Western Interconnection Regional Advisory Body

Transcription

1 Western Interconnection Regional Advisory Body January 24, 2008 Alberta Arizona British Columbia California Colorado Mexico Montana Idaho Nebraska Nevada New Mexico Oregon South Dakota Utah Washington Wyoming John Savage Chair Louise McCarren, Chief Executive Officer Western Electricity Coordinating Council 615 Arapeen Drive, Suite 210 Salt Lake City, UT Dear Louise: The Western Interconnection Regional Advisory Body (WIRAB) submits the attached advice as a 2008 study request to the Western Electricity Coordinating Council (WECC) and the Transmission Expansion Planning Policy Committee (TEPPC). WIRAB makes this request as part of its broader responsibility to provide informed advice about the reliability of the Western Interconnection under Section 215 of the Federal Power Act. WIRAB believes regional transmission planning must begin examining emerging long-term issues facing the Western Interconnection such as looming carbon regulation. To that end, we are requesting WECC and TEPPC model transmission needs associated with resource mixes that are consistent with the goal of achieving a 15% reduction in carbon emissions by 2020 relative to 2005 levels. This is the goal of the seven states and one province in the Western Interconnection that are members of the Western Climate Initiative. This is also consistent with the goal of leading carbon regulation legislation in the U.S. Congress. Such a study, including sensitivity analyses of more and less stringent emission levels, would help us understand transmission needs and operational challenges. WIRAB recognizes that this study request will require WECC to expand its analysis beyond the traditional production cost modeling. WIRAB is willing to assist TEPPC in this endeavor. We look forward to working with you. Sincerely, John Savage, Chairman Western Interconnection Regional Advisory Body Attachment: WIRAB Advice cc: Mark Maher Jay Loock Steve Walton Transmission Expansion Planning Policy Committee

2 January 31, 2008 Louise McCarren, Chief Executive Officer Western Electricity Coordinating Council 615 Arapeen Drive, Suite 210 Salt Lake City, UT Dear Louise, The Renewable Northwest Project, West Wind Wires, American Wind Energy Association, and Western Resource Advocates ( Renewable Energy Advocates ) appreciate the Western Electric Coordinating Council (WECC) and the Transmission Expansion Planning and Policy Committee (TEPPC) providing stakeholders the opportunity to submit a study request and participate in the 2008 transmission study process. Our interest is primarily in ensuring adequate transmission infrastructure to support a significant increase in renewable energy generation. The Renewable Energy Advocates write in support of the transmission study request made by the Western Interconnection Regional Advisory Body (WIRAB, dated January 24, 2008) to study transmission and resource implications of implementing a 15% carbon emissions reduction below 2005 levels by This target is the goal of the seven states and British Columbia signing the Western Climate Initiative (WCI). Collectively, the signatories of the WCI represent approximately 74% of the load in the Western Interconnection. We believe that this study scenario is critical for understanding what transmission investments and policies are necessary for meeting proposed state and federal carbon reduction legislation. This study request will also prepare WECC for meeting requirements of the North American Electric Reliability Corporation s 2009 Long Term Reliability Assessment scenarios similarly focused on carbon legislation. The Renewable Energy Advocates recognize that the assumptions and the model sophistication used to study this scenario will determine its usefulness to policy makers and transmission providers. It is likely that additional data points and analytical tools beyond the scope of strict production cost modeling will be necessary. Specifically, it is critical to have accurate assumptions about carbon cost adders and price sensitivities. We also believe that all scenarios, including this 15% carbon reduction, must include at a

3 minimum enough renewables to meet all state mandates within the Western Interconnection and should anticipate policy making bodies continuing to increase the minimum renewable energy portfolio requirements. We applaud TEPPC for taking on this analysis and agree with WIRAB s suggestion that a work group should be formed to gather the best available data and modeling tools. The Renewable Energy Advocates request and are committed to active participation in WIRAB s suggested work group, and all pertinent WECC committees (Studies Work Group, Technical Advisory Subcommittee, TEPPC, etc.) Sincerely, Cameron Yourkowski Transmission Policy Associate Renewable Northwest Project 917 SW Oak, Suite 303 Portland, OR (phone) Roger Hamilton Policy Consultant West Wind Wires 511 Brookside Drive Eugene, OR Hamilton.roger@comcast.net Robert E. Gramlich AWEA th St., NW, 12th floor Washington, DC (202) rgramlich@awea.org Tom Darin Staff Attorney, Energy Transmission Western Resource Advocates 2260 Baseline Rd., Suite 200 Boulder, CO ext. 244 tom@westernresources.org cc: Steve Walton, TEPPC

4 2008 Study Request of the Western Interconnection Regional Advisory Body to the Western Electricity Coordinating Council The Western Interconnection Regional Advisory Body (WIRAB) submits this 2008 study request 1 to the Western Electricity Coordinating Council (WECC) and its Transmission Expansion Planning Policy Committee (TEPPC). WIRAB requests 2 that WECC s 2008 study of transmission expansion address the following parameters. 1. Model a mix of generation and transmission to achieve a level of carbon emissions from generation in the Western Interconnection in 2018 consistent with the goal of achieving a 15% reduction in carbon emissions by 2020 relative to 2005 levels. WIRAB understands there are many alternative strategies, methods, and assumptions that could be used to model these carbon reduction goals. WIRAB will organize a work group of experts to recommend specific strategies and assumptions about generation and loads in modeling the WIRAB study request. 2. Perform sensitivity analysis of greater and lesser levels of CO2 emission reductions that would provide insights on the potential impact of a U.S. economywide or international greenhouse gas (GHG) cap and trade system In evaluating the carbon constraints specified above, model energy efficiency policies that implement the WGA Clean and Diversified Energy Initiative (CDEi) goal of 20% energy efficiency by The CDEi recommendations call for full implementation of current best practices All WIRAB members --13 States, 2 Provinces and Mexico -- voted in favor of the request. 2 This study request is made pursuant to the Federal Energy Regulatory Commission s Order 890 issued February 16, 2007, P , the Transmission Planning Protocol of Western Electricity Coordinating Council s Transmission Expansion Planning Policy Committee, Section 5.2.3, page 18, and the letter dated December 18, 2007 from the TEPPC Co-Chairs Scott Cauchois and Dave Areghini regarding TEPPC Planning Protocol and the 2008 Open Window for Economic Transmission Planning Study Requests. 3 A U.S. economy-wide or international carbon trading system could significantly change the economic level of carbon emissions from generation in the Western Interconnection. For example, some argue that under a carbon trading system it will be more economic for western utilities to buy carbon credits from Midwestern coal plants that would shut down, convert to gas, and sell their carbon allowances. Another possibility is that under a cap and trade system, other sectors of the economy, such as transportation, will find it cheaper to buy allowances from the electricity sector than to reduce their carbon emissions. In that case, the electricity sector could see an even greater reduction in carbon emissions than in the baseline scenario. A sensitivity analysis would improve the understanding of the impact of these different futures. 4 See the Energy Efficiency Task Force Report, Western Governors Association Clean and Diversified Energy Initiative, January A potential fourth element of this request is to study the impact of increased penetration of distributed generation resources. For example, the Arizona Renewable Energy Standard requires that applicable utilities must meet 30% of their RPS requirements through distributed generation and the Colorado RPS

5 Rationale for the Study Request Emerging government policies will probably require the Western electric power system to significantly reduce carbon emissions over the next decade. Seven states and one province in the Western Interconnection have joined the Western Climate Initiative, which collectively include approximately 74% percent of the load in the Western Interconnection, and set the goal of reducing greenhouse gas emissions 15% below 2005 levels in the year By August 2008, these states and province plan to design a cap and trade system to achieve this goal. The leading federal carbon cap and trade legislation authored by Senators Lieberman and Warner establishes a similar goal. To achieve this level of carbon emissions reductions, the generation fuel mix in the Western Interconnection would change significantly with attendant needed changes in the transmission system to deliver power from the new generation mix to customers. The North American Electricity Reliability Corporation (NERC) issued its 2007 Long Term Reliability Assessment (LTRA) and stated that it would develop two scenarios to support the 2008 LTRA: "A Generation Fuel Mix Re-Defined by Federal CO2 Legislation and An Industry Facing New Levels of Natural Gas Demand. Since the August 2007 release of the LTRA, NERC has apparently modified its objective for the 2008 LTRA. Under the revised objective, each region (e.g., WECC) will be required to outline in the 2008 LTRA the scenarios it will study for the 2009 LTRA. WECC will likely be required to deliver to NERC its proposed scenarios by late spring WIRAB recognizes that developing a sound methodology and analysis for the 2009 LTRA will require a substantial effort. WIRAB believes that studying the impact of reduced carbon emissions in the 2008 TEPPC study cycle will provide a solid foundation to make improvements to develop a more robust analysis for the 2009 LTRA. Development of 2008 Study Parameters WIRAB recognizes that its 2008 study request will require WECC to expand its analysis beyond the traditional production cost modeling. WECC is already taking some steps in this direction in its 2007 transmission expansion planning study by including carbon dioxide emissions in its database. To conduct the requested 2008 study, WECC will need to expand its study work to include significant analysis before running production cost models. WIRAB understands that analyses 6 conducted or being conducted by other groups could provide valuable input to the WECC 2008 study. WIRAB is offering to assist WECC in accessing such studies. requires applicable utilities to meet 4% of their RPS requirements from solar energy and half of that amount must come from distributed sources. 6 For example, DOE s Energy Information Administration has evaluated the impact of several Congressional cap and trade proposals. Although EIA presents results nationally, the analysis generates regional results. The Western Climate Initiative is planning to hire a consultant to evaluate the impacts from achieving the WCI greenhouse gas goals. Efforts such as the WCI consultant s work could help inform the development of a WECC low-carbon transmission expansion planning scenario. 2

6 WIRAB believes the requested study comports with the criteria WECC will use to prioritize study requests. 7 Below are the WECC criteria used for the prioritization of study requests (in italics) and how the WIRAB study request fits with the criteria. (a) What portion of the interconnected system will be considered by the study? The study requested by WIRAB will cover the entire Western Interconnection. (b) Does the request raise fundamental design issues of interest to multiple parties? The impact of potential carbon emission limits on the need for transmission in the Western Interconnection is of interest to state/provincial policy makers, state, federal and provincial regulators, generation developers, load serving entities, and transmission developers. (c) Does the request raise policy issues of national, regional or state interest; for example, access to renewable power, and location of both conventional and renewable resources? The study request raises major policy issues of interest at the national, regional and state level. (d) Can the objectives of the study be met by other studies by clustering or combination? To WIRAB s knowledge, there are no interconnection-wide studies of the impacts of carbon limits on transmission needs. Additionally, sub-regional or local studies will not have sufficient scope to identify interconnection-wide transmission needs in the event of limits on carbon emissions. (e) Will the study provide information of broad value to customers, regulators, transmission providers, etc.? The study will provide valuable information not found elsewhere to all types of government and private sector decision-makers. (f) Can similar requests for studies or scenarios be represented generically if the projects are generally electrically equivalent? WIRAB is not aware of similar requested studies or scenarios. 7 The WECC criteria are codified on page 21 of Transmission Planning Protocol of Western Electricity Coordinating Council s Transmission Expansion Planning Policy Committee 3

7 (g) Can requests be aggregated into energy or load aggregation zones with generic transmission expansion between? Possibly. The answer to this question should be determined as part of the detailed study scoping process. (f) Does the study request require the use of production cost simulation or can it be better addressed through technical studies such as power flow and stability analysis? The study request will likely require analytic capability not found within production cost simulation or power flow and stability analysis. WIRAB expects that the scope of the inputs to a production cost simulation will determine what additional analytic tools are needed. 4