PNGC Power Utility School 101 Washington, D.C. April 12, 2013 1 - - PowerPoint PPT Presentation

PNGC Power Utility School 101

Washington, D.C. April 12, 2013

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Introduction

Dan James VP, Public Affairs & Marketing

Introduction

• Our goal for today: an overview of

Northwest power and transmission fundamentals

• Why? A context for energy policy
• PNGC Power: who we are, what we do

PNGC Power Members

Who we are, what we do

• Who we are:

– A Generation & Transmission Cooperative with 14 Rural Electric Cooperative Members – BPA preference power customer

• What we do:

– Net requirements wholesale power provider to our Members – Joint Operating Entity (JOE) under the NW Power Act – We hold the BPA power and transmission contracts

• Only operating aggregator
• BPA’s 3rd largest power customer
• Meet our members load with a diversified portfolio – market, BPA, PNGC Power

resources

• Member services

PNGC Power Introduction

• Beginning in 1996, PNGC Power started diversifying

with 30% non-federal power

• 2001 – 2011, the Slice years - meeting our load

requirements on an hourly basis

– 24/7 scheduling

• 2011 – 2028, provide a diversified portfolio for our

members to meet load

Introduction

• John Prescott, President and CEO
• Aleka Scott, VP of Transmission and Contracts
• Zabyn Towner, General Counsel & Government

Affairs Manager

Power Systems 101

John Prescott President and CEO

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Take-aways

1. The electrical system must reliably provide power to keep the lights on – Power is provided by generating capacity 2. Generator output must exactly match demand for electricity every 4 seconds – Need flexible/controllable generation 3. Interconnected power systems create opportunities and risks

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Let’s talk generators

Hydro turbine - generator Steam turbine - generator

Electricity

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Generator Capacity

• A generator can produce power up to its

nameplate capacity – power output

– Actual power output depends on generator type, fuel availability, etc.

• Power output is measured in Watts

– kW = 1,000 watts, MW = 1,000,000 Watts

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What is Electrical Energy?

• Energy is power times time

– A generator producing 1 kW for one hour accumulates 1 kW-hr of electricity – 1 kW X 1 hr = 1 kW-hr – Common form of billing measurement

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Compare to a car

• Power compares to speed

– How fast? – Miles per hour

• Energy compares to distance

– Speed times time – How far? – Miles

3,089 miles 70 miles/hour

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Hydro

Flexible and controllable (with lake storage)

Grand Coulee, WA - USBR

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Coal

Thermal - Generally fixed with some flexibility (with coal pile storage)

Boardman Coal Project, OR 16

Natural gas

Thermal - Flexible and controllable (limited by gas pipeline capacity)

Simple Cycle Combined Cycle 17

Nuclear

Thermal - Generally fixed with minimal flexibility (long term fuel storage)

Columbia Generating Station, WA 18

Geothermal

Thermal - Generally fixed with minimal flexibility (no fuel storage)

Raft River Geothermal, ID

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Wind

Intermittent with minimal control (near term predictability with no fuel storage) Known as a Variable Energy Resource (VER)

Nine Canyon Wind Project, WA 20

Solar PhotoVoltaic, or PV

Follows Sun with minimal control (no fuel storage) Also known as a Variable Energy Resource (VER)

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Landfill gas-to-electricity

Thermal - Fixed output with some flexibility (no fuel storage)

Coffin Butte Landfill Gas Project, Corvallis OR

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Electrical System

100 MW 100 MW

Simple system: Ignores losses & voltage transformations

Generation must match Load Every 4 seconds!

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Interconnected System

100 MW 100 MW 80 MW 80 MW

A B Balancing Authority A & B

4 sec control

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Interconnected System

100 MW 110 MW 90 MW 80 MW

A B

10 MW

Hourly Scheduling

Constant for one hour 25

Interconnected systems

• Created hourly markets

– Market opportunities and risks

• Economic gains / losses
• Exposure to reliability risks

– That’s why a power line fault in Idaho can cause an outage in San Francisco – Complexity

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Take-aways

1. The electrical system must reliably provide power to keep the lights on – Power is provided by generating capacity 2. Generator output must exactly match demand for electricity every 4 seconds – Need flexible/controllable generation 3. Interconnected power systems create opportunities and risks

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Transmission Issues Primer

Aleka Scott VP, Transmission & Contracts

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Transmission Primer and Current Issues

• Basic Understanding of Transmission

System

• Basic Understanding of Variable Energy

Resources (VERs), primarily wind and solar, in BPA’s Balancing Authority

• Basic Understanding of Oversupply in

BPA Balancing Authority

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With RROs

Interconnections, BAs and RROs

• Three Interconnections in the country

– Generation, lines and load act as interconnected big machine – Electrical separation – Cascading outages can’t cross interconnections

• Regional Reliability Organizations (RRO) oversee reliability

across BAs within an Interconnection

Western Electricity Coordinating Council (WECC) = RRO for whole Western Interconnection

• Balancing Authorities (BA) balance load and generation every

4 seconds within their metered boundaries, e.g.

– BPA

• PGE

– Avista

• Pacificorp East and West

– Northwestern

• Idaho Power Company

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Balancing Authority Areas in WECC

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BPA Transmission System Expansion: VERs

Windy Point near Goldendale, WA King Estate Solar Project, OR

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VERs Defined

VERs

• 1. are renewable;
• 2. cannot be stored by the facility owner or
• perator; and
• 3. have variability that is beyond the control
• f the facility owner or operator.
• For example: wind, solar and hydrokinetic

generating facilities.

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Quantity

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Growth of Wind has driven need for transmission additions

• Why such a challenge?

– Quantity – Centralized Location

• Today, 17,000 MW of requests (primarily wind) in BPA’s

Generation Interconnection request queue

• For perspective, load in the BPA BA averages about

7,500 MW

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Centralized Location of wind generation stresses transmission system

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Wind CA

BPA innovates to meet commercial expansion need

• Reforms Open Access Transmission Tariff

(OATT) process

– Network Open Season (NOS)

• 1. Studies all viable requests in one study –

Cluster study

FERC default is individual studies

• 2. Build feasible projects at “rolled in” rates

FERC default is requestor pays for full expansion

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McNary-John Day $170 million - completed Big-Eddy-Knight $185.5 million - in construction I-5 Reinforcement $460 million – postponed Central Ferry-LOMO $95 million - on hold

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Conditions Change

• California limits out of state renewables to meet RPS to 25%
• NW utilities acquire enough renewables for RPS
• 1,800 MW of wind projects asked BPA to terminate or

modify firm transmission contracts

• BPA suspends Network Open Season (NOS) in 2011 and

redesigns process

• New NOS about to be issued by BPA

– will have tougher financial security requirements – protects all transmission ratepayers from defaults

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Transmission System Expansion: South Idaho Load Service

• BPA’s load in south Idaho was served by

PacifiCorp through a power exchange, which PacifiCorp cancelled effective June 2016

• No firm transmission available across Idaho
• BPA’s preferred option is participation in

Boardman to Hemingway (B2H) Transmission Project with rights through to its load

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BPA’s South Idaho Load area B2H – Idaho

Power and PAC

Gateway West

PAC and Idaho Power 46

Policy Implications of Expansion

• 1. Potential rate increases for all

transmission customers

• 2. BPA borrowing authority – use and limits
• 3. Tougher requirements for new generation

to get firm transmission

– reformed process will need FERC approval

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VERs and BPA – Balancing Reserves

The Dalles Dam, OR

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Balancing Reserves

• Generation capacity needed to balance within

hour fluctuations in load and resources

– Inc (incremental) reserve – generating capacity that can be brought up within hour when VERs goes down

• r load goes up

– Dec (decremental) reserves – capacity that can be turned down within hour when VERs goes up or load goes down

• Without VERs, need ~150 MW for load and gen
• With VERs, need ~900 - 1100+ MW for load and

gen

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Morning peak Evening peak

Wind Ramp

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http://transmission.bpa.gov/Business/Operations/Wind/baltwg.aspx

Max Forecast uncertainty: ~1,400 MW

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Federal Hydro Capacity at Limit for Balancing Reserves

• BPA limit is ~900 MW (inc), 1100 MW

(dec) of hydro capacity for within hour balancing reserves

• BPA may have to buy more reserves on

market or curtail VERs generation

• Need better solutions for meeting

balancing demands of VERs

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Better Solutions for Balancing Reserves

Industry searching for better ways to provide reserves:

– Better wind scheduling regime – Intra-hourly scheduling (BPA has 30-minute scheduling Pilot program) – Energy Imbalance Markets (EIM) – within hour market that pools imbalances across BAs

Issues:

• Cost/benefit for BPA
• Governance
• Transmission use, revenue and control
• Control of BPA hydro system

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Policy and Technical Issues for Balancing Reserve solutions

• 1. Cost and cost allocation of new systems

development and system implementation

• 2. Impact on federal generation,

transmission

• 3. Unintended consequences

– reliablility, market manipulation

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Oversupply

April 6, 2009, Bonneville Dam, OR

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Oversupply Management (OSM)

• Occurs in spring when

– hydro flows from spring run-off are high, – wind generation is high, and – loads are low.

• Water can either go through turbines or spill over dam.
• Spill is limited because of Total Dissolved Gas (TDG) levels.
• High TDG causes gas bubble trauma in fish
• May cause BPA to violate Endangered Species Act (ESA) and

Clean Water Act (CWA) obligations

• Thermal generators shut down with BPA replacement

power at no charge.

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Oversupply Management (OSM)

• When BA generation exceeds load, BPA will replace all

generation it can with federal hydro at no charge

• As the last resort, BPA curtails wind generation and

replaces with hydro power at no charge, plus

– BPA provides compensation for lost Production Tax Credits (PTCs) and Renewable Energy Credits (RECs)

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Legal Challenges to BPA Oversupply Management

• Multiple parties have challenged BPA’s

right to curtail wind during oversupply situations

• Venues: FERC and 9th Circuit Court

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Topics of Ongoing Interest

• BPA Borrowing Authority – transmission construction

for commercial interests, balancing reserve transformation efforts

• Balancing Reserves for Variable Energy Resources

– Continuing work on solutions (i.e. EIM) – Cost and cost allocation of solutions

• Network Open Season (NOS) reform – who bears risk
• f defaults, construction based on firm contracts
• Legal and Regulatory Issues surrounding

– BPA’s Open Access Transmission Tariff (OATT) – Oversupply Management Protocols – Fish Issues

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FERC Dec 7 2011 Order on ER Rehearing Requests FERC Dec 20, 2012 Order Denies Rehearing Requests Precautionary 2nd Rehearing Request Appeal to Ninth Circuit March 6th, 2012 BPA Compliance Filing FERC Dec 20, 2012 Order “Conditionally” Accepting OMP Request for Rehearing: BPA Rates Process

March 1st, 2013 BPA Compliance Filing (Expected Appeal to Ninth Circuit)

BPA Develops Oversupply Management Protocol BPA OS-14 Rate Case BPA Will File Rate with FERC

Appeal to Ninth Circuit Appeal to Ninth Circuit of Original ER ROD

CONTACT US!

For background on complex NW electric energy issues

John Prescott President & CEO 503.288.5559 jprescott@pngcpower.com Aleka Scott VP, Transmission and Contracts 503.288.5547 ascott@pngcpower.com Zabyn Towner General Counsel & Government Affairs Manager 503.528.5308 ztowner@pngcpower.com Dan James VP, Public Affairs & Marketing 503.288.5545 djames@pngcpower.com Gary Barbour PNGC Lobbyist 202.548.0074 garybarbour@earthlink.com

We are here to help!

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• B2H – Boardman to Hemingway Transmission Project
• BA – Balancing Authority
• BPA – Bonneville Power Association
• Central Ferry-Lower Monumental (LOMO) – a proposed BPA

transmission expansion project currently on hold

• CWA – Clean Water Act
• Dec Reserve – Decremental Reserve
• EIM – Energy Imbalance Market
• ESA – Endangered Species Act
• FERC – Federal Energy Regulatory Commission
• Inc Reserve – Incremental Reserve
• kW – kilowatt - measure of capacity, power
• kWh – kilowatt hour – measure of energy
• MW – megawatt, 1,000 kW
• MWH – megawatt hour, 1,000 kWH
• NERC – North American Electric Reliability Corporation
• NOS – Network Open Season
• OATT – Open Access Transmission Tariff
• OSM – Oversupply Management
• PACE – PacifiCorp East Balancing Authority
• PACW – PacifiCorp West Balancing Authority
• PTCs – Production Tax Credits
• PV – Photovoltaic
• RECs – Renewable Energy Credit
• RPS – Renewable Portfolio Standard
• RRO – Regional Reliability Organization
• TDG – Total Dissolved Gas
• VERs – Variable Energy Resources
• WECC – Western Electricity Coordinating Council

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