1. Modeling Tres-Amigas Update Modeling Work Group Meeting February 10, 2011 WECC Staff

2. Adjustments to the Modeling of the Tres-Amigas Project

3. Background

4. Modeling the Tres-Amigas Project This model was developed by Z-Global. This model consists of a set of energy cost curves that describes the price at which the SPP and ERCOT markets are willing to buy or sell power with WECC. The cost curves do not represent the entire supply curves for the ERCOT and SPP markets. Rather the cost curves represent the subset of the generation fleet in SPP and ERCOT that is expected to participate in the WECC energy market. 4

5. Background At the last Modeling Work Group meeting it was suggested that this approach may be overly optimistic. The subset of generation that was assumed to be available to participate in the WECC market may not always be available due to high loads, forced outages, lack of transmission, etc… Potential over-generation problems during off peak hours in ERCOT and SPP are not accounted for in the current modeling. 5

6. Background During the last MWG meeting it was proposed to address the concerns stated above as follows: The unavailability of SPP and ERCOT generation to participate in the WECC market could be modeled with an 8760 load shape. Potential over-generation problems during off peak hours in ERCOT and SPP could be modeled with an 8760 generator shape. These load and generator shapes would then be netted against the output of the current Tres-Amigas model. 6

7. Implementation of the Model Adjustments

8. Terminology Unavailable Generation Adjustment Accounts for the occasional unavailability of SPP and ERCOT generation to participate in the WECC market. Modeled with an 8760 Load Shape. Over-Generation Adjustment Accounts for potential over-generation problems in SPP and ERCOT in the off peak hours. Modeled with an 8760 Generator Shape. 8

9. Unavailable Generation Adjustment The Unavailable Generation Adjustment hourly shapes were created as follows: 1. All hours were selected in the 2006 ERCOT and SPP historical load shapes that were within a given percentage of the shapes monthly peaks. ERCOT -> 28% SPP -> 20% 2. The monthly peak was multiplied by one minus this percentage and then subtracted from the selected values. 3. The values were then normalized by multiplying each value by the ratio of the monthly peak divided by the annual peak. 9

13. Unavailable Generation Adjustment Reasoning behind assumptions Since generation supply shortages and transmission congestion problems tend to occur at times of high load it seems reasonable to use ERCOT and SPP historical load shapes as a starting point. Since many utilities tend to schedule units out for maintenance during the winter and shoulder months it seems reasonable to allow the adjustment to be non zero during these months. Although there is a non zero adjustment during the winter and shoulder months the magnitude of the adjustment during these months is significantly less than the adjustment during the summer months. 13

18. Over-Generation Adjustment The Over-Generation Adjustment hourly shapes were created as follows: 1. All hours were selected in an ERCOT and SPP wind profile that were within a given percentage of the profiles maximum value. ERCOT -> 40% SPP -> 60% 2. The profiles maximum value was multiplied by one minus this percentage and then subtracted from the selected values. 18

21. Over-Generation Adjustment Reasoning behind assumptions Since over-generation problems in off peak hours can be aggravated by wind generation it seems reasonable to use wind shapes as a starting point for this adjustment. Only the hours of high wind generation were selected since these are the hours when wind will tend to aggravate over generation problems. 21

26. Composite Shape The adjustment shapes for ERCOT and SPP were scaled and then combined into a Composite Shape. The adjustment shapes were scaled so that the Over- Gen shapes and the Unavailable Gen shapes had about the same energy. The shapes were then combined by subtracting the Unavailable Gen shapes from the Over-Gen shapes. The Composite shape can be thought of as an adder to the generation in SPP and ERCOT that will be exported to the WECC energy market. 26

34. Major Assumptions Summary What percentage of the monthly load peaks should be used when deriving the Unavailable Gen shape? Current Assumption (ERCOT -> 28% SPP -> 20%). What percentage of the wind profiles maximum value should be used when deriving the Over-Gen shape? Current Assumption (ERCOT -> 40% SPP -> 60%). How should the Over-Gen and Unavailable Gen shapes be scaled before they are combined? Current Assumption (The shapes were scaled to contain the same energy). How should the ERCOT and SPP Composite Shapes be scaled relative to each other? Current Assumption (Both shapes were scaled with a multiplier of one). 34