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Ex Post Power Economic Analysis of Record of Decision Operational Restrictions at Glen Canyon Dam

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Ex Post Power Economic Analysis of Record of Decision Operational Restrictions at Glen Canyon Dam ANL/DIS-10-6 Ex Post Power Economic Analysis of Record of Decision Operational Restrictions at Glen Canyon Dam Decision and Information Sciences Division About Argonne National Laboratory Argonne is a U.S. Department of Energy laboratory managed by UChicago Argonne, LLC under contract DE-AC02-06CH11357. The Laboratory's main facility is outside Chicago, at 9700 South Cass Avenue, Argonne, Illinois 60439. For information about Argonne and its pioneering science and technology programs, see www.anl.gov. Availability of This Report This report is available, at no cost, at http://www.osti.gov/bridge. It is also available on paper to the U.S. Department of Energy and its contractors, for a processing fee, from: U.S. Department of Energy Office of Scientific and Technical Information P.O. Box 62 Oak Ridge, TN 37831-0062 phone (865) 576-8401 fax (865) 576-5728 [email protected] Disclaimer This report was prepared as an account of work sponsored by an agency of the United States Government. Neither the United States Government nor any agency thereof, nor UChicago Argonne, LLC, nor any of their employees or officers, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise, does not necessarily constitute or imply its endorsement, recommendation, or favoring by the United States Government or any agency thereof. The views and opinions or document authors expressed herein do not necessarily state or reflect those of the United States Government or any agency thereof, Argonne National Laboratory, or UChicago Argonne, LLC. ANL/DIS-10-6 Ex Post Power Economic Analysis of Record of Decision Operational Restrictions at Glen Canyon Dam by T.D. Veselka,1 L.A. Poch,1 C.S. Palmer,2 S. Loftin,2 and B. Osiek2 1 Center for Energy, Environmental, and Economic Systems Analysis Decision and Information Sciences Division, Argonne National Laboratory 2 Western Area Power Administration, Colorado River Storage Project Management Center, Salt Lake City, Utah July 2010 Work sponsored by United States Department of Energy Western Area Power Administration FOREWORD This report was prepared by Argonne National Laboratory (Argonne) in support of an economic analysis of operational restrictions at the Glen Canyon Dam (GCD) conducted for the U.S. Department of Energy’s Western Area Power Administration (Western). Western markets electricity produced at hydroelectric facilities operated by the Bureau of Reclamation. The facilities known collectively as the Salt Lake City Area Integrated Projects include dams equipped for power generation on the Colorado, Green, Gunnison, and Rio Grande rivers and on Plateau Creek in the states of Arizona, Colorado, New Mexico, Utah, and Wyoming. This report presents detailed findings of studies conducted by Argonne related to an ex post economic analysis of Record of Decision operating criteria for GCD issued by the U.S. Department of the Interior on October 9, 1996. Staff members of Argonne’s Decision and Information Sciences Division prepared this report with assistance from staff members of Western’s Colorado River Storage Project Management Center. ii CONTENTS ACRONYMS AND ABBREVIATIONS .................................................................................... ix UNITS OF MEASURE ................................................................................................................. x ABSTRACT ................................................................................................................................... 1 1 INTRODUCTION................................................................................................................. 2 2 HISTORICAL BACKGROUND ......................................................................................... 4 2.1 GLEN CANYON DAM AND PHYSICAL POWERPLANT CHARACTERISTICS ... 4 2.2 POWERPLANT CAPACITY AND MAXIMUM POTENTIAL POWER OUTPUT .... 6 2.3 POWERPLANT GENERATION ................................................................................... 9 2.4 POWERPLANT EFFICIENCY .................................................................................... 12 2.5 GLEN CANYON DAM OPERATING CONSTRAINTS ............................................ 13 2.6 BEACH/HABITAT-BUILDING FLOWS AND EXPERIMENTAL RELEASES ...... 20 2.7 SALT LAKE CITY AREA INTEGRATED PROJECTS ............................................. 22 2.8 MARKETING OF GLEN CANYON DAM POWER AND ENERGY ........................ 23 2.9 CRSP DISPATCH PRACTICES .................................................................................. 27 2.10 EVOLUTION OF WECC POWER MARKETS .......................................................... 28 3 METHODS AND MODELS .............................................................................................. 33 3.1 SCENARIO ASSUMPTIONS ...................................................................................... 33 3.2 CONSTRUCTING SLCA/IP FIRM CONTRACTS ..................................................... 36 3.3 CUSTOMER SCHEDULING ALGORITHM .............................................................. 40 3.3.1 Schedules for Large and Small Customers ............................................................... 41 3.3.2 Customer Scheduling Algorithm Objectives and Constraints .................................. 41 3.3.3 Total SLCA/IP Hourly Firm Loads .......................................................................... 44 3.4 WECC MARKET HUB PRICES .................................................................................. 44 3.4.1 Daily Minimum and Maximum Prices ..................................................................... 45 3.4.2 Shaping Hourly Prices with WECC Total Loads ..................................................... 46 3.5 SIMULATION OF SLCA/IP HOURLY DISPATCH AND MARKET TRANSACTIONS ...................................................................................... 49 3.5.1 GTMax Model Input Data for Power Plants and Reservoir ..................................... 49 3.5.2 GTMax Model Input Data, Loads, and Market Prices.............................................. 51 3.5.3 GTMax Topologies ................................................................................................... 53 3.5.4 Ancillary Services ..................................................................................................... 58 3.6 CALCULATING ECONOMIC VALUE ..................................................................... 60 4 ECONOMIC COST OF THE ROD .................................................................................. 61 4.1 COST OF ROD IN WY 1997 ........................................................................................ 63 4.2 COST OF ROD IN WY 1998 ........................................................................................ 66 4.3 COST OF ROD IN WY 1999 ........................................................................................ 68 4.4 COST OF ROD IN WY 2000 ........................................................................................ 71 4.5 COST OF ROD IN WY 2001 ........................................................................................ 75 4.6 COST OF ROD IN WY 2002 ........................................................................................ 78 4.7 COST OF ROD IN WY 2003 ........................................................................................ 81 iii CONTENTS (Cont.) 4.8 COST OF ROD IN WY 2004 ........................................................................................ 85 4.9 COST OF ROD IN WY 2005 ........................................................................................ 87 4.10 SUMMARY OF ROD COST IN STUDY PERIOD ..................................................... 91 5 REFERENCES .................................................................................................................... 97 5.1 REPORTS ..................................................................................................................... 97 5.2 FORMS ......................................................................................................................... 98 iv TABLES Table 2.1 Glen Canyon Powerplant Improvements during the Study Period ................................. 6 Table 2.2 Summary of Hydropower Operational Scenarios ......................................................... 14 Table 2.3 List of Historical Experimental Flow Periods from 1997 through 2005 ...................... 22 Table 2.4 SLCA/IP Divisional Allocations under the Post-1989 Marketing Criteria .................. 25 Table 2.5 SLCA/IP Divisional Allocations under the Post-2004 Marketing Criteria .................. 25 Table 3.1 Overview of Scenario Assumptions ............................................................................. 35 Table 3.2 Aggregate Annual SLCA/IP Contract Terms Under the Without ROD and With ROD Scenarios ............................................................................................. 37 Table 3.3 Monthly Project Capacity Use, by Customer ............................................................... 52 Table 3.4 Monthly Project Energy Use, by Customer .................................................................
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