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Rocky Mountain Area Transmission Study RRocky ocky MMountain ountain AArea rea TTransmission ransmission SStudytudy
RMATS EconomicsReference Cases
Economic Comparisons
Distribution of Economic Gains and Losses
RMATS Steering Committee
August 5, 2004
2 RMATS Economics (08/06/04)
Overview
Finalize IRP-based reference case• Modeling issues with excessive cycling – distorts
distribution of gains and losses
• Three solutions considered:
1. Reduce wind dispatch
2. Relocate Wyoming wind resources
3. Medium build transmission
Finalize economic comparisons • Revised reference cases: IRP-based and All-gas
• Original reference case now gone
Finalize distribution of economic gains & losses
Rocky Mountain Area Transmission Study RRocky ocky MMountain ountain AArea rea TTransmission ransmission SStudytudy
Finalized IRP Reference Case
4 RMATS Economics (08/06/04)
Jim Bridger & Naughton Dispatach
0
500
1000
1500
2000
2500
1/1/13 2/1/13 3/1/13 4/1/13 5/1/13 6/1/13 7/1/13 8/1/13 9/1/13 10/1/13 11/1/13 12/1/13
Time
MW
Jim Bridger (IRP Light Build) Naughton (IRP Light Build)
IRP–based Reference CaseThe problem: excessive cycling of JB & Naughton coal resources
91.1% CF
92.2% CF (MAX)
88.8% CF
89.9% CF (MAX)
Bridger cycling
12% of timeNaughton cycling
9% of time
Solutions to prevent plant cycling in ABB Market Simulator:1. Reduce wind output - recommended
2. Relocate wind – but this deviates from IRPs, and requires additional analysis on transmission to integrate wind
3. Add transmission – but this is uneconomic if only for wind
5 RMATS Economics (08/06/04)
Wind at Miners (141MW existing + 925MW new)
0
200
400
600
800
1000
1200
1/1/13 3/1/13 5/1/13 7/1/13 9/1/13 11/1/13
Time
MW
Remaining Wind Suppressed Wind
Wind Reduction at Miners (SW Wyoming)To minimize excessive cycling on thermal units
Capacity factor change from 38.7% to 25.9%
Modifications:
• No more than 100MW from 1/1/2013 – 3/1/2013
• No restrictions from 3/1/2013 - 6/24/2013
• No more than 100MW from 6/24/2013 - 9/15/2013
• No restrictions from 9/15/2013 – 11/15/2013
• No more than 300MW from 11/15/2013 – 12/31/2013
Full wind output is equal to Blue + Yellow
6 RMATS Economics (08/06/04)
Wind at Pleasant Valley (144 MW existing + 250 MW New)
0
50
100
150
200
250
300
350
400
450
1/1/13 3/1/13 5/1/13 7/1/13 9/1/13 11/1/13
Date
MW
Remaining Wind Suppressed Wind
Wind Reduction at Railroad (N. Utah)To minimize excessive cycling on thermal units
Capacity factor change from 33% to 22.5%
Modifications:
• Reduce wind output by 200MW from 6/15/2013 – 10/15/2013
Full wind output is equal to Blue + Pink
7 RMATS Economics (08/06/04)
Jim Bridger & Naughton Dispatach
0
500
1000
1500
2000
2500
1/1/2013 3/1/2013 5/1/2013 7/1/2013 9/1/2013 11/1/2013
Time
MW
Jim Bridger (Suppressed Wind) Naughton (Suppressed Wind)
Cycling results in the modelingExcessive cycling is greatly reduced by suppressing wind dispatch
92.1% CF
92.2% CF (MAX)
89.8% CF
89.9% CF (MAX)
Bridger cycling 3.5% of time
Naughton cycling 1% of time
8 RMATS Economics (08/06/04)
Coal - Wind Integration
Issues Observations
Wind farm sizing
Location of wind farms
Wind farm output variability and coal plant ramp rate
IRP-based reference case: wind operation is at 22 – 25% capacity factor
Capacity factor of ~30% is perhaps breakeven
Coal plant ramp rate is 5-15 MW/min
9 RMATS Economics (08/06/04)
System Cost Changes
$ millions
IRP- based case (light tx build)
IRP- based case (light tx build - with wind suppressed)
Difference
WI Production Costs $19,988 $20,046 $58
Rocky Mountain Area Load Cost delta from Rec 1
$132 $5 ($128)
Rocky Mountain Generator Margin delta from Rec 1
$475 $294 ($181)
10 RMATS Economics (08/06/04)
Distribution of Economic Gains & LossesIRP-based reference case
TWh LMP ($) Cost ($MM) TWh LMP ($)Revenue
($MM) VOM ($MM)Gross Margin
($MM)
Rocky Mountain States 0 0.82 132 5 1.06 434 (41) 475NWPP- US 0 (0.31) (60) (1) (0.32) (94) (24) (71)NWPP- Canada 0 (0.13) (19) (0) (0.12) (28) (10) (18)Mexico- CFE 0 (0.02) (0) (0) (0.02) (1) (1) (0)California 0 (0.17) (59) (4) (0.12) (211) (107) (104)AZ, NM & S. NV 0 0.01 2 (1) 0.04 (18) (25) 7Total 0 (0.00) (4) 0 0.08 81 (208) 289
Load GeneratorBefore:
After:
TWh LMP ($) Cost ($MM) TWh LMP ($)Revenue
($MM) VOM ($MM)Gross Margin
($MM)
Rocky Mountain States 0 0.03 5 5 (0.20) 191 (103) 294NWPP- US 0 (0.34) (65) (1) (0.35) (109) (31) (78)NWPP- Canada 0 (0.14) (20) (0) (0.13) (31) (12) (20)Mexico- CFE 0 (0.04) (1) (0) (0.04) (2) (1) (1)California 0 (0.16) (54) (3) (0.14) (207) (97) (110)AZ, NM & S. NV 0 (0.06) (9) (0) (0.03) (31) (22) (9)Total 0 (0.14) (145) 0 (0.19) (189) (266) 77
GeneratorLoad
Rocky Mountain Area Transmission Study RRocky ocky MMountain ountain AArea rea TTransmission ransmission SStudytudy
Economics
12 RMATS Economics (08/06/04)
Antelope Mine
Dave Johnston
LRS
Cheyenne Tap
Ault
Green Valley
MinersJim Bridger
NaughtonBen Lomond
Midpoint
Recommendation 1 Transmission Projects
Broadview
Colstrip
Added Series Compensation Only
Taft
Montana Upgrades
Bridger Expansion
New WY- CO lines
Treasureton
Garrison
Townsend
Borah West
Path C
West of Naughton
West of Bridger
Black Hills to C. Wyoming
C Wyoming to LRS
TOT 3
TOT 7
TOT 4A
West of Colstrip
West of Broadview
Montana to NW
500 Wind
210 Gas 500 Coal
500 Wind
1150 Wind
700 Coal
359 Coal
50 Wind
250 Coal
280 Wind
125 Wind
575 Coal
100 Wind
575 Coal
140 Gas
250 Wind
Added 345 kV Line
Modified Interface
Added Resource
Bridger E
13 RMATS Economics (08/06/04)
Economics Comparison Table
(2004 Dollars in Millions)
Initial InvestmentRepresentative
Year Initial InvestmentRepresentative
Year Initial Investment Representative Year Initial InvestmentRepresentative
Year
1 Production Costs (Fuel & Other VOM) 21,018 20,046 19,780 18,458
2 Change from All Gas Case [Column A] - (972) (1,238) (2,560)
3 Change from IRP- Based Case [Column B] 972 - (266) (1,588)
4
5 Resource Costs:
6 RM Resource Additions Capex
7 Wind 1,957 2,246 3,766
8 Gas thermal 2,204 444 198 373
9 Coal thermal 3,453 3,985 7,857
10 Incremental Transmission Integration Capex 53 159 175 311
11 RM Resource Capex Sub Total 2,257 6,012 6,604 12,306
12 Adj. Outside RM Resource Additions Capex (2,257) 13 Other RM Costs14 Incremental Capital Charge @ 10% 226 601 660 1,231 15 Incremental Fixed O&M 28 116 128 245 16 Wind "wear and tear" - 39 56 94 17 Subtotal Other RM Costs 254 756 845 1,570 18 Adj. Other Costs Outside RM - (254) 19 Total Resource Costs 2,257 254 6,012 756 6,604 845 10,050 1,316 20
21 Transmission Costs:22 Incremental Line Capex 777 3,872 23 Customized Equipment Capex 193 393 24 RM Transmission Capex Sub Total 970 4,265 25
26 Incremental Fixed O&M 19 85 27 Incremental Capital Charge @ 10% 97 427 28 RM Transmission Costs 970 116 4,265 512 29
30 Annualized Costs 254 756 961 1,828 31
32 Total Initial Investment 2,257 6,012 7,574 14,315 33 Annual Net (Savings)/Cost from All Gas Case - (470) (531) (986) 34 Annual Net (Savings)/Cost from IRP- Based Case 470 - (61) (516)
Key Assumptions:
Transmission Capital Charge 10.0% Real Levelized depreciation, interest, ROE, taxes, G&A. All Gas Case IRP-Based CaseGeneration Capital Charge 10.0% Real Levelized depreciation, interest, ROE, taxes, G&A. Recommendation 1 5.0 7.2 Transmission Fixed O&M 20.0% 20% of TX Capital Charge Recommendation 2 5.5 6.2 Wind "wear and tear" $/MWh 5.50
Wind Fixed O&M $/kW/yr 17.50
Coal Fixed O&M $/kW/yr 25.00 NWPCC assumptionsGas Fixed O&M $/kW/yr 7.25 NWPCC assumptionsAll cases include Amps line phase shifter, Flaming Gorge transformer and the Midpoint to Boise 230 kV line.
A B
Reference Cases
All Gas Case Gas resources and no new
transmission additions in Rocky Mountain States
D
Recommendations
C
Includes "wear and tear" on non-wind resources due to wind
NWPCC assumptions (a range of $12.5/kW- $17.5/kW was tested resulting in negligible impact)
Recommendation 2Recommendation 1
Initial Investment/ Net Savings, excluding capital charges (Δ Line 32/ [Line 2:3 + Δ Line 15, 16, 26, 18 (O&M only)] ) Shown as difference from each reference case
IRP- Based Case IRP resources and no new
transmission additions in Rocky Mountain States (Suppressed
Wind)
14 RMATS Economics (08/06/04)
Production Cost (VOM) Comparison
Alt 1- “light” Tx build
All Gas Reference Case
Original Reference Case
Western Interconnect Production Costs (VOM) ($Millions)
$21,018
$20,046
$19,780
$18,458
$18,000 $18,500 $19,000 $19,500 $20,000 $20,500 $21,000 $21,500
All Gas Reference
IRP Based Case
Recommendation 1
Recommendation 2
$ Millions
15 RMATS Economics (08/06/04)
Distribution of Economic Gains & Losses
Recommendation 1 vs IRP-Based Reference Case
Recommendation 1 vs All-Gas Reference Case
Load Cost is hourly demand (MWh) at each load node x hourly LMP ($), summed for 2013
Generator Gross Margin is hourly generation (MWh) at generation node x hourly LMP, summed for 2013 (generator
revenue), less annual fuel & other VOM costs
TWh LMP ($)Load Cost
($MM) TWh LMP ($)Revenue
($MM) VOM ($MM)
Generator Gross Margin
($MM)
Rocky Mountain States 0 0.03 5 5 (0.20) 191 (103) 294NWPP- US 0 (0.34) (65) (1) (0.35) (109) (31) (78)NWPP- Canada 0 (0.14) (20) (0) (0.13) (31) (12) (20)Mexico- CFE 0 (0.04) (1) (0) (0.04) (2) (1) (1)California 0 (0.16) (54) (3) (0.14) (207) (97) (110)AZ, NM & S. NV 0 (0.06) (9) (0) (0.03) (31) (22) (9)Total 0 (0.14) (145) 0 (0.19) (189) (266) 77
GeneratorLoad
TWh LMP ($)Load Cost
($MM) TWh LMP ($)Revenue
($MM) VOM ($MM)
Generator Gross Margin
($MM)
Rocky Mountain States 0 (0.76) (123) 7 (1.48) 45 (939) 983NWPP- US 0 (0.66) (128) (2) (0.71) (245) (84) (161)NWPP- Canada 0 (0.26) (37) (1) (0.22) (58) (24) (35)Mexico- CFE 0 0.04 1 (0) 0.03 (1) (1) 1California 0 (0.27) (91) (3) (0.25) (215) (139) (76)AZ, NM & S. NV 0 0.00 0 (1) 0.04 (51) (51) 0Total 0 (0.37) (377) (0) (0.52) (526) (1,238) 712
GeneratorLoad
16 RMATS Economics (08/06/04)
Distribution of Economic Gains & Losses
All Gas CaseIRP- Based Case
(Suppressed Wind) All Gas CaseIRP- Based Case
(Suppressed Wind)
Rocky Mountain States (1,106) (290) (1,742) (926)NWPP- US 32 13 52 33NWPP- Canada (2) (1) (4) (3)Mexico- CFE 0 0 3 4California (14) 56 (396) (326)AZ, NM & S. NV (0) (0) 109 109Total (1,090) (221) (1,978) (1,110)
Recommendation 1 Recommendation 2
$ Millions
17 RMATS Economics (08/06/04)
Economic Gains & LossesRecommendation 1 vs IRP- Based Case
Load GWh Load Cost Load LMP Gen GWh
Gen Revenue
Generator LMP
Generator VOM
Generator Gross Margin
Rocky Mountain StatesColorado
Colorado- East 0 18,273 0.31 (6,257) (272,879) 0.60 (16,535) (256,344)Colorado- West 0 1,308 0.21 32 5,526 0.26 439 5,087Laramie River 0 1,142 0.29 1,749 82,201 0.13 (1) 82,202subtotal 0 20,723 0.30 (4,476) (185,152) 0.36 (16,097) (169,055)
IdahoGoshen (KGB) 0 4,756 0.72 0 1,003 0.74 0 1,003Idaho- West 0 18,684 1.13 (4,550) (215,048) 0.39 (69,394) (145,654)subtotal 0 23,440 1.01 (4,550) (214,045) 0.45 (69,394) (144,651)
MontanaBroadview 0 (3,147) (1.64) 2,771 121,374 (2.02) 19,430 101,944Colstrip 0 (929) (1.60) 2,051 58,948 (1.90) 12,070 46,878Montana- West 0 (7,677) (0.94) 195 3,433 (1.24) 0 3,433Yellowtail 0 (1) (0.65) 1 (750) (0.71) 0 (750)subtotal 0 (11,754) (1.10) 5,018 183,005 (1.81) 31,499 151,506
UtahBonanza 0 (214) (0.19) (6) (437) (0.05) (119) (318)Utah- North 0 (30,693) (0.84) (172) (8,414) 0.00 (4,808) (3,606)Utah- South 0 (1,507) (0.29) (2,519) (137,751) (0.56) (103,927) (33,824)subtotal 0 (32,414) (0.76) (2,697) (146,602) (0.41) (108,855) (37,747)
WyomingBig Horn Basin 0 137 0.03 0 (350) (0.39) 0 (350)Black Hills 0 1,340 0.21 19 3,132 0.42 1,990 1,142Jim Bridger 0 0 0.00 4,590 239,228 1.43 45,802 193,426SW Wyoming 0 2,315 0.60 1,959 80,824 (2.61) 0 80,824Wyoming- Central 0 745 0.34 5,011 230,954 (0.05) 11,574 219,380subtotal 0 4,537 0.28 11,579 553,788 0.51 59,366 494,422
Rocky Mtn. States Sub-total 0 4,532 0.03 4,874 190,994 (0.20) (103,481) 294,475
NWPP- USsubtotal 0 (64,883) (0.34) (781) (109,492) (0.35) (31,303) (78,189)
NWPP- Canadasubtotal 0 (20,393) (0.14) (243) (31,432) (0.13) (11,643) (19,789)
Mexico- CFEsubtotal 0 (712) (0.04) (17) (1,871) (0.04) (934) (937)
Californiasubtotal 0 (54,334) (0.16) (3,354) (206,794) (0.14) (96,672) (110,122)
AZ, NW & S. NVsubtotal 0 (8,957) (0.06) (478) (30,565) (0.03) (21,729) (8,836)
Total 0 (144,747) (0.14) 1 (189,160) (0.19) (265,761) 76,601
18 RMATS Economics (08/06/04)
Economic Gains & LossesRecommendation 1 vs All Gas Case
Load GWh
Load Revenue
($000) Load LMP Gen GWh
Gen Revenue
($000)Generator
LMPGenerator
VOM ($000)
Generator Gross Margin
($000)
Rocky Mountain StatesColorado
Colorado- East 0 (45,889) (0.77) (3,972) (222,447) (0.66) (376,191) 153,744Colorado- West 0 (4,067) (0.66) (199) (28,529) (1.26) (9,631) (18,898)Laramie River 0 (5,394) (1.38) 1,749 60,371 (1.75) (1) 60,372subtotal 0 (55,350) (0.80) (2,422) (190,605) (1.03) (385,822) 195,217
IdahoGoshen (KGB) 0 (1,199) (0.19) 318 15,489 (0.07) 0 15,489Idaho- West 0 7,212 0.44 (2,081) (120,604) (1.86) (99,840) (20,764)subtotal 0 6,013 0.26 (1,763) (105,115) (1.68) (99,840) (5,275)
MontanaBroadview 0 (5,116) (2.66) 2,767 119,106 (3.24) 19,388 99,718Colstrip 0 (1,654) (2.84) 2,044 34,341 (3.25) 12,018 22,323Montana- West 0 (16,525) (2.03) 832 27,551 (2.82) (8,064) 35,615Yellowtail 0 (2) (1.64) 0 (2,497) (2.33) 0 (2,497)subtotal 0 (23,297) (2.19) 5,643 178,501 (3.19) 23,342 155,159
UtahBonanza 0 (1,141) (1.05) (177) (14,171) (1.71) (7,943) (6,228)Utah- North 0 (22,325) (0.61) (4,504) (222,208) (0.17) (197,614) (24,594)Utah- South 0 (2,510) (0.48) (4,009) (211,163) (0.60) (315,028) 103,865subtotal 0 (25,976) (0.61) (8,690) (447,542) (0.64) (520,585) 73,043
WyomingBig Horn Basin 0 (7,197) (2.00) 885 40,205 45.42 0 40,205Black Hills 0 (10,050) (1.60) (281) (24,446) (1.98) (12,710) (11,736)Jim Bridger 0 0 0.00 4,565 202,006 (0.68) 45,423 156,583SW Wyoming 0 (3,828) (0.99) 3,592 155,287 (5.38) (14,673) 169,960Wyoming- Central 0 (3,297) (1.49) 5,358 236,369 (1.79) 26,206 210,163subtotal 0 (24,372) (1.53) 14,119 609,421 (1.52) 44,245 565,176
Rocky Mtn. States Sub-total 0 (122,982) (0.76) 6,887 44,660 (1.48) (938,660) 983,320
NWPP- USsubtotal 0 (128,287) (0.66) (2,041) (244,896) (0.71) (84,205) (160,691)
NWPP- Canadasubtotal 0 (36,517) (0.26) (528) (58,341) (0.22) (23,508) (34,833)
Mexico- CFEsubtotal 0 734 0.04 (28) (568) 0.03 (1,210) 642
Californiasubtotal 0 (90,550) (0.27) (3,062) (215,389) (0.25) (139,035) (76,354)
AZ, NW & S. NVsubtotal 0 201 0.00 (1,230) (51,084) 0.04 (51,303) 219
Total 0 (377,401) (0.37) (2) (525,618) (0.52) (1,237,921) 712,303
19 RMATS Economics (08/06/04)
Tesla
Table Mtn.
Grizzly
Ashe
Bell
Taft
Missoula
Great Falls
Broadview
RinglingColstrip
Ant MineDave Johnson
LRS
Cheyenne Tap
Ault
Green Valley
Miners
Jim Bridger
Naughton
Grand Junction
Emery
MonaIPP
Red Butte
Ben Lomond
Borah
Kinport
Midpoint
Crystal
Market Place
500 kV
345 kV
Adelanto
Option 1
Option 2
Option 4
Option 3
Recommendation 2Longer-term export options
Added Phase Shifter
Noxon
Hot Springs
This recommendation requires two 500 kV lines
for export
Inc. DC
Options 2-4
Option 1 Only
Consistent with Rec 1
20 RMATS Economics (08/06/04)
Distribution of Economic Gains & Losses
Recommendation 2 vs IRP-Based Reference Case
Recommendation 2 vs All-Gas Reference Case
Load Cost is hourly demand (MWh) at each load node x hourly LMP ($), summed for 2013
Generator Gross Margin is hourly generation (MWh) at generation node x hourly LMP, summed for 2013
(generator revenue), less annual fuel & other VOM costs
TWh LMP ($)Load Cost
($MM) TWh LMP ($)Revenue
($MM) VOM ($MM)
Generator Gross Margin
($MM)
Rocky Mountain States 0 (4.64) (750) 27 (5.55) 51 (124) 176NWPP- US 0 (2.68) (517) (6) (2.64) (808) (257) (550)NWPP- Canada 0 (1.45) (207) (2) (1.43) (292) (88) (204)Mexico- CFE 0 (1.00) (20) (0) (0.96) (36) (13) (23)California 0 (1.92) (646) (9) (2.44) (973) (652) (321)AZ, NM & S. NV 0 (1.76) (286) (10) (1.66) (849) (454) (395)Total 0 (2.39) (2,427) 0 (2.86) (2,906) (1,588) (1,318)
GeneratorLoad
TWh LMP ($)Load Cost
($MM) TWh LMP ($)Revenue
($MM) VOM ($MM)
Generator Gross Margin
($MM)
Rocky Mountain States 0 (5.43) (878) 29 (6.83) (95) (959) 864NWPP- US 0 (3.01) (581) (7) (3.00) (943) (310) (633)NWPP- Canada 0 (1.57) (224) (2) (1.52) (319) (100) (219)Mexico- CFE 0 (0.92) (18) (0) (0.88) (35) (13) (22)California 0 (2.03) (683) (8) (2.54) (981) (694) (287)AZ, NM & S. NV 0 (1.70) (277) (11) (1.59) (869) (484) (386)Total 0 (2.62) (2,660) (0) (3.19) (3,242) (2,560) (682)
Load Generator