Modeling Work Group Discussion Outline

1. Modeling Work GroupDiscussion Outline MWG Web Meeting April 2, 2012

2. Proposed Agenda • Welcome & MWG Business Tom Miller • Reserve Violations Stan Holland • Four Corners retirement Stan Holland • 2010 Dataset Update Stan Holland • AB 32 Scoping Document Review Tom Miller • MWG Work Plan Tom Miller • Preparation for April TAS Tom Miller • Next Meeting

3. Reserve Violations Follow-up

4. Reserve Violations in 2022 CC • Caused by input error • Flag to enable reserve contribution of hourly purchase was inadvertently removed when the flex reserves were updated to fill in the missing week of solar data. • Without the flag the reserve requirement was essentially a flat annual value. • Once flag was reset, the reserve violations went away.

5. Reserve Modeling Next Steps • Tom to investigate possibility of bringing the flexibility reserve calculations in-house. • Staff to work with Ventyx to change code such that hydro contributions can be limited. • Review of other generation types that should not contribute to reserves

6. Four Corners Retirement Revised Assumption

7. Four Corners Change • APS and SCE made a joint proposal last year that would transfer SCE’s share of units 4 and 5 to APS, which would allow APS to retire units 1, 2, and 3. • With no approval at the end of 2011, APS and CAISO recommended that no retirements be modeled. • Recent approvals have prompted a reversal of the recommendation.

8. Staff Proposal • The reserve flag problem opened a 1 day window of opportunity to modify the 2022 dataset. • Only critical pre-approved changes were considered. • Proposed (enacted) changes – 3/26/12 • Re-apply reserve flag • Retire Four Corners 1,2,3 • Split Hoover Power plant

9. Proposal Move part of Hoover PP back to AZNMNVS. Contractually, 44% is owned by entities there. This change will divide the energy and reserves between the two sub-regions.

10. 2010 Dataset Status Update

11. 2010 Dataset Status

12. 2010 Dataset – Final Issues • Reserves • Flexibility reserves not necessary • What granularity for spinning reserve? • Forced Outage rates • Data has specific rates by unit • Could adjust to get closer match on CF • Path Limits • Were any paths limited below rating for significant periods?

13. AB 32 Scoping Document Review

14. AB 32 Scoping Document • CA AB32 Sensitivity (2011-2012 Study Program) • Draft Scoping Document • Introduction & Prior Modeling • Modeling Issues and Options • CO2 adder cost for California in-state resources • Import hurdle rate to account for CO2 created by unspecified out of state generation • CO2 Cost of specified out of state generation • Next Steps • Circulate Draft Scoping Document for Review • Finalize Assumptions and Scoping Document

15. MWG Work Plan Objectives & Tasks “The Modeling Work Group (MWG) develops improved simulation models based on needs identified in past studies” “The 2012 Study Program is more extensive than past programs”

16. 2011-2012 Study Program Plan – Overview • Where are we? 2012 Study Program is second year of TEPPC’s 2011-2012 biennial transmission study program under the RTEP project. • What? produce study result reports in 2012, and again in early 2013, that can be used in the preparation of a 10-Year and 20-Year Regional Transmission Plans due out in September 2013 • Horizon Year 2022 – A new 2022 Common Case was developed to evaluate the impact of options to meet existing and potential future energy policies, and the impact technology changes and external drivers may have on transmission needs and costs in the Western Interconnection. The 2022 Common Case as a starting point from which to conduct the studies and as a common reference point for all studies used to inform the 2013 10-Year Plan. • Horizon Year 2032 – A set of scenarios representing potential energy futures for a 2032 study year will be evaluated using a new set of long-term planning tools that augment existing planning tools. A desired outcome, in part, of the long-term study program is to identify those decisions that need to be made now in order to realize the potential energy futures being evaluated. • 2010 Case (Existing system): Result stemming from these analytics will be used to improve modeling techniques and included in the 2013 10- and 20-Year Plans. • TEPPC 2011-2012 Study Program Development Timeline: • March 30th : DRAFT 2012 TEPPC Study Program has been posted for TEPPC’s review. • April 10 TEPPC Monthly Call : approve the DRAFT 2012 TEPPC Study Program for public release and comment. • April 30 TAS Meeting; review request for consideration • May 22 TEPPC Final Approval

17. MWG Work Plan – Near Term tasks • 2022 dataset • Review modeling results – hydro, reserves, nomograms, hurdle rates, path flows • 2010 dataset • Inputs – hurdle rates, reserves • Benchmark results • Target the April 30th TAS meeting to present 2011-2012 work plans for the remaining bit of this study cycle

18. MWG Work Plan – Framework • Dataset building activities • Hydro Modeling • Study case activities • Other/ongoing activities • TAS meetings as milestones for deliverables.

19. MWG Work Plan – Long Term tasks • On-going: Hydro, DSM, Operational Flexibility • New: technology advancements, integration solutions, transmission utilization • Investigative Efforts for 2012-2013 Work Plan • TAS Engagement with SPSG & LTPT • Engage with PCC and SPG’s • VGS Flexibility Reserve Efforts • Assist in Model Evaluations • Assist coordination Economic and Reliability Studies What are the key variables that really count?

20. Wrap-up and Next meeting • Wrap-up • Action Items • Next Meeting

21. TEPPC Sub-regions and Areas

22. Other Generator Parameters

23. Reserves from Hydro generation • HMTF recommended that reserve contribution from hydro be limited • PLF (k=0) no contribution • PLF/HTC limited to 25% of max capacity • Ventyx reported that contribution options do not apply to hydro generation. • Currently all unloaded hydro generation contributes to pool reserves