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Document Sample
Resource Planning Issues
NW Power Planning Council Meeting
Charlie Black
May 28, 2003
Portfolio Planning Levels Considered
Planning
Standard
Energy Capacity
Current deficit grows with
Do Nothing Current deficit grows with demand
demand
Status Quo 2003 deficit level maintained Deficit is maintained at 2003 level
Level A1 Meets Nov-Feb customer needs Deficit is maintained at 2003 level
Level A2 Meets Nov-Feb customer needs Meets 19 Degree F hour at SEA-TAC
Meets highest deficit month
Level B1 Meets 23 Degree F hour at SEA-TAC
needs
Meets highest deficit month
Level B2 Meets 16 Degree F hour at SEA-TAC
needs
Meets 110% of highest deficit
Level C1 Meets 13 Degree F hour at SEA-TAC
month needs
Meets 110% of highest deficit
Level C2 Meets 13 Degree F hour at SEA-TAC
month needs
PSE Need for New Resources -
Energy
2,000
Status Quo
1,800
Level A1, 2
1,600
Level B1, 2
1,400 Level C1
1,200 Level C2
1,000
800
600
400
200
0
2004 2006 2008 2010 2012
PSE Need for New Resources -
Capacity
4,000
Status Quo Level B1
3,500
Level A2 Level B2
3,000
2,500 Level C1, 2
2,000
1,500
1,000
500
0
2004 2006 2008 2010 2012
Expected Cost to Customer
(For Combined Planning Levels)
$4,400
$4,200
Expected Cost ($Millions)
$4,000
$3,800
$3,600
$3,400
$3,200
$3,000
Do Status Level Level Level Level Level Level
Nothing Quo A1 A2 B1 B2 C1 C2
Expected Cost $3,503 $3,821 $3,699 $4,187 $4,043 $4,234 $4,211 $4,151
Expected Cost to Customer
(By Energy Planning Level)
$4,000
Expected Cost
$3,800
$3,600
$3,400
Status A1 Energy B1 Energy C1 Energy C2 Energy
Quo A1 Cap A1 Cap A1 Cap A1 Cap
Expected Cost $3,821 $3,699 $3,675 $3,610 $3,541
Expected Cost to Customer
(By Capacity Planning Level)
$4,400
Expected Cost ($-Millions)
$4,200
$4,000
$3,800
$3,600
$3,400
$3,200
B1 Energy-
B1 Energy-23 B1 Energy-19 B1 Energy-16 B1 Energy-13
Status Quo
Deg Capacity Deg Capacity Deg Capacity Deg Capacity
Capacity
Expected Cost $3,678 $4,049 $4,151 $4,237 $4,317
Expected Cost versus Risk
20%
C2
18%
Expected Cost Standard Deviation
B1 C1
16% A1
14% B2
A2
(% of Mean)
12%
Status Quo
10% B Energy A1 Capacity
8%
6%
4%
2%
0%
$3,400 $3,600 $3,800 $4,000 $4,200 $4,400
Expected Cost ($Millions)
Net Market (Purchase and Sale) Risk Exposure
Net Market Positions by Planning Level
1,500.00
1,000.00
Market Sales/(Purchases)
20-Year NPV $-Millions
500.00
-
(500.00)
(1,000.00)
(1,500.00)
(2,000.00)
(2,500.00)
Do Status
Level A1 Level A2 Level B1 Level B2 Level C1 Level C2
Nothing Quo
Purchases (2,218.92) (895.98) (740.50) (739.76) (593.28) (593.25) (500.17) (346.84)
Sales 141.74 311.11 398.90 417.45 591.35 598.93 756.57 1,242.81
Net Position (2,077.18) (584.86) (341.60) (322.31) (1.92) 5.68 256.40 895.97
PSE Load-Resource Balance
Pacific Northwest Region
Regional resources:
Less than loads Equal loads Exceed loads
Less than
PSE resources:
loads
Equal
loads
Exceed
loads
The recently updated Washington State Energy
Strategy provides the following guidance*
Guiding Principle Detailed Annotation
#1 Encourage all load-serving entities to adopt “…underscore the continuing obligation that the
and implement resource plans to ensure they state’s utilities have to serve their customers’ load
have adequate resources to meet their requirements and to acquire the resources
obligation to serve their customers’ projected necessary to do so.”
long term energy and capacity needs “…Recognize that current and future electricity
markets are likely to experience greater price
volatility, and supply risk than has historically
occurred prior to 2000.”
#2 Encourage the development of a balanced,
cost-effective and environmentally sound
resource portfolio that includes conservation,
renewables (e.g. wind, geo, hydro, biomass,
and solar) and least-cost conventional
resources
#4 Preserve and promote Washington’s cost- “…Washington continues to be extremely cautious
based energy system to benefit the end use about increasing its reliance on market forces to
consumer by providing reliable power and provide for its electric supply……the main question
reduce the consumers’ vulnerability to supply for Washington is the extent to which our load-
shortage and price volatility. At the same time, serving utilities rely on market purchases or their
the state should promote policies that harness own resources to serve their loads.”
market forces in the wholesale energy market
to reduce customer costs and increase
reliability while protecting the environment
* Comments reflect selected excerpts from 3 of the 13 Guiding Principles
