PacifiCorp 2007 Integrated Resource Plan (May 30, 2007)

PacifiCorp – 2007 IRPChapter 6 – Modeling and Risk Analysis Approach(emission quantity multiplied by the emissions cost adders) as well as a net allowance cost balanceunder a cap-and-trade regime for all pollutants.Risk ExposureRisk exposure is the stochastic upper-tail mean PVRR minus the stochastic mean PVRR. Theupper-tail mean PVRR is a measure of high-end stochastic risk, and is calculated as the averageof the five stochastic simulation iterations with the highest net variable cost. Risk exposure issomewhat analogous to Value at Risk (VaR) measures. The fifth and ninety-fifth percentilePVRRs are also reported. These PVRR values correspond to the iteration out of the 100 thatrepresents the fifth and ninety-fifth percentiles, respectively. These measures represent snapshotindicators of low-risk and high-risk stochastic outcomes.Capital CostThe total capital cost measure is the sum of the capital costs for generation resources and transmission,expressed as a net present value.Production Cost VariabilityTo capture production cost volatility risk, PacifiCorp uses the standard deviation of the stochasticproduction cost for the 100 Monte Carlo simulation iterations. The production cost is expressedas a net present value for the annual costs for 2007 through 2026.Carbon Dioxide EmissionsCarbon dioxide emissions are reported for two time periods: 2007–2016 and 2007–2026. The 10-year view excludes the emissions impact of growth stations—generic combined cycle units thatserve primarily to meet load growth beyond the 10-year investment window.For risk analysis portfolios considered as finalists for preferred portfolio selection, CO 2 emissionsare reported for both generation sources (direct emissions) as well as combined with the neteffect of wholesale market activity. The emission contribution assigned to market purchases (indirectemissions, net of emission credits from wholesale sales). The indirect CO 2 emissions relatedto purchases are calculated by multiplying net purchased power generation by an averageemissions factor of 0.565 tons/MWh which is offset by emissions deemed to go with wholesalesales at the average system emission rate. This factor is based on actual 2005 purchases, and isapplied through the 20-year forecast. The total system emissions footprint (generation only) forsulfur dioxide, nitrogen oxides, mercury is also reported for the period 2007–2026.Supply ReliabilityEnergy Not ServedEnergy Not Served is a condition where there is insufficient generation available to meet loadbecause of physical constraints or market conditions. Certain iterations of a PaR stochastic simulationwill have “Energy Not Served” or ENS. This occurs when an iteration has one or morestochastic variables with large random shocks that prevent the model from fully balancing thesystem for the simulated hour. Typically large load shocks and simultaneous unplanned plantoutages are implicated in ENS events. For example, a large load shock in a transmissionconstrainedtopology bubble would yield a relatively large amount of ENS. Running the PaR134