1 Utility Resource Planning Fundamentals
Fred Stoffel Tri-State Generation and Transmission Association, Inc.
May 19, 2012
2 Utility Resource Planning Fundamentals
Tri-State Overview
Tri-State is a not-for-profit, wholesale power supplier owned by 44 electric cooperatives and public power districts serving a population of approximately 1.5 million people.
3 Utility Resource Planning Fundamentals
Tri-State At a Glance
Annual operating revenue $ 1.2 billion
Assets $ 4.2 billion
Average wholesale rate 6.5 cents/kilowatt-hour
Member peak demand 2,654 megawatts
Member service territory 250,000 square miles
Employees 1,475
5 Utility Resource Planning Fundamentals
Tri-State resource planning
Purpose:
To ensure that the
lowest cost resources,
DSM projects, and/or
purchase power options
are available on time to
meet Tri-State member
load requirements in a
reliable, robust manner
6 Utility Resource Planning Fundamentals
Utility Planning
Regulatory Context
Local Siting
State Siting appeal
CPCNs
PUC rules and regulations
Environmental: State health departments
Federal Resources: WAPA, RUS
Transmission: FERC
Reliability: WECC, NERC, FERC
Environmental: NEPA
7 Utility Resource Planning Fundamentals
Federal Regulatory Context
Environmental
National Environmental Policy Act (NEPA)
Required when siting facilities on federal land or using federal funding
National Environmental Policy Act (NEPA)
National Ambient Air Quality Standards (NAAQS)
Cross-State Air Pollution Rule
Resources
Integrated Resource Plan (IRP)
Western Area Power Administration requirement
Rural Utilities Service funding requirement
8 Utility Resource Planning Fundamentals
Federal Regulatory Context
(cont.)
Transmission
Federal Power Act (FPA)
Federal Energy Regulatory Commission (FERC)
201(f) Exempts cooperatives
211 Open access
211A Comparability
212 Interconnection
215 Reliability
Reliability
Western Electricity Coordinating Council (WECC)
North American Electricity Reliability Corporation (NERC)
Federal Energy Regulatory Commission (FERC)
Public Utility Regulatory Policies Act (PURPA)
9 Utility Resource Planning Fundamentals
Role of State Policies
Reliability standards – service quality, determination of need
Applicability – IOUs, municipalities, cooperatives
Service territories
Ratemaking standards – fair and equitable; just and reasonable; definitions of test years; financial oversight; approval of returns
Resource plan filing requirements – frequency, modeling requirements, third party participation
Efficiency standards – demand side management; demand response
10 Utility Resource Planning Fundamentals
Role of State Policies (cont.)
Renewable portfolio standards – RECs, multipliers
Consideration of new technologies
Environmental considerations; Nox, Sox, carbon,
particulates
Treatment of externalities
Customer usage privacy issues
Retail choice, municipal aggregation
Treatment of construction costs – construction work
in progress
Low income considerations
11 Utility Resource Planning Fundamentals
Tri-State’s Resource Planning
Objectives
Adequacy/reliability
Capacity and energy
Renewable portfolio standards
Low cost
Manage uncertainty/risks
Exposure to price volatility
Regulatory and environmental requirements
Operable – will it work?
On time, right location, robust
12 Utility Resource Planning Fundamentals
Basic Elements of Utility
Resource Planning
Assess current load/demand
Forecast load growth
Assess existing resources and delivery infrastructure
Determine “resource gap” to be filled
Identify resource constraints, policy obligations and mandates, modeling requirements and filing requirements
Determine alternative resource options and costs
Forecast future prices
Develop alternative resource plans, related costs and risk assessments
Decide on which alternative portfolio is preferable
13 Utility Resource Planning Fundamentals
Data from
member
Data from
outside
Forecast
development
Projections of
number of
customers
Projections of
use per
customer
Projections of
energy – each
class
End-users by Class
Nine classes – 44 members
Load Forecast Process
14 Utility Resource Planning Fundamentals
Projections of
demand
Total Member
Projections of
energy
Each class
Total loads for each member
Projections of
energy
Total Member
Historical monthly and
hourly load patterns
Changes to monthly and
hourly load patterns
Load shaping
models
Load Forecast Process
15 Utility Resource Planning Fundamentals
Hourly Patterns in July Demand
0
500
1000
1500
2000
2500
0 2 4 6 8 10 12 14 16 18 20 22 24
Ho
url
y A
vera
ge D
em
and
(M
W)
Hour
Total System
East Colo
West Colo
New Mexico
Wyoming
Nebraska
16 Utility Resource Planning Fundamentals
Hourly Patterns in December
Demand
0
500
1000
1500
2000
2500
0 2 4 6 8 10 12 14 16 18 20 22 24
Ho
url
y A
vera
ge D
em
an
d (
MW
)
Hour
Total System
East Colo
West Colo
New Mexico
Wyoming
Nebraska
17 Utility Resource Planning Fundamentals
Monthly Patterns in Annual
Energy
0
200
400
600
800
1000
1200
1400
1600
1800
1 2 3 4 5 6 7 8 9 10 11 12
Mo
nth
ly E
ne
rgy-
GW
H
Month
Total System
East Colo
West Colo
New Mexico
Wyoming
Nebraska
18 Utility Resource Planning Fundamentals
Board Strategic Direction
Timing Assessment
Load Forecast
Resource Assessment
Market Assessment and Forecast
Load / Resource Balance
Economic Modeling
Member load
forecast, EE /
DSM, trends
LREF, System
Optimizer
Risk Analytics
Hourly
dispatch
(Ventyx PAR)
Ventyx /
PIRA with
adjustments
Existing fleet
Future options:
sites, transactions,
DSM, technologies
Action:
Short term
Long term
WAPA IRP CPUC ERP
RUS LF, LREF Budget What-If-Analysis
19 Utility Resource Planning Fundamentals
Inputs to Hourly Chronological
Production Cost Model
Load
Forecast
Resource
Characteristics
Long Term
Purchases and
Sales
Transmission
Rights
Hourly
Simulation
Planning and
Risk
Commodity Price
Forecasts
Reserve and
Renewable
Requirements
Planning and Risk /
System Optimizer
20 Utility Resource Planning Fundamentals
Outputs to Hourly Chronological
Production Cost Model
Load
Forecast
Resource
Characteristics
Long Term
Purchases and
Sales
Transmission
Rights
Hourly
Simulation
Planning and
Risk
Commodity Price
Forecasts
Reserve and
Renewable
Requirements
Planning and Risk /
System Optimizer
Generation
Dispatch
Generation
Emissions Line Loading
Commodity
Usage
21 Utility Resource Planning Fundamentals
Resource Plan Scenario Summary
Scenario
BAU BAU High
Load BAU Low
Load BDS
BDS - Geo CAP limited
Wind WRA Data
Growth Rate Median High Low Median Median Median
DSM Level None None None Low Level High Level Low Level
Electric Price Median Median Median Median Median Median
Gas Price Median Median Median Median Median WRA
Coal Price Median Median Median Median Median Median
RPS Level Compliance Compliance Compliance Compliance Compliance Compliance
Renewable Int. Cost $5 $5 $5 $5 $10 $5
Carbon Cost Adder $0 $0 $0 20 20
$18 in 2013 [email protected]%
23 Utility Resource Planning Fundamentals
January 27, 2012 (MW output vs. Hour of Day)
0
10
20
30
40
50
60
1 2 3 4 5 6 7 8 9 10
11
12
13
14
15
16
17
18
19
20
21
22
23
KC Cimmarron
24 Utility Resource Planning Fundamentals
January 28, 2012
0
10
20
30
40
50
60
1 2 3 4 5 6 7 8 9 10
11
12
13
14
15
16
17
18
19
20
21
22
23
KC Cimmarron
25 Utility Resource Planning Fundamentals
Finding Balance
Reliability
Resource mix – fuel
diversity
Cost of resources
Impact on environment
Rate stability
Bill stability
Sustainability
Affordability