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New Generation Projects: Northwest Issues

New Generation Projects: Northwest Issues. APPA New Generation Workshop August 1, 2007 Kurt J. Conger EXS, Inc. kconger@nrgxs.com. Energy Expert Services, Inc. Kirkland, WA. Institutional Drivers. BPA Regional Dialog Renewable Portfolio Standards Greenhouse Gas Regulation

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New Generation Projects: Northwest Issues

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  1. New Generation Projects:Northwest Issues APPA New Generation Workshop August 1, 2007 Kurt J. Conger EXS, Inc. kconger@nrgxs.com Energy Expert Services, Inc. Kirkland, WA

  2. Institutional Drivers • BPA Regional Dialog • Renewable Portfolio Standards • Greenhouse Gas Regulation • FERC Order 890 • NERC Reliability Requirements

  3. Resource Planning Challenges • Transmission System Congestion • Environmental Opposition • Load Growth Uncertainty • Fuel Price Uncertainty • Delays in BPA Regional Dialog

  4. BPA Regional Dialogand New Resources • Current BPA wholesale power contracts expire in 2011 • Long-term tiered rate methodology adopted • New Tier 1 contracts, based on the cost of existing system, will have a 20-year term • BPA Tier 2 product or non-Federal options for new resources

  5. BPA Tier 1 Rate Basics • Take-or-pay purchase commitments in 2008 • HWM determines customer share of FBS • HWM = High Water Mark (derived from load forecast) • FBS = Federal Base System • Forecast of Net Load • 2010 True-up Based on Actual Load Net of Non-Federal Resources

  6. BPA Tier 2 Rate Basics • Power purchased from BPA beyond the HWM • Rate set to fully recover BPA’s costs of securing additional resources • Customers can choose non-Federal power options other than the BPA Tier 2 product • Tier 2 Alternatives: • New Renewables • Default: portfolio of purchased power at market-based rates • Vintaged: portfolio of long-term resources (10 year min)

  7. Renewable Portfolio Standards • Washington I-937: Initiative 937 mandates that all large utilities cover 15% of their energy load with eligible renewable resources by 2020. • Oregon SB 838: Oregon passed a renewable portfolio standard (RPS) that will require the largest utilities in Oregon to provide 25 percent of their retail sales of electricity from renewable sources in 2025.  Smaller utilities will have similar, but lesser, obligations.

  8. Constrained Transmission Paths

  9. Potential BPA Corridors

  10. NWCPUD Case Study: • Rapid Load Growth • BPA Regional Dialog • Two Powerplant Options Considered • Energy Northwest PMEC • Intermountain Power Project #3 • May 15 Ballot Results

  11. Comparison Table

  12. Ballot Results • “Voters spurn PUD coal plan” • 81% of voters opposed • NWCPUD “recommendation was the best in terms of reliability and overall cost to the customers” • Voters provided clear direction that they wanted other alternatives • Current challenge: adequate energy supply at an affordable price

  13. Questions?

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