PacifiCorp 2007 Integrated Resource Plan (May 30, 2007)

PacifiCorp – 2007 IRPChapter 7 – Modeling andEmissions Externality CostPacifiCorp calculates the emissions externality cost as the increase in stochastic mean PVRRrelative to the $0 adder case for each CO 2 adder level. This externality cost measure captures (1)the increased variable operating costs for fossil fuel generation, (2) the system re-dispatch impactattributable to the cost adders, and (2) the net present value of the sum of the annual CO 2 allowancetrading balances for 2007–2026. The externality costs are reported in Table 7.20 along withportfolio rankings based on the average of the incremental costs for the four adder levels. Thesecost estimates assume a cap-and-trade compliance strategy.Portfolio RA7 performs the best with an average externality cost of $187 million. RA8 had thehighest cost at $690 million. All the portfolios that included the extra wind—RA3, RA7, RA11,and RA12—had the lowest costs. In contrast, portfolios built according to the lower 12-percentplanning reserve margin had the highest externality costs (RA8 and RA9). The lower reservemargin results in higher coal resource utilization to keep the system balanced.Table 7.20 – Portfolio Emissions Externality Cost by CO 2 Adder LevelIncremental Stochastic Mean PVRR by CO 2 Adder (Million $)CO 2 Adder Level (2008$)ID $0 $8 $15 $38 $61 Average RankRA1 - 330 598 849 690 617 10RA2 - 331 575 710 417 508 7RA3 - 246 471 558 213 372 2RA4 - 349 613 835 649 612 9RA5 - 317 575 662 304 465 6RA6 - 271 506 616 369 441 5RA7 - 228 415 318 -214 187 1RA8 - 332 618 932 878 690 12RA9 - 301 579 847 760 622 11RA10 - 309 585 819 672 596 8RA11 - 240 490 610 298 410 3RA12 - 249 494 638 375 439 4Capital CostFigure 7.11 shows the total capital cost for each portfolio, expressed on a net present value of thesum of all capital costs accrued for 2007–2026. As expected, RA5 with its relatively larger coalplant investment schedule and earlier in-service dates exceeds all others at $6.78 billion. In contrastRA6—with no coal resources until 2016—has the lowest capital cost at $5.08 billion. Theaverage capital for all portfolios is $5.83 billion.165