Items 7 & 10: Briefing from Austin Energy — original pdf

Backup

June 4, 2014 June 4, 2014 Austin Energy Update to Austin Generation Resource Planning Task Force Babu Chakka - Manager, Energy Market Analysis John Wester - Manager, Energy Supply & Risk Management INVESTING IN A CLEAN FUTURE June 4, 2014 Agenda •Austin Energy all-in historical production cost/revenue for Gas and Wind units •Recap of the Methodology review with LSAC Experts •Resource Planning Guiding Principals 3 INVESTING IN A CLEAN FUTURE June 4, 2014 Austin Energy All in Production Cost/Revenue for Gas units 4 $0$20$40$60$80$100$120$140Millions of Dollars (M$)Total Natural Gas GenerationNon-Fuel CostFuel CostMarket RevenueGenerationMWhFuel Cost($Million)Non-Fuel Cost($Million)Total Cost($Million)Total Cost($/MWH)Total Revenue ($Million)Total Revenue ($/MWH)Net Revenue/Cost ($Million)Net Revenue/Cost ($/MWH)CY 20111,760,176$116.3$28.6$144.8$82.28$242.7 $137.87 $97.8 $55.59CY 20121,388,101$75.0$33.7$108.7$78.32$94.3 $67.95 ($14.4)($10.37)SummaryINVESTING IN A CLEAN FUTURE June 4, 2014 Austin Energy Renewable Energy Cost/Revenue for Wind 5 $0$1$2$3$4$5$6$7$8$9$10Millions of Dollars (M$)Total WindPPA CostMarket RevenueOther costs such as Congestion cost & contract sharing cost are not included here The totals shown here is in Calendar year and will be different from the previous update which is in Fiscal year GenerationMWhPPA Cost($Million)Non-Fuel Cost($Million)Total Cost($Million)Total Cost($/MWH)Total Revenue ($Million)Total Revenue ($/MWH)Net Revenue/Cost ($Million)Net Revenue/Cost ($/MWH)CY 20111,294,451$49.4$0.0$49.4$38.15$33.3 $25.69 ($16.1)($12.46)CY 20121,845,660$73.3$0.0$73.3$39.70$37.0 $20.07 ($36.2)($19.63)SummaryINVESTING IN A CLEAN FUTURE June 4, 2014 Solar PV Cost/Benefit Approach (LSAC Review) 6 •Based on the expected annual cash flow for AE –Forecast period: 2014 to 2020 –Outflows: Payments going out –Inflows: Revenues coming in •Outflows (i.e. cost) –Residential: Value of Solar (VOS) rate x kWh + rebate –Commercial: (PBI + average base rates) x kWh –Community PV: Purchased Power Agreement (PPA) x kWh –Utility PV: Purchased Power Agreement (PPA) x kWh •Inflows (i.e. revenues/benefits/avoided costs) –Solar PV hourly output kWh x AE load zone hourly LMP –Community PV also includes •2% ERCOT transmission losses •AE 4 CP transmission TCOS savings –Adjustments already accounted for VOS and net meter for Residential/Commercial INVESTING IN A CLEAN FUTURE June 4, 2014 Solar PV Scenarios Considered (LSAC Review) 7 2020 Scenario MW Local Utility Scale 2020 Goal Residential Commercial Community Total Wholesale Existing 48 MW 9.9 8.1 18 30 Current Goal (200 MW) 38 39 10 87 113 200 Inc. to 400 MW (LSAC Recommendation) 50 50 100 200 200 400 Inc. to 600 MW (LSAC Recommendation) 50 50 200 300 300 600 INVESTING IN A CLEAN FUTURE June 4, 2014 Solar PV Scenarios – Assumptions (LSAC Review) 8 INVESTING IN A CLEAN FUTURE June 4, 2014 Estimated Cumulative Net Impact (LSAC Review) 9 $156 $226 $283 $224 $366 $487 $0$100$200$300$400$500$600200 MW400 MW600 MW$ millions Estimated Cumulative Net Impact to System Average Cost 2014- 2020, $ Millions Case ACase BINVESTING IN A CLEAN FUTURE June 4, 2014 Estimated Net Annual Impact to System Average Rates (LSAC Review) 10 0.90% 1.70% 2.40% 1.70% 3.30% 4.70% 0.0%0.5%1.0%1.5%2.0%2.5%3.0%3.5%4.0%4.5%5.0%200 MW400 MW600 MWEstimated Net Annual Impact to System Average Rates 2014- 2020, % Increase Case ACase BINVESTING IN A CLEAN FUTURE June 4, 2014 LSAC Review Conclusions with AE Comments (LSAC Review) 11 AE = $142M AE = $137M Difference in ramp rates and capacity factor for solar. LSAC =$118 Reduces by $3M, Why 2% esc? No relationship to 2014-2020 actual cash flows. LCOE New Gas and VOS are long term levelized (i.e. PV average) costs. AE = Actual net cost of solar commitments INVESTING IN A CLEAN FUTURE June 4, 2014 Resource Planning Guiding Principals •All Resources are evaluated in the context of ERCOT Nodal Market –Resource costs include •Capital, Fuel/PPA, Operations & Maintenance wherever applicable •Based on EIA, AE estimates & other sources –Revenues include •Energy & Ancillary services applies to all if they can provide •Reserve adder (Operating Reserve Demand Curve) applies to all, except renewables •Consider entire AE portfolio net cost –10-year horizon: 2015-2024 (Extended to consider end effects) –ERCOT market LMP forecast fundamentals –Load cost + resource cost – resource revenue –Across sensitivities per key uncertainties •Load (ERCOT & AE) •Gas price •Carbon •Market design •PTC/ITC 12 INVESTING IN A CLEAN FUTURE June 4, 2014 Appendix 13 INVESTING IN A CLEAN FUTURE June 4, 2014 ERCOT Nodal Market Mechanics 14 # Component Basic Calculation Cash flow 1 AE Load Obligation Sum of (AE load zone LMP price x 15-minute kW demand) Expense 2 Distributed PV 15-minute kW production + Distribution losses “Revenue” 3 Net AE Load Obligation Sum of (AE load zone LMP price x 15-minute kW demand less [15-minute kW production + Distribution losses] ) Net of PV Expense 4 Owned Unit A Revenue Sum of (generation node LMP price x 15-minute kW production) Revenue 5 Owned Unit A Cost Production + Ownership Cost Expense 6 PPA Revenue Sum of (PPA delivery node LMP price x 15-minute kW production) Revenue 7 PPA Cost PPA Terms Expense 8 NET SYSTEM COST Load Expense + Sum of Net Revenue SUM(3,4-7)