Over 3,300 Megawatts and CountingGrowing and Transforming One of Nation’s Largest DSM Portfolios

ABOUT DUKE ENERGY

Six regulated operating companies: Duke Energy Carolinas, Duke Energy Progress, Duke Energy Florida, Duke Energy Indiana, Duke Energy Ohio, Duke Energy Kentucky

About Duke Energy

Examples of Programs Impacting Demand

• Energy Efficiency Programs• Interruptible Service• Time of Use Rate Offerings• Real Time Pricing• Demand Side Management (DSM) ProgramsResults – Defer the need for additional power plants, delay the need for transmission and distribution upgrades, and reduce fuel costs used in generation.

1,157 MW Residential, 1,851 MW Commercial

Summer DSM Capabilities

Duke Energy DR Portfolio = 2,100+ Winter MW

CarolinasDuke Energy Progress

Residential10 MW

Commercial233 MW

Duke Energy Carolinas

Commercial450 MW

MidwestDuke Energy

Indiana

Commercial346 MW

Duke Energy Ohio

Duke Energy

Kentucky

FloridaDuke Energy Florida

Residential685 MW

Commercial433 MW

695 MW Residential1,462 MW Commercial

Winter DSM Capabilities

Duke Energy – DSM Programs

A “Traditional” DSM Program

EnergyWise HomeDuke Energy Progress

Residential - EnergyWise Home• Overview

– Control of Residential AC Units, Heat Pump Strip Heat, and Water Heaters using cycling strategies

– One-way RF paging switches using commercial paging– Both Summer and Winter Program Options – Summer - AC only, entire service territory, in 2014 120,000 customers yielding

251 MW– Winter - Water heaters, HP strip heat, western region only, in 2014 6,000

customers yielding 10 MW– 15% market penetration in 5 years

• Summer Program (System Wide)– Control Season – May through September– Control AC Units for up to 4 hours daily and up to 60 hours during control season– Participants receive an initial $25 bill credit and $25 annual bill credits– Participants have the ability to “opt-out” of control events twice per season

(average of 46 per control event or 0.04%)

Residential - EnergyWise Home• Winter Program (Western Region Only)

– Control Heat Pump Strip Heat for up to 4 hours daily and up to 60 hours during control season

• Control Season – December through March• Participants receive an initial $25 bill credit and $25 annual bill credits• Participants have the ability to “opt-out” of control events twice each season (average of 2 per

control event or 0.02%)• Participants receive an initial $25 bill credit and $25 annual bill credits

– Control Water Heating for up to 4 hours daily with no maximum limitation throughout calendar year

• Participants receive an initial $25 bill credit and $25 annual bill credits

• Customer Satisfaction– High customer satisfaction =>90% four years in a row

• Current and Future Growth Initiatives– Multi-family rental market– Two-way Wi-Fi thermostats – Expand Winter Program to entire service territory

266 MW

290 MW

312 MW

332 MW

350 MW

2015

2019

5 yr GrowthSummer MWs

Cycling Based DSM Technology

A/CCompressorRun Times

On48 minutes

Off 12 minutes

AverageRun

Time per hour(example

48 out of 60 minutes)

On - 24 minOff - 36 min

65%cycle

On - 16.8minOff - 43.2 min

On4.2 min

Off10.8min

On4.2 min

Off10.8min

On4.2 min

Off10.8min

On4.2 min

Off10.8min

On6 min

Off9 min

On6 min

Off9 min

On6 min

Off9 min

On6 min

Off9 min

50%cycle

Cycling Strategies

Two Schools of thought as to cycling strategies and the extent of their deployment –• Deploy it as often as possible irrespective of necessity:

– Use the maximum program hours per season– Employ higher cycling rates

Result: Satisfies DSM needs, can cause program participants unnecessary discomfort and an increase in attrition rates

• Deploy it when it becomes absolutely necessary:– Use to satisfy system requirements due to capacity limitations or

constraints– Use lowest possible cycling rates

Result: Satisfies DSM needs, minimizes unnecessary participant discomfort, maximizes satisfaction and minimizes attrition

DSM Program Strategies

Use participant based DSM Strategies that:• Can be deployed effectively when needed; • That effectively lessen the need for supply side

resources, as designed, when those resources are in short supply or constrained; and

• Maintain the pool of existing participants and to attract new program participants

Duke Energy – DSM Programs

A “non-Traditional” DSM Program

DSDR

DSDR - Duke Energy Progress

The Distribution System Demand Response (DSDR) Program is comprised of a system of enhanced equipment and operating controls which enables the reduction of peak load using the Company’s distribution system.

DSDR is definitely a “Non-Traditional” DSM Program.

DSDR - Duke Energy Progress

DSDR might be considered a “Non-Traditional” Energy Efficiency program as well.

In any event ……..

DSDR is an innovative voltage control program which is on the “leading edge” of grid technology and is an element of the Company’s overall Smart Grid strategy.

DSDR – What Does it Do?

• DSDR provides the ability to reduce peak load requirements which would otherwise require building peak load generation capacity. At present DSDR can provide over 320 MW.

• DSDR reduces system line losses (~32,000 MWH annually)

• DSDR reduces spinning reserves and related fuel requirements

• An additional benefit of DSDR is its capability to communicate with and help accommodate distributed generation and renewable resources

DSDR – How Does It Work?

• For a typical distribution feeder, voltage leaves the substation in proximity to the highest allowable voltage level and drops as it goes farther down the feeder to a level close to the lowest allowable level.

• The DSDR Program essentially provides and maintains consistent voltage to all customers served from the feeder.

• Consistent voltage across feeders maximizes the ability to reduce voltage when supply side resources are in short supply or constrained.

DSDR – Voltage “Equity”

Lower Regulatory Limit

Upper Regulatory Limit

Illustrative Example of Voltage Control – Pre & Post DSDR

Pre-DSDR

Post DSDR

Feed

er

Volta

ge

Feeder Length

DSDR Principle of Operation

Lower Regulatory Limit

Upper Regulatory Limit

Flattened profile allows greater Voltage Reduction

Existing

Flattened Profile after feeder conditioning

Lower Voltage to Reduce MWs

Feed

er

Volta

ge

Feeder Length

DSDR – What Does it Need?

Real Time Data from Substations and Feeder Devices• Real time status of breakers, switches and reclosers

• The Distribution Management System (DMS) is the integral component of DSDR

• DMS utilizes approximately 240,000 data points

• Average of 200 points per feeder

• A typical feeder has 1,500 customers, 10 MWs, line regulators, an electronic recloser and an average of 1.5 Medium Voltage sensors

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DSDR Illustrative Overview

Regulator Capacitor

SUB

DSCADA

Distribution Management System

Medium Voltage Sensor

Low Voltage Sensor

DMS receives telemetered data from substation devices, line regulators, cap banks, and

MV/LV sensors.

DMS runs load flow on GIS network model.

DMS runs state estimation and calibrates the load flow

calculations using the telemetered data.

DMS will send out ‘switching sequences’ to change the

‘setpoints’ of regulators and status of capacitor banks.

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Growing Customer Load

Trajectory of Load(dotted)

Sys

tem

Lo

ad (

DE

P)

System Load for 4 Hours During 2014 Polar Vortex

Generating Limit

DSDRLoad

Reduction

5 A

M

6 A

M

7 A

M

8 A

M

9 A

M

10 A

M

Example - Distribution System Demand Response Performance