2020 Integrated Resource Plan
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TUCSON ELECTRIC POWER COMPANY 2020 Integrated Resource Plan JUNE 26, 2020 Tucson Electric Power Page - 2 2020 Integrated Resource Plan Acknowledgements Tucson Electric Power Company IRP Team Jeffrey Yockey, Director, Resource Planning Lee Alter, Lead Resource Planner Kevin Battaglia, Lead Resource Planner Ilse Morales Duarte, Supply Side Planner II Luc Thiltges, Lead Resource Planner Celeste Williams, Student Intern Greg Strang, Lead Forecasting Analyst Jared Dang, Pricing Rate Analyst II Richard Bachmeier, Manager, Pricing Lauren Briggs, Manager, Balancing Authority Function Sam Rugel, Director, System Control & Reliability Michael Bowling, Director, Wholesale Marketing Carol Delillo, Lead Renewable Energy Analyst Ted Burhans, Director, Emerging Technologies & Innovation Debbie Lindeman, Supervisor, Energy Efficiency Planning Analysis & Reporting Raymundo Martinez, Principal, Emerging Technologies & Innovation Team David Smith, Enterprise Program Manager Scott Paulsen, Metering Services Communication Specialist Chris Fleenor, Manager, Protection & Controls Donovan Sandoval, Manager, Engineering Christopher Lindsey, Director, Transmission & Distribution Planning Gary Trent, Manager, Transmission Planning Todd Lichtas, Transmission Planning Engineer, IV Christopher Lynn, Supervisor, Transmission & Distribution Engineering Catherine Schladweiler, Principal, Environmental Policy & Sustainability Joe Salkowski, Senior Director, Communications & Public Affairs Joe Barrios, Supervisor, Media Relations & Regulatory Communications Rhonda Bodfield, Manager, Corporate Communications Chris Norman, Senior Director, Regulatory Services Mike Sheehan, V.P., Fuels, Resource Planning & Wholesale Marketing University of Arizona Institute of the Environment Ben McMahan, PhD, Asst. Professor - Climate Assessment for the Southwest, Arizona Institutes for Resilience Will Holmgren, PhD, Asst. Professor - Hydrology and Atmospheric Sciences Andrea Gerlak, PhD, Assc. Professor - School of Geography & Development & Udall Center for Studies in Public Policy Page - 3 Tucson Electric Power IRP Consultants and Forecasting Services Siemens Energy Business Advisory https://new.siemens.com/global/en/products/energy/services/transmission-distribution-smart- grid/consulting-and-planning/energy-business-advisory.html Gerry Cauley, Consulting Director, Strategy and Planning Practice Alankar Sharma, Senior Risk Consultant, Risk Advisory Practice Xin Wang, Senior Energy Market Consultant, Risk Advisory Practice Wood Mackenzie - Consulting Services http://public.woodmac.com/public/home Energy Exemplar - Aurora Software Consulting Services https://energyexemplar.com/solutions/aurora/ Page - 4 2020 Integrated Resource Plan Table of Contents ACKNOWLEDGEMENTS ....................................................................................................................... 3 Tucson Electric Power Company IRP Team ........................................................................................................................................ 3 University of Arizona Institute of the Environment ........................................................................................................................ 3 IRP Consultants and Forecasting Services ........................................................................................................................................... 4 ACRONYMS ............................................................................................................................................ 11 FORWARD .............................................................................................................................................. 15 CHAPTER 1 ............................................................................................................................................ 17 EXECUTIVE SUMMARY ....................................................................................................................... 17 Introduction ....................................................................................................................................................................................................17 Advisory Council ...........................................................................................................................................................................................18 Load Forecast and Reserve Margin Requirement ..........................................................................................................................21 Resource Adequacy ......................................................................................................................................................................................22 Customer-Sited Resources and Distribution Modernization ....................................................................................................23 Future Resource Alternatives .................................................................................................................................................................23 The Development of TEP’s Preferred Portfolio ...............................................................................................................................24 TEP’s 2020 IRP Preferred Portfolio ......................................................................................................................................................24 Five-Year Action Plan ..................................................................................................................................................................................27 CHAPTER 2 ............................................................................................................................................ 29 ENERGY DEMAND AND USE PATTERNS ....................................................................................... 29 Load Forecast .................................................................................................................................................................................................29 Geographical Location and Customer Base .......................................................................................................................................30 Customer Growth ..........................................................................................................................................................................................31 Retail Sales by Rate Class ..........................................................................................................................................................................32 Reference Case Forecast ............................................................................................................................................................................33 Methodology ...................................................................................................................................................................................................33 Reference Case Retail Energy Forecast ...............................................................................................................................................34 Reference Case Retail Energy Forecast by Rate Class ..................................................................................................................35 Reference Case Peak Demand Forecast ..............................................................................................................................................36 Data Sources Used in Forecasting Process ........................................................................................................................................37 Risks to Reference Case Forecast and Risk Modeling ...................................................................................................................37 Firm Wholesale Energy Forecast ...........................................................................................................................................................38 Summary of Reference Case Load Forecast ......................................................................................................................................39 Rate Design Influence on the Long-Term Load Forecast ............................................................................................................40 Rate Design ......................................................................................................................................................................................................40 Volumetric Rates ...........................................................................................................................................................................................40 Demand Rates.................................................................................................................................................................................................40 Time-Varying Rates .....................................................................................................................................................................................40 TEP Rate Design 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