1. Planning Reserve Margin
Dan Egolf
Senior Manager, Power Supply & Planning

2. Resource Adequacy Requirements
Planning Reserve Margin (PRM): power supply buffer that allows a utility to reliably serve customers
Three primary drivers:
Dependent on resource portfolio and is utility-specific
Industry standard is Loss-Of-Load-Expectation (LOLE) of 1 day in 10 years
Resource forced outages
Increased demand due to weather
Higher than expected load growth
-PRM’s role is to ensure resource adequacy when dealing with unforeseen increases in demand and forced outages in the system. It serves the utilities’ ultimate goal of “keeping the lights on” over the planning horizon.
-PRM is the dependable capacity above the expected peak demand and is measured in MW or percentage of the expected peak
-PRM is calculated as the difference between system dependable generation capacity and peak demand, measured in either MW or percentage of peak demand
-Three primary drivers for PRM:
-Unavailability of supply due to unplanned generating unit or transmission outages
-Unexpectedly high loads, typically due to extended extreme weather
-A period of load growth that outpaces the possible installation of new supply resources
System characteristics affecting reliability and reserve requirements include load shape, generating unit forced-outage rates, generating unit maintenance-outage requirements, number and size of the generating units in a region or service territory, transmission interties with neighboring utilities, and availability and effectiveness of intervention procedures
PRM isn’t required if market robust enough to rely on market purchases with no risk
PRM includes Operating Reserves which are required to meet NERC and WECC reliability standards and ensure real-time reliable system operation
LOLE is the expected number of days in a year when the aggregate resource is insufficient to meet load. Often, monte carlo simulation analysis is used.
The traditional LOLE criterion is “1 day in 10 years”, or equivalently 0.1 day/year if annual analysis is required.
Caution should be exercised when comparing PRM numbers values stated by different utilities as they may differ in a number of dimensions, and would be specific to the type of resources held by each utility and the nature of their loads

3. What is Planning Reserve Margin (PRM)?
Extra capacity
Not having enough won’t get the job done
Having too much is costly
Shown in MW or percentage
Lots of different ways of measuring it
No “one size fits all” solution
Are additional resources required?
Our study is based on 2012 Load Forecast and information

4. So What’s the Problem?
A basic assumption is that enough resources exist to meet the load
Do we really need PRM?
- Load Uncertainty
A. Short-term weather-related
B. Long-term load growth
- Resource Uncertainty
A. Generation risk
B. Contract risk
C. Market risk
With perfect knowledge far enough in advance, PRM wouldn’t be needed
Every utility’s situation is different

5. How do we evaluate PRM? This requires two steps:
1. Measurement Options:
- Loss of Load Expectation (LOLE, in days per year)
- Loss of Load Hours (LOLH, in hours per year)
- Expected Unserved Energy (EUE, in MWh per year)
- Loss of Load Probability (LOLP, in %)
2. Methodology Approaches:
- Older rule-based
- Modern probabilistic Monte Carlo based
FBC is using LOLE of 1 day in 10 years, or 0.1 day per year using a Monte Carlo simulation

6. Risk Assumptions Load uncertainty
- Long-term load uncertainty is covered as part of the load forecast
- Short-term weather has a significant impact on loads and the timing of the peak load is particularly risky
Generation Risk
- Required operating reserves are part of PRM
- Unit Forced Outage Rate (FOR) based on historical data or reasonable assumptions
Contract Risk: PPA assumed to have no risk
Market Risk (Short-Term)
- Market access of 150 MW is assumed
- Transmission Forced Outage Rate of 0.74%

7. Results: LOLE in the Base Case
Year
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Annual
Winter PRM %
2014
0.000
0.002
0.001
0.004
0.005
0.016
27%
2015
0.015
0.006
0.024
26%
2016
0.009
2017
2018
25%
2019
0.003
0.007
0.020
2020
2025
0.012
0.021
24%
2030
0.014
23%
2033
0.023
0.030
LOLE 0.1 day per year met in all years
PRM is about 25%

8. Results: Cases for Sensitivity Analysis
Description
Meet LOLE Target?
Load Sensitivity Analysis
Case 1
1-in-10 economic drivers
Case 2
Industrial self-generating demand of 40 MW
Case 3
Time of seasonal peaks
Resource Sensitivity Analysis
Case 4
WAX FOR
Case 5
Double FOR
Case 6
No WAX surplus taken into account for PRM requirements
Case 7
No additional capacity planned for gaps
expected gaps must be met
Market Sensitivity Analysis
Case 8
Market sizes at the base case FOR
Case 9
No market access
alternative capacity needed
Case 10
Market FOR at 150 MW

9. Next Steps
We can present a detailed ½ day technical workshop on PRM if there is interest
Our PRM Report will be updated and included as part of the Long Term Electric Resource Plan
Questions?