1. 1 Introduction, scope, context Terminology, high-level approach Methodology, Inputs, Assumptions –Portfolio development –Discounted core –Environmental scoring –PV assessment –Transmission sizing –Timing assessment Results Next steps for analysis Schedule, Summary Agenda

2. 2 Transmission Bundles (review) Resources in CREZs are aggregated into transmission bundles in the following order: 1. Existing transmission bundle 2. Minor upgrade bundle 3. New transmission bundle Discounted core projects given first priority to fill each transmission bundle  Non-core Commercial projects given next priority to fill the New Transmission bundle  Any remaining transmission capacity in the bundle is allocated to the lowest-scoring generic projects  Up to 3000 MW of new transmission allowed for each CREZ

3. 3 Examples of Transmission Capacity Allocation (review)

4. 4 Transmission sizing and cost Weakness of previous study: assumed no capacity on existing transmission system; upgrades essentially all single or double circuit 500kV lines “trunklines” Updates: –ISO high-level assessment of capacity from various CREZs 1.) over existing system; 2.) over relatively minor new upgrades –Additional lines on case-by-case basis: 500kV for large and out- of-state zones, smaller lines for smaller zones close to loads. Cost = function of length and capacity –Incorporation of RETI work has been difficult – many CREZs tied to single line segments; many line segments tied to single CREZs; but additional detail would help in cost and timing review

5. 5 Transmission sizing and cost See: –California ISO assessment of capacity over existing system and minor upgrades –Zaininger Engineering assessment of capacity over RETI lines Available here: http://www.cpuc.ca.gov/PUC/energy/Procurement/LTPP/ltpp_history.htm

6. 6 Introduction, scope, context Terminology, high-level approach Methodology, Inputs, Assumptions –Portfolio development –Discounted core –Environmental scoring –PV assessment –Transmission sizing –Timing assessment Results Next steps for analysis Schedule, Summary Agenda

7. 7 33% RPS Implementation Analysis Timelines created for the 33% Reference Case – not for any of other 3 cases –Timeline 1: Historical experience, reforms/risk –Timeline 2: Reforms, no risks –Timeline 3: Reforms + external risks Goal: Better understand the tradeoffs between cost, risk, and time associated with particular procurement strategies Identify market and regulatory barriers to renewable development Identify solutions and their impacts on achievement of a 33% RPS

8. 8 Example – Aspen Environmental Group research into generation timelines

9. 9 Example – Research into transmission timelines

10. 10 33% RPS Reference Case – Timeline 3

11. 11 Timeline Tool Black & Veatch tool under development to automate timing considerations, create scenario timelines and supply curves Generic generation scheduling factors according to: –Technology –Project size –Land type –Location Generic transmission schedules for several types of lines User has ability to change/define inputs and timing assumptions; change default schedules and MW counts based on technology and other factors, etc.

12. 12 Timeline Tool Data already incorporated –Contracts approved and pending approval – basic project information –Proxy projects – RETI, others to be added ED staff updating tool for consistency with new scenarios still being added See mock-up of tool here: http://www.cpuc.ca.gov/PUC/energy/Procurement/LTPP/ltpp_history.htm

13. 13 Generic generation timing assumptions Little change from Implementation Analysis: Project Type Development Length (months) excluding transmission Estimated Commercial Online Date Biogas/Biomass < 50 MW > 50 MW 62 72 2015 2016 Geothermal < 50 MW > 50 MW 46 64 2014 2015 Small Hydro462014 Solar Thermal < 50 MW > 50 MW 58 68 2015 2016 Solar PV < 50 MW > 50 MW 32 36 2013 Wind < 50 MW > 50 MW 34 50 2013 2014 ED Database projects –Filed/approved by CPUC (public) –Under negotiation (confidential) - Per public contract information - Per generic estimates above

14. 14 Transmission timing assumptions Transmission Schedule Type Transmission Planning by CAISO/ POU/ WECC (months) Project Description Prep by Utility CEQA/ NEPA Review By CPUC/POU/ Feds Final Review and Approval by CPUC/ POU/Feds Final Design And Construction by Utilities Total Existing / Distributed000000 Typical1812244 82 Typical - Short126 31851 Typical - Long241824430100 Long-Distance241824630102 Tehachapi 1-3000000 Tehachapi 4-11000024 Sunrise000024 Devers - CO River000030

15. 15 Building scenario timelines Each zone and transmission bundle/increment is assigned to a transmission schedule → no generation in that bundle is available before transmission Non-CREZ, distributed resources, and resources accessing existing capacity not reliant on transmission → available per contract or generic generation schedule Each scenario is assigned an “online date” according to the availability of the last generation resource chosen for that scenario No “bottlenecks” considered now; what assumptions are appropriate?

16. 16 Timeline Tool – Features to Come Aggregated portfolios for alternative cases presented with summary timelines and yearly generation charts Timelines for individual projects available for review Project development phases are broken out Example Only

17. 17 Timeline Tool – Features to come (cont’d) Yearly generation charts can be broken out by viability class – high, medium, and low viability Example Only

18. 18 Introduction, scope, context Terminology, high-level approach Methodology, Inputs, Assumptions –Portfolio development –Discounted core –Environmental scoring –PV assessment –Transmission sizing –Timing assessment Results Next steps for analysis Schedule, Summary Agenda

19. 19 Preliminary Results

20. 20

21. 21 Total Net Cost* by Scenario * Sum of each resource’s net cost, not the same as the portfolio cost calculated in 2009

22. 22 Cost-Constrained Case: Resources by Type

23. 23 Cost-Constrained Case: Resources by Location Key Indicators:  Total Solar MW: 5,800  Out-of-State RECs: 25%  Earliest compliance year: 2021 Much less solar than other cases

24. 24 Cost-Constrained Supply Curve

25. 25 Environmentally-Constrained Case: Resources by Location

26. 26 Environmentally-Constrained Case: Resources by Type Key Indicators:  Total Solar MW: 19,500 (16,800 PV)  Out-of-State RECs: 10%  Earliest compliance year: 2020 Large-scale remote solar requires new transmission corridors Remote small-scale PV is the marginal resource – not all is picked

27. 27 Environmentally-Constrained Supply Curve

28. 28 Time-Constrained Case: Resources by Location

29. 29 Time-Constrained Case: Resources by Type Key Indicators:  Total Solar MW: 8,600 MW  Out-of-State RECs: 33%  Earliest compliance year: 2015 Largest proportion of out-of-state resources Out-of-state wind is a good resource if time is the only driver

30. 30 Time-Constrained Supply Curve

31. 31 Trajectory Case: Resources by Location

32. 32 Trajectory Case: Resources by Type Key Indicators:  Total Solar MW: 6,800 MW  Out-of-State RECs: 20%  Earliest compliance year: 2019 Most balanced scenario Very few generic projects

33. 33 Trajectory Case Supply Curve

34. 34 Introduction, scope, context Terminology, high-level approach Methodology, Inputs, Assumptions –Portfolio development –Discounted core –Environmental scoring –PV assessment –Transmission sizing –Timing assessment Results Next steps for analysis Schedule, Summary Agenda

35. 35 IOU-specific allocations To provide direct input into 2010 LTPP, statewide portfolios will need to be “allocated” each IOU. Proposed approach: –Remove any POU resources from each portfolio; –Allocate public ED database projects to the IOUs with which those projects have signed contracts (PUBLIC); –Allocate confidential ED database projects to the IOUs with which those projects are negotiating contracts (CONF.); –Allocate generic projects to load on a pro-rata basis for each resource type in each zone (PUBLIC); –Aggregate each IOU’s contracted, short-listed and generic project allocations to generate IOU-specific RPS portfolios (PUBLIC, provided the aggregation sufficiently masks the confidential data).

36. 36 Integration assessment California ISO developing model that estimates integration needs and costs associated with 33% Reference Case from 2009 Implementation Analysis PG%E has developed Renewable Integration Model (RIM) tool – not as analytically comprehensive, but simpler and spreadsheet-based. Tools may be introduced into LTPP proceeding later this year. Possible next steps: –Parties vet methodologies and results –Models are re-run to estimate integration needs of final RPS scenarios adopted in Scoping Memo –Results inform Commission consideration of the amount and types of resources to authorize in 2010 LTPP

37. 37 Capacity Credit for Solar Resources

38. 38 Overview PG&E and CAISO integration studies are considering capital costs of resources needed for intermittent renewable resource integration in addition to variable costs of increased operating reserves Capital costs driven by assumptions about how much capacity would already have been online during the planning year  Online capacity is a function of Planning Reserve Margin  For intermittent renewables, Net Qualifying Capacity (NQC) is used to estimate contribution toward meeting peak demand Issue: Capacity credit of intermittent renewables, particularly solar, depends on how much is online

39. 39 California Peak Load Hours In California, peak loads occur during summer days when there are high air conditioning loads Solar has been considered to have a high capacity credit because maximum output occurs during the hot day-time hours when load is highest The figure above shows the CAISO load profile on June 20, 2008 which includes the annual system peak hour, 3-4 PM Hour Ending (HE) Load (MW) CAISO Load June 20, 2008

40. 40 Peak Load Day (June 20, 2008) with High Solar Penetration “Must Run Gen” is an approximation of nuclear, coal, and minimum hydro Solar resources are simulated fixed-tilt utility-scale PV and solar through with no storage at high penetration for June 20, 2008 High penetration of solar generation moves the “net peak” load hour, when load must be met from dispatchable generation, into the nighttime Load (MW) HE

41. 41 Top 500 Net Load Hours under high PV Penetration Levels Net Load (MW) Ranked Net Load Hour Average PV Output in Top 100 Hours (MW) As PV penetration increases, the net load hours are re-sorted from highest to lowest and more nighttime hours are among the top 500 net load hours

42. 42 Capacity Credit by Renewable Penetration E3 calculated a capacity credit for the first 1000 MW of resource equal to the average production during top 100 load hours Added 1000 MW of resource, re-sorted hours from highest to lowest net load, and re-calculated average production during top 100 net load hours Capacity credit declines rapidly for solar resources as more high net load hours occur at night Marginal Capacity Credit can be negative when high renewable generation hours are displaced from the top 100 net load hours Capacity Credit Penetration (MW)

43. 43 Capacity Credit Depends on the Resource Mix The previous slides assumed penetration of only one technology The figures above assume a diversified portfolio with 8 MW Wind to every 3 MW PV and 3 MW CSP Combined portfolio receives average capacity credit of 31% at 10,000 MW of penetration, higher than any of the three individual technologies Capacity Credit Penetration (MW)

44. 44 CPUC and California ISO signed MOU on May 13, 2010 ( http://www.caiso.com/2799/2799bf542ee60.pdf) http://www.caiso.com/2799/2799bf542ee60.pdf –Agrees on certain elements of the ISO’s new proposed annual Transmission Planning Process –Commits to closer coordination between resource and transmission planning – ISO planning process considers scenarios provided by CPUC, CPUC gives substantial weight in the permitting process to projects consistent with ISO plan Umbrella LTPP proceeding considers EE, demand response, distributed generation, utility-scale renewables, fossil retirements, when determining overall system need –CPUC must consider these same things when assessing the need for individual transmission projects, pursuant to statute Transmission Assessment 44

45. 45 Transmission assessment (cont’d) “The CPUC and the ISO will review the results of the California Transmission Planning Group modeling phases and evaluate their implications for the transmission needs of the CPUC's Long Term Procurement Plan renewable resource scenarios. The ISO will subsequently seek, within the time and human resource constraints of Phase 2 of the transmission planning process, to provide the CPUC and other stakeholders with a formal assessment of the transmission planning needs within the ISO balancing authority area for the Long Term Procurement Plan renewable resource scenarios.” - May 13, 2020 MOU between California ISO and CPUC

46. 46 Introduction, scope, context Terminology, high-level approach Methodology, Inputs, Assumptions –Portfolio development –Discounted core –Environmental scoring –PV assessment –Transmission sizing –Timing assessment Results Next steps for analysis Schedule, Summary Agenda

47. 47 Schedule Comments due July 9 Reply comments due July 16 –Ruling next week will request feedback on specific questions – please attempt to address these, in addition to your general comments