2009 Integrated Resource Plan. PNUCC Board of Directors Meeting. January 7, Copyright 2010 Portland General Electric. All Rights Reserved.

Transcription

1 2009 Integrated Resource Plan PNUCC Board of Directors Meeting January 7, Copyright 2010 Portland General Electric. All Rights Reserved.

2 IRP Public Process IRP / Boardman Public Process: Unprecedented Public Dialogue and Review Conducted over 2 ½ year period Involved Numerous Stakeholders and Interested Parties from a Wide Range of Perspectives and Interests Utility Customer Advocacy Groups Industry & Business Alliances Social Justice and Low Income Advocacy Organizations Environmental Interest Groups State and Regional Energy Policy Representatives OPUC Staff DEQ Staff Labor Organizations Interested Individuals State, County and Municipal Government Leaders Coordination of OPUC and DEQ Process / Objectives Significant Press coverage and general public interest OPUC Process included 14 Public Meetings and Workshops DEQ Process included 9 Public Meetings and Workshops

3 IRP Stakeholder Workshops & Public Meetings Presentation Topics from IRP Public Meetings: Load forecasts Future resource needs Supply Alternatives Capital Costs of Supply Alternatives Wind Integration Energy Efficiency and Demand Response Fuels Price Forecasts CO 2 / Environmental Impacts Boardman BART / Regional Haze Rate / Economic Impacts Impacts to Communities & Employees Transmission / Cascade Crossing Portfolio Analysis Methodology Candidate Portfolios and Futures Modeling Results Proposed Action Plan PGE Service Territory 3

4 PGE Resource Needs Energy Load-Resource Balance Annual Average Availability MWa _ 4,000 3,500 3,000 2,500 2,000 1,500 1,000 Annual Average Retail Load Long-term Contracts 873 MWa Wind - Biglow 1-3, Klondike II, Vansycle Hydro - PGE owned, MID-C contracts 1,393 MWa 1.9% Load Load Growth Growth Load Load before before EE EE actions actions Load Load excludes 5-yr 5-yr Opt-Outs under under SB1149 Expiration of of MWa MWa in in contracts Boardman operation through through Natural Gas - Port Westward, Coyote, Beaver (as an intermediate resource) 500 Coal - Colstrip Coal - Boardman

5 PGE Resource Needs Winter Capacity Load-Resource Balance ,000 MW Capacity Available 6,000 5,000 4,000 3,000 2,000 Long-Term Contracts Peak Hour Load 1,724 MW Wind - Biglow 1-3, Klondike II, Vansycle Hydro - PGE owned and Mid-C contracts 2,630MW 1.7% 1.7% increase in in peak peak hour hour load load Includes operating & planning reserves Load Load before before EE EE actions actions 1,000 Natural Gas - Port Westward, Coyote, Beaver (as an intermediate resource) Coal - Colstrip Coal - Boardman

6 PGE Resource Needs Summer Capacity Load-Resource Balance ,000 MW Capacity Available 6,000 5,000 4,000 3,000 Long-Term Contracts Peak Hour Load 1,468 MW Wind - Biglow 1-3, Klondike II, Vansycle 2,442 MW 2.2% 2.2% increase in in peak peak hour hour load load Includes operating & planning reserves Load Load before before EE EE actions actions 2,000 Hydro - PGE owned and Mid-C contracts 1,000 Natural Gas - Port Westward, Coyote, Beaver (as an intermediate resource) Coal - Colstrip Coal - Boardman

7 PGE RPS Resource Need MW/MWa Total Intermittent Nameplate Capacity (MW) Renewables Required (MWa) Renewables Existing or Under Development (MWa) PGE RPS Load* (MWa) We We will will need need MWa MWa of of new new renewables by by to to meet meet OR OR RPS. RPS. Incremental RPS RPS need, need, combined with with current current generation translates to to a total total of of almost almost 2,100 2,100 MW MW of of nameplate capacity of of intermittent resources (at (at 33% 33% capacity factor). factor) *RPS load is PGE load forecast less EE and projected 5-year opt-out load

8 IRP Modeling Approach 16 Candidate Portfolios Considered all commercially viable generation technologies (e.g. gas, wind, coal, solar, biomass, nuclear, geothermal, wave) Incremental resource additions included pure plays and more diverse mixes Tested Portfolios Against Varied Future Environments Various CO 2 costs and start dates High and low cases (fuel prices, load growth, wholesale electricity prices) Others (high capital costs, reduced incentives on renewable resources, etc.) 8 Various Cost and Risk Metrics Evaluated Cost = Net Present Value of Revenue Requirements (NPVRR) Risk Analysis: Scenario Analysis Stochastic Analysis Reliability Technology / Fuel Concentration

9 Portfolio Cost vs. Risk $37,000 $36,500 Bridge to IGCC in WY ($32,735, $38,635) Market Natural Gas Wind Diversified Green $36,000 Diversified Thermal w/ Wind Bridge to IGCC in WY RISK Average of 4 worst futures NPVRR, $ million $35,500 $35,000 $34,500 Bridge to Nuclear Diversified Green w/ On-peak Energy Target Diversified Thermal w/ Green Oregon CO2 Goal Boardman through 2011 Boardman through 2020 $34,000 Diverse Green w/ wind in WY $33,500 Diversified Thermal w/ Green w/o lease Boardman through 2014 Boardman through $33,000 $27,000 $27,500 $28,000 $28,500 $29,000 $29,500 $30,000 $30,500 $31,000 Base Case NPVRR, , $ million COST

10 Wind Portfolio Scoring Grid Weighted Scores & Ranked Results Green w/ On-peak Energy Target Boardman through 2020 Diversified Thermal w/ Green w/o lease Diversified Green Diversified Thermal with Green Market Boardman through 2014 Diversified Thermal with Wind Reliability & Diversity (20%) Risk Metrics (30%) Expected Cost (50%) Bridge to IGCC in WY Oregon CO2 Goal Diverse Green with wind in WY Natural Gas Boardman through 2017 Bridge to Nuclear Boardman through 2011

11 Acknowledged Action Plan 11 Key Elements of PGE Action Plan: Acquire 122 MWa of Oregon RPS compliant renewables 214 MWa of EE by MW high-efficiency combined cycle gas plant Up to 200 MW of flexible gas capacity resources Acquire additional natural gas pipeline and storage capacity Cascade Crossing Transmission Line Other Actions: Contract renewals, DSG expansion, DR acquisitions Boardman 2020 plan Install Upgrades to meet requirements of Dec 2010 EQC rule Cease coal-fired operations by end of 2020

12 Cascade Crossing Project Overview 12 PGE proposes to construct approximately 210 miles of new 500 kv electric transmission capacity to provide increased transmission transfer capability Path : Boardman, Oregon to Salem, Oregon Target capacity: Double Circuit Proposal 2200 MW Single Circuit Option 1500 MW Anticipated generation interconnection: Coyote Springs Boardman (Boardman replacement post-2020) New thermal generation Renewables Third party interconnection requests Right of Way (ROW) parallels PGE s existing Boardman-Slatt 500 kv line and Round Butte-Bethel 230 kv line, and existing BPA lines Commercial operation target

13 Cascade Crossing Proposed Paths 13

14 Cascade Crossing Benefits Cascade Crossing will enable reliable delivery of existing and future power supply resources to our customers Allows direct connection of existing PGE generation Provides transmission capacity for accessing new generation Diversifies transmission provider rate and operations exposure Proposed path crosses a renewable resource rich area on the east side of the Cascades Improves overall grid reliability Reduces flows on parallel paths to below emergency rating for all contingencies studied Provides additional circuit to deliver east side resources to load Proposed path minimizes impacts to homes, farms, businesses, and the environment by utilizing existing transmission corridors for the majority of its route 14

15 Boardman Generating Station 15 Plant Capacity: 585 MW Location: Approximately 13 miles southwest of Boardman in Morrow County, Oregon Owners: Portland General Electric (65%) Operator Idaho Power Company (10%) Power Resources Cooperative (10%) Bank of America (15%) Fuel: Low sulfur sub-bituminous coal Commercial operation: August 1980 (Site certificate March 1975) Approximately 110 full-time employees, 30 contractors, 225 seasonal maintenance positions Consistently performs more cleanly than operating permit requires Approximately 15% of PGE s power comes from Boardman at prices one-third to one-half market prices Supply Portfolio: Fuel diversity, low marginal cost, baseload and dispatchable

16 Boardman BART: Regulatory History Jan. 2006: Nov. 2007: Nov. 2008: Dec. 2008: June 2009: Sept. 2009: Nov. 2009: Sept Jan. 2010: Jan. 2010: April 2010: June 2010: Aug. 2010: Aug. 2010: Oct. 2010: Nov. 2010: Dec. 2010: PGE volunteers Boardman to submit data for DEQ regional haze study PGE proposes BART Best Available Control Technology for Boardman DEQ issues proposed regional haze rule requiring BART controls PGE recommends decision point plan DEQ adopts regional haze rule / Rejects decision point plan Stakeholders ask PGE to consider 2020 closure in Integrated Resource Plan PGE submits IRP to OPUC, incorporates required BART controls with 2040 operating plan PGE conducts additional analysis of potential Boardman operating scenarios PGE announces intent to cease Boardman operations 20 years early PGE submits BART II proposal to DEQ, files IRP Addendum at OPUC with 2020 plan DEQ denied BART II released preliminary proposal with 3 new options PGE submits BART III proposal to DEQ PGE submits analysis of DEQ proposals to OPUC, including BART III PGE submits alternative BART to DEQ OPUC acknowledges PGE s IRP with Action Plan based on BART III 2020 Plan EQC approves revised BART with 2020 Operating Plan 16

17 Boardman: EQC Approved Regional Haze / BART Rule EQC Adopts Revised Regional Haze / BART Rule for Boardman December 2010 NOx (Low NOx Burners & Over Fire Air) 0.23 lb/mmbtu by July 1, 2011 SO 2 Sulfur restriction #1 (Post combustion controls Coal) 0.40 lb/mmbtu in 2014 SO 2 Sulfur restriction #2 (Post combustion controls Coal) 0.30 lb/mmbtu in 2018 Particulate Matter (PM) No change in current PM emissions Cease operation of the Boardman Plant boiler by December 31, 2020 Under a separate DEQ rule PGE will be reducing mercury (Hg) at Boardman by 90% by

18 NPVRR (2009$) Reference Case Cost & Deterministic Risk Boardman Portfolios $ Millions $28,700 $28,600 $28,500 $28,400 $28,300 $28,593 $28,396 $28,674 $35,200 $35,100 $35,126 Both Both and and closure closure cases cases perform well well under under deterministic risk risk measures case case is is riskier riskier according to to both both measures. $6,700 $6,650 $6,600 $28, Boardman portfolio provides lower lower cost cost for for customers by by $197 $197 MM MM NPV NPV as as compared to to Boardman option. option. * NPVRR: Millions $35,000 $34,900 $34,800 $34,700 $6,533 $6,374 $34,770 $34,910 $6,236 $6,550 $6,500 $6,450 $6,400 $6,350 $6,300 $6,250 Delta NPVRR: Millions $34, * $6, NPVRR = Net present value of revenue requirement * 2040 is Diversified Thermal with Green Portfolio Average of Worst 4 Futures Avg. of Worst 4 Futures Less Ref. Case

19 Boardman 2020: Most Sustainable Option for Customers Best outcome for customers and state Saves customers about $600 million over the next 11 years, compared to 2014 shutdown Gives PGE time to build or buy cost-effective, reliable replacement resources Allows time for workers at the plant to transition to other jobs Meets or exceeds environmental goals Cuts mercury by 90 percent Cuts nitrogen oxides by 50 percent Haze-causing emissions would be less than 2040 option Lower sulfur coal would reduce allowed sulfur dioxide emissions 50 percent by 2014 Ends Boardman carbon emissions from coal at least 20 years earlier than planned (net 60% carbon reduction if replaced by gas) Sets an important national precedent Eliminates use of coal at a relatively young baseload plant, 20 years ahead of schedule 19

20 Next Steps Action Plan Implementation 2011 Issue New Resource RFPs Flexible Capacity Baseload Gas RPS Renewables Include Benchmark, Utility Owned options to consider alongside Market Alternatives Engage OPUC Staff and Independent Evaluator to provide third-party review of RFP process and resource evaluation Continue development and evaluation of Cascade Crossing Transmission 20 Begin Implementation of Boardman 2020 Plan Install Low NOx Burners and Initiate DSI testing

21 Upcoming IRP Considerations Key Issues: Loads Effects of recent severe recession on future demand expectations Natural Gas Prices will robust supply and relatively low prices continue? CO 2 Costs Evolving expectations for Climate Legislation Increasing penetration of variable energy resources costs & system impacts Begin examining Boardman replacement options 21 PGE / Regional Transmission Needs

22 PGE s 2009 IRP Action Plan Creates the highest value for customers by balancing expected cost and associated risks and uncertainties Preserves power supply diversity while transitioning to a lower environmental footprint Opens up access to new resources and regions to improve and maintain system reliability Captures opportunities to reduce energy needs through energy efficiency and demand response Strikes a fair and reasonable balance between regulatory requirements Invests in renewable resources and emission reductions to achieve statutory and regulatory requirements Minimizes the impact on residents of the state by leveraging existing assets and rights Recognizes the impacts on employees and communities Sets national precedents for environmental stewardship Positions Oregon for a more sustainable energy future 22