NorthWestern Energy Public Meeting April 18, 2018 John Bushnell - - PowerPoint PPT Presentation

NorthWestern Energy Public Meeting April 18, 2018 John Bushnell - Manager of Energy Supply Planning & Regulatory Joe Stimatz - Manager of Asset Optimization 1

NorthWestern Energy Forecast supply need Electric Provider Plan for new gas & electric resources MONTANA: • Acquire new supply, balance system 353,600 customers in 187 communities Operate & maintain generation fleet SOUTH DAKOTA: • 62,500 customers in 110 communities Operate electric trading floor Natural Gas Provider MONTANA: • 189,000 customers in 105 communities NEBRASKA: • 42,000 customers in 4 communities SOUTH DAKOTA: • 45,500 customers in 60 communities 2

Today’s Focus Primary purpose of today’s public forum is to discuss • Resource needs of NorthWestern’s retail customers. • Identify resources to be evaluated in NorthWestern’s 2018 Resource Plan. • The development of the emerging electricity market in the West. 3

NorthWestern Energy - Resource Planning • Resource planning process is defined by law – “A utility should routinely communicate with the commission and stakeholders regarding portfolio planning and resource procurement activities” – “A utility should use an independent advisory committee of respected technical and public policy experts as a source of upfront, substantive input to mitigate risk and optimize resource procurement outcomes in a manner consistent with these guidelines.” – “ Provide customers adequate and reliable electricity supply services, stably and reasonably priced, at the lowest long-term total cost .” • Resource planning process ( greatly simplified ) – Identify resource needs – Identify resource alternatives – Optimize resource additions to achieve objectives 4

Load Composition by Customer Class 2017 Actual Retail Load: Energy Usage by Rate Class (*Includes DSM Energy Savings) Lighting Irrigation 0.9% GS-2 Transmission 1.7% Yellowstone Nat'l Park 1.8% 0.4% GS-2 Substation 3.5% GS-1 Primary 5.4% Residential* 41.4% GS-1 Secondary* 44.8% Residential and GS-1 Secondary account for approximately 86% of energy supply load serving obligation . 5

Energy Forecast Retail Load Forecast Forecast load growth for base case is 0.4%, before losses and net of DSM and NEM (dashed line) 6

Weather Sensitive Load 2017 Retail Load Shape (MW) Including losses 1400 1200 1000 800 600 400 200 Heavy Load Hours: Hour Ending 7 through 22 (Pacific Prevailing Time) Monday through Saturday excluding NERC Holidays 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 Winter Peak Day Summer Peak Day Average of 2017 Days Minimum Load Day 7

Variation in Loads and Resources Variations in Loads and Resources Over a Two Day Period (modeled) 8

Energy Balance – Heavy Load Hours NorthWestern Energy Supply Portfolio HL Hours Generation Actual to 2017 Forecast to 2023 800,000 700,000 Includes MPSC Gen. above load is Order QF 600,000 sold into the market facilities. and purchases are made to meet load. 500,000 MWh 400,000 300,000 200,000 100,000 - Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 Apr-19 Jul-19 Oct-19 Jan-20 Apr-20 Jul-20 Oct-20 Jan-21 Apr-21 Jul-21 Oct-21 Jan-22 Apr-22 Jul-22 Oct-22 Hydro Rate Based Assets Colstrip Unit 4 Basin Creek DGGS (Optimized) RFP/PPA (Morgan, PPL, Transalta) Small Hydro (PPA) DSM Distributed Gen. (net meter) Tier II QF (No Wind) Small QF-1 (no wind) Wind (RBA, PPA, QF) Retail Load 9

Energy Balance – Light Load Hours NorthWestern Energy Supply Portfolio LL Hours Generation Actual to 2017 Forecast to 2023 800,000 700,000 600,000 500,000 Gen. above load is Includes MPSC sold into the market MWh Order QF 400,000 and purchases are facilities. made to meet load. 300,000 200,000 100,000 - Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 Apr-19 Jul-19 Oct-19 Jan-20 Apr-20 Jul-20 Oct-20 Jan-21 Apr-21 Jul-21 Oct-21 Jan-22 Apr-22 Jul-22 Oct-22 Hydro Rate Based Assets Colstrip Unit 4 Basin Creek DGGS (Optimized) RFP (Morgan, PPL, Transalta) Small Hydro (PPA) DSM Distributed Gen. (net meter) Tier II QF (No Wind) Small QF-1 (no wind) Wind (RBA, PPA, QF) Retail Load 10

Energy Balance – Non-Carbon / Carbon 11

Peak Capacity Needs NWE’s Capacity deficits are very large and grow over time 12

Physical Resources: Name Plate vs. Capacity Contribution 13

Last 4 Years - Summer Peak 14

Last 4 Years - Winter Peak 15

Flexible Capacity Need and Resources Flexible Capacity Need vs. Resources Total: 271 Total: 265 350 Colstrip 4, 24 300 Regulation, 50 Hydro, 45 250 Contingency Reserves, 65 Basin Creek, 52 200 MW 150 Within-hour INC, 150 DGGS, 150 100 50 0 Intra-hour Need Flexible Capacity Within-hour INC Contingency Reserves Regulation DGGS Basin Creek Hydro Colstrip 4 16

2018 Resource Planning Process Potential Resources for Inclusion in Resource Portfolio. • Thermal Generation – 11x0 SCCT 50 MW Aeroderivative – 1x0 SCCT 50 MW Frame/Industrial – 1x0 RICE – 18 MW – 1x0 RICE – 9 MW – 2x1 nominal 150 MW CCCT (small CCCT option) – 1x1 F-Class CCCT (with ACC or wet cooling) – 1x1 CCCT duct firing (generic) • Renewables – Geothermal – Solar PV – Wind – Hydro Upgrades • Storage – Pumped Hydroelectric – Compressed Air Energy Storage – Lithium Ion Battery – Vanadium Flow Battery 17

2018 Resource Planning Process • 2018 resource planning process is well underway. • 2018 Resource Plan to be filed by December 15, 2018. • NorthWestern plans to hold at least one additional public meeting. 18