2010 Integrated Resource Plan: Process and Assumptions · 2009-05-05 · Market Inputs: •Customer Forecast •End Use Saturation •Fuel Shares •Baseline Consumption Potential

Seattle City LightSeattle City LightIntegrated Resource PlanIntegrated Resource Plan

2010 Integrated Resource Plan:Process and Assumptions

IRP StakeholdersApril 16, 2009


IRP StakeholdersIRP StakeholdersApril 16, 2009April 16, 2009

Page 2

Agenda

• Introductions

• Stakeholders Role in 2010 IRP

• Draft Assumptions– Demand outlook– Conservation– New Resources – Environmental Impacts



Page 3

2010 IRP Team

Sarang Amirtabar, Resource Planning & Forecasting Glenn Atwood, ConservationDavid Clement, Resource Planning & ForecastingCarsten Croff, Financial PlanningCorrine Grande, Environmental AffairsEric Espenhorst, Resource Acquisition & ContractsHormoz Roomiany, Resource Planning & ForecastingMary Winslow, Resource Planning & Forecasting

= Returning from 2008 IRP


Stakeholder Roles

IRP StakeholdersIRP StakeholdersApril 16, 2009April 16, 2009 Page 4



Page 5

Integrated Resource Plan (IRP)

• An Integrated Resource Plan:– Identifies how much, when, and what kind of energy

resources are needed– Treats conservation as equal to power generation– Includes public involvement– Is updated often (biennially) – Is now required by state law

• City Light Measures Resource Plans By:– Cost, Risk, Reliability, and Environmental Performance



Page 6

Many Public Objectives for SCL’s Resource Planning

Enhance Power Quality

StabilizeRates

Create GreenJobs

More Wind

Power Create BusinessOpportunities

Political & Policy Impacts

Ensure High Power Reliability

Sustainability

National Environmental

Leadership

ConservationFirst

Preserve Low Cost

Power

LimitCarbon Tax Exposure

Distributed GenerationIncentives

FightClimateChange

More Solar Power

More Public Oversight

Reduce Utility Debt

Demand-ResponsePrograms


StabilizeRates

Create GreenJobs

More Wind




Sustainability


Leadership

ConservationFirst

Preserve Low Cost

Power



FightClimateChange

More Solar Power


Reduce Utility Debt



StabilizeRates

Create GreenJobs

More Wind




Sustainability


Leadership

ConservationFirst

Preserve Low Cost

Power



FightClimateChange

More Solar Power


Reduce Utility Debt



2010 Stakeholder Meetings


Apr. 16 Jun. 25 Sep. 3 Feb. 25 May 20



Page 8

Seattle City Light’s IRP Input Process

IRP Policy Group

1 2 3 4 5Process,

AssumptionsResource Needs,Rd. 1 Portfolios

Rd. 1 Results, Rd. 2 Portfolios

Rd. 2 Results,Preferred Portfolios

Preferred Portfolio,Action Plan

IRP Stakeholders

City Council E&T

IRP Policy Group

IRP Stakeholders

City Council E&T

IRP Policy Group

IRP Stakeholders

City Council E&T

IRP Policy Group

IRP Stakeholders

Advisory Board

Public Meeting

City Council E&T

IRP Policy Group

IRP Stakeholders

Advisory Board

Public Meeting

City Council E&T

Public Meetingcontent

content



Page 9

2010 IRP Assumptions


Load Forecast



Declining Load P e r ce n t C ha ng e in S ys tem Lo a d

Y e a r -O v er -Y e a r 3 -M o nth M o vin g A v er a ge

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

Mar

-99

Mar

-00

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Mar

-06

Mar

-07

Mar

-08

Mar

-09


Page 11


Effect of the Recession on Load

E ig ht -W e e k M ov ing A v era g e o f W e a the r -A dj us te d Lo a d

1 000

1 050

1 100

1 150

1 200

1 250

1 300

1 350

1 400

24-S

ep

1-O

ct

8-O

ct

15-O

ct

22-O

ct

29-O

ct

5-N

ov

12-N

ov

19-N

ov

26-N

ov

3-D

ec

10-D

ec

17-D

ec

24-D

ec

31-D

ec

7-Ja

n

14-J

an

21-J

an

28-J

an

4-Fe

b

11-F

eb

18-F

eb

25-F

eb

4-M

ar

11-M

ar

18-M

ar

25-M

ar

1-Ap

r

8-A

pr

15-A

pr

22-A

pr

29-A

pr

6-M

ay

13-M

ay

20-M

ay

27-M

ay

Eigh t-W eek P eriod E nd -D at e

Ave

rage

Meg

awat

ts

2007-082008-09

38

3331

28 aMW d iffe renc e

25


Page 12


Hard-Hit Industrial CustomersSample of Custom ers in Construction Materials Industr ies

0

10

20

30

40

50

60

70

Jan-

07

Feb

-07

Mar

-07

Apr

-07

May

-07

Jun-

07

Jul-0

7

Aug-

07

Sep-

07

Oct

-07

Nov

-07

Dec

-07

Jan-

08

Feb-

08

Mar

-08

Apr

-08

May

-08

Jun-

08

Jul-0

8

Aug-

08

Sep-

08

Oct

-08

Nov-

08

Dec-

08

Jan-

09

Feb

-09

Aver

age

Meg

awat

ts


Page 13


National Economy – GDP ForecastsR eal G DP G row th

(annual percent change)

-8

-7

-6

-5

-4

-3

-2

-1

0

1

2

3

4

5

6

7

8

2007 2008 2009 2010 2011

Oct-08Nov-08Jan-09Feb-09Mar-09Apr-09

Sourc e: IHS Global Ins ight


Page 14


Local Economy – Employment Forecasts

K in g C ou nty E m ploy m en t Fo re c a s ts

1000

1050

1100

1150

1200

1250

1300

1350

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Thou

sand

s

M arch 2009Dec ember 2008Sep tember 2008June 2008Histo ry

So u rc e: C o nw a y P e d ers e n E co n o m ic s, In c .


Page 15


Forecast RevisionsL oa d Fo re c as t C om p a r is on

11571140 1133

1143

11631176

1186

1000

1050

1100

1150

1200

1250

1300

1350

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Ave

rage

Meg

awat

ts

2007 Load Forecast

October 2008 R evision

March 2009 Revision

Histo ry


Page 16


Load Stress on Resource AdequacyHourly Load & Heat ing Degree-Days

Dec 12-26, 2008

0

200

400

600

800

1000

1200

1400

1600

1800

2000

1 25 49 73 97 121 145 169 193 217 241 265 289 313 337Hour

Meg

awat

ts

0

5

10

15

20

25

30

35

40

45

50

Hea

ting

Deg

ree-

Days

Actual HDDLoadNormal HDD

M onday19 degree

low

Saturday14 degree

low Xm asM etro cuts

serv ice by half

Cancellationsat SeaTac


Page 17


I-937 RequirementsR e n e w a b le R es o urc e s N e e de d fo r I -9 3 7

44

1 86

1 24

161

19 517 7

0

25

50

75

1 00

1 25

1 50

1 75

2 00

2 25

2 01 2 2 01 3 20 14 20 15 2 01 6 20 17 20 18 2 01 9 2 02 0 20 21 20 22 2 02 3 2 02 4 20 25 20 26 2 02 7 20 28 20 29

Ave

rage

Meg

awat

ts

Burl ing ton B iom as sCo lum b ia R idge Land fill GasRos eburg B iom assSta te line W indNew Renew ables N eeded

3%

9%

15%

R eq u irem en t is e xc ee d ed

th rou g h 20 1 5.


Page 18


Summary

• Load is driven by economic activity.– Declining load in near-term.– Eventual recovery, but timing is uncertain.

• Load forecast & IRP – Forecast is an input to Resource Adequacy

calculation.– Forecast is used to calculate future renewables

acquisition under I-937.


Page 19


Conservation



Overview

• Background• Round 1 Approach• Conservation Portfolios• Conservation Potential Assessment• I-937 & 6th Power Plan



Background

• Energy Conservation SCL’s First Priority Resource– Least Cost– Least Environmental Impact– Least Risk

• Implementing Programs Since 1977• Energy Savings through 2008 = 115 aMW, 8% of

load• Achievements about 7 aMW 2005 – 2007 increasing

to 10.3 aMW in 2008• Conservation Five Year Plan: Doubling of Energy

Savings by 2012



Conservation: IRP Round 1 Approach

• Three conservation portfolios constructed:– 5 Year Plan– Base Case = Reduced Budget – Accelerated

• Based on Five Year Plan Program Assumptions, scaled to 2006 Conservation Potential Assessment

– Updated to reflect accomplishments from 2006-2009– Costs based on actual program expenses

• Main assumptions– $80/MWh avoided cost threshold– Achievable potential consistent with I-937 and NWPCC guidelines

Measures PortfolioPrograms



Conservation Portfolios

Annual New Conservation

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

18.00

20.0020

0820

0920

1020

1120

1220

1320

1420

1520

1620

1720

1820

1920

2020

2120

2220

2320

2420

2520

2620

2720

2820

29Year

aMW

Original Five Year PlanScenarioAccelerated ConservationScenarioReduced Budget Scenario



Conservation Savings

• New savings acquired through 16 programs

– 5 commercial– 2 industrial– 8 residential– 1 mixed use

• Pilot programs and new technologies not included in IRP analysis

• Expiring measures are renewed at end of life to maintain savings

• Avg. cost = $49.43/MWh

Conservation Resources

Division

Conservation Programs

Division and Program Support

Commercial

Industrial

Residential

Mixed Use

Commercial Retrofit

Commercial New

Construction

Smart Business

Lighting Trade Ally Program

Resource Conservation

Manager

Industrial Retrofit

Simple Compressor

Rebates

Built Smart

Common Area Lighting

Multifamily Weatherization

Twist & Save (CFLs)

Wash Wise

Refrigerator Recycling

Residential Lighting

Retail Big Box

Mixed Use New Construction



Conservation Potential Assessment New for Round 2 Analysis, September

Characterize Market and Energy Efficiency Measures

Estimate Technical Potential

Estimate Achievable Potential

Integrated Resource Portfolio Analysis

Market Inputs:•Customer Forecast•End Use Saturation•Fuel Shares•Baseline Consumption

Potential of energy efficiency measures in all technically feasible applications

Resource bundles by customer group, end use, and price point

Measure Inputs:•Savings•Costs•Lifetimes

Potential of energy efficiency measures with market constraints applied



Other Drivers: I-937 Conservation Targets & NWPCC 6th Power Plan

• I-937 requires City Light to submit and meet biennial conservation target starting in 2010– Maximum 2010-2011 targets based on NWPCC Calculator:

• 2010: 9.47 aMW• 2011: 9.85 aMW

– Utility option to conduct CPA to establish targets• NWPCC 6th Power Plan

– In process of finalizing assumptions– Likelihood of higher regional conservation targets for 2012

and beyond• Higher avoided costs• Voltage regulation and distribution system upgrades included in

conservation target• Emerging technologies with significant energy savings included



Summary

• Round 1: Three alternative conservation portfolios– Reduced Budget, Five Year Plan, Accelerated

• Updated CPA for Round 2

• I-937 and 6th Power Plan requirements could have significant effects on conservation beginning in 2012



New Resources



Generic Supply Options

• Geothermal• Wind• Small biomass (fuel on-site)• Landfill gas• Wastewater treatment plant gas• Hydroelectric• Solar photo-voltaic• Solar thermal• Wave or tidal• Engineered geothermal systems



Supply Options in the IRP

• Time horizon: 2010-2029• Regulatory compliance• New resources should complement existing

resources• Evaluation criteria include:

– Reliability,– Cost,– Environmental impact,– Availability, and– Risk



Relative Cost Example (Before Incentives, Transmission, and CO2 Costs)


$0

$20

$40

$60

$80

$100

$120

$140

Wind Geothermal SmallBiomass

Gas-firedCombined-

Cycle

Landfill Gas SCLContracts

SCL-ownedHydro

$/M

WH

(200

9$)

Fixed Variable*At assumed average capacity factors


Market and Policy Uncertainties

• Price of natural gas– Varied from $12/MMBTU to $4/MMBTU over the past 12 months– $7/MMBTU levelized price 2010-2029 (2009$)– Affects short term and long term market price for electricity

• Reasons why actual power plants may cost more or less than generic examples– Developer experience– Site quality– Transmission availability– Economic conditions

• Federal or state greenhouse gas emission limits• Taxes and incentives

– Production tax credits, investment tax credits, and other federal programs may lower prices

– These programs have conditions and are time-limited



More Uncertainties

• SCL as a buyer– Used to be a buyer’s market– Today, it’s a seller’s market, so SCL is competing with all

other utilities– Expect to pay comparable prices, 8-12+ cents/kWh

• Reduce risk to ratepayers– Bring public power benefits to SCL’s ratepayers– SCL has transmission to bring power to customers

• Capture opportunities to provide long term value to SCL customers



Environmental Impacts



State Environmental Policy Review

• Environmental Analysis Documentation: – Environmental Impact Statement in 2006– Addendum in 2008– Addendum likely for 2010

• Impacts covered (primarily qualitative): Soils and Geology, Air Quality, Surface and Groundwater, Energy and

Natural Resources, Environmental Health, Land Use, Aesthetics and Recreation, Cultural Resources, Employment



Air Emissions

• CO2, SOx, NOx, Mercury, Particulates• Include quantitative analysis in Model

– Emission Rate (tons per MWh)– Price ($ per ton of air pollutant)

• Price based on forecast compliance cost– continuing uncertainty in federal regulations

• Price also serves as proxy to quantify environmental externalities from residual emissions

• Price is applied to all emissions from existing and new power plants



CO2

• CO2 is the main cost component, since it is created in much larger amounts than other air emissions

• High likelihood of some form of cost on CO2: cap and trade or tax

• Issues that impact potential cost of CO2: level of cap, allocation, auction, trading boundary, offsets

• NWPCC: average CO2 price numbers for 6th Power Plan similar to SCL’s 2008


Page 38


Recommended CO2 Costs

• 2010: $9/ton• 2029: $65/ton

Issue: – CO2 costs increase the revenues the model calculates for

surplus sales, thereby potentially over estimating the value of adding resources beyond SCL’s load and the value of renewables



Climate Change

• 2008 IRP: UW work for NPCC 5th Plan • 2010 IRP: continuing work with UW, also working

with LLNL and PNNL• Will track efforts of NPCC (for 6th Plan and beyond) and

BPA• Focus of work: Downscaling models to watershed level,

glacier melt and snowpack patterns impacts at Skagit




Page 41

Questions?

IRP Website Address: http://www.seattle.gov/light/news/issues/irp/E-Mail: [email protected]

David Clement(206) 684-3564, [email protected]

Documents

2010 Integrated Resource Plan: Process and Assumptions · 2009-05-05 · Market Inputs: •Customer Forecast •End Use Saturation •Fuel Shares •Baseline Consumption Potential