An Overview of Arizona

1
An Overview of Arizonas Renewable Transmission
Planning Process

• Southwest Renewable Energy Transmission
  Conference
• Amanda Ormond Ormond Group LLC
• Brian Cole Arizona Public Service
• May 21, 2010

2
Arizonas Renewable Portfolio Standard

• 15 of retail electric load must be served by
  renewable resources by 2025
• Of this percentage, 30 (i.e. 4.5 of total
  retail sales in 2025) must come from distributed
  renewable (DE) resources by 2012 and thereafter
• One-half of the distributed renewable energy
  requirement must come from residential
  applications and the remaining one-half from
  nonresidential, non-utility applications

3
Regulatory Background Stakeholder Forums

• Biennial Transmission Assessment (BTA)
• Orders issued by the Arizona Corporation
  Commission (ACC)
• Conducted every two years to assess the existing
  and future transmission system in Arizona
• 4th and 5th BTAs (2006 and 2008) emphasized
  renewable resource and associated transmission
  development

4
Regulatory Background Stakeholder Forums

• Southwest Area Transmission (SWAT) Study Group
• Comprised of utilities and stakeholders from AZ,
  NM, NV, and portions of southern CA
• Conducts collaborative planning for the regional
  electrical transmission system
• Forms committees to focus on specific topics or
  studies

5
Regulatory Background Stakeholder Forums

• SWAT Renewable Transmission Task Force (RTTF)
• Committee formed within SWAT as a result of the
  4th BTA
• Tasked with identifying renewable resource
  potential and existing future transmission
• Will conduct technical modeling of proposed
  renewable transmission in the SWAT footprint

6
Arizona Statewide Planning
Southwest Area Transmission Group (SWAT)

• In December of 2008, the ACC approved the Fifth
  BTA (Decision No. 70635). The Order directed
  Commission-regulated utilities to take the
  results of the Arizona Renewable Transmission
  Task Force and..identify the top three potential
  renewable transmission projects in its service
  territories and propose funding mechanisms to
  construct the top three renewable transmission
  projects.

Renewable Transmission Task Force (RTTF)
AZ Renewable Resource and Transmission
Identification Subgroup (ARRTIS)
Utility Transmission Plans
7
ARRTIS Background

• Established by SWAT RTTF in January 2009
• An open stakeholder process tasked with
• Identifying potential areas for Arizona renewable
  resource development
• Assisting the RTTF group by providing information
  to assess transmission options
• Informing and assisting the utilities in their
  response to the 5th BTA Order

8
ARRTIS Process

• Assemble group of key stakeholders
• Gather AZ renewable resource potential
• Identify constraint criteria
• Identify likely developable areas for renewables
• Provide information to RTTF, and ultimately
  utilities, for identification of transmission
  options

9
ARRTIS Final Sensitivity Map
10
RTTF Finance Subcommittee

• Created by the RTTF in January 2009
• Primary Objectives
• Provide the RTTF with recommendations for
  financing methodologies for renewable
  transmission projects (RTP) in Arizona
• Determine what constitutes a RTP
• Provide information recommendations to support
  utilities responsible for filing responses to the
  5th BTA Order

11
Finance Subcommittee Final Report

• Report specifies types of RTP development costs
  that should be eligible for rate recovery by
  utilities
• Proposes development of utility-specific
  Renewable Transmission Action Plan (RTAP)
• Utility will describe how each RTP is expected to
  advance renewable resource development in Arizona
• Utility may request special cost recovery for the
  Commissions consideration, which the Commission
  may order

12
Finance Subcommittee Final Report

• RTPs include
• new transmission line(s),
• upgrade(s) of existing line(s), or
• the development of transmission project(s)
  previously identified by the utility which
  provide either
• access to renewable energy resource areas
• enables renewable resources to be delivered to
  load centers
• Did not define the amount of renewable generation
  that needs to be on the line

13
Finance Subcommittee Final Report

• Recommendations to the Commission
• Adopt the RTAP procedure as part of the Ten Year
  Plan filing requirement and the BTA process
• Coordinate RTP cost recovery with related
  determinations made by FERC
• RTP designation and special cost recovery should
  be determined by the Commission on a case-by-case
  basis

14
RTTF Final Transmission Options Map
15
Utility Evaluation Process Overview
16
Utility Evaluation Process

• Process Consisted of
• Economic Evaluation
• Qualitative Evaluation

17
Arizona Utilities' BTA Projects
17