PacifiCorp 2007 Integrated Resource Plan (May 30, 2007)

PacifiCorp – 2007 IRPChapter 5 – Resource OptionsSUPPLY-SIDE RESOURCESResource Selection CriteriaThe list of supply-side resource options has been reduced in relation to previous IRP resourcelists to reflect the realities evidenced through previous studies and to help efficiently manage thecomputer processing time involved in developing detailed portfolios. For instance, subcriticalpulverized coal resources are not included since it is felt than any new, large (greater than 500megawatts) pulverized coal plant will utilize a supercritical boiler based on the increased efficiencyand superior environmental performance of the supercritical designs. Similarly, naturalgas based options based on smaller, less efficient combustion turbines have not been includedsince previous IRP exercises have demonstrated that the superior heat rate and cost performanceof larger combustion turbines will cause the larger machines to be selected over the smaller options.Derivation of Resource AttributesThe supply-side resource options were developed from a combination of resources. The processbegan with the list of major electrical generating resources from the 2004 IRP Update. This resourcelist was reviewed and, in some cases, simplified. Once the basic list of resources was determinedthe cost and performance attributes for each resource was estimated. A number of informationsources were used to identify parameters needed to model these resources. PacifiCorphas conducted a number of engineering studies to understand the cost of coal and gas resourcesin recent years. Recent experience with the construction of the 2x1 combined cycle plants at CurrantCreek and Lake Side as well as other recent simple cycle projects at Gadsby and West Valleyhas provided PacifiCorp with insight into the current cost of new power generating facilities.For newer technologies (integrated gasification combined cycle (IGCC) plants and supercriticalpulverized coal plants) a study performed by WorleyParsons was used along with internal studiesto review the cost estimates of these resources.In order to refresh the modeling data used in the 2004 IRP Update, PacifiCorp purchased a licenseto utilize the Electric Power Research Institute (EPRI) new resource data base called theTechnical Assessment Guide® (TAG). The TAG contains information on capital cost, heat rate,availability, and fixed and variable operating and maintenance cost estimates. The data in theTAG must be customized for each application by adjusting basic financial parameters as well asphysical parameters for each potential site, such as coal quality, water availability, and elevation.The 2006 TAG data were used to develop a cost and performance profile for each potential resource.The results of the TAG runs were compared to the actual cost data from recent projectsas well as internal PacifiCorp studies of site specific generation options. The TAG results werecustomized to give results approximately in agreement to these recent studies. The customizationwas primarily done for capital costs, and reflects market conditions as of late spring of 2006. Ofparticular concern with the capital costs contained in the TAG database was the apparent lag inthe TAG results in recognizing the recent trend of increases in capital costs for power generatingequipment. It was apparent from numerous discussions with engineering and construction companiesin the power industry that construction costs have increased substantially in the last two tothree years. These increases, on the order of 25 to 35 percent with respect to the costs reported inthe 2004 IRP Update, are due to increased construction activity stemming from shortages of90