1. California Energy Commission Projection Tool to Support Contingency Mitigation Decisions 2015 IEPR Workshop UC Irvine, Irvine, California August 17, 2015 Mike Jaske and Lana Wong Energy Assessments Division Mike.Jaske@energy.ca.gov / 916-654-4777 1

2. California Energy Commission Scope Purpose Methods and Assumptions Baseline Results Sensitivities Scenarios Findings and Conclusions for Modeling Using the Tool to Inform Mitigation Measure Triggering 2

3. California Energy Commission LCAAT Purpose LCAAT = Local Capacity Annual Assessment Tool Develop annual projections of resources versus local capacity requirements for Southern California Provide an analytic basis for understanding the timing and nature of a shortfall in any local capacity area and/or subarea in Southern California Issues surfaced by LCAAT, confirmed by a power flow study, could lead to a recommendation to trigger mitigation measures or other actions 3

4. California Energy Commission SoCal Local Reliability Areas 4

5. California Energy Commission METHOD & ASSUMPTIONS 5

6. California Energy Commission Method Spreadsheet tool for easy use/modification Baseline input assumptions drawn from those already developed for 2014 LTPP and for 2014/15 TPP Create methods and supplemental inputs to enable geographic tagging by local areas/subareas Create logic to modify initial LCR study results Produce tabulations of resources vs requirements by local area/subarea Update inputs comprehensively annually and selectively as needed 6

7. California Energy Commission Method, cont’d Advantages of Simplified Tool –Much easier to assemble data and assess a new set of assumptions –Reduced effort per run allows many more runs Disadvantages of Simplified Tool –Loss of accuracy compared to in depth methods –Greater loss of accuracy when contingencies create voltage instability concerns –Concerns may be larger for smaller subareas –Requires update when new in depth results arise 7

8. California Energy Commission Overview of Assumptions Base Demand – CEC 2013 IEPR –Demand-side adjustments Additional AAEE (savings beyond base forecast) IOU PPAs – Preferred EE, BTM Storage, BTM DG Local capacity requirement values - CAISO 2015, 2019, 2024 Local Capacity studies –Transmission Adjustments based on CAISO published studies and response to CEC questions –Demand-side adjustments Assumed 1-for-1 MW reduction 8

9. California Energy Commission Overview of Assumptions (cont.) Resources –2014 Net Qualifying Capacity (NQC) List –IOU PPAs –2014/2015 TPP RPS Portfolios – Trajectory (baseline) and High DG (alternative) Retirements –SWRCB OTC compliance dates –Some aged-based retirements –Contract based extensions to aged-based retirements 9

10. California Energy Commission Local Capacity Requirements CAISO Studies Provide Base LCR Values –2015 and 2019 from Local Capacity reports –2024 results from studies within the 2014/15 TPP Base LCR requirements modified by: –Load modifiers (EE, BTM DG, BTM storage) –Transmission system upgrades not included within the assumptions for the study of a specific year 10

11. California Energy Commission Resources Base year capacity values: –2014 NQC list used for resource adequacy –Tabulated by local area and subarea Modifications in future years: –OTC facility compliance dates –Projected retirements based on plant age modified by contract term data when available –Presumed resource additions –Specialized factors for specific variables 11

12. California Energy Commission OTC Retirements/Replacements Facility Capacity (MW) SWRCB Compliance Date Replacement Capacity (MW) Online Date El Segundo 433512/31/2015-- Redondo Beach1,35612/31/2020-- Alamitos2,01012/31/20206406/1/2020 Huntington Beach45212/31/20206445/1/2020 Encina95012/31/201763211/1/2017 12

13. California Energy Commission Tabular Results for LA Basin Variables (Summer Peak MW)Source201320142015201620172018201920202021202220232024 LA Basin Base Load Forecast2013 IEPR203782081221210214902176222039223442266222964232372348823716 lessLoad Forecast Adjustment000000000000 lessAAEE2013 IEPR0221472733994885886807698619691078 lessPreferred EESCE RFO0005249912012813011710695 lessPreferred BTM Energy StorageSCE RFO000025163169172170172 lessPreferred BTM DGSCE RFO00001140 =Managed Load Forecast203782078921064212132130421250214262164221854220472220222332 Gross Local Capacity Requirements10692948496151014710242101071004510280102181017310228 lessT-system Upgrade Impacts(240) (640)(740)(500)(400)(700) (800) lessLCR Change from Demand Adjustments(22)(147)(277)(458)(790)(917)(1020)(1110)(1190)(1286)(1384) =Adjusted LCR Base104309097909890498712869086258471832881868043 OTC Non NuclearScenTool4153 3818 24620000 plus OTC Nuclear ScenTool00000000000 plus Hydro ScenTool309 plusSolarScenTool22222222222 plusWindScenTool62252 plusGeothermalScenTool00000000000 plusBiomassScenTool97 plusCogenerationScenTool554710 681 plusPumpScenTool00000000000 plusNon OTC PeakerScenTool1927 18821622 plusNon OTC ThermalScenTool357635912951 plusVarious and UnknownScenTool77 plusIncr. Peaker AdditionsSCE RFO000000098 plusIncr. Thermal AdditionsSCE RFO0000001280 plusIncr. RPS Calc - Renew14/15 Port714 plusIncr. RPS Calc - DG14/15 Port2952154155159162166174195222 plusStorage AdditionsSCE RFO0000000100 plusDR Program/Preferred DRCapability162164167180219253256258261 =Total Resources Base10953113471043310186102301026710198794579397966 =Resource Need (Surplus/Deficit) Base 523225013361137151815771573(526)(389)(220)(77) 13

14. California Energy Commission Graphical Results for LA Basin Key VariablesSurplus/Deficit 14

15. California Energy Commission BASELINE RESULTS 15

16. California Energy Commission Simplified LA Basin Results Variable2016202020212024 Base Load Forecast21490226622296423716 Load Forecast modifiers278102011101385 Managed Load Forecast21213216422185422332 Gross Local Requirements9615100451028010228 T-system Upgrade Impacts-240-400-700-800 Load Modifier Impacts-277-1020-1110-1384 Adjusted Local Requirements9098862584718043 Total Resources104331019879457966 Resource Surplus/Deficit over LCR13361573-526-77 16

17. California Energy Commission Baseline Surplus/Deficit Results 17

18. California Energy Commission Baseline Results Observations Surpluses exist in all areas through 2020. OTC retirements at the end of 2020 reduce the surplus and result in resource deficits beginning in 2021 in LA Basin and West LA subarea that slowly shrink through 2024. San Diego area has a surplus that declines over time, resulting in a small deficit in 2024. Combined LA Basin/SD has a small deficit in 2021 that slowly increases through 2024. 18

19. California Energy Commission Observations (cont.) One of the key drivers of the reduction in the deficit in LA Basin between 2021 and 2024 is the ramping of energy efficiency: –Increases savings by about 300 MW just between 2021 and 2024 –Uncertainties exist with the overall AAEE projections and their allocation to specific load busses within LA Basin local area 19

20. California Energy Commission SENSITIVITY RESULTS 20

21. California Energy Commission Sensitivity Study Baseline assumptions are carefully prepared, but most are subject to uncertainty Ease of use of LCAAT allows assessments of uncertainty too resource intensive to be used with other assessment tools Consider plausible range of alternative assumptions around the baseline Analyze impact on surplus/deficits by local area 21

22. California Energy Commission 11 Variables Assessed 1.2014 IEPR Demand Forecast 2.AAEE Savings Reduced by Recent EM&V 3.Transition of CHP QFs to wholesale gen. 4.Demand Response – Full Capability 5.Demand Response – Moderate Capability 6.Higher Demand Growth than CEC Forecast 7.Mid-AAEE Savings Projections 22

23. California Energy Commission 11 Sensitivities (cont.) 8.RFO Performance Below Nominal 9.RPS High DG + DSM Portfolio 10.Storage High – Satisfies CPUC D.13-10-040 11.Storage Moderate – Mid Way between Baseline Storage and High Storage 23

24. California Energy Commission Alternative DR Capability in 2024 Effective (MW) Moderate (MW) Full (MW) Combined LA Basin / SD Area 203542882 LA Basin 182521861 West LA (effective) 182 West LA (less effective) 0185370 Eastern-Metro subarea 0141282 Eastern Sub-area bal. 01327 San Diego Subarea 21 24

25. California Energy Commission Alternative AAEE Projections(MW) Case Area201620202024 Baseline AAEELA Basin2736801078 (low-mid)West LA subarea161402637 Eastern-Metro subarea90224355 San Diego81216361 SensitivityLA Basin164408647 (40% Reduct.)West LA subarea97241382 Eastern-Metro subarea54135213 San Diego49130217 IncrementLA Basin-109-272-431 West LA subarea-64-161-255 Eastern-Metro subarea-36-89-142 San Diego-32-87-145 25

26. California Energy Commission Alternative RPS Portfolios (MW) Area/Type 33% Trajectory Mid-AAEE 33% High DG + DSM Difference LA Basin DG222904682 Central Station Renew.147-7 Western LA Basin DG209785576 Central Station Renew.000 Eastern LA Basin DG13119106 Central Station Renew.147-7 26

27. California Energy Commission Combined Area Selected Sensitivity Results

28. California Energy Commission LA Basin Area Selected Sensitivity Results

29. California Energy Commission Sensitivity Results Observations Sensitivity results have a similar shape to the baseline surplus/deficits. Some variables improve the surplus/deficits while other variables worsen surplus/deficits. Sensitivities may have different impacts on the local areas/subareas. 2021 remains a critical year due to OTC retirements. –DR Full and RPS: High DG + DSM sensitivities are the only two that eliminate the deficit in 2021. 29

30. California Energy Commission SCENARIO RESULTS 30

31. California Energy Commission Scenario Development Alternative scenarios were developed: –Optimistic Bookend – 2014 IEPR load forecast, full DR capability, high levels of storage –Markets Cooperate – moderate levels of DR capability, moderate levels of storage –Incentives Fail – higher base forecast, partial AAEE savings –Pessimistic Bookend - higher base forecast, partial AAEE savings, IOU preferred resources not fully achieved, incomplete conversion of CHP QFs 31

32. California Energy Commission Surplus/Deficit: Combined Area 32

33. California Energy Commission Surplus/Deficit: LA Basin 33

34. California Energy Commission Surplus/Deficit: SD Subarea 34

35. California Energy Commission Surplus/Deficit Range in 2024 Optimistic (MW) Baseline (MW) Pessimistic (MW) Combined LA Basin / SD Area 1193(237)(1975) LA Basin1138(77)(1496) West LA subarea524(291)(1253) Eastern-Metro subarea3637(378) San Diego Subarea175(40)(358) 35

36. California Energy Commission Baseline vs. Scenarios No alternative scenario illustrates a radical change in pattern from the Baseline pattern. Combined, LA Basin and West LA subarea all have similar shapes dominated by large loss of fossil OTC on 12/31/2020. San Diego subarea has a different shape since its OTC capacity loss is 12/31/2017. Bookend scenarios have a quite wide range. 36

37. California Energy Commission FINDINGS AND CONCLUSIONS 37

38. California Energy Commission Conclusions Baseline results for key years are consistent with ISO power flow study results. LCAAT reveals 2021-2024 deficits for all areas involving LA Basin. LCAAT shows San Diego subarea surplus is steadily declining toward small deficit in 2024. Alternative assumptions can eliminate deficits or increase surpluses. 38

39. California Energy Commission Findings Deficits are a source of concern, not alarm. The ISO should study year 2021 using its standard power flow modeling technique. The CPUC should: –Study local capacity requirements in the 2016 LTPP for years 5-8 forward. –Consider using an expanded version of LCAAT for JRP, Track 2. Critical to monitor demand-side savings and use realistic range of projections for key variables. 39

40. California Energy Commission USING THE TOOL TO TRIGGER MITIGATION 40

41. California Energy Commission Analyses to Support Decisions Regular Activity –Update and run LCAAT periodically. –Update and run LCAAT as significant new information becomes available. –Communicate results to staff of other agencies. If LCAAT results show future deficits –Identify any independent information that can inform a decision. –Brief agency management team. –Request ISO to conduct a power flow study. –Provide LCAAT and power flow results to agency decision- makers 41

42. California Energy Commission Triggering Mitigation Measures ILLUSTRATIVEPOSSIBLE ACTIONS Projection pattern dictates mitigation Case A - projections show a temporary gap –Trigger a compliance date deferral request to SWRCB Case B - projections show a large, permanent gap –Trigger new fossil capacity option 42

43. California Energy Commission Mitigation Measure Selection Nature of the shortfall of resources versus requirements –Amount: small or large –Time period: limited or permanent –Area in which deficit is predicted to occur Considerations –The uncertainty of shortfall estimates –The elapsed time from triggering until the solution could be operational –Feasibility of off ramps if new information emerges 43

44. California Energy Commission QUESTIONS? 44