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HomeMy WebLinkAboutAgenda Packet 06/03/2009 City Council/Utility Advisory Committee Special Meetings June 3 & 4, 2009 Northwest Public Power Association Tier 2 Power Supply Planning Workshop Agenda Day 1 Power Supply Consideration Topics Wednesday, June 3, 2009 ........~.........~.~.~~~~.~.~~.i.~.~.~...~..!.~.~.~.Y.~.~..~~J~~.~.~y..!:~.............................................................................................~~.!:.~.~...~~.~~.~.~.............~.:.~.~~.~.. .......3.........~.I.!:.~~~.~~...~.~~.~.~~y....~..!.~~.~~.~...~~~~.~..~..~!:~.~.~.~~...!..~~...~.~~~!:.........................................~.ry.~.~...~.~.~.fJ..!~.~.~ry.............~.:.1.~~.~.. 3 SPA Tier 2 FY2012-2028 Load Forecast Phil Lusk 9:00AM ................................................................................................................................................................................................................................................................................................. .......~........~.~.~..!.~.!:~..~...~.~~.~.~.~~..9.p.~.~.~~.~!...~.~~.i.~.~~..~...~.~.~.~.~.~.~!:.~~.~...........................~.~~.~.~~~...~E!:~.~.~.............~:.~..~~.~.. Break: Is the Price Right? Any Number & Switcheroo Games 10:00AM 5 SPA Transmission Considerations Melanie Jackson 10:15AM ................................................................................................................................................................................................................................................................................................. Tom Krueger .......~.........~.~!:E~.Y...~.~.~~.~~~.~..~.~~~.~..~.~.p..P..~y....9.P~~.~.~.~.................................................................................!.~.~...~.!:~.~~y....................~.1.~.~.. ..................~~.~.~~..{~~.~~.y~~~.~~..~.~.~!~~.~~.~!:...~~.~.~J..............................................................................................................................................~~~~.. .......!.........~.~.~..~.~.~~.~.~~.~.~~...~~~.~~.~.~~.i.~.~...~.~~.~~.~~.~~...~.~~.~y...................................................................~.~y..~.~..~~.~~.............1..:~.~.~.~.. Break: Is the Price Right? That's Too Much & Showcase Showdown Games 1 :45PM .......~........9.~~.!:.~..~.~~.~.~..~~.p..p..~y....~.~.~.~.i.~.!:~~~.i.~.~.~..........................................................................................~.~~.ry.P.~.~.~~E.............~.:.~.~.~.~.. ..................~.~J.~.~.~.~.................................................................................................................................................................................................................................~.:.~.~.~.~.. Lunch, along with refreshments at morning breaks, will be provided. tlWPPA Northwest Public Power Association Tier 2 Power Supply Planning Workshop Agenda Day 2 Power Supply Direction Topics Thursday, June 4,2009 .......~........!..~.~.~y..~~..9~J~~~.~y.~~.............................................................................................................................................~.!.!::.~.~...~~.~!.!::.~.............~.:.~g~.~.. .......~........!..~.~~..~...~.~~~E..~~.P..P..~y....~.~~~.~..~.~~...~.~?p..~.~~.~...........................................................................~.~.~.ry..!?.~.~.~~.~.............~.:.~.~~.~.. Continue Reliance on BPA - Option A Policy-Makers C Form 3 Groups 8:30AM Diversify from BPA - Option B Refine Straw Man .........................~.~.9.~.r.~.!..~!.!.~.i.~.~.~.~..~~.~ry..........................~~.~.~~.~!...~~.~J?.~~.~.I.!...~r.~.~.~...........................~!...~.~.i.!.!.~!...!:9.~.~.!..~.!::~.~.. Break: Is the Price Right? Any Number, Switcheroo & That's Too Much Games 10:00AM .......~........~.r..~.~.p....~.~r.~.~..~.~~...~~.p..~.~~.................................................................................................................~.~~.~J?..~.!::~.~.~.r.~..........1g.:..~.~~.~.. Transformation of 3 Group Straw Man Reports into 1 Stone Bryan Singletary .......~........~~.~...~.~~.p..~~.~.I..............................................................................................................................................~.~~.~.!?..~.~.~.~.~.~~~.~~.?.~.........~..~.:.~.~~.~.. Break: Is the Price Right? Showcase Showdown & Showdown Games 11 :45AM ..................~.~.~.~~.J.~.~.~~...~.~~~.~~..~.~.~!~~.~.~.~~...~~.~.~.L............................................................................................................................................~~~~.. Continuation (If Needed) Transformation of 3 Group Straw Bryan Singletary .......~........~~.~...~!:.!??~.~.J~~?..~...~~?.~.!:..~.~.~...~.~~.p..?.~.~.~................................................................~.~~.~.!?...~.~.~.~.~.~~~.~~.?.~.............~..:~.~.~.~.. ..................~.~J.?~.~~.................................................................................................................................................................................................................................~.:.9..~.~.~.. Lunch, along with refreshments at morning breaks, will be provided. Day 1 3-Jun-09 Att d o . f P en ee rganlza Ion resen Bryan SinQletary NWPPA Yes Kevin Smit EES Consulting Yes Melanie Jackson Bonneville Power Administration Yes Shannon Greene Bonneville Power Administration Yes Ted Beatty Energy Northwest Yes Tom Krueger Energy Northwest Yes Bob Kajfasz Staff Yes Glenn Cutler Staff Yes Kent Myers Staff Yes Nathan West Staff Yes Larry Dunbar Staff Yes Phil Lusk Staff Yes Teresa Pierce Staff Yes Betsy Wharton Councilmember Yes Cherie Kidd Councilmember Yes Dan DiGuilio Councilmember Yes Dean Reed Utility Advisory Committee member Yes Don Perry Councilmember Yes Gary Braun Councilmember Yes Karen Rogers Councilmember Yes Larry Williams Councilmember Yes Orville Campbell Utility Advisory Committee member Yes o Day 2 4-Jun-09 A d o P tten ee rQanlzatlon resent Bryan Singletary NWPPA Yes Kevin Smit EES Consulting No Melanie Jackson Bonneville Power Administration No Shannon Greene Bonneville Power Administration No Ted Beatty Energy Northwest No Tom Krueger Energy Northwest No Bob Kajfasz Staff No Glenn Cutler Staff Yes Kent Myers Staff Yes Nathan West Staff Yes Larry Dunbar Staff Yes Phil Lusk Staff No Teresa Pierce Staff No Betsy Wharton Councilmember Yes Cherie Kidd Councilmember No Dan DiGuilio Councilmember Yes Dean Reed Utility Advisory Committee member Yes Don Perry Councilmember Yes Gary Braun Councilmember Yes Karen Rogers Councilmember Yes Larry Williams Councilmember Yes Orville Campbell Utility Advisory Committee member Yes or \,ORT AN :\~ c> '" ~(r ~ \.'11....- - .. ~ Tier 2 Power Sulm!YPlannin~ Worksho~ For City Council and Utility Advisory Committee members June 3 and 4, 2009, 8AM-3PM, Council Chambers, lunch provided Northwest Public Power Association This workshop's purpose is to begin consideration of how the Electric Utility will meet its Tier 2 power supply. The Utility Advisory Committee and City Council need to determine a Tier 2 power supply by November 1,2009, which is required by the Bonneville Power Administration. Northwest Public Power Association Tier 2 Power Supply Planning Workshop Agenda Day 1 Power Supply Consideration Topics Wednesday, June 3, 2009 1 Introductions & Today's Objectives Glenn Cutler 8:00AM ._~._-_.._--------------------------------------------------------------------------------------------------------------------------------------- 2 Electric Utility & Tiered Rates - Setting The Stage Bryan Singletary 8:15AM -.-------------.-----------------------.--------------------------------------------------------------------------------------------------------- 3 BPA Tier 2 FY2012-2028 Load Forecast Phil Lusk 9:00AM -.-----------------------------------------------------------.----------------------------------------------------------------------------------- . _ _ _ ~ _ _ _ _~~ ~_ !~~_~ _~_ ~~_<?_~_~~! _ ~P_~~~~~_,_ _~c:>_~i_C?~~ _~ _~~~_'!'_i~~~~~~_ _ _ _ _ _ _ _ _ _ _ _ _ _ ~~~~_~_c:>_~_ ~~~~_':1~ _ _ _ _ _ _ ~: ~ ?_~~_ Break: Is the Price Right? Any Number & Switcheroo Games 10:00AM 5 BPA Transmission Considerations Melanie Jackson 10:15AM ._-----~----------------------------------------------------------------------------------------------------------------------------------------- Tom Krueger . _ _ _ ~ _ _ _ _~_~_~!".!)X _ ~~~_~~~_~~_ ~~~~_~ _~_':I_f?P__Iy' _9p.~!~~~_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _! ~~ _~~~~~y_ _ _ _ _ _ _ _ _ ~ ~_~~_ ._________~_~_~~~_(~_~~~_~~~~~~_~_<?_~~~~~~~~_~c:>_<?_~)________________________________________________________________________~_~_<?_':I_ . _. _!_ _ _ _ _-::_~~ _~~~~_':I_I~_i~~ _ ~~~~~_~~~!~~ _~~~~_':1~_i~~ _ ~!~~V_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ~~~i_~_ ~_~ ~~_ _ _ _ _ _ _~ = ~9_ ~~_ Break: Is the Price Right? That's Too Much & Showcase Showdown Games 1 :45PM -------------------------------------------------------------------------------------------------------------------------.----------------------- . _ _ - ~- - - _ _~!~~_~ _~~~~~_ ~~p.p.~V_ ~_<?_':1~!~~_~~_~i_<?_':1~_ _ _ __ _ _ _ _ _ _ _ _ _. _ _ _ _ _ _ _ _ _ _ _ _ _ _. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _~~~ry _ ~~~~~~ _ _ _ _ _ _ ~ =~9_~~_ . - - - - - - - - -~~)-<?-~ ~_':1_ - - - - - - - - - _ _ - - - - - - - - _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _.... _ _ _... _ _.... _ _ _.. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _~ = ~9_ ~~_ Lunch, along with refreshments at morning breaks, will be provided. Northwest Public Power Association Tier 2 Power Supply Planning Workshop Agenda Day 2 Power Supply Direction Topics Thursday, June 4, 2009 . _ _ _ ~ _ _ _ _"!"_<?_~~t~ _ ~_~J~~~i_~~~ _ _ _ _ _ _. _ _ _ _. _ _. _ _ _ _ _ _. _ _ _ _. _ _ _ _ _ _ _ _ _. _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ ____ _ _ _ _ _ _ _ _ _ _ ~_I_~~~ _ ~~~!~_~ _ _ _ _ _ _ ~: ~~_~~_ . _ _ _ ~.. _ _"!"_i~~_ ~ _ ~~~~~. ~~p.p.~v_ ~~_~~~. ~.~~ _ ~~~p'~~~_I_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _-=-~~ry _ ~~~~~~ _ _ _ _ _ _ ~: ~?_~~_ Continue Reliance on BPA - Option A Policy-Makers c Form 3 Groups 8:30AM Diversify from BPA - Option B Refine Straw Man . _ _ _ _ _ _ _ _ _ _. _ ~~~~~~~ _~i_I~~~~_~! _ ~~~ry _ _ _ _ _ _ _ _ _ _ _ _ _ ~~~~~~~ _~?_~_I?~~~ ~,_ _~~~~_':l_ _ _ _ _ _ _ _ _ _ _ _ _ _I?~ _~~~~i_C?!_ ~_i~~! _ ~~~_~_ Break: Is the Price Right? Any Number, Switcheroo & That's Too Much Games 10:00AM . _ _. ~ _ _ _ _~~~~p- _ ~~~~~_ ~?_':l_ _~r:p.~~~ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _~~~~p- _ ~~_~~~~~ _ _ _ _ _~ ~: ~_ ?~~_ Transformation of 3 Group Straw Man Reports into 1 Stone Bryan Singletary .. _ _ ~ _ _ _ _~ ~~ _~~~p.C?~_~! _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _. _ _ _ _ _ _ _ _ ~ ~~~p. _~_~~~ ~i_~~~_i~~ _ _ _ _ _~ ~ :~?_~~_ Break: Is the Price Right? Showcase Showdown & Showdown Games 11 :45AM . _ _ _ _ _ _. _ _~_l:I.~~~ _< ~_~~~ .~i_~~i_~_ ~_<?~!~~~~~~_ ~_<?_<?_~) _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _~_C?_C?_':l_ Continuation (If Needed) Transformation of 3 Group Straw Bryan Singletary . _ _ _ ~_ _ _ _ _IY!~~ _~~.P_<?_~~_ ~~!~. ~_ _~_~?_r:'.~ _ ~_~_~_ ~!.<?J?~~~I_ _ _ _ _ _ _ _ _ _. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ~~~~p. _~_~~!~~~~~_i~~ _ _ _ _ _ _ _~: ~9.~~_ . _ _ _ _ _ _ _. .~~_<?~ !.~_ _ _ _ _ _ _ _ _ _ _ _ _ _ _. _ _ _ _ _ _ _ _ _' _ _ _ _ _ _ _ _. _ _ _ _ _ _ _ _ _.. _ _ _ _ _. _ _... _. _ _ _ _ _ _ _. _ _ _.. _ _ _ _ _ _ _ _ _.. _ _ _ _ _ _ _ _ _ _ _.. _ _ _ _ _ _ _ _ _ _ _. _. _ _ _~: ~9_ ~ ~_ Lunch, along with refreshments at morning breaks, will be provided. . ~;~ I 'I Typical Hourly Load for a Month 700 ,.......--- It II ~ 11 II It A ~ ^ ~ ~ " t1 ~ ,...... It ^ 11 ~ I- - .- - ---- - - -'-- - - ~ ~ 1\ ~ ! .~ .... !/ ~ ^ I~~ - -1----. ~ .,,~ -- --, rr--- - .-- -_. ". !"- -'~ f--. ------- f--. -f--. "\ V v \ u V---- v v ~ v v \ \i F 1\1 .- V V V \J V \J ~ " - ... / . .. 600 500 400 300 200 100 o 1 28 55 82 109 136 163 190 217 244 271 298 325 352 379 406 433 460 487 514 541 568 595 622 649 676 703 730 Hour Typical Annual Load Duration Curve Example of stacking generation 1 0 o 0.9 0.8 00 o o - 0.7 ............. , ."~ 'I' " . i"" .+." . ," '. ': :. ,flT r~ : - i- I I I I I 0 I 00 II' .. IilIo o ,', 0 I, ',0 I I I _~ .... ,.'1 I 1-.'---- 'I I" I II <1,1, " 'II ,00,' I , I' I ,r Base load units 'I " ,0 0 , II ' 1 ,0 , 0 I 0 I 0 I I I' , I' I,," ,II I 0 ' -I 0 I ~ 0: I 0' 0 I ' I, , ,I 0 . I." " " o ' ~ ~- ,0 0 II '; ,,' " 0 , ' I' · I 1----, 0.6 0.5 0.4 0.3 0.2 0.1 o 1 501 1001 1501 2001 2501 3001 3501 4001 4501 5001 5501 6001 6501 7001 7501 8001 :8760 Typical Annual Load Duration Curve Example of stacking generation 1 ~"--'-~,-"'~..._,,_..,......_~-~----,,---------,,------~....,~.._-""'~_....- \ 8 " -'-------~-"-- ~ ,,----- 7 ~ ~--lnterm-ediate-~lJnits--~-- I I I I I if 6 I :;Ii; IIIII!! ... 5 - .. III --- 1- ~ '.- ......,. .,-~- - ~~,"- ".' ~---~ .., --~. ."-. i.., .,.._, -,.>>.. --,... I I I---- ,.- '- --- - I - -- -' ,,- .~.... "-. .,,-, ~,~,. ~,,<' .,.., -- I - I 1 I---- -- I---- - - I---- -, I 0.9 o. o. o. o. 0.4 0.3 0.2 o. o 1 501 1001 1501 2001 2501 3001 3501 4001 4501 5001 5501 6001 6501 7001 7501 8001 : 8760 i Typical Annual Load Duration Curve Example of stacking generation o. 1 ~ I ++ I ~U~; 9. , ' Peakirlg~ Un i ~ .. 8 -""0 [--- ,-- ,~ I 7 t;;!;. ~ 6 I iiiioc- , I I 5 -~ _. I- I-- - -I-- _., - .- 1-- . ... .... I I I ... .... .. I I I... ~ I- I ._-" ~,,' ,---- I" ..... ,-.. ,'-' ..,......,.:. ,---; 1 I I .. I I . I. I Base load units I I I. I. . I . I . 1 I I . I . I I I I I I . I . I I . '. I I I I .' I' I I ",,,." ,.....,. .....,.- .. I I I I I I I I . I I I .f- - . I - - - ~- - - f....- ~- -- .",.,.", 1- -. .- -:- .- I . I I I . I I . I 1 7 :8" 60 o. o. o. o. 0.4 0.3 0.2 0.1 o 1 501 1001 1501 2001 2501 3001 3501 4001 4501 5001 5501 600 6501 001 7501 8001 BP A Tier 2 FY2012-2018 Load Forecast Tier 2 Power Supply Planning Workshop Gtyof Port Angeles June 3, 2009 Philip D. Lusk Power Resources Manager I Topics Forecasting Background Energy Accounting Basics Future Loads and Resources Forecast o Projected Tier 1 and Tier 2 Power Requirements Future Considerations 01 o ...... o o : I Energy Accounting Basics What is a BTU, KWh, MWh and aMW? o BTU is a British thermal unit; a basic energy unit The amount of heat required to raise the temperature of one pound of liquid water by one degree from 600 to 61 oFahrenheit at a constant pressure of one atmosphere About equal to one large kitchen match o KWh is a kilowatt-hour; a smaller energy unit used by electric utilities About equal to 3413 BTU If a 100-watt light bulb is on for 10 hours, the energy used is 1 KWh (100 W x 10 h = 1000 Wh = 1 KWh) I Energy~Account~g'Basics What is a BTU, KWh, MWh and aMW? o MWh is a megawatt-hour; a larger energy unit used by electric utilities. If 1000 100-watt light bulbs are on for 10 hours, the energy used is 1 MWh (1000 x 100 W x 10 h = 1,000,000 Wh = 1 MWh) o aMW is average megawatt; the average number of MWh used over a specified time period If 8760 100-watt light bulbs are on for 10 hours for one year, the energy used is 1 aMW (8760 x 100 W x 10 h / 8760 h/year = 1 aMW) 1 !i i I 1 ~ t ,\ 1 ;\ ij :1 1 ~ I ! ti l ! I I j I ! ; ! I Port Angeles Electric Uti1i~ Background Principal load centers o Industrial Transmission (IT) system Looks forward to working with the City in sourcing power requirements that may exceed SPA's Tier 1 allocation o Would be financially responsible for any associated costs or proceeds Not considered in the following evaluation o Distribution system Everyone else .:L. 1 r Port~geles El~ctricUtility For;cast Uses a six-factor polynomial regression for the distribution system based on the past 36 months Future growth o Distribution assumes a 1.250/0 Compound Annual Growth Rate (CAGR), which is about 200/0 less than the historic 1.52 % CAGR for the 2001-2008 time period IE Lower CAGR predicated on continuing recession impacts and energy use reductions from the City's existing conservation program Reality check o Forecast was backcast against the historic loads from January 2007 though March 2009 (I Overall aMW forecast error was 0.660/0 IE Overall kWh forecast error was 0.200/0 50,000 45,000 40,000 35,000 30,000 ~ 25,000 C'O City of Port Angeles Distribution Utility aMW 20 , 000 ....~ ~- ~~~~~~m__~~~~~~~~~_~.~~.. m m~~m~~~~~ ...~m"~"m m~m~m~~m.... .. .....~m m .. ....~ 15,000 .................................--................ .. ...-.,.............................................. ............................."...................................... ................................................. ..........._.....~.............. ..........................................,'u. 1 0,000 . ... . ..mmmm....~~~~~......mmm..m ............. ...~ .mm m ...... m~m ........ ..... .. m_m . mmmmmmm.m .... m m.mmm~ .. ....m m ..mm~ 5,000 o y=0.4323x6 -18.758x5 + 306. 12x4 -2273.6x3 + 7920.8x2 -16116x+56297 R2 = 0.9675 1 2 3 4 5 6 7 8 9 10 11 12 I o 00" ..... :::!. 0- S. o' :J I -l .... CD :J 0.. S" CD ~/'Q ~ ~ "'70 ~-<;: o ~ "'77 "'':''-<7 7 ~ ",~ ~-<7 ~ ~ "'7" ~-<7 " ~ "'7", ~7 '" ~ "'0 ~-<7 oS ~ "'76' ~-<7 6' ~ "'7.> "'", <(7.> ~ "'70> ~7 0> ~ "'-':9 ~-<;: 09 ~ "<"0 ~ "<"0 ~ "<"7 ~ "<"7 ~ "<,,~ ~/"" ? ~ "<"" '1.""" U> ~ "<"V '1.,,~ '" ~ "<"oS ~ "<"oS ~ "",6' '1.,,~ 6' ~ "<".> ~ ""'.> ~ ""'0> "'", "<"0> MWh -'" N N W W .I>- .I>- CJ'1 CJ'1 0 CJ'1 .0 CJ'1 0 CJ'1 0 CJ'1 0 "0 ""0 ""0 0 "0 "0 "0 ""0 "0 ""0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 <:: I c::: ! , , I \ c:: I c::: I I I I c:::: I ! I c:::: I I I c:::: I c:::: I I I c:::: c I I , c:: , I I <: I I <C ~ I I C I I I i IC::: I c::: c::::: (") -. P+ '< o ..... ~." go cc;:l ~)> 0:1 ~(Q co (I) miD ~ tn CD ~ C (Q -. '< tn ,,~ o -. ., C" CD s::: (") P+ Q) -. tJ) 0 ....:1 C P+ -. - -. .... '< I Tier 2 Power Requirements Will slightly exceed SPA's Tier 1 allocation during FY2012 - FY2013 Will exceed SPA's Tier 1 allocation by 1.026 aMW in FY2014 . o 0.922 aMW Distribution o 0.104 aMw Industrial Transmission Depending on load growth, City may require 8.028 aMW of Tier 2 power by FY2028 ~ 25 lU City of Port Angeles Distribution Utility 2011 - 2028 Power Sources 50 45 40 35 30 20 15 10 0 ,,')... ,,'=' "I>< ,,~ "lO >0 "co ,,<1> r5' a, " a,')... w a,I>< ~ ~ ~ ~ ~~ ')...\:) ')...\:) ~ ~~ ~~ ~ ~')...\:) ~ ~~ ')...\:) ~~ ~')...\:) ')...\:) ~~ ')...\:) ~ << <<-\: <<-\: <<-\: << << <<-\: << << -\: << <<-4.. << << << -\: << <<-\: << -\: IOTier 2 II Tier 11 "Tier 2 Gap" Distribution Utility Impacts? Period Wholesale Power Wholesale Power Tier 2 MWh/Year Cost Increase ($) Cost Increase (0/0) 2014 2018 2022 2026 8,073 24,227 41 ,205 59,048 435,920 1,747,090 3,407,680 5,497,380 0.90/0 . 3.70/0 6.80/0 9.70/0 NOTE: Wholesale power costs currently represent about two-thirds of the total electric utility operating expenses 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% ~ <<.J..~ City of Port Angeles Projected Tier 2 Wholesale Power Cost Impacts ,,":J .J..~ << ~ <<.J..~ ~ ~ {~ >0 <<.J..~ ,,<0 .J..~ << . 0 ,,<0 .J..~ << "C1> <<.J..~ ~ .J..~ << a..." .J..~ << a,,'l- .J.."v~ << aJ' .J..~ << ~ ~ <<~ ~ .J..'l-~ << cV> <<.J..~ a,,<O 'l-~ <<~ rV ~ <<~ I Reduce "Gap" with Two Priorities? Seek all cost-effective conservation as the favored resource for meeting future loads o As needed, look for options to accelerate those . energy savings . u U .... ~ Pursue renewable energy & cogeneration o Preference for resources located within City utility's service territory ~ C/) rl t--l · o ~ C/) .'V rIj ~ > .~ ~ = = .. ~ ~ ~ < ~ ~ ~ ~ "t:S == ~ eIJ == .~ ~ .~ .. ~ ~ > .~ ~ ~ ~ .~ "t:S = ~ =----= ~B~_ :~~i;~=1~~~~~wlfir;:~;~~'~~~~~5f?if~~~~~i~1::r!~~;~~A~};~fri~~~~~~~~,==~;s~;;i2R:~~~~iF~~,~~~-=-~=~~~ ~--=.::::::.-..:::::::::-...:-=--::::::::::.-::::::::.::--=-=..:::;::::::::::=::..::::.:::=--~~~~:.:..:::.::::::.::..:::.::.':==:.,;:::=.:.-":::-:":::'::':-::-:'~""-~:'===::::-':::::::-~::::.::-..::-::..::=:'.::::= :-:::::..,..:....::~.;::-:::.:::..::::::.:::-...:.==-:......:--=_-:::.::::::....:. -:::::::;.-..:::.-::::----::::.::,.--::.:;;:=;:..-.:.-:::::=-..=--=::::...-::::=::.=~,:.::=.=.:::;::::::.::.--= ====='-:-==-==-~:==..::::"_~ =:~.::::=::::=-...---==:::.:::..~:::.::=::::~.,.== ~'=~=::--==::::;~::~7:S:_~=::~~::::'-:':::::--=':'=:--~==::~:=== =.:::~~~=~:::--=~:=:=~====-~ Discussion Overview · Overview · Tier 2 Rate Alternatives · Election Deadlines and Diversification Rights · Indicative Pricing and Renewable Request for Information · Resource Characteristics · Timeline · Transition High Water Mark / November 2009 Decision Pre-Decisional, for Discussion Purposes Only Slide 2 -~-----~~------~-------~ --~~- - ----~_........~--- --......... -------~~----~ --.........."'-...------- --~.-~...---------_.........~- ~-~......._.........,-_.-~------~---- -~- -_............_----~-------~-~.......~ _......."-~ ~------...._........._- ..~............--._~.........---................._~......----------~_&_..------- -~-~-~~-- -~ ~-,,,,~,,-,,,, - -- --~.. - ~~ -- ~---...--"-'~...~~~ - ~-~~ ~~ ... -"'- -~-- ~~~..... - ~~ ---~~~---~----.....---------------..._- E=;=C~=-=Q- ~=~~}~~~~~-~~~!_!fZl~~i~i;59~~~t~~lS~j~~_===:b-:~=ct'J-=-- --= Overview · Each customer has received the forecast Transition-period High Water Mark. From this information a customer can determine what their above-High Water Mark load will be for FYs 2012,2013 and 2014. · BP A is continuing the process of engaging customers on their interest in the different Tier 2 rate alternatives for FY 2012 and beyond. · BP A is presenting this information now to help inform customers as they assess their options for meeting their above-rate-period High Water Mark load for the first three years of Regional Dialogue contract implementation. · By November 1, 2009, customers must elect whether they intend to have BPA supply all or a portion of their above-High Water Mark power needs for FY s 2012, 2013 and 2014, and if so, how much and through what rate alternative. . Pre-Decisional, for Discussion Purposes Only Slide 3 --~------------~ ....-..,.--..-..-- -- ------.-- ------- -----------.........------------...,.,...-- -..------------~---.--'-"-----~--...............-- ----------- -------------~------._-~--.......-....-..----~..---------.........--....----.----.._-~---"._--------~---------------.,,--~---------_._---------------------- ~--_.........----- _...........,------~~--.-..~----"'-"'~~------~_._-~----""'---~--------- =--=-:=--- -e~=---=--==-=--:::-:;:-:="-;-:::=:;-:;-="::tJ--::---::=--"===:-=-----::::;-..:::::-:-:=:::::-= -::::..:=-=-=::_-:::-==::-::-===-~---=:--::-=-=c::..-:::--=-...::~-==-..:::::::..-::-::==-= ~- __ ~ "~:: ~__~=~- ~;~~~~~:-~;~'~;;;~=~~~~~1~i2~=~~{t~~~~~~~~~c:::co~~~-- ~~~~~==~~=t~~=_~_~~ _=_~-~ ~~_._ e~.:=~==__=_;:;: High Water Mark Definitions There are three types of High Water Marks: · Transition Period High Water Mark (THWM): calculated in FY 2009 using the public customer's forecasted FY 2010 load to establish a Above-Rate Period" High Water Mark load for all of part of the Transition Period (FYs 2012, 2013, 2014). · Contract High Water Mark (CHWM): the amount (expressed in Average Megawatts) computed for each public customer in accordance with the Tiered Rate Methodology. The CHWM will be calculated in FY 2011 based on FY 2010 actual loads and sets customers' initial eligibility to purchase power at Tier 1 rates. The CHWM determination process also defines the augmentation limit. · Rate Period High Water Mark (RHWM): set in the RHWM process prior to the 7(i) process (rate case). The RHWM defines the public customer's maximum eligibility to purchase at Tier 1 rates for the rate period (limited by the customer's actual net requirement). Pre-Decisional, for Discussion Purposes Only Slide 4 -- ...........----~----------------~ ~ - --------- --------- ----- -- =------====---=~--=-===--=-=-- _.=-=----===-==--===-~=----=--- ~ tsj- - - - - -- ---- - - -- - - - -- -- ------ - --- - - - ._ ~-~ =~-- tsj=--~__~I==~- J~ J~ _g..0)- ___ YJl ~ ~ _ _ ~~__~~~:.~~ ..::::L_~=- J JS::: * ~:::._.8 ~ _1-=-. -- ----~- ~~ ------- Useful Definitions · Rate Period: the period of time during which a specific set of rates established by BP A pursuant to the Tiered Rate Methodology is intended to remain in effect. The plan is to have a two-year rate period. · Rate Case Year: the fiscal year ending prior to the commencement of a Rate Period. The Rate Case Year immediately follows the Forecast Year. It is the year in which the 7(i) process for the next rate period is conducted. · Forecast Year: the fiscal year ending on full year prior to the commencement of a rate period. . · Example: Rate Period: Fiscal Years 2012 - 2013 Forecast Year: Fiscal Year 2010 Rate Case Year: Fiscal Year 2011 Pre-Decisional, for Discussion Purposes Only Slide 5 ~ ~,~~~~~B~~f~.~~~~~~~~~~~~~J~t~;~~~~~~&1~~~.~~:,~~~ii;~~~~ ~~~~~~~;~I~~~~=~ :. -- -'-:-= - - ~=--=-==:~'=-~~:~~~:.:;-:.;::;:;;.--::::=~===-~~~-::::::::.~=---::.:-==~;;.:;-=-:: --~.~==~~~=;:..--= City of Port Angeles r-w Projected Load 95.00 Po rt Angeles ."... ,-- 90.00 --- i!!!I rn,p. Il!["'~a U III G I.'Zl I!lll E1l i:2lI ~ ---- ."...,. ~ 85.00 - ".., "0 ~ 80.00 x ~s ." 75.00 t!. - -forecast A actual xCY2008 -WeaAdj Est HWM .... "'" Est. HWf..l + i fv'IW 70.00 2004 2009 FY 2014 2019 Pre-Decisional, for Discussion Purposes Only Slide 6 --~------~-~~--~-~--------~..-....-~..........-_....._--~--.....-.-_------_..-...-_.........._.._..~----"'-'...._---.....-.-_----........,............_~-----------~~.............~--- ~------ --~---_-......-.-----------.~_----............-_---...............------~---............- --~----~-~ ._---~-~-~----~y.......~-yy~-~----------~------_..........----------- ----~ --~----- -----~-~~---------------~- .~-~-~--~~~.- ----------...... -~--..._~_.._-~ -----,<; ~......._-----~- ----- ~._~----_._---------~~-------- ----......_--------'_......_----_._--~-----~----~ ----~-----..----.--- -- -----------. -~------ -. --- -~ . --~~---- -~ _...~ - - ------- -~----'-. ---"*"'---- --_..............~-~-- ----~.._----~--------~----....-_-- =s----==-Q.-~~--.-~- ---::'ffi:----:'SL-==I-.Iii;....;:;:-c:::Iii;=---=~-- -~-~=Q- "~:c::.:W- :::=ffi:--:::~B--="::..:-.- --f!.." h"-:-=G~'''::;M-- "_C:::':I::::'::--"::-~- '::::"':'/-='"=S" --- -~-=:;::B"" '/!;.- _..:::~ -1-e=tsJ-----= -~- -- - -~ ----- -- -~ -~- ~-~- -~~ -~ ~- ~---~ ~~-_~___ ~___ ~~___ ___ _A__ ___.... ___~ __ __.... __ __ ............., ~_ = ~~.. ... _~ ..__..__ ~___ ~~_ ___ _ ___ __ _ ______ ~--- - -- ---~ -~ --- --............ - -- ~---- ..........-- -~~"" __.__~__ ~__~_ . ---"- _~_ A_~ _ __~_ ~.__~ ~_ _ _ ___.-. _ _ __ _____ ___~ ___ ,.......__ __~ ..-~ ~ __............. ~ ----,... ~_ -- -- -,,""--- -- --- -- --- - -- ~-~ - -----...........-~- -~~ .........-- -~- --- - ._-------- - ---- -- ..... -~- --- --- - --~ -~ ----- ~- ~ - -- --- --- --- -- - -- --------~~~-----------~----...........---._---....-_--------.-..-- ~-------~----~---------_.......----'--- ---- -----~~- ------., ~ ~...--~-.-..----..............._--- _---._-~........ ~--------._---'--_.......-..-_------------ ~----~~---~~~--.........-..__............__.'_"_~...............___N""'____..._~~......_..._...__ _......~~~___"""""'___~_____...._~ ~"'"-~___________~."""*"_~_N~___________ ~~__~_ ----------~----~-------------______________ --h____ ..__~_'"'_________..,= __ .... _ ~_______ _-> ___. ~_...~~__~_____..._'__~..,___~_~~___~__~_______ -~-~-----~---~--_....-~ -----........~~-. -...............---~........ -~ ~,_____~_ ~~..__~~ ___.............~___.._...._ ~~ n_" _ ~~~~__~ ~~__...__~ ____...._.-l..__ _______ _........_ ~__~_____~ --~--------------------...-..-.-.-~-------------~~--- --~-~------- -~--------_.~----~------------~-~-- -..---------~ City of Port Angeles ~ Transition High Water Mark Fm11't'Q!;t AdJ I.""d J.I, :u 1\)R'(usl l''''''"itk.o AdJ t.:..d J,', nw M Jj lOin 20J~ tJ<ilJt2'" ., ., ,,088 7, OM (! 1,1l~ o (I 1;1 7,2.18 l,{jiflt I) (i o ThH!l J44 144 Tf!iMiiion ,~rl;,."ad \'....100 OIl> 1U'03')m ~Mlt r(fJ'tfllst 1""loll,..d II, II 1011' Rlf:~!t-ur(<,. Sl lOJn J'on:i:dsl Adj l.,~d If, .~ lOl6 87,51 0.15 87"94 0.58 PI.....rt Angeles 85,29 o 85,29 Trurrdliun 1l\\'M 87,,36 ~""",',,,.d ,\"""..llWM f'i'T'l',o'li:d Ah..,.. IJWM 1''''''<0.1<<1 1A).Qd 1~)lJ:id [...Iad Iltud I..,..."td 20ll lllll 20Ll lOLl 2<';1-1 88.39 1.3% """ GrtwI. Pal. 0.7% ....n. .3T...1/I flit. NOTES II The.. p-oje<llon. ",fJe" Df'A. LOJd Fo..""i/lBl" J.~" oftk..1 TI1.L<u'lo",,,, 'l"'dl>: 1"0..".... (SlUd}' $4:.. 21 The ..I,......J. dc, 001 j .dude lood ndju._n.. ,,,,-,..>>lizO[i,,., de ""ribed i. !be, P,,@io..1 Dinhgue poli.:y V T;... I S).....m Finn Critical OUlpul.",onvlion. ;ndt>:le: 10((8 DiOp....IAdj; No Foor Milo Hill; 00 "'NP3so,ulo"".1 r..ur. Thio fisu", "'!'''"" 0'" the "",rag.ol"lheproJl'<li!d TlS.~O [01 H10ll.nd 2013 ",,,,O,,,,,,he CGS "'[ueling"l'd.. 4" I\-ojee~d .uglllen",,,,,. d"". net include .nl'ioc new !",blie.ol DOI>RJehl.nd. fJ( thi. ...,1.1.115 nMW b.." AJ",,.;y ","eo ..<u",d rJJcodll,. III) 51 It. "",u"""I:!o' <u""""Tld.c. tile Eu"iogRomul<<! of", CHI'{M nod 128 to. MW' of. ";m....d NI.5L. (NISt... I'<nd O",iII., 6.16 .MW. fWD. J5 "MW. C"""blz .25 nMW nod ~l.tbeod. SI.M'H 0<. nit. I a",.. &~pri".) 6' It.tlecl. "'110\..1 01 ('..,.ITOIi. R.pb:..menl !l.!."",,,,. co.:i.leo, with It.gjo.oI CiNo@U. Pob<y~ 7l If Abo1." HWlooI, h..:! i. Io",lb... I .MW BPA ,,'ill ""..." u.d.r iI.Land Sh.pi.t<l\llg... No .<1;'0 b}' (\'''''''0''' i. "'<1llj",d Pre-Decisional, for Discussion Purposes Only Slide 7 ~~;;:;~~~~~~:::~~~,~~t;:~~;~?~~;~:~~~~~~~; G~:i:=;:~;;t~l'~{C)i~ :s::~::::;:~:~,~~~;~:6'::~I;;~~~~~~~~;f~:f-i;~~4?'::~~~~t;~}~~~~~.~::~::~i:~~ ~~~.~~{-;~~~~~~i~'t:::,=:t:%~;~~ Tier 2 Rate Alternatives · BP A will offer the following Tier 2 rate alternatives: - a Load Growth Rate - a Short-Term Rate - a Vintage Rate or set of Vintage rates, as customer needs and interest warrant, . · Statement of Intent by November 1st election deadline · BP A Tier 2 rate alternatives will be based on the cost of providing a flat annual block of power Pre-Decisional, for Discussion Purposes Only Slide 8 ~~------------- -.......--..........,... - ~------~-~~~~-,.._....._~.........._-...............- ~---"'-----------.-.--_"-- _~_~......__________~~__~__-'...N ~----..-_____________............._..............._____~__ ----~ ----~--.-..---._- --...----......__.........._-----_...._-~...............------- ,,-- ~...--....... ..-~---.--~,.-----.". - -~_.----"" ----------- -....---....-......... -.--- -"--," --~--~------------------. ------------ ------------ --- -~-- --~-------~--- --~-------_...~--..,,_.._- ~- --.-'"----- -------- _..._----~-~----'""-~--------...."-_.--_~_.._~------- ==:::----::-==~=__::7..:-=--_:::::-.::__"=..::::.__c:-..:.=_=_~.:_::=_=_::c.::.-:_..::_:__=. ---.~::::~-- "-:~:-W-' - ---"=- :;::::-.' -==":'. ~ --.":::::::::: ,::c.:;::--:::-.__ -'.-:-=-': .:-=:. C:::='::---'::'::::--=-=':::::'-:::-_-:::.'7"-==-.-:::-==--===--===.::::. :::::::--=--==e=e-- -~-=~:=-:~:::~''sI=I::=:-..:~ '~15-:::-::::5'-' -_-:-:=~::::-:::- ;;:-:::: =(;I-:::::=ER=-"::-::::-_:::_f!.,.-:'=I3.'::::-:::M-::::=I-=--~:::-'=:I"'::::'S----~':';:-O:ER:-=-/];:::'=="1". ---I=e=f'SJ= --~ --- ~ ----.... ----......--~_....-.......-----.......------------- ---~ ..--~ -~~ ....- .~~"-- -- ...~-__ _ ~"'_~~____ __,,___ ___h__ ___ _~'::',~.....,.......--........--. ~____........_ ---~-- ---- - --- --- - -- ------ -- ----- -- ---...~- ---- - -- -~~ --~-~, - ~---~ ---- - - ~...-""" ~~~-~ "- ---- .........~~ ""-,"<-- -............. -- ~ ~---- ...~--- -"'--- --- ---- ~-- -- - -- -- ---..~---------_---..._-----~-~~-_.........~""------"'_....-_..~ ....__.~~~-~ - -- - -~--- ~ --- ,~~- ~"'"~ ,~-- ~ ~~ ,. ~ ~ _ _ ,_ _. w ~ '"~ ~_->._ __"'____.-..,____ _ ~ ~"'__ ~~~_ _ t..~ ..______..-_""""__~~_~~__ --~---~ --~------._----- - --~_.---....,..-~-- _........~--.....,.-~~--~~~....,.~-" -~"""'""~-~~----~-~'"""'......_~~~--<-~--'"...~ -<---~~ -~............._~~-~.._~~ -~ -----~ -...............~-----_..._-_... -~-----"'''-~ ~----------._------.._- ~ '" -~ ~ -..................... ~........." -- - " -... . - ,,-_....~ -- ~~ -~ ~--- .." -~-~-~.. -~---~~ --. --.- -"~ ~- ~-..-...--.-....-~------~-- ------.~- -------------~-------- --~~- ~~------ - ..4 _~_~ _~_< ~ _"___,,. ~~ '" _"'_ ~ ~ ..., .._.........____.......,____ __~"" _-<.~_fl~~~ -"__~,~_.........,. ..~<. _______...............,."___-'-__o.-~~_,,.~__""'~ "'n_", 0.- .......___ _~ _ "'............... --'__~_4_____________~ _ _____~_ ------~-------------------~-----------~-~__....________~..............__4_.._~ ~____~..,. ~ _ ~"""""-0" __~ ~~~~ ....,_~~_ ~~___ ~_._~_.____~____~____~~___~____________~_______ Tier 2 Rate Alternatives · BP A Tier 2 rates will be established in applicable 7(i) processes (Rate Cases) which are set to occur every two years. · Applicable cost components that may be included in Tier 2 rate alternatives: · Resource Acquisition Costs · BP A overhead costs - overhead costs associated with power provided at Tier 2 Rates · Resource Support Services (RSS) - the cost ofRSS products needed to deliver a flat block of energy · Other costs: risk-related costs, transmission costs, Balancing Authority costs for within hour balancing, fuel adjustment adders, etc. Pre- Decisional, for Discussion Purposes Only Slide 9 ~-----.-,------ -----------~-~---~- ----~ ----------,,-------,....- ----.....----_._---------~---..;..-.>----------------_....-------------- --~~-----~---...........------_.- ...~-""'--........_~--~--........~_.-._~-..,---------.......,.,,~--~.... --....--~------------------------ -~---------~~-........-----_.~--~~---,-~------~"'-""'-----~--------- --------.....--'~---~- ---==----=---e\--:.---N-- --=tfi=::-=- -= -I:: - - ===--='='=---\C-',7/"::':-:::--= --==-==-=-:c..:-::=--K=jj--::-=-=-====-==:=--==--=----=-=---;--:::::--==-=-=-= = _:6 _-:c~- ~~_ -_ ~~~_ =~=~~~~~==-~~~~~~~~~~~~=?~~~~~~~:_G~=~~~~~~~~~.~=~~~=::t~:~~- j~~:t~:::;;;TE- :;.R=-=~~--=T~ ~l::-=<:;==-~_ -__~ ====-------=======-====--....==-:-===--====:::::::--:.::=::::::-=:::::-:::=:.-:::="::::=-=:::::-=:.:=-;::;:-;:.:--:::-:..... -~~-_-='7"".;""-=";::-:=:::::..;-==:--.:;_~=:;.::::.:....:::::::::=--==::::::.:::::::::==::::.:=:-::::::..""':::'-.:--:::..:::-=:==-:::::::::;.:-=.::::::::::::.:-=.:..:::-.::::::::-:--====--.::::::::_--.::-=-~ Tier 2 Rate Alternative ~ Load Growth Rate Load Growth Rate · BPA commits to meet customer's load growth placed on BPA for the term of the commitment period - although when giving notice to purchase at the Load Growth rate the customer may establish set amounts of above-RHWM load to be served by non-federal resources or other Tier 2 rate alternatives for the contract term. · Election Opportunities: November 1,2009 for the period FYs 2012 through 2028 and September 30,2011 for the period FYs 2015 through 2028. . · Customers have a diversification right to limit the amount of power they purchase at the Load Growth rate in future years with notice and possible liquidated damages. · Customers choosing to purchase 1000/0 of its Above -RHWM load service at the Load Growth Rate may elect the Shared Rate Plan. Pre-Decisional, for Discussion Purposes Only Slide 10 -~~~-~_......--._------_............~_........~---~,_---....~----_............---..........._--_---..._-'-........,..........""-~..........- -........._--~--+--~--........._~...........~----.............--~ -------------------..,.,......~---_...~-~-----~-----~.....-............-~- -~-~~ -~-.....,.- ---~~--- .-.,.-- -~- -~-..-~----------......--...-~----~--_-------..._- -----~----.........~---~----~---~---.--~_...~....,-~~ -.,..,...----'-'-...~~-"'~ ~-~~------ ,..--..........."'-'----~~ -------~-----~~-- ------~--~-- ---------...-----------~--- ----~---~__ -_--0.--------------- _~ .__~~_ _~. _ _~--'-- _~___~___~___ _____..-___________________~___~__ -8 ~-~ ~-=~ -'sl- J-~- -E :;~--.-~...-.e. --=W.-=E=-='=IR-::-="::-/1...::.::::::6=M-."::'=':;"=~-='---':;::;-s.::::"=m ~-~. -m--'-e--=f'\J-----------= ---- -~ --- - - - -- -- - ~ ~~--- -- - -~- --* -....~ ----~~ -- ~-- -....--- --- -~ ........-.......- -......... ------- -- - --- -.......- - ------ ~=- --- .- - - ---=- - - ~~-=-=:_~=--~=-~~== ~_::~-~~~=~~~-~~~;::. ~~-- ~= :::=-:_~=;-~:- . ~ - -=~- -.--=- ~ ~-- - - Tier 2, Rate Alternative ~ Shared Rate Plan Shared Rate Plan · A load following customer may only elect the Shared Rate Plan (SRP) if it commits to purchase 100% of it above- RHWM load service at the Tier 2 Load Growth Rate. · Each SRP participant will pay the same SRP rate as all other participants within that pool of the SRP. · "Melding" of Tier 1 and Tier 2 rates. · Demand charges are applied on an individual customer basis. Pre-Decisional, for Discussion Purposes Only Slide 11 ~~~!.'~mf~~t~!tif~~~t~~Jijl;!~!~;l~~~~~ Tier 2 Rate Alternative r'-J Short-Term Rate Short-Term Rate . Shorter purchase commitment with terms of 3 years (FY 2012-14), 5 years (FY 2015-2019),5 years (FY 2020- 2024) and 4 years (FY 2025-2028). · Pricing based on best market opportunities. . Service at this rate may be converted to service at a . Vintage Rate with proper notice and conversion costs. . Customer has right to reduce purchase amounts with notice and possible liquidated damages. . Short- Term is the default rate alternative if a customer fails to make an election (including an election NOT to purchase at Tier 2 rates) by the notification deadline. Pre-Decisional, for Discussion Purposes Only Slide 12 -~~~..-...--------~---...--~-~-...............~ - ~~--~..........--- ~ -............ -.....--..~ ~..........-~-..........~ -~--............_........... -....----- ~- ..........~-.........._-..........,--~_...----~-_...........~--- ------------.........~~---~-~-~ ======:::===..==:==:::::==:::::=::=_-:-.....:=::::::=~ ---=:.~-:::--~--::::--_::::::::::::::=:::...--:::....---:::::::-=.:.~::::.::.:::-:::.*-:.=:----*-::'~..::::::::::::.:::_~---::- -~:.:::':=-=-~::;--::~::....::::::::::-~::::-::::::-.;::::::::....:"'""-::::::::::...~=-~~':'..::::::::::-----=--~-'-~.::::=:=::.~:::::==:. ~-~_~~:B=~-e - ._~:~~ ~ ~~- .o~;=t~~-~~~-:~~~~~;~0-~~~:~~i=-~~~~~~:~~~;~~~=:~~~iiJ~~~~~~~ 1~~~~'~~=--;r~=~F ~a - ~~_ ; Tier 2 Rate Alternatives ~ Vintage Rate Vintage Rate · Term of commitment dependent on term of intended BP A resource acquisition. · A Vintage Rate may be available as early as November 2009, or anytime thereafter based on customer need and interest. · To ensure that Tier 2 costs do not affect Tier 1 rates, customers will have to give BPA a binding commitment (with a Statement of Intent) to take service at this rate before BP A will begin to finalize the purchase commitment for the resource. · BP A wants to work with customers to understand their needs and interests for Vintage Rate alternatives. Pre-Decisional, for Discussion Purposes Only Slide 13 ;-~~~~~~0i~~f~W~~E~~~~:i~~~~=jfg~~~~~=:-~'9'~-! il ~l~~~~~_~ ~ Start Load Following Tier 2 Rate Alternative Selection Load Growth Rate DeciSions Required .Im1is.!!. I2Y!lli!l2 11/1/09 for 9/30/11 for Purchase ~ FY 2012 - 2028 FY 2016 ~ 2028 LG Rates may differ depending on election date. N Option 1 Full Load Growth Rate May Modify LG wf Notice by 1 0/31 of each Rate Case Year One-time Termination Right by 3f31 of each Forecast Year Tier 2 Rate Selection - Load Following Yes Yes N N Yes Yes Option 3 Load Growth Rate w/ other T2 &for Dedicated Resources May Modify LG wf Notice by 1 Of31 of each Rate Case Year Notify BPA at each Notice Deadline that Tier 2 will not ~ be purcha.,ed and whether RSS will be purchased for Specif1ed Resources ,or' Short-Term, Dedicated Resources & Co....blnatlons and RSS Elections These Tier 2andfor Dedicated Resource amounts and RSS elections for Specified Resources are established each Notice Deadline for the corresponding Purchase Period I I I I I I I I I No Short-Term &RSS Elections Decisions Required for Short-Term Rate elections & RSS Product elections for non-Federal Resources Notice Deadline 11/1/09 for 9/30/11 for 9f30f16 for 9/30/20 for Purchase Period FY 2012 - 2014 FY 2016 - 2019 FY 2020 ~ 2024 FY 2026 - 2028 Alternative A Short-Term Serves ail Above- RHWM Load greater than established "not to exceed" Dedicated Resources Dedicated Resources Tier 1 Pre-Decisional, for Discussion Purposes Only Alternative A Short-Term Serves ail Above- RHWM Load Tier 1 Alternative B Dedicated Resources Serve all Above- RHWM Load greater than established "not to exceed" T2 Amounts T2 Short-Term Revised May 27.2009 @ 11:35 Slide 14 -~-------~-~-..............-_-~.-.-~----~~~-~-~~------ ~-----......._-~~-----------------------------~-~--------~----------~--------------~-- -----~-~~--------~-----_--....._~_...............~-~-"--~------------------------~---- ===--===--==---===--===--=-=-~ -====-=--=-:::-==--=-:=--:::.:=:...-===--::::::-=---.::::-:::::::---==-=.-=-=--=--:::==-= - - - ---- ------ ------ -- - - - ------------- - --- --...-- ~- ~ --- ~ -- ~~ -~- - ~ -~ ----- - ---- - - --- =-~ -~~==~--- -~~~~_._L~_ G---~~__~=-=____ _~~-=~~__:=~~::!-=_~:=~~~- ::~~~~~ID~~~i~~~~=~ ~:::_~-~~ ::-::I-=?_@:=:~o___-=___ Features and Benefits All Tier 2 Rate Alternatives · Above-RHWM load served by one or more of the Tier 2 Rate Alternatives will be PF-rate based power · Tier 2 costs, including risk and RSS is integrated into each Tier 2 cost pool · Pooled risk within each Tier 2 cost pool · Ability to rely on BP A staff and resources to meet Above-HWM load, minimal utility overhead required · BP A meets all or some of utility load growth · Maximum flexibility · Resource specific · Greater control over resource choice and costs Load Growth (& Shared Rate Plan) Short Term Vintage Pre-Decisional, for Discussion Purposes Only Slide 15 ..-- --..,..-.----- --- -~----....-.--_.- .-. ..._- --' --- -- ~ - --....-- -....,.,---. ....- -.---- -., - ----- -.-.-.. ----- ~._... "----..- ---...---.-.....------- --"----_.~-_......- ......-.-. -- -.--....--- ----- ---~-- --- -~-.-----"~----~--- -....----..--.- - ---. _..,.,.,,"'_........ ..... ." --'-- . .,.,..~.._-..,..,.-_._----"'---------- ...--..-......------- ----~---------.__.-- ------..--- ----..-....-- :~~-=-==~g-"~~1"=.~~~=~~~-=e~::~w~~I~~~~~~~~~~ffi,~~~~~;;=t)~~w~~~~~~~"}~~~[Q~~M~~~~~~~e=~$~=~T-o;~~g---==g' .*=:==I:=:-=~-=~~=;-:~~ :=::::::::::::::::::=::.::;:;:.:::::-...::::::=::==~..:::.::::::::-...::.::::.~.:..."...-:::::: =--=_'::--::::::-::"':':::::::'::7":"-::=::':::-_=":'-~--=_- ::::::::-,., --:.--::==::.,""'::.:.:,:.:::.:::::::.:::::::::.:...::::::.::.::::::::;::;:-~-....-:-:::::::--.:-:::=:::::::::=::::..-:::::::::::::-..=:::.....-;::::::-'.=:=:::;::---===---==- ~~....=::::---:-......::...=.--::::::.-:::.-..:::::-~_-:::-::=-==...--==:.-::. ~==-~~-~=--::::-~~=--=:::~_:-====::.::.~~=~:=::...:~--=~::::::...-~==-~-=-=-=---===-~-==-====---==--=---~~~~-~-=-= Diversification Rights and Tier 2 Election Deadlines · Customers have a diversification right to limit the amount of power they purchase at the Load Growth and Short Term rates in future years with notice and possible liquidated damages. · Above-HWM Notice Deadlines: Notice Deadline November 1,2009 September 30, 2011 September 30, 2016 September 30, 2021 for for for for Purchase Period FY 2012 - FY 2014 FY 2015 - FY 2019 FY 2020 - FY 2024 FY 2025 - FY 2028 Pre-Decisional, for Discussion Purposes Only Slide 16 ._-------_......---............--_--~---.~-----------------......._--- -------~--........-.---..........--.._--. - - -=--8- -(:)---- ~=----:~---=-. ffi-- -'!jL~--- ~-=-3=~~-=~-=-::-'E-=-=-.;;:--,-:::~- --"':::2-(:)-.- -:::-.:::W'-~-.:;..-=ffi-....:-'~:;:rR,.=i:z=- --:::'':-t:s,,--:-:?.cID:::::-.:M-=--.:;;:::::,::-.:i--N---'--'"=--:::-=-S::''' -~fS-7"'-t:s,' -'--=ffi- I ~ .~- -- -- - -- -- - - -- ---- -- -- ~-~~--- ---.-- - - ----- ~_..-- -----._.._..._^'~- -~ ---- -- ---- -- -- ~ ~- ---- ---- --- - - -..-..- .:::::::::: ~ -----....--- ~ - -- - -- -- --.-- -- ----- ---- "--- -- -- --~..- ....-.....- ._-- --- --- --- ~- --- -- ---- -- -- - - ------ -- - - --- -------- --- .--- -----.---....--- ---- ----- --...._-- -------- ------. -- ------ -- - --_._-----~-------~------.-...._------....-_-----------.-....------~------------------------------------------------- --------------------~--'-----"---'-------~------'----. ------------------.---.........._._--....---~------ ....-.---...---------.---..---.------- ----------.....~----------.-~...-....-.__.-___...._-----..____________.._-+--...........___......__.._u.._____......___...._. _._.........~____'"_______...............__.....___________.._~. ~----------------~-~---------_._..---.-~'""~-------.... ~-- ---------...--_..~ -----~~--~---~----------- ---~-------------------- Advantages of BPA Tier 2 and Non-BPA Resources " - J Advantages of BP A Tier 2 Rate \ Alternatives I Range of Tier 2 alternatives: Short term, Load. Growth, Vintage .. <> ~oli~, ~xperi~n8!~dJ3P~ sta~~ w;~rL)~ng;Jor ypu all the way frolll. acquisition to qelivery. In depth marketknowledge andexper;ience trading. Excellent credit worthiness, credit support and risk management. Long - t~l11:! partner. No need for additional utility staffing (reduced overhead costs) }>ooleqrisL)s(wi~hi~ l'ier~ ppr1;fol~o p.oQls) Advantages of Non-BPA Sources Maximum freedom of choice and control in resource types and terms Development of Utility-owned resources No Section 6c or NEP A requirements. Less "transparency" required. Opportunities to partner and pool with other utilities. Flexibility in marketing surplus generation Pre-DeCISIonaL for DIscussion Purposes Only Slide 17 _ ~ ___ _ ..." _ _______...__ __._~... __~ _".__~....__ ... __." _..- _.. __, ,.,..",.... . ~ _... . .,..,_. ~.. ~~... ,,_ -.. ~ ,_ .. _. "'_ _ , ... ....~ ~_ ,_. . .". . . ~ ..... " _. ,,__... "'.. _~ .~...,... '" ,_. .. ....... ... .. .._...... 'M _ ..."..._... . _._...~ .. "'__.' .~- --'" .. ..,-..._.~....'"-'~' ...... --... ~__~..~..___ __ __V, __. _.....,__......._ _...,... __... _'_ . .....~ . ,_. .._. _'..... ~._ _ _..". ..... "M."..... _~..' ".--.' ~ "" _.. "..._ ........ , ~.....oLe -'''' .........~.... ..... ......... .. .........." --.. -.-.-. -~- " .._.._~.. .. ._. --.. ......-_. -......---. ...--....-..--------.. ______..__......__...._.__..~__. ...._.._ '~h_'" _'. .. __ _ ..... _. ... ..._.. ". ~,~ ,_.. ......~... _" _." ...._.... ~.~ ............ ...~ ....~...~..~ _..~.__~_.H............~.__......_..._...._..,.____ =:.::::=:-.-'=~ .g' -':'':;,. ~':'-::-N'.':;"-' ':-; 'v:. " '.'..'.. t ':.. 'L'" . ,'" .' ~.'.. ....::'8 :. .... W'"'''' '.;" ..:."::. .' :. ~ c ,'c. .. .':'.. . .'.. . :'.,' :....... , --::. .:"~ ,'-..:C. -.~ ..,:,.". '':''.. "'''1'';:::-. ~=~c N'::::::: .-:.:::::::::,,;: ~;~~~.i1f~~~i~th~~~;-t~~L.:~~}JZ.~ :~t~:;:~ \l::.:::~::...~.: :.~:~;.:)~,p.:~:\:._..:f:~3i~~~:(;~~;~ ~~y~~ti;~:~]~~f~~.'~~~~~:0:~~TSf=~IIi~t~~\~i~if:~jJi~~~{li~ti;~~~ Indicative Pricing and Renewable Request for Information · BP A is releasing indicative pricing to inform customers of the potential costs that may be included for different Tier 2 rate alternatives. .. The prices and resource combinations should not be relied on for determining what future prices or what combinations will be available at that time. · These numbers represent a snapshot of the current market conditions. · Actual Tier 2 PF-rate alternatives will be set in a 7(i) rate proceeding prior to each rate period. · The renewable price estimates are based on information suppliers provided earlier this year in response to BPA's renewable Request for Information. Pre-Decisional, for Discussion Purposes Only Slide 18 --.......-------.---~~-------~_.---_~----...---_..............._......_'"'--------------------_---.~-~~--~---.._----~- -......................."""'"--~~-~-~-............-------------- --------------------- -~---~---.-.-....*----...- -~~-- ---...-~~-~-...----..........~-~.~.....,..----<<----.>~~....---....--..~ _____ _~~_,,___........... _-......_ w_______......_ ________.....____ -- B ~@. N.:::" -N~~~'--~Yi-~-==-I -:~~.Sl:-:':~:E:-=-=-~:-~I?.-:::.:..:::::;:--e..:-=.-:;-w-. -::-.' --~~~'7i--fR ..::?c~~=~'A- ':":..-2. -D---::~IV1:::: ::-_-:::I'':-:':'-N--=:'::;:-I::-';'?S'~'_-:::'-~'--::::':::-fR7:::: '8 ffi~ I--e N _P--------. ._ ____ ~__ - _~__ - _____ ___ _~~__~ _~~__~_ __ ___~ .__~~ __ ~__ __~ _____ - _~_ _^~_ ..__~~ .__~ __~__ ____ ~_~ ___ - ___ ~~_ _______ ___ ___ =====::::::.== - ~~ -- - --- -- - - -.........-. -~- -~-------- ~- ---- --- -- ~~- ---~-----~. -._- - --- -.<<- ---- ---- ~-_. --- -~ -- -- - - - - -- - <- -- - - --- --- -- --- "--- ---~-~--.. ~~ --- -- - - - -- --- - ~----~---- ...... --- ~-.-.....- . -~ --- "~ -.....- -- ~~-- --- ~ ----- - -- --- - - --- -~- --- = - .'- - -=- .~.=:;~----. ;.-i:.~:::.:.. -=:-_.:~c=:{~::::~~~-==~:f~..::~~:::-~;=;~~&=~y.,::::~::::;;:;:=Z::;;::~=;;;;:.:.-:::;~":..:-~~~~~.:::_::-:...::, .__:- .:::::: -'C. -:.-- __ _ _ Indicative Pricing and Renewable Request for Information · BP A is providing the estimated resource cost as well as the Fully Loaded Cost. - The Resource Cost includes only the cost of the resource. - The Fully Loaded Cost includes estimated adjustments necessary to convert a resource's output to a flat block of power including risk, overhead and RSS. - Estimated carbon costs are included in the vintage least-cost resource only. - None of the fully loaded costs include transmission. - Much uncertainty remains around the fully loaded costs. Pre-Decisional, for Discussion Purposes Only Slide 19 ~~~1~~~~~~!1~Jl~~I~~~~~~lllt~JiI~fii~Ag:l~~~~~ Summary of Tier 2 Rate Alternatives Short-Term (3-5 yrs) Short-term market purchases (5 years or less in duration). Purchases driven by lowest cost market opportunities Load Growth A mix of short and long term purchases (examples could include, Renewables, CCCT , Waste Energy Gen, Market Purchases). Resource selection primarily driven by lowest life cycle cost (14 or 17 yrs) Vintage (up to 17 Yfs) Based on customer interest. (Wind, Geothermal, Solar, Waste Energy Generation, CCCT) Resource selection driven by targeted resource and lowest life cycle cost Pre-Decisional, for Discussion Purposes Only U nlikel y Potential that some level of RECs could be provided over the course of the contract. Yes, for most renewable- based Vintage Rate Alternatives. Slide 20 -~-"-"'-'--~~"'------------- -............ -~ -.-..-- ---...~-_........_-.........._----~~-~ -~---~- ....._......._-......_-~.....--......~-- .._.~--'---_..--._-~~---~-~---- -~~-----~~- ------------.._----._------------------~---- - --- -~--------~--~--.._~~~ ~ ...._-~......~--~----,~~--,.....~---- ----_...........".....,. --~ ~- ~..--------~---_.....~--------------- --~------~-----~------~-~--- --- - -_..._ __r-_~___.._ __.~......... __ __ ~____________....._ ~_____._________ __________________________ ----------~-------------~-------------------.--~--__._______._._.__~___k~____~_____________.______~........_____..__~_~_~ .....__~__......_______________________....._____ -13.-e-~-=~-=g- 3I:-I=~---~ --g===--':B-"'='-e--.:::;::.:.:w-.. =E-=-~::::fR=--=-=--==1J.- :..=G==I\71-c=I=I'\J-=I==S.......--~--fR--- 1I:. ::em -I--e-~-- -- ----- -- --- -- - ----~---- ~--~--- -- .......--- _~_ _~___ ---'~_.........~__..o-- ~_~ _.....~~_ __ ______~ __~~____~___ _~__ ~_ ____...~_ ~ ~ ------- -- -- -----. -- --- ---- -- -- ----- ---- --.---- ~ -- ......-...-~- -_. ~--- -~_-_ _-.,.. _.... ~._.. _ .___ H ___ ~ _ _ _.-__ __......_ ___'_ ___ _____ _ ............... _ -- --- ----.- -- -- --- -- --- ----- ----__~______ ___ .--0-- __ _ ____---'"-....__...~......... _..... ___~-"''''"-_ ________~ __ _....._ _ ___ __ _____ _ ~_ ---~---_._~-~-- ------------------- ~--~-_..- --"-.----~. --......--- .,-~-~~--- .~,...",- ........-_--~--_._--~....------_....------~-----~_..... ~~-=--~~-:::::..~::::::::::::-_-~~-=-~::::::::.~..:.::-:--::;:~".~-:;-~.:::-"--~;:..=:::;::::::-......_~--:::::;:-:-..==~.:.:=-.~-=-=-~~=::::::::::::=:~ --~------------------~--....,.-_-.._-----""-----~.....~-----~--_..... -.....-- -~.._~-.............~--~-~- "'~_............--'---._---..__.._---~--......_--'-~....,,-_.._._...._------------- -----------------------------------------------------------------------~- Cost Comparison of Tier 2 Rate Alternatives Levelized Cost Estimated as of May 2009 $140 $120 $40 .. ~l.. Long-term risk ~ .. . . . . . . ]-~ $100 f ! ~ - ~ i ] $80 $20 $0 III Resource Cost 1m Fully Loaded Cost $62 $64 Vintage - Wind Resource (20 yrs) $52 $82 $54 $117 Pre-Decisional, for Discussion Purposes Only Slide 21 Load Growth (17 yrs) Short-Term (3 yrs) Vintage - Market wlLC Resource (20 yrs) $68 $77 Vintage - Least Cost Resource (15 yrs) $87 $96 ---------- -------_._._-----_._-_._~_._---_._---..-----....----- ---.---.- ---.------------ -_.._-----------------------_..._--~._-_._-- ------_--.-_...-------_......_------------._~-----_........---------. ----------------...----------------------------- =::::::=-=--==~_=_-=,_=_===_=__=_.:.._.:-_==_=.;:::_.;:::;::..=__.:..._:;__....:::;-_-.__:.-.:::..::::__:.=- ===--=--:;;:::-.::-=--=--=-=---=.:::----....;:::;;::--==-~ l"\ ... =-.: :~- ~~~~=:~~~~~!r~~1~~t~~~~:~#~~~1~~l::r3~~~~~~qrf~~~~;~2~f~~r~~~~~f~T;f~1~~~~~~~~~~~;~~~~~~~~~~~~~ Tier 2 Levelized Indicative Pricing Estinlated as of May 2009 Tier 2 PF Rate Alternative Resource Cost Basis Resource Cost Fully Loaded Cost* Load Growth (1 7 yrs) Internal Forecast $ 62 $64 Short-Term (3 yrs) Market Quote $ 52 $ 54 Vintage - Wind Resource (20 20-yr Power Purchase yrs) Agreement $ 82 $ 117 5-yr Market plus 15yr Vintage - Market wlLC NG Power Purchase Resource (20 yrs) Agreement $ 68 $ 77 Vintage - Least Cost Resource 15-yrNGPower (15 yrs) Purchase Agreement $ 87 $ 96 * Fully Loaded Cost does not include the cost of transmission. Pre- Decisional, for Discussion Purposes Only Slide 22 II -- - ----=--- - .. - --- - I3-==::=-Ea J~J::::=~-~\.1=.==I::=-1i= ~__G _~ fJ._c's/!l_ G--=ffi====;~=:-m--=M=I-N--:I~-=S-.,:;~ F:R=tL r~ .I_@_=~=:::: ---:::=:.-... II Dimensions of Uncertainty · Fully loaded Vintage wind resource costs include the following estimated cost adders which are part of the ongoing rate case. - RSS charges for 2010 of$18.50 which are then inflated for each year. - Transmission Services Wind Integration fee's of$7.00/MWhr which are also inflated for each year. Actual rate case outcomes could vary by as much as +/-30% - A 4% risk adder for all renewable resources, which may be high · Construction cost cycles are currently on the down swing. Estimated prices do not reflect this. .. ... .... .. · Adders for wind and other Vintage resources are based on what we estimate the costs to be today, prices will undoubtly change moving forward. · The development of additional energy storage systems in the NW such as pump storage, compressed air etc could significantly reduce the cost ofRSS and Wind Integration moving forward. Pre-Decisional, for Discussion Purposes Only Slide 23 .........-- ~- _._~-- . ~"'_..- --........ -.-. .--_. --,,-....."'- .>.....- - ~~--- --~- . ._-~... ...... - -"'-- ""~ -. ~...... ~-"..,.. --.,. ~ _...+--- .....--..... -........---......... ._-~._--......._.........--_.-- -...........---... --~.- . -- -_., -----.--,.- ,..--'- ---.---- -- ..--...---- ---- _____________.__~_______~ _..__.......___ _....._.<<__ ...........___.. -0.-.. '_~...--'.,.,.._ _" _.~ "'. ._....,...,. __~_......._....--._. ............--______._.. . ......._.-.---...--~_._.- .......- ...~------..,....----_._- --..---------.--- ---- --.-. --.,. --- ----- -- ~ ------.............-------,-----~-"'"'--...--....... -_._~------~.-~-.-..--......._._~._----_..._...._----------- ------- ------------- -...--.---.----------.--- -.-.. .---...- ---- .....--.._-----.~--- --....-.-.........- "'- ~ -- --- --- ---.. --.. -- ......--..-...... ------.-.-..--...,..,-----...--- --.---._--_._.~---._--- ===-e--I'C'\-==N- =N- ==r=.-=-\':I==I=:':I::-_:::-=I:::';:;='::r=-::-==::'~=:D=-=:~A-:::' ::'::w' =.;...::c:-::::o.-:::'r:;=-- ,J\';"--=D-=-'::::=M- =I=N- =1"---5- --'T"'---S ~, 'T"--I-l"'\-N- = =-_=-_ _ s ::=-~~3~.:_:;~_::_~:~-:'_~ ~1:;:.3t:~:'~:':-:~:~~~~,::"~j~~7~:~~~~~~~~::~~~-==:.:~~~::E2~~:~~:=':~-==:'::~-7;':~~ _~;.=:.:: --;;~-=-::~~~ ~~~. -- ~--;?--=__~.~_~:= --.:: ~~::--: _-'_ - _..::-~::.-=~ :?~::-~.::::::::=-_~.:=:::::.:::=-~:.~~..-~=::'":"":-:.--=~.~:?~ ::::::'?~~::~::.:.~~:;:~~::-:::2:~:::":f:~7':.":::-::~':"'''::;~:~::-:_7:~~~~-=-E:::::'::~:~~~:==:r~,:;.;:::::~=:::-,=~-c~~=:::':;:~~--::::-==~~~-~-=:~3:~==?= Transition High Water Mark November 1, 2009 Decision . Each customer will cOlnmit by November 2009 in their contract whether its Above- RHWM load will be served by BP A, a non-federal resource, or a combination of the two. The THWM is a proxy for the CHWM and is used for forecasting Above-RHWM Load for each year of the Transition Period - Fiscal Years 2012,2013 and 2014 BP A will work with customers between now and November 1, 2009 to bring as much certainty as possible about the types, costs, risks and other characteristics of resources we expect to secure for each Tier 2 rate alternative. - Work with Customers to better understand their Above-RHWM needs and interests. - Scan the market for the best resource opportunities. - Iterate back with interested custolners regarding what we are seeing as viable resources that are available to meet customers needs. - Seek to develop well-defined Vintage Rate Alternative options by November (if interest warrants). · Customer input is key to BP A's success in offering Tier 2 rate alternatives that meet customer needs and interests. . . Pre-Decisional, for Discussion Purposes Only Slide 24 ..- --."-==:':: ;~::;~~~~~'~-~~'.~:.=-~- .-._::--_:=-=~ =S--(l==-N=~=~__~f=_E--E_E:'-=~=fg -=-f;)==Wh_~._.::cR___-==--=::.-=~.::-=:Ill-::..-..::-M::-=I::-.=~=--::I::c'-=S..::-- ill _ ts==~=-~_::::::I=-=-~-N= ============="::====::::=:::::::::===-~:"::::=-:~~~...=:.....~.:-.-::::=."~-::..--=~~";:.....-;:-~..:::::-.::...~..::::=~::::::::..=:.~..='::::..~--:;:~...:.:".::::...-::.:..."::::::::::::..~.::.=.:.::::::-;:::;;-~~:.:.:::::::::--=---::=.:.....~..:...~ =--=-~-==-======--==-=:::::"=~-~-===~~~~7.:::"-~=~=-~~~~~ Tier 2 Timeline May · Transition HWM Forecast, Indicative Pricing/Renewable RFI · Assist customers in preparing for November 1, above-RHWM load elections · Transition HWM finalized · June 22rd: Tier 2 Workshop in Rates Hearing ROOITI in Portland (1 - 4 pm) · Decision Deadline for Tier-2 and/or Non-Federal Resource elections for FY2012, FY 2013 and 2014 June November 1 2011 · Contract HWM's are Calculated · FY 2012-2013 Rates Finalized · Customers decide how to serve load above the RHWM with BP A's Tier-2 Rate alternatives, non-Federal Resources or a combination for FY2015-2019 · Service Under New Contracts Begin Summer September October 1 Pre-Decisional, for Discussion Purposes Only Slide 25 .....-.---...-- '--' --." .----......................- --.. ....-~_.. - . ......".. ~..., - -- - '" - --~ . . ....,..~~~-~ ..... -. .~--,- - - -- ....-..~, ~ ..."... -~-" ~_..- "~..-._-'" ..,..-. _... .--... --.... -~. -~ '--" ....--. -.."._---.......~._~--~..~.,--~ ........-----.-- ____~_____.__ _~_~_ __..._ .______ ....._.~~ ..._ ~..___,_~~. ,~ _..._, ....... ____. _.__,.._..,..._~...~_ ~ _._~.....~,,_ _~,,_..... _, n_< .....~~ '" __., """.......... __ _" _~_. __'_~"""~__' __..........-........,0-_.__... __ ~M' ..-.-...... .,_.._ .~ ...,..-- .- .....-.- -.-- --~- .--"'.--. -.-- - -. --.- -_._-~_._- _"'-._______.__.___..__._____ ~~_._",.."..... ~_.._~~W '~"_ ~ _~_.~ _'" ..._~...... .._~._.._~...~~. -..... ---.-- -..,~....-~~. -.... . --.. ~~-~~... ~......._~ .~~~- .. ~....."'.-,.-.~ --..- ~---- -................... .."'.._-_.--...~_....- .--.--...-......-..-.-~,-..~-...---"-......-""-.-.....-..--~--,----. =---==--==--:--::::::_:-C:::--::::-=""-==_-"=-';:::=';;-=-=--':':=:'::-=:-':=_'-:~ -- ,-- :..::::::: --:--:-;:-.,-- >::"---~ ,- :-~-~:::---:--- .::::c..- -: ;:::':"-:::--, :-;:-:-=::=.= -":--:"M"---'::~I: = -:-:"::0:"-::;;-"_-':-'::::"'-- ~=-:--;;-===---;:::--'-:7::-::;;I-'--::-e---:::::""N':=-:'=':::'=--;:: ~ ;c~~_~~~~... _1'J~::~~:~~JE~~~~~::;'J~~:~--~:-:'-~:~~~~i~~~::i;fif{~( ~~-:~:Y.'{r\~;2~~-~~-~~~~t:~~~~~~,~~;:~~--::.~:~?~Y3:!~i-&~~~~~~Ti~~,~~~~~._~=~,~-=;:=::i-==~2g ~=:~-=:::-.::~::~.:=..:: ~=:~-:::~.:==~ ~~:-=:::~---::; :::;::~~:~:::: ,:,,'::~~-:=-'::~:;~~~ .;:..~::. ~.. ~~~:;3:;:'~~ 4:=~~=.:;:-~':';:::.. ~ :.-;:.....:;~:.~::: =: -:-::~-~~-:"2'::"='''::~-';'--::~:;,;;':-:::~:: ;~::":;;:'~::-_::'=. :::::=~;:::~.: ~,,::::'::';Z:=":;;.;~::::.:;'."":: _.. _ ?'';::::::'''?;':::: ~::~ r.~-:C';~:;"'~~:::':,:~:;=:::_~~"::::-E:~'.=:=:~S:::;;::=.' Key Decision Timeline by Rate Period October 2009 Customers commit to BP A Tier-2, a non-Fed resource, or a combination for FY2012-2014, or for entire contract term if choosing Load Growth Tier-2 rate. September 2011 Customers with load not already committed to the Load Growth Tier-2 rate or another long-term Vintaged Rate commit to how they will serve load above their HWM for FY2015-2019. Customers may also adjust short term and non-federal elections. I I I I I I I I I I ~,_._._,-,-,--_._._,_._._---_._-_. . Commitment by I 11/1/09 I 1 t Initial Commitment: 3- Year p!rChase I Commitment Through FY2014 I ~ r r FY09 FYIO t t1:ate P;~d 1 ~Y~4 Rat:~e:Od 2~t6 HWMs Finalized I Contracts Signed by 1211/08 -jl FY08 October 1, 2011 delivery begins under new contracts Second chance to select Load Growth Tier-2 rate effective 10/1/2014 for remainder of contract Subsequent Commitment: 3 yr Notice, 5 yr Commitment for FY2015-19 Rate Period HWM Established = ) t r r f r- FY17 FYl8 FYl9 FY20 FY21 \. J\. J\.. J y y y Rate Period 3 Rate Period 4 Rate Period 5 Pre-Decisional, for Discussion Purposes Only Slide 26 -----------------~-------------------- ------_._--------------------~---------~~---- ~-~-~--------~- ----------~---~-----~~ -6- @--~-~- -~- 'V:-I-~ ~ ~ ~-@--'15L- -~ -IR- A-- ~-~- -1-l'!J--I-S- ~ g A ~- I-@-~- - - -- - -- - -'--- - - - - - --- - --- --- -~ ---- ------- - -- :: - . --~ ~_- :=-- - _ -=-=_ --:=- - --- -- ===-=_ - . _--:-~- =-_--=-c-___----. ~ -__ - '--- _= - --- ~ - _ - SPA T'ransmission: Challenges for Serving Network Load with New Resource Choices Melanie Jackson SPA Transmission Account Executive June 3, 2009 ~ ----- ------- ---- -- ._--------~-- _. ..._-~ .-- - --_.....--..._- ---~- -.-. .~---~---- -'---~--" _....-- -_.... .- -..----.. ~-----. ..-- --- --~-_..- ---.._-- --~._---------'-"-----'----' _____________~______,_____~~~_~_~.__. ___~_ _.._~ ____ ______ _____~____n_____ ___ ___..____________________ ~------------------------------------- :- e-= ~;=~ j~J=::~Ff-~\b~--I;;;~-=~~=~;~=:_._=_~:::-==f?_ -=-~~':::;W::;~_=-gi:~~:~-~~----ID=~~@--=I~----=I~ -:$"- -~t - f:R_-==~~ -=;1-=--=1;'_~ ~I~t=~_ ---; --'~- -------------------- ---~--------..-----_.~------ -----_._-------------------~ --~---- -------------------------- ----..---- -- ------ -_.._-----~_.._---------------------- - ----.--------.---------------....- ---~-------- ----------------------------------------------- -------------~----------- ------ -----..----..-. - --. .---'-- -_...._------~----------------- -------------------..------- ---- .-- ~-------------- -~._- ----_.~- -------~--~._----_.----- -- -- ._- ----- ------~-------------------------- Key Business Drivers · Regional Dialogue Choices · Resource Mandates and Constraints: Renewable Portfolio Standards (RPS) and Federal Columbia River Power System (FCRPS) constraints are changing the way the region plans for and acquires resources. Resource decisions will impact transmission facility development. . Transmission Construction and Resource Timelines: Load and resource forecasts generally provide sufficient time to build transmission facilities but provide little commitment. For Network (NT) customers, the attestation and resource designation process provide commitment and need to be timely to inform transmission construction decisions. - Resources average 18 months to construct. - Transmission facilities average 3-5 years to construct. =--=::=::::----===-..=::=:::=::::-=::::..=:=::::==:-::-==:::...~~..:::=::-.::::::::...-=-~~:::::=::::=::::~~~=--=--=.:::.:.:=--====-::::::::=:::::: i~T-:;~~~~~:~~~!;~!~~;~-~~~~~- 5~~---~~~~- fr1~~~~=-==i~~~-_~~~~~~l~~;J~~~~;;~~~~~;t~~~~~lE:;ti~~~~~ How Does an NT Customer Obtain Firm Transmission for Non-Federal Resources? . Work is currently underway to identify transmission system needs to facilitate your Non-Federal Resource decisions. - Regional Dialogue Implementation Team (RDIT), go to schedules and information. for meeting · When modifying an NT service agreement with a new Non-Federal Resource, customers must designate a new Network Resource (DNR). - Customers must submit a Transmission Service Request (TSR) via BPA's Open- Access Sametime Information System (OASIS); and - Customers must attest that they own the resource, have committed to purchase generation pursuant to an executed contract, or have committed to purchase generation contingent upon the availability of transmission service; and - The Network Resources do not include any resources, or any portion thereof, that are committed for a sale of one year or more to non-designated third party load. y .--_________________ _~__ __ __." ___ __ __".. __ ~ ___ _____. __~ '__~ ._~.._ . ._ ~_ ~ ___M ______ ____ -__~ --_.....~_.____ -- -~--.... ~ ~--. -- --- ~-----~-~ ---- ---- ... -........--,...-.---~.~--'~---..-- --~,."...--~^'-, ,-- -.- ...-- --~-- - --- --- --- --.- --~ -~-~.- .. -~ --- "" --.... -~-- ---. -.. -~ --...-......-- ~......... ---....... ~ "'-'-~---"~ _......._....~...... -~ ---~--._-- -~..._----~ -~--- ---- -~----"---....----- _......-- -...~- --~ ---.-- ""-~----- - .--- ---"" -.. --- -.---- ------ - ----~------~- ----.,-. ---'~-- -- - -------~ -. - ---_._--~-- --- ~---_.- ---- ----- - -- -"--,~ _........----- ---~_. - ~-~ ~_.~-.~ ----. ------~--~ ,------ ---~-- ~---~-- --~----- --_._---..~ -- ,---,,~ -~ -,-~ ."'~-- ===:;;:.--:::=:::~==-fSJ-::::.--e-- - -VJi.-- -I _.::=---.~--- ::. :e- =:::=:-~. -'-@--::--==w'-- -'e---.- ~ ..:;;:':::-=".-"8'-'--. ==':';;::::::--:::-=::::::':-;:=::::N=-=::::::::::'-=::::-'::=:::.-7.C::::::;:::'-=::::::-;-:::::::-=:;;:'-::::.~""'::-=.:::C:.:::::-'':::..~=-::= .::::::::..-_-=::8::::::-.::.1''\::---==.1\:1.:::.= ==. -...::;:.::: _=.: _-::--,,:.'1::::.::.::::: _--- :;::::.:::.:::::.=.::::: .:::.: .-::;- :;-::-...::;: :::..= -::::.:.:;;==:::;:- ",.=.n=:::::l'd:::;::-::.I..-;:.,.- ::.:.:::t...::-::C:::::"-ffi-'=--::FS.::::::-:.tA:;-:;:"::''T':::::::::I'.::::::-: ::-=".1 -:;-::-:_--:. ~------~----9---!\;;;l--f:~--' ~.-- --" .....-.-...-..t;;;:-----.'" -"'~------~ -~._- - -- -~-' ~--._.- ~--._.~~-.rv.l-'-.- --~--~---- -..-_. ---~ ---.::.~:........-..-_. --.-(~----------- __,___ ____ __ _........_... n-__' __ ______ ----- -_.. ------- -- ~-_. -. ..~.__. -.-.. .,--..----.,.., - --. - -_.- . ~.-.----". ........... .-"-,~ -.----~ ---, _..~~ - -."'..,.....--- ..,.,,-~-- _........~ - ""~-~""...--,~- ---~--- ~----------~-----~--------,..",._~---_._--~~"'~........._- ---~ .... "., - _.........._._~- .....-.-- - --- --....~----..---... ---- -_. ...---.- --_._._~------------ ~_.- --- - ---- -.-. ---.- ------- --- _.----~------ ------- ----- -~------ - ------------ --- - --- -~-~---.-- .__.......--~.....--~-~~-~ ---~--- ----- - ---...- ..- --_...-~-- --.- ~---~ .-.........-- ~,-,,-. --'"----- --'--"-~ . -------- --- ----....----^"- ------------.. ----,.,.,,-----------"'--""- ~~-~...-----,.,..~._-----.._-- -~-_.----~_._- _.------~~--"._-_.~- ~-----_.- _._------~-~---- ------. - ----~-- .- --------- - -- ---- - -------.-- - -- .- -.- -... --~-----"-_._._....- -~------ ---'--- ...---- --~------.,-- ._-,.,..,....-~.......-_._~-_...--_.-- ~.-_.._~-- ----"- -- --------.....--.. ~."- ------- ~ -- "'--- --'" "'----~_._.------ ~-..,-- ------->--- --- ~".........., -- "'-..-,.,.---- --..,.,.....~-_.---_.-...- -- - -~....---- ------- ----....--.---.--. --_._--~----~----~_._-~- ---~---- .--- How Does an NT Customer Obtain Firm Transmission for Non-Federal Resources? · For NT Service, SPA plans the transmission system to meet load growth from a customer's existing Network Resource portfolio to the customer's Network Load. · If the new transmission impacts are less than or equal to the existing transmission impacts on all flowgates, then there is no additional available transfer capability (A TC) needed and the request can be granted. If there are net positive impacts on any flowgate, then SPA must determine whether A TC is available. · If upgrades are needed on the transmission system to provide for service to an NT customer's load growth from designated Network ResoUrces., SPA may finance and roll-in the associated costs of the upgrade into network rates. ._------~------_._----------------------------- -------------------------------------------~------ ~13-- 3D -of"J=~f"J-- --- s---='yL- - -l~ b=--=:=b-==~=:=-:=--::--=fg:::::-~--~-=-:iW---"::~-'-s=~B.-::.--=--=1;~8c:.-:::.-=--C)-~~ --::--M::-- I::...~...:::=--::~-:-:,~~$- :=--ffi~==FS----fj.-: ."1: I~=e::-=rcl-- --.- - --- --- - - - ------ - -- ---- ---- -- --- -- ---------- -- ----~ --+- - -- -- --- -- - -. -----::..=______ -~--==::::::l~ --- - -- - - - - -- --- .---- -- ---- -- ---- ~ - - ---- - ------- - - -- ---- -- - - --- --- - - - - -- - -- ---------------------------------- --------------------- ----------------------------------------~ ---------------------------------------~--------------------------- -------------------~------~------------~-_. Load and Resource Forecasts · NT Customers are required to provide Transmission Services with annual updates of Network Load and Network Resource forecasts (1 O-year forecasts). - SPA works collaboratively with customers to develop these. - Resource forecast requirements will use the same information as what is provided to Power in their Power Sales Contracts. · Transmission Services will work with NT customers to define the data requirements and timelines. · NT customers will also provide the Transmission Provider with timely notice of material changes to customer's Network Load or Network Resources. 5 -------------------~---_. ------------------------------- --- ------------------"---------~--------------- -----~----~-~----~--~----- -- -- =6~~e~~~~j~~=~V~=C~~~~~;_=_~==..~~R~-=-~=~W-=::-If~B~::~=::~~:a~~N1;~t~~~3=~$==~jt=~=-~~i~-=r ~==--~==--.- =: ------ -- ---------------- - ------------------------- ----------- -- ~--- ------------------ ~ ----------------- ----- ----- - --- ---- ---- ---- ------- -- ------------------------- --- .----- -- - ----- ------~--- -- ----- - --- -- - ------ ------ ------------------------------- - ------- ------------ ----------------------- Marketing Surplus Energy: Undesignation of Network Resources · Customers may not commit Designated Network Resources to serve non- designated third party load. · Customers may undesignate their Network Resources in order to conduct third party sales of surplus energy. - Often referred to as network resource 'termination.' - May be done on a temporary (< 1 year) or permanent basis. - May undesignate or terminate portions of a network resource. - Only applies to resources that have already been designated as network resources. To serve third party load, customers must acquire Point-to-Point (PTP) Transmission Service and go through the normal queuing process. · To uridesignate a Network Resource, submit an email to tblresdesk@bpa.gov. :9'............. ....... 6 y;~ . ~~-~~~~~~~~k~A~~~L_i\l~=-",S -or lRoJt J,--"-I=cei\l=-~ "' Designation of Transmission Services as a Reservation Agent . Transmission Services can act as a Reservation Agent for NT customers who submit long-term firm requests on an infrequent basis. - A Reservation Agent is an entity authorized to submit and process Transmission Service Requests (TSR) on behalf of a customer. The customer must complete the following steps in order to designate Transmission Services as its Reservation Agent: .. . - Contact their Account Executive to request a Long-Term Firm(L TF) Reservation Agent Agreement. - Sign a L TF Reservation Agent Agreement with Transmission Services. - Submit a written notice on official letterhead to OA TI upon execution of a L TF Reservation Agent Agreement at least five Business Days prior to the effective date of such deSignation. Transmission Services will submit up to three TSRs each fiscal year on behalf of the Customer. Additional TSRs will be processed at Transmission Service's discretion. . . y........................................... .... 7:~~j ~.~ _~=~~~~~~iL~;;;:~~~~~~~=i~~~'~~~~~=ff~1=~~~~ .==============-:--======--=============-~-=====---:::::::=:::::::::::::=::::: Network Resource Designation: Next Steps · The Regional Dialogue Issue Team Customer meeting: June 11, 2009, 8:00 am - 12:30 pm Rates Hearing Room 911 NE 9th Avenue Portland, OR Phone Bridge: 503-230-5566, 6254 · Our intent is to provide the following: Clarify current A TC methodology documents and walk through the NT TSR process. - Identify how resource forecasts go into the A TC base case and how transmission for NT customers is set aside. Define the forecast and resource designation needs (data requirements, TSRs, timing, etc.) so NT customers know how to assure that ATC wi available to meet their load growth for their resource choices. 8 --~-- - ------ ---- --.------ ----- ~ ---=------~ -----~=========-----===--===--======- =- _._-=~ _~. !t-=~; ~ L_ _:~_ -~ g _ -~= @ W__~--~ -:_ _~~:-~ID-__-~~ -~~ =! _$-= ffi__ -~~_-~~ m=:'=--~~ -~~~_ = --- - ------------ ------- -- Network Resource Designation: Next Steps (cont.) · Network Customers may submit updated resource forecasts and Designation of Network Resources as part of Network Open Season 2009. - No Security re~uirement is required if the TSR is for transmission from a new Network Resource. Requires an attestation as specified in section 29.2 of the OA TT.- _H__ · A draft NT Business Practice is currently underway. The BP will include: - Load and Resource Forecasts - Designation of Network Resources - Undesignation of Network Resources - New Network Load - Reservation Priority for NT requests ;v.:.:..:::.:...:.............:..:.. q~~, 9 .""" I- '" w >5 ~:x:: a: I- wD: 20 wZ Energy Northwest )( WA State Chartered Joint Operating Agency a 25 Member Public Utility Districts and Municipalities )( Primary Focus: Power Generation D Northwest Focus D Cost-Based, Participant Controlled a Cost Effective, Environmentally Responsible, Innovative )( Joint Action. Power Plants a Develop, Finance,.Construct and Operate U) c o -- ...., C\1 I.. CD C- O OJ C .- ...., tn. .- >< w c o .- .... CO ...... (j) ; - me. c ... ;; C'O co CD ... - CD (J C ~ CD C C) ~ ~ .~ 0 :E .c _0 ,.... E ~ ~ ..2Z~ o ODD )( .... (.) CD 0 .~ ... o "C CD'" ~ ~D.. J: co (.) ...... ~.t: (J -at) [ o CD ~ E OCi):E - ~ e ,.... ~ (.) -a N ..J co~ D..:J: D D )( .- a :E ::s- I -. ... w CD COm A- :e C ru en o - D.) .., en ... D.) ... o. ::s . a a Z -. 0'" CD ::s "'C::r~CD ~ ~ s 0 ~~:e~ 0=.,,'< ::s . ::T 0 W W S>> ::s ::i: ~ fJ) < __,. (I) < o =- - -- co ~ go 5- 0= o -a 3 .., 3 .2. (I) CD .., (') n ... iir m >< -- en ...... -- :J (Q o -c (D .., m ...... -- o :J en Contract O&M and Project Development Offenngs . )( HW Hill Landfill Refurbishment & Operations Training )( Olympic View Generation Plant, Mason PUD-6 MW O&M Agreement )( Hydro Maintenance Agreements with Seattle City Light & Grant PUD )( Morse Creek Hydro Operations )( Satsop\Greys Harbor Natural Gas Combined Cycle- 680 MW Project Development )( Reardan Twin Buttes- 60 MW Project Development )( Radar Ridge- 60-80 MW Wind Project Development )( Kalama Energy- 326 MW NGCC )( Adage Biopower Project Alliance )( Natural Gas Peaking Project-50 MW Under Evaluati.on & Future Offers . City of Port Angeles Landfill & Biomass . Wind-Western & Central Washington )I( Solar- Oregon )I( Grays Harbor NGCC 50 MW Option . Nuscale 40 MW Modular Nuclear-12 Modules )( Monitoring Market Viability TidallWave Small Hydro Geothermal . ...,'...., .::C'-'::>' ........:; \;i>:.' ..... ....!..,~.>;?!lIIr ;11' .I! WD: zQ wZ ...:.';'-. .. )( )( \J ~ r 0 Q) r-+ 0 ::J CD 0 c.. :::J c.. -h r-+ -. -. Q) - OJ - - -. G) 0 \J 3 Q) en 0 Q) ~ en en )> :::J CO CD - CD en )> ..., CD Q) \J ..., .0. CD (1 r-+ en CJ) co <.9 - - -- '+- -c c ro ...J ~ (X)""C 0.3 000 C\I \f- ~ o := = :.cO) _ CO --0 tE u. ~ ...~ ""C '" (I) cELL-C j Q) ~e 6 E CUCCI en c ~ o en -- J:: Q) EC en := ...0 en en (I)-- CO <:( s-. +-' (!) en a... ..~ 0') s- "'C Q) "'0 .~ ~ 2 a5 c Co .~ ~ (!) :3 i::i:: 0') c.. s- O c 6 Q) C>> .~ w 0 S ~ :c:- en () & u -- 0 Z ro()enwO m a a ~ )( a IV 8 0 r'" ..., 10 ~ 0 Iii 0\ V\ l~ I I-.) ;.;.! l 01 ! co t tv I. .0 Vl >- n [ ~ tv ;::Q co n l~. tt ~ N 0\ t"".-.. 01 h~ C ..... ...... LFG Flow at 50% Metbane (dll1) ~ , ---~ I ---- -. t-.' I ; I I ! 3 ~.. x ~ I ; . -- r. -.._. ...-.. -1. .. .... .---~'l. .. -+__. i I -+ ! I l. ...--11'" I tv '^ o w ~ , , ._..,.~. j .(:- ! ! I +--_t- . '1 r-I 1 I 4- j -+- \".0 V\ co t"'" > z ~ "rl - - OW t- ::It- >C') = > (JCl CI'; *"C'l VJ ~ r.r.Z r- rr: (' ~ ~. ~~ Q ~ ::lo >2 :: ;;0.- ~z ~ ~ ..~ ~ c.:>- (j ;'0 -. , :: ... (JCl ~ 0:= :: -< ~ ..., ~ r Q) :J 0.. -h -- - - G) Q) en Landfill Gas a Review Power Generation Options a Internal Combustion Engine Technology a Project size 400- 600 kW Landfill Gas )( Financial I.ncentives fo.r City of Port Angeles a Build America Bonds (BABs) . Provide Refund for 350/0 of Interest Paid to Bondholder · Must be Sold Prior to Jan 1, 2011 a Clean Renewable Energy Bonds (CREBs) Rulemaking Issued · $2.48 Available · Buyer Receives 700/0 Interest Credit (Taxable) · Applications Due 8/4/09 · Allow 3-years to Sell, Another 3-years to Spend · Allocation Process · 1/3 Available to Load Serving Public Power Utilities - Prorata · 1/3 Available.. to Government Agencies -Smallest to Largest · 1/3 Available to Co-operatives - Smallest to Largest a WA State Local Option Capital Asset Lending (LOCAL) Landfill Gas a REPI Available Through 2013 · -$21/MWh in 2009 -Recent Funding Level Inadequate - Reduced Payments · Could be Used in Concert With CREBs for Portion Financed by Municipal Bonds or BABs Landfill Gas )( Economics a Capital Cost Estimated at $1.1 Million (~$2,200/kW) a O&M Estimated at $180,000/year a Levelized Busbar Cost: $80-$100/MWh CD .....-... +-' e CO 0 > -- -- s- +-' a. .....-... 0 ~ :J .....-... C .....-... +-' s- O) +-' -- +-' e CO e - en co -- .c CD e +-' :J +-' +-' E 0 -- a E s- c.. 0 CD s- - -- -c CD - :J e -c co 0- co e a. E w co ........... en ........... Q) 0) ~ ~ E en en e -- en :J -- a::: CD -- E > a::: - 0 +-' -- -- +-' ~ > l- e c Q) en 0) ........... ........... Q) CO 0 ~ ~ E u - en en c.. e (!) 0 -- -- - a::: a::: 0 e - u ..c +-' CD -- - - - - en 0 Q) en > ..c .- '+- ~ CD :J 0 Q) :J -0 en l- LL 0 0 a. c -- 0:: a a a a a CO ....J )( Landfill Gas )( Benefits a Green, RPS Qualifying Baseload Resource a Sell RECs to Reduce Cost a Gas Gathering and Flaring Already in Place a Can be a Cost Effective Resource When Compared to Other Renewables a Located in Port Angeles on City Property a Interconnection with Port Angeles Grid Landfill Gas )( Next Steps a Decision Point: Move to Next Development Phase or Continue Monitoring III Time is Limited; Gas Supply is Declining a Development Services and Operations Agreement with EN a Conduct Detailed Feasibility and Preliminary Engineering Studies, Permitting a Monitor for Lo.w Cost Equipment a a IG)-U I Q) CD CD cO- -a. ~ == :T ~...,3 r O Q) -- CD r-+::J < o -- Q) ~gR ~ s: 0;0 "J;I =:"'O.CO Q) -!:ten en o c -- ::J;:+C'" -- Q) .~ == :::-o~ :T 0 en COme -U::J a. o .!:!: -< ;::1. ~ z )>-Om ::J 0 ..., co ~. - ~co'< CD ""0 en 0 3 "'0 - CD r-+ CO a )>)>m ::J ::J ::J coco CO CO CO ..., - -co COCO,< enenz Io Q) ;::1. ..., :T a.~ ~ CO o en o r-+ a. __ en en ~~ )>0 I~ ~ -- Q)c5 a~ -- off -- ~-U o 0 ....,;::1. -U o ;::1. )( OJ Q) C") 7\' co ..., o c: :J c.. ~ o o c.. OJ -- o 3 Q) en en Wood Biomass · Potential Project Description a Existing PAHBoiler has Available Spare Steam Capacity a Can Add Superheater and 1.5 MW Steam Turbine Generator to Boiler a Extraction Steam Used to Operate Kilns aTypical Operations Would Produce ~1 aMW a a o r ~ a co (D " :J I ('") "0 < ffi (") -Efi Q) ~ ~ :-:- CD 1\.)"0 c.. N" -Efi 3 0,;::+ COCO ~co o~ :Jc.. I :J 0 .- OJ ~ .- - ('") oco~7'O :J en ..~ !e. "o-"OO-m cOl~~ en ~0 ~ s:: !:!: ('") 0 ~ D;1 ~ ofn.'-'- CD !e. -Efi 0 3" c.. en 0) :J Q) ....,..... 0 .- Q) I co .- co c.. -Efi o ,,, w ............ ~ . s:: ~ ~ < 01 s:: ~ 0 == ... -. o 0 o :J o ~ CD Q) -, .....-... I cO. ::r - ~ )( m () o :J o 3 -. () CIJ ~ o o c.. OJ -- o 3 Q) CIJ CIJ Wood Biomass )( Risks a Technology Risk (Equipment Additions) a Fuel Risk (Cost and Availability of Fuel) a Cost Risk (Timing and Construction) a Operations Risk (Privately Controlled) Wood Biomass )( Benefits a Green,RPS Qualifying Baseload Resource a Sell RECs to Reduce Cost a Existing Boiler in Place a Can be a Cost Effective Resource When Compared to Other Renewables a Interconnection with Port Angeles Grid a Good Incentives for Private Investment a Diversifies and Strengthen Mill Operations Wood Biomass )( Next Steps a Decision Point: Move to Next Development Phase? a EN Development Services Agreement a City of Port Angeles and EN Negotiate Power Purchase with Port Angeles Hardwoods a Fast Decision Cycle .. Construction Must Commence by 2010 To Qualify for 30% Federal Grant Gty of Port Angeles Electric Utility CDnservation Potential Study June 3, 2009 Presented By: Kevin Smit, EES Consulting Telephone (425) 889-2700 Facsimile (425) 889-2725 sm it@eesconsulting.com Consulting ---- ----------~- ._-----~ - ------------- ----- ----- ------- - --_.~- ----~_._---- -------- .----- ----- -------~ ~------------~- ----------- -----. I Presentation Overview II Introduction II Conservation History II Conservation potential assessment methodology Ii Service Territory II Potential Results II Action Plan Acknowledgements: Philip Lusk - City of Port Angeles Amber Nyquist - EES Consulting 2 I Introduction II Why Conservation? D Tier II rates from Bonneville are coming o Low-cost resource o The Recovery Act (2009) and increased awareness of global climate change II How does a potential study help? D Estimates the amount of conservation available o Illustrates timing of resource attainment o Estimates resource costs o Identifies areas to focus program efforts 3 Conservation History 2001- 2008 Commercial 4% New Construction 1% Residential Breakdown Water Heating 2% 4 I Conservation History III Strong Residential Program o Lighting o Weatherization o HV AC o Showerheads City of Port Angeles Conservation Rate Credit Program -$255,300/Year Total Savings . Recent CRC Funding o $255,OOO/year . Commercial III Industrial .. Residential 5 I Potential Estimation Methodology ~ 1 ~ - .. .1 .. . ...... ... .1 ",,--'-~. t I ,.......... ..... .......,. '. '~,~ '''-... " ,", '" ' E E S C Conservation ' " " ' P orential AssesSInent 1\'10 del ~ 6 I Port Angeles Service Territory II Residential DOver 8700 residential customers o Approximately % of the homes are single family o Many buildings are both older (pre-1992) and heated with electricity (880/0) Manufactured Homes 3% 7 I Port Angeles Service Territory II Commercial o Approximately 20 million square feet of commercial floor space may be available for lighting upgrades o Commercial floor space is dominated by retail and office o Modest commercial building growth projected (1 % annually) &I Industrial o Historically consumed about 600/0 of City's retail sales over past 3 years o Potential estimation outside scope of CPS Share of Commercial Floor Space by Building Type ...., >f..... Hospitality 2.4% Warehouse 0.5% Grocery 0.4% 8 Initial Measure Categories Residential and Commercial Measure Categories Residential Measures Domestic Water Heater Upgrades Energy Star Appliances Lighting (CFLs) Weatherization Energy Star New Homes Duct Sealing Heat Pump Upgrades Efficient Shower Heads Window and Central AC Upgrades Refrigerator & Freezer Decommissioning Gravity Film Heat Exchanger Customer-Side Solar PV Heat Pump Water Heaters Solar Water Heaters Commercial Measures Retrofit Lighting Commercial/MF Clothes Washer Weatherization Variable Speed Chiller EE Reach-in Refrigerator EE Reach-in Freezer Exit Sign Replacement HV AC System Upgrades Spray Head Replacement HV AC Controls Optimization Integrated Building Design Grocery Program Municipal Sewage Treatment LED Traffic Signals Street Lighting 9 ---------~-----------~----------------~~._---~-----~-------~ ---- ----- --~~---- -~- ~--------- ------- --~----- ------- I Avoided Cost 10 . . . en +-' :J en (]) c::: I E~~~~~~cTp~~~~ti;i~'summary - - ~-'-- ----------_--..---".--....__._,...-_.--_._....__..,..---_.,-~--_.-._-'---- .----- ---- Achievable Conservation Potential (aMW) Residential 0.14 1.4 2.8 Total 0.3 .... ___~_ .._..~ ____.,~......___.___~". ....___...___ _._..... _;....._. _"'_"_'_.' '.___.'" _......__....".__.__.'.._.~._....... _.__...____.._r.__~_ _..._.___________.____... --_. -....--...-.---. -,-- -~,.-. 0.34 3.4 6.87 0.25 0.2 0.15 S ~0.1 0.05 o . Residential Commercial III Technic<ll . Economic Achievable ~~-'"'_.iSmW.~...~~~~..-.~-_-.f-"'.-'ol. 12 Conservation Supply Curve (Residential and Commercial Only? 8 7 6 5 ~ 4 ~ 1'0 3 2 1 0 <10 <20 <30 ~,~".,....~"...._.~ <40 <50 <60 <70 <80 <90 <100 ~100 Levelized Cost $2009/MWh -+-Total - Lost Opportunity -- Retrofit/Discretionary 13 ~--- - ~+--- -- - -- ----------------------- - ------ -- ------------------- --- - - -- I Residential Savings - 0.14 aMW/year II Heat pump upgrades and conversions o Potential still exists in these areas although much has already been done III Lighting o CFLs can provide significant savings at low costs for the utility and at no cost after 2014 when standard incandescent bulbs are phased out o New lighting technologies may provide additional EnergyStar New savings in the future Appliances Home 8% 1% III Weatherization and Duct Sealing Water Heat o A good deal has been achieved but 10% still some out there II Water Heating - .. II Appliances and Refrigeration o Includes refrigerator/freezer decommissioning Refrige ration 6% Heat Pumps 28% Weatherization and Duct Sealing 14% 14 I Commercial Savings - 0.2 aMW/Year III Lighting o Low levelized costs and lots of it II Weatherization and HV AC II Emerging Technologies and Code Changes o Not much can be achieved by utility o Exclusion reduces annual potential to 0.19 aMW II Equipment o Grocery store programs -refrigeration II Infrastructure o Municipal waste water efficiency improvements o Street and roadway lighting HVAC 20% Emerging Technologies & Code Changes 6% Infrastructure 3% Weatherization J 16% 15 ----~------------- ------ I Scenarios II Business as Usual o 0.15 aMW/year based on historic achievement II Base Level o 0.34 aMW per year II Accelerated Base Level o Achieves 800/0 of 20 year potential in first 10 years 16 f'.,. 8Z0Z ..--< LZOZ 9Z0Z SZOZ Q) II) ro PZOZ co "'C Q) ..... EZOZ ro 10- Q) Q) ZZOZ u u <( IZ0Z I OZOZ GI0Z ~~ Q) II) 8I0Z ro co gg LI0Z I .s 9I0Z ~ SI0Z ro :J II) 0 PI0Z ~ II) ro ~ EI0Z II) II) Q) c ZI0Z II) en :J co 0 110Z + .~ ~ 010Z ~ GOOZ <1) 00 "'" ~ L/') o::t M N ~ 0 U C/) Mwe I Estimated Costs ~"'__... ,_....,.<' ""W ._. _~,.." ',,^,"_' " ..d_' .._..,.... '_.".,,_,,_., .,,_,.' ,. N" ... _" ...""",, .,M_~_.~..~~,'~_.._~ .._",._.~. __,h_,__.~_"'''~,_L.,.., "~H_.^,'_",~.,,___"..'H~,.'~_'__M"_~_ __,,_",_.__~~~,.,.._...~,_..A_'~"'_""".~_'.'_'~'~__'''~~'____M_"_~' ,,-~-""'~..~ ~.._.,~.~- _.,~,__'_'-'.. ~._"",...~-'.~ - ........_"- . ..... ~. ,- . Total Costs of Conservation 2009-2028 Weighted Average Levelized Cost $1,0005 perYear $516 $1,147 $1,624/$692 . J~QJ~L(~J_ !.9Q~Q~l_.._ _.__.... __,___,___..____...__._l~~!~.?~___.______._.______._ $? 2 ~~~3___.___..__._.._._$_?~!_~4~.__._.... , $30 $30 $30 III Administration Costs are 200/0 of measure incremental capital costs . Utility incentives are assumed to be 1000/0 of measure incremental cost (Le., this is the TRC cost of the conservation) 18 5- Year Estimated Costs/Budgets ........... ----... -.~._- .-...._'."-,..-~ -,-....-.-.- ~--- ._~------_...,.--....~-.- ~----..--.,_._~ -~. ..... ._..~-~- .'-" -_..-. ~_. -,._....~,_. ........~..,. .~"-.~ .... -'-'.---,""~-""-""--"" ........ .........'. ~-....~._.. .. .... -- ,~._...- ,"'_".~..._ _, ._ ,~_._ ........_~.o.-.___ _w._ ._........ 5-Year Costs of Conservation (2009-2013) 500/0 Measure Cost ($/yr) " 00070 Meas'ureqyp~t($IY'fr $310,000 "'\' '$$16,00,0:, 'Base' ' $688,000 .... . - "..' '0'" "'$dt410doq, , '.. , '" , 'Accelerated, Base ,q $809,000 , $1 ,349,000 Annual Potential (aMW) 0.15 'i:$~ye~r::f1Qje'otiaF(~M~.F:'!i1P;;Tii!':":.'i::".;',.;":',',;':, "O;;'7tl ,: 0.32 .. .. .. :1 j61 0.32 - 0.45 1.94 <----. ~.___.____...__.v__~__,~ -----.~.-~-..'~.-~--.-____,.__ ~_._._~. .__ ~ _..".. ._.~_ .._....._.,._..<_.......__..__... __._ _____ ._...._ __.._ '__._.___ _"'._'- '_._'_'~. __w_ ,_".... _'~_'_'~.___ ~____..~_______ ....______ --~"""~....~_.""""~~.........,,,-~~,~ 19 ~------~- -~ ----------- ---------------- - ---- I Action Plan II Decide what level of conservation to pursue o Stay the course or increase? o The base potential estimate is a 3x increase over current levels II Commit the resources to achieve the goals o A three or four-fold increase in budgets may be needed to achieve the conservation levels o Staffing, marketing/promotion, vendors III Design and plan new or revised programs o SetJ?r~gram goals and targets o Identify and engage all parties (e.g., contractors/vendors) II Establish measurement and verification protocols to make sure you are getting the resource 20 I Action Plan - Near Term (5 years) III #1 - Build a commercial building program o Develop a commercial conservation plan o But continue to also maintain a strong residential program II # 2 - Develop a robust commercial lighting program o Commercial lighting is the most significant potential category (814,000 kWh annually) o Consider direct install, simple rebates, contractor network o Target retail and office sectors II # 3 - Investigate small commercial weatherization o Large portion of electric heat II #4 - Residential heat pump o Continue and increase this program III #5 - Residential lighting o Standard incandescents are being phased out o Ramp up program for specialty CFLs o Look for L.E.D measures 21 -------------~----~-- ~- I Action Plan - Additional Programs II Commercial o Equipment - Grocer program participation; c-store refrigeration systems o HVAC - heat pumps and rooftop systems; watch for upcoming SPA programs o Infrastructure - wastewater treatment, traffic lighting, street lighting o Non-standard or custom programs - fans, pumps, air compressors II Residential o Ductless heat pumps - may be good opportunity o Energy Star refrigerator and refrigerator decommissioning programs o Continue E-Star appliance programs and efficient water heater tanks 22 Other Considerations . 6th Power Plan o Code changes in consumer electronics (televisions etc) may provide additional resources to the utility in the future at no additional cost o Ductless heat pumps in homes with baseboard heat o Heat pump water heaters are projected to provide significant savings potential once commercially available o Top commercial program savings are in lighting, grocery, HVAC o New measures including energy project management in industrial sector may provide significant savings in the future 23 ---------~----- ------~--- --- -------------------------- -- ----~- -- -~-- ----------------------- I Other Considerations . 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Q ';=::" . . :::::; ....:..: :';::::::::':':""~''''''':'''' ..,:{.... :::::,' ",:,,,:-:::::::::,:{{,::--..:.:..: .':':. . ....:.:.:.::~:r~::,:::::...:.:.:. .'. ..... "'=:;:8? ...... ........ .:.... .:::::::..:o.P.'......~:~ .:.:IE......... .' .:m:~ .:::::.': . . Tier 2 40/0 Tier 2 Power Supply Straw Man Proposal City of Port Angeles Electric Utility The Utility Advisory Committee and City Council need to determine a Tier 2 power supply by November 1, 2009, which is required by the Bonneville Power Administration. Page 1 6/4/2009 Draft Tier 2 Power Supply Straw Man Proposal City of Port Angeles Electric Utility 1. Straw Man Proposal Purpose. This is a draft business proposal designed to generate a large number of ideas for the solution of our initial Tier 2 power supply problem. The proposal is intended to generate discussion of its advantages and disadvantages and to provoke the creation of a new and better proposal. The proposal is intended to jump start discussions, is not expected to be the last word, and may be "knocked down" by something more substantial. As part of today's workshop, the "Straw Man" proposal is to be refined into a "Stone Man" proposal by group consensus. The "Stone Man" proposal will evolve into an "Iron Man" proposal no later than November 1,2009. 2. Tier 2 Power Supplv Problem Statement. On November 18, 2008, City Council approved a Power Sales Agreement with the Bonneville Power Administration (BPA). The new Power Sales Agreement will commence on October 1, 2011 and conclude on September 30,2028. The primary change in the new Power Sales Agreement is a shift from average embedded melded rates to a Tiered Rate Methodology (TRM). TRM is composed of a two-level pricing construct in which Tier 1 supply is limited to the output of the federal based system, and the rates for which are based on the cost of those resources. Tier 1 will serve the City's current load. Tier 2 serves load in excess of that served by Tier 1 at a rate (or rates) based on the cost of new resources At the time of execution of the new agreement it was anticipated that about 97% of the City's power supply would initially be provided by BPA under the Tier 1 rate. It was understood that Tier 1 costs would be similar to average embedded costs at that time. We expected the remaining 3% of the City's power supply needs could be provided by BPA under a Tier 2 rate alternative. Based on the most recent BPA load forecast and transition period high water marks, the City's Tier 2 power supply needs will begin in October of 2011 in the amount of 0.145 aMW or 0.2% , increasing to 0.569 aMW in October of 2012, and 1.026 aMW or 1.2% of the City's power supply in October of 2013. Tier 2 loads below 1.0 AMW will be covered under load shaping charges. Note the significant difference between what was anticipated upon execution of the new Power Sales Agreement and the recent BPA load forecast. The City's Tier 2 exposure was delayed two years and is about one-third of the initially anticipated amount. Anticipating historical customer growth rates, it is anticipated that within twenty years 8% of the City's power supply may fall under the Tier 2 power supply with an projected wholesale power supply' cost increase of 11 %. A Tier 2 commitment to BPA must be provided by November 1, 2009, which would cover the 3-year period from October 2011 through September of 2014 or a longer term depending on the rate alternative selected. Power supply sources other than BPA can be used to serve all or part of the City's Tier 2 loads. Page 2 6/4/2009 Draft Tier 2 Power Supply Straw Man Proposal City of Port Angeles Electric Utility Similar considerations need to be made in the future with the next decision due prior to September 30, 2011 for the 5-year period of October 2014 through September 2019. 3. [Tier 2 Power Supply Options. There are three general options available to the City to; satisfy its Tier 2 power supply including: 1) continued reliance on SPA; 2) diversify all Tier 2 load to non-SPA supply; and 3) do a portion of Tier 2 with SPA and the remainder with non-SPA power supply. The options are recommended to be separately applied to the City's distribution customers (e.g., residential and commercial rate classes) and the industrial transmission rate class. Although the SPA Power Sales Agreement does not require the City to allocate Tier 1 or 2 power supply to its residential, commercial, and industrial transmission rate classes, allocations are considered in the following options and alternatives. 3.A. Continue Reliance on SPA for Part or All of Tier 2 Power Supply. This option can include the Short-Term, Load Growth, and Vintage rate alternatives. If the Short-Term rate alternative is selected, a future decision will need to be made prior to September 30, 2011 to diversify or continue with that selection or the Load Growth or Vintage rate alternative. The main advantage of this alternative is that it's simple and SPA would have more capability than the City to obtain favorable pricing. This alternative limits the City's risk to the rates that SPA sets every two years. The key disadvantage is that similar to the approximately $20 million expense for today's purchased power, the future Tier 2 wholesale power purchases will flow out of Port Angeles providing no local economic benefits. The estimated net present value of this option based on SPA indicative pricing and a market forecast for the contract term is $30.8 million, which need to be allocated to distribution customers and the industrial transmission rate class. The initial Tiered Rates will not be set by SPA until some time in 2011. Another disadvantage is that there would be minimal, if any, wholesale rate signal for conservation since the majority of costs would be take/don't take but pay. However, a load shaping credit may be available, which SPA will be set every two years, that could provide a conservation rate signal. After each two year rate period conservation could reduce Tier 2 needs. The Tier 2 rate alternatives could be the same, different or a combination for the City's distribution customers (e.g., residential and commercial rate classes) and industrial transmission rate class. For example, the City could select 0.622 aMW for Short-Term and 0.300 aMW for Load Growth for distribution customers and 0.104 aMW for Short Term for the Industrial Transmission rate class. 3.S. Diversify from SPA. This option can include a combination of any SPA rate alternative (1-3 below) with any other alternative (4-8 below). For example, Page 3 6/4/2009 Draft Tier 2 Power Supply Straw Man Proposal City of Port Angeles Electric Utility the City can select the Short-Term Tier 2 rate alternative for part of its Tier 2 needs and additional conservation within the City for the balance of its Tier 2 needs. All loads above Tier 1 in excess of 1 ;0 aMW must be either served by a non-federal resource, a Tier 2 rate alternative, or a combination of both. i I There are several alternatives that should be carefully considered as part of decision-making. A brief summary of each alternative and its advantages and disadvantages is provided below. The alternatives are not mutually exclusive, combining alternatives to form a resource portfolio are possible. 3.B.1. BPA Short-Term Tier 2 Rate Alternative. This rate alternative mayor may not provide the least cost approach in the long-run and will depend on the market. Selection of this alternative could provide the City until October of 2014 to develop its initial 0.922 aMW Tier 2 resources for the distribution system. The main advantage of this BPA alternative is that it provides the most flexibility of all BPA Tier 2 rate alternatives and additional time. 3.8.2. BPA Load Growth Tier 2 Rate Alternative. Depending on market conditions at the time of selection, which will include BPA resetting the rate every two years in a rate case proceeding, this rate alternative may provide the least cost approach in the long run. If the Short-Term rate alternative is initially selected the City could decide to select the Load Growth alternative as part of its September 30, 2011 decision. If this alternative is initially selected for some or all of the City's Tier 2 needs, the City can elect to use other options at a later date but cannot remove load actually served by BPA under this option through the term of the Power Sales Agreement ending in year 2028. With proper notice the City could exercise a one-time termination of future new purchases under this alternative. Liquidated damages may apply. 3.B.3. BPA Vintaqe Tier 2 Rate Alternatives. This wind based resource alternative should only be considered if the City was required by Federal or State law to develop a renewable resource portfolio. The Vintage alternatives (market with least cost resource and least cost resource) are not going to be initially available. Selection of the Short-Term rate alternative would preserve future consideration of Vintage rate alternatives. 3.B.4. Additional Conservation. Perhaps the most flexible, least risk, and lowest cost power resource is pursuit of additional conservation. The Conservation Potential Study indicates there are significant conservation "negawatts" available that have the same effect as traditional generation resources. This alternative by itself could provide the initial 0.922 aMW Tier 2 resources for the distribution system. Conservation by itself may not be able to satisfy all of the City's Tier 2 power supply needs during the term of the new Power Sales Agreement. Page 4 6/4/2009 Draft Tier 2 Power Supply Straw Man Proposal City of Port Angeles Electric Utility 3.B.5. EnerQY Northwest Purchase Power AQreements. The advantage of this alternative is risk sharing and development, operation and maintenance of large commercial facilities by an experienced provider. Possible disadvantages could be transmission, no local economic multiplier benefits, and reliance on a single generation source. 3.8.6. EnerQY Northwest Landfill Gas Generation. The key advantage of this alternative is City ownership and control of a resource within the City that provides local economic benefits. The City could partner with Energy Northwest to develop, operate and maintain this facility, which would provide renewable energy credits. The main disadvantages are that gas production declines over time, the cost of integrating the resource into the BPA supply, and the City would have capital and operating risk similar to its Morse Creek hydro project. 3.B.7. Biomass COQeneration. The advantage of this alternative may be non- City investment in a project that could provide local economic benefits. The main disadvantages of cogeneration is a primary focus by the customer to serve production load versus utility load, and capital, operating and fuel risks. The City could partner with Energy Northwest to further consider a project. 3.B.8. Market Purchases. Compared to the Short-Term and Load Growth rate alternatives, the main disadvantage of this alternative is that the City's Tier 2 needs by itself have little market influence; Bonneville's rate alternatives would likely provide better pricing. 4. Straw Man Proposal. Staff recommends that the City diversify its Tier 2 power supply from the BPA. The proposal would require several City. actions between now and September 30, 2014. As part of the recommendation, staff believes that time is needed to develop a "no regrets" resource portfolio, hence a continuing need for Tier 2 Short- Term power supply from the BPA. Several strategic goals should be considered for the Electric Utility to maximize local benefits and minimize risks of the Tier 2 power supply. The goals take the form of a resource portfolio including: High High Benefit Low Risk "No Regrets" High Benefit High Risk "A Big Bet" .... ;0:: CD l: CD m Low Benefit Low Risk "Bad Outcome" Low Benefit High Risk "Worst Outcome" Low High Risk Page 5 6/4/2009 Draft Tier 2 Power Supply Straw Man Proposal City of Port Angeles Electric Utility 4.A. Selection of the BPA Short-Term Tier 2 rate alternative for the distribution system and industrial transmission rate class. This will continue to satisfy the City's overall Tier 2 power supply through September of 2014. 4.B. Proceeding with expanded residential, commercial, and City facility conservation programs consistent with the Conservation Potential Study "Base" recommendation (0.32 aMW per year) to satisfy remaining Tier 2 power supply needs for the distribution system through 2014. Staff would include an expanded conservation program, which would double City efforts in the 2010 proposed budget, which would be maintained through 2014 at the same level. Staff also recommends that the City facilitate any industrial transmission rate class initiated conservation programs that qualify for BPA program funding. 4.C. Continue to have a wholesale rate structure for the industrial transmission rate class that's similar to today. Proceed with negotiation of a power sales agreement (or an agreement in principle) for the industrial rate class prior to November 1,2009. The agreement should include the Tier 2 rate alternative selection and other items such as load forecasting, take or don't take but pay, risk mitigation, and conservation responsibility and opportunities. Similar to the November 1, 2009 deadline, the City must make another Tier 2 power supply decision by September 30, 2011 for the period of October 2014 - September 2019. Staff recommends that a power supply workshop be held in early 2011 to reassess its Tier 2 power supply needs. The initial Tier 1 & 2 rates and Resource Support Services should be known at that time, which could be a guidepost for a future strategy. At that time we should reassess: 4.0. The costs, risks, and benefits of avoiding BPA Tier 2 rate alternatives for the period of October 2014 and beyond for its distribution customers. The decision for the industrial rate class should be based on their election. 4.E. To revisit the opportunity of a City owned Landfill Gas Generation project. 4.F. To revisit biomass cogeneration opportunities within Port Angeles through a purchase power agreement as needed to satisfy the City's Tier 2 power supply needs. Staff believes the following items are crucial to the success of diversifying its Tier 2 power supply from BPA: 4.G. Acknowledge that the City is becoming responsible for its Tier 2 power supply and that power supply should be "long" versus "short". The Washington State renewable portfolio standard does not apply to the City and that the City would continue to voluntarily support conservation in the absence of any current State or federal mandate. The Western Climate Initiative does not include any mandates at this time, but the State is developing mandatory greenhouse gas reporting requirements that may be applicable in the future. Page 6 6/4/2009 Draft Tier 2 Power Supply Straw Man Proposal City of Port Angeles Electric Utility 4.H. That future City sponsored conservation programs should be rT)aintained at a consistent and predictable level. 4.1. That renewable energy credits assigned to the City's Tier 1 power purchases should be used to offset the City's cost of developing Tier 2 power supply. The preliminary Tier 1 Renewable Energy Credit (REC) estimate is about 2.5 aMW: which has a current annual market value in the range of $5 to $10 per REC, and may provide from $100,000 to $200,000 per year. 4.J. That consulting services will be included in the 2010 proposed budget for designing new retail rates based on wholesale tiered rates anticipating changes will be needed in 2011. Customer communications about retail rate design changes will need to begin in 2010. 4.K. Technology needs will be included in the 2010 proposed budget such as Advanced Metering Infrastructure (AMI), Supervisory Control and Data Acquisition (SCADA) upgrades, conservation voltage reduction, peak demand management. SPA programs for Smart Grid and Demand Response will need to be integrated. 4.L. There are other local power resources that may be commercially feasible in the future such as solid waste conversion, hydrokinetic (wave/tidal/in-stream, off-shore wind), community solar, and incremental generation at Morse Creek Hydro. Upon commercial feasibility, the City should provide a preference for local power resources that are either below or similar to the avoided cost of other non-local resources. 4.M. There may be legislative issues that the City may want to consider such as Washington State House Sill 1811 , which could have increased the benefits of the City's Morse Creek hydro project. 5. Staff Guidance. Staff requests that it receives guidance and direction today on the Straw Man proposal. If there is any additional research or consideration that needs to be completed, staff could return to the Utility Advisory Committee in July through September as an "Iron Man" proposal is developed. Staff will return to the Utility Advisory Committee no later than October 13, 2009 requesting their recommendation to City Council. Staff will request City Council consideration no later than the October 20, 2009 to ensure compliance with the November 1, 2009 Tier 2 notice deadline. Page 76/4/2009 Draft .ollllIl Tier 2 Power Supply Straw Man Proposal City of Port Angeles Electric Utility 6. Tier 2 Power Supplv Assessment. An assessment of the potential benefits and risks for each alternative presented in the previous section should be carefully considered as part of decision-making. A summary table is presented below. 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