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DRAFT
IRP 2016
RESOURCE NEEDS AND DRAFT
PORTFOLIO CONCEPTS
NOVEMBER 4, 2015
| 2
AGENDA
• Introductions
• Demand Outlook 2016
• Resource Adequacy
• Draft Portfolio Concepts
• Conservation Potential Assessment (CPA) 2016
DEMAND FORECAST
2016
| 4
ASSUMPTIONS OVERVIEW
• National economic outlook from IHS Economics
• Rates set to Seattle City Light’s 2014 Strategic
Plan through 2020 and 3% thereafter
• Forecast based on “normal weather”
• Forecast of tunnel boring machine not included
• Approved by ROC in July 2015
| 5
SEATTLE CITY LIGHT RETAIL LOAD HISTORY
8,000
8,500
9,000
9,500
10,000
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
GW
h
dot.com recession
&
>30% real rate increase
record
warmth
housing goes
busthousing goes
boom
2014 Retail Load
≈0.4% LESS THAN
1999 Retail Load
| 6
“NEW NORMAL” OF MODERATE ECONOMIC
GROWTH?
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
An
nu
al G
row
th R
ate
Real GDP Average Real GDP (Post-War)
| 7
LOAD, EMPLOYMENT, AND HOUSEHOLDS
200
300
400
500
600
700
800
900
1000
1100
1200
200
300
400
500
600
700
800
900
1000
1100
1200
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Em
plo
ym
en
t &
Ho
use
ho
lds
(00
0's
)
Avera
ge M
eg
aw
att
s
Weather-Adjusted System Load (aMW) Wage & Salary Employment Households
| 8
ENERGY EFFICIENCY, CODES, & CONSERVATION
0
2
4
6
8
10
12
14
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
20
08
20
10
20
12
20
14
20
16
20
18
20
20
20
22
20
24
Residential MWh Per Household
| 9
LOAD HISTORY & FORECAST BY CUSTOMER
CLASS
Forecasted 20-year Average Growth Rates
Total Retail: 0.4% Commercial: 0.6%
Residential: -0.1% Industrial: 0.5%
0
2000
4000
6000
8000
10000
120001
99
9
20
01
20
03
20
05
20
07
20
09
20
11
20
13
20
15
20
17
20
19
20
21
20
23
20
25
20
27
20
29
20
31
20
33
20
35
Gig
aw
att
-Ho
urs
Total Retail Commercial Residential Industrial
| 10
SUMMARY
• Economic growth expected to continue, yet it
does so below the historical trend line
• Load demand growth expected to continue its
lower-than-historical trend due to various
factors
• 20-year average annual growth rate ≈ 0.4%
RESOURCE ADEQUACY
PROBABILISTIC ANALYSIS
| 12
WHAT IS RESOURCE ADEQUACY?
• The ability of the City Light Portfolio to supply
the energy requirements of the customers under
all probable conditions including high and low
temperatures and lower water supply conditions
effecting demand and supply respectively
| 13
ASSUMPTIONS
• Portfolio Contracts:
o Bonneville Power Administration monthly shaped
Block and Slice contract extends to the end of IRP
study period
o Bonneville Power Administration monthly shaped
Block and Slice contract expires in September,
2028
| 14
ASSUMPTIONS (CONTINUED)
•Northern California Power Agency exchange
contract expires in 2017
• Stateline Wind contract expires in 2021
• Lucky Peak Exchange contract will expire in 2016
• Priest Rapids contract expires in 2052
• Burlington Biomass contract expires in 2017
| 15
ASSUMPTIONS CONTINUED
• Portfolio Resources:
o Additional 64 MW of hydro efficiency gains from
Boundary project upgrades by fall 2017
| 16
AN OVERVIEW OF THE METHODOLOGY
• 4,000 supply and demand scenarios
o Based upon detailed studies of historical hourly
supply and demand conditions in winter
• Scenarios are ranked by resource need
o 𝐷𝑒𝑓𝑖𝑐𝑖𝑡𝑇,ℎ = 𝑆𝑢𝑝𝑝𝑙𝑦𝑇,ℎ - 𝐷𝑒𝑚𝑎𝑛𝑑𝑇,ℎ , T = Month
(December and January) and h = Hour (1488
hours)
| 17
AN OVERVIEW OF THE METHODOLOGY
• Majority of scenarios are surplus
o The 95th, 90th, 85th, 80th, and 75th percentiles are
identified
o Deficits are adjusted for short-term firm market
purchases 200 aMW
| 18
RISK ANALYSIS
• Risk is applied to supply and demand independently
o Supply risk is determined by uncertainties in water
conditions and forced outages
o Demand risk is determined by uncertainties in
system load
| 19
SUPPLY (HYDRO) UNCERTAINTIES
• More than 90% of City Light resource portfolio
is from hydropower generation assets
• Impact of water conditions across City Light’s
hydro resources are interdependent
• “Time-Series” and “Cross-Sectional”
correlations are incorporated into the
probability distribution analysis
| 20
DEMAND UNCERTAINTIES
• Demand is strongly related to temperature
o Demand and hydro generation capabilities have
no correlation
• The temperature for a given hour has no
correlation with the temperature of an hour
in another month
| 21
DEMAND UNCERTAINTIES (CONTINUED)
• Historical demand variation for December and
January are incorporated into the probability
distribution analysis
| 22
DEVELOPING RISK METRICS: SIMULATION OF
OBJECTIVE FUNCTION
• Resource Adequacy Objective Function:
o R.A. = Resource Adequacy
o D = Demand
o BN = BOUNDARY
o SK = SKAGIT (ROSS, DIABLO, and GORGE)
o SL = Bonneville Power Administration Slice Product
(City Light share of BPA hydro projects)
)SL,SLBNBN ,SK,SK,D,D ( FR.A.hhhhhhhh JANDEC,JAN,DECJANDECJANDEC
| 23
DEVELOPING RISK METRICS: SIMULATION OF
OBJECTIVE FUNCTION
• Normal distributions are assigned to both
demand and hydro generation inputs
| 24
RISK ANALYSIS OF SUPPLY AND DEMAND
S0
S1
S2
D0
D1
D2
Time
Meg
aw
att
| 25
WINTER SEASON ONE HOUR PEAK: 5%, 10%,
15%, 20%, 25% CHANCE OF EXCEEDENCE
0
50
100
150
200
250
300
350
400
450
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
20
27
20
28
20
29
20
30
20
31
20
32
20
33
20
34
20
35
20
36
Meg
aw
att
YEAR
5%
10%
15%
20%
25%
| 26
RESOURCE ADEQUACY AT 95% WITH BPA
CONTRACT EXPIRATION IN 2028
0
200
400
600
800
1000
1200
1400
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
20
27
20
28
20
29
20
30
20
31
20
32
20
33
20
34
20
35
Meg
aw
att
YEAR
5% 5% BPA Contract Expires
DRAFT PORTFOLIO
CONCEPTS
| 28
DRAFT PORTFOLIO DEVELOPMENT
• Resource Adequacy Requirement
• Renewable Portfolio Standard (RPS) Requirement
• Characteristics of supply resources
o Evaluation Criteria
• Reliability
o Availability and Deliverability
• Cost and Financial Risk
• Environmental Impact
| 29
DRAFT PORTFOLIOS DEVELOPMENT
(CONTINUED)
• Conservationo Base and High Conservation
• Market Purchase Availability
• Bonneville Power Administration Contract
Expiration in 2028
| 30
WIND & HYDRO WITH 200 MARKET PURCHASE
FLEXIBILITY
0
100
200
300
400
500
600
700
800
900
aMW
Wind & Hydro with 200 Market Purchase Flexibility
RECs market purchase
Wind2
Wind1
HYDRO
Conservation
Resource Adequacy (RA) Requirement with BaseCons. & 200 Mkt. Flexibility
| 31
NO RENEWABLES WITH RENEWABLE ENERGY
CERTIFICATES & 200 MARKET PURCHASE
FLEXIBILITY
0
100
200
300
400
500
600
700
800
900
aMW
No Renewables with RECS & 200 Market Purchase Flexibility
RECs market purchase
CCT
HYDRO 2
HYDRO
Conservation
Resource Adequacy (RA) Requirement with BaseCons. & 200 Mkt. Flexibility
| 32
EXISTING BONNEVILLE POWER
ADMINISTRATION & MARKET PURCHASE
PORTFOLIO
0
50
100
150
200
250
aMW
Existing BPA-Hydro with 200 Market Purchase Flexibility
RECs market purchase
Wind1
Convservation
Resource Adequacy (RA) Requirement with BaseCons. & 200 Mkt. Flexibility
| 33
PORTFOLIOS WITH MARKET PURCHASE
AVAILABILITY
1. Wind & Hydro
o Wind & BPA Hydro
2. No Renewables
o RECs Market Purchase, Gas, BPA Hydro
& Non-BPA Hydro
3. High Conservation & Wind
o Wind & BPA Hydro
4. Renewables with no Wind
o Biomass, Solar PV & BPA Hydro
| 34
PORTFOLIOS WITH MARKET PURCHASE
UNAVAILABILITY
5. Hydro, Renewables & Gas
o Gas, Wind, Biomass, Solar PV, BPA Hydro, &
Non-BPA Hydro
6. Diversity with no Market Purchase
o Gas, Biomass, Solar PV, Solar Thermal,
Geothermal, BPA Hydro, & Non-BPA Hydro
7. Renewables with no Market Purchase & Gas
o Wind, Biomass, Solar PV, BPA Hydro, & Non-BPA
Hydro
| 35
CURRENT BONNEVILLE POWER
ADMINISTRATION CONTRACT EXTENSION
8. Existing BPA with Market Purchase
o Wind & Market Purchase
9. Existing BPA with no Market Purchase
o Gas, Wind, Biomass, & Solar PV
CANDIDATE PORTFOLIOS
SELECTION METHODOLOGY
| 37
SENARIOS FOR SENSITIVITY ANALYSIS
• Demand Forecast
o High and Low Demand
• Hydro Conditions
o High and Low Water Conditions
•Natural Gas Prices:
o High and Low Natural Gas Prices
• CO2 Price Forecast
o High and Low CO2 Prices
| 38
EVALUATION CRITERIA FOR CANDIDATE
PORTFOLIOS
• Reliability
• Cost
• Financial Risk
• Environmental Performance
CONSERVATION
POTENTIAL
ASSESSMENT 2016
| 40
CONSERVATION CONTEXT
• Energy conservation is SCL’s first priority
resource, and has been since 1976
o Low cost
o Low environmental impact
o Low risk
• Longest continually operated energy
conservation program in the country
• 189 (aMW) of conservation in place
o 10%+ of City Light’s retail load
| 41
STUDY OBJECTIVES - CPA
Estimate 20-year technical, economic, and
achievable potential
Satisfy requirements of WAC 194-37
Develop conservation supply curve for the IRP
Provide reports and presentations that
thoroughly document methodology, data
sources, and results
| 42
OVERVIEW OF METHODOLOGY
| 43
WHAT’S NEW FOR THE 2016 CPA?
• New Load forecast
• 7th Power Plan measures
• Updates to RTF measures
• Residential and industrial program accomplishments
• CBSA Data
• Updated SCL non-residential database
• Federal standards and energy codes
oNew measures
• Enterprise data centers
• Indoor agriculture
| 44
SUMMARY OF RESULTS
Sector
Achievable Economic Potential – aMW
2 Year 10 Year 20 Year
2014 CPA 23.7 118.4 250.6
2016 CPA 25.6 128.1 204.8
% Change8% 8% -18%
• Residential, commercial, and industrial sectors
account for 24%, 70%, and 5% of 20-year
achievable potential
| 45
IMPACT OF RAMP RATES
| 46
RESIDENTIAL – ECONOMIC POTENTIAL BY END USE
Cooling
0%
Heating
17%
Water Heating
23%
Interior Lighting
46%
Exterior Lighting
5%
Appliances
1%
Electronics
7%
Miscellaneous
1%
2015 CPA
Cooling
0%
Heating
23%
Water Heating
29%
Interior Lighting
20%
Exterior Lighting
2%
Appliances
3% Electronics
22%
Miscellaneous
1%
2013 CPA
| 47
COMMERCIAL ECONOMIC POTENTIAL BY END USE
Cool Central
6%
Heat Central
3%
Heat Pump
0%
Ventilation
7%
Lighting
67%
Office Equipment
12%
Water Heating
2%
Refrigeration
3%Other
0%
2015 CPA
Cool Central
4%
Heat Central
5%
Heat Pump
0%Ventilation
10%
Lighting
57%
Office Equipment
4%Water Heating
11%
Refrigeration
3%
Other
6%
2013 CPA
| 48
IRP SCENARIOS
0.0
50.0
100.0
150.0
200.0
250.0
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
aMW
Base
Low
High