www.centrehelios.org Com m ents on the Muskrat Falls Reference Presentation to the Public Utilities Board of Newfoundland and Labrador Newfoundland and Labrador Philip Raphals For Grand Riverkeeper Labrador Inc. F G d Ri k L b d I February 23, 2012 1
www. centrehelios.org O ti Optimality lit « How did you ensure that « How did you ensure that … you were you were dealing with the optimal scenario under each one? » > Technical optimization vs. planning processes > Iterative process seeking robust solutions > Real time (evolutive) versus planning exercise > Avoiding irrevocable choices that would turn out badly in certain possible futures out badly in certain possible futures > Scenario versus plan 2
www. centrehelios.org PPA PPA payment options t ti “Does the 2035 ratepayer have to pay Does the 2035 ratepayer have to pay more so that the 2017 ratepayer can pay less?” less? > Nominal LUECs vs. escalating prices > Same present value, but different reality > Consumers unlikely to prefer escalating prices 3
www. centrehelios.org PPA vs COS PPA COS Simulate annual costs for Muskrat Simulate annual costs for Muskrat Falls under COS > Higher than PPA in early years Hi h th PPA i l > Drastically lower in later years Prices post 2067 > PPA: maintaining 2067 price levels ($400/MWh) ⇒ windfall profits $ > COS: continue to decline (< $20/MWh) 4
www. centrehelios.org CDM CDM MHI MHI > model CDM like generation > End-use modelling Nalcor’s approach > Integrate into load forecast through technological change variable > No mesure-by-mesure or program-by-program analysis Objectives to date not met Sensitivities > Far less than Marbek scenarios > At low demand (= high CDM) scenarios, ( g ) , CPW preference for Muskrat drastically reduced 5
www. centrehelios.org 6 NWPPC fuel forecast 2009 Fuel price forecasts t f i l F
www. centrehelios.org 7 EIA Retrospective Review i R ti EIA R t
www. centrehelios.org Wi d Wind power assessment t 2004 NLH study 2004 NLH study > Sole source for Strategist inputs > 80 MW limits primarily economic > 80 MW limits primarily economic • Based on minimizing spill • Fails to take into account cost of wind, net of curtailment or spills curtailment or spills > « preliminary » > Government RFP shows that higher Go e e t s o s t at g e penetration remains an objective 8
www. centrehelios.org C Conclusions l i Reference question Reference question > Verify that the costs attributed to each scenario are correct? > Verify that each scenario makes sense? V if th t h i k ? Analyses of MHI and others > Results highly dependent on assumptions g y p p > Great uncertainties > Little confidence that the Isolated Island scenario would play out as defined play out as defined If Muskrat Falls does not go forward > planning process will continue > May lead to solutions very different from IIS Thus Reference Question largely academic 9
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