Out of Region Market Assumptions

Resource Adequacy Technical Committee

April 6th, 2011

Canadian Import Assumption

BC policy is to export the Canadian Entitlement (approximately 500 aMW)– but done in spot markets not under long term contracts

BC is winter peaking with approximately half of generation located in Columbia River Valley – lack of complete load/generation diversification with PNW

Canada has been a net importer in the past decade (slide 3) BC load growth forecast + 24% by FY 2020 – or 1,600 aMW Conclusion: no import assumption at this time BC will complete IRP by January 2012 –reevaluate assumption

at that time

California Import Assumption

The resource adequacy assumption is 3,000 MW of hourly import capability from October through May and 0 MW from June to September

Note that this is not the dispatch in Genesys – just the capability

Is this a reasonable estimate? Power plant development in California between

2000 and 2010 (total in state regardless of owner) CPUC Resource Adequacy Assessment (January

2011) (owned or capacity under contract) Intertie Loadings between 2004 and 2009

Power Plant Development in California

During the past 11 years there as been substantial resource development within the state of California – most of it gas-fired

Chart (page 6) includes all resources built in state regardless of owner

Since not all developers are load serving entities or all generation is dedicated to LSE – no load/resource assessment can be made

Chart (page 7) “net addition” include the impact of plant retirements in the state (but also including Mohave)

Source: Ventyx

California Power Plant Development 2000 - 2010

90%

6%

Misc. Geothermal Biogases Natural Gas Wind Biomass Hydro PV

Wind

Natural Gas

  MW

Natural Gas 21567

Wind 1378

Geothermal 211

Biogases 219

Hydro 275

PV 157

Biomass 87

Misc. 21

Net Additions = cumulative additions – cumulative retirements

California Cummulative and Net Resource Additions 2000 - 2010

0

5000

10000

15000

20000

25000

30000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

MW

Cummulative Additions Net Addition

California Cumulative and Net Resource Additions

CPUC RA Assessment

Assessment includes all IOUs and Community Choice Aggregators

Purpose of RA is mandatory LSE acquisition of capacity to meet load and reserve requirements

Results include unit-contingent, import contracts, DWR contracts, physical resources, and RMR capacity

Only net qualifying capacity is considered based on historical performance and other factors – designed to get the expected value of capacity (GADs data)

Results – excluding demand response programs – California has winter surplus capability (November to March)

Excluding imports - tight margins in the summer and shoulder months (April to October)

CPUC RA AssessmentWITHOUT DEMAND RESPONSE

A B C D E F G

20009Demand

1:2

Adequacy Requirement

(AR)

Total Resources Reported

Resource Reported as a

% of AR

Resources Reported as a % of

Net Demand

Difference between

Resources and AR

Import Assumption

in D*C=D*1.15 E=D/C F=D/B G=D-C

Jan 30359 34913 37554 108% 124% 2641Feb 29265 33655 36224 108% 124% 2569Mar 28722 33030 35702 108% 124% 2672Apr 30623 35216 34476 98% 113% -740May 36369 41824 44224 106% 122% 2400 2731Jun 40672 46773 48979 105% 120% 2206 2552Jul 44498 51173 52365 102% 118% 1192 4632Aug 46699 53704 54587 102% 117% 883 5540Sep 42594 48983 50262 103% 118% 1279 4033Oct 35000 40250 39380 98% 113% -870Nov 30529 35108 36406 104% 119% 1298Dec 32394 37253 38927 104% 120% 1674

* No Import Assumptions given for other months

CPUC 2010 RA Assessment

RA assessment looks backward; does not include these new gas-fired plants that are available for (or under) RA contracts:

Plant Installed MW On-Line DateStarwood 120 May 2009Panoche 400 July 2009Otay Mesa 590 Oct 2009Inland Empire I 400 Jan 2009Inland Empire II 400 May 2009Gateway 530 Jan 2009Orange Grove 96 April 2010Humbolt Bay 163 Oct 2010Colusa 660 Dec 2010

3359

The Interties

The average physical transfer capability* on the A.C. line S. to N. is 3,100 MW [Genesys 4880]

The average physical transfer capability* on the D.C. line S. to N. is 1,700 MW [Genesys 2850]

Flows on the A.C. line were S. to N. 3.8% of the time with an average flow of 346 MW and a maximum of 1,513 MW

Flows on the D.C. line were S. to N. 18.9% of the time with an average flow of 472 MW and a maximum of 2,045 MW

The maximum coincidental import on both lines was 2,810 MW

*A.C. rated at 4,800 MW; average includes line de-rates (Dec 2004 to Dec 2009)

Limiting Factors

Interties provide enough physical import capability ~ 4,800 MW – up to 2,810 MW have been imported coincidentally over both lines

Over 16,500 MW of net generation has been built within the state over the past 11 years, but not necessarily under contract with load serving entities

California LSEs are the limiting factor – no meaningful surplus capacity from April to October (pg 9 – column G)

Recommendation

Genesys assumption of 0 import capability from June to September is reasonable

Shoulder months of April, May, and October are also problematic and should be set to 0

With new power plant development in California; 3,000 MW of import capability November to March appears reasonable

Appendix – Intertie Loading

Months% of Total Hours

S. to N. Average MW Maximum MWJan 14.2% -473.1 -1827Feb 15.2% -478.8 -1708Mar 11.6% -455.2 -1957Apr 3.9% -414.8 -1496May 0.5% -428 -1027Jun 0.2% -258.4 -584Jul 0.4% -362.1 -633Aug 4.0% -365.9 -901Sep 7.7% -426.8 -1746Oct 8.7% -413.4 -1687Nov 13.5% -545.5 -2045Dec 19.9% -507.5 -1872

D.C. Line Loading S. to N.(18.9 % of the hours S. to N.)

Months% of Total Hours

S. to N. Average MW Maximum MWJan 11.6% -435.7 -1427Feb 11.3% -280.4 -1087Mar 21.5% -400.7 -1513Apr 10.2% -366.3 -1106May 2.1% -179.1 -701Jun 0.3% -250.4 -422Jul 0.1% -95.5 -167Aug 2.6% -220.3 -713Sep 5.9% -299.7 -1505Oct 6.6% -261.3 -869Nov 7.5% -236.3 -977Dec 20.5% -383.6 -1330

A.C. Line Loading S. to N.(3.8 % of the hours S. to N.)