California Energy Commission Staff Paper - April 12,20071 Estimating the Generation Resource Mix of Electricity Imports to California – Energy Commission Staff Paper California Energy Commission and Public Utilities Commission Workshop on Reporting and Tracking Greenhouse Gas Emissions for a Load-Based Cap April 12 and 13, 2007 Al Alvarado Electricity Analysis Office California Energy Commission

California Energy Commission Staff Paper - April 12,20072 Presentation Overview Purpose of Resource Mix Analysis Role of Electricity Imports Average Regional Methodology Alternative Approach to Estimate Resource Mix

California Energy Commission Staff Paper - April 12,20073 Goals of Resource Mix Analysis Increase attribution of specific purchases and ownership Estimate unspecified purchases into what is bought & sold in the market Advance links between statewide and LSE accounting Incremental improvement of current estimate, while shifting emphasis to new reporting and tracking

California Energy Commission Staff Paper - April 12,20074 Types of Electricity Imports Ownership shares of generation located out- of-state Contracts and other entitlements Purchases to satisfy customer obligations Purchases to cover unexpected short-term variations (i.e. forced outages) Economy Purchases Wheeling through CA

California Energy Commission Staff Paper - April 12,20075 Average Methodology Used for GHG Emissions Imports Inventory 2000 to present GHG emission estimates apply the average generation mix in each region Current estimates reported in: –Net System Power Report –2006 Greenhouse Emissions Inventory Report

California Energy Commission Staff Paper - April 12,20076 Limitations of Averaging Approach Does not account for specific ownership or power purchase agreements Ignores system constraints Does not capture when and what types of electricity is purchased Assumes California is purchasing the same mix as region’s native load Does not account for other state’s priority preferences

California Energy Commission Staff Paper - April 12,20077 Revised Approach to Estimate Imports Resource Mix First identify ownership generation Identify long-term power purchase contracts and entitlements (i.e. Hoover) Remaining balance are considered unspecified system imports

California Energy Commission Staff Paper - April 12,20078 Specified and Unspecified Imports by Region for 2005

California Energy Commission Staff Paper - April 12,20079 Estimating Sources of Unspecified Imports Separate Northwest and Southwest regions – different generation profiles Coordination with other western efforts Initial study uses marginal generation analysis for Southwest mix Initial study uses marginal generation analysis and sales assessment for Northwest

California Energy Commission Staff Paper - April 12, Rationale for Marginal Generation Analysis Used for Electricity System Imports Utilities and generators typically use their cheapest electricity supplies to meet customer obligations Baseload generation is usually the lower cost resource, mostly owned by utilities Remaining surplus are generally the marginal generation resources Electricity from marginal generation will be sold if there is a market

California Energy Commission Staff Paper - April 12, Southwest Study System simulations to respond to stakeholder questions on marginal resource assumptions Test to see what generation is re-dispatched with reduced imports Transfer capability reduced to amount needed for specified resources Transmission constraints create GWH coal- generation drop (0.1%) Natural gas generation increase in CA & Southern Nevada, declines in rest of SW

California Energy Commission Staff Paper - April 12, Table Southwest Electricity Imports Resource Mix (GWh) Resource TypeSpecifiedUnspecified Unspecified Percent Total Percent mix Coal34, % 35, % Nuclear7,0740 0% 7, % Hydropower2,0930 0% 2,0933.4% Natural Gas017,360 96% 17, % Renewables00 0% 00.0% Total Imports44,15918, % 62,242100% Percent Specified and Unspecified 71%29%100%

California Energy Commission Staff Paper - April 12, Unspecified Imports from Northwest NW predominately hydroelectric system High correlation between NW water conditions and California system imports Identify types of sellers to California Attribute generation mix to each seller: –IOU, POU & Other = WA/OR disclosures –Canada = Hydro –IPP & Marketers = 50% Hydro, 46% Gas, 4% Coal

California Energy Commission Staff Paper - April 12, Table Northwest Electricity Imports Resource Mix (GWh) Resource TypeSpecifiedUnspecified Unspecified Percent Total Percent mix Coal5651,5728.8%2, % Nuclear %4662.3% Hydropower1,43211, %13, % Natural Gas03, %3, % Renewables %4862.4% Other900%9 Total Imports2,40417,882100%20,286100% Percent Specified and Unspecified 12%88%100%

California Energy Commission Staff Paper - April 12, Comparison of the 2005 Total Statewide Imports Resource Mix Using the Revised and Average Estimation Methods Resource TypeRevised MethodAverage Method Coal45.9%59.4% Large Hydro18.6%18.2% Natural Gas25.8%15.5% Nuclear9.1%6.8% Renewables0.6%0.0% Total100.0%

California Energy Commission Staff Paper - April 12, Inter-State Coordination Working with Washington and Oregon energy staff Better understand purpose and tracking methodologies between states A coordinated regional tracking system is needed –Avoid double-counting and shifting emission attributions –LSE transaction choices that lead to actual emission reduction

California Energy Commission Staff Paper - April 12, Partial Data Available to Track Imports Metered gross and net power flows between 3 CA and out-of-state control area operators Electricity generation and fuel use by power plant Power Source Disclosure for 70% of CA FERC and EIA Reporting Limited information on the generation source of the electricity imports Additional types of data needed to advance ability to track transactions

California Energy Commission Staff Paper - April 12, Conclusion The revised methodology provides a more detailed characterization than previous approaches More LSE purchase data would refine the resource mix estimates This is an interim approach for historical and near- term tracking More policy analysis and inter-state discussion needed prior to finalizing methodology

California Energy Commission Staff Paper - April 12, Background Slides

California Energy Commission Staff Paper - April 12, Net Electricity Imports (MWh) RegionYearQ1Q2Q3Q4Annual total PNW ,1321,475,6152,242,6203,472,1316,826, ,619,4909,208,7248,551,7114,806,16727,186, ,482,2767,534,0885,992,7304,294,35022,303, ,853,3045,992,2025,035,3055,949,92420,830, ,997,0215,731,7117,064,8453,492,10720,285,684 SW ,349,53512,742,71811,124,85814,387,37353,604, ,253,56012,385,21012,137,49217,161,83255,938, ,249,40212,576,50114,764,95116,264,78158,855, ,885,63915,559,71116,903,48617,601,50665,950, ,851,57712,815,95415,582,76017,934,36962,184,661

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California Energy Commission Staff Paper - April 12, Net System Power Report Imports from PNW and SW (GWh)

California Energy Commission Staff Paper - April 12, Net Electricity Imports (GWhs) Import TypeNWSWTotal % of Total Specified Imports2,40444,15946,56356% Unspecified Imports17,88218,08335,96544% Total Imports20,28662,24282,528 Regional %25%75% Source: California Energy Commission

California Energy Commission Staff Paper - April 12,200724

California Energy Commission Staff Paper - April 12, Facility NameDependable Capacity (MW) Ownership Shares PercentMW Intermountain1, %1,738 Mohave1, %915 Four Corners2, %740 Navajo2, %477 Reid Gardner %178 San Juan1, %399 Palo Verde3, %1,060 Total13,6965,507 California Utility Ownership Shares of Generation Facilities Located Out-of-State (Dependable Capacity MW)

California Energy Commission Staff Paper - April 12, Facility Name Intermountain12,85512,94713,02013,85213,118 Mohave6,7666,7126,4016,7156,954 Four Corners5,2114,4685,4255,1715,403 Navajo3,6863,7803,4613,7573,611 Reid Gardner1,1471,2531,2261,2151,176 San Juan2,8633,0002,7433,0243,016 Palo Verde7,8738,4597,8327,7067,074 Total Generation40,40240,62040,10741,43940,351 Generation from California Utility Ownership Shares (Gigawatt hours per year)

California Energy Commission Staff Paper - April 12, CA Utility Ownership of Out-of-State Plants (Summer Capacity MW) * IPP figures represent contracted capacity. ** Source: Global Energy Decisions

California Energy Commission Staff Paper - April 12, Correlation Between PNW Hydro-Generation and Electricity Imports to California ( )

California Energy Commission Staff Paper - April 12, Statewide Electricity Imports Resource Mix (GWh) Resource TypeSpecifiedPercent MixUnspecified Percent MixTotalPercent Mix Coal35,55776%2,2956%37,85246% Nuclear7,23516%3051%7,5409% Hydropower3,5258%11,81133%15,33619% Natural Gas00%21,30559%21,30526% Renewables2371%2491%4861% Other90%0 9 Total46,563100%35,965100%82,528100% Specified and Unspecified56% 44% 100%