HomeMy WebLinkAboutMemo - Mail Packet - 2/21/2017 - Memorandum From Tim Mccollough, John Phelan, Lance Smith Re: Platte River Power Authority Customized Resource Planning Portfolio Modeling Project UpdateUtilities
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700 Wood Street
PO Box 580
Fort Collins, CO 80522
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utilities@fcgov.com
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M E M O R A N D U M
DATE: February 15, 2017
TO: Mayor Troxell and Councilmembers
FROM: Tim McCollough, Utilities Light and Power Operations Manager
John Phelan, Utilities Resource Conservation Manager
Lance Smith, Utilities Strategic Finance Director
THROUGH: Darin Atteberry, City Manager
Kevin R. Gertig, Utilities Executive Director
RE: Platte River Power Authority Customized Resource Planning Portfolio Modeling
Project Update
This memo provides a progress update on the Platte River Power Authority (Platte River) project
for Customized Resource Planning (CRP).
Bottom Line
Platte River has made progress on the CRP effort and is currently in phase 1 of the project.
Initial modeling results are anticipated to be delivered to municipal staff in June 2017.
These model results will outline the cost impacts of adding varying amounts of additional utility
scale renewable generation resources for individual municipal owners to the current shared
generation mix.
Background
In March of 2016, the Platte River Board directed Platte River staff to develop a project charter
to study customized resource portfolios for the municipal owners of Platte River. Specifically it
was asked to explore separate electricity supply structures and revenue requirements for the City
of Fort Collins to help achieve the City’s Climate Action Plan (CAP) goals through a more
diversified resource mix.
A project team and charter was developed and signed by municipal and Platte River staff in May
of 2016. The project charter outlined a plan to maintain a base case scenario model of Platte
River current generation mix and a range of options for additional renewable energy.
DocuSign Envelope ID: 32E20AC1-3594E4C5-3D40-6AE3-4037-4BFB-9EC3-9AAE-2EA54E12512F ADB3A20033C6
For the remainder of 2016, Platte River staff worked with Fort Collins, Longmont, and Loveland
and Estes Park stakeholders to identify and verify modeling assumptions regarding their
individual goals and objectives.
The goals of the Customized Resource Plan (CRP) are to:
1. Identify ways to meet long-term strategic needs of each of Platte River’s four
municipalities
2. Develop a range of alternatives
3. Determine costs associated with altering portfolio mix
4. Establish portfolio decision paths for each municipality
In phase 1 of the project in 2017, Platte River will begin with a base case derived from the
current generation resource plan and adapted for Clean Power Plan objectives. Given the
uncertainty for the future of carbon legislation, scenarios will be constructed with and without
carbon pricing assumptions. After initial modeling results are complete, more specific scenario
planning will be developed to refine the results through the third quarter of 2017.
Phase 2 of the project in 2018 will explore program design if any of the customized resource
plans are attractive to the municipal owners.
Next Steps
Fort Collins staff will evaluate how the initial modeling results support the City’s Climate Action
Plan (CAP) goals.
If Council has any additional questions or concerns, please feel free to contact Staff.
DocuSign Envelope ID: 32E20AC1-3594E4C5-3D40-6AE3-4037-4BFB-9EC3-9AAE-2EA54E12512F ADB3A20033C6
Customized Resource Plan
Ft. Collins Energy Board
2/9/17
DocuSign Envelope ID: 32E20AC1-3594E4C5-3D40-6AE3-4037-4BFB-9EC3-9AAE-2EA54E12512F ADB3A20033C6
• Individual cities have
expressed interest in having
specific types of generation
serving their customers
• Each city has distinct long-
term goals
• Board-approved project
• Charter was formed, signed
May 2017
Customized Resource Plan
for Four Munis
DocuSign Envelope ID: 32E20AC1-3594E4C5-3D40-6AE3-4037-4BFB-9EC3-9AAE-2EA54E12512F ADB3A20033C6
Project Goals
1. Identify ways to meet long-term strategic needs of
each of PR’s four municipalities
2. Develop range of alternatives
3. Determine costs associated with altering portfolio
mix
4. Establish portfolio decision paths for each
municipality
DocuSign Envelope ID: 32E20AC1-3594E4C5-3D40-6AE3-4037-4BFB-9EC3-9AAE-2EA54E12512F ADB3A20033C6
Overview of Customized
Resource Plan Process
2017 2018+
Phase 1 Phase 2
Initial modeling
establishes
cost landscape
of potential
customized
resource plans
A subset of the
most effective
plans are
chosen for
further analysis
If customized
resource plans
look attractive,
new programs
and business
structures to
facilitate CRP
implementation
will be
developed and
deployed
DocuSign Envelope ID: 32E20AC1-3594E4C5-3D40-6AE3-4037-4BFB-9EC3-9AAE-2EA54E12512F ADB3A20033C6
Phase 1 – Schedule
Feb-
May
• Initial modeling
• Internal review
Jun • Presentation of initial results
Jul-
Sep
• Revised modeling on portfolios of interest
• Sensitivities
Oct • Presentation of final results
Dec • Decision on next steps
DocuSign Envelope ID: 32E20AC1-3594E4C5-3D40-6AE3-4037-4BFB-9EC3-9AAE-2EA54E12512F ADB3A20033C6
Phase 1 – Analytics
Platte River will begin with a Base
Case derived from the current Budget
model
Given the uncertainty for the future of
carbon legislation, scenarios will be
constructed with and without carbon
assumptions
Platte River currently assumes some
limits on the volume of energy exports.
Selected scenarios will test the impact
of that assumption on the modeling
All incremental costs (system costs
above the Base Case) will be
assigned to the specific municipal
sponsor
High-level assumptions
Craig 1
retirement 2025
Craig 2
retirement
(w/carbon) 2029
Craig 2
retirement (w/o
carbon) 2041
Rawhide
retirement 2046
Wind additions
for RPS
compliance
50 MW in 2030
85 MW in 2040
DocuSign Envelope ID: 32E20AC1-3594E4C5-3D40-6AE3-4037-4BFB-9EC3-9AAE-2EA54E12512F ADB3A20033C6
Phase 1 - Models
Platte River will develop cost estimates for a wide range of renewable
energy portfolios
Portfolio Additional
Wind
Additional
Solar
Base - -
Wind25 +25MW -
Wind50 +50MW -
Wind100 +100MW -
Wind200 +200MW -
Solar25 - +25MW
Solar50 - +50MW
Solar100 - +100MW
Solar200 - +200MW
Wind100Solar200 +100MW +200MW
DocuSign Envelope ID: 32E20AC1-3594E4C5-3D40-6AE3-4037-4BFB-9EC3-9AAE-2EA54E12512F ADB3A20033C6
Phase 2 – Conceptual
program design
Significant program design and administration
Custom programs treated through rate allocations (directly assigned charges)
Transfer payments evaluated through system planning model simulations
Requires periodic rate true-ups, compensatory adjustments (riders)
Base resources—
designed to meet EPA
CPP
Elective incremental
measures
Transfer payments for
stranded costs and
system impacts
Base Rates
Direct
Assignments
True-ups
+
+
DocuSign Envelope ID: 32E20AC1-3594E4C5-3D40-6AE3-4037-4BFB-9EC3-9AAE-2EA54E12512F ADB3A20033C6
Next Steps
Platte River is exploring joining an
organized market
Negotiations are underway with the
Southwest Power Pool
Participants are expected to realize
overall cost savings in an organized
market (aggregate $53 million in
2016)
Participation in an organized market
presents operational opportunities
and planning uncertainties
Platte River will evaluate RTO
membership under the CRP
DocuSign Envelope ID: 32E20AC1-3594E4C5-3D40-6AE3-4037-4BFB-9EC3-9AAE-2EA54E12512F ADB3A20033C6