PEAK CAPACITY COST & DEMAND RESPONSEPACIFIC NORTHWEST DEMAND RESPONSE

PLANNING COMMITTEEBILL DICKENS

TACOMA POWERFEBRUARY 23, 2012

2

DEMAND RESPONSE: OVERVIEW

3

Cost$.MWh

Capacity

LoadWith DR

Load Power Supply

With DR No DR

-----------------------------------------------------CostWith DR

------------------------------------------------------------------------------------CostNo DR

ECONOMICS of DEMAND RESPONSE

Peak Demand Reduction

CostReduction

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TACOMA’S CAPACITY MARGIN: WINTER 1-HOUR

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 200

200

400

600

800

1000

1200

1400

Tacoma Power Resources BPA Block BPA SliceOther Contracts Peak Loads

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Period Peak Load Peak Supply Peak Load Planning Reserve

Margin

1-hour 1003 MW 1266 MW 26%

18-hour 948 MW 1266 MW 36%

72-hour 833 MW 1178 MW 41%

PEAK LOAD-RESOURCE BALANCE SUMMARY

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01/31/2

008

02/02/2

008

02/04/2

008

02/06/2

008

02/08/2

008

02/10/2

008

02/12/2

008

02/14/2

008

02/16/2

008

02/18/2

008

02/20/2

008 -

5.00

10.00

15.00

20.00

25.00

30.00

HLH ($/MWh)LLH ($/MWh)

$/MWh

MID-C DOW JONES POWER PRICE INDEX

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20122014

20162018

20202022

20242026

20282030

$-

$10.00

$20.00

$30.00

$40.00

$50.00

$60.00

$70.00

$80.00

$90.00

WECC Forecast

2012 PreliminaryOff-Peak WECCOn-Peak WECCNominal

Dollars$/MWh

WHOLE-SALE POWER PRICE FORECAST

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CONCLUSIONSTARS DO NOT ALIGN

• NO THERMAL RESOURCES

• NO CAPACITY CONSTRAINTS

• NO FLEXIBLE RATES

• NO RTO/ISO

• OPPORTUNITIES – WIND INTEGRATION

QED