DRAFT 2010 Integrated Resource Plan Seattle City Light Review - PowerPoint PPT Presentation

DRAFT 2010 Integrated Resource Plan Seattle City Light Review Panel June 30, 2010 Power Supply & Environmental Affairs

Integrated Resource Planning: Objectives and Key Questions • Objectives: – Sufficient Power Supply for Reliability & Low Costs – Meeting I-937 and Other Regulatory Requirements – Appropriate Mix of Cost and Risk • The IRP is About Three Key Questions: – How Much Conservation and Resources? – When? – What Kind? page 2 Power Supply & Environmental Affairs

What Do People Care About in the IRP? Distributed Distributed Distributed More Public More Public More Public Generation Generation Generation Limit Limit Limit Oversight Oversight Oversight Incentives Incentives Incentives Carbon Tax Carbon Tax Carbon Tax Exposure Exposure Exposure More More More Political Political Political Wind Wind Wind & Policy & Policy & Policy Power Power Power Create Business Create Business Create Business Impacts Impacts Impacts Opportunities Opportunities Opportunities National National National Reduce Reduce Reduce Environmental Environmental Environmental Utility Debt Utility Debt Utility Debt Leadership Leadership Leadership Preserve Preserve Preserve Demand- Demand- Demand- Sustainability Sustainability Sustainability Low Cost Low Cost Low Cost Response Response Response Power Power Power Programs Programs Programs More Solar More Solar More Solar Enhance Enhance Enhance Power Power Power Power Quality Power Quality Power Quality Create Create Create Stabilize Stabilize Stabilize Green Green Green Rates Rates Rates Jobs Jobs Jobs Fight Fight Fight Ensure Ensure Ensure Climate Climate Climate High Power High Power High Power Change Change Change Conservation Conservation Conservation Reliability Reliability Reliability First First First IRP Stakeholder & Public Meetings page 3 Power Supply & Environmental Affairs

Recessions: Seattle Customer Demand Often Lags a Recovery Load Troughs Often Lag Recession End Points 1200 1150 Average M egaw atts 1100 1050 1000 950 900 Dec-80 Dec-81 Dec-82 Dec-83 Dec-84 Dec-85 Dec-86 Dec-87 Dec-88 Dec-89 Dec-90 Dec-91 Dec-92 Dec-93 Dec-94 Dec-95 Dec-96 Dec-97 Dec-98 Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 National Recession Puget Sound Recession/Stagnation 12-Month Rolling Average Load page 4 Power Supply & Environmental Affairs

2010 Demand Forecast: Comparison with 2009 Forecast 1,400 1,350 Average Megawatts 1,300 1,250 1,200 1,150 1,100 1,050 1,000 9 1 3 5 7 9 1 3 5 7 0 1 1 1 1 1 2 2 2 2 0 0 0 0 0 0 0 0 0 0 2 2 2 2 2 2 2 2 2 2 March 2009 Forecast Revision April 2010 Forecast page 5 Power Supply & Environmental Affairs

Hydropower Variability at City Light’s Skagit River and Boundary Plants Generation 1991 - 2008 1,000 tts a 800 w a g 600 e M 400 e g a r 200 e v A 0 1 3 5 7 9 1 3 5 7 9 9 9 9 9 0 0 0 0 9 9 9 9 9 0 0 0 0 1 1 1 1 1 2 2 2 2 page 6 Power Supply & Environmental Affairs

2010 IRP: Less Resources Needed to Preserve 95% Winter * Reliability 600 * December and January Winter Resource Adequacy Average Megawatts 500 400 300 200 100 0 0 2 4 6 8 0 2 4 6 8 1 1 1 1 1 2 2 2 2 2 0 0 0 0 0 0 0 0 0 0 2 2 2 2 2 2 2 2 2 2 2008 IRP 95% Res. Adeq. 2010 IRP 95% Res. Adeq. Accounts for Load Growth, Weather Impacts, Hydro Volatility, Forced Outages, Operating Reserves, Power Contract Terms and Expirations Notes: Both 2008 and 2010 assume 100 aMW from wholesale spot market. Winter reliability-based resource needs are independent of I-937 requirements. page 7 Power Supply & Environmental Affairs

Key Drivers: Forecast Customer Annual Average Demand and Firm Resources Existing Firm Resources Average Annual Energy (aMW) 1,600 1,400 1,200 1,000 No need for firm “annual” resources for 10 years* 800 600 0 2 4 6 8 0 2 4 6 8 1 1 1 1 1 2 2 2 2 2 0 0 0 0 0 0 0 0 0 0 2 2 2 2 2 2 2 2 2 2 Total Resources Load - After Cons. Load - Before Cons. *Does not include “winter-only” needs page 8 Power Supply & Environmental Affairs

City Light I-937 Compliance Outlook: Now About 40 aMW Short for 2016 250 15% 200 9% 150 aMW 3% 100 50 0 0 2 4 6 8 0 2 4 6 8 1 1 1 1 1 2 2 2 2 2 0 0 0 0 0 0 0 0 0 0 2 2 2 2 2 2 2 2 2 2 Post-Cons. I-937 Requirement Forecast RECs Hydropower is not a qualifying resource for I-937 page 9 Power Supply & Environmental Affairs

Wind, Geothermal, Biomass, and Landfill Gas Locations and Transmission • Resource Concentrations – Wind (blue) • Montana, Wyoming, Oregon, Washington – Geothermal (purple) • Nevada, California, Utah, Oregon, Idaho – Biomass (green) • Washington, Oregon, N. California, Idaho – Landfill Gas (orange) • Seattle-Tacoma, Portland, San Francisco Bay Area, Los Angeles- San Diego, Denver page 10 Map by SCL IRP & Forecasting Power Supply & Environmental Affairs

Top 3 Portfolios in Cost and Risk: Lo-RECs*, Higher Cons., Hi-RECs 0.385 SCL: RECs Only 0.365 Risk Measure 0.345 Med. RECs 0.325 Max-Exch 0.305 Higher Cons. Hi-RECs Lo-RECs 0.285 0.265 $2,500 $2,600 $2,700 $2,800 $2,900 $3,000 $3,100 20-yr. Cost (NPV in Millions) *RECs = Renewable Energy Credits, representing environmental attributes of renewable energy under Initiative 937, can substitute for renewable energy in the law page 11 Power Supply & Environmental Affairs

20-Year NPV of Cost Compared to RECs-Only Case (Millions) Top 3 Portfolios: Top 3 Portfolios: Hi-Cons. Hi-Cons. Lo-RECs Lo-RECs Hi-RECs Hi-RECs High Demand High Demand $535 $535 $536 $536 $701 $701 Low Demand Low Demand -$1,976 -$1,976 -$1,975 -$1,975 -$1,888 -$1,888 -$1,874 -$1,874 -$1,875 -$1,875 -$913 -$913 High CO 2 Price High CO 2 Price Low CO 2 Price Low CO 2 Price -$1,372 -$1,372 -$1,358 -$1,358 -$193 -$193 High Gas Price High Gas Price -$906 -$906 -$291 -$291 -$700 -$700 Low Gas Price Low Gas Price $21 $21 $20 $20 $86 $86 High REC Price High REC Price -$501 -$501 -$459 -$459 -$362 -$362 Low REC Price Low REC Price -$649 -$649 -$480 -$480 -$532 -$532 1 st 1 st st st 2 nd 2 nd nd nd 3 rd 3 rd rd rd Scenario Avg. Ranking Scenario Avg. Ranking 95% Risk 95% Risk -$334 -$334 -$294 -$294 -$301 -$301 Base Case Base Case -$589 -$589 -$470 -$470 -$428 -$428 Rankings: First Second Third page 12 Power Supply & Environmental Affairs

Other Issues Being Analyzed • Plug-In Hybrids & Electric Vehicles – Update assumptions, consistent with Electric Power Research Institute study • Climate Change – Update for New UW Research on Impacts to Hydro Generation and Electricity Demand page 13 Power Supply & Environmental Affairs

What’s Next? • Seek City Council Approval of Draft 2010 IRP • Incorporate Key Elements of the IRP into the Strategic Plan Update as Appropriate – Contributes to Customer Service, Operational Excellence, Environmental Stewardship, and Balanced Resource Portfolio in the Strategic Plan • Continue to acquire RECs and Renewable Resources on a Path to Comply with 2016 Targets for I-937 page 14 Power Supply & Environmental Affairs

Questions or Comments? IRP Website Address: http://www.seattle.gov/light/news/issues/irp/ E-Mail: SCL.IRP@Seattle.gov David Clement (206) 684-3564, Dave.Clement@Seattle.gov page 15 Power Supply & Environmental Affairs