1. Market Price Forecasts and PPA Rate Scenarios
Tony Liu
Price Risk Analyst

2. Price Forecasts and PPA Rate Scenarios
Required to determine resource options costs, including electricity market purchases and BCH PPA
Provide range of prices to assess portfolios in scenario analysis
Includes:
- Sumas natural gas price forecast
- Mid-C electricity price forecast
- Carbon price forecasts for BC and US
- BCH PPA rate scenarios
Forecasts and scenarios presented in real $2015
Need to adjust forecast prices for other adders (e.g. transportation costs, line losses) before portfolio analysis

3. Gas Market Price Forecasts

4. Gas Market Price Forecasts

5. Electricity Market Price Forecasts

6. Electricity Market Price Forecasts

7. B.C. Carbon Price Forecasts
The carbon tax, introduced in 2008 at $10 per tonne of carbon dioxide equivalent emissions (CO2e), was increased gradually by $5/tonne annually until it reached $30/tonne in B.C. has committed to keep the rate at $30/tonne until 2018.
The carbon tax started in 2008 at $10/tonne and increased to $30/tonne by 2012.
B.C. has committed to keep the rate at $30/tonne until 2018.

8. U.S. PNW Carbon Price Forecasts
BCH’s low, mid, high regional GHG forecasts, NPCC’s base forecast, and PSE’s low forecast all have zero carbon price until 2035.

9. BC Hydro PPA Rate Scenarios
10 year plan (Nov 2013):
- Government will direct BCUC to set rate increases for the initial 2 years at: 9% and 6%
- BCUC will set rate increases for the following 3 years within caps of 4%, 3.5% and 3% (out to F2019)
- BCUC will set rate increases for the final 5 years and actions by BC Hydro and government will ensure increases remain low and predictable
Existing 5% rate rider remains in place
-Low Case: no change in real terms - just keeping up with inflation
-Mid Case: 1% increase per year in real terms
-High Case: 3% increase per year in real terms, with an extra 1% increase in 2024 due to Site C

10. Next Steps
Monitor market and policy developments and any price forecast updates by fall 2015
Determine our base price forecasts and rate scenarios by end of 2015
- Develop HLH and LLH Mid-C price forecasts
- Include transportation/transmission costs, losses
- Translate prices to Canadian dollar units
- Develop market capacity price curves
Update resource options costs
Incorporate market prices to cost of new resources in portfolio analysis

11. Questions?