Utility Responsibility to Maintaining Load Reliability Resource Adequacy Forum Technical Committee M

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Utility Responsibility to MaintainingLoad
Reliability Resource Adequacy ForumTechnical
Committee MeetingJune 20, 2007
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What is the Utilitys Role Team player, going
it alone or a combination?
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Individual Utility Perspective

• Do customers have a reliable supply
• Does utility have adequate resources, contracts
  and options in portfolio to provide adequate
  supply
• Is the region surplus or deficit to provide
  energy during constrained conditions
• Is the power cost/risk reasonable (efficient
  frontier) in meeting utility objective.

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Individual Utility Position Demand and Supply

• Hourly changing loads under range of conditions
• Portfolio of supply options to include
• Owned or acquired resource output
• Energy purchase and sales contracts, specific to
  terms for energy entitlement
• Options (and obligations) to acquire energy
  under terms specified
• Reliance on market purchases assessment of
  regional surplus or deficit
• IPP Imports /Exports part of regional assessment

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WECC Western Regional View

• Inclusive of all interconnected loads and
  resources
• Resources dispatched in economic manner to
  provide greatest value to generation while
  providing energy at lowest cost
• Transmission utilized based upon economic
  criteria, providing energy at least cost
• Not inclusive of contracts between utilities
  assumes efficient dispatch of all resources to
  meet total system load
• IPP imports and exports treated same as utility
  resources

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Northwest Regional View

• Inclusive of interconnected loads and resources
  in Northwest
• Resources in NW region dispatched in economic
  manner to provide greatest value to
  generation/lowest cost to consumers
• Assumes some energy transfer between outside
  interconnected areas, not fundamentally based
• Transmission within NW region utilized based upon
  economic criteria
• Not inclusive of contracts between NW utilities
  assumes efficient dispatch of all NW resources to
  meet total system load
• IPP imports/exports to areas outside NW effect
  available energy

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Integration of Utility Positions to Regional
Perspective

• With the following list of caveats, the sum of
  utility perspectives will align with a regional
  view
• All loads and resources are similarly represented
  in the regional and individual utility portfolio
  being uniquely identified (sum of parts total)
• Contracts (energy purchases or sales) have an
  equal and offsetting entry with another regional
  constituent.
• All utilities manage their portfolios to the
  level of reliability implied in the regional view
  (equal distribution of LOLP)

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Illustration of Utility Positions to Regional
Perspective

• Company A
• Load Profile
• Supply Portfolio
• Resources
• Contract Purchases
• Options
• Market purchases

Company B Load Profile Supply
Portfolio Resources Contract
Purchases Options Market purchases
Company A Load Profile Supply
Portfolio Resources Contract
Purchases Options Market purchases
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Example of Utility Positions to Regional
Perspective

• Sum of individual utilities equals regional
  view
• Intra-region transactions include entitlements
  and obligations both sides of each transaction
• Load / resource balance approximately equal all
  surplus

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Example of Utility Positions to Regional
Perspective
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Example of Utility Positions to Regional
Perspective

• Critical period, loads up by 25 for all
  companies, resource output same in simple example
• Intra-regional options exercised during
  constrained period
• Load / resource balance not equal some surplus,
  other deficit
• Region as a whole is deficit, implies LOL

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Example of Utility Positions to Regional
Perspective

• Critical period, loads up by 25 for all
  companies, resource output same in simple example
• Intra-regional options re-configured to establish
  equal un-served load percentage
• Conclusion Portfolio view reflective of regional
  view when properly configured to include all
  obligations, entitlements and loads and resources
  consistently applied to regional view.

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Summary / Conclusions

• Equal allocation of LOLP among utilities requires
  purchase commitments in portfolio equal to
  regional LOLP
• Purchase commitment by Utilities provides revenue
  base to promote regional development by both
  regional Utilities and IPPs.
• Lack of providing long-term assurance of adequate
  supply by individual utilities in their
  portfolios may result in underdevelopment in the
  region resulting in higher LOLP