Natural Gas Infrastructure Assessment Jim Robb, CEO Byron Woertz, Mgr. System Adequacy Planning Western Electricity Coordinating Council

Why Are We Doing This Study? Context What has been done in the past? Questions What do we still need to know? Study How will we move forward? Western Electricity Coordinating Council

Context 2014 study by Energy + Environmental Economics (E3) Phase 1 Will there be adequate natural gas infrastructure (interstate and intrastate), including storage, to meet the needs of the electric industry in the Western Interconnection approximately ten years in the future? Phase 2 Will the gas system have adequate short-term operational flexibility to meet increased volatility in hourly electric industry natural gas demand due to higher penetration of variable renewable resources in the Western Interconnection? Western Electricity Coordinating Council

A Few Key Conclusions from E3 The natural gas and electric industries are deeply linked. Existing gas transportation infrastructure will generally be adequate to meet regional electric needs based on current usage patterns; however, growth in gas generation (e.g., resulting from coal and nuclear retirement) will require expansion of natural gas infrastructure to provide fuel security . Gas generation that does not contract for firm transportation service may be subject to interruption. Interregional coordination is essential to regional reliability. Western Electricity Coordinating Council

Western Electricity Coordinating Council What Has Changed? Four years have passed Updated views of renewable growth and need for flexibility and balancing resources Updated outlook on load and new generation build Increased understanding of the “duck curve” effect on gas plants Gas infrastructure permitting challenges have increased Gas pipelines will not magically appear with a signed contract Aliso Canyon Refined understanding of gas storage and the practical limits of pipeline “pack and draft” and its role in balancing increasingly rapid gas plant ramps Western Electricity Coordinating Council

Western Electricity Coordinating Council Study Purpose Identify potential future reliability risks related to the current and future natural gas infrastructure Contingencies Identify key natural gas related contingencies that should be included in utility planning Dependence Highlight risks associated with increasing dependence on gas—communicate to key policy makers Mitigation Identify risk mitigation options for policy maker and utility consideration Western Electricity Coordinating Council

Western Electricity Coordinating Council Key Concerns How secure and reliable is the gas supply? Supply restrictions due to weather or other supply disruptions Impacts of firm vs. interruptible contracts Can and will any needed new infrastructure be built in a timely manner? Challenges in permitting and siting Is there adequate flexibility to meet future electric system operational needs? Use of storage as a “shock absorber” to balance increasing ramping needs Use of storage and pipeline pack to meet deliverability requirements How should mid-stream risks be factored into electric reliability planning? Critical storage fields Critical processing facilities Interstate pipeline availability Western Electricity Coordinating Council

What Questions Can We Answer? Mapping How are the gas and electric systems connected? Infrastructure What infrastructure will be needed to meet “stress case” fuel demands in 2026? Contracts How could contracting practices affect reliability? Contingencies How should electric planners factor single point of failure, gas supply, and operating contingencies in their planning work? Western Electricity Coordinating Council

Western Electricity Coordinating Council Proposed Scope Western Interconnection BES, with primary focus on US-based generation Future scenario based on WECC’s 2026 Common Case load forecast, resource mix, and transmission topology Focus on midstream asset-related contingencies (presume upstream gas availability) Rely on public sources for other needed information (e.g., core gas loads) Western Electricity Coordinating Council

The Study Will Build On Other Work WECC Gas-Electric Interface Study 2014 E3 Study Infrastructure Adequacy Operational Flexibility NERC/Argonne Study Characterize Storage Fields NERC SPOD Study Vulnerabilities WRT Storage CAISO Analytics Lessons Learned From Aliso Canyon Western Electricity Coordinating Council

Western Electricity Coordinating Council Deliverables Map BES assets to natural gas infrastructure and identify key points of vulnerability Assess infrastructure adequacy to meet future needs based on 2026 Common Case Assess the firmness of Western Interconnection gas supply and transportation contracts (ROP 1600 Request) Identify key planning contingencies for utility planners to consider Western Electricity Coordinating Council

Deliverables (continued) Identify and assess risks of supply-side constraints and options for planning around them (e.g., Mexican gas exports; LNG exports) Identify operating protocol issues that should be reconciled Identify one or more “stress test” scenarios (e.g., weather and/or infrastructure failure stresses) and assess risk of cascading electric outage Suggest mitigation options for reducing any identified risks Western Electricity Coordinating Council

Western Electricity Coordinating Council Project Structure Steering Committee Jim Robb, Chair Marie Jordan, Peak Steve Berberich, CAISO Ron Nichols, SCE Mike Cashell, NW Energy Jim Piro, PGE Kimberly Harris, PSE Mark Schiavoni, APS Core Team Technical Advisory Committee WECC Staff Gas Consultant Terry Baker, Peak John Moura, NERC Maury Galbraith, WIEB Mark Rothleder, CAISO* Ken Kujala, NWPCC* Brian Theaker, NRG David Mills, PSE Justin Thompson, APS Val Yildirok, PGE * Invited, but not yet confirmed Western Electricity Coordinating Council

Gas-Electric Interface Study Timeline 2017 2018 Mar May Jul Sep Nov Discussion with Board Mar 7 Release RFP Mar 31 Select Consultant May 31 Interim Report Final Report Sep 12 Mar 1 - Mar 31 Create RFP May 1 - May 31 Review RFP Responses Jun 1 - Jul 31 Establish Data Sharing Protocols Jun 1 - Feb 28 Complete Interim Report Mar 1 - Aug 31 Complete Final Report Today 31 days 31 days 61 days 273 days 184 days Western Electricity Coordinating Council