To that end, respondents should provide as much detail and supporting evidence as possible in the following

sections. The goal is to explain – as clearly and comprehensively as possible – the unique value propositions proposed as part of this demonstration.

Note that the Companies encourage – but do not require – respondents to submit much of the detailed information in this section as an Excel file, included as an appendix to the response. That Excel file can be in a format of the respondents’ choosing. If submitting an Excel file, respondents are encouraged to include a basic sensitivity analysis in that submission. Such an analysis should identify the range of inputs to a given variable (if known) and demonstrate the degree to which that variance of inputs affects the output.

Regardless of whether a respondent submits an Excel file or not, all are expected to fill out the required Word sections that follow with a written response to each category below.

2.2.1. Summary

Please briefly describe the value proposition in entirety. Clarify which services and benefits will be provided to which party, including the Companies, the Companies customers (both participating and non-participating), other partners, and the respondent. Please briefly explain how capital and operational costs are allocated (note: the budget will be discussed in much greater detail in section 2.5).

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2.2.2. Participating customer(s)

Please describe in greater detail what services and benefits are provided to the Companies customer(s) participating in the demonstration. Please also clarify who will pay for these services. Please identify any key assumptions regarding the value proposition provided to the participating customer. Finally, provide evidence to support key assumptions, and evidence to support the hypothesis that whomever is paying for these services will in fact do so, at the price point proposed.

2.2.3. Partner/Third Party

Please describe the services provided by, and/or to, the project respondent and key respondent partners. Please clarify whether the respondent or its partners will participate in NYISO markets and, if it does, who will enroll the respondent (i.e., the Companies or the respondent itself). If NYISO related revenue will be generated as part of this demonstration, please describe exactly how such revenue will be allocated to project participants. Finally, identify key assumptions and provide evidence to support those assumptions.

2.2.4. Utility (the Companies)

Please describe the services and benefits provided by, and/or to, the Companies as part of this demonstration. As relevant, please distinguish between those services where the Companies are the sole provider and/or recipient, and those services where the Companies share either provision or receipt of services with another party. Please clarify the sources of any revenue the Companies will receive as part of this demonstration. Please describe the types of support the Companies are being asked to contribute (e.g., capital costs, customer support, operational and maintenance costs, etc.) Finally, identify key assumptions and provide evidence to support those assumptions.

2.2.5. Optionality

Please describe whether the demonstration project proposed allows for multiple value propositions to be tested and compared. If the demonstration project does not allow for this, please propose an approach to compare the value proposition proposed for this demonstration against alternative value propositions.

2.2.6. Scalability

Please describe the extent to which this business model is scalable outside of this specific demonstration. Please address how the demonstration could reduce risks or barriers to scalability. Respondents can use diverse measures of scalability, such as revenue projections or total market potential in the future given identified assumptions. Please address whether costs scale linearly with market growth, or stabilize after initial

demonstration(s). Finally, identify key assumptions and provide evidence to support those assumptions.

2.3. Demonstration Plan

Respondents should address, in greater detail than the executive summary, exactly what they plan to demonstrate over the course of the project. Please recall that the response should require no more than $25M in the

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section should make clear the key hypotheses that the demonstration will test and how the plan will seek to prove/disprove those hypotheses.

2.3.1. Metrics for Success

Please identify key metrics that will be used to determine if the hypotheses prove true and explain the rationale for selecting these metrics.

2.3.2. Data Collection

The data collected over the course of this demonstration project will serve as the evidence to prove/disprove key hypotheses. For this reason, respondents should consider carefully which sources of data are necessary and how it will collect this data.

In this section, please describe the key pieces of data to be collected in this demonstration, why this data is important/necessary for proving hypotheses, how it will be captured, and who owns the information.

2.3.3. Timelines, Milestones

Assume the project proposed is presented to and approved by the NYSPSC, and work on this project begins exactly 6 months from the response date. Based on those assumptions, please provide high level milestones and

timelines for the project. Please reference, in the appendix, the Companies’ demonstration project outlines and implementation plans for examples of appropriate timelines and milestone.

2.3.4. Operating Parameters

If not already included elsewhere, respondents should describe the rights of each project participant in dispatching the storage asset. Please address who has the rights to dispatch the storage asset, whether those rights can be limited in certain conditions, and, if there are limits, please describe the conditions of those limits in detail. Please also include assumptions about the frequency of dispatch over a given period of time (e.g., day, month, year)

2.3.5. Proposed Project Measurement & Verification

Respondents should address how they plan to measure and verify performance. In addition, respondents should clarify how it – or other project partners – will measure and verify proposed savings or benefits.

2.3.6. Utility Resources and Capabilities

To the extent this topic has not already been addressed in this section, respondents should identify assumptions regarding the resources and capabilities it expects the utility to provide to this demonstration project.

2.4. Third Party Partners

One key priority for REV demonstration projects are partnerships between utilities and third party service providers. The Companies are interested in responses with ready-made partnerships addressing all parts of the

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storage value chain necessary to execute the proposed demonstration (e.g., customers, storage balance of system vendors, software/analytics companies, etc.).

2.4.1. Vendors

Please describe partnerships with other vendors who are part of this demonstration proposal. Describe the nature of this partnership, explain why these partners were chosen, and what products/services they will provide.

2.4.2. Customers or End-Users

Respondents should address whether they have acquired customers in the Companies’ territory for the proposed demonstration. If respondents have not acquired customers, please describe the customer acquisition plan including the timing of, and funding required for, acquiring customers. In addition, respondents should describe the criteria for selecting a given sub-set of customers. Respondents should address to what extent the targeted customers are representative of the Companies’ overall customer base and the extent to which targeted demonstration project customers can serve as a “control group” for a later rollout of storage to a much larger portion of the Companies’ customer base.

2.4.3. Siting

The Companies have not and will not pre-select a demonstration site(s). However, the Companies fully appreciate that siting and permitting a demonstration could be a major timing and deployment risk to this effort. Therefore, this RFI seeks responses that either have a particular site identified or – at a minimum – have clear siting

requirements that can result in the Companies and the applicant quickly identifying a site together.

With that context, respondents should address whether the respondent has identified a site for the proposed demonstration. If the respondent has not identified a site, please describe in detail the desired or required criteria for a demonstration location. Please also describe, briefly, any relevant previous siting or permitting experiences.

2.4.4. Other

Respondents should describe any other partnerships for this demonstration project. Other partners could include any who does not clearly fall into the two categories above (e.g., industry associations, third-party testing,

measurement, and verification firms, financing partners, etc.). Respondents should note that partnerships in name only – that do not clearly advance the goals of the demonstration above and/or add costs with no clear benefit – are not desired.

2.5. Financials

The Companies are interested in the financial value and impact of this demonstration project. Therefore, respondents should provide as much detail as necessary to address the following sections, identifying key

assumptions. This section focuses on the financials of the demonstration project, during the period of the project, and is not focused on long-term projections (longer-term projections are discussed in post-demonstration

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2.5.1. Summary

Please provide an estimated budget for the proposed demonstration. This budget should include key cost categories, incurred by quarter, and should clearly identify any underlying assumptions.

Note that the Companies encourage – but do not require – respondents to submit much of the detailed information in this section as an Excel file, included as an appendix to the response. That Excel file can be in a format of the respondents’ choosing. If submitting an Excel file, respondents are encouraged to include a basic sensitivity analysis in that submission. Such an analysis should identify the range of inputs to a given variable (if known) and demonstrate the degree to which that variance of inputs affects the output.

2.5.2. Utility Revenue Streams

If the Companies are to receive revenue from this project, please identify the nature, timing, and amount of revenue. Please also identify assumptions. Respondents are encouraged – but not required – to include a basic sensitivity analysis of the numbers presented in this section.

2.5.3. Investments

If the Companies or other project participants are expected to make investments in this project, please identify the nature, timing, and amount of investment. Please also identify assumptions. Respondents are encouraged – but not required – to include a basic sensitivity analysis of the numbers presented in this section.

2.5.4. Returns

Respondents should choose and support a relevant measure of return (e.g., cash-on-cash, IRR, ROI, etc.). Please identify the returns on the project (if any) attributable to each participant. If there are no financial returns received as part of this project, please identify the assumptions or scenarios under which such returns could eventually be realized. Respondents are encouraged – but not required – to include a basic sensitivity analysis of the numbers presented in this section.

2.5.5. Cost Effectiveness

Respondents should describe why this project is cost effective. Specifically, please demonstrate that the respondents’ approach, vendors, and technology proposed are the most cost effective option. If a given part of the demonstration is not the most cost effective option, respondents should describe why a less cost effective option is not appropriate.

2.5.6. Sources of Funding

Please clearly identify the sources of funding for the proposed demonstration. Note that the Companies are interested in utilizing other funding streams (i.e., City, State, Federal) to mitigate the overall demonstration cost. Please also note that 3rd_{party capital contribution is a basic principle of REV demonstration projects.}

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Respondents should explain the key technology(ies) proposed for the demonstration project, in the appropriate categories listed below. Respondents are welcome to include relevant supporting data – such as third party testing or validation – as an attachment. If including such data, please explain its relevance.

2.6.1. Storage solution

Please describe the nature of the storage solution (e.g., electrochemical, mechanical, thermal, etc.). Respondents should explain why the chosen storage solution is best suited to address the objectives of the proposed

demonstration.

2.6.2. Performance characteristics

Please describe the performance characteristics listed below. Answers in this section should conform to estimates of the actual devices to be installed during the demonstration projects. Responses below should not be

projections for the performance of a given technology in the future. Respondents are welcome to include supporting performance data or characteristics as a separate attachment:

2.6.2.1. Device Lifecycle: Respondents should provide their estimate of the working lifetime of the device proposed for the demonstration. In this section, it is critical that respondents are detailed about their key assumptions. These assumptions include, but are not limited to, expected duty cycle, total cycles, operating temperature, depth of discharge, etc. that result in the forecasted lifetime.

2.6.2.2. Round trip efficiency (%): Please provide the round trip efficiency percentage of your storage solution, identifying assumptions regarding depth of discharge for the number provided. Please also address whether this round trip efficiency has been verified by a third party or in an operational deployment of the storage device.

2.6.2.3. Energy density (Wh/kg): Please provide the energy density of your device. This should be an overall system energy density that includes any battery cells or packs for

electrochemical devices, as well as inverters, switchgear, etc.

2.6.2.4. Power density (W/kg): Please provide the power density of your device. This should be an overall system power density that includes any battery cells or packs for electrochemical devices, as well as inverters, switchgear, etc.

2.6.2.5. House Loads/Parasitic Loads (kW) Requirement, e.g., HVAC: Please describe and quantify the parasitic load requirements for the project proposed. Please identify whether these requirements were included, or excluded, in the roundtrip efficiency measurement. 2.6.2.6. Environmental – Temperature, Humidity and Altitude: Please describe any environmental

requirements, including temperature, humidity, and altitude, required for optimum operation of the device. Please describe degradation – in terms of performance and safety – outside the optimum conditions provided. Please include any standards to which a system enclosure has been designed to satisfy.

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2.6.2.7. Cooling Requirements: Please address whether the storage device will require either external active cooling, or requires a location with such cooling capacity available. 2.6.2.8. Sound & EMI Emissions: Please provide an estimate of sound (in dB) the device will

produce. Please also provide details on electromagnetic interference (EMI) that will be produced by the device.

2.6.2.9. Installed Capacity, Energy (MW/MWh): Please provide, in MW/MWh respectively, the total installed capacity and energy of the solution. If relevant, please identify the capacity and energy of each single device deployed (if part of a multi-device solution).

2.6.2.10. Maintenance Requirements: Please describe the nature of expected maintenance throughout the device’s useful life.

2.6.2.11. Controls: The respondent should detail any required utility data and interfaces necessary for control schema. Please note that the Companies may require the existence of SCADA controls depending on the size of the proposed deployment, and the customers to which it will be deployed.

2.6.2.12. Standards: Please detail all applicable industry standards the energy storage solution will satisfy, e.g., Battery UL 1973, Inverter IEEE 1547, etc.

2.6.3. Measurement & Verification to date

Please provide measurement and verification information to support the claims made in the section above. Please indicate whether this information was provided by a third party.

2.6.4. Storage Interconnection

Please describe the proposed approach to interconnecting the storage device. Please provide basic details and performance characteristics of key interconnection equipment such as the power conversion system, including whether the inverter proposed has the ability to provide reactive power control. Please also provide basic details on the control system proposed. Respondents should also include a basic diagram detailing power one-line and communications architecture, including assumptions about protection/safety, including power electronics. Respondents should note that the Companies have not preselected a particular demonstration site [see section 2.4.3 for further details]. Therefore, we appreciate that some detail in this section may depend in part on the specific characteristics of the site.

If the solution requires the storage device to be mobile, please describe if/how that affects the interconnection approach described.

2.6.5. Storage Integration and Interoperation

Con Edison operates a GE XA21 Distribution Management System, a Siemens’ Distributed Energy Resource

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DSCADA system. Please describe how the storage device will integrate and interoperate with the systems in question (depending on the nature of the response, the Companies understand that integration may not be required for all systems). If relevant to the proposal, please describe how the system will meet market

requirements for NYISO-related services and how the solution aggregates multiple storage devices, providing the Companies visibility to/control of its operation.

If the solution requires the storage device to be mobile, please describe if/how that affects the integration and interoperation approach described.

2.6.6. Software/Analytics

Please address what additional operational capabilities – or financial opportunities – software or analytical capabilities, packaged along with the storage device, will provide.

2.6.7. Safety/Permitting

Respondents should address whether their proposed energy storage solution has been approved by the Fire Department of New York (FDNY) and New York City Department of Buildings (DOB). If the solution in question has not been approved, please address the status and anticipated timing of approval by FDNY and DOB (if known). If not approved, please also address whether a technically similar solution has been approved by FDNY and DOB. Because the Companies are interested in rapid deployment of the solution, respondents who have not been approved by FDNY or DOB should demonstrate familiarity with safety, permitting, and approval processes. Please also address whether the solution meets applicable UL standards. Finally, if the solution requires the storage device to be mobile, please describe any expected safety or permitting requirements related to transport and/or mobility.

2.6.8. Environmental & Community Impacts

The Companies are interested in avoiding or mitigating any detrimental environmental impacts of the proposed demonstration project. Please address each of the following questions:

2.6.8.1. Environmental Impacts: Please list and describe key environmental impacts prior to, during, and after the proposed demonstration project.

2.6.8.2. Waste Disposal: Please describe your plan for disposal of waste prior to, during, and after the proposed demonstration project.

2.6.8.3. Remanufacturing, reuse, recycling: Please describe any opportunities for remanufacturing, reuse, and recycling of your technology.

2.6.8.4. Noise impacts: Please describe any noise impacts the solution will have on the surrounding community.

2.6.8.5. Other disruption: Please describe any and all other types of disruption this solution could present to the community (e.g., gas emissions, impact of enclosures, etc.)

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2.7. Post-Demonstration Benefits

Respondents should provide a summary of the benefits expected to accrue to all relevant parties (e.g., the

Companies, the Companies’ customers, vendors/3rd_{parties, etc.) that last beyond the term of the demonstration.} Please clearly identify the assumptions necessary to result in the expected benefits.

2.7.1. Qualitative

Please describe any qualitative benefits that last beyond the term of the demonstration. Please identify which party will receive the benefits in question. Benefits more difficult to define or quantify should be addressed in this section, and could include improved storage operational knowledge, or other knowledge/operational benefits for the Companies. Respondents should clarify why they expect these benefits to result, and identify any assumptions necessary to achieve the expected benefits.

2.7.2. Quantitative

Please identify metrics, including specific numeric values, expected to last beyond the term of the demonstration. Respondents are welcome to support the assertions in this section with an Excel document submitted as a

supporting attachment.

2.7.3. Plans to Scale

Respondents should describe a strategy for scaling energy storage to a larger set of the Companies’ customers, and/or at more points in the Companies’ system, assuming a successful demonstration. Please include a high-level, brief strategy for either acquiring customers and/or deploying storage throughout the system. Please note that this topic is distinct from section 2.2.6, where the Companies ask about whether the business model is scalable. This section intends to address how respondents plan to scale.

2.8. Privacy and Cybersecurity

The data collected as part of this demonstration is of utmost importance. That data will prove or disprove the core hypothesis articulated in this document: the Companies can derive significant Market-Based Earnings (MBE) from deploying energy storage on their respective systems. It will also prove or disprove the other related hypotheses the Companies have articulated. Moreover, it is of foremost importance that the Companies and respondents collect, store and maintain data from this demonstration in a way that protects the company’s and our customers’ privacy, and maintains the highest cybersecurity standards.

2.8.1. Privacy

Respondents should describe their strategy for ensuring the Companies and the Companies customers’ privacy and protection of personally identifiable information (PII). In addition, please address the strategy for ensuring the privacy and protection of all other demonstration partners and participants.

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2.8.2. Cybersecurity

Respondents should describe their approach to cybersecurity, including, if relevant to the response, meeting NERC CIP protection rules.

2.9. Commitment to New York

In the State of New York’s Public Service Commission (NYSPSC) Memorandum and Resolution on Demonstration Projects, issued on December 12, 2014, NYSPSC calls for demonstration project partners to demonstration “willingness to invest in the New York market.” With that context, respondents should address whether their company and key project partners are based, or have offices in, New York State. If the respondent is neither based nor has offices in New York, please provide evidence of commitment to enter or invest in the New York market.

2.10. Key risks

Respondents should complete this section as open, honestly, and comprehensively as possible. The Companies are well aware there are risks associated with undertaking an innovative and relatively novel project.

Respondents should not dismiss or minimize the natural and very real risks associated with this project. Instead, the Companies expect respondents to identify all meaningful risks, explain why these have been identified, describe the likelihood and severity of risks, and provide a brief explanation for how each risk could be mitigated or avoided.

2.11. Relevant experience

Respondents’ previous experience with similar efforts is of high importance to the Companies. This section should describe other previous or ongoing efforts similar to the project proposed in this application.

2.12. References

Respondents should include references, and basic contact information such as email addresses and phone numbers, so that the Companies can learn more about the team’s prior work. The best references will be those who were involved in similar efforts to the project being proposed here.

2.13. Team

In a separate attachment, respondents should include CVs for all key team members, including project partners. Respondents should also describe each listed team members’ role on the proposed project.

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3. Instructions to Respondent

Respondents are instructed to prepare the response in accordance with the instructions outlined below, with the response focused on the Demonstration Proposal (Section 2). Respondents should also provide:

1. A separate attachment that includes CVs of key team members, and a description of each team member’s role, per section 2.13;

2. Additional supporting documents provided as separate attachments. These could include, but are not limited to, detailed information regarding the unique value proposition proposed, detailed

budget/financials, evidence to support key assumptions, letters of support, etc. Submissions can be provided in either Excel or PDF format, depending on the nature of the attachment. If respondents submit more than one attachment, please clearly label and number each attachment.

3.1. Response and Submittal Instructions

Responses will be submitted by email to: [email protected]. Please format the email subject line as follows: “Company Name”-2016 Energy Storage RFI E.g. Subject: ABC Company- 2016 Energy Storage RFI

Responses delivered by hand or fax, regular mail, or any other method will not be accepted. The Companies will not be responsible for late, lost, illegible or misdirected submissions.

The Companies may, at its option, contact respondents with additional questions or information requests. If the company is interested in a respondent’s solution, the Companies will contact the respondent and provide

additional details regarding the process subsequent to this submission that will ultimately lead to a demonstration project.

Any questions or clarifications concerning this RFI should be directed to the Companies at

[email protected]. The deadline to submit questions via email is 5:00 PM EDT on February 19, 2016. Emailed questions received after this date will not receive a response. The Companies will not respond to any questions received in-person, by mail, by fax, or by phone. A summary of all questions submitted and the corresponding answers will be submitted via email to all potential respondents by March 11, 2016.

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Response Section Response Section Title

n/a Cover Letter n/a Table of Contents

1 Demonstration Proposal (a described in Section 2) 2 Team (as described in Section

2.13)

Appendix Glossary of Terms

Attachment(s) _{Supplemental Information –} Number/label if more than one included

3.2.1. Cover Letter

The cover letter shall include the following:

 The legal name and address of respondent;

 The name, title and telephone number of the individual authorized to submit information; and  A statement that the respondent has read, understands, and agrees to all provisions of the RFI

3.2.2. Table of Contents

Include a clear identification of the response by section and by page number as identified above.

3.2.3. Demonstration Proposal

This section should include the items outlined in Sections 2.1 – 2.12.

3.2.4. Team

This is a response to section 2.13. As a separate PDF attachment, respondents should include CVs for all key team members, including project partners. Respondents should also describe each listed team members’ role on the proposed project.

3.2.5. Glossary of Terms

Respondent should provide a glossary of terms that is specific to the respondent’s solution.

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Respondents should include any supplemental or supporting attachments, as separate documents, in this section. These could include, but are not limited to, detailed information regarding the unique value proposition proposed, detailed budget/financials, evidence to support key assumptions, letters of support, etc. Submissions can be provided in either Excel or PDF format, depending on the nature of the attachment. Respondents should not include attachments in any other format.

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4. APPENDICES

This section intends to provide respondents with background information to inform and improve responses. Not all the information that follows will be relevant to every response. The Companies recommend respondents read, at a minimum, the New York State Public Service Commission (NYSPSC) Memorandum and Resolution on

Demonstration Projects (4.1) in order to understand the NYSPSC and the Companies’ shared objectives. Moreover, the Companies recommend respondents at least browse the filings related to previously approved demonstration projects. A basic understand of these projects is necessary for the respondent to avoid proposing a demonstration that duplicates existing efforts.

4.1. The New York State Public Service Commission (NYSPSC) Memorandum and

Resolution on Demonstration Projects

On December 12, 2014 the State of New York’s Public Service Commission (NYSPSC) issued a Memorandum and Resolution on Demonstration Projects. That order describes ten guiding principles for REV demonstration projects. The document can be found here:

www.coned.com/energyfuture/pdf/resolution-on-demonstration-projects.pdf

4.2. Linkages to REV Demonstration Principles

The State of New York’s Public Service Commission (NYSPSC) Memorandum and Resolution on Demonstration Projects describes ten guiding principles for REV demonstration projects. Respondents should ensure their response satisfies these criteria. Below, we briefly describe or re-state each key principle and then describe, in

italics, how this RFI process addresses them:

1. Flexibility: The Commission does not intend “to specify the types of project expected but instead to establish guiding criteria.” In this section, the Companies make explicit how this RFI process meets the

guiding criteria. In addition, the detailed and targeted RFI should also filter for only those respondents who have addressed the guiding criteria.

2. Demonstrating Innovation: NYSPSC wants utilities to have “a portfolio of demonstration projects to test various technologies” that include “various DER technologies and products that can be into the utility distribution system planning and operations; customer engagement and response; and DSP technologies that will allow for the integration, visualization, and market operations related to DERs.” Energy storage is

a DER technology and, depending on the specific demonstration ultimately selected, is likely to also feature customer engagement and response and/or involve integration of other DERs.

3. Value Distribution: The Commission seeks a clear delineation of how generated economic value is divided between the customer, utility, and third party service provider. It also seeks a proposal for how much capital expense should go into the rate-base versus competitive markets. Any successful response should

be clear on the division of economic value between each key constituent. An intended outcome of this demonstration – like others – is to shed light on optimal recovery mechanisms.

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4. Partnerships: The Commission seeks partnership between the utility and the third party service provider with the goal of a significant third party capital contribution. This RFI seeks to identify specific partners

best suited to execute the objectives above. Any successful response will require partnerships, likely multiple partnerships, and will also require third party capital.

5. Customer Engagement: The Commission states that, “customer engagement and measuring customer response to DER and data sharing will be a crucial element of these demonstrations.” While the

Companies are not mandating a particular approach to customer engagement, we ask about customer acquisition and engagement in this RFI and therefore expect successful respondents to have an effective strategy and process for maximizing value to – and engagement with – customers.

6. Market Solutions: The Commission states, “utilities should identify the problem and the market should propose solutions.” The Companies could not agree with this sentiment more. This RFI seeks to describe

our “problem” or objective, and let the market propose specific solutions.

7. Developing Competitive Markets: The Commission desires demonstration participants to propose rules that will help to create competitive markets. This RFI focuses heavily on “experiment” or demonstration

design in an attempt to derive the information necessary to create an informed perspective on what an optimal competitive market might look like.

8. Ensuring Cyber-Security: The Commission desires to “maintain customer data privacy and keep platform operations safe.” The RFI asks respondents to address these specific issues in section 2.8.

9. Scalability: The Commission wants to “ensure the scalability of the technologies and products tested.”

This RFI asks respondents to address these specific issues in sections 2.2.6 and 2.7.3

10. Cost Recovery: The Commission asks utilities to “bring proposed cost allocation methodologies and cost recovery mechanisms to the Commission for consideration.” Successful respondents will envision and

articulate these mechanisms as part of their response.

4.3. NYSPSC Staff White Paper on Ratemaking and Utility Business Models

On July 28, 2015 the State of New York’s Public Service Commission (NYSPSC) issued a White Paper on Ratemaking and Utility Business Models. This document contains a discussion of Market Based Earnings (or MBE). It can be found here:

www.coned.com/energyfuture/pdf/white-paper-on-ratemaking-and-utility-business-models.pdf

4.4. NYSPSC Table of Contents for Demonstration Filings

After the Companies select the respondent(s) with whom it will file a demonstration project(s), the Companies are required to file the project with the NYSPSC for approval. This document is the table of contents that the

Companies will have to follow for the demonstration project filings. Respondents should note that the Companies have designed this RFI to address almost all of the topics to be discussed in the formal filing. The document can be found here:

www.coned.com/energyfuture/pdf/rev-demo-table-of-contents.pdf

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After the Companies submit a demonstration project to the NYSPSC for consideration, the NYSPSC has established criteria upon which to evaluate the proposed project. Respondents should note that this is the NYSPSC’s criteria, and not the Companies’. This document can be found here:

www.coned.com/energyfuture/pdf/rev-demo-criteria-for-evaluation.pdf

4.6. Existing Con Edison and Orange & Rockland Demonstration Filings

Con Edison has filed three demonstration projects with the NYSPSC. Orange and Rockland Utilities has filed one demonstration project. What follows are links to the demonstrations as filed with NYSPSC. These documents are relevant to respondents as the Companies do not want to replicate or duplicate activities undertaken by existing demonstrations.

4.6.1. CONnectED Homes (Con Edison)

This Reforming the Energy Vision (REV) demonstration project, run by Con Edison, will leverage customer data and analytics to develop highly targeted and tailored Distributed Energy Resources (“DER”) messaging for customers to be used in partnership with Energy Service Providers (ESPs), as well as an online marketplace for customers to purchase energy-saving DERs. Please note that there was an addendum to the original demonstration. Both the original proposal, and the addendum, can be found here:

www.coned.com/energyfuture/pdf/connected-homes-platform.pdf www.coned.com/energyfuture/pdf/addendum-connected-homes.pdf

4.6.2. Building Efficiency Marketplace (Con Edison)

This REV demonstration project, run by Con Edison, is setting up a marketplace to drive increased customer awareness of, and participation in, its energy efficiency and demand management programs. The document can be found here:

www.coned.com/energyfuture/pdf/building-efficiency-marketplace.pdf

4.6.3. Virtual Power Plant (Con Edison)

This REV demonstration project is designed to demonstrate how aggregated fleets of solar plus storage assets in hundreds of homes can collectively provide network benefits to the grid, resiliency services to customers, monetization value to Con Edison, and results that help inform rate design and development of distribution-level markets. The document can be found here:

www.coned.com/energyfuture/pdf/virtual-power-plant-vpp.pdf

4.6.4. Distributed Energy Resources Residential Offering Platform (Orange and

Rockland)

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This REV demonstration project, led by Orange and Rockland, intends to provide a Customer Engagement and Marketplace Platform (CEMP) to increase customer awareness and education of energy consumption issues, motivate customers to participate in O&R programs, increase distribution and adoption of distributed energy resources, and develop new revenue streams for O&R and its partners. The document can be found here: www.coned.com/energyfuture/pdf/o-and-r-demo.pdf

4.7. Existing Con Edison and Orange & Rockland Implementation Plans

For each demonstration project filed with the NYSPSC, the Companies must file a more detailed implementation plan. Those plans provide more granular insight into the management structure of the project, experiment design, and specific work plans and budget. These documents are relevant to respondents in helping to consider effective approaches to testing the hypotheses described in this RFI.

4.7.1. CONnectED Homes (Con Edison)

The implementation plan for the CONnectED Homes project can be found here: www.coned.com/energyfuture/pdf/connected-homes-implementation-plan.pdf

4.7.2. Building Efficiency Marketplace (Con Edison)

The implementation plan for the building efficiency marketplace project can be found here: www.coned.com/energyfuture/pdf/building-efficiency-marketplace-implementation-plan.pdf

4.7.3. Virtual Power Plant (Con Edison)

The implementation plan for the virtual power plant (or VPP) project can be found here: www.coned.com/energyfuture/pdf/clean-vpp-project-implementation-plan.pdf

4.7.4. Distributed Energy Resources Residential Offering Platform (Orange and

Rockland)

The implementation plan for the distributed energy resources residential offering platform can be found here: www.coned.com/energyfuture/pdf/o-and-r-implementation-plan.pdf

4.8. NYSPSC Assessment of Existing Con Edison and Orange & Rockland

Implementation Plans

After the Companies file implementation plans with NYSPSC, the Commission responds with an assessment of those plans. Assessments for each demonstration project’s implementation plan follow.

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The assessment for the CONnectED Homes implementation plan project can be found here: www.coned.com/energyfuture/pdf/dps-staff-assessment-report-connected-homes.pdf

4.8.2. Building Efficiency Marketplace (Con Edison)

The assessment for the building efficiency marketplace project implementation plan can be found here: www.coned.com/energyfuture/pdf/dps-staff-assessment-report-building-efficiency-marketplace.pdf

4.8.3. Virtual Power Plant (Con Edison)

The assessment for the virtual power plant (or VPP) project implementation plan can be found here: www.coned.com/energyfuture/pdf/dps-staff-assessment-report-clean-vpp.pdf

4.8.4. Distributed Energy Resources Residential Offering Platform (Orange and

Rockland)

The assessment for the distributed energy resources residential offering platform project implementation plan can be found here:

Request for Information

Consolidated Edison Company of New York, Inc. and Orange and Rockland Utilities, Inc.