Prepared Direct Testimony of Robert McCullough on Behalf of the ...

Page 23 <strong>of</strong> 76SEATAC-400Over the period <strong>of</strong> the crisis, generation from the Big Five units is 3,119 megawatts lower onaverage than what we would have expected from a decision to dispatch into the market based ona comparison <strong>of</strong> market prices to plant operating costs. It is interesting to note that the shortfalltakes place throughout California, even in areas that were not subject to the NOx market in theL.A. basin.Q. How does this analysis treat forced outages?Q. The incomplete accounting <strong>of</strong> outages at the California IS0 as well as the transcripts from AES,Williams, and Reliant do not create much confidence in the reliability estimates provided by eitherthe IS0 or the generators.Our approach is exceedingly conservative. We have derated the plants in our study by thecorresponding equivalent availability factors (Ems) from GADS from 1995 to 1.999. Inpractice, this means that we have assumed that the generators were as likely to schedule plannedoutages during the summer as the winter and to make repairs on-peak as well as <strong>of</strong>f-peak.Clearly, this is not true in the real world.Q. Are there other conservative elements in your analysis?A. Yes. The simple dispatch model we have developed does not consider ramping. In practice, thismeans that we consistently underestimate <strong>of</strong>f-peak hours where the practice <strong>of</strong> siich units is tomaintain a minimum operating level. In our model, we have assumed that the unit can be taken tozero and then returned to full operation. Obviously, these plants ramp up during <strong>of</strong>f-peak in orderto generate for high costs during on-peak hours.