PacifiCorp 2007 Integrated Resource Plan (May 30, 2007)

PacifiCorp – 2007 IRPChapter 7 – Modeling andprovisions. The coal resource replacement resulted in a $687 million increase in stochastic meanPVRR and a $411 million increase in risk exposure. The risk exposure increase is due to the twopercentlower availability of the IGCC relative to the Wyoming SCPC resource.Replace a Base Load Resource with CHP and Dispatchable Customer Standby GenerationUsing portfolio RA1 as the starting point, PacifiCorp replaced the small Utah pulverized coalresource with 280 megawatts of gas-fired CHP resources and 60 megawatts of west-side customerstandby generation. (This sensitivity addresses an analysis requirement in the Oregon PublicUtility Commission’s 2004 Integrated Resource Plan acknowledgement order.) Table 7.45reports the sizes, locations, and number of units used for the study.Table 7.45 – Combined Heat and Power Replacement ResourcesCHP Resource Type East Location West Location System TotalLarge industrial – 25 MW 75 MW (3 units) 150 MW (6 units) 225 MW (9 units)Small industrial/commercial – 5 MW 35 MW (7 units) 20 MW (4 units) 55 MW (11 Units)Total 110 MW 170 MW 280 MWComparing against portfolio RA1, the new portfolio with CHP and customer standby generationresources had a $168 million higher stochastic mean PVRR. Risk exposure was higher by $2.4billion, while Energy Not Served was higher by about 7 percent.PREFERRED PORTFOLIO SELECTION AND JUSTIFICATIONBased on the stochastic analysis results for the Group 2 risk analysis portfolios, the company haschosen RA14 as the preferred portfolio. Table 7.46 shows the resulting load and resource balancewith preferred portfolio resources and east-west transfers included.This portfolio reflects a robust resource strategy that accounts for the major resource risk factors(specifically the form and cost impact of CO 2 regulations, and price volatility for natural gasplants and market purchases) as well as evolving state resource policies that are currently notcoordinated with respect to PacifiCorp’s system-wide integrated resource planning mandate.Portfolio RA14 is viewed as the least-cost and least economically risky proposition for reliablymeeting PacifiCorp’s load obligation while accommodating different state policies and interests.In assessing the overall merits of this portfolio, PacifiCorp also concentrated on the value of thedifferent resource types for managing portfolio risks in the short term, mid term, and long term.For the short term, the acquisition of renewables, DSM and CHP increases portfolio diversityand lays the groundwork for a resource base that can comply with early RPS and CO 2 complianceschedules. For the mid term—2012 through 2014, which is a period marked by significantresource need and escalating regulatory risks—the preferred portfolio is constituted with a mixof proxy long-term assets with complementary risk profiles (supercritical pulverized coal andCCCT resources), supplemented by new front office transactions to increase planning flexibility.For the long term, the preferred portfolio includes flexible long-term assets with a small emissionsfootprint and a moderate reliance on front office transactions. This resource mix is most inline with the company strategy to reduce its long-term reliance on the market, which is discussedin more detail later in this chapter.202