1

Out of Region Market Assumptions

Resource Adequacy Technical Committee

April 2010

2

California Import Capability

• Focus analysis on California Imports• Currently, the assumption in Genesys for the adequacy

assessment is 3,000 MW of hourly import capability from October through May and 0 MW from June to September

• Note that this is not the dispatch in Genesys – just the capability

• Examine this assumption by looking at:– Power plant development in California between 2000 and 2010

(total in state regardless of owner)– CPUC Resource Adequacy Assessment (March 2009) (owned

or under contract by IOUs or community aggregators)– Intertie Loadings between 2004 and 2009

3

Power Plant Development in California

• During the past 11 years there as been substantial resource development within the state of California – most of it gas-fired

• Chart (page 4) include all resources built in state regardless of owner

• Since not all developers are load serving entities or all generation is dedicated to load – no load/resource assessment can be made

• Chart (page 5) “net addition” include the impact of plant retirements in the state (but also including Mohave)

4

California Power Plant Development 2000 - 2010

91%

5%

Misc. Geothermal Biogases Natural Gas Wind Biomass Hydro PV

Wind

Natural Gas

  MW

Natural Gas 21561

Wind 1303

Geothermal 211

Biogases 204

Hydro 275

PV 146

Biomass 87

Misc. 21

Source: Ventyx

5

California Cummulative and Net Resource Additions 2000 - 2010

0

5000

10000

15000

20000

25000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

MW

Cummulative Additions Net Addition

Net Additions = cumulative additions – cumulative retirements

6

CPUC RA Assessment• The CAL-ISO has not published a winter assessment since October 2003• The March 2009 CPUC study does not include municipal utilities and

irrigation districts – so study does not represent the entire state of California • Analysis includes all IOUs and Community Choice Aggregators• Tables include monthly results

– First table includes the results including the demand response programs– Second table removes demand response programs – assume that California

would cut exports (short term sales) before calling on demand response programs

• Results include unit-contingent and non-unit contingent import contracts, DWR contracts, physical resources, and RMR capacity

• Only net qualifying capacity is considered based on historical performance and other factors – designed to get the expected value of capacity

• Results – excluding demand response programs – California has winter surplus capability, tight margins in the summer, and modest surpluses in the shoulder months (page 7 Column G)

7

CPUC RA Assessment

WITH DEMAND RESPONSEA B C D E F G H

2008Demand Forecast

Demand Response

Net Demand

Adequacy Requirement

(AR)

Total Resources Reported

Resource Reported as a % of

AR

Resources Reported as a % of

Net Demand

D=B-C E=D*1.15 G=F/E H=F/DJan 29529 2048 27481 31603 39626 125% 144%Feb 29023 2048 26975 31021 37816 122% 140%Mar 28082 2047 26035 29940 34821 116% 134%Apr 28973 2047 26926 30965 36136 117% 134%May 33822 2396 31426 36140 40547 112% 129%Jun 36437 2629 33808 38879 44125 113% 131%Jul 42252 2670 39582 45519 48771 107% 123%Aug 44880 2677 42203 48533 49153 101% 116%Sep 40945 2653 38292 44036 47463 108% 124%Oct 33284 2348 30936 35576 38445 108% 124%Nov 29222 2043 27179 31256 34871 112% 128%Dec 31272 2046 29226 33610 40544 121% 139%

8

CPUC RA AssessmentWITHOUT DEMAND RESPONSE

A B C D E F G

2008 Demand

Adequacy Requirement

(AR)

Total Resources Reported

Resource Reported as a

% of AR

Resources Reported as a % of

Net Demand

Difference between

Resources and AR

C=D*1.15 E=D/C H=F/D G=D-CJan 29529 33958 39626 117% 134% 5668Feb 29023 33376 37816 113% 130% 4440Mar 28082 32294 34821 108% 124% 2527Apr 28973 33319 36136 108% 125% 2817May 33822 38895 40547 104% 120% 1652Jun 36437 41903 44125 105% 121% 2222Jul 42252 48590 48771 100% 115% 181Aug 44880 51612 49153 95% 110% -2459Sep 40945 47087 47463 101% 116% 376Oct 33284 38277 38445 100% 116% 168Nov 29222 33605 34871 104% 119% 1266Dec 31272 35963 40544 113% 130% 4581

9

The Interties

• The average physical transfer capability* on the A.C. line S. to N. is 3,100 MW [Genesys 4880]

• The average physical transfer capability* on the D.C. line S. to N. is 1,700 MW [Genesys 2850]

• Flows on the A.C. line were S. to N. 3.8% of the time with an average flow of 346 MW and a maximum of 1,513 MW

• Flows on the D.C. line were S. to N. 18.9% of the time with an average flow of 472 MW and a maximum of 2,045 MW

• The maximum coincidental import on both lines was 2,810 MW

*A.C. rated at 4,800 MW; average includes line de-rates (Dec 2004 to Dec 2009)

10

Limiting Factors

• Interties provide enough physical import capability ~ 4,800 MW – up to 2,810 MW have been imported coincidentally over both lines

• Over 17,000 MW of net generation has been built within the state over the past 11 years, but not necessarily under contract with load serving entities

• California IOU/community aggregators are the limiting factor – no meaningful surplus capacity during July to October (pg 8 – column G) and less than 3,000 MW during shoulder months

11

Recommendation

• Assuming that California would cut exports before initiating demand response programs:– Genesys assumption of 0 import capability

during July to August is justified as well has 3,000 MW during December to February

– However, shoulder months should be revised to reflect 0 import capability in October, and amounts of less than 3,000 MW in March to June and November

12

Appendix – Intertie Loading

Months% of Total Hours

S. to N. Average MW Maximum MWJan 14.2% -473.1 -1827Feb 15.2% -478.8 -1708Mar 11.6% -455.2 -1957Apr 3.9% -414.8 -1496May 0.5% -428 -1027Jun 0.2% -258.4 -584Jul 0.4% -362.1 -633Aug 4.0% -365.9 -901Sep 7.7% -426.8 -1746Oct 8.7% -413.4 -1687Nov 13.5% -545.5 -2045Dec 19.9% -507.5 -1872

D.C. Line Loading S. to N.(18.9 % of the hours S. to N.)

Months% of Total Hours

S. to N. Average MW Maximum MWJan 11.6% -435.7 -1427Feb 11.3% -280.4 -1087Mar 21.5% -400.7 -1513Apr 10.2% -366.3 -1106May 2.1% -179.1 -701Jun 0.3% -250.4 -422Jul 0.1% -95.5 -167Aug 2.6% -220.3 -713Sep 5.9% -299.7 -1505Oct 6.6% -261.3 -869Nov 7.5% -236.3 -977Dec 20.5% -383.6 -1330

A.C. Line Loading S. to N.(3.8 % of the hours S. to N.)