PacifiCorp 2007 Integrated Resource Plan (May 30, 2007)

PacifiCorp – 2007 IRPChapter 7 – Modeling andbillion. Changing the planning reserve margin strategy (RA8) has a large impact on risk exposure:going from a 12% to 15% margin reduces average risk exposure by $1.4 billion.In contrast to the risk exposure reduction strategies, removing pulverized coal as a resource option(RA5) increases average risk exposure by $5.7 billion. At the $61 CO 2 adder level, the riskexposure for RA6 reaches a high of $6.4 billion.Cost/Risk Tradeoff AnalysisThe three figures below are scatter plots of portfolio cost (PVRR) and risk exposure, and illustratethe tradeoff between the two performance measures. Figure 7.12 plots the average PVRRand risk exposure across the CO 2 adder cases. Figure 7.13 shows the cost-risk relationship for the$0 CO 2 adder case, while Figure 7.14 shows the relationship for the $61 CO 2 adder case (representingthe CO 2 scenario risk bookends).The figures show that when considering exposure to potential high-cost outcomes, RA5 has thelowest portfolio risk regardless of the CO 2 adder level. However, when considering the balancebetween risk and cost, RA7 and RA1—and RA2 and RA3 right behind—perform the best amongthis portfolio set. Under the high CO 2 adder case, portfolio RA7 dominates the others by a significantamount.Figure 7.12 – Average Stochastic Cost versus Risk Exposure50.00Average Across All CO2 Adder Cases($0, $8, $15, $38, $61/ton)Risk Exposure: Upper-Tail StochasticMean minus Overall Mean PVRR (Billion $)47.5045.0042.5040.0037.5035.00RA6RA8RA12RA9RA4RA3RA1RA10RA2RA11RA7RA521.4 21.6 21.8 22.0 22.2 22.4Stochastic Mean PVRR (Billion $)169