Update on the Western Region Resource Plan Presented to the Community Energy Advisory Council November 14, 2008

Update on the Western Region Resource Plan

Presented to the Community Energy Advisory Council

November 14, 2008

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Update on the Western Region Resource Plan

Agenda

• Latest load forecast for the Western Region and Dashboard update

• Review of resource planning principles and objectives

• Where do we stand today?

• What issues remain to be addressed and where do we go from here?

Update on the Western Region Resource Plan Latest load forecast for the Western Region

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Recent forecasts show increasing trend

DSM/EE activities cut load growth in half

Update on the Western Region Resource Plan Latest load forecast for the Western Region

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Future AdditionsOther MW above

CT Solar PV Wind DR EE Purchase Minimum2008 0.1 0.0 662009 0.8 0.0 442010 4.6 0.4 150 792011 11.2 1.4 722012 147 13.1 2.3 -150 662013 13.3 3.0 642014 8.4 3.3 582015 2.5 3.3 432016 1.9 3.3 292017 4.8 3.2 182018 3.7 3.1 62019 49 2.3 2.7 412020 1.1 2.1 252021 0.0 1.7 6

Select Year --> 2012

Dashboard

Update

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Update on the Western Region Resource Plan Review of resource planning principles and objectives

System Resource

Planning

NCUC SCPSC SERC NERC FERC

Plus:

Federal, state and Local Environmental Regulations

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Regulatory Body Areas of Regulation

North Carolina Utilities Commission Cost, reliability, adequacy

NERC/SERC Reliability, adequacy

FERC Cost, reliability

EPA, NCDENR Environmental performance, siting

Local Authorities Zoning/siting

This list is not intended to be all inclusive or a complete representation of the authority of any given regulatory body.

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Some of the regulatory considerations in creating the plan:

• Adequacy of resources – Are there enough to meet the peak?

• Reliability of resources – Are there enough to deal with contingencies?

• Least Cost – Is the plan the lowest cost to customers?

• Environmental Performance – Does the plan meet environmental limits?

Clean Smokestacks

CAIR, CAMR, CAVR etc.

• Licensing/zoning requirements

The plan must consider planning and operating requirements.

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The objective of the planning process is to provide an adequate, reliable supply of electricity at the lowest (least) cost to customers.

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Update on the Western Region Resource Plan Where do we stand today?

West Region Supply Resources

Asheville 1 - Coal

Asheville 2 - Coal

Asheville 3 - Combustion Turbine

Asheville 4 - Combustion Turbine

SEPA - Purchase

Rockport - Purchase

Marshall & Walters - Hydro

0

200

400

600

800

1,000

1,200

Meg

aw

atts

2007 Winter Peak Demand2010 Winter Peak Demand

Marshall & Walters - Hydro

Remember where we started

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West Region Peak Day 2006 (December 8)

650

700

750

800

850

900

950

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Hour of Day

Meg

awat

ts

Morning

Peak

928 MW

(about 7-8 a.m.)

West Region Peak Day 2006 (December 8)

DSM and energy efficiency activities aim to reduce peak usage

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An adequate supply meets firm demand plus reserve requirements

8000

9000

10000

11000

12000

13000

14000

15000

16000

17000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

New ResourcesRequired

Purchases

Existing Capacity

Reserves Plus FirmDemand

Firm Demand

8000

9000

10000

11000

12000

13000

14000

15000

16000

17000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

New ResourcesRequired

Purchases

Existing Capacity

Reserves Plus FirmDemand

Firm Demand

Reduction of firm demand reduces supply requirements


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So how did we address the resource shortfall in 2010?

• Purchases of firm capacity (250 MW) for two years from multiple sources

• Extended purchases an additional year through 2012

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Update on the Western Region Resource PlanWhat issues remain to be addressed and where do we go from

here?

West Region Hourly Load for 2006

0

100

200

300

400

500

600

700

800

900

1000

Meg

awat

ts

J F M A M J J A S O N D

Peak Demand

Daily

Load

Variation

~ 200 MW


We are in the process of addressing adequacy.

Now we need to consider reliability.

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here?


0

100

200

300

400

500

600

700

800

900

1000

Meg

awat

ts

J F M A M J J A S O N D

Amount of Resources

Must be Adequate to

Meet Peak Demand

and Provide ReservesReserves must be

Available to Meet

Contingencies

at any time

Reliability


Operating reserves are required to meet contingencies


here?

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What are operating reserves?

Operating reserves are resources that can quickly replace any generating resource that may be lost due to equipment failure or other cause. There are 3 sources of operating reserves:

• Spinning reserves

• Fast start reserves (available within 10 minutes)

• Demand reduction

These reserves must be available to replace the power that is provided instantaneously by neighboring utilities.


here?

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How do we provide operating reserves in the Western region today?

Unique AEP contract transmission arrangements

How will we provide operating reserves after the AEP contract expires?

Spinning reserves and reserved transmission capacity


here?

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Issues that need to be addressed :

• Spinning reserves and reserved transmission capacity burns additional fuel and increases cost (vs. fast start reserves in area)

• DSM capacity, which acts like fast start, varies hourly and seasonally (2 a.m. in April)

• New federal standards may require specific allocation of operating reserves

How should we provide needed operating reserves?

Documents

Update on the Western Region Resource Plan Presented to the Community Energy Advisory Council November 14, 2008