Power Supply Adequacy Forum Roundtable Discussion on IRP

1
Power Supply Adequacy ForumRoundtable Discussion
on IRP

• Overview
• History of IRP
• PacifiCorps Position
• Key IRP Assumptions
• Reviewing Assumptions
• Studies Issues

• May 2003

2
History of PacifiCorps IRP
Dec. 01 to Feb. 02
Mar. 02 to May 02
Jun. 02 to Aug. 02
Sep. 02 to Jan. 03

• History of IRP
• Used Henwood models (ProSym and MarketSym) to
  perform analysis
• Risk was introduced as an important factor in
  this IRP process
• Required to file an IRP every two years
• Ten Public Input Meetings were held between
  December 2001 and February 2003
• Eleven Public Technical Workshops were held with
  participants
• The IRP was filed in all states on January 24,
  2003

• Began public input meetings
• Selected IRP model
• Gathered and input model data and assumptions

• Held technical workshops
• Finalized risk model
• Ran portfolios through models
• Processed data and produced preliminary results
• Refined portfolios based on findings, ran new
  portfolios

• Produced final set of IRP Results
• Developed Action Plan
• Prepared IRP Draft Report
• Communicated IRP findings and issued Draft Report
• Modified Draft Report based on public input
• Filed IRP with all State Public Service
  Commissions

• Evaluated risk models
• Consolidated models and verified preliminary
  results
• Updated inputs and assumptions
• Selected initial new resources for portfolios
• Completed initial model runs

3
Analysis of Current Position

• PacifiCorps current position reveals a
  substantial need for new resources
• Anticipate need of about 4,000 additional
  megawatts of capacity over the next 10 years
• The 15 Planning Margin accounted for 1,700 MW
  of the 4,000 MW in the least-cost, low risk
  portfolio

• Results of Analysis
• Both deterministic and stochastic analysis were
  performed on top portfolios
• Thirteen stress tests were also performed on top
  portfolios
• Least-Cost Portfolio included
• 1,400 MW Renewables
• 1,200 MW Peakers
• 2,100 MW Base Load
• 450 MWa DSM
• 700 MW Shaped Products

4
IRP Planning Margin Assumption

• Base Case Assumptions
• Average hydro
• Average loads
• No Capacity credit for wind
• Market sales and purchases were limited to 500 MW
  for each control area

• Decision Criteria used in filed IRP
• Limit initial net short energy position to less
  than 5 of the hours in any year
• Build portfolios to meet 15 capacity planning
  margin for the system by fiscal year 2007
• Planning Margin Load (LT Sales - LT
  Purchases) x 0.15
• This is mid-way between 12-18 mentioned in SMD
  discussions
• Reserve peakers were built to cover planning
  margin
• Issues with Decision Criteria
• 5 criteria seemed arbitrary to third parties
• FERC's SMD White Paper issued on April 28, 2003
  specifically said it would not require a minimum
  level of resource adequacy
• FERC indicated that resource adequacy will be
  left up to the states and/or regions

NoteFERCs Standard Market Design - Notice of
Proposed Rulemaking
5
Review of Planning Margin Assumption

• Planning Margin Analysis
• Planning margin was used to provide sufficient
  resources to cover unplanned outages, provide
  operating reserves, regulatory margin, and demand
  growth uncertainty

• PacifiCorps view is planning margin needs to
  reflect the operating requirements
• Operating Reserves (vary by control area)
• Obligated by WECC to carry operating reserves
  above firm load at any time plus additional as
  seemed appropriate by operators
• One measure of operating reserves is 5 of hydro
  and 7 of thermal generation being used to serve
  load at that time
• Generator Unplanned Outages
• Historical and future unplanned outages between
  10 - 12
• Appropriate amount of planning margin for each
  control area is still under review
• PacifiCorp has transmission constraints on the
  East side of its system that may mandate a higher
  planning margin requirement
• More flexibility on West side of PacifiCorp
  system

6
Next Steps - Studies Issues

• Goals of IRP
• Plan for new resources to provide reliable
  service
• Gain key stakeholder involvement and commitment
• Comply with PUC requirements
• Gain PUC acknowledgement of the Action Plan
• Foundation for future investment and long term
  business planning

• Studies Under Review
• Demand-elasticity in our load forecast
• Reliability and economic risk associated with
  varying planning margin levels
• Capacity contributions associated with wind
  plants
• Different planning margin requirements for
  transmission constrained areas
• Issues
• Appropriate trade-off between risk and cost is a
  policy/regulatory issue
• Building reserves is expensive - production cost
  models should always choose less reserves unless
  extreme assumptions are made for market prices
  penalties