2013 irp pim 3 - meeting report for july 13, 2012 - pacificorp

2013 IRP – July 13, 2012, Public Meeting Report 1

Meeting Report

2013 Integrated Resource Plan

Third Public Input Meeting

Meeting Date: July 13, 2012

Meeting Time: 9:00 am – 3:00 pm (Pacific) / 10:00 am – 4:00pm (Mountain)

Location: Portland, Oregon; Salt Lake City, Utah; and telephone conference

Organizations Attending The list of individual meeting attendees is provided as Appendix A.

Alpern Myers Stuart LLC (Interwest Energy Alliance) Office of Consumer Services

Citizens' Utility Board of Oregon (CUB) Oregon Public Utility Commission (OPUC)

CRD Management Inc. (Encana) PacifiCorp

Customers Renewable Northwest Project (RNP)

Energy Strategies, LLC Synapse Energy Economics

enXco Utah Clean Energy (UCE)

E-Quant Consulting Utah Division of Public Utilities (DPU)

First Wind Utah Office Of Consumer Services (OCS)

Hatch, James & Dodge (For UAE) Utah Public Service Commission (UT-PSC)

Idaho Conservation League (ICL) Western Resource Advocates (WRA)

Idaho Public Utilities Commission (IPUC) Washington Utilities and Transportation Commission

(WUTC)

Magnum Energy Wyoming Office of Consumer Advocates (WY-OCA)

Monsanto Company Wyoming Public Service Commission - Staff

Northwest Pipeline GP

Meeting Overview

Agenda items for this public meeting included (1) review and discussion of the strawman set of

portfolio development cases distributed to IRP stakeholders on June 28, 2012, (2) a presentation

and discussion on PacifiCorp’s proposed approach for analyzing transmission expansion

benefits, and (3) continued discussion on the Company’s proposed Energy Gateway scenarios

presented for the June 20 public input meeting.

Strawman Portfolio Development Cases

Pete Warnken, Manager of Integrated Resource Planning, provided the meeting participants with

a walk-through of the strawman portfolio development cases (See Appendix A). He covered the

different sets of scenario attributes, categorized as ―environmental regulations‖, ―fuel prices‖,

―state/federal energy policies‖, ―load forecasts‖, ―technology game-changers‖, and ―resource

selection constraints‖. PacifiCorp requested that stakeholders provide initial case


recommendations and comments by August 1, 2012—preferably using the Excel template

already provided to stakeholders—along with an explanation as to how the resource selection

outcomes from proposed cases should differ from other cases. The Company plans to distribute

the final list of cases to stakeholders by mid-September, 2012. Mr. Warnken also reminded

attendees that PacifiCorp may revisit case definitions and consider stakeholder changes after

initial portfolio development are distributed for review.

Transmission Benefit Analysis Mr. Darrell Gerrard, Vice President of Transmission System Planning, presented the proposed

framework for evaluating transmission expansion benefits that are not captured using the IRP

models. Mr. Gerrard first provided background and context for developing the benefit analysis

framework, highlighting past stakeholder input, regional planning reforms outlined in Federal

Energy Regulatory Commission (FERC) Order 1000, and the benefit metrics being considered

by the Northern Tier Transmission Group (NTTG). Mr. Gerrard then summarized seven potential

transmission benefit metrics that PacifiCorp is planning to incorporate in the framework:

Reliable customer load service and generation delivery

Operations improvements

System energy loss reduction

Transmission reliability standard compliance

System flexibility, including access to reserve resources

Resource integration, PacifiCorp and third-party

Third-party cost sharing

Mr. Gerrard then provided a qualitative benefit valuation example using the three segments

constituting the Windstar to Populus transmission project (Windstar to Aeolus, Aeolus to

Bridger, Bridger to Populus). The general process is to evaluate benefit metrics unique to each

segment and then assess combined benefits and synergies of the multiple segments. In response

to participant’s questions regarding the purpose of the benefits analysis framework, PacifiCorp

stressed that in addition to assimilation in the IRP portfolio evaluation process, the framework’s

other main purpose is to support the justification of moving from the permitting/approval stages

of a transmission project to full implementation. PacifiCorp asked for stakeholder input on the

overall concept, and will continue to develop the approach, quantify benefits based on the

identified metrics and new ones if applicable, develop a results ―dashboard‖ reporting tool, and

keep stakeholders informed on the analysis results.

Transmission Scenario Follow-up Mr. Brian Fritz, Director of Transmission Services, facilitated a discussion on the five Energy

Gateway scenarios presented at the June 20 IRP public input meeting. Participants questioned the

rationale behind PacifiCorp’s grouping of transmission segments into the various scenarios, and

recommended that certain segments be isolated and analyzed separately. PacifiCorp explained

that segment groupings reflect certain scenario themes as well as the Utah Commission’s

acknowledgment order directive on treating resource expansion options without a certificate of

public convenience and necessity (CPCN) or a signed final procurement contract. PacifiCorp

stated that it will consider the recommendations and encouraged more stakeholder feedback on


the Energy Gateway scenarios as well as submission of thoroughly developed alterative

transmission scenarios.

Discussion Highlights

Strawman Portfolio Development Cases

1. PacifiCorp stated it would compile comments and responses on portfolio development

cases into a table for distribution to IRP stakeholders.

2. A number of participants recommended that PacifiCorp provide more than five slots for

stakeholder-defined core cases. PacifiCorp responded that participants should see what

stakeholder-defined core cases are actually proposed, and if, in combination with the

other core cases, sufficient resource diversity across portfolios is not obtained, then the

Company would consider additional case proposals. The Company reiterated the concern

regarding increasing the number of core case portfolios beyond those defined in the

strawman case list.

3. A participant requested that PacifiCorp include system emissions charts that show

emission quantities in relation to 1990 levels.

4. Several participants recommended that the core cases should allow for portfolio

comparisons incorporating differences in the stringency of non-air environmental

regulations. The Company agreed that pairing such regulations (i.e., for coal combustion

residuals and cooling water intake structures) with air-related regulations was reasonable.

5. A participant requested that PacifiCorp include a case that assumes that the requirement

for selective catalytic reduction (SCR) equipment installation for coal units be eliminated

in return for early unit retirement (For example, Jim Bridger units 1 and 2). The

stakeholder cited a 2021 retirement date assumption. Another participant suggested that

this case should be paired with a high natural gas price scenario. PacifiCorp requested

that the stakeholder define and provide a detailed case proposal.

6. A participant recommended that the Company look into scenarios where Energy Gateway

investment dollars are redirected to support other objectives such as improved access to

renewable generation. PacifiCorp stated that a well-defined proposal would be needed

prior to further consideration of the concept.1

7. Participants discussed the rationale for including a physical (―hard‖) cap on carbon

dioxide (CO2) emissions as a substitute for, or an addition to, the high CO2 cost scenario.

After the Company described the concept of shadow prices and how a hard cap has been

modeled, participants agreed that a hard cap would need to be specified on a federal basis

as opposed to a PacifiCorp system basis. Other participants suggested that the rationale

for a high CO2 cost scenario, in combination with a high natural gas price scenario, is to

force retrofitting the entire coal fleet. The CO2 cost would be set to an electricity sector

specific level that climate scientists suggest is necessary to stabilize climate change.

1 This concept was discussed at the Oregon stakeholder input meeting held on July 19, 2012. Parties at that meeting

agreed that defining such an analysis was too complex to address in this IRP cycle and is best handled as part of an

on-going dialogue with the Company.


8. A Utah participant suggested that the Company incorporate a more extreme weather

event scenario than the one-in-20 (5th

percentile) sensitivity case included in the

strawman list. A one-in-100 (1st percentile) probability sensitivity was recommended.

9. Participants discussed a solar mandate case where financial incentives and regulatory

requirements result in a high distributed solar penetration rate. PacifiCorp called on the

clean energy advocacy groups in attendance to help define appropriate assumptions for

such a portfolio development case.

10. PacifiCorp briefly described the general approach for analyzing renewable portfolio

standards and compliance strategies, and developing an RPS-compliant renewable

resource capacity floor for all core cases. Wind was cited as the default (or ―base‖)

resource for RPS compliance because it is a relatively mature and cost-effective

renewable technology. Participants suggested that a mix of renewable types is more

appropriate. One participant suggested that at least one RPS scenario should be

developed with an optimized base renewable resource mix as determined by a System

Optimizer run. PacifiCorp explained that a base RPS resource mix needs to be

determined outside of System Optimizer due to modeling limitations including handling

REC banking and interstate trading rules.

11. Participants discussed the Company’s base assumption for the renewable production tax

credit (PTC), which is that no extension is enacted. PacifiCorp stated that it would

consider alternative PTC extension scenarios.

12. Participants raised the issue of state cost assignment and how renewable energy credit

(REC) prices would be estimated. PacifiCorp emphasized that cost allocation for

incremental resources is an issue best dealt with as part of Multi-state Protocol

discussions.

13. A participant asked if the Company had plans to allow System Optimizer to select cost-

effective resources from energy efficiency supply curves based on technical potential

rather than achievable potential. PacifiCorp explained that the 85 percent achievable

potential target assumed for IRP modeling is already exceptionally high.

14. Utah Clean Energy stated it would send the latest Lazard generation technology levelized

cost of energy (LCOE) report.

Transmission Benefit Analysis and Energy Gateway Scenarios

1. Some stakeholders recommended that Segment G of Energy Gateway (Sigurd to Red

Butte) be moved from Scenario 2, ―System Improvement‖, to Scenario 1, ―Reference‖

because the main purpose of the segment was to meet loads. The Company explained that

segment G does not have a CPCN or signed final procurement contract, and therefore

does not meet the Utah Commission’s standard for inclusion in a base portfolio. Utah

Commission staff suggested that the Company ask the Commission for a waiver of the

CPCN/contract requirement for this segment and others with a similar function. Another

participant questioned why Segments E and H (Populus-Hemingway-Boardman-Bethel)

is not address as a separate scenario. The Company agreed to reconsider how the

segments would be grouped into the scenarios.

2. While participants did not take issue with the effort to assess additional benefits of

Energy Gateway, some questioned how the Company would use this analysis to justify

investments and seek regulatory approvals. Some participants also thought that the


analysis should be expanded to include relative costs and benefits of alternatives to

Energy Gateway (both transmission and non-transmission related). PacifiCorp stated that

in addition to supporting the IRP, the analysis supports decisions to pursue and continue

with the segment permitting process in light of the long lead-time for transmission

planning and scalability of the Energy Gateway design. The Company also performs

more detailed evaluations to support CPCNs.

3. Participants made recommendations for additional benefits to include in the analysis.

Examples include facilitation of renewable grid integration and portfolio standard

compliance, compliance with FERC Order 1000, and other quantifiable societal benefits

such as what is done for energy efficiency.

Action Item Follow-up

1. PacifiCorp prepared and distributed a ―stakeholder portfolio development

recommendations log‖ for discussion at the August 2, 2012 public input meeting.

2. The Lazard LCOE report was received from Utah Clean Energy on July 13, 2012.


Appendix A:

PacifiCorp’s Strawman Portfolio Cases

June 27, 2012 7

2013 IRP Strawman Portfolio Development Cases

The accompany Excel Workbook, named “2013IRP_Scenario-Case Matrix_Strawman”,

provides a list of portfolio development cases for stakeholder review and discussion at the next

2013 IRP public input meeting, scheduled for July 13, 2012.

Nomenclature

Portfolio Development Case (“case” for short): A set of model input assumptions that the System

Optimizer model uses to derive an optimal resource expansion plan (or portfolio). Cases are

divided into two major groups:

Core – Those defined for broad portfolio comparability on the basis of portfolio

performance criteria (various cost, risk, and supply reliability measures). All core cases

would be simulated for each Energy Gateway scenario.

Sensitivity – Those defined specifically for comparison to a base case, focusing on

changes to resource-specific assumptions and alternative load growth forecasts.

Resource Constraints: Pertains to specifying upper or lower bounds on resource capacity

selection in the System Optimizer model for a given year or range of years.

Fixing a Resource: “Fixing” a resource means that the model is forced to select a given resource

for a specific year and capacity amount, effectively meaning that upper and lower bounds on

resource selection are equal.

Scenario Attributes: Pertains to the individual elements that define a portfolio development case.

The attributes are currently grouped into the following categories:

Environmental Regulation1

Fuel Cost

State/Federal Energy Policy

Load Forecast

Technology Game-changers

Resource Selection Constraints

Total Number of Core and Sensitivity Cases

PacifiCorp is limiting the number of core cases to no more than 20 given the total number of

portfolios that will need to be developed when considering multiple Energy Gateway scenarios.

The final number of sensitivity cases will be determined after a review of core case results and

after considering time availability, stakeholder recommendations, and the Company’s analytical

priorities.

1 Note that CO2 tax values in the strawman case definition list are indicative and could change based on stakeholder

discussions in forthcoming public input meetings.

June 27, 2012 8

Stakeholder Defined Cases

PacifiCorp has set aside up to five “slots” for portfolio core cases that will be defined by

stakeholders. These portfolio cases can be defined through a combination of alternative resource

constraints and scenario attributes. In proposing a stakeholder-defined case, the Company will

expect a description of the rationale for the case as well as the specific model input values or

instructions for deriving the input values. Stakeholders may provide their case proposals prior to

portfolio development in August-September, 2012, or may choose to wait until after portfolio

results are distributed for public review.

In selecting the stakeholder-defined cases among proposals received, the Company is proposing

to use the following criteria:

1. Cases proposed by Staff of each state utility commission will be prioritized first.

Commission Staff may collaborate with other state stakeholders to develop one or more

“consensus” case proposals.

2. Both PacifiCorp and other stakeholders will consider the merits of the stakeholder case

proposals (overall reasonableness and value-added), and may offer modification

suggestions prior to final consideration of the case proposals.

Coal Investment Sensitivities

In each of the core and sensitivity cases, incremental coal investments required to achieve

compliance with known and emerging environmental regulations will be incorporated into the

portfolio development process by allowing the System Optimizer model to choose investment

alternatives. In as much as Scenario Attributes lead to portfolios that reflect selection of early

retirement or gas conversion alternatives, PacifiCorp will develop sensitivity cases, focusing on

potential early retirement or gas conversion outcomes that occur in the first ten years of the

planning period, to calculate the present value revenue requirement differential (PVRR(d)) of the

selected investment alternative and to account for other cost adjustments that cannot be

accounted for directly in the System Optimizer model. This would include adjustments

associated with a change in the fueling plan for a coal plant in which only a portion of the

individual generating units retire early or are otherwise converted to natural gas.

PacifiCorp - 2013 Integrated Resource Plan Strawman Portfolio Development Cases

Themes

Case Number 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Environmental Regulation 2/

CO2 Cost - None ($0/ton) X X X X X

CO2 Cost - Medium ($16/ton, starting in 2022 escalating at inflation) X X X X X X X

CO2 Cost - High ($34/ton, starting in 2018 escalating at inflation+5%) X X X

CO2 Cost - Hard Emissions Cap (OR H.B. 3543 reduction goals)

Base EPA BART/Regional Haze X X X

Stringent EPA BART/Regional Haze

Fuel Price

Natural Gas - Medium X X X X X X X X X X X

Natural Gas - Low X X

Natural Gas - High X X

Coal - Low

Coal - Medium X X X X X X X X X X X X X X X

Coal - High

State/Federal Energy Policies 3/

No RPS rules

Current state RPS rules - Wind only strategy X X X X X X X X X X X X X

Current state RPS rules - Wind and geothermal strategy X

Federal RPS X X X X X X X X X

Federal Clean Energy Standard

Renewable PTC extension past 2012 X X X X

High achievable energy efficiency potential X

Load Forecast

Medium X X X X X X X X X X X X X X X

Low

High

1 in 10 Peak Weather



Wind/Solar - Increased capacity factors, reduced cost 4/

Advanced Energy Storage - Commercially Viable/Favorable Costs


Constrain FOT selection to maximum availability X

Prevent FOT selection in PacifiCorp East X

Constrain distrib. solar selection to max. achievable potential X

1/ Fixed resources from 2013 Business Plan portfolio.

2/ CO2 tax values are only indicative of what the Company will use; CO2 risk

analysis will be a discussion topic at the August 13, 2012 public input meeting.

3/ RPS rules establish a lower bound resource constraint only.

4/ Apply info from industry RFI on capacity factor assumptions.

All core cases would be simulated for each Energy Gateway scenario.

Gray highlighted cells indicate Scenario Attributes that are not

applicable to the core cases.

Base

Stakeholder Defined

To Be

Determined

To Be

Determined

To Be

Determined

To Be

Determined

To Be

Determined

No CO2

Cost/

High Gas

Prices

High CO2

Cost/

Low Gas

Price

Targeted Clean Technology Focus Market Reliance

Energy

Efficiency

Mandates

Distributed

Solar

Mandates

High CO2

Cost/

Medium

Gas Price

High CO2

Cost/

High Gas

Price

Geothermal

RPS Strategy Federal RPS

Maximum

Reliance

No East

Reliance

CORE CASES

Reference

Status

Quo

2013

Business

Plan 1/

GHG Regulation Bookends

No CO2

Cost/

Medium

Gas Price

No CO2

Cost/

Low Gas

PriceCase Description

9 July 13, 2012

PacifiCorp - 2013 Integrated Resource Plan Strawman Portfolio Development Cases

Themes

Case Number

Environmental Regulation 2/

CO2 Cost - None ($0/ton)

CO2 Cost - Medium ($16/ton, starting in 2022 escalating at inflation)

CO2 Cost - High ($34/ton, starting in 2018 escalating at inflation+5%)

CO2 Cost - Hard Emissions Cap (OR H.B. 3543 reduction goals)

Base EPA BART/Regional Haze

Stringent EPA BART/Regional Haze

Fuel Price

Natural Gas - Medium

Natural Gas - Low

Natural Gas - High

Coal - Low

Coal - Medium

Coal - High

State/Federal Energy Policies 3/

No RPS rules

Current state RPS rules - Wind only strategy

Current state RPS rules - Wind and geothermal strategy

Federal RPS

Federal Clean Energy Standard

Renewable PTC extension past 2012

High achievable energy efficiency potential

Load Forecast

Medium

Low

High




Wind/Solar - Increased capacity factors, reduced cost 4/

Advanced Energy Storage - Commercially Viable/Favorable Costs


Constrain FOT selection to maximum availability

Prevent FOT selection in PacifiCorp East

Constrain distrib. solar selection to max. achievable potential

1/ Fixed resources from 2013 Business Plan portfolio.

2/ CO2 tax values are only indicative of what the Company will use; CO2 risk

analysis will be a discussion topic at the August 13, 2012 public input meeting.

3/ RPS rules establish a lower bound resource constraint only.

4/ Apply info from industry RFI on capacity factor assumptions.

All core cases would be simulated for each Energy Gateway scenario.

Gray highlighted cells indicate Scenario Attributes that are not

applicable to the core cases.

CORE CASES

Case Description

Coal PVRR(d) Sensitivities

Federal

Clean

Energy

Standard

S1 S2 S3 S4 S5 S6 S7 S8 S9 S10 S11 S12

X X X

X X X X X X X

X

X

X X X

X X X X X X X X X X X

X

X X X X X X X X X X

X

X

X X X X X X X X X X X

X

X X X X X X X X

X

X

X

X

X X

X

High Coal Investment Cost Other

Advanced

Energy

Storage

Low Coal Plant

Cost Bookend

High Coal Plant

Cost Bookend

Alternative Load Forecasts

Hard

Emissions

Cap

Wind/Solar

Technology

Resurgence

Medium

Assumptions No RPS

Low

Loads

High

Loads

SENSITIVITY CASES

These sensitivity cases are intended for

calculation of the present value revenue

requirement differential, PVRR(d), relative to

cases with retirement or gas conversion

outcomes occurring in the first ten years of

the planning period.

Extreme

Weather:

10th

Percentile

Peaks

Extreme

Weather:

5th

Percentile

Peaks

10 July 13, 2012


Appendix B:

Meeting Attendance List, Individuals

Organization Name

Alpern Myers Stuart LLC (Interwest Energy Alliance) Hickey, Lisa

Citizens' Utility Board of Oregon Feighner, Gordon

Jenks, Bob

Templet, Sommer

CRD Management Inc. (Encana) Belland, Roger

Customers Ashcroft, Peter

Klingele, John

Energy Strategies, LLC Hendrickson, Don

enXco Wadi, Ala

E-Quant Consulting Swenson, Roger

First Wind Klein, Mark

Hatch, James & Dodge (For UAE) Dodge, Gary

Idaho Conservation League (ICL) Otto, Ben

Idaho Public Utilities Commission (IPUC) Louis, Michael

Magnum Energy Webster, Rob

Monsanto Company Geddes, Bob

Northwest Pipeline GP Hagins, Teresa

Oregon Public Utility Commission (OPUC) Bless, Adam

Colville, Erik

Hicks, Jim

PacifiCorp Andrews, Ian

Arzola, Eric

Bumgarner, Jeff

Cunningham, Bill

Edmonds, Sarah

Fritz, Brian

Gerrard, Darrell

Heng, Irene

Jones Jr., Don

Kusters, Stacey

Liljenwall, Michael

Link, Rick

Moghadam, BJ

Morris, Eli

Swan, Dan

Weston, Ted

Renewable Northwest Project (RNP) Lindsay, Jimmy


Organization Name

Yourkowski, Cameron

Synapse Energy Economics Fisher, Jeremy

Utah Clean Energy (UCE) Hayes, Sophie

Shah, K. Kumar

Wright, Sarah

Utah Division of Public Utilities (DPU) Liu, Sam

Wheelwright, Doug

Zenger, Joni

Utah Office Of Consumer Services (OCS) Beck, Michele

Vastag, Bela

Utah Public Service Commission (UT-PSC) Harvey, John

Holland, Joseph

Revelt, Carol

Western Resource Advocates (WRA) Dubuc, Rob

Kelly, Nancy

Washington Utilities and Transportation Commission (WUTC) Johnson, Steven

McGuire, Chris

Nightingale, David

Wyoming Office of Consumer Advocates (WY-OCA) Parrish, Denise

Wyoming Public Service Commission - Staff Walker, Dave

Biedermann, Don

Yetter, Laura

2013 irp pim 3 - meeting report for july 13, 2012 - pacificorp

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