1. Ad Hoc West-wide Resource Assessment Team (WRAT) : Assessment of Western System Adequacy in the Short-term Jeff King Northwest Power Planning Council Presentation to Joint WEIB/CREPC Meeting April 23, 2003

2. Western System Adequacy2 The concern, exemplified by Northwest capacity additions

3. Western System Adequacy3 Purpose of this assessment To explore an approach for relatively quick assessment of future system adequacy. To assess near-term (through 2006) conditions using this approach. To identify information needs and availability to support this type of assessment.

4. Western System Adequacy4 What are we measuring? Index of unserved energy Forecast unserved energy by month as fraction of annual average load. A comparative measure of adequacy. Not greatly meaningful in absolute terms. Reserve margin Difference between monthly peak load and supply capacity, divided by monthly peak load. Not quite, but close to “Planning Reserve” convention. Has comparative value; probably some absolute significance as well.

5. Western System Adequacy5 The modeling tool The EPIS AURORA © Electric Market Model, a proprietary computer model of the western power system. Forecasting future resource additions Test resource cost-effectiveness through iterative dispatch runs. Plants having uneconomic going forward costs are retired. New units having positive net present value are added. Model seeks a least-cost resource mix. Forecasting power prices Calculate hourly market clearing prices by load-resource area. Hourly area price = variable cost + dispatch premium of most expensive resource required to meet load for that hour.

6. Western System Adequacy6 Geographic Scope 16 load-resource areas, defined by transmission bottlenecks Individual generating units (~3300) Fuel price forecasts for ea. LRA Load forecast for ea. LRA Load curtailment blocks for ea. LRA Transmission capacity, losses & costs between LRAs New resource options for ea. LRA

7. Western System Adequacy7 Modeling approach (1) The primary output of the model is wholesale prices. However, the following (& more) are available on an annual, monthly and hourly basis. Loads Supply (capacity & capability) Fuel use Emissions Transmission loading Curtailment The latter is of particular use for this assessment

8. Western System Adequacy8 Modeling approach (2) Set up AURORA © input data sets to simulate the WECC system for years 2000 through 2006. began with Power Council database ca: Jan 2003 reviewed & updated NPPC database, focusing on 2000-06 resource additions & retirements. WRAT members very helpful. Base case hourly resource dispatch poor Northwest hydro conditions calculated unserved load Ran variations on the base case that considered plausible developments that might impact ability to serve load.

9. Western System Adequacy9 Base Case assumes poor Northwest hydro Northwest hydro approximating 2001 for each study year. Projects under construction are completed as scheduled. Projects scheduled for retirement are retired as scheduled. Operating reserve (non-dispatchable) - 6.5% for each LRA NPPC medium load growth forecasts. EPIS AURORA default seasonal & daily load shapes. SBC and RPS resource additions (CA, MT, OR, NV, AZ). Transmission upgrades (between AURORA L/R areas): P15 (3950 > 5400MW between 2004 - 06 ) S. CA - Baja (408 > 1361MW in 2005)

10. Western System Adequacy10 Base Case Loads

11. Western System Adequacy11 Base Case resource additions & retirements

12. Western System Adequacy12 Base Case: no shortfall potential evident through 2006

13. Western System Adequacy13 Sensitivity cases A - C A. Some projects scheduled for completion are not completed. Asmp: Post-03 completions not achieved (-4373 MW). Result: Small shortfall potential in 2006. B. Retirements in addition to those currently announced. Asmp:Economic retirements from AURORA capacity addition study (-420 MW). Result: No significant change from Base Case. C. RPS/SBC additions are less than forecast. Asmp:RPS/SBC additions 50% of forecast (-975 MW). Result: No significant change from Base Case.

14. Western System Adequacy14 Sensitivity cases D - F D. Reduced availability of non-hydro resources. Asmp: Non-hydro FOR increased by 2% (-2590 MW in ’06). Result: Small shortfall potential in 2006. E. High load growth. Asmp: Load growth rates increased by 1%/yr. Result: Shortfall potential appearing in 2004, significant by 2006. F. Plausible combination of “downside” factors. Asmp: Base + combo of downside sensitivities. Result: Shortfall potential appearing in 2004, very significant by 2006.

15. Western System Adequacy15 High load growth: Incipient shortfall potential evident beginning summer 2004

16. Western System Adequacy16 Plausible Combination of downside factors: significant shortfall potential by 2006

17. Western System Adequacy17 Plausible Combination of downside factors: Potential shortfall by WECC subarea

18. Western System Adequacy18 Reserve margin under plausible assumptions suggests return to 2000 conditions

19. Western System Adequacy19 Findings & Observations Shortfall potential comparable to 2000 might return by 2006 under plausible conditions. Summer problem in all WECC areas Winter problem as well in Northern areas Results are sensitive to load recovery & growth assumptions While the comparative results of the approach are probably reasonably indicative, the absolute estimates of shortfall are much less certain Hydro capability is a significant uncertainity.

20. Western System Adequacy20 Observations regarding data needs Good information regarding resource additions, retirements and loads are tough to come by. CA & Northwest data generally available, other areas more difficult. Needed information re planned additions & retirements: name type capacity status (in-service, active construction w/service date) anticipated service date general location Consistent, unique plant nomenclature would be helpful.