IEP Annual Conference 2012
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Renewable Portfolio Standards in the West
State RPS
State RPS Goal
WA 15% by 2020
MT 15% by 2015
OR 25% by 2025 (large utilities)
5-10% by 2025 (smaller utilities)
ID
NV 25% by 2025
WY
CO 30% by 2020 (IOUs)
10% by 2020 (co-ops and large munis)
CA 33% by 2020
UT 20% by 2025*
NM 20% by 2020 (IOUs)
10% by 2020 (co-ops)
AZ 15% by 2025
Source: Energy Strategies adapted from information from DSIRE,
www.dsireusa.org
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Renewable Procurement Trends
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Arizona
◦
APS exceeded its 2011 RES requirement of 3%. APS projects a need for 518 MW of new
renewable resources by 2020 to meet its RES and terms of its 2009 Settlement Agreement.
◦
TEP exceeded its 2011 RES requirement of 3%. TEP’s 2012 IRP projects a need for 296 MW
of renewable energy by 2020.
◦
SRP has a goal for 20% of their resources to come from “sustainable resources” by 2020. To
meet its goals, SRP projects a need for 470 MW of new renewable energy by 2020.
Nevada
◦
NV Energy was compliant with the 2011 RPS requirement of 15%.
◦
NV Energy’s (South) most recent IRP anticipates procuring 250 MW of renewable resources
through RFP(s) in 2014 and/or 2015.
New Mexico
◦
SPS (Xcel) expects to meet the required RPS MWh through at least 2014, though it has not
satisfied the “other” (non-wind, non-solar) diversity component.
◦
PNM is unlikely to meet the 10% RPS target in 2012, projecting only 7.3% renewables (cost
threshold issue). If PNM’s Renewables Plan is approved, it should achieve the 10% target in
2013 and 2014, and will meet the diversity requirements in 2014.
◦
EPE expects to meet the 10% RPS requirement in 2012-2014, and will meet the diversity
requirements.
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Oregon
◦
PacifiCorp OR and PGE will meet the 5% RPS target through 2014 with owned/contracted
generation. Without further resource acquisition, the utilities would need to rely on banked
RECs in 2015, when the RPS increases to 10%.
Washington
◦
Avista is forecast to exceed the 3% RES target in 2012, as well as the 9% RES target in 2016.
◦
PacifiCorp WA expects to meet the 3% RES target through 2016 with generation from
eligible renewable facilities and a small quantity of unbundled RECs. Beginning in 2016,
compliance will be achieved with banked bundled RECs.
◦
Puget Sound Energy is forecast to exceed the 3% RES target in 2012, and the 9% RES target
in 2016.
Montana
◦
Montana’s largest electric utility, NorthWestern Energy, projects that based on currently
contracted resources the utility will meet its RPS obligations through 2016.
Colorado
◦
Public Service Company of CO (Xcel) expects to exceed the RES requirements through at
least 2013, and compliance through 2021.
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TOP FIFTEEN OWNERS OF WECC REGION (U.S.) COAL ASSETS (2011)
Owner
PacifiCorp
Public Service Company of Colorado
Salt River Project
Tri-State Generation & Transmission Association, Inc.
Arizona Public Service Company
Intermountain Power Agency (LADWP/SCPPA)
Tucson Electric Power Company
Idaho Power Co.
Basin Electric Power Cooperative
Public Service Company of New Mexico
Southern California Edison Co.
Puget Sound Energy, Inc.
Nevada Power Company
Portland General Electric Company
Deseret Generation & Transmission Cooperative
Total MW
Owned Operating Capacity (MW)
6,102.1
3,063.7
2,209.3
1,871.9
1,747.1
1,800.0
1,374.5
1,025.1
1,085.1
963.1
739.2
677.0
667.0
676.3
548.8
24,550.3
1. Does not take into account planned coal plant divestitures, shutdowns, or natural gas conversions.
2. Comprises 77% of all coal plants in WECC (operating MW).
3. Merchant plant owners not included are TransAlta(Centralia-1,376MW) and PPL Montana Holdings, LLC.(764 MW).
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WECC REGION COAL PLANTS BY AGE
Age
>50 Years
>40 Years
>30 Years
Subtotal > 30 Years
<30 Years
Total
Operating Capacity (MW)
3,008.5
4,037.6
18,914.0
25,960.1
5,969.0
31,929.1
% of Total
9%
13%
59%
81%
19%
100%
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
Environmental Catalysts = Economic Impact
◦ Regional Haze – Mandated NOX reductions via Best
Available Retrofit Technology (BART)
 BART can range from LNB/OFA to SCR
◦ Coal Combustion Residuals (ash handling)
◦ CO2 (California SB 1368) –places limits on additional
plant investment.
◦ CO2 federal – possible future regulation of GHGs.
◦ Plant owners exiting coal plants: SCE, LADWP,
TransAlta, PGE & players to be named later…
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
Coal versus Gas: Who’s “Marginal” Now?
◦ Long-term low gas prices paint good picture for
servicing new load AND replacing some coal.
◦ 3,000 MW of coal-to-gas conversions being
seriously considered prior to 2020.
◦ 3,200 MW of coal plants being retired.
◦ Ratepayers tired of endless rate increases for
emissions upgrades on older plants.
◦ Election… Election…Election & Federal CO2 -
wildcard
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o
o
o
o
o
There are 12,700 MW of coal fired generation in the Desert
Southwest States [AZ, NM, NV] serving utilities located in AZ, CA,
NM, CO, and UT. These plants are located in EPA Region 6 [NM] and
8.
Under the Clean Air Act’s Regional Haze Rule, states are required to
make reasonable progress toward improving visibility at national
parks and wilderness areas by reducing emissions of dioxide and
nitrogen oxides.
The rule requires major stationary emissions sources built between
1962 and 1977 to operate the best available retrofit technology.
The Four Corners coal complex will shut down units 1-3 as per final
rules issued by EPA in August 2012. APS is in the process of buying
SCE’s 739 MW share [48%] of 4C units 4 & 5.
Major coal plants potentially challenged by EPA rules in the future
include San Juan and Navajo.
1SNL
2011 operating capacity data
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o
o
o
o
There are 17,080 MW of coal-fired generation in the
Rocky Mt. States [CO, UT, WY] serving utilities located
in AZ, CA, CO, MT, UT, and WY.
These plants are located in EPA Region 8.
EPA Regional Haze Rule and locations of numerous
national parks and wilderness areas present
challenges for many coal plants in this region.
Intermountain Power Plant (1,900 MW in UT) with
LADWP and SCPPA as primary customers considering
conversion to gas.
1SNL
2011 operating capacity data
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o
o
o
In 2011 the Washington Senate approved a bill that will
result in the shutdown of one of two Centralia coal units
by 2020 and end all coal burning at the plant by 2025.
Centralia plant produces 688 MW in two units for a total
of 1,376 MW. TransAlta recently announced it has
signed an 11-year power purchase agreement with
Puget Sound Energy.
The Oregon Environmental Quality Commission on Dec.
10, 2010, adopted a proposal to close Portland General
Electric Co.’s 585 MW Boardman plant by 2020.
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



Currently over 3,000 MW of coal plants have
committed to convert or are evaluating conversion
to natural gas before 2020.
Committed retirements in WECC total 3,200 MW
prior to 2020.
Numerous other utilities evaluating long-term
alternatives and costs of adding controls, gas
conversion and retirement.
Gas conversion and retirements comprise 6,200
MW, or 20%, of current coal generation in WECC.
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
WECC Problem Statement:
◦ WECC’s current structure, a Regional Entity (regulatory) with
Registered Function (regulated) creates a duality of purposes that
precludes WECC from fully delivering its reliability mission.
◦ The common compliance and Reliability Coordinator functions of
WECC are the issue.

Why Consider Restructuring?
◦ A restructured WECC will benefit the Western Interconnection by:
 Bringing more independence, oversight and analysis
 Clarifying roles and responsibilities
 Allowing participation in all aspects of reliability
 Bringing focus on reliability improvement rather than compliance risk
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
At its September 6-7 Strategic Planning Session the WECC
Board passed four resolutions:
◦ Pursue bifurcation into two separate and distinct companies – one
Regional Entity and one Non-Regional Entity
◦ Complete work on a governance model for the Regional Entity
based on an Independent Board with a strong Member Advisory
Committee.
 The Regional Entity will focus on compliance.
◦ Complete work on a governance model for the Non-Regional
Entity based on a Hybrid Board.
 The Non-Regional Entity will focus on Reliability Coordinator
functions, Planning, EIM(?), WREGIS & other activities
◦ Continue funding of the Regional Entity under current FERC
Section 215 mechanism and develop a regional tariff to fund
Non-Regional Entity.
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
PUC-EIM Group has embarked on a costbenefit analysis of an Energy Imbalance
Market in the West.
◦ Received cost proposal from SPP & CAISO:
 SPP - $64M start-up, $28M ongoing annual costs
 CAISO - $0.19/MWh of EIM energy, plus a one time
cost of $0.03/MWh of annual energy use
◦ NREL performed a benefit analysis
 In 2020, total benefits for the region are estimated to
be $146M compared to the Business-As-Usual (10minute dispatch) case.
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