CALIFORNIA ENERGY COMMISSION Electricity Supply Adequacy in the West Daniel Nix Deputy Director California Energy Commission April 2000 Committee on Regional

CALIFORNIA ENERGY COMMISSION

Electricity Supply Adequacy in the West

Daniel NixDeputy Director

California Energy Commission

April 2000Committee on Regional Electric Power Cooperation


Is There a Problem?

• The Summer of 1998– Record High Temperatures throughout the West– Record High Electricity Demand– Four Stage Two Emergency Alerts in California

• The Summer of 1999– Cool Summer… But– Record High Electricity Demand


Non-Coincident Peak Demand Reserve Margins

1993-1998

0.0%2.0%4.0%6.0%8.0%

10.0%12.0%14.0%16.0%18.0%20.0%

1993 1994 1995 1996 1997 1998

Percent

WSCC

California

Southwest

EstimatedActual


WASH.+18.3%

ORE.+16.7%

IDAHO+24.3%

NEV.+50.6% UTAH

+23.6% COLO.

+23.1%

ARIZ.

+30.4%

TEXAS

+18.0%

FLORIDA+16.8%

GEORGIA+20.2%

N.D.-0.8%

IOWA+3.3%

W. VA.+0.7%

MAINE+2.0%

MASS.+2.6%

R.I.-1.3%

CONN.-0.2%

N.Y.+1.1%

PA+0.9%

Slowest-growing/shrinking statesFastest-growing states

A Country in TransitionPercentage changes in population from April 1, 1990 through July 1, 1999


Statewide Peak Demand Load Resource Balance at 7% Operating Reserve

35000

40000

45000

50000

55000

60000

65000

2000 2001 2002 2003

Interruptible

Imports*

Firm Trans.

Powerplants

Existing *

Imports* additional amounts are available in nominal and 1:5 scenarios, but not necessarily in 1:40 scenario

Existing Resources*This number is derived from base installed resources, less outages or43,856 - 2,572 = 41,104

Nominal Peak Demand

1 in 5 year Demand

1 in 40 year Demand

Resources


Similar Conclusions• Bonneville Power Administration

– The White Book, 1999

• National Electricity Reliability Council– Summer of 1999 Assessment Report

• ICF Kaiser– Early 1999

• Northwest Power Planning Council– December 1999

• US Department of Energy– January 2000



California ISO Peak Demand - Actual PX Prices

0

5,00010,000

15,000

20,000

25,00030,000

35,000

40,00045,000

50,000

$0

$10

$20

$30

$40

$50


Otay Mesa Power PlantSize: 510 megawattLocation: San Diego CountyProponent: PG&E Generating AFC filed Aug. 2, 1999 (99-AFC-5)

Blythe Energy Power Plant ProjectSize: 520 megawattLocation: Riverside CountyProponent: Summit Energy GroupAFC filed Dec. 9, 1999 (99-AFC-8)

High Desert Power Plant ProjectSize: 678 or 720 megawattLocation: San Bernardino CountyProponent: Inland Energy and Constellation EnergyAFC filed June 30, 1997 (97-AFC-1)

Three Mountain PowerSize: 500 megawattLocation: Shasta CountyProponent: Ogden Power PacificAFC filed March 3, 1999 (99-AFC-2)

Long Beach District Energy FacilitySize: 500 megawattLocation: Los Angeles CountyProponent: EnronAFC expected 2000

Los Medanos Energy Center(Formerly Pittsburg District Energy Facility)Size: 500 megawattLocation: Contra Costa CountyProponent: CalpineAFC filed June 15, 1998 (98-AFC-1)

Metcalf Energy CenterSize: 600 megawattLocation: Santa Clara CountyProponent: Calpine & BechtelAFC filed April 30, 1999 (99-AFC-3)

Moss LandingSize: 1,090 megawattLocation: Monterey CountyProponent: Duke EnergyAFC filed May 7, 1999 (99-AFC-4)

Pastoria Power ProjectSize: 750 megawattLocation: Kern CountyProponent: Tejon Ranch Co.AFC filed Nov. 30, 1999 (99-AFC-7)

Midway-Sunset Cogen WestSize: 500 megawattLocation: Kern CountyProponent: Midway Sunset Cogeneration Co. AFC filed Dec. 22, 1999 (99-AFC-9)

La Paloma Generating ProjectSize: 1,048 megawattLocation: Kern CountyProponent: PG&E GeneratingAFC filed August 12, 1998 (98-AFC-2)

Sunrise Cogeneration & Power ProjectSize: 320 megawattLocation: Kern CountyProponent: Texaco Global Gas and PowerAFC filed Dec. 21, 1998 (98-AFC-4)

Elk Hills Power ProjectSize: 500 megawattLocation: Kern CountyProponent: Sempra & OxyAFC filed February 24, 1999 (99-AFC-1)

Antelope ValleySize: 1,000 megawattLocation: Kern CountyProponent: AESAFC expected 2000 (98-SIT-8)

Sutter Power ProjectSize: 500 megawattLocation: Sutter CountyProponent: CalpineAFC filed Dec.15, 1997 (97-AFC-2)

Power Plant LicensingCases Currently Before the Commission

Expected Power Plant Licensing Cases


Current, Expected and ApprovedPower Plant Licensing Cases

March 23, 2000 - California Energy Commission

South City ProjectSize: 550 megawattLocation: San Mateo CountyProponent: AESAFC expected 2000 (98-SIT-7)

Newark Energy CenterSize: 500 megawattLocation: Alameda CountyProponent: Calpine & BechtelAFC expected 2000 (99-SIT-4)

Contra CostaSize: 530 megawattLocation: Contra Costa CountyProponent: Southern EnergyAFC filed Jan. 31, 2000 (00-AFC-1)

PotreroSize: 520 megawattLocation: San Francisco CountyProponent: Southern EnergyAFC expected March 2000

Delta Energy CenterSize: 880 megawattLocation: Contra Costa CountyProponent: Calpine & BechtelAFC filed Dec. 18, 1998 (98-AFC-3)

Mountainview Power ProjectSize: 1,056 megawattLocation: San Bernardino CountyProponent: Thermo EcotekAFC filed Feb. 1, 2000 (00-AFC-2)

Power Plant Approvedby the Commission

TOTAL PROJECTS: Approved Projects = 4 Current Projects = 13 Expected Projects = 7

Fuel type for all projects will be Natural Gas

Redondo BeachSize: 700 megawattLocation: Los Angeles CountyProponent: AESAFC expected 2000

Morro BaySize: 530 megawattLocation: San Luis Obispo CountyProponent: Duke Energy AFC expected 2000

Nueva AzaleaSize: 550 megawattLocation: Los Angeles CountyProponent: Sunlaw Cogen Partners IAFC filed March 8, 2000 (00-AFC-3)


Project Size Key Possible CumulativeName MW Dates Operation Capacity

ApprovedSutter 500 Apr-99 2001 500Los Medanos 500 Aug-99 2001 1,000La Paloma 1,043 Oct-99 2001 2,043Delta Energy 880 Feb-00 2002 2,923High Desert 720 Apr-00 2002 3,643

Possible PermitSunrise Cogen 320 Apr-00 2002 3,963Elk Hills 500 Jun-00 2002 4,463Three Mountain 500 Jul-00 2002 4,963Moss Landing 1,060 Aug-00 2003 6,023Otay Mesa 510 Nov-00 2003 6,533Metcalf 600 Dec-00 2003 7,133Pastoria 750 Jan-01 2003 7,883Contra Costa 530 Mar-01 2003 8,413Midway-Sunset 500 2001 2003 8,913Nueva Azalea 550 2001 2003 9,463Mountain View 1,056 2001 2003 10,519Blythe 520 2001 2003 11,039

Expected FilingPotrero 520 2000 2003 11,559South City 550 2000 2003 12,109Newark 500 2000 2003 12,609Morro Bay 530 2000 2003 13,139Antelope Valley 1,000 2000 2003 14,139Long Beach 500 2000 2003 14,639Redondo 700 2000 2003 15,339

5 Projects Approved 11 Projects in licensing 8 Projects Expected

California Energy Commission 5/00


Are New Plants Economic?

- New combined cycle need to receive about - $90/kw to cover total costs.

- “Generic” new generators would have lost money in 1998.

- In 1999, a new efficient combined cycle might have covered its cost in Northern California’s energy market. It would have lost money in Southern California.

- Future revenues from ancillary services and reliability must-run contracts may increase revenues, but by enough?



First Year Experience


Month by Month Earnings of a CCGT, 1999Burning Gas at 6800 Btu/kWh

0

5

10

15

20

25

April May June July Aug Sep Oct Nov Dec

$/kW

NP15

UMCP

SP15


Accumulated Earnings of a CCGT, 1999 Burning Gas at 6800 Btu/kW h

0

10

20

30

40

50

60

70

80

90

April May June July Aug Sep Oct Nov Dec

$/kW

NP15

UMCP

SP15



California ISO Load Duration

34000

36000

38000

40000

42000

44000

46000

48000

Top 200 Hours

LDC 1998 LDC 1999


What Actions Are Needed?

• Enable electricity users to respond– To prices if they choose to do so– To sell their load for compensation

• Encourage voluntary load reduction

• Educate about the value of energy efficiency

• Search for existing, but underused supplies

• Work towards a regional solution


C A L I F O R N I A E N E R G Y C O M M I S S I O N

0

1 0 0 0

2 0 0 0

3 0 0 0

4 0 0 0

5 0 0 0

6 0 0 0

M A J O R C O M P O N E N T S O F S T A T E W I D E P E A K D E M A N D ( M W )

Comm. AC

Res . AC

AssemblyIndustries

Comm.InteriorLighting

Res .Misc.

Agr. &Pumping

Res .Refrigeratio n

ProcessIndustries

Comm.Other

Comm.Ventilation

Comm.Refrigeratio n

ResourceExtractionIndustries

MW

Res .Cooking

Res .Dryers

14%14%

13%

11%

7%7%

5%5%

4%3%

3%2% 2%

2%

• R E S I D E N T I A L A N D C O M M E R C I A L E N D U S E S• I N D U S T R I A L S U B S E C T O R S


Who Might Do What by WhenID Institutions

2000 2001 2002 2003

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

6 Demand Relief Program Bids

8 CPUC

9UDC Load CurtailmentProgram Decision

29 New Building Standards

4

3

1 Legislature

ISO

Participating Load ProgramBids

11

10Redirect Energy EfficiencyPrograms to Peak Reductions

Definition of UDC Roles

12

13

5

7

Operation of Participating LoadProgram

Operation of Demand ReliefProgram

Post Transition Rate Designs

Renew/Revise UDC LoadCurtailment Programs

26

25

24

23

19

18

17

14 UDC

New Curtailment Programs

Retarget Energy Efficiency toReduce Peak

New/Expanded PGC/PeakReduction Programs

Energy Commission

Public Awareness Campaign

Work with Federal Gov toRevise Appliance Standards

Schools, Public Buildings

28

27Begin New Peak SensitiveStandards Given New RateStructures

PIER Research Results onPeak Reduction Technologies

Possible MWImpact

700 MW

180 MW

Up to 1,100 MW

Up to 40 MW

Up to 135 MW

2004

Q4 Q1 Q2 Q3

2Legislation to Extend PGCFunding and Expand PGCFunding to Peak Reduction

21

20 PX

Demand Reduction Market

22 Price Information

161,500 to 2,780

MWExisting Interruptible Programs

15 Up to 2,000 MWVoluntary Emergency Appeals


Energy Commission’sResponse to Supply Adequacy

• Commission is:

– processing record number of siting cases

– proposing streamlined siting process laws and regulations

– analyzing situation and informing market participants about options

– making recommendations to CPUC and ISO

– monitoring situation and identifying contingency plans

– working towards a regional solution

– encouraging mid-term contributions of energy efficiency, renewables and R & D


• A market has two parts: Supply and Demand

• At peak demand, prices are extremely sensitive

• Demand reductions can happen in time for 2000, 2001, 2002

Why Focus on the Demand Side?


What Actions Are Needed?

• In the Long Run– Enable electricity users to respond

• To prices if they choose to do so

• To sell their load for compensation

– Encourage voluntary load reduction

– Educate about the value of energy efficiency


For Summer 2000

• Utilities/CPUC– Load curtailment Proposals

• CA ISO– Load Bidding

• Ancillary Services Market• Supplemental Energy Market

– Emergency Reduction


Beyond Summer 2000

• CPUC– Incentivize Demand Responsiveness– Keep Utilities Neutral

• CEC– Power plant licensing– Focus Public Goods Charge Monies– Continue Supply/Demand Assessments

Documents

CALIFORNIA ENERGY COMMISSION Electricity Supply Adequacy in the West Daniel Nix Deputy Director California Energy Commission April 2000 Committee on Regional