California Energy Commission Projection Tool to Support Contingency Mitigation Decisions 2015 IEPR Workshop UC Irvine, Irvine, California August 17, 2015 Mike Jaske and Lana Wong Energy Assessments Division /

California Energy Commission Scope Purpose Methods and Assumptions Baseline Results Sensitivities Scenarios Findings and Conclusions for Modeling Using the Tool to Inform Mitigation Measure Triggering 2

California Energy Commission LCAAT Purpose LCAAT = Local Capacity Annual Assessment Tool Develop annual projections of resources versus local capacity requirements for Southern California Provide an analytic basis for understanding the timing and nature of a shortfall in any local capacity area and/or subarea in Southern California Issues surfaced by LCAAT, confirmed by a power flow study, could lead to a recommendation to trigger mitigation measures or other actions 3

California Energy Commission SoCal Local Reliability Areas 4

California Energy Commission METHOD & ASSUMPTIONS 5

California Energy Commission Method Spreadsheet tool for easy use/modification Baseline input assumptions drawn from those already developed for 2014 LTPP and for 2014/15 TPP Create methods and supplemental inputs to enable geographic tagging by local areas/subareas Create logic to modify initial LCR study results Produce tabulations of resources vs requirements by local area/subarea Update inputs comprehensively annually and selectively as needed 6

California Energy Commission Method, cont’d Advantages of Simplified Tool –Much easier to assemble data and assess a new set of assumptions –Reduced effort per run allows many more runs Disadvantages of Simplified Tool –Loss of accuracy compared to in depth methods –Greater loss of accuracy when contingencies create voltage instability concerns –Concerns may be larger for smaller subareas –Requires update when new in depth results arise 7

California Energy Commission Overview of Assumptions Base Demand – CEC 2013 IEPR –Demand-side adjustments Additional AAEE (savings beyond base forecast) IOU PPAs – Preferred EE, BTM Storage, BTM DG Local capacity requirement values - CAISO 2015, 2019, 2024 Local Capacity studies –Transmission Adjustments based on CAISO published studies and response to CEC questions –Demand-side adjustments Assumed 1-for-1 MW reduction 8

California Energy Commission Overview of Assumptions (cont.) Resources –2014 Net Qualifying Capacity (NQC) List –IOU PPAs –2014/2015 TPP RPS Portfolios – Trajectory (baseline) and High DG (alternative) Retirements –SWRCB OTC compliance dates –Some aged-based retirements –Contract based extensions to aged-based retirements 9

California Energy Commission Local Capacity Requirements CAISO Studies Provide Base LCR Values –2015 and 2019 from Local Capacity reports –2024 results from studies within the 2014/15 TPP Base LCR requirements modified by: –Load modifiers (EE, BTM DG, BTM storage) –Transmission system upgrades not included within the assumptions for the study of a specific year 10

California Energy Commission Resources Base year capacity values: –2014 NQC list used for resource adequacy –Tabulated by local area and subarea Modifications in future years: –OTC facility compliance dates –Projected retirements based on plant age modified by contract term data when available –Presumed resource additions –Specialized factors for specific variables 11

California Energy Commission OTC Retirements/Replacements Facility Capacity (MW) SWRCB Compliance Date Replacement Capacity (MW) Online Date El Segundo /31/ Redondo Beach1,35612/31/ Alamitos2,01012/31/ /1/2020 Huntington Beach45212/31/ /1/2020 Encina95012/31/ /1/

California Energy Commission Tabular Results for LA Basin Variables (Summer Peak MW)Source LA Basin Base Load Forecast2013 IEPR lessLoad Forecast Adjustment lessAAEE2013 IEPR lessPreferred EESCE RFO lessPreferred BTM Energy StorageSCE RFO lessPreferred BTM DGSCE RFO =Managed Load Forecast Gross Local Capacity Requirements lessT-system Upgrade Impacts(240) (640)(740)(500)(400)(700) (800) lessLCR Change from Demand Adjustments(22)(147)(277)(458)(790)(917)(1020)(1110)(1190)(1286)(1384) =Adjusted LCR Base OTC Non NuclearScenTool plus OTC Nuclear ScenTool plus Hydro ScenTool309 plusSolarScenTool plusWindScenTool62252 plusGeothermalScenTool plusBiomassScenTool97 plusCogenerationScenTool plusPumpScenTool plusNon OTC PeakerScenTool plusNon OTC ThermalScenTool plusVarious and UnknownScenTool77 plusIncr. Peaker AdditionsSCE RFO plusIncr. Thermal AdditionsSCE RFO plusIncr. RPS Calc - Renew14/15 Port714 plusIncr. RPS Calc - DG14/15 Port plusStorage AdditionsSCE RFO plusDR Program/Preferred DRCapability =Total Resources Base =Resource Need (Surplus/Deficit) Base (526)(389)(220)(77) 13

California Energy Commission Graphical Results for LA Basin Key VariablesSurplus/Deficit 14

California Energy Commission BASELINE RESULTS 15

California Energy Commission Simplified LA Basin Results Variable Base Load Forecast Load Forecast modifiers Managed Load Forecast Gross Local Requirements T-system Upgrade Impacts Load Modifier Impacts Adjusted Local Requirements Total Resources Resource Surplus/Deficit over LCR

California Energy Commission Baseline Surplus/Deficit Results 17

California Energy Commission Baseline Results Observations Surpluses exist in all areas through OTC retirements at the end of 2020 reduce the surplus and result in resource deficits beginning in 2021 in LA Basin and West LA subarea that slowly shrink through San Diego area has a surplus that declines over time, resulting in a small deficit in Combined LA Basin/SD has a small deficit in 2021 that slowly increases through

California Energy Commission Observations (cont.) One of the key drivers of the reduction in the deficit in LA Basin between 2021 and 2024 is the ramping of energy efficiency: –Increases savings by about 300 MW just between 2021 and 2024 –Uncertainties exist with the overall AAEE projections and their allocation to specific load busses within LA Basin local area 19

California Energy Commission SENSITIVITY RESULTS 20

California Energy Commission Sensitivity Study Baseline assumptions are carefully prepared, but most are subject to uncertainty Ease of use of LCAAT allows assessments of uncertainty too resource intensive to be used with other assessment tools Consider plausible range of alternative assumptions around the baseline Analyze impact on surplus/deficits by local area 21

California Energy Commission 11 Variables Assessed IEPR Demand Forecast 2.AAEE Savings Reduced by Recent EM&V 3.Transition of CHP QFs to wholesale gen. 4.Demand Response – Full Capability 5.Demand Response – Moderate Capability 6.Higher Demand Growth than CEC Forecast 7.Mid-AAEE Savings Projections 22

California Energy Commission 11 Sensitivities (cont.) 8.RFO Performance Below Nominal 9.RPS High DG + DSM Portfolio 10.Storage High – Satisfies CPUC D Storage Moderate – Mid Way between Baseline Storage and High Storage 23

California Energy Commission Alternative DR Capability in 2024 Effective (MW) Moderate (MW) Full (MW) Combined LA Basin / SD Area LA Basin West LA (effective) 182 West LA (less effective) Eastern-Metro subarea Eastern Sub-area bal San Diego Subarea 21 24

California Energy Commission Alternative AAEE Projections(MW) Case Area Baseline AAEELA Basin (low-mid)West LA subarea Eastern-Metro subarea San Diego SensitivityLA Basin (40% Reduct.)West LA subarea Eastern-Metro subarea San Diego IncrementLA Basin West LA subarea Eastern-Metro subarea San Diego

California Energy Commission Alternative RPS Portfolios (MW) Area/Type 33% Trajectory Mid-AAEE 33% High DG + DSM Difference LA Basin DG Central Station Renew Western LA Basin DG Central Station Renew.000 Eastern LA Basin DG Central Station Renew

California Energy Commission Combined Area Selected Sensitivity Results

California Energy Commission LA Basin Area Selected Sensitivity Results

California Energy Commission Sensitivity Results Observations Sensitivity results have a similar shape to the baseline surplus/deficits. Some variables improve the surplus/deficits while other variables worsen surplus/deficits. Sensitivities may have different impacts on the local areas/subareas remains a critical year due to OTC retirements. –DR Full and RPS: High DG + DSM sensitivities are the only two that eliminate the deficit in

California Energy Commission SCENARIO RESULTS 30

California Energy Commission Scenario Development Alternative scenarios were developed: –Optimistic Bookend – 2014 IEPR load forecast, full DR capability, high levels of storage –Markets Cooperate – moderate levels of DR capability, moderate levels of storage –Incentives Fail – higher base forecast, partial AAEE savings –Pessimistic Bookend - higher base forecast, partial AAEE savings, IOU preferred resources not fully achieved, incomplete conversion of CHP QFs 31

California Energy Commission Surplus/Deficit: Combined Area 32

California Energy Commission Surplus/Deficit: LA Basin 33

California Energy Commission Surplus/Deficit: SD Subarea 34

California Energy Commission Surplus/Deficit Range in 2024 Optimistic (MW) Baseline (MW) Pessimistic (MW) Combined LA Basin / SD Area 1193(237)(1975) LA Basin1138(77)(1496) West LA subarea524(291)(1253) Eastern-Metro subarea3637(378) San Diego Subarea175(40)(358) 35

California Energy Commission Baseline vs. Scenarios No alternative scenario illustrates a radical change in pattern from the Baseline pattern. Combined, LA Basin and West LA subarea all have similar shapes dominated by large loss of fossil OTC on 12/31/2020. San Diego subarea has a different shape since its OTC capacity loss is 12/31/2017. Bookend scenarios have a quite wide range. 36

California Energy Commission FINDINGS AND CONCLUSIONS 37

California Energy Commission Conclusions Baseline results for key years are consistent with ISO power flow study results. LCAAT reveals deficits for all areas involving LA Basin. LCAAT shows San Diego subarea surplus is steadily declining toward small deficit in Alternative assumptions can eliminate deficits or increase surpluses. 38

California Energy Commission Findings Deficits are a source of concern, not alarm. The ISO should study year 2021 using its standard power flow modeling technique. The CPUC should: –Study local capacity requirements in the 2016 LTPP for years 5-8 forward. –Consider using an expanded version of LCAAT for JRP, Track 2. Critical to monitor demand-side savings and use realistic range of projections for key variables. 39

California Energy Commission USING THE TOOL TO TRIGGER MITIGATION 40

California Energy Commission Analyses to Support Decisions Regular Activity –Update and run LCAAT periodically. –Update and run LCAAT as significant new information becomes available. –Communicate results to staff of other agencies. If LCAAT results show future deficits –Identify any independent information that can inform a decision. –Brief agency management team. –Request ISO to conduct a power flow study. –Provide LCAAT and power flow results to agency decision- makers 41

California Energy Commission Triggering Mitigation Measures ILLUSTRATIVEPOSSIBLE ACTIONS Projection pattern dictates mitigation Case A - projections show a temporary gap –Trigger a compliance date deferral request to SWRCB Case B - projections show a large, permanent gap –Trigger new fossil capacity option 42

California Energy Commission Mitigation Measure Selection Nature of the shortfall of resources versus requirements –Amount: small or large –Time period: limited or permanent –Area in which deficit is predicted to occur Considerations –The uncertainty of shortfall estimates –The elapsed time from triggering until the solution could be operational –Feasibility of off ramps if new information emerges 43

California Energy Commission QUESTIONS? 44