2010 Integrated Resource Plan
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2010 Integrated Resource Plan August 2010 Prepared by Power Management Direct Comments/Questions to (253) 502-8025 Tacoma Power 2010 Integrated Resource Plan Executive Summary Tacoma Power’s 2010 Integrated Resource Plan recommends conservation as the sole addition to the utility’s resource portfolio. Analysis indicates that an aggressive conservation acquisition program coupled with Tacoma Power’s existing resources will be sufficient to meet projected retail load. This strategy should allow the utility to avoid a need to purchase expensive generating resources for over ten years. Specifically, this IRP found that: • Approximately 63 aMW of new conservation is cost-effective in Tacoma Power’s service territory over the next ten years. • This conservation, when combined with current utility resources should be sufficient to serve projected retail load beyond 2020. • Tacoma Power is well positioned to comply with the 3 percent renewable resource mandate that begins in 2012. Tacoma Power’s eligible renewable resource portfolio is comprised of nearly equal parts of utility owned incremental hydro and a contract for renewable energy credits. The 2010 IRP also considered the potential effect of electric vehicles and climate change on utility operations: • Electric vehicles are unlikely to impose a significant load on Tacoma Power until 2018 to 2025. • The effects of climate change are likely to be small for Tacoma Power’s loads and resources through the mid-2020s. This assessment is preliminary – the findings are likely to evolve as our understanding of the regional implications of climate change improves. Page: iii TACOMA POWER 2010 INTEGRATED RESOURCE PLAN EXECUTIVE SUMMARY The primary purpose of preparing an meet any identified load-resource gap at integrated resource plan (IRP) is to the lowest cost and risk. For Tacoma determine whether a utility has sufficient Power, a third purpose is to identify a resources to satisfy projected retail conservation acquisition goal for the loads. The second purpose is to utility. Tacoma Power’s 2010 IRP determine the mix of new supply-side addresses these tasks together. and demand-side resources that will Tacoma Power’s Resource Status Retail Electric Loads individual conservation measures. To Electric load forecasts are a fundamental develop this estimate, the utility hired component of any IRP. Tacoma Power’s the Cadmus Consulting firm to assess the load projection was compiled from applicability of 306 individual individual forecasts for each of the conservation measures and more than utility’s seven customer classes. A 60,000 variations on those measures. variety of factors including population, Over 200 of the assessed measures were economic conditions, energy prices, and found to be “cost-effective” in Tacoma business expectations (for large Power’s service territory; that is, the customers) influenced these individual energy saved costs less than had the forecasts. The red line on figure ES.1 utility acquired the same amount of represents the utility’s projected annual electricity from the wholesale market. retail customer load over time without These cost-effective measures are any conservation savings.1 projected to reduce Tacoma Power’s retail load by about 63 aMW over the Conservation next decade. However, a small portion Conservation reduces retail load. The of the potential conservation is at federal black line on Figure ES.1 shows the facilities and outside of the utility’s projected annual retail customer load control. Excluding this energy savings with conservation. The difference reduces the utility’s ten-year between the red and black lines shows conservation potential to about 60 aMW. how much conservation is expected to reduce Tacoma Power’s retail load. Three schedules for acquiring conservation are considered in this IRP. Tacoma Power’s conservation estimate is Each schedule would achieve the same the sum of the energy saved by multiple amount of conservation by the end of the ten-year period: 1 This analysis used an 18-year planning horizon to 1. A roughly uniform amount each year coincide with the conclusion of the utility’s new contract with BPA which expires on September (pro rata). 30, 2028. Page: iv TACOMA POWER 2010 INTEGRATED RESOURCE PLAN EXECUTIVE SUMMARY 2. Accelerated conservation in the early have a life-cycle cost of $2.0 million more years (front-loaded). than the pro rata schedule. Tacoma 3. Reduced conservation in the early Power’s two-year, 2012 to 2013, years (back-loaded). conservation target under a pro rata The pro rata conservation acquisition acquisition schedule is 12 to 13 aMW. schedule was found to be best for The black line on Figure ES.1 shows the Tacoma Power’s customers. The Energy utility’s projected annual retail load with Independence Act (a.k.a. I-937) prohibits conservation. This black line indicates back-loaded acquisition schedules and a the minimum amount of electricity front-loaded schedule is estimated to Tacoma Power needs to serve load. Figure ES.1 Tacoma Power’s Annual Load-Resource Balance: Critical Water Utility Resources and Bonneville Power Administration For planning purposes, Tacoma Power (BPA) resources. assesses its electricity supply assuming The bars in Figure ES.1 indicate the that its owned and contracted resources amount of electricity that Tacoma Power face critical water conditions. Critical expects to be available each year from its water is defined as the river flows that generation and contract resources under occurred over the 1940-41 operating critical water conditions: year2 – the year with the lowest • combined river flows into Tacoma Power The blue portion represents electricity from BPA through the Regional Power Sales Contract. 2 A utility operating year begins on August 1, and ends on July 31. Page: v TACOMA POWER 2010 INTEGRATED RESOURCE PLAN EXECUTIVE SUMMARY • The green portion represents planning horizon, the analysis does electricity from other electricity supply project a small deficit of about 15 aMW contracts. for the utility. • The orange portion is electricity from While Tacoma Power plans for critical Tacoma Power’s own generation water conditions, river flows are typically resources. much higher. Thus, the utility’s supply Annual Load Resource Balance resources will generally produce more The annual load-resource balance is electricity than Figure ES.1 indicates. defined by the amount that power Figure ES.2 depicts Tacoma Power’s load- supplies exceed or fall below the resource balance under average water expected loads. As conditions. With Without conservation, Tacoma Figure ES.1 shows, power average water, Power would need new supply supplies (the bars) exceed resources. Load would begin to supplies exceed retail load (black line) through exceed demand around 2014 loads by about the first fourteen years of and the overall resource deficit 200 aMW. The utility the planning horizon. would reach approximately sells this excess power Tacoma Power’s load- 135 aMW by the end of the in the wholesale planning period. resource balance is market. The revenue surplus during this period. This signals from these sales helps Tacoma Power that Tacoma Power does not, at this maintain electric rates that are among time, need additional resources. the lowest in Washington and the nation. However, over the last four years of the Figure ES.2 Tacoma Power’s Annual Load-Resource Balance: Average Water Page: vi TACOMA POWER 2010 INTEGRATED RESOURCE PLAN EXECUTIVE SUMMARY Monthly Load Resource Balance estimate of the utility’s load-resource Retail loads grow and fall throughout a balance under alternative river flow year. Therefore, in addition to serving regimes. annual retail load, utilities must also have To account for uncertain river flows, the the resources to satisfy variable monthly model assessed Tacoma Power’s monthly loads. This type of analysis is especially load-resource balance based on difficult for hydro-based utilities like 75 operating years of actual river flow Tacoma Power where the quantity and data (1928-29 through 2002-03). timing of river flows into generating Another important input is the monthly projects is highly uncertain. retail load. The monthly retail load © This IRP used Vista LT , a proprietary profile, presented in Figure ES.3, was computer program, to model the based on an annual average load of operation of Tacoma Power’s resources. 622 aMW. This is the highest annual load Essentially, the model determines when projected for the IRP study period, and is it is best to use water for generation and forecast to occur during the 2017-18 when it is best to store water in project operating year. reservoirs. The model produces an Figure ES.3 Tacoma Power’s Projected Monthly Load for 2017 While monthly deficits would be an number of deficit months and the adverse outcome of this monthly model, magnitude of those deficits. The utility they would not necessarily indicate a searched for two adverse trends when need for additional supply resources. reviewing the model results: That conclusion would depend on the Page: vii TACOMA POWER 2010 INTEGRATED RESOURCE PLAN EXECUTIVE SUMMARY • Whether 5 to 10 percent of operating those below 0 aMW indicate a resource years were resource deficit over the deficit. same month(s). The lines in Figure ES.4 are nearly always • Whether any operating year had a above 0 aMW indicating that Tacoma deficit load-resource balance over the Power’s resources are virtually always entire water year. surplus to monthly retail load. Only two Figure ES.4 shows the results of this of the 900 months plotted were resource analysis. The figure contains 75 lines, deficit. And since the two deficit months one for each year of actual river flows occurred in the same year, no seasonal examined. Each line shows Tacoma shortage reoccurred over multiple years. Power’s calculated load-resource balance Furthermore, Tacoma Power was surplus over 12 months based on a historical for each of the 75 historic operating year of actual river flows.