Generation and Import Deliverability Baseline Study CAISO Stakeholder Meeting May 9, 2005

1. Generation and Import Deliverability Baseline StudyCAISO Stakeholder MeetingMay 9, 2005

2. Background and meeting objectives Review of study methodology, assumptions and identified issues Lunch (on your own) Review of study results Review of conclusions/recommendations Discussion of next steps Status of locational capacity analysis Today’s Agenda

3. Describe preliminary results and implications Describe ISO recommendations for deliverability in this Baseline Study Receive stakeholder input on this Preliminary Baseline Study Meeting Objectives

4. Deliverability, for resource adequacy purposes, ensures the output of a generating unit can reach load under peak conditions Deliverability is an essential element of the CPUC’s resource adequacy requirement Deliverability does NOT ensure dispatch: Deliverability does not mean 100% congestion elimination for all load levels The Concept of Deliverability

5. Resources considered in deliverability include: Existing generators (for aggregate of load) Imports Generators within transmission-constrained areas New generationinterconnections The Concept of Deliverability(continued)

6. The ISO’s proposed strawperson deliverability proposal consists of three assessments: Deliverability of Generation to the aggregate of load Deliverability of Imports Deliverability to Load within transmission constrained areas (locational capacity requirement) The Baseline study and this presentation focus on the deliverability of generation and imports only Deliverability Strawperson

7. Spring 2004 - ISO proposes a straw person deliverability methodology to CPUC Late 2004 - CPUC approves methodology in principle January 2005 - ISO begins baseline study January and February 2005 – PTOs provide data to ISO May 2005 – ISO publishes preliminary results of baseline study Overview- How We Got to this Point -

8. This preliminary study confirms that: historical summer peak imports levels are deliverable. most of the existing generating units in the ISO Control Area are deliverable Some transmission upgrades are needed over the next few years to make allexisting generating units fully deliverable to load using this methodology The ISO intends to recommend that all existing generators be considered deliverable, and the ISO will work with the PTOs to identify and implement the necessary transmission upgrades Overview(continued)- The Bottom Line -

9. May, 2005 - ISO receives stakeholder input and conducts further stakeholder meetings/conference calls if necessary June, 2005 - ISO completes deliverability analysis, including any adjustments to the methodology determined to be necessary during stakeholder review Early July, 2005 - ISO publishes final results of Baseline Deliverability Study Overview(continued)Further Steps for Baseline Study

10. Preliminary Baseline Study for Generation and Imports Study Assumptions and Identified Issues

11. Part I: Background and Study Methodology Part II: Study Assumptions Part III: Identified Study Issues

12. Capacity resources within a given sub-area must be able to be exported to other parts of the Control Area experiencing a resource shortage due to forced generation outages Deliverability of Generation:Assumptions

17. Forced outages are random and occur throughout the system

18. The location of units forced out and causing reserve margin shortage in Scenarios 1 and 2 do not significantly change the loadings on constrained transmission lines associated with the generation pocket The units forced out in Scenarios 1 and 2 are outside of the generation pocket study area, so their status and dispatch levels, in aggregate, do not significantly impact the study area The hundreds of thousands of generation forced outage scenarios can be sufficiently represented by evenly distributing the forced outages across the system Generation Pocket Analysis

19. A deliverability assessment should be applied to existing and planned generation located in the control area This baseline study covers planned generation through 2006 Developed from PJM Methodology Peak load conditions Aggregate of generation can be transferred to aggregate of the ISO Control Area Load Deliverability of Generation: Methodology

20. First we need to apply deliverability test to existing system: Validate deliverability test methodology and parameters Identify all overloads Mitigate overloads Once all overloads in baseline analysis are mitigated, then new overloads that are identified (using the same test) can be consistently and equitably assigned to proposed new generation projects Generation Deliverability Baseline Analysis

21. Building new or upgrading existing transmission facilities Implementing operating solutions (i.e. short term ratings, RAS/SPS) Limit capacity to be counted from the portion of existing generation that is deliverable Overloads identified during the baseline study could be mitigated by:

22. Build power flow base case model Create base case generation dispatch Create study areas around each line and transformer and analyze them individually Identify overloaded lines and transformers constraining generation capacity and the units that are constrained Overview of Test Procedure

23. Dispatching generation in the base case essentially means that we evenly distribute the available generation Since all available capacity is needed, it is all dispatched without consideration of cost Base case values will also represent approximate dispatch of generation outside of the study areas during the analysis. Generation inside of the study areas will be maximized during the study Elaborating on the Base Case Dispatch

24. Each transmission line and transformer is analyzed individually A study area is established for each line and transformer that includes all generation with a 5% distribution factor or greater on the particular line or transformer Capacity generation dispatch inside the study area is maximized to determine the maximum potential loading on the line or transformer. Generation outside the study area is proportionally decreased to balance the load and resources This process is intended to test the ability of resources inside of the study area to be dispatched at full output when various resources outside of the study area are unavailable Study Areas Are Created Around Each Line and Transformer

25. Example Generation Deliverability Test Study Area for Gregg-Borden 230 kV line Los Banos Bellota 230 kV 230 kV -16% Dos Amigos 230 kV Melones 230 kV Moss Landing 230 kV Warnerville 230 kV 1.6% Wilson Coburn Line outage 230 kV 230 kV Panoche 8.5% 230 kV 23% Storey 230 kV Helms 230 kV 8.8% 230/115 kV Bank #1 10% Henrietta 230 kV Mc Call Borden 230 kV 230 kV Line overload Gregg Gates Arco 230 kV 230 kV 230 kV Morro Bay PP Gates 230 kV 500 kV Midway 230 kV DFAX% 2%

26. Baseline analysis identifies all cases where thermal overloads occur with the existing set of facilities The same test applied in this baseline analysis will be applied with new generation capacity so all new overloads can be consistently and equitably assigned to proposed new generation projects Generation Deliverability Summary

27. California is dependent on imports to satisfy its resource requirements Imported resources in the resource plans of all LSEs need to be assessed by the ISO to ensure that they can be simultaneously accommodated on the transmission grid When relying on imports to meet reserve margin requirements, LSEs with the assistance of the ISO should demonstrate that their imports are deliverable from the tie point to aggregate load on the ISO System using a deliverability test procedure similar to the generation deliverability test Deliverability of Imports --Assumptions

28. Assessing the deliverability of imports and generation simultaneously will ensure that any interaction between the deliverability of imports and generation is considered This can be done by modeling import capacity to be used for resource adequacy planning purposes as the starting point for import assumptions in the internal generation deliverability analysis The initial import capacity would be based on historical data during summer peak load and high import conditions. Deliverability conflicts between imports and internal generation were expected to be minimal using historical import data Deliverability of Imports and Internal Generation – Assumptions

29. The initial baseline analysis would determine the deliverability of all existing internal generation units and the total amount of imports on a path by path basis This preliminary analysis did not identify any deliverability impacts associated with the historical import levels Total deliverable import capacity would be allocated to LSEs using a predetermined allocation methodology (to be determined by the CPUC) Deliverability of Imports and Internal Generation – Summary

30. A network model of the ISO Controlled Grid modeling the year 2006 was used for this study Generation Capacity data collected from generation owners was used for this study Capacity values as defined in the Resource Adequacy Workshop Report: Net Dependable Capacity Qualified Capacity Capacity values under Summer Peak temperature conditions. All units commercially operable by summer 2006 were modeled Network model and Generation Capacity Study –Assumptions

31. Imports modeled in the base case are based on OASIS import schedule data from 2003 and 2004: Summer peak load, maximum import conditions by branch group The 2006, 1 in 5 peak load forecast for the ISO Control Area was modeled in the base case All NERC Category B and C contingencies were analyzed while applying the study methodology: excluding C.3 overlapping contingencies Import, Load and Contingency Study -- Assumptions

32. For some units, conflicting capacity data was provided by the generation owner and the generation power purchasing utility, due to their different interpretations of the Qualifying Capacity definitions in the CPUC’s Resource Adequacy Workshop Report The highest capacity value was tested in the base case. Capacity data provided for some units was significantly higher than the capacity data in WECC basecases The highest capacity value was tested in the base case Identified Generation Data Issues

33. For intermittent generation, Qualifying Capacity data represents an average production over summer peak load hours In some cases this average capacity value could be deliverable but production amounts above that average are not deliverable In this situation the average capacity amount is not a valid qualified capacity value since it could represent levels of production that would not be deliverable based on the deliverability methodology For this study, the capacity data already in the original WECC base case was assumed to be the maximum production during summer peak load hours to ensure that all production values represented by the average capacity would be deliverable Identified Generation Data Issues

34. Some ratings have recently been entered into the ISO Transmission Register that are lower than the previously provided facility rating These new ratings have not been evaluated using traditional transmission assessment methodologies Therefore identified deliverability issues associated with facilities that have this type of rating issue should not be attributed to the proposed deliverability methodology Identified Line Rating Issues

35. Preliminary Baseline Study for Generation and Imports Study Methodology and Results

36. Deliverability Problems • A deliverability problem is identified by conditions when resources cannot be delivered to load because their outputs cause reliability problems in the transmission system • Causes of deliverability problems: • Dispatch of resources: Under normal conditions, deliverability problems may occur from the dispatch of resources • Dispatch of resources and contingencies: Combined impact from these two factors cause deliverability problems under emergency conditions • This study looks for potential deliverability problems from a combination of dispatch and contingency scenarios

37. Study Methodology • The study technique is divided into two main parts: 1) Screening process and 2) Verification process • Screening process searches for potential deliverability problems using linear analysis technique. The main purpose of this process is to minimize the number of scenarios that will be analyzed by verification process • Then the scenarios that pass the screening process will be analyzed by Verification process to confirm deliverability problems using AC power flow

38. Overview of Study Methodology

39. Study Methodology –Screening Process • Identify potential deliverability problems using linear analysis • Since it does not require power flow solution for all scenarios This technique speeds up the study process significantly • Scenarios that are identified by the screening process will be analyzed again with the verification process

40. Study Methodology – Verification Process • Simulates the scenarios identified by the screening process by utilizing a simplified governor power flow • If a deliverability problem is confirmed, calculate generation capacity reduction that will lower power flow on the overloaded facility below its rating

41. Output Report - Example Monitored Facility Details of the outage Resources with DFAX 5% or higher

42. Output Report - Example

43. Output Report - Example 39% -3% 26% 24% 21% DFAX

44. Output Report The Output Report assigns deliverability status of each facility into one of the following categories: • Fully deliverable: 100% capacity of the resources using this transmission facility could be counted as deliverable for resource adequacy purposes • Partially deliverable: Without mitigation, a fraction of capacity should be discounted due to deliverability problems • Non-deliverable: This is an extreme case where the resources substantially contribute to deliverability problems. Without mitigation, no part of the resources utilizing this facility can be counted for resource adequacy purposes under this test

45. Study Results –Summary of preliminary deliverability problems PG&E Service Territory *Curtailing the generators alone is not sufficient to mitigate the overloading conditions

46. Study Results PG&E (cont) *Curtailing the generators alone is not sufficient to mitigate the overloading conditions

47. Study Results SCE Service Territory

48. Study Results SCE (Cont)

49. Study Results SCE (Cont)

50. Study Results SDG&E Service Territory