1. 1 R.12-03-014: LTPP Track II Workshop – Operating Flexibility Modeling Results Patrick Young Analyst, Generation & Transmission Planning California Public Utilities Commission August 26, 2013

2. 2 Remote Access 2 Call in: Phone #: 866-812-8481 Passcode: 9058288# Remember to use *6 on your phone to mute or unmute: Upon entry to the call, please place yourself on mute, and remain on mute unless you are asking a question WebEx: Meeting Number: 748 742 472 Meeting Password: LTPP https://van.webex.com/van/j.php?ED=217130507&UI D=491292852&PW=NNTYyYTRhMmM0&RT=MiM0 https://van.webex.com/van/j.php?ED=217130507&UI D=491292852&PW=NNTYyYTRhMmM0&RT=MiM0

3. 3 3 Agenda TimeItem 9:30 – 9:40Introduction, Schedule 9:40 – 11:00 Deterministic Model Study Results Presented by Shucheng Liu, Ph.D., CAISO 11:00 – 11:15 Break 11:15 – 12:30 Deterministic Model Study Results (cont.) 12:30 – 1:30Lunch Break 1:30 – 3:30Stochastic Model Study Results Presented by Energy and Environmental Economics (E3)

4. 4 4 Workshop Logistics Restrooms are out the Auditorium doors and down the far end of the hallway In the event of an emergency evacuation, please go to the Opera House courtyard, across from City Hall

5. 5 5 LTPP Schedule August 26Track II Workshop: ISO Operational Flexibility modeling results Track IV Opening Testimony due: SCE LCR modeling results September 4Prehearing Conference: Track II and Track IV procedural issues 18Track II Workshop: SCE Operational Flexibility modeling results 20Track II Opening Testimony due: ISO and SCE 23Track IV Opening Testimony due: All other Parties October 7Track IV Rebuttal Testimony due: All Parties Track IV: Last day to request evidentiary hearings Late Oct.Track IV: Evidentiary hearings if necessary November 1Track II Opening Testimony due: All other Parties 15Track II Rebuttal Testimony due: All Parties

6. 6 Thank you! For Additional Information: http://www.cpuc.ca.gov/PUC/energy/Procurement/LTPP/ltpp_history.htm

7. Review of Scenario Assumptions and Deterministic Results CPUC LTPP Track 2 Workshop August 26, 2013 Shucheng Liu, Ph.D. Principal, Market Development

8. About 2012 Long-Term Procurement Plan (LTPP) Track 2 system operational flexibility study CPUC requested the ISO conduct a system operational flexibility modeling study using the Standardized Planning Assumptions and Scenarios as determined in the CPUC Dec 24, 2012 decision (12-03-014). ISO conducts the operational flexibility study using a Plexos production cost simulation model. ISO studies: 1) Base scenario, 2) Replicating TPP scenario, 3) High DG-DSM scenario, and 4) Base scenario with SONGS. * SONGS is retired in the first three scenarios. Assessment of local reliability needs without SONGs is address by separate studies. Page 8

9. Agenda Model data sources Scenario assumption comparison Preliminary deterministic simulation results Page 9

10. Model Data Sources

11. The Plexos production cost simulation model uses data from multiple sources. Page 11 CPUC RPS Calculator 2012 LTPP Plexos Model 2010 LTPP Study Group 5 Assumptions CPUC Scenario Tool v5 CEC 2012 IPER & 2013 IPER Preliminary TEPPC 2022 PC1 Case & WECC 2012 LRS Report ISO Master Generating Capability List ISO Operation Data Additional CPUC and CEC Inputs

12. Load forecasts and load shapes are drawn from several data sources. Page 12 ISO 2009-2011 Pump Load Profiles CPUC Scenario Tool v5 TEPPC 2022 PC1 Case & WECC 2012 LRS Report WECC All Load Shapes CEC 2012 IPER CA Load Forecast & Incremental Adjustment Outside CA Load Forecast CA Load Profiles Outside CA Load Profiles Outside CA Load Profiles

13. California renewable generation portfolios follow the CPUC scenario definitions. Page 13 CPUC Renewable Generation Shapes CA Renewable Generation Profiles CPUC RPS Calculator TEPPC 2022 PC1 Case & WECC 2012 LRS Report Outside CA Renewable Generation Profiles Outside CA Renewable Generation Profiles CA Resources portfolios

14. Generation resource information is primarily taken from TEPPC 2022 PC1 Case. Page 14 CPUC Scenario Tool v4 TEPPC 2022 PC1 Case & WECC 2012 LRS Report CA Resources & Characteristics Outside CA Resources & Characteristics Outside CA Resources & Characteristics ISO Master Generating Capability List CA Demand Response

15. CEC provided staff forecast of natural gas prices. Comparison of natural gas price forecasts for 2012 and 2010 LTPP studies Page 15

16. Scenario Assumption Comparison

17. Aggregated demand and supply assumptions Page 17 SONG is retired in three of the four scenarios.

18. Base scenario load forecast and adjustments Page 18

19. High DG-DSM scenario load forecast and adjustments Page 19

20. Replicating TPP scenario load forecast and adjustments Page 20

21. California RPS net short calculation Page 21

22. California RPS renewable portfolios Page 22

23. 70% of out-state RPS renewable generation is imported into California in all scenarios. The shift from Hourly Schedule to Intra-Hour Schedule reflect combination of FERC Order 764 and Energy Imbalance Market The scheduling assumptions affect Regulation and Load-Following requirements calculated in Step 1 Page 23

24. Step 1 regulation and load following requirement calculation uses t-30 minute forecast errors. Page 24

25. Using t-30 min forecast errors resulted in slightly lower load-following requirements. Page 25

26. SCIT and California import limits Page 26

27. Demand response resource capacity, triggering prices, and availabilities Page 27 Note: The demand response assumptions were made in 2010 LTPP study and scaled proportionally to match the total capacity in the 2012 LTPP Track 2 study scenarios.

28. Preliminary Deterministic Simulation Results

29. Upward ancillary services and load-following shortages Page 29 Note: Rep TPP scenario 5,359 MW shortage includes 359 MW Unserved Energy

30. Number of hours with upward ancillary services and load-following shortages Page 30

31. Annual CO 2 emission by California generation Page 31

32. Average CO 2 emission from California generation Page 32

33. Annual CO 2 emission to meet California load Page 33

34. Annual production cost to meet California load Page 34

35. The ISO annual total net import Page 35

36. The ISO maximum net import and export Page 36

37. Net import distribution of the Base scenario Page 37 Note: there are 179 hours with net export

38. Net import distribution of the High DG-DSM scenario Page 38 Note: there are 691 hours with net export

39. Net import distribution of the Replicating TPP scenario Page 39 Note: there are 92 hours with net export

40. California annual average capacity factors of selected types of units Page 40

41. California annual average starts of selected types of units Page 41

42. ISO energy balance on peak-load day in the Replicating TPP scenario Page 42

43. Available capacity is insufficient on peak-load day in the Replicating TPP scenario. Page 43

44. Resource dispatch on peak-load day in the Replicating TPP scenario. Page 44

45. ISO energy balance on a Spring day in the High DG- DSM scenario Page 45

46. Takeaway based on the preliminary results: Demand response program should revised to extend and reduce shortage window Local capacity requirements without SONGs is a separate assessment but should be considered into residual system shortage results Assessment of alternatives needs to be considered Page 46

47. Thank you! Shucheng Liu, Ph.D. California ISO sliu@caiso.com