2018 INTEGRATED RESOURCE PLAN PROJECT UPDATE APRIL 10, 2018 - PowerPoint PPT Presentation

2018 INTEGRATED RESOURCE PLAN PROJECT UPDATE APRIL 10, 2018 Commission Presentation August 9, 2016

Presentation Outline 2  What is an Integrated Resource Plan (IRP)?  Key Takeaways from 2016 IRP  Preview 2018 IRP Information  2018 IRP Considerations  Summary

3 What is an IRP?

What is an IRP? 4  Washington State RCW 19.280 mandate  10 year strategy to meet energy, capacity, and renewables  Evaluates generation resources, conservation and Renewable Energy Credits (REC)  Provides strategies for reliable, low cost electricity at reasonable risk  Creates action plan over two to four years

IRP Inputs/ Modeling 5

6 Key Takeaways from 2016 IRP

Key Takeaways From 2016 IRP 7  District long on resources with seasonal capacity deficit  District relying on market  Energy needs  Capacity needs  Renewable Energy Credits (REC) needs  Regional summer capacity constraints growing post 2019  PNUCC Northwest Regional Forecast  Power Council Resources Adequacy Studies  BPA White Book (2015 Pacific NW Loads & Resources Study)  Regional uncertainty of future legislation

8 Preview 2018 IRP Information

2018 IRP Project Charter 9

2018 Assumptions & Modeling 10 Load Growth Assumption Carbon Assumption Low Natural Gas Price Modeling Stochastic Modeling

Load/Resource Balance – DRAFT Annual – Critical Water 11 300 Renewables 275 250 Frederickson 225 Market 200 175 Slice aMW 150 125 100 75 Block 50 25 0 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Block Critical Slice Renewables Market Frederickson Resource Requirement* * Retail Load Forecast plus distribution & transmission losses

Load/Resource Balance – DRAFT Annual – Average Water 12 300 Average Water 275 Renewables Slice Adder Frederickson 250 225 200 175 Slice aMW 150 125 100 75 Block 50 25 0 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Block Critical Slice Average Slice Adder Renewables Frederickson Resource Requirement* * Retail Load Forecast plus distribution & transmission losses

2018 Monthly Forecasted Loads Block and Critical/Average Slice over time 13 Average Slice Rely on Frederickson 350 needed to serve Slice surplus & Market to meet load sold to market load 300 250 200 aMW 150 100 50 - January February March April May June July August September October November December Block Critical Slice Average Slice Renewables Frederickson 2018 Resource Requirement Block/Slice Generation observed over the last 3 years Frederickson available as energy call option through August 2022

Example of Hourly Market Purchases How hourly loads are met on a extreme hot summer day 14 Load/Resource Balance (2015 Peak Day) 450 Temperature 400 Observed 1 : 105  F 350 300 250 MWh 200 150 100 50 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Hour Ending Block To Load Slice To Load Nine Canyon Wind - To Load White Creek - To Load Packwood - To Load Fredrickson - To Load District Market Purchases Actual Load 1 – As observed by the Hanford Meteorological Station

Capacity Deficits Without Frederickson With Frederickson 15

16 2018 IRP Considerations

2018 IRP Considerations 17  Energy & Capacity Uncertainties  Resource Adequacy Studies (PNUCC, NWPCC & BPA)  Market availability? Who and when will build?  Frederickson CT contract retires in 2022  Legislation Uncertainty  EIA requirements  Carbon Policy  Customer Preferences Changing?  Customer Green Rate options  BPA Post 2028

Summary 18  Key Draft Takeaways  Regional seasonal capacity constraints growing  Winter constrained  Summer constraints growing  District continues to be annually long on resources  Critical water- short after 2022  Frederickson expires in 2022  Average water- long thru 2028  District seasonal deficits continue to be met by RMC hedging  2018 Considerations/Uncertainties  Market, Legislation, Customer Preference, BPA 2028  Commission updates throughout summer  Adopt 2018 IRP by August 28th

Questions 19