spp.org 1. status update for reliability and economic assessments stakeholder meeting september 16,...
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SPP.org 1
Status Update for Reliability
and Economic Assessments
Stakeholder Meeting
September 16, 2008
Austin, TX
SPP.org 3
Activities Completed Since Last Meeting
• Reliability Assessment
Include 69 kV assessment for 2012 Summer Peak case
Sensitivity with Cottonwood connected to ERCOT
Transfer analysis into ETI as a result of reliability projects
• Economic Assessment
Input assumptions into PROMOD IV revised based on stakeholder comments
Status Quo 2012 and Base Case run with reliability upgrades completed
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Reliability Assessment
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Reliability Study Cases
• Contingency analysis (N-1) for SPP-ETI system
More stringent reliability criteria in Western Region (N-1, G-1)
Monitored 69 kV and above
• Several potential thermal and voltage violations found
• SPP examined a set of reliability upgrades to mitigate these violations
New 500/230 kV Transformers at Orange County and Cypress
Reconductor nine 138 kV lines in ETI area
• High level planning estimate of projects required to meet SPP Criteria is $115 M
COTTONWOOD IN SPP
Projects to meet SPP Criteria
New Orange County 500/230kV Transformer + Substation work ($50 M)
New Cypress 500/230kV Transformer ($10 M)
Planned Known Projects
ETI Proposed Projects for 2012
Local Reliability projects for Western Region
Transmission Reliability projects from the 2007 approved STEP Plan
ETI Transmission Construction Plan
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Reliability Study Cases
• Two Step analysis to assess Cottonwood moving to ERCOT
Identified projects to address Cottonwood exiting SPP (Similar STEP plan, this cost is excluded from Cost/Benefit analysis)
Examined additional reliability projects to address SPP Criteria
• Major projects to meet SPP criteria include
New 500/230 kV Transformers at Orange County and Cypress
Reconductor six 138 kV lines in ETI area
• High level planning estimate of projects required to meet SPP Criteria is $90 Million
COTTONWOOD IN ERCOT
Cottonwood Related Projects
Projects to meet SPP Criteria
Planned Known Projects
ETI Proposed Projects for 2012
Local Reliability projects for Western Region
Transmission Reliability projects from the 2007 approved STEP Plan
ETI Transmission Construction Plan
New Webre – Richard 500kV line ($180 M)
New Orange County 500/230kV Transformer + Substation work ($50 M)
New Cypress 500/230kV Transformer ($10 M)
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Cost allocation of ETI Reliability projects
• Reliability projects are required solely to integrate ETI into SPP
• SPP policy is to allocate these costs to the local zone
Similar to current discussion with Nebraska entities
Consistent with treatment with Pre Base Plan funding
• SPP analysis will measure benefits on an equivalent basis
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Transfer Capability Assessment into ETI
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Transfer Capability Assessment into ETI
• Observations based on Market Power Study
No mitigation needed for case with Cottonwood in SPP
Increase transfer capability into ETI by approx 500 MW in the case with Cottonwood in ERCOT
• Transfer Simulated between the rest of the Entergy and SPP combined into ETI
• Reliability Projects identified in Base Case are considered for this assessment
Series Compensation on Mt. Olive- Hartburg line also considered ($10 M)
• Found approx 460 MW transfer capability as a result of all projects above
• No additional projects recommended at this time
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Other Activities In Progress
• Tie Back Analysis to evaluate SPP’s Reliability need for ERCOT QPR option
• Stability analysis performed by independent consultant (Powertech) for SPP QPR and ERCOT QPR study
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Economic Assessment
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Key Market Assumptions – Status Quo Model
• SPP Market Assumptions
SPP modeled as Day 2 Market planned by SPP Cost Benefit Task Force
System wide unit commitment
System wide treatment of spinning reserve requirements
Security Constrained Unit Commitment and Economic Dispatch
SPP operates as a Single Balancing Authority
• Entergy (including ETI) Operating Assumptions
System wide unit commitment
Security Constrained Economic Dispatch
Reserve Requirements set and met on Entergy System wide basis
ETI Must Run Generation modeled via transmission constraints that represent voltage constraints
ETI and Entergy IPP output consistent with current operations
• Hurdle rates between SPP / other Regions and Entergy / other Regions
Dispatch hurdle 7 $/MWh
Commitment hurdle 25 $/MWh
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Key Market Assumptions – Base Model
• SPP Market Assumptions same as Status Quo model
• ETI is a Member of SPP
• ETI Local Area Operating Assumptions same as Status Quo case
• Hurdle rates same as Status Quo except no hurdle rate between SPP and ETI
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Benefit Metric – ETI Adjusted Production Cost
• Same Benefit metric being used by the SPP Cost Benefit Task Force in the Future Market Design Study
• Adjusted Production Cost for ETI
Generation Total Variable Cost
+ Purchase Cost at ETI Load-Hub Rate
– Sales Revenue at ETI Generation-Hub Rate
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Entergy-TX Hub Prices On-Peak 2012 ($/MWh)
2012 Average On-Peak ETI Load Hub Prices (with Cottonwood in EIC)
80.0090.00
100.00110.00120.00130.00140.00150.00160.00
$/M
WH
Base Case
Status Quo
2012 Average ETI Load Hub Prices With Cottonwood in ERCOT
90.00
100.00
110.00
120.00
130.00
140.00
1 2 3 4 5 6 7 8 9 10 11 12
$/M
WH
Base Case
Status Quo
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Transmission Congestion Impact on ETI Load Hub
• Status Quo – impact on $/MWH
Inland – Hartburg line under contingency
24.05 (Cottonwood in ETI) and 12.89 (Cottonwood in ERCOT)
Mt. Olive – Hartburg line under contingency
5.07 (Cottonwood in ETI) and 10.81 (Cottonwood in ERCOT)
Mabel line under contingency
-1.74 (Cottonwood in ETI) and -1.60 (Cottonwood in ERCOT)
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Transmission Congestion Impact on ETI Load Hub
• Base Case – impact on $/MWH
Inland – Hartburg line under contingency
4.11 (Cottonwood in ETI)
Mt. Olive – Hartburg line under contingency
6.96 (Cottonwood in ETI) and 6.84 (Cottonwood in ERCOT)
Wyatt – Parnell under contingency
6.80 (Cottonwood in ERCOT)
McAdam line under contingency
4.05 (Cottonwood in ETI)
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2012 Benefits to ETI
Millions of $
Benefit to ETI of joining SPP
Base Case with Cottonwood in
ERCOT
Status Quo with Cottonwood in
ERCOT
Base Case with
Cottonwood in Eastern
Interconnect
Status Quo with Cottonwood in
Eastern Interconnection
Benefit with Cottonwood in
ERCOT
Benefit with Cottonwood in
Eastern Interconnection
2012 2,454.65 2,621.93 2,355.08 2,491.43 167.28 136.35
Jan 197.35 216.41 193.66 206.57 19.06 12.91 Feb 159.27 176.49 161.74 173.51 17.22 11.77 Mar 159.88 186.48 168.26 178.67 26.59 10.42 Apr 159.37 181.61 157.93 173.32 22.24 15.39 May 203.91 212.83 192.56 205.54 8.92 12.98 Jun 240.24 243.55 219.39 228.25 3.31 8.87 Jul 277.66 276.01 251.32 257.23 (1.66) 5.90 Aug 287.17 287.03 254.50 266.61 (0.14) 12.12 Sep 217.72 228.79 204.00 216.44 11.08 12.44 Oct 178.59 198.32 177.69 192.74 19.74 15.05 Nov 173.07 192.92 173.18 185.31 19.85 12.13 Dec 200.43 221.49 200.85 207.23 21.06 6.38
Millions of $
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SPP Load Hub Prices On-Peak 2012 ($/MWh)
2 - 7% increase if ETI joins
SPP Load Hub Prices
60.00
70.00
80.00
90.00
100.00
110.00
$/M
WH
Status Quo:Cottonwood in SPP
Status Quo:Cottonwood in ERCOT
Base: Cottonwood inSPP
Base: Cottonwood inERCOT
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2012 SPP Generation Impact of ETI Joining SPP (Cottonwood in Eastern Interconnection)
Benefit to SPP of ETI joining if Cottonwood stays in Eastern Interconnection
Base Case Status QuoGeneration
Change Base Case Status QuoGeneration
Cost Change
2012 184,534.44 184,428.67 (105.77) 7,050.91 7,224.31 173.40
Jan 15,207.31 15,132.07 (75.25) 481.56 490.49 8.93 Feb 12,872.04 12,698.48 (173.55) 393.60 393.16 (0.44) Mar 13,420.91 13,205.33 (215.59) 481.70 474.84 (6.85) Apr 12,865.27 12,789.34 (75.92) 414.21 423.84 9.64 May 15,002.93 14,963.97 (38.96) 526.40 543.88 17.48 Jun 16,833.63 17,040.57 206.94 724.18 757.52 33.35 Jul 19,753.94 20,039.96 286.02 938.64 980.28 41.64 Aug 20,411.53 20,622.01 210.48 957.40 989.44 32.04 Sep 16,654.22 16,774.30 120.07 620.45 646.43 25.98 Oct 13,938.54 13,749.18 (189.36) 508.40 507.57 (0.83) Nov 13,069.52 12,962.54 (106.99) 514.96 514.09 (0.88) Dec 14,504.60 14,450.92 (53.67) 489.42 502.76 13.34
Generation (GWH) Generation Costs(millions $)
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2012 Benefits to SPP of ETI Joining SPP
Benefit to SPP of ETI joining SPP
Base Case with Cottonwood in
ERCOT
Status Quo with Cottonwood in
ERCOT
Base Case with
Cottonwood in Eastern
Interconnect
Status Quo with Cottonwood in
Eastern Interconnection
Benefit with Cottonwood in
ERCOT
Benefit with Cottonwood in
Eastern Interconnection
2012 7,652.40 8,432.43 7,750.26 8,309.27 780.03 559.01
Jan 478.57 562.43 500.11 552.51 83.86 52.40 Feb 417.61 487.13 432.00 484.37 69.52 52.36 Mar 478.75 549.39 495.98 542.56 70.64 46.57 Apr 411.08 490.88 422.25 483.35 79.79 61.10 May 541.51 623.02 560.00 615.95 81.51 55.95 Jun 825.12 877.14 824.83 861.09 52.02 36.26 Jul 1,090.72 1,131.42 1,079.13 1,114.35 40.71 35.22 Aug 1,092.75 1,132.41 1,077.42 1,114.74 39.67 37.31 Sep 666.21 731.06 672.30 718.64 64.85 46.33 Oct 541.00 605.18 551.61 600.77 64.18 49.16 Nov 581.59 634.05 593.04 625.96 52.46 32.92 Dec 527.49 608.31 541.57 594.98 80.82 53.41
Millions of $
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Discussion of Findings - ETI• Summary of Production Cost Analysis
$136.3 million in lower annual production costs to ETI area with Cottonwood in SPP
$167.3 million in lower annual production costs to ETI area with Cottonwood in ERCOT
Lower production costs driven by decline in ETI generation as ETI purchases more from SPP
Production Cost benefit greater in non-summer months due to lower seasonal demand allowing SPP lower cost generation to serve more ETI load
Major transmission congestion in Mt. Olive/Hartburg/Inland area and around Wyatt/Parnell had major impact on ETI hub prices
• Entergy – TX hub prices for load decline with inclusion of ETI into SPP about 12 - 20%
• Cottonwood reduces Entergy – TX load hub prices but lowest Entergy – TX load hub prices occur with ETI in SPP and Cottonwood in SPP
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Discussion of Findings – SPP• SPP/ETI generation increases but overall variable generation
costs are lower by $173.4 million (if Cottonwood in EIC) due to more efficient commitment and dispatch
• SPP benefits due mostly to changes in load and generation hub prices which drive the cost of purchases and sales revenues
• SPP benefits more if Cottonwood is not included
$559.0 benefit with Cottonwood in SPP
$780.3 million benefit with Cottonwood in ERCOT
• SPP Load hub prices increase slightly with inclusion of ETI in SPP, about 2 - 7%
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Questions?
