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Resource Planning Process Agenda
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• Conventional Capacity Additions – Build vs. Buy – Unit Replacement vs. Life Extension
• Generation Resource Options – Baseload – Intermediate Duty – Peak Duty
• Native Peak Load vs. Installed Capacity • Current Generation and Capacity Mix • Generation Options • Renewable technology will be discussed in the
following IRP meeting
Conventional Capacity Additions
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• Build Advantages – Increase local generation near load base – Mitigation of transmission costs if built locally versus remotely – Site selection provides decreased risk in system reliability – Decrease reliance on purchased power
• Build Disadvantages – Large capital investment – Long permitting process (Certificate of Convenience and
Necessity “CCN” and environmental) – Acquire land, water, fuel supply and potential transmission
upgrades
Conventional Capacity Additions
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• Buy Advantages (Long Term Purchase) – Specify operational needs through Request For Proposal Process
– No capital investment – No O&M costs
– No staffing issues
• Buy Disadvantages – Less reliable, higher risk Minimal control over how the unit is operated EPE has transmission limitations where it may not be able to
import additional power Transactions may not be dispatchable Performance risk regarding construction and operation
Conventional Capacity Additions
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• Unit Replacement Advantages – Better heat rates – Increased reliability – Lower emission rates – Lower O&M costs – Technology improvements equals better unit response
• Unit Replacement Disadvantages – Capital investment – Escalating costs for new units – Long lead times – Obtaining permits
Conventional Capacity Additions
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• Life Extension Advantages – Smaller capital investment – Units located in load base – No need to acquire land – Use of existing infrastructure, i.e. fuel, water, transmission – No required lead times
• Life Extension Disadvantages – Higher O&M costs (refurbishment, part replacements,
retrofitting) – Higher heat rates – Less reliable (higher probability for forced outages and unit
derations) – Higher emission rates – Older units are not designed for cycling or quick starts
• Local existing units’ lives have already been extended by an average of 7 years
Generation Resource Options
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• Nuclear (Modular) – Baseload – High capacity factor – Reliable – No emissions – Spent Uranium disposal concern – Large capital investment – Long construction period
Generation Resource Options
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• Coal – Baseload – Coal-fired generation is not a future option due to several
factors which include: EPA proposed Carbon Regulation and other uncertainties Regulation of Coal generation to comply with environmental
standards to limit Mercury and Air Toxics with the addition of scrubbers and other equipment Litigation and Campaigning by Activists to close plants Coal generation is less efficient and flexible than Natural
Gas generation Coal emits about twice as much CO2 as Natural Gas
Margin between Coal and Natural Gas prices has narrowed
Generation Resource Options
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• Natural Gas – Baseload, intermediate or peaking – Load following and quick start capabilities – Lower capital investment – Improved heat rates – Medium construction period
2013 Native Peak Load vs. Installed Capacity
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0
500
1000
1500
2000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
MW
s
Hour
Palo Verde Four Corners Newman
Rio Grande Copper Solar
Market Purchase Resource Purchase Peak Day 6/27/2013
15% Reserve Margin Low Peak Day 3/26/2013
1750
974
EPE’s Generation Fuel Mix
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2013 Generation Fuel Mix
• 46% Nuclear
• 6% Coal
• 34% Natural Gas
• 14% Purchased Power, including Renewable Energy Purchase Power Agreements (“PPA”)
EPE’s Generation Capacity by Fuel Type
2013 Generation Capacity by Fuel Type • Approximately 34% Nuclear
―Total EPE-owned installed capacity 633 MW • Approximately 6% Coal
―Total EPE-owned installed capacity 108 MW • Approximately 60% Natural Gas
―Total EPE-owned installed capacity 1,110 MW • Less than 0.05% Renewables
―Total EPE-owned installed capacity less than 1.5 MW
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EPE Generation Capacity Retirements
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673 MW will be retired in the next 10 years Rio Grande 6 2014 45 MW Four Corners 4 & 5 2016 108 MW Rio Grande 7 2020 46 MW Newman 1 2022 74 MW Newman 2 2023 76 MW Newman 4 2023 227 MW Newman 3 2024 97 MW
Natural Gas Generation Options
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EXAMPLES OF NATURAL GAS-FIRED
COMBINED CYCLE PLANT OPTIONS AND
GAS TURBINE PLANT OPTIONS
Combined Cycle Plant Options
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• Siemens Flex-Plant 30 Combined Cycle – 281-582 MW net output depending on configuration – Designed for shutdown, turndown, load following and baseload
operation – Flex-Plant can operate at 13% of its rated load while maintaining
environmental compliance – Load following at 75 MW/min (Combined Cycle mode) – Full load in less than one hour – Can provide approximately 45% of capacity in 10 minutes
• Emissions Controls – Clean Ramp Technology enables Flex-Plant to stay in emissions
compliance while load following • Integrates control of the gas turbine and Selective Catalytic
Reduction (“SCR”) to enable low total plant emissions out of the stack
• Reduces fuel consumption for higher efficiency – Ultra Low NOx (“ULN”) combustion system
Combined Cycle Plant Options
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• General Electric 7EA Combined Cycle – Approximately 278 MW net output – Can provide approximately 33% of capacity in under 10 minutes – Turndown operation at lower load levels while maintaining low
emissions and reducing fuel costs to stay online • Emissions Controls
– OpFlex Solutions available for gas turbines – Low single-digit NOx-emissions capability with the Dry Low NOx
1+ combustion system technology Reduction of annual NOx emissions by 67 percent compared to Dry
Low NOx (“DLN”) technology – Single-digit CO emissions on natural gas at baseload – Eliminates the need for water and steam/water injection costs
associated with other NOx control systems
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GE 7E.03 Gas Turbine
3-Stage Turbine Advanced materials improve High-temperature strength, Increase inspection intervals
Combustor Multiple-fuel combustion system allows switching from one fuel to another while running under load
17-Stage Compressor Enhanced compressor with high-strength, corrosion-resistance material
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• General Electric LMS100 Gas Turbine – 88 MW net output – Quick start capability – Full load in under 10 minutes – Load following and cycling capability No cost penalty for starts and stops compared to other types of
thermal gas units that must burn gas to boil water Better ramp rate for faster load following capability
• Emissions Controls – Water-Injected Low Emissions (“WLE”) for wet-cooled option – DLN – SCR Catalyst – Carbon Monoxide Reducer (“COR”) Catalyst
Gas Turbine Plant Options Aeroderivatives
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• Rolls Royce Trent 60 Gas Turbine (“GT”) – 49 MW net output per GT – Quick start capability – Full load in 10 minutes – Load following and cycling capability No cost penalty for starts and stops compared to other types of
thermal gas units that must burn gas to boil water Better ramp rate for faster load following capability
• Emissions Controls – Water-Injected Low Emissions (“WLE”) – SCR Catalyst – COR Catalyst
Gas Turbine Plant Options Aeroderivatives
Glossary
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Aeroderivative Base load
A light weight, land based gas turbine derived from an aircraft jet engine. A power plant that is planned to run continually except for maintenance and scheduled or unscheduled outages. Base load also refers to the minimum load in a power system over a given period of time.
Capacity The maximum power that can be produced by a generating resource at specified times under specified conditions. Capacity Mix Amount of power generated by differing fuel types CCN Certificate of Convenience and Necessity filing at Commissions requesting Clean Ramp Integrated control technology developed by Siemens and NRG that allows the plant to maintain low emissions while navigating fast,
intermittent load ramps. CO2 Carbon Di-Oxide Combined Cycle The combination of a gas turbine and steam turbine in an electric generating plant. The waste heat from the first turbine cycle provides the
heat energy for the second turbine cycle. Combustion Turbine A fuel-fired turbine engine used to drive an electric generator. Cycling A unit's ability to turn on or off daily to load follow Dispatch The monitoring and regulation of an electrical system to provide coordinated operation; the sequence in which generating resources are
called upon to generate power to serve fluctuating loads. Dispatchable A generating unit whose load can be increased or decreased based on load conditions. Forced Outage An unforeseen outage that results from emergency conditions. Heat Rate A measure of generating station thermal efficiency commonly stated as Btu per kilowatt hour. Note: Heat rates can be expressed as either
gross or net heat rates, depending whether the electricity output is gross or net generation. Heat rates are typically expressed as net heat rates
Intermediate Load The range from base load to a point between base load and peak. This point may be the midpoint, a percent of the peak load, or the load over a specified time period.
Load Following Regulation of the power output of electric generators within a prescribed area in response to changes in system load, frequency, and/or tie line loading.
Native Peak Load The end-use customers that the Load-Serving Entity is obligated to serve NOx Nitrogen Oxide O&M Operation and Maintenance Peak Load The maximum electrical load demand in a stated period of time. On a daily basis, peak loads occur at midmorning and in the early evening. Peak Load Plant A power plant which is normally operated to provide power during maximum load periods. Examples are combustion turbines and pumped
storage hydro. Quick Start The ability of a unit to quickly go from an off state to a state to serve load while maintaining emission compliance Ramp Rate The unit of measurement of a quick start unit expressed in megawatts per minute (MW/min)
Glossary
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Reserve Capacity Extra generating capacity available to meet unanticipated demands for power or to generate power in the event of loss of generation. Reserves The electric power needed to provide service to customers in the event of generation or transmission system outages, delays in the
completion of new resources or other factors which may restrict generating capability or increase loads. Reserves normally are provided from additional resources acquired for that purpose, or from contractual rights to interrupt, curtail or otherwise withdraw portions of the electric power supplied to customers.
SCR Selective Catalytic Reduction (SCR) is an advanced active emissions control technology system that injects a liquid-reductant agent through a special catalyst into the exhaust stream
Turndown Turndown refers to the load range from a maximum load output to a minimal load output while remaining in emissions compliance Unit Deration A decrease in the available capacity of an electric generating unit, commonly due to:• A system or equipment modification• Environmental,
operational, or reliability considerations. Causes of generator capacity deratings include high cooling water temperatures, equipment degradation, and historical performance during peak demand periods. In this context, a derate is typically temporary and due to transient conditions. The term derate can also refer to discounting a portion of a generating units capacity for planning purposes.
