PacifiCorp RTO project team Presentation to SSG-WI Planning WG PDX Business Center, 7/31/02

1. PacifiCorp RTO project team Presentation to SSG-WI Planning WG PDX Business Center, 7/31/02 Economic Assessment of Generation & Transmission Expansion Scenarios in WECC

2. Models used in Power Market analysis A wide range - some old, some new... • Econometric models- stochastic models that correlate trades and prices to time of year, weather or hydro conditions, fuel price & supply, etc. Used for predicting forward price curves, spark spreads, price spikes, etc. For M&A analysis, project assessment, for assessing credit risk, risk management, trade analytics and support, etc, etc • Game theory models- KBS-based models that simulate traders’ behavior (always within the rules!). Used for developing/testing trading strategies; for stress testing of market designs, detecting/monitoring unusual trades, etc. • Power market models - that optimize centrally-dispatched markets; or minimize traders’ production costs in meeting their load service obligations within transmission rights; or price transmission rights/congestion rents, etc. • System planning tools - for generator interconnection design and impact studies; for network expansion planning, for computing flowpath ratings, etc

3. Simple Low PSI 13.89 CG&E 14.74 WVPA 13.41 OVEC 13.65 EKPC 13.78 Accuracy Complexity LG&EE 12.66 KUEN 13.59 ERIKLOAD 108 REACTOR 106 BIGCOAL 223 BIGCOIL 213 EASTIE-1 110 MIDOIL 107 EASTIE-2 212 HYDRO 222 ANNELOAD 105 CARIOCA 220 MIDTIE-1 109 COAL-B 102 MIDTIE-2 211 NUKE-B 221 CONDENS 214 VIKING 219 MARYLOAD 104 ADDON 225 COAL-A 101 Good MIDCOALP 215 High MIDCOAL 216 WESTIE-1 103 WESTIE-2 224 NUKE-A 218 NOLOAD 217 Network models in Power Market analysis Single Area • OK for small control areas • No congestion • Ignores transmission ‘Bubble’ view • Major flowpaths only • Transportation model • Better, but… • Power doesn’t flow like that! Complete network • Very complex • All network constraints • Only way to track line flows • Still an approximation...

4. MIDOIL 107 High Ideal combination (doesn’t yet exist) PSI 13.89 CG&E 14.74 Sophistication of Market model WVPA 13.41 OVEC 13.65 EKPC 13.78 LG&EE 12.66 KUEN 13.59 Low Simple Complex Network model Trade-off in Market vs Network modeling Trading models Production simulation models Power market models System planning models

5. User specified scenarios Generation • size, capability • costs (fuel, O&M) • availability • outages Clearing Prices Transmission • network data • constraints • outages • operation rules Revenues/rents Capacity factors Flows/Congestion Load • distribution • hourly variation • max MWh, MW • annual growth Additional Scenarios Power Market simulation overview Market Modeling Market Simulation Scenario Analysis Goal: To predict the economic and physical performance of large power networks

6. The heart of ABB-MS Why Linearize? • Speed: Enables fast Linear Program (LP) solution • Convergence: LP always a convex problem • Accuracy: Flows on HV circuits modeled well • Acceptability: Generally recognised by Industry DC Optimal Power Flow Transmission Constrained Economic Dispatch with linearized power flow model

7. Transmission Network Constraints • Thermal Line Limits • Maximum MW on any line • Percentage of MVA rating • HVDC • Fixed or controllable • Maximum flow: different for each direction • Limits on MW changes per hour • Phase Shifter • MW Capacity • Angular limits • Limits on angle changes per hour • InterfaceConstraints • Limit on net flows on selected lines • Models a variety of operating constraints: • Reliability, Angular/Voltage stability, Area Interchange Limits

8. Limit for online G1 Limit for online G2 > G1 Total Flow From North Total Flow From East Transmission Network Constraints CombinedGeneration& Transmission Nomograms • Interface limits can be a function of generation variables • Online capacity • Reserve capability, etc • Example: Southern California import nomogram

9. Output Summary

10. Where we’re at with ABB-MS • Hand over to Kurt • various plots of Y2004 flowpath flows, generator nodal price differences, load factors,etc • on-line demo of selected results

11. Keys to successful use of COUGER Easy to change data • Large Base Case data set + Small, modular, incremental changes • Similar data stored/displayed together • Describe changes from Base Case to User Easily interpreted results • Summary file: Physical and Financial Performance, with or without time element • Summary file: highlight important constraints • Graphical representation of results • Case comparison: Summary and Graphical

12. Keys to successful use of COUGER Flexibility: User selects which • hours to run • entire year, one hour, sampled weeks, etc • constraints to model (accuracy vs. time) • Monitored Lines • Interface constraints • Individually, or as Groups via database filters • results to view • Clearing Price for selected buses • Flows, Shadow Prices for selected lines and flowpaths • Totalgeneration, load and average clearing price for selected areas Total Flexibility via User-controlled proprietary database

13. Tasks to complete Planning WG’s analysis... Given the necessary data, the steps would be: • Set up a complete data set for Y2008: generators (capacity, costs, availability); loads by control area (annual energy, monthly maximum demand and hourly demand profile); and transmission network (a complete WSCC system or other as specified by WG) • Run economic analyses using ABB-MS for a set of scenarios (fuel prices, new generator type and location, wet/dry hydro production) as specified by the WG • Report to the Planning WG, on a timetable to be mutually agreed, the prospective resource utilization, system flows, congestion incidence and cost, and other agreed economic indicators • Repeat the above analysis for Y2018, incorporating a specified set of transmission expansion options, taking account of agreed load growth and generator expansion/ fuel price options

14. What the Planning WG would need to do... • Provide a complete transmission network data (e.g. in the form of a WSCC loadflow case in PSS/E format), circuit thermal ratings and interface/flowpath ratings, phase-shifter and HVDC link data. • Provide load data (monthly energy and max demand, hourly load profile by control area/utility, annual growth rates). Dispatchable load data. • Provide generator data (type, capacity, heat rates, ramp rates, outage rates, O&M, and fuel costs, hydro production MW/hr in wet and dry conditions). • Specify the new generators (type, location, commissioning date, economic data and expected performance data) to be added • Specify the transmission expansions to be studied (terminations, circuit data, ratings and commissioning date), and the combination/sequence of generation/ transmission projects selected to be studied. • Also, the Planning WG would have to compute the effect on interface/ flowpath ratings of the specified combination of generation/transmission expansion projects that are selected to be studied. We are content to leave the interpretation of analysis results and the compilation of all reports to the Planning WG