Conceptual Plans for Electricity Transmission in the West

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Conceptual Plans for Electricity Transmission in
the West
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Agenda

• Decision factors
• Study characteristics
• Study method/results
• Policy considerations

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What Factors Influence the Nature of
Inter-regional Transmission Plans
?
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Decision Factors

• Load and load diversity

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Load and Load Diversity
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Load and Load Diversity

• Installed Generation 26,400 MW

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Load and Load Diversity
2,000 MW

• Installed Generation 22,400 MW

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Decision Factors

• Load and load diversity
• Reliability

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Reliability
2,000 MW

• Installed Generation 26,400 MW

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Reliability
1,000 MW
1,000 MW

• Installed Generation 22,400 MW

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Reliability
1,000 MW
1,000 MW

• Installed Generation 24,400 MW

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Decision Factors

• Load and load diversity
• Reliability
• Fuel source location

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Fuel Source Location
2,000 MW
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Decision Factors

• Load and load diversity
• Reliability
• Fuel source location
• Economics

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Economics

• Generation Displacement

Usage Factor
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Study Characteristics

• What study does
• Provides broad base conceptual plans
• Provides insight into issue trade-offs
• Suggests principles for expansion guidance
• Suggests financing mechanisms
• Identifies alternatives to conventional
  transmission expansion

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Study Characteristics

• What study does not do
• Evaluate plans through 2004
• Study expansion of natural gas pipeline system
• Consider generation capital costs least cost
  plan
• Provide definitive actionable construction plan

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Method of Study Results
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Base Study Characteristics

• Two generation expansion scenarios
• Gas scenario
• Other than gas scenario OTG

Base Year 2004
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Base Study Characteristics

• Simulated 2010
• 2 per year load growth
• 25 generation reserve margins
• Performance analysis
• Production cost model
• Spreadsheet
• Gas price variance
• Hydro availability

Base Year 2004
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Gas Scenario New Lines

• Fig 14A - Estimated Cost 2.1B

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Gas Scenario New Capacity
Fig 14B
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Other Than Gas New Lines
Fig 15B - Estimated Cost 8B - 12B
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Other Than Gas New Capacity
Fig 15C
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Next Technical Steps

• Evaluate alternate load growth scenarios and
  natural gas pricing
• Incremental transmission analysis including DC
  options
• Evaluate market power issues
• Include emerging technology-based transmission
  applications

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Five Recommended Principles

• Principle 1
• Any expansion of the transmission system must
  maintain reliability, support both load and
  resource diversity in the Western
  Interconnection, and enable an efficient
  wholesale electric market.

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Key policy issues

• 1. What is the value of increasing diversity in
  the fuels used to generate electricity?
• 2. What is the value of transmission to mitigate
  generation market power?

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Principle 2

• Transmission pricing and cost recovery should
  provide incentives for regionally beneficial
  expansion and system improvement.

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Transmission financing alternatives

• Spread the costs of new transmission across all
  users of the transmission system.
• Provide that a portion of the difference in
  electricity prices between two delivery points
  (congestion costs) is used to pay for new
  transmission to mitigate congestion.
• Implement an open season model like that used
  for natural gas pipeline expansion.

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Principle 3

• A forward-looking Western interconnection-wide
  transmission planning process should be
  established.

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Key policy issues

• How can a proactive transmission planning process
  be instituted in the Western Interconnection?
• How will new transmission technologies and
  non-transmission alternatives (load-based
  generation, energy efficiency and demand
  reduction) alternatives be considered?

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Principle 4

• Transmission should enable access to more
  economical and less-polluting resources, thereby
  minimizing environmental impacts on both a local
  and regional basis.

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Principle 5

• All siting review processes must be streamlined
  and coordinated. State review processes should
  address both local and interconnection-wide
  needs, and federal agency review processes must
  be coordinated internally as well as with state,
  tribal and local authorities.

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Questions
?