Reliability Must Run (RMR) WorkshopJanuary 15, 2004

Bob SmithArizona Public Service Co.

Arizona Corporation Commissionand

Central Arizona Transmission System (CATS)

2

Outline of Presentation

2004 RMR Study ProcessDescription of network and

constraintSIL/MLSC determinationRMR - demand, energy and durationEconomic/environmental impact of

transmission constraintObservations

3

2004 RMR Study Process

Transmission Provider Coordination- Basic Case Development- July 1, 2003 meeting - Draft Study Plan

4

2004 RMR Study Process (cont.)

Process open to all stakeholders- July 23, 2003 CATS Meeting

Study Plan approved 2005, 2008, 2012 Selected for detailed

analysis Study APS/SRP combined Phoenix Area

- August 22, 2003 CATS Meeting Propose RMR load and Generation Definition

- September 30, 2003 CATS Meeting Preliminary Results Model Welton Mohawk in Yuma

5

APS 2005 Yuma Area Network

Hassayampa/Palo Verde

N.Gila 500/69 kV

WAPAGila 161/69 kV

Imperial Valley/San Diego

Pilot Knob

Yucca 161/69 kV

APS Yuma AreaNetwork

YCA

IID CT#21IID-Steam #1APS-CT 1-4

BLK1/8/04

CriticalOutage

Mittry

LimitingElement

LimitingElement

LagunaTap

6

APS 2008 Yuma Area Network

Hassayampa/PaloVerde

N.Gila 500/69 kV

WAPAGila 161/69 kV

Imperial Valley/San Diego

Pilot Knob

Yucca 161/69 kV

APS Yuma AreaNetwork

YCA

IID CT#21IID-Steam #1APS-CT 1-4

BLK1/8/04

CriticalOutage

LimitingElement

LagunaTap

7

APS 2012 Yuma Area Network

Hassayampa/Palo Verde

N.Gila 500/69 kV

WAPAGila 161/

69 kV

Imperial Valley/San Diego

Pilot Knob

Yucca 161/69 kV

APS Yuma AreaNetwork

YCA

IID CT#21IID-Steam #1APS-CT 1-4

BLK1/8/04

GilaBend

TS8CriticalOutage

Mittry

LimitingElement

LagunaTap

Quechan

8

APS 2005 Yuma Nomogram

Yuma Area 2005

160

180

200

220

240

260

280

300

320

340

360

380

400

420

440

460

480

500

0 20 40 60 80 100 120 140 160 180 200 220 240 260 280 300

Generation

Load

Forecasted load: 344 MW

Hassayampa-N.Gila 500 kV OutageOverloads Yucca 161/69 XFMRs

12/8/03BLK

N.Gila-Gila 69 kV OutageOverloads N.Gila-Mittry 69 kV

Yucca-Laguna T 69 kV OutageOverloads 10th Strt-32nd Strt 69 kV

9

APS 2008 Yuma Nomogram

Yuma Area 2008

160

180

200

220

240

260

280

300

320

340

360

380

400

420

440

460

480

500

0 20 40 60 80 100 120 140 160 180 200 220 240 260 280 300

Generation

Lo

ad

Forecasted load: 380 MW

12/15/03BLK

Yucca-Laguna T 69 kV OutageOverloads Riverside-10th Str 69 kV

Hassayampa-N.Gila 500 kV OutageOverloads Yucca 161/69 XFMRs

W/ Welton-Mohaw k Gen

W/O Welton-Mohaw k Gen

10

APS 2012 Yuma Nomogram

Yuma Area 2012

200

220

240

260

280

300

320

340

360

380

400

420

440

460

480

500

520

540

560

580

600

0 20 40 60 80 100 120 140 160 180 200 220 240 260 280 300

Generation

Lo

ad

Gila Bend-TS8 230 kV OutageMittry-Quechan 69 kV

Forecasted load: 425 MW

12/9/03BLK

W/ Welton-Mohaw k Gen

W/O Welton-Mohaw k Gen

Gila Bend-TS8 230 kV OutageYucca-Laguna T 69 kV

11

2005 Yuma Load Duration and RMR Condition

YUMA LOAD DURATION & RMR CONDITION (2005)

0

50

100

150

200

250

300

350

400

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000

HOURS

LO

AD

(M

W)

SIL = 265 MW

YUMA LOAD

PEAK = 344 MW

79 MW

714 HOURS

20 GWH

Total Yuma Energy = 1,517 GWH

12

2008 Yuma Load Duration and RMR Condition

YUMA LOAD DURATION & RMR CONDITION (2008)

0

50

100

150

200

250

300

350

400

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000

HOURS

LO

AD

(M

W)

SIL = 292 MW

YUMA LOAD

PEAK = 380 MW

88 MW

676 HOURS

21 GWH

Total Yuma Energy = 1,663 GWH

13

2012 Yuma Load Duration and RMR Condition

YUMA LOAD DURATION & RMR CONDITION (2012)

0

50

100

150

200

250

300

350

400

450

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000

HOURS

LO

AD

(M

W)

SIL = 410 MW

YUMA LOAD

PEAK = 425 MW

12 HOURS LOAD EXCEEDS SIL

15 MW

Total Yuma Energy = 1,869 GWH

14

RMR Economic Analysis

GE MAPS production-cost simulatorEntire WECC modeledHourly least cost dispatch with

transmission constraintsAnnual cost to serve area load determinedStudy repeated ignoring local import limitDifference is the RMR costEnvironmental impact determined for

each generator using emission rates

15

2005 APS Yuma Energy

Load Requiring no RMR, 1497

GWh, 98%

RMR Energy "within economic

dispatch", 12 GWh, 1%

RMR Energy "outside of economic

dispatch", 8 GWh, 1%

APS Yuma Area Total Load = 1,517 GWh

$995,000 incremental cost

16

2008 APS Yuma Energy

Load Requiring no RMR, 1642

GWh, 99%

RMR Energy "within economic

dispatch", 21 GWh, 1%

RMR Energy "outside of economic

dispatch", 0 GWh, 0%

APS Yuma Area Total Load = 1,663 GWh

$0.0 incremental cost

17

2012 APS Yuma Energy

Load Requiring no RMR, 1869

GWh, 100%

RMR Energy "within economic

dispatch", 0 GWh, 0%

RMR Energy "outside of economic

dispatch", 0 GWh, 0%

APS Yuma Area Total Load = 1,869 GWh

$0.0 incremental cost

18

Environmental Impact of Transmission Constraint for Yuma

Pollutant Avg. Reduction(ton/year)

Reduction of YumaArea Emissions(% of total emission fromall source)

VOC 1.0 Unavailable

NOx 20 Unavailable

CO 5 Unavailable

Pm10 1.0 0.001

19

Yuma RMR Observations

APS load is expected to exceed import capability for 714 hours in 2005, 676 hours in 2008, and 12 hours in 2012.

Estimated cost to run local generation outside of economic dispatch is approximately $1.0 million in 2005 and $0 in 2008 and 2012.

2nd North Gila transformer in 2005 and new 230kV line in 2012 effectively manage RMR conditions.

Removing the transmission constraint in 2005 would reduce PM10 emissions by 0.001%.

20

2005 Phoenix Area Network

Westwing500KV

230KV

Surprise

Lone Peak Cactus Ocotillo

230KV

345KV

Pinnacle Peak

500KV

Rudd Kyrene500KV

PaloVerde/

Hassayampa

GilaRiver

Reach

500KV

230KV

Deer Valley

Brandow (2)Papago Butte

Rogers (2)

69Kv (3)

69Kv

Gavilan Peak

(3)

Agua Fria

DeerValley

69Kv (2)

Raceway

(3)

(2)

230KV

Orme

Buckey e

TS4

Liberty

230KV

69Kv

Knox

500KV

(2)230KV

Browning

500KV

230KVSilverKing

Jojoba

(2)

(2)

Apache

BonneyBrookTap

AsarcoTap

Hay den

115KV

115KV

SpookHill

Coolidge

230KV

PhoenixArea Load

Phoenix AreaLoad (2005)

Critical Outage Critical Element

- SIL Jojoba-Kyrene Voltage collapse inSoutheast part of Valley

- MLSC Jojoba-Kyrene Orme-Rudd

Orme

CriticalElement

Critical Outage

21

2008 Phoenix Area Network

Westwing500KV

230KV

Surprise

Lone Peak Cactus Ocotillo

230KV

345KV

Pinnacle Peak

500KV

Rudd

Kyrene

500KV

PaloVerde/

Hassayampa

GilaRiver

Reach

500KV

230KV

Deer Valley

Brandow (2)Papago Butte

Rogers (2)

69Kv (3)

69Kv

Gavilan Peak

(3)

Agua Fria

DeerValley

69Kv (2)

Raceway

(4)

(2)

230KV

Buckey e

TS4

Liberty

230KV69Kv

Knox

500KV(2)

230KV

Browning

500KV

230KVSilverKing

Jojoba

(2)

(2)

Apache

BonneyBrookTap

AsarcoTap

Hay den

115KV

115KV

SpookHill

Coolidge

230KV

PhoenixArea Load

Phoenix AreaLoad (2008)

500KV 230KV

TS5

500KV(2)

230KV

South EastValley

Critical Outage Critical Element

- SIL Jojoba-Kyrene Voltage collapse inSoutheast part of Valley

- MLSC Glendale-Agua Fria West Phoenix-Lincoln St.

WestPhoenix

LincolnSt.

Agua Fria

Glendale

Critical Outage

Critical Outage

CriticalElement

22

2012 Phoenix Area Network

Westwing500KV

230KV

Surprise

Lone Peak Cactus Ocotillo

230KV

345KV

Pinnacle Peak

500KV

Rudd

Kyrene

500KV

PaloVerde/

Hassayampa

GilaRiver

Reach

500KV

230KV

Deer Valley

Brandow (2)Papago Butte

Rogers (2)

69Kv (3)

69Kv

Gavilan Peak

(3)

Agua Fria

DeerValley

69Kv (2)

Raceway

(4)

(2)

230KV

Buckey e

TS4

Liberty

230KV69Kv

Knox

500KV(2)

230KV

Browning

500KV

230KVSilverKing

Jojoba

(2)

(2)

Apache

BonneyBrookTap

AsarcoTap

Hay den

115KV

115KV

SpookHill

Coolidge

230KV

PhoenixArea Load

Phoenix AreaLoad (2012)

500KV 230KV

TS5

500KV(2)

230KV

South EastValley

TS6

69Kv

Av ery

Critical Outage Critical Element

- SIL Palo Verde-Rudd Westwing-Surprise

- MLSC Palo Verde-Rudd Westwing-Surprise

Critical Outage

CriticalElement

23

2005 System Import LimitValley Nomogram

SIL

2005 Load Serving Capability

8617

1010010100

11764

8000

8500

9000

9500

10000

10500

11000

11500

12000

0 500 1000 1500 2000 2500 3000 3500 4000

VALLEY GENERATION (MW)

VA

LL

EY

LO

AD

(M

W)

2005 LSC (VAR)

2005 LSC (THERMAL)

Safe Operating Area

24

2008 System Import LimitValley Nomogram

2008 Load Serving Capability

10494

1220012200

13952

10000

10500

11000

11500

12000

12500

13000

13500

14000

14500

0 500 1000 1500 2000 2500 3000 3500 4000

VALLEY GENERATION (MW)

VA

LL

EY

LO

AD

(M

W)

2008 LSC (VAR)

2008 LSC (THERMAL)

Safe Operating Area

25

2012 System Import LimitValley Nomogram

2012 Load Serving Capability

11103

14663

10000

10500

11000

11500

12000

12500

13000

13500

14000

14500

15000

0 500 1000 1500 2000 2500 3000 3500 4000

VALLEY GENERATION (MW)

VA

LL

EY

LO

AD

(M

W)

2012 LSC (THERMAL)

Safe Operating Area

26

2005 APS Phoenix Load Duration and RMR Condition

PHOENIX LOAD DURATION & RMR CONDITION (2005)

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

11,000

12,000

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000

HOURS

LO

AD

(M

W)

SIL = 8,617 MW

VALLEY LOAD

PEAK = 11,141 MW

2,524 MW

678 HOURS

550 GWH

Total Valley Energy = 47,833 GWH

27

2008 APS Phoenix Load Duration and RMR Condition

PHOENIX LOAD DURATION & RMR CONDITION (2008)

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

11,000

12,000

13,000

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000

HOURS

LO

AD

(M

W)

SIL = 10,511 MW

VALLEY LOAD

PEAK = 12,425 MW

1,914 MW

338 HOURS

222 GWH

Total Valley Energy = 54,310 GWH

28

2012 APS Phoenix Load Duration and RMR Condition

PHOENIX LOAD DURATION & RMR CONDITION (2012)

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

11,000

12,000

13,000

14,000

15,000

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000

HOURS

LO

AD

(M

W)

SIL = 11,103 MW

VALLEY LOAD

PEAK = 14,406 MW

3,303 MW

758 HOURS

805 GWH

Total Valley Energy = 63,037 GWH

29

RMR Economic Analysis

GE MAPS production-cost simulatorEntire WECC modeledHourly least cost dispatch with

transmission constraintsAnnual cost to serve area load determinedStudy repeated ignoring local import limitDifference is the RMR costEnvironmental impact determined for

each generator using emission rates

30

2005 Phoenix Area Energy

RMR Energy "outside of economic

dispatch", 6 GWh, 0.0%

Load Requiring no RMR, 47283

GWh, 98.9%

RMR Energy "within

economic dispatch", 544

GWh, 1.1%

Phoenix Area Total Load = 47,833 GWh

$0.0 incremental cost

31

2008 Phoenix Area Energy

Load Requiring no RMR, 54088

GWh, 100%

RMR Energy "within economic

dispatch", 222 GWh, 0%

RMR Energy "outside of economic

dispatch", 0 GWh, 0%

Phoenix Area Total Load = 54,310 GWh

$0.0 incremental cost

32

2012 Phoenix Area Energy

Load Requiring no RMR, 62233

GWh, 99%

RMR Energy "outside of economic

dispatch", 1 GWh, 0%

RMR Energy "within economic

dispatch", 804 GWh, 1%

Phoenix Area Total Load = 63,037 GWh

$84,000 incremental cost

33

Phoenix Area Reserves

2000

1800

1600

1400

1200

1000

800

600

400

200

0

2005 2008 2012

Reserves(MW) 850

1735

346

809865 865

99% Reliability Reserve Requirement

34

Environmental Impact of Transmission Constraint for Phoenix Area

Pollutant Avg. Reduction(ton/year)

Reduction ofPhoenix AreaEmissions(% of total emission fromall source)

VOC 0.0 0.000

NOx 4.0 0.007

CO 1.0 0.000

Pm10 0.0 0.000

35

Phoenix RMR Observations APS load is expected to exceed import capability for

678 hours in 2005, 338 hours in 2008, and 758 hours in 2012. RMR energy represents approximately 1% of the total energy.

Estimated cost to run local generation outside of economic dispatch is less than $100,000 in each year.

Such small annual RMR costs do not justify Construction costs to relieve RMR.

The projected reserves in 2012 are 346 MW compared to a 99% reliability reserve requirement of 865 MW.

Removing the transmission constraint would reduce emissions in the Phoenix Area by 0.007% or less.

36

Phoenix RMR Observations(Continued)

Benefits of local generation- Increase reliability

• Local voltage support• Contingency response• Operating flexibility

- Reduced losses- Lower transmission investment