ELECTRICITY AND OUR FUTURE CWLPS INTEGRATED RESOURCE PLAN Public - - PowerPoint PPT Presentation

ELECTRICITY AND OUR FUTURE

CWLP’S INTEGRATED RESOURCE PLAN

Public Utilities Committee Meeting May 6, 2019

1

Agenda

• Purpose of IRP
• Public Process
• TEA Present Results
• Report & Presentation Online www.cwlp.com/IRP
• Next Steps

2

IRP

An Integrated Resource Plan (IRP) is the result of a comprehensive planning study, which provides a recommended mix of supply- and demand-side resources a utility may use to meet its customers’ future electricity needs.

3

IRP Public Process

• Public Meetings & Presentations

June 11, 2018, September 17, 2018, December 18, 2018, May 6, 2019

• 2018 Public Comments On IRP Inputs
• 2019 Public Comments: May 7th to June 3rd

IRP@cwlp.com; US Mail; Open House

• Open House May 20th

Lincoln Library, 5:00-7:00 pm

• Next Public Utilities Committee Meeting

www.cwlp.com/IRP

4

CWLP Integrated Resource Plan

Spring 2019

Overview

• Introduction
• Process Overview
• Results Overview
• Recommendations Explanation

2

CONFIDENTIAL & PROPRIETARY May 6, 2019

Process Overview

3

CONFIDENTIAL & PROPRIETARY May 6, 2019

IRP Process Flow

Develop Assumptions & Scenarios Create and Run Models Process Results and Develop an Action Plan

4

CONFIDENTIAL & PROPRIETARY May 6, 2019

5

CONFIDENTIAL & PROPRIETARY May 6, 2019

Planning Considerations

“What is cheapest isn’t always what is best.”

Risk

Flexibility

Cost

Cost

6

CONFIDENTIAL & PROPRIETARY May 6, 2019

Total Cost Per Unit Cost Net Present Value of Revenue Requirements Levelized Cost of Energy NPVRR ($) LCOE ($/MWh)

Risk

• Renewables
• Market prices
• Weather
• Environmental regulations
• Power plant retirements
• Electricity usage
• Electric vehicles

7

CONFIDENTIAL & PROPRIETARY May 6, 2019

Modeled Fuel Price Uncertainty

8

CONFIDENTIAL & PROPRIETARY May 6, 2019

Market Risk Cases

9

CONFIDENTIAL & PROPRIETARY May 6, 2019

Flexibility

10

CONFIDENTIAL & PROPRIETARY May 6, 2019

• Short term actionable items
• Long term directional items

– Greater potential to change with circumstances

• Phased approach

– Improves optionality – Reduces portfolio risk

Results Overview

11

CONFIDENTIAL & PROPRIETARY May 6, 2019

Considered Resources

12

CONFIDENTIAL & PROPRIETARY May 6, 2019

• Natural Gas

– Combustion Turbine – Combined Cycle Gas Turbine – Reciprocating Internal Combustion Engine

• Renewables

– Solar – Wind

• Battery Storage
• Market Purchases

• Potential Programs:

– Insulation incentives – Smart Thermostat Program – A/C Rebate – Social Behavior Change

Energy Efficiency Programs

13

CONFIDENTIAL & PROPRIETARY May 6, 2019

• Existing Programs:

– Heating and A/C – Lighting – Home Energy Audit – Low Income

Short-Term Results

14

CONFIDENTIAL & PROPRIETARY May 6, 2019

80% 50% 100% 100% 100% 100%

Long-Term Results

15

CONFIDENTIAL & PROPRIETARY May 6, 2019

90% 75% 100% 100% 100% 100%

*Recommendations based on best information available during study process

Recommendations Explanation*

16

CONFIDENTIAL & PROPRIETARY May 6, 2019

Recommendation Summary

• Retire Units 1,2 & 3 in 2020 (or as practical)
• Retain Unit 4
• Issue renewable RFP
• Issue capacity & energy RFP
• Expand energy efficiency efforts
• Retain peaking units
• Build FEJA solar (if feasible)

17

CONFIDENTIAL & PROPRIETARY May 6, 2019

Recommendation Timeline

18

CONFIDENTIAL & PROPRIETARY May 6, 2019

• NPV ($M): 1,042
• LCOE ($/MWh): 45.29

‘19 ‘38 ‘37 ‘36 ‘33 ‘28 ‘35 ‘30 ‘34 ‘32 ‘29 ‘31 ‘20 ‘21 ‘22 ‘23 ‘24 ‘25 ‘27 ‘26

Energy Efficiency programs

Generation Mix

19

CONFIDENTIAL & PROPRIETARY May 6, 2019

Market Purchases and Sales

20

CONFIDENTIAL & PROPRIETARY May 6, 2019

47%

• 57%
• 9%

39%

• 80%
• 60%
• 40%
• 20%

0% 20% 40% 60% 2019 2021 2023 2031

 Purchases Sales 

Environmental Impact

21

CONFIDENTIAL & PROPRIETARY May 6, 2019

Dallman 1 & 2

22

CONFIDENTIAL & PROPRIETARY May 6, 2019

• Retire Dallman 1 & 2

–Every scenario retired these units –$22 million capital expense avoided

Dallman 3

23

CONFIDENTIAL & PROPRIETARY May 6, 2019

• Retire Dallman 3

–Every eligible scenario retired –$26 million capital expense avoided –$210 million NPV cost increase to retain Dallman 3

• Expected to increase cost $10 M / year over

next few years

–2020 retirement may be unreasonable

Dallman 3 Retention Cost

24

CONFIDENTIAL & PROPRIETARY May 6, 2019

Dallman 4

25

CONFIDENTIAL & PROPRIETARY May 6, 2019

• Recommend retaining and reassessing in

next IRP

• Must be replaced due to transmission

constraints

–Gas unit replacement cost $120 million

• Marginal on retirement

–Replacing increases risk

• High coal cost scenario makes Dallman 4

less economic

Dallman 4 Coal Price

26

CONFIDENTIAL & PROPRIETARY May 6, 2019

Renewables RFP

27

CONFIDENTIAL & PROPRIETARY May 6, 2019

• Recommend issuing a renewables RFP ASAP

– Tax Credits expiring – Can sign PPA beginning in future

• Results add PPA in 2023
• Significant cost declines in last decade

Market Purchases

28

CONFIDENTIAL & PROPRIETARY May 6, 2019

• Consider market purchases

–Replace Dallman 1, 2, & 3 at a reduced cost –Energy & capacity

• Long-term (5-10 years)

Energy Efficiency

29

CONFIDENTIAL & PROPRIETARY May 6, 2019

• CWLP has successful energy efficiency

programs

• Expand programs on as-economic basis
• Conduct more focused analysis

– Demand-side management (DSM) – Energy Efficiency – Advanced Meter Infrastructure

Retain Peaking Assets

• Cheap capacity
• Reliability benefits

30

CONFIDENTIAL & PROPRIETARY May 6, 2019

Illinois FEJA

31

CONFIDENTIAL & PROPRIETARY May 6, 2019

• Build 2 MW Illinois Future Energy Jobs Act

(FEJA)-applicable solar

• CWLP may not qualify

Additional Risks

• Electric Vehicles
• New Technologies
• Environmental Regulations
• Changes near CWLP

– Generation & Transmission

• Market Prices
• Fuel Prices

32

CONFIDENTIAL & PROPRIETARY May 6, 2019

Disclaimer

33

CONFIDENTIAL & PROPRIETARY May 6, 2019

This document was prepared by The Energy Authority, Inc. (“TEA”), solely for the benefit of City, Water, Light and Power (“CWLP”). TEA hereby disclaims (i) all warranties, express or implied, including implied warranties of merchantability or fitness for a particular purpose, and (ii) any liability with respect to the use of any information, recommendations, or methods disclosed in this document. Any unauthorized commercial use of this document by third parties is

• prohibited. The recommendations resulting from this study are based
• n the economics of each decision according to the inputs available to
• TEA. The recommendations are subject to change as the underlying

facts and assumptions change. CWLP’s final action plan may reasonably differ from the TEA’s recommendations due to various local,

• rganizational, or other considerations not factored into these

recommendations. More next pgs.

NEXT STEPS

CWLP’S INTEGRATED RESOURCE PLAN

6

NEXT STEPS

• Develop Action Plan

– Review Public Comments – Begin planning steps with MISO

• Initiate RFP for Purchase Power Agreements (PPAs)
• Retain Dallman 3 longer than Dallman 1 and 2
• Develop a plan for employees

7

Public Discussion of IRP Results

• May 20th Open House
• Lincoln Library 5:00-7:00 pm
• Public Comment Period May 7 to June 3
• Name & Address requested (IRP@cwlp.com or U.S. Mail)
• Next Public Utilities Committee Meeting
• Updates & Summary of Public Comments
• TEA’s full report and all presentation

documents and videos to date

www.cwlp.com/IRP

Public Communication

9

www.cwlp.com/IRP

Website

IRP@CWLP.com

Email

CWLP General Office, 4th floor, Attention IRP, 800 East Monroe Street, Springfield, IL 62757

US Mail

Lincoln Library May 20th, 5-7pm

Open House

Questions

10