California s Electricity Market Law Seminar s International Tribal Energy and the California Market June 23, 2008 Denny Brown California Energy Commission Overview Role of the Energy Commission Electricity Demand in California Resource Mix to Meet Demand Summer 2008 Forecast Potential Resources in the Pipeline Factors for Future Generation CA ISO LCR Load Pockets
Role of the Energy Commission Assesses energy supply/demand balances Natural Gas and Electricity Pre-restructuring: 5, 12, and 20-year forecasts Post-restructuring: Summer ahead & 10-year forecasts License thermal power plants (>50 MW) Develop energy efficiency i building standards d Research and Development Transportation Fuels Assessments Investor Owned Utilities Serve ~75% load Pacific Gas and Electric Company (PG&E) 15 million consumers, 70,000-square-mile service area in northern and central California, 21,818 MW peak demand and 106,589 GWh. (2007 year) Southern California Edison (SCE) 13 million consumers, 50,000 square miles of service area in central, coastal and Southern California. 22,079 MW peak demand and 103,316 GWh. (2007 year) San Diego Gas and Electric (SDG&E) 3.3 million consumers in San Diego and southern Orange counties. The utility s area spans 4,100 square miles. 4,226 MW peak demand and 21,019 GWh. (2007 year) 3 other small utilities
Municipal Utilities Serve ~25% load Los Angeles Department of Water and Power (LADWP), the largest municipal utility in the nation supplies water and electricity to 3.8 million residents and businesses in Los Angeles. 5,322 MW peak demand and 25,757 GWh (2007 year). Sacramento Municipal Utility District (SMUD) provides power to Sacramento County (and a small part of Placer County). The sixth largest publicly owned utility in the country. 2,873 MW peak demand and 11,034 GWh (2007 year). 45 other Municipal Utilities in California Electricity Demand/Consumption Agricultural 6% Other 6% Residential 31% CAL peak demand d of 60,599 MW Summer 2007 Electricity Consumption 295,059 GWh in 2007 Industrial 21% Commercial 36%
Demand is Volatile During Summer Annual Pattern of Daily Peak Demand 65,000 Demand is volatile during summer 60,000 55,000 50,000 MegaWatts 45,000 40,000 35,000 30,000000 25,000 Low points are weekends or holidays 20,000 January February March April May June July August September October November December Month Typical Peak Day Demand Curve Megawatts 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Time of Day Res. - Air Conditioning Com. - Air Conditioning i i Com. - Interior Lighting Res. - Lighting & Misc. Com. - Other Res. - Refrigerator Com. - Ventilation Res. - Cooking Res. - Clothes Dryer Com. - Refrigeration Remainder of Com & Res Industrial Sector TCU, Agr & Other
Typical Peak Day Supply Profile 60,000 50,000 40,000 30,000 20,000 10,000 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Baseload Hydro Load-follow year-round Load-follow Summer Peakers In State Generation Capacity 58,553 MW Fuel Ownership Renewables 10% Large hydro 18% Other 1% Coal 2% Independent 34% IOUs 23% Nuclear 17% Natural gas 52% QFs 15% Federal 6% Munis 22%
Power Plant Ownership >1,000 generators, 58,000 MW Merchant generators bought IOU-owned thermal power plants in late1990s. IOUs retained nuclear and hydroelectric power plants. Most new merchant generation is natural-gas fired. Renewable Portfolio Standard (20 % by 2010) drives investment in new wind and geothermal power plants. California s Transmission System > 31,000 miles of lines Mostly IOU-owned Some federally owned Most publicly owned utilities rely on IOUs for transmission service. Merchant transmission projects are coming.
Interconnected Western Grid BC Hydro Hydro & Gas Alberta California has historically imported 15-30% of its electricity Northwest Wyoming ID-SPP Utah Coal & Gas Colorado Southern Nevada Arizona Palo Verde New Mexico Summer 2008 Electricity Outlooks Forecast planning reserve margins Statewide, California ISO, NP26 and SP26 Probabilistic analysis California ISO, NP26 and SP26 Statewide t assessment not conducted d
2008 California Electricity Supply and Demand Outlook Resource Adequacy Planning Conventions NP 26 SP 26 CA ISO Statewide 1 Existing Generation 25,039 22,277 47,316 58,553 2 Retirements (Known) 0 0 0 0 3 High Probability CA Additions 0 593 593 671 4 Net Interchange * 250 10,100 10,350 13,118 5 Total Net Generation (MW) 25,289 32,970 58,259 72,342 6 1-in-2 Summer Temperature Demand (Average) 21,671 28,604 49,071 61,439 7 Demand Response (DR) 458 186 644 644 8 Interruptible/Curtailable Programs 427 1,215 1,642 1,842 9 Planning Reserve 20.8% 20.2% 23.4% 21.8% Probability of Peak Day Event NP 26 SP 26 CA ISO Probability of Involuntary Firm Load Curtailments (Stage 3) 0.7% 2.1% 0.6% * Outlook assumes 3,000 MW flowing North to South on Path 26 at time of peak. This flow could flow South to North, if needed. As SP 26 improves planning reserve margins above NP 26, this assumption should be reduced to a level necessary to balance the planning reserve margins in both regions. Major Factors Affecting Supply Adequacy Economy Resource Additions & Retirements Local Generation Demography Generator Outage Weather Demand Supply Line Outage Demand Response Fuel Availability Target Reserve Margin Operating Reserve Margin Interruptibles Net Import Supply Adequacy
Risk of Event California ISO Summer 2008 100% 90% 80% 70% 60% OR without DR&I OR with DR OR with DR&I Voluntary Demand Response Voluntary Interruptible Load Involunta ry Load Curtailed 50% 40% 30% 20% Risk of Event 10% 0% 25% 20% 15% 10% 5% 0% -5% Operating Reserve Margin Risk of Event NP 26 Summer 2008 100% 90% 80% 70% OR without DR&I OR with DR ry Demand Response Volunta ry Interruptible Load Volunta tary Load Curtailed Involunt 60% 50% 40% 30% 20% Risk of Event OR with DR&I 10% 0% 30% 25% 20% 15% 10% 5% 0% -5% Operating Reserve Margin
Risk of Event SP26 Summer 2008 100% 90% 80% Voluntary Demand Response Voluntary Interruptible Load Involuntary Load Curtailed 70% 60% 50% 40% Risk of Event 30% OR without DR&I 20% OR with DR OR with DR&I 10% 0% 35% 30% 25% 20% 15% 10% 5% 0% -5% Operating Reserve Margin Loss of Load Probability 4.0% 35% 3.5% 3.0% LOLP Triggered at 1.5% Operating Reserve LOLP Triggered at 3.0% Operating Reserve 2.5% Risk 2.0% 1.5% 1.0% 0.5% 0.0% CA ISO NP 26 SP 26
New CA Capacity Under Construction Approved / Under Construction Capacity (MW) Construction Completed (percent) Location Date Approved Construction Start Date Current On-line Date* 1 Niland Peaker - Imperial Irrigation District 93 70 Imperial Co. 10/11/06 6/25/07 6/08 2 Inland Empire - GE & Calpine {4} 800 82 Riverside Co. 12/17/03 8/29/05 8/08 3 Otay Mesa - Calpine 590 30 San Diego Co. 4/18/01 Resumed 5/1/07 5/09 4 Gateway - PG&E 530 44 Contra Costa Co. 5/30/01 8/30/2001 (formerly Contra Costa - Resumed Mirant) 2/2007 6/09 5 EIF Panoche - Energy Investors Fund 6 Colusa Generation Station - E&L Westcoast Under Construction Subtotal 400 1 Fresno Co. 12/19/07 2/15/08 11/09 660 Green Field Colusa Co. 4/23/08?? 3,073 Source: http://www.energy.ca.gov/sitingcases/all_projects.html Potential New CA Capacity 7,622 MW approved but on hold Financial issues Environmental uncertainty Inadequate transmission Additional 7,077 MW of capacity in the Siting Queue with proposed on-line dates from 2009 to 2012
Potential WECC Capacity Project Status 1 - Under construction 2 - Regulatory approval received Northwest Rocky Mountain Southwest Total 2,131 1,764 2,266 6,161 3,948 215 875 5,038 3 - Application under review 11,835 1,432 2,490 15,757 Total 17,914 3,411 5,631 26,956 Source: http://www.energy.ca.gov/electricity/wscc_proposed_generation.html Drivers of Future Generation Mix Moratorium on new nuclear in early 1980 s Three Mile Island, cost overruns By law, must solve waste disposal problem No new hydro (no more room for dams) GHG concerns no new coal without sequestration Dramatic growth is CCGTs in last 10 years Limited support for subsidized cogeneration in market environment Strong support for renewable generation, competitive with federal production tax credit
CA ISO Local Capacity Requirement Areas Summary Role of the Energy Commission Electricity Demand in California Resource Mix to Meet Demand Summer 2008 Forecast Potential Resources in the Pipeline Factors for Future Generation CA ISO LCR Load Pockets