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INDEPENDENT REVIEW OF SPP’S COST/BENEFIT STUDY FOR THE PRIORITY TRANSMISSION PROJECTS

INDEPENDENT REVIEW OF SPP’S COST/BENEFIT STUDY FOR THE PRIORITY TRANSMISSION PROJECTS. Presented To: SPP Board of Directors/Members Committee Presented By: Craig R. Roach, Ph.D. Boston Pacific Company, Inc. April 27, 2010. OUTLINE. METHODOLOGICAL CONCERNS METHODOLOGICAL FIXES

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INDEPENDENT REVIEW OF SPP’S COST/BENEFIT STUDY FOR THE PRIORITY TRANSMISSION PROJECTS

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  1. INDEPENDENT REVIEW OF SPP’S COST/BENEFIT STUDY FOR THE PRIORITY TRANSMISSION PROJECTS Presented To: SPP Board of Directors/Members Committee Presented By: Craig R. Roach, Ph.D. Boston Pacific Company, Inc. April 27, 2010

  2. OUTLINE • METHODOLOGICAL CONCERNS • METHODOLOGICAL FIXES • RESULTS

  3. I. METHODOLOGICAL CONCERNS • With benefits that are here: • Jobs benefits from wind • Natural gas price decreases • With benefits that are not here: • Consumer protection against natural gas price increases • Consumer protection against high carbon prices

  4. I. METHODOLOGICAL CONCERNS (continued) • Isolating transmission benefits from generation • Consequence is that it pushes the Board to consider non-traditional benefits

  5. II. METHODOLOGICAL FIXES • Intended consequence is to allow greater reliance on traditional benefits • Base Case uses current wind capacity (3.7 GW), Change Case 6.9 GW • Three alternative natural gas price forecasts • Three alternative CO2 prices/taxes

  6. III. RESULTS • SPP modeled 6 scenarios for Boston Pacific

  7. III. RESULTS (continued) • Two analytical points • Higher natural gas prices increase production cost savings

  8. III. RESULTS (continued) • CO2 prices decrease production cost savings

  9. III. RESULTS (continued) • Additional benefits categories to consider first • Reliability • Seams • Explicit modeling of later years

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