1. Generation and Import Deliverability Baseline Study CAISO Stakeholder Meeting May 9, 2005

2. Today’s Agenda Background and meeting objectives
Review of study methodology, assumptions and identified issues
Lunch (on your own)
Review of study results
Review of conclusions/recommendations
Discussion of next steps
Status of locational capacity analysis

3. Meeting Objectives Describe preliminary results and implications
Describe ISO recommendations for deliverability in this Baseline Study
Receive stakeholder input on this Preliminary Baseline Study

4. The Concept of Deliverability
Deliverability, for resource adequacy purposes, ensures the output of a generating unit can reach load under peak conditions
Deliverability is an essential element of the CPUC’s resource adequacy requirement
Deliverability does NOT ensure dispatch:
Deliverability does not mean 100% congestion elimination for all load levels
When the 15% reserve margin was established it was assumed that the resources were 100% deliverable.
Our job is to ensure that this is a reasonably accurate assumption.

5. The Concept of Deliverability (continued)
Resources considered in deliverability include:
Existing generators (for aggregate of load)
Imports
Generators within transmission-constrained areas
New generation interconnections
When the 15% reserve margin was established it was assumed that the resources were 100% deliverable.
Our job is to ensure that this is a reasonably accurate assumption.

6. Deliverability Strawperson
The ISO’s proposed strawperson deliverability proposal consists of three assessments:
Deliverability of Generation to the aggregate of load
Deliverability of Imports
Deliverability to Load within transmission constrained areas (locational capacity requirement)
The Baseline study and this presentation focus on the deliverability of generation and imports only
Locational capacity requirements will be determined in a different study

7. Overview - How We Got to this Point -
Spring ISO proposes a straw person deliverability methodology to CPUC
Late CPUC approves methodology in principle
January ISO begins baseline study
January and February 2005 – PTOs provide data to ISO
May 2005 – ISO publishes preliminary results of baseline study

8. Overview (continued) - The Bottom Line -
This preliminary study confirms that:
historical summer peak imports levels are deliverable.
most of the existing generating units in the ISO Control Area are deliverable
Some transmission upgrades are needed over the next few years to make all existing generating units fully deliverable to load using this methodology
The ISO intends to recommend that all existing generators be considered deliverable, and the ISO will work with the PTOs to identify and implement the necessary transmission upgrades

9. Overview (continued) Further Steps for Baseline Study
May, ISO receives stakeholder input and conducts further stakeholder meetings/conference calls if necessary
June, ISO completes deliverability analysis, including any adjustments to the methodology determined to be necessary during stakeholder review
Early July, ISO publishes final results of Baseline Deliverability Study

10. Preliminary Baseline Study for Generation and Imports Study Assumptions and Identified Issues

11. Part I: Background and Study Methodology
Part II: Study Assumptions
Part III: Identified Study Issues

12. Deliverability of Generation: Assumptions
Capacity resources within a given sub-area must be able to be exported to other parts of the Control Area experiencing a resource shortage due to forced generation outages

17. Forced outages are random and occur throughout the system

18. Generation Pocket Analysis
The location of units forced out and causing reserve margin shortage in Scenarios 1 and 2 do not significantly change the loadings on constrained transmission lines associated with the generation pocket
The units forced out in Scenarios 1 and 2 are outside of the generation pocket study area, so their status and dispatch levels, in aggregate, do not significantly impact the study area
The hundreds of thousands of generation forced outage scenarios can be sufficiently represented by evenly distributing the forced outages across the system

19. Deliverability of Generation: Methodology
A deliverability assessment should be applied to existing and planned generation located in the control area
This baseline study covers planned generation through 2006
Developed from PJM Methodology
Peak load conditions
Aggregate of generation can be transferred to aggregate of the ISO Control Area Load
Peak load are conditions are when a capacity shortage is most likely to occur

20. Generation Deliverability Baseline Analysis
First we need to apply deliverability test to existing system:
Validate deliverability test methodology and parameters
Identify all overloads
Mitigate overloads
Once all overloads in baseline analysis are mitigated, then new overloads that are identified (using the same test) can be consistently and equitably assigned to proposed new generation projects

21. Overloads identified during the baseline study could be mitigated by:
Building new or upgrading existing transmission facilities
Implementing operating solutions (i.e. short term ratings, RAS/SPS)
Limit capacity to be counted from the portion of existing generation that is deliverable

22. Overview of Test Procedure
Build power flow base case model
Create base case generation dispatch
Create study areas around each line and transformer and analyze them individually
Identify overloaded lines and transformers constraining generation capacity and the units that are constrained
MUST uses linear optimization routines to search for groups of generation that impact heavily loaded lines

23. Elaborating on the Base Case Dispatch
Dispatching generation in the base case essentially means that we evenly distribute the available generation
Since all available capacity is needed, it is all dispatched without consideration of cost
Base case values will also represent approximate dispatch of generation outside of the study areas during the analysis.
Generation inside of the study areas will be maximized during the study

24. Study Areas Are Created Around Each Line and Transformer
Each transmission line and transformer is analyzed individually
A study area is established for each line and transformer that includes all generation with a 5% distribution factor or greater on the particular line or transformer
Capacity generation dispatch inside the study area is maximized to determine the maximum potential loading on the line or transformer.
Generation outside the study area is proportionally decreased to balance the load and resources
This process is intended to test the ability of resources inside of the study area to be dispatched at full output when various resources outside of the study area are unavailable

25. Example Generation Deliverability Test Study Area for Gregg-Borden 230 kV line
Los
Banos
Bellota
230 kV
230 kV
-16%
Dos Amigos
230 kV
Melones 230 kV
Moss Landing
230 kV
Warnerville
230 kV
1.6%
Coburn
Wilson
230 kV
230 kV
Line outage
Panoche
230 kV
8.5%
23%
Storey
230 kV
Helms 230 kV
230/115 kV
8.8%
Bank #1
10%
Henrietta 230 kV Mc
Call
Borden
230 kV
230 kV
Line overload
Gregg
Gates
Arco
230 kV
230 kV
230 kV
Morro
Bay PP
230 kV
Gates
500 kV
Midway 230 kV
DFAX% 2%

26. Generation Deliverability Summary
Baseline analysis identifies all cases where thermal overloads occur with the existing set of facilities
The same test applied in this baseline analysis will be applied with new generation capacity so all new overloads can be consistently and equitably assigned to proposed new generation projects

27. Deliverability of Imports -- Assumptions
California is dependent on imports to satisfy its resource requirements
Imported resources in the resource plans of all LSEs need to be assessed by the ISO to ensure that they can be simultaneously accommodated on the transmission grid
When relying on imports to meet reserve margin requirements, LSEs with the assistance of the ISO should demonstrate that their imports are deliverable from the tie point to aggregate load on the ISO System using a deliverability test procedure similar to the generation deliverability test

28. Deliverability of Imports and Internal Generation – Assumptions
Assessing the deliverability of imports and generation simultaneously will ensure that any interaction between the deliverability of imports and generation is considered
This can be done by modeling import capacity to be used for resource adequacy planning purposes as the starting point for import assumptions in the internal generation deliverability analysis
The initial import capacity would be based on historical data during summer peak load and high import conditions.
Deliverability conflicts between imports and internal generation were expected to be minimal using historical import data

29. Deliverability of Imports and Internal Generation – Summary
The initial baseline analysis would determine the deliverability of all existing internal generation units and the total amount of imports on a path by path basis
This preliminary analysis did not identify any deliverability impacts associated with the historical import levels
Total deliverable import capacity would be allocated to LSEs using a predetermined allocation methodology (to be determined by the CPUC)

30. Network model and Generation Capacity Study – Assumptions
A network model of the ISO Controlled Grid modeling the year 2006 was used for this study
Generation Capacity data collected from generation owners was used for this study
Capacity values as defined in the Resource Adequacy Workshop Report:
Net Dependable Capacity
Qualified Capacity
Capacity values under Summer Peak temperature conditions.
All units commercially operable by summer 2006 were modeled

31. Import, Load and Contingency Study -- Assumptions
Imports modeled in the base case are based on OASIS import schedule data from 2003 and 2004:
Summer peak load, maximum import conditions
by branch group
The 2006, 1 in 5 peak load forecast for the ISO Control Area was modeled in the base case
All NERC Category B and C contingencies were analyzed while applying the study methodology:
excluding C.3 overlapping contingencies

32. Identified Generation Data Issues
For some units, conflicting capacity data was provided by the generation owner and the generation power purchasing utility, due to their different interpretations of the Qualifying Capacity definitions in the CPUC’s Resource Adequacy Workshop Report
The highest capacity value was tested in the base case.
Capacity data provided for some units was significantly higher than the capacity data in WECC basecases
The highest capacity value was tested in the base case

33. Identified Generation Data Issues
For intermittent generation, Qualifying Capacity data represents an average production over summer peak load hours
In some cases this average capacity value could be deliverable but production amounts above that average are not deliverable
In this situation the average capacity amount is not a valid qualified capacity value since it could represent levels of production that would not be deliverable based on the deliverability methodology
For this study, the capacity data already in the original WECC base case was assumed to be the maximum production during summer peak load hours to ensure that all production values represented by the average capacity would be deliverable

34. Identified Line Rating Issues
Some ratings have recently been entered into the ISO Transmission Register that are lower than the previously provided facility rating
These new ratings have not been evaluated using traditional transmission assessment methodologies
Therefore identified deliverability issues associated with facilities that have this type of rating issue should not be attributed to the proposed deliverability methodology

35. Preliminary Baseline Study for Generation and Imports Study Methodology and Results

36. Deliverability Problems
A deliverability problem is identified by conditions when resources cannot be delivered to load because their outputs cause reliability problems in the transmission system
Causes of deliverability problems:
Dispatch of resources: Under normal conditions, deliverability problems may occur from the dispatch of resources
Dispatch of resources and contingencies: Combined impact from these two factors cause deliverability problems under emergency conditions
This study looks for potential deliverability problems from a combination of dispatch and contingency scenarios

37. Study Methodology
The study technique is divided into two main parts: ) Screening process and 2) Verification process
Screening process searches for potential deliverability problems using linear analysis technique. The main purpose of this process is to minimize the number of scenarios that will be analyzed by verification process
Then the scenarios that pass the screening process will be analyzed by Verification process to confirm deliverability problems using AC power flow

38. Overview of Study Methodology

39. Study Methodology – Screening Process
Identify potential deliverability problems using linear analysis
Since it does not require power flow solution for all scenarios This technique speeds up the study process significantly
Scenarios that are identified by the screening process will be analyzed again with the verification process

40. Study Methodology – Verification Process
Simulates the scenarios identified by the screening process by utilizing a simplified governor power flow
If a deliverability problem is confirmed, calculate generation capacity reduction that will lower power flow on the overloaded facility below its rating

41. Output Report - Example
Monitored Facility
Details of the outage
Resources with DFAX 5% or higher

42. Output Report - Example

43. Output Report - Example
39%
-3%
26%
24%
21%
DFAX

44. Output Report
The Output Report assigns deliverability status of each facility into one of the following categories:
Fully deliverable: 100% capacity of the resources using this transmission facility could be counted as deliverable for resource adequacy purposes
Partially deliverable: Without mitigation, a fraction of capacity should be discounted due to deliverability problems
Non-deliverable: This is an extreme case where the resources substantially contribute to deliverability problems. Without mitigation, no part of the resources utilizing this facility can be counted for resource adequacy purposes under this test

45. Study Results – Summary of preliminary deliverability problems
PG&E Service Territory
*Curtailing the generators alone is not sufficient to mitigate the overloading conditions

46. Study Results PG&E (cont)
*Curtailing the generators alone is not sufficient to mitigate the overloading conditions

47. Study Results
SCE Service Territory

48. Study Results
SCE (Cont)

49. Study Results
SCE (Cont)

50. Study Results
SDG&E Service Territory

51. Study Results
SDG&E (Cont)

52. Summary of the Deliverability Problems For the Entire System
Study Results
Summary of the Deliverability Problems For the Entire System
*Note 1: 923 MW of deliverability problems in the PG&E area are related to criteria violations identified in the transmission expansion planning process. **Note 2: MW of deliverability problems in the SCE area are related to recent transmission line deratings. The revised line ratings will be reflected in SCE’s 2005 grid planning assessment. Any identified criteria violations will be addressed as part of that process.

53. QUESTIONS?

54. Preliminary Baseline Study for Generation and Imports Study Conclusions and Recommendations ***Stakeholder Comments Needed for these Recommendations

55. Recommendation: Approve the Deliverability Study Methodology for generation interconnection study purposes and for resource adequacy counting purposes
No fatal flaws in the Deliverability Study Methodology were identified
The majority of issues identified by this study are not attributable to the application of the proposed Deliverability Study Methodology
This study, using the proposed methodology, demonstrates that historical summer peak imports and almost all of the existing generation are deliverable

56. Recommendation: Identified issues should be investigated further by PTOs
The issues identified by this study should be investigated and resolved by the PTOs
Alternatives for resolution include:
Building new or upgrading existing transmission facilities
Implementing operating solutions (i.e. short term ratings, RAS/SPS)

57. Recommendation: Existing units and imports should be considered deliverable
During an interim period, including but not limited to the study year 2006, all generation should be considered to be fully deliverable
By a date to be determined, any deliverability issues from this baseline study that affect existing units and imports should be resolved by the PTOs

58. Recommendation: ISO with PTO support should perform additional baseline study
A Phase II baseline study needs to be performed by the ISO with PTO support to include all new generation projects that have approved interconnection studies and operating dates after 2006 to establish the Deliverability of these projects
The ISO should review with stakeholders a planned schedule for performing this additional baseline study

59. Next Steps Proposed Action for Finalizing Phase I Baseline Study
May 23, ISO receives written stakeholder comments
Early June – ISO conducts further stakeholder meetings/conference calls if necessary
June, ISO completes deliverability analysis, including any adjustments to the methodology determined to be necessary during stakeholder review. ISO publishes final results of Phase I Baseline Deliverability Study
Early July, Begin Phase II Baseline Deliverability Study

60. Status of Locational Capacity Analysis
ISO presented Locational Capacity Requirement methodology/criteria at CPUC workshops late 2004
Three on-going processes are inter-related
Resource adequacy
Deliverability
Locational capacity requirement
Present plans are that a transition from RMR to Local Capacity will need to occur in 2006
ISO RMR analysis currently underway with results presented in May 2005
ISO will re-study the system utilizing the proposed Locational Capacity methodology/criteria with results presented in June 2005
ISO is working towards all three processes coming together in July 2005