PNGC Power Utility School 101 Washington, D.C. April 12, 2013 1
Introduction Dan James VP, Public Affairs & Marketing
Introduction • Our goal for today: an overview of Northwest power and transmission fundamentals • Why? A context for energy policy • PNGC Power: who we are, what we do
PNGC Power Members
Who we are, what we do • Who we are: – A Generation & Transmission Cooperative with 14 Rural Electric Cooperative Members – BPA preference power customer • What we do: – Net requirements wholesale power provider to our Members – Joint Operating Entity (JOE) under the NW Power Act – We hold the BPA power and transmission contracts • Only operating aggregator BPA’s 3 rd largest power customer • • Meet our members load with a diversified portfolio – market, BPA, PNGC Power resources • Member services
PNGC Power Introduction • Beginning in 1996, PNGC Power started diversifying with 30% non-federal power • 2001 – 2011, the Slice years - meeting our load requirements on an hourly basis – 24/7 scheduling • 2011 – 2028, provide a diversified portfolio for our members to meet load
Introduction • John Prescott, President and CEO • Aleka Scott, VP of Transmission and Contracts • Zabyn Towner, General Counsel & Government Affairs Manager
Power Systems 101 John Prescott President and CEO 8
Take-aways 1. The electrical system must reliably provide power to keep the lights on – Power is provided by generating capacity 2. Generator output must exactly match demand for electricity every 4 seconds – Need flexible/controllable generation 3. Interconnected power systems create opportunities and risks 9
Let’s talk generators Electricity Steam turbine - generator Hydro turbine - generator 10
Generator Capacity • A generator can produce power up to its nameplate capacity – power output – Actual power output depends on generator type, fuel availability, etc. • Power output is measured in Watts – kW = 1,000 watts, MW = 1,000,000 Watts 11
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What is Electrical Energy? • Energy is power times time – A generator producing 1 kW for one hour accumulates 1 kW-hr of electricity – 1 kW X 1 hr = 1 kW-hr – Common form of billing measurement 13
Compare to a car • Power compares to speed – How fast? – Miles per hour 70 miles/hour • Energy compares to distance – Speed times time – How far? 3,089 miles – Miles 14
Hydro Grand Coulee, WA - USBR Flexible and controllable (with lake storage) 15
Coal Boardman Coal Project, OR Thermal - Generally fixed with some flexibility (with coal pile storage) 16
Natural gas Combined Cycle Simple Cycle Thermal - Flexible and controllable (limited by gas pipeline capacity) 17
Nuclear Columbia Generating Station, WA Thermal - Generally fixed with minimal flexibility (long term fuel storage) 18
Geothermal Raft River Geothermal, ID Thermal - Generally fixed with minimal flexibility (no fuel storage) 19
Wind Nine Canyon Wind Project, WA Intermittent with minimal control (near term predictability with no fuel storage) Known as a Variable Energy Resource (VER) 20
Solar PhotoVoltaic, or PV Follows Sun with minimal control (no fuel storage) Also known as a Variable Energy Resource (VER) 21
Landfill gas-to-electricity Coffin Butte Landfill Gas Project, Corvallis OR Thermal - Fixed output with some flexibility (no fuel storage) 22
Simple system: Ignores losses & voltage transformations Electrical System 100 MW Generation must match Load 100 MW Every 4 seconds! 23
Interconnected System 100 MW 100 MW 80 MW 80 MW 4 sec control A B Balancing Authority A & B 24
Interconnected System Constant for one hour 10 MW 100 MW 110 MW 90 MW 80 MW A B Hourly Scheduling 25
Interconnected systems • Created hourly markets – Market opportunities and risks • Economic gains / losses • Exposure to reliability risks – That’s why a power line fault in Idaho can cause an outage in San Francisco – Complexity 26
Take-aways 1. The electrical system must reliably provide power to keep the lights on – Power is provided by generating capacity 2. Generator output must exactly match demand for electricity every 4 seconds – Need flexible/controllable generation 3. Interconnected power systems create opportunities and risks 27
Transmission Issues Primer Aleka Scott VP, Transmission & Contracts 28
Transmission Primer and Current Issues • Basic Understanding of Transmission System • Basic Understanding of Variable Energy Resources (VERs), primarily wind and solar, in BPA’s Balancing Authority • Basic Understanding of Oversupply in BPA Balancing Authority 29
With RROs 30
Interconnections, BAs and RROs • Three Interconnections in the country – Generation, lines and load act as interconnected big machine – Electrical separation – Cascading outages can’t cross interconnections • Regional Reliability Organizations (RRO) oversee reliability across BAs within an Interconnection Western Electricity Coordinating Council (WECC) = RRO for whole Western Interconnection • Balancing Authorities (BA) balance load and generation every 4 seconds within their metered boundaries, e.g. – BPA - PGE – Avista - Pacificorp East and West – Northwestern - Idaho Power Company 31
Balancing Authority Areas in WECC 32
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BPA Transmission System Expansion: VERs King Estate Solar Project, OR Windy Point near Goldendale, WA 34
VERs Defined VERs 1. are renewable; 2. cannot be stored by the facility owner or operator; and 3. have variability that is beyond the control of the facility owner or operator. • For example: wind, solar and hydrokinetic generating facilities. 35
Quantity 36
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Growth of Wind has driven need for transmission additions • Why such a challenge? – Quantity – Centralized Location • Today, 17,000 MW of requests (primarily wind) in BPA’s Generation Interconnection request queue • For perspective, load in the BPA BA averages about 7,500 MW 38
Centralized Location of wind generation stresses transmission system 39
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Wind 41 CA
BPA innovates to meet commercial expansion need • Reforms Open Access Transmission Tariff (OATT) process – Network Open Season (NOS) 1. Studies all viable requests in one study – Cluster study FERC default is individual studies 2. Build feasible projects at “rolled in” rates FERC default is requestor pays for full expansion 42
I-5 Reinforcement $460 million – postponed Central Ferry-LOMO $95 million - on hold McNary-John Day $170 million - completed Big-Eddy-Knight $185.5 million - in construction 43
Conditions Change • California limits out of state renewables to meet RPS to 25% • NW utilities acquire enough renewables for RPS 1,800 MW of wind projects asked BPA to terminate or • modify firm transmission contracts • BPA suspends Network Open Season (NOS) in 2011 and redesigns process • New NOS about to be issued by BPA – will have tougher financial security requirements – protects all transmission ratepayers from defaults 44
Transmission System Expansion: South Idaho Load Service • BPA’s load in south Idaho was served by PacifiCorp through a power exchange, which PacifiCorp cancelled effective June 2016 • No firm transmission available across Idaho • BPA’s preferred option is participation in Boardman to Hemingway (B2H) Transmission Project with rights through to its load 45
B2H – Idaho Power and PAC BPA’s South Idaho Load area Gateway West PAC and Idaho Power 46
Policy Implications of Expansion 1. Potential rate increases for all transmission customers 2. BPA borrowing authority – use and limits 3. Tougher requirements for new generation to get firm transmission – reformed process will need FERC approval 47
VERs and BPA – Balancing Reserves The Dalles Dam, OR 48
Balancing Reserves • Generation capacity needed to balance within hour fluctuations in load and resources – Inc (incremental) reserve – generating capacity that can be brought up within hour when VERs goes down or load goes up – Dec (decremental) reserves – capacity that can be turned down within hour when VERs goes up or load goes down • Without VERs, need ~150 MW for load and gen • With VERs, need ~900 - 1100+ MW for load and gen 49
http://transmission.bpa.gov/Business/Operations/Wind/baltwg.aspx Evening peak Morning peak Wind Ramp 50
Max Forecast uncertainty: ~1,400 MW 51
Federal Hydro Capacity at Limit for Balancing Reserves • BPA limit is ~900 MW (inc), 1100 MW (dec) of hydro capacity for within hour balancing reserves • BPA may have to buy more reserves on market or curtail VERs generation • Need better solutions for meeting balancing demands of VERs 52
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