Providing Resource Planning Guidance to Individual Utilities PNW Resource Adequacy Steering Committee Meeting April 13, 2007

Resource Adequacy Steering Committee Meeting 2 Objectives Use the regional standard to provide non- binding guidance to individual utilities to aid them in their resource planning processes Must not “trample on the jurisdiction of states or prerogatives of individual utilities in planning and acquiring resources to meet load”

April 13, 2007Resource Adequacy Steering Committee Meeting 3 Range of Options 1.Regional-only assessment – i.e. no guidance to individual utilities 2.Detailed analytical process to convert regional metrics and targets into utility level values 3.General rule-of-thumb type of screening tool for utilities

April 13, 2007Resource Adequacy Steering Committee Meeting 4 Guidance for Energy Planning Primarily for hydro-based utilities Must have sufficient resources to meet the average annual demand Counting critical hydro generation Including a conservative estimate for spot market supply and other non-firm resources Resulting in no more than a 5% LOLP

April 13, 2007Resource Adequacy Steering Committee Meeting 5 Guidance for Capacity Planning Primarily for thermal-based utilities Guidance on sufficient resources to –Maintain hourly operating reserves –Meet peak hour load deviations for a 1-in-20 year temperature event Resources include a conservative estimate for spot market supply and other non-firm supplies Resulting in no more than a 5% LOLP

April 13, 2007Resource Adequacy Steering Committee Meeting 6 Adapting the Regional Standard for Individual Utilities Needs to take into account dependence on –Hydro generation –Spot market supply –Other non-firm resources Each utility’s metrics and targets will likely vary from the regional standard

April 13, 2007Resource Adequacy Steering Committee Meeting 7 Option 1 – Regional Only Assess the status of the power supply on a regional basis only ALL OPTIONS: If a warning status results, publish available information to identify sources of inadequacy Individual utilities encouraged to take appropriate actions

April 13, 2007Resource Adequacy Steering Committee Meeting 8 Option 2 – Detailed Tool (Energy) Determine dependence on hydro flex Determine dependence on imports Determine dependence on IPPs R = function (flex, imports, IPP) Utility’s FIRM resources ≥ (1 – R) Load

April 13, 2007Resource Adequacy Steering Committee Meeting 9 Option 3 – General Tool (Energy) Normal weather regional load is about 22,500 MWa (2010 operating year) Non-firm resources counted in the regional standard include –3,000 MWa of in-region IPP generation –1,500 MWa of spot market supply, hydro flexibility and other non-firm resources Non-firm resources = 4,500 MWa or about 20% of the regional load

April 13, 2007Resource Adequacy Steering Committee Meeting 10 Option 3 – General Tool (Energy) The sum of FIRM regional resources is greater than or equal 80% of the regional load Half of Region’s utilities are hydro utilities 1/, thus –For a hydro utility, the sum of its FIRM resources should be ≥ 70% of its load –For a thermal utility, the sum of its FIRM resources should be ≥ 90% of its load 1/ Hydro utilities secure 25% or more of their firm resources from hydro