Integrated Resource Planning at Tacoma Power Ahlmahz Negash EE 500E Energy & Environment Seminar University of Washington 11-8-2018
About Tacoma Public Utilities Public, cost-of-service organization; we don t pay investors Part of the community since 1893 Led by a 5-member Public Utility Board appointed by the mayor and confirmed by the Tacoma City Council Services include: Power, including Click! Water Rail
Tacoma Power s Resources Hydroelectric Power 97% Carbon-Free Surplus hydro power Currently sold wholesale Could be used (retail) for electrification of transportation. Conservation 10% Bonnaville Contracts 51% Mossyrock Dam Tacoma Owned 36% Resources Other Contracts 3% Wholesale Sales 40% Cushman Powerhouse Tacoma's Load 60% Sales to Customers
About the IRP What is an Integrated Resource Plan? A planning tool that Determines whether, when, and which new resources are needed to meet forecasted demand for electricity over the next 20 years. Plans how the utility will comply with conservation and renewable energy requirements of I-937. Required by law (RCW 19.280.030) to consider both supply-side resources (like utility-scale generation) and demand-side resources (like conservation) on an equal basis. Open to the public
2015 IRP public Process and Schedule Stakeholder Process Public Meeting #1 April 19 th 1. Tacoma Public Schools 2. Tacoma Community College 3. Bates College 4. WestRock 5. Pierce Conservation District 6. Bonneville Power Administration 7. WA State Department of Commerce Public Meeting #2 Sept 27th 1. Bates College 2. University of Puget Sound 3. Davita 4. Praxair 5. WestRock 6. Multicare 7. City of Tacoma Office of Sustainability 8. Northwest Energy Coalition 9. Northwest Power and Conservation Council 10. WA State Department of Commerce Q1 Q2 Q3 Q4 Invitation to Participate Present to Senior Management Oct 10 Present to PUB Oct 25 Request PUB Adopt IRP Nov 15 5
Planning Process Survey Landscape Identify Need Define Resources Analyze Uncertainty Develop Action Plan Resources Loads Policy Technology Load resource balance Resource adequacy Generation Conservation T & D Sensitivity Scenario Stochastic Portfolio strategy Monitor conditions Repeat every 2-4 years!
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 amw 2015 Annual Load-Resource Balance (2001WY) Survey Landscape Identify Need Define Resources Analyze Uncertainty 800 700 600 500 400 300 200 100 0 Develop Action Plan BPA - Block BPA - Slice Other Resources 7 TPU Resources Load without Cons Load with Cons
2-Year Action Plan Survey Landscape Identify Need Define Resources Analyze Uncertainty Develop Action Plan 1. Acquire 9.4aMW conservation 2. Continue evaluating BPA products 3. Learn from small-scale pilots 4. Monitor emerging technologies impacting retail load 5. Explore methods to incorporate climate change impacts 8
9 What has changed since 2015?
amw Changes since 2015 Lower and declining load forecast Declining usage per customer Energy efficiency Codes and standards Adjusted large load assumptions 700 600 500 400 300 200 100 0 Firm Energy Load Forecast w/ Conservation 2018 2021 2024 2027 2030 2033 2036 2015 Forecast 2017 Forecast 10
$/MMBTU Changes since 2015 Lower and declining load forecast Lower natural gas price forecast $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $0.00 Natural Gas Price Forecasts Fall 2016 Fall 2015 Fall 2014 11 All price forecasts in 2016 dollars
$/MWh Changes since 2015 Lower and declining load forecast Lower natural gas price forecast Lower electricity wholesale market price forecast $60 $45 $30 Mid-C Wholesale Price Forecasts $15 $- 2018 2021 2024 2027 2030 2033 2015 Forecast 2016 Forecast 2017 Forecast 12 All price forecasts in 2016 dollars
What What do do these these changes mean? mean? Our forecasted surplus energy is increasing. The market value of surplus sales is declining. 13
IRP Questions Resource Adequacy Can we meet annual energy needs under critical water conditions? Can we meet monthly/seasonal energy needs 95% of the time? Do we have capacity to meet a 72 hour peak? I-937 Compliance How should we meet our renewable portfolio standard obligation? 14
Average Megawatts Annual Adequacy Metric 700 600 500 400 300 Annual Load Resource Balance (Critical Water) Simulated energy supply under critical water conditions exceeds forecasted customer loads over a year. 200 100 0 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 BPA - Block BPA - Slice Ensures we have enough energy to meet retail demand. Other Resources TPU Resources Load w/conservation 15
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 average megawatts Monthly Adequacy Metric -100 Monthly Load Resource Balance: 5th Percentile 200 150 100 50 0-50 Simulated energy supply exceeds forecasted customer loads in every month, 19 times out of 20. Ensures we have the capacity to meet customer need as it varies by season and month. -150 Worst case scenario 16
Megawatts Peak Adequacy Metric 1600 1400 1200 1000 800 600 400 200 0 72 Hour Peak Winter Capacity Analysis (2020) Simulations of Retail Load and Hydro Load Reserves Capacity Simulated energy supply exceeds the highest 72-hour average peak customer load in 19 out of 20 water year simulations. Ensures we have the capacity to meet the most pressing peak demand. Represents stressful conditions 17
MWh Renewable Portfolio Standard (RPS) Obligation 800,000 600,000 400,000 200,000 0 I-937 Renewable Requirement and Compliance Strategy I-937 Renewable Energy Compliance Options: 1. Renewable generation resource 2. Renewable energy credits (RECs) Hydro Improvement Acquired RECs Banked RECs Used BPA Wind RECs Excess RECs Banked Projected Renewable Need 18
Tacoma is not projected to need a new generation resource. Conservation continues to be Tacoma s preferred resource. 19
2017 Action Plan: 1. Acquire target of 6.4 amw of conservation as directed by the Conservation Potential Assessment 2. Investigate the value of flexible capacity 3. Explore distributed energy resource (DER) planning 4. Improve resource planning analytical methodologies 20
Looking Ahead to the 2019 IRP NAVIGATING CHANGE AND UNCERTAINTY
Sources of Change and Uncertainty Loads Resources Fuel Costs Market Prices Energy Policies
Declining load growth is the new normal 100 50 0-50 -100 1-Yr Change in Regional BA Loads 4% 3% 2% 1% 0% -1% -2% -3% -4% -5% 20% 15% 10% 5% 0% US Load Growth (Annual & Decadal Average) -5% 1950 1960 1970 1980 1990 2000 2010 2020 amw Change % Change Annual Growth Decadal Average Source: Ansergy, 2017 Source: EIA, 2016 23 Loads Resources Fuel Costs Market Prices Energy Policies
(ft^3/sec) Thousands Hydroelectric output depends on water conditions 16 14 12 10 8 6 4 2 0 Average Monthly Inflows Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 24 Loads Resources Fuel Costs Market Prices Energy Policies
Contracts represent 55% of our resources and expire by 2028. 2022 - CBH (1.5 amw) 2024 - CBH (23 amw) 2028 - BPA (400 amw) 2023 - CBH (0.55 amw) 2026 - CBH (5.5 amw) We assume CBH Contracts expire and BPA is renewed. This keeps us surplus (on ave.) through the planning horizon. 25 Loads Resources Fuel Costs Market Prices Energy Policies
Dec-16 Sep-17 Jun-18 Mar-19 Dec-19 Sep-20 Jun-21 Mar-22 Dec-22 Sep-23 Jun-24 Mar-25 Dec-25 Sep-26 Jun-27 Mar-28 Dec-28 Sep-29 Jun-30 Mar-31 Dec-31 Sep-32 Jun-33 Mar-34 Dec-34 $/mmbtu - real $/MMBTU Natural gas impacts prices and adds uncertainty We assume a lower gas price forecast $12 Henry Hub NG Forecast (2016$) But economics or policy may change that $12 Henry Hub Spot Prices (2016$) $10 $10 Reference case $8 $6 $4 $2 $0 $8 $6 $4 $2 $0 High economic growth Low economic growth High oil price Low oil price High oil and gas resource and technology Low oil and gas resource and technology Spring 2016 Fall 2016 Spring 2017 26 Loads Resources Fuel Costs Market Prices Energy Policies
Wholesale power prices impact customers $60 Average Market Prices & BPA Contract Rates $45 $30 BPA Priority Firm Mid-C Actual Mid-C Projected $15 $- 2006 2008 2010 2012 2014 2016 2018 27 Loads Resources Fuel Costs Market Prices Energy Policies
Not all carbon policies are equal Washington GHG Emissions (MMT CO2e) 100 Total Other Electricity Residential/Commercial/Industrial Use Transportation Electrification Carbon Tax Innovation Electrification Carbon Tax Renewable Pipeline Increased RPS Carbon Tax 80 60 40 20 0 2013 2020 2035 2050 Source: WA Department of Ecology Actual Target Loads Resources Fuel Costs Market Prices Energy Policies
Future of Resource Planning DOE Recommendations: Ensure consistent methods to evaluate a wide range of DERs (in addition to conservation) and utility scale generation Consider new investment drivers in addition to traditional resource adequacy, such as risk management, value-added services or cost reduction. Develop integrated models to systematically consider rate design, customer behavior, and distribution networks into the resource planning process. 29
30 Thank You