1. Quantifying Results Model Comparison Run models under various scenarios –Heavy load –Light load –Normal load Calculate cost reduction under new model

2. Model Comparison Based on same inputs –prices –forecasted demand Compare models against an actual load –Actual load = average load during time intervals utilized in UCB model

3. Model Comparison UCB Model is inherently better than Palo Alto’s current Model. Time LoadLoad 6am10am2pm6pm10pm

4. Monthly Savings

5. Annual Savings

6. Summary of Results UCB Model Savings –$1.121 million for 1998 –4% cost reduction UCB with revenue Model –additional $180,762 for 1998 –additional 1% cost reduction

7. Reduction in Variance

8. Benefits of UCB Model Utilizes all available procurement options Low Run-time Partitions day into finer time intervals –more closely follows demand curve –reduction in variance from actual load Reduction in risk

9. Recommendations Replace existing model with UCB model Negotiate with WAPA to reduce lower capacity limit –For June 1998, the max purchase quantity is ~ 40 mwh (no lower capacity limit) Incorporate spot market into decisions