1. Economic Planning Study Presentation Northwest Coal Retirement Reduction Study Results Kevin Harris February 3, 2015

2. 2 Study Objective Impacts on Northwest transmission system, due to Announced Coal retirement (Centralia and Boardman) Replacement Capacity Included Sensitivity of additional coal retirement in the Northwest Currently focus on flow pattern (utilization), congestion,.. This is not a reliability analysis Not focus on stability or system inertia,.. If a significant amount of new congestion is identified additional analysis can be preformed

3. 3 Review of Major Assumptions Use WECC 2010 Backcast as starting point  Improved backcast to mimic historic flows Use 2017 loads for all forecast runs  Eliminates the need to develop seven year for load growth Supply assumptions reflect current development for 2017 Key Base Case Assumptions:  ST-Coal retirement based on WECC Base Case Fall-2014  Modeled announced utility repowers  California Once Through Cooling changes + SONG replacement capacity Evaluate location impact of generic replacement capacity for Centralia (1,340 MW)  Replacement capacity consist of 1,320 MW (4 1x1 CC) of combine cycle  Three locations evaluated (Centralia, North of Seattle and Stanfield areas) Sensitivity runs with potential Colstrip 1&2 retirement Sensitivity runs by adding 600 MW of new wind in Montana with the proposed Colstrip 1&2 retirements

4. 4 Potential Replacement Capacity Sites Centralia Area: North of Longview and South of Olympia North of Seattle: North of the greater Seattle Metro Area Stanfield Area: Stanfield, John Day, Boardman Area North of Seattle

5. 5 Summary of Base Cases Base CaseCase Abbrv Base Coal Retire Replace Cap at Centralia Replace Cap N. of Seattle Replace Cap at Stanfield Base Case 0B0No000 Base Case 1B1Yes1,32000 Base Case 2B2Yes9903300 Base Case 3B3Yes6600 Summary of net replacement capacity in the Northwest used in the Base Case Replacement capacity for Centralia 1,340 MW is 4 1x1 CC 330 MW each for 1,320 MW Based Coal Retire assumes 7,000 MW of coal is retired or converted to NG since 2010 Colstrip was assumed to be in-service in all Base Cases

6. 6 Summary of Sensitivity Cases SensitivityCase Abbrv Based On +MT Wind Replace Cap at Centralia Replace Cap N. of Seattle Replace Cap at Stanfield Sensitivity 1S1B1No1,6500330 Sensitivity 2S2B2No990660330 Sensitivity 3S3B3No66001,320 Sensitivity 2w*S2wB2Yes990660330 Sensitivity 3w*S3wB3Yes66001,320 Sensitivity Cases are based on the Base Cases with the potential retirement of Colstrip 1&2 (614 MW) * “w” indicates 600 MW of additional wind installed in Montana

7. 7 Conclusions No significant impact from replacing Coal Transmission flow typically within historic operation (2010-2014) Path operating limits are reached: Within historic operations: Montana to Northwest, North of John Day, and South of Allston Greater than historic operation was reached on COI+PDCI Modeling issues with Hydro generation during spring run-off Losses decreased do to reduced generation from replacement supply Most of the savings is during the off-Peak As replacement capacity is located closer to load center result in increase saving

8. 8 Base Cases

9. 9 Base Case: Observations Generation from Colstrip does not change between any of the Base Cases Net dispatchable generation in the Northwest are all equivalent in Base Case 1-Base Case 3 Generation patterns shift between East and West Cascade depending where the new generation is installed

10. 10 Base: NW Dispatchable Generation NW Dispatchable Generation: Thermal generation in the NW that is dispatchable: ST-Coal (Centralia, Boardman, and Colstrip) CC: Dispatchable CC generation in WA and OR A full list of units is in the Appendix Dispatchable CC replace 82% of the lost generation from the retirement of Centralia and Boardman

11. 11 Base: Net Annual NW Exports Annual net NW exports remains stable between Base Case 1-3 Location of replacement capacity does not impact NW exports Net NW Exports drops 310 while CA Exports drops 150 aMW Net NW Export: + Path 3 (NW-BC) + Path 66 (COI) + Path 65 (PDCI) + Path 76 (Alturas) – Path 8 (MT-NW) – Path 14 (ID to NW)

12. 12 Base: Net Monthly NW Exports NW is a net importer during the fall and winter months Spring run-off continues to be the primary driver of exports Net NW Export: + Path 3 (NW-BC) + Path 66 (COI) + Path 65 (PDCI) + Path 76 (Alturas) – Path 8 (MT-NW) – Path 14 (ID to NW)

13. 13 Base: West of Cascade - North All Base Cases are within historic operating range B3 flow increases over B1 & B2 flow by 328 aMW After applying a backcast bias of +270 aMW, flows are within or on the high side of historic operation Backcast flow is low by -270 aMW (-5.6%) Historic flow is based on BPA Flowgate data for 2010 through 2014 RTC Flow (aMW) Act 2010: 4,830 Backcast: 4,560 Base 0: 5,110 Base 1: 4,900 Base 2: 4,820 Base 3: 5,145 Rounded to the nearest 5

14. 14 Base: West of Cascade - South All flow are on the high side of historic operating range B3 flow increases over B1 & B2 flow by 169 aMW After applying a backcast bias of -200 aMW, flows remain are the high side of historic operation Backcast flow is high by 200 aMW (6.6%) Historic flow is based on BPA Flowgate data for 2010 through 2014 RTC Flow (aMW) Act 2010: 3,080 Backcast: 3,280 Base 0: 3,615 Base 1: 3,615 Base 2: 3,670 Base 3: 3,820 Rounded to the nearest 5

15. 15 Base: North of John Day All Base Cases are within historic operating range B2 flow increases over B1 & B3 flow by 226 aMW After applying a backcast bias of +445 aMW, flows remain within historic operation except peak flow Backcast flow is high by 445 aMW (29.3%) Historic flow is based on BPA Flowgate data for 2010 through 2014 RTC Flow (aMW) Act 2010: 1,520 Backcast: 1,965 Base 0: 1,950 Base 1: 2,130 Base 2: 2,355 Base 3: 2,140 Rounded to the nearest 5

16. 16 Base: South of Allston Base Case 0, 1, and 2 are all within historic operating range B3 flow decreases over B1 & B2 flow by -195 aMW After applying a backcast bias of -180 aMW, flows are within or on the low side of historic operation Backcast flow is high by 180 aMW (29.2%) Historic flow is based on BPA Flowgate data for 2010 through 2014 RTC Flow (aMW) Act 2010: 605 Backcast : 785 Base 0: 785 Base 1: 790 Base 2: 740 Base 3: 565 Rounded to the nearest 5

17. 17 Base: Montana to Northwest All Base Cases are within historic operating range Peak flow and peak flow with backcast bias (-75 MW) are within path rating Backcast flow is high by 75 aMW (5.4%) Historic operation range consist of operation between 2010 and 2014 Note: Historic data used was BPA West of Garrison Used Path rating of 2,000 MW this assumes no imports at Mile City DC tie This limit is reached in all Base Cases and Sensitivity w/600 MW of Wind in Montana

18. 18 Base: Flow on COI+PDCI Peak flow or peak flow with backcast bias (+145 MW) are within path rating Backcast flow is high by -145 aMW (-2.8%) 90% of the time flow is within or on the low side of historic operations Historic flow is based on BPA Flowgate data for 2010 through 2014 RTC Flow (aMW) Act 2010: 2,640 Backcast: 2,865 Base 0: 2,815 Base 1: 2,655 Base 2: 2,680 Base 3: 2,655 Rounded to the nearest 5

19. 19 Base: Flow on COI+PDCI Peak flow or peak flow with backcast bias (+145 MW) are within path rating Backcast flow is high by -145 aMW (-2.8%) 90% of the time flow is within or on the low side of historic operations Historic flow is based on BPA Flowgate data for 2010 through 2014 RTC Flow (aMW) Act 2010: 2,640 Backcast: 2,865 Base 0: 2,815 Base 1: 2,655 Base 2: 2,680 Base 3: 2,655 Rounded to the nearest 5

20. 20 Without Centralia CC Replacement Impact to NW net exports if Centralia is not replaced Net NW imports increase 675 aMW w/o Centralia replacement capacity Units: aMW

21. 21 Sensitivity Cases

22. 22 Sensitivity Cases: Observation 94% of the lost generation from Colstrip 1&2 is replaced by dispatchable CC in the NW Note: Replacement capacity for Centralia resulted in only 82%. This is implying that as additional ST-Coal is retired CC is moves down the NW supply stack Net dispatchable generation in the NW remains stable between all runs within an operating range of 1.9% Flow on Montana to Northwest increase 170 aMW with the addition of 600 MW of wind in Montana

23. 23 Sensitivity: NW Dispatchable Generation Net NW Dispatchable generation remains stable between B1-S3 5,880 to 5,795 The addition of 600 MW of wind in MT displaces 55 to 70 aMW of NW dispatchable gen in NW Case * ST- Coal CCTotal B03,2002,9206,120 B11,8104,0505,860 B21,8104,0705,880 B31,8104,0455,855 S11,3104,4855,795 S21,3104,5555,865 S31,3104,5305,840 S2w1,3104,5005,810 S3w1,3104,4605,770 *Rounded to the nearest 5

24. 24 Sensitivity: Net Annual NW Exports From average Base to Sensitivity Cases ST-Coal gen: -500 aMW (Colstrip 1&2) CC gen: 470 aMW (94% of lost Coal gen) Net NW Exports: 445 aMW CA exports remain stable (avg S1-3: 2,693 aMW) CaseNetTo CA Bo1,4312,815 B11,1252,650 B21,1352,680 B31,1052,655 S11,5352,695 S21,6002,695 S31,5602,690 S2w1,5302,775 S3w1,4802,740 NW Export (aMW) *Rounded to the nearest 5

25. 25 Sensitivity: Net Monthly NW Exports Net monthly Northwest exports remain stable across all cases Avg Base Cases (B1-B3): 1,121 w/2.6% range Avg Sensitivity Cases (S1-S3): 1,565 w/4.0% range Avg Sensitivity w/Wind (S2w-S3w): 1,504 w/3.7% Net NW Export: + Path 3 (NW-BC) + Path 66 (COI) + Path 65 (PDCI) + Path 76 (Alturas) – Path 8 (MT-NW) – Path 14 (ID to NW)

26. 26 Sensitivity: West of Cascade West of Cascade – North/South Sensitivity S1-S3: Relative to B1-B3, peak flow remains constant and average flow remains constant (+/- 2.0%) Sensitivity S2w-S3w: Relative to S2-S3, the addition of 600 MW of wind in MT result in peak flow remains constant and average remains constant (+/- 2.0%) West of Cascade - North B2 to S2: -200 aMW S2 to S2w: + 50 aMW Historic flow is based on BPA Flowgate data for 2010 through 2014

27. 27 Sensitivity: North of John Day Sensitivity S1-S3: Relative to B1-B3, peak flow drops -159 MW and average flow drops -229 aMW Sensitivity S2w-S3w: Relative to S2-S3, the addition of 600 MW of wind in MT result in peak flow increasing 532 MW and average flow increases 170 aMW Historic flow is based on BPA Flowgate data for 2010 through 2014 Backcast Bias: -445 aMW

28. 28 Sensitivity: South of Allston Sensitivity S1-S3: Relative to B1-B3, peak flow remains constant and average flow remains constant Sensitivity S2w-S3w: Relative to S2-S3, the addition of 600 MW of wind in MT result in peak flow remains constant and average remains constant Historic flow is based on BPA Flowgate data for 2010 through 2014 Backcast Bias: -180 aMW

29. 29 Sensitivity: Montana to Northwest Sensitivity S1-S3: Relative to B1-B3, peak flow drops -341 MW and average flow drops -347 aMW Sensitivity S2w-S3w: Relative to S2-S3, the addition of 600 MW of wind in MT result in peak flow at path rating (2,000 MW) +341 MW and average flow increases 292 aMW Historic flow is based on BPA Flowgate data for 2010 through 2014 Note: BPA West of Garrison was used for WECC Path 8 Backcast Bias: -75 aMW

30. 30 Sensitivity: COI+PDCI Sensitivity S1-S3: Relative to B1-B3, peak flow remains constant and average flow remains constant Sensitivity S2w-S3w: Relative to S2-S3, the addition of 600 MW of wind in MT result in peak flow remains constant and average remains constant Historic flow is based on BPA Flowgate data for 2010 through 2014 Backcast Bias: 145 aMW

31. 31 What Next? Results presented in a different format? Additional sensitivity case of existing dataset? Seasonal derate of paths Study Report Long Term: The creation of unit mapping to a power flow case. Once this is completed updating it to a new power flow cases can be done in a week (Updated and tested). Develop Wet, Dry and Critical NW Hydro generation? Multi year backcast Need to process additional historic data to backcast Create the dataset

32. Questions?

33. 33 Appendix

34. 34 Posted Results - 1 of 2 Major Path Flow: Backcast and forecast results/charts for: On-Peak, Off-Peak and Round the Clock (RTC) flow by month can be downloaded from ColumbaGrid web site File Name (Excel files)Contains Interface_Flow_Backcast_W141219aW141219a Backcast Interface_Flow_Forecast_B0-B3_W150106aB0, B1, B2 & B3 Interface_Flow_Forecast_B1-S1_W150106aB0, B1 & S1 Interface_Flow_Forecast_B2-S2w_W150106aB0, B2, S2 & S2w Interface_Flow_Forecast_B3-S3w_W150106aB0, B3, S3 & S3w Interface_Flow_Forecast_B1_woCentraliaCC _W150106a B0, B1 w/ 0/4 CC. B1 w/ 2/4 CC. & B1 w/ 4/4 CC Note file size ~69 MW each

35. 35 Posted Results - 2 of 2 Dispatchable generation by month by case File: PNW_DispGen_W150106a.xlsx Area losses by month by area File: Losses_by_Area_W150106a.xlsx LMP by area. Can be viewed hourly or monthly average by time period File: LMP_Charts_B0-B3_W150106a.xlsx Energy Not Service by area File: ENS_W150106a.xlsx

36. 36 Future Modeling Improvements Explore the use of bidding on and off-peak to improve cycling of CC Explore the use of local commitment targets to mimic BA commitment behavior, vs. system commitment Create BANC and LADWP BAs in CA and apply appropriate transfer fees between BAs (CAISO) Develop Hydro profiles for critical, dry, and wet water year. This will include tools to set GridView Hydro parameters to match water year Limit key NW paths based on historic availability of nomogram relationship

37. 37 NW Dispatchable Gen NW Dispatchable Gen List ST-Coal Colstrip Centralia Boardman CC Lancaster CC Hermiston Gen & Pwr Coyote I & II Klamath CG River Road CC Port Westward CC Grays Harbor CC Chehalis CC Beaver CC Mint Farm CC March Point CC Encogen CC Ferndale CC Frederickson CC Goldendale CC Sumas CC Carty I & II Replacement CC Historic data from EIA-923

38. 38 Impact of WY on NW Disp Gen Impact of Water Year (WY) on Northwest dispatchable generation. Based on actual generation from 2008 through 2013

39. 39 Impact of Critical Year Hydro The following charts show the impact of 2001 Hydro on modeled Hydro generation (2008) Normal Hydro is based on 2008 for the Northwest Based on EIA-923 data Matched 202 Hydro plants in WA, OR, ID and MT

40. 40 Historic Path Availability Monthly average availability is based on BPA Flowgate data available at: http://transmission.bpa.gov/Business/Operations/Paths/default.aspx http://transmission.bpa.gov/Business/Operations/Paths/default.aspx Path Rating in charts is modeled value in analyst

41. 41 Historic Path Availability

42. 42 Backcast: Flow on Major Paths Backcasting is a process of applying modeling constraints to mimic historic behavior 2010 is backcast because the starting data set was WECC 2010 Promod dataset converted to GridView

43. 43 Backcast: Flow on Major Paths

44. 44 Backcast: Flow on Major Paths