1. May 31, 20061 Resource Adequacy Capacity Standard Resource Adequacy Forum Technical Committee May 31, 2006 Background Image: Bennett, Christian Science Monitor

2. May 31, 20062 Objectives The capacity metric should be transparent and easy to calculate. The metric should be linked to a more sophisticated analysis (e.g. LOLP). Meeting the capacity target should assure that the power supply will adequately protect against capacity problems.

3. May 31, 20063 Proposed Capacity Metric A load/resource assessment (like the energy metric) But over the peak load period for each month (4 to 10 hours) In the form of a percent of resources that are surplus over the load or, in other words, a “surplus sustained peaking capacity”

4. May 31, 20064 Proposed Capacity Standard Metric – Surplus sustained-peaking capacity (%) –over the highest load period (for each month) –period duration is ??? hours –normal weather –under critical hydro (’37 water) Target – ??? percent (i.e. reserve margin)

5. May 31, 20065 Proposed Capacity Target 5-7% for Contingency Reserve X% for Outage Uncertainty Y% for Adverse Weather and Load Forecast Uncertainty For example: California is using a 15 to 17% reserve margin but for a single hour peak Z% for the Sustained Peaking Capacity Reserve Margin

6. May 31, 20066 Proposed Capacity Target (For January) 5 to 7% for Contingency Reserve 5% for Resource Forced Outages 10% for Adverse Weather (What should we plan for?) Yields a 20 to 22% target

7. May 31, 20067 Regional Capacity Assessment (L/R Bal = –1,500 aMW, LOLP = 5%) January 20061-Hour2-Hour4-Hour10-Hour Hydro (’37)26,85021,13120,54118,686 Non-hydro9,760 Firm Imports-1,218 Spot Imports3,000 Total Resource38,39232,67332,08330,228 Load (Avg)25,63325,50624,84722,691 Balance12,7597,1677,2367,537 Reserve50%28%29%33% This is a scenario that is just adequate for energy needs.

8. May 31, 20068 Observations Acquiring resources to meet the energy needs of the region (i.e. LOLP = 5%) yields a 10-hour capacity reserve of 33% for January. 33% may be more than is needed based on our example, Which means that, for January, the region is energy constrained not capacity limited.

9. May 31, 20069 Statistical Approach Define a “peaking” event –Certain duration –Certain magnitude Determine an acceptable likelihood for peaking events (i.e. like 5% for energy) Run a simulation model to assess the capacity LOLP Plan resources to limit the LOLP to the acceptable limit then calculate the resulting reserve margin.

10. May 31, 200610 Curtailment Events

11. May 31, 200611 LOLP Type Statistics Types of “peaking” eventsNo. of Games LOLP (%) At least 1 hour of curtailment1836 At least one hour with curtailment > 1,000 mw1122 At least five separate hours with curtailment > 1,000 mw510 At least ten separate hours with curtailment > 1,000 mw24 At least one hour with curtailment > 2,000 mw24 At least one hour with curtailment > 3,000 mw12 At least two consecutive hours, each > 1,000 mw816 At least three consecutive hours, each > 1,000 mw510 At least four consecutive hours, each > 1,000 mw24 Energy: at least 28,000 mw-hrs of curtailment24

12. May 31, 200612 Capacity LOLP One hour > 1,000 mw => LOLP = 22% One hour > 2,000 mw => LOLP = 4% One hour > 3,000 mw => LOLP = 2% One hour > 4,000 mw => LOLP = 0% 4 hours, each > 1,000 mw => LOLP = 4%