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Status Report: Resource Adequacy (RA) and Long Term Procurement Planning (LTPP)

Status Report: Resource Adequacy (RA) and Long Term Procurement Planning (LTPP). CPUC Energy Division Molly Tirpak Sterkel Email: mts @ cpuc.ca.gov; Tel: 415-703-1873 Power Association of Northern California April 11, 2006. Key Milestones in RA and LTPP. 2004

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Status Report: Resource Adequacy (RA) and Long Term Procurement Planning (LTPP)

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  1. Status Report:Resource Adequacy (RA) and Long Term Procurement Planning (LTPP) CPUC Energy Division Molly Tirpak Sterkel Email: mts @ cpuc.ca.gov; Tel: 415-703-1873 Power Association of Northern California April 11, 2006

  2. Key Milestones in RA and LTPP • 2004 • Adopted procurement policy framework (Jan-2004) • Adopted RAR Framework (Oct-2004) • Approved first 10-year of Long-Term Plans (Dec-2004) • 2005 • Established rules for System RAR program (Oct-04) • 2006 • First round of System RAR compliance process underway • Two New Proceedings for RA and LTPP • RA: Local RAR program rules under development • LTPP: Next round of 10 year plans (2007-2016) will be reviewed

  3. System RAR Program In Place for 2006 • Applicable to all LSEs under CPUC jurisdiction, including 3 IOUs + 12 ESPs • LSEs must meet 15-17% planning reserve margin based on monthly peaks • Based on a “top down” approach to monthly peaks • Must acquire qualifying capacity that meets availability requirements • “Year-Ahead” showing is for 90% of 115% of peak for a 5 month summer period • “Month-Ahead” is for 100% of 115% of peak • Sanctions/Penalties for LSE non-compliance

  4. October 2005 RA Decision onLiquidated Damages (LD) Contracts • LD Contracts phased out for RA Counting Purposes • No LD contracts starting after 10-29-05 count • Except DWR Contracts, LDs are limited to: • 75% of an LSE’s portfolio for 2006 • 50% for 2007 • 25% for 2008, • and 0% thereafter • For 2006, there are ~6300 MW of LDs • LD contracts (not inc. DWR) are about 14% of filed RA Capacity • By 2007, most LD contracts expire • By 2008, only ~2300 MW of non-DWR LD contracts

  5. System RAR Compliance for 2006/2007 • LSEs filed first “year-ahead” filings in Feb. 2006 • Showing at least 90% of the RA requirement (115% of forecast load) is covered for 5 peak months of 2006 • Preliminary analysis shows 92% covered in aggregate • CPUC investigating possible compliance issues • LSEs will file first “monthly” filings in May 2006 • Due May 1st for June month • Monthly thereater • All LSEs will file “year ahead” 2007 showings October 2, 2006 (1st business day after 9/30)

  6. New RA Proceeding R.05-12-013 • Phase 1 Issues • Adoption of Local RA Requirement based on consideration of CAISO’s LCR Study • Other Issues as-needed related to: • Implementation • Compliance • Tradable Capacity Product • Phase 2 Issues • Capacity Markets & tradable capacity product • Multi-year forward RA Requirement • Zonal RA Requirement • Other Implementation Issues/ General Order

  7. Local RAR Consideration Underway • CAISO 2006 Local Capacity Report (LCR) - Sep-05 • New Proceeding Opened - Dec-05 • Parties filed Local RAR Proposals - Jan 24-06 • CAISO filed supporting info on 2006 LCR - Jan-31-2006 • CAISO Hosted Meet and Confer on 2007 LCR - Feb-17-06 • Purpose was to lock in assumptions for 2007 study • Workshops Held • 2007 Local RAR – Feb 8-9/Mar-15-06 re: LCR study & program • RE: Tradable Capacity Product - Mar-27-06 • CPUC Staff Report Issued on Local RAR - Apr-10-06 • 2007 LCR expected from CAISO - Apr-21-2006 • Expect CPUC decision to adopt Local RAR - Jun-2006

  8. Milestones for Local RAR 4/21 - CAISO submits 2007 LCR study ~5/15 - Draft Dec issued 1/24 - Local RAR proposals submitted 1/27 - CAISO resubmitted 2006 LCR study 6/15 - CPUC vote on dec 10/2 - LSE submit RA filings for both 2007 System RAR (“year ahead”) and 2007 Local RAR 4/18 - Opening Comments due 2/17 - CAISO started 2007 LCR study after the “meet & confer” session 4/28 - Reply Comments due 5/3 - Close of CPUC Proceediing Record

  9. New Long Term Procurement Plan Proceeding R.06-02-013 • Phase 1 Issue • Need for Additional Policies to Support New Generation • Proposals were due on March 7, 2006 • Workshop on March 14, 2006 • Comments on 4/7 and 4/14 • Planning for a June 2006 Decision • Phase 2 Issues • New Long Term Procurement Plans to be filed in Summer, decision by end of year. • No additional schedule details yet on plan filings

  10. Proposals to Support New Generation • Commission received 18 responses on 3/2 • Blink: “We must intervene to ensure new generation gets built” • Don’t Blink: “Give RA and LTPP policies a chance to work” (with numerous “other” fixes) • Proposals that support other issues • Workshop - 3/14 • Discuss proposals and need numbers • Intermediary Concept Presented • Comments Received on 4/7 • Replies due on 4/14

  11. Upcoming Milestones in Procurement April ‘06 PG&E Expected to file new Power Plant Application May ‘06 Additional Schedule Details to be determined on LTPP Cycle June ’06CPUC will consider Local RA Decision CPUC will consider New Generation Decision Summer ‘06 Long Term Procurement Plans Filed Oct. 2 ’06 LSEs file 2007 Local RAR Demonstrations LSEs file “Year Ahead” Summer 2007 RAR December ’06 CPUC Decision on LTPP Spring ‘07 CPUC Decision on RA Phase 2 Issues * Capacity markets * RA General Order

  12. CPUC Procurement and RA Website • Links to LTPP and RA key documents & proposals • www.cpuc.ca.gov/static/hottopics/1energy/r0404003.htm

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