Power Supply Planning and

Projects Conference & Round-

table
March 7-8, 2018
Denver Marriott South at Park Meadows
Lone Tree, CO

Instructed by:
Lanny Nickell, VP, Engineering, Southwest Power Pool
Randy Elliott, Regulatory Counsel , National Rural Electric Cooperative Association
Daniel Neville, Director, NextERA Energy Resources
Garrett Meyer, Thermal Engineer, Black & Veatch
Conrad M. Spencer, Director, Sundt Generation Modernization Project, Tucson Electric Power (TEP)
Adam Diamant, Technical Executive , EPRI
David Morton, SME Microgrids, Arizona Public Service
Tim O’Brien, Director, Economic Development and External Relations, Omaha Public Power District

WiFi Information
Network: Marriott_Conference
Password: RMEL2018

RMEL ~ 6855 S. Havana, Ste 430 ~ Centennial, CO 80112 ~ (303) 865-5544 ~ FAX: (303) 865-5548 ~ www.RMEL.org
CONFERENCE AGENDA
Wednesday,
March 7, 2018
8:00 a.m.
Welcome and
Introductions
8:30-9:15 a.m.
Increasing Value
to a Broader Set of
Consumers: MWTG’s
Membership in SPP
Lanny Nickell, VP,
Engineering,
Southwest Power Pool
The Mountain West
Transmission Group is a
collaborative of seven
electricity service providers
with transmission facilities in
the Western Interconnection
that have been negotiating
terms of membership with
SPP, an RTO currently
operating in the Eastern
Interconnection. This
presentation will provide an
update on that membership
effort and will describe SPP’s
process for new member
integration, how the MWTG
membership objectives are
expected to be achieved, the
opportunities, challenges,
and benefits of expanding
SPP’s RTO services into the
Western Interconnection,
SPP’s previous expansion
successes, and potential for
further opportunities in the
west.
9:15-10:00 a.m.
FERC Under the New
Administration
Randy Elliott, Regulatory
Counsel, National Rural
Electric Cooperative
Association
In late 2017, the five-member
Federal Energy Regulatory
Commission got four new
members, including a new
chairman. Energy Secretary
Rick Perry gave the new
commission an immediate
task—acting on his proposed
Grid Resiliency Pricing Rule
intended to compensate
generation resources for
their fuel security. But
technological, market, and
public-policy changes will
require the commission to
address important power-
supply issues as well:
adapting to a changing
generation mix, including
distributed energy resources;
accommodating state
public policies in federally
regulated wholesale
markets; updating its PURPA
regulations. Policy changes
could affect not only how
the nation’s utilities provide
and deliver electric power,
but also the relationship
between utilities and their
customers and the division
of authority between federal
and state governments.
10:00-10:15 a.m.
Networking Break &
Exhibits
10:15-11:00 a.m.
Integrating Utility Scale
Renewable Energy and
Battery Storage
Daniel Neville, Director,
NextERA Energy Resources
This presentation will give an
in-depth look at the factors
involved with developing
the largest solar and storage
project in the U.S. Market
trends, regulatory factors,
and customer demand all
play important roles when
combining renewables
plus storage at a particular
project. We will discuss the
declining costs of storage,
use of the federal investment
tax credit, and other vari-
ables affecting the value of
storage coupled with a re-
newable facility. In addition,
the presentation will review
some of the key factors
when designing a particular
facility including use cases,
control systems, and storage
duration. Please join the
conversation on this new and
innovative use of technology
to meet your system needs.
11:00-11:45 a.m.
Generation Vital Issues
Roundtable
Bring roundtable topics
for discussion and/or send
topics ahead of time to
jamessakamoto@rmel.org.
Roundtables offer a unique
forum for peer-to-peer shar-
ing of experiences, critical
issues and expertise. The
roundtable is a discussion
group, open only to RMEL
members. Discussion is
based on topics brought by
attendees. Roundtables are
focused on the open discus-
sion period and provide
each attendee the oppor-
tunity for participation and
dialogue on their particular
issue. Roundtables are
held in conjunction with a
conference and many topics
presented at the conference
are discussed further in
the roundtable setting. The
roundtable is a good oppor-
tunity to share experiences,
troubleshoot problems
and network with peers in
a smaller, informal setting.
Each participant is offered
a chance to pose questions
and share information. All
attendees are encouraged to
bring issues for discussion
and materials for sharing.
11:45 a.m. - 1:00 p.m.
Networking Lunch &
Exhibits
1:00-1:45 p.m.
Revving Up the Latest
Reciprocating Engine
Technologies
Garrett Meyer, Thermal
Engineer, Black & Veatch
Reciprocating engines have
proven to be a flexible and
competitive solution to ad-
dress intermittent generation
in this renewable-driven pe-
riod. Their performance, con-
structability, and economics
present a good opportunity
for power producers, even
when compared to grid-
scale batteries. By the end of
the presentation, attendees
will understand the latest
trends, manufacturers, and
technologies of reciprocat-
ing engines.
1:45-2:30 p.m.
Tucson Electric Power
(TEP) Sundt Generation
Modernization Project
Conrad M Spencer,
Director, Sundt Generation
Modernization Project,
Tucson Electric Power (TEP)
TEP has a goal to achieve
30% of its retail sales from
renewable resources by
2030. The presentation will
review the internal TEP stud-
ies that resulted in selecting
RICE technology as the best
option to achieve this objec-
tive. It will present steps
that were taken to make this
decision and then the steps
used to implement the deci-
sion. It will give the current
status of the project.
2:30-2:45 p.m.
Networking Break &
Exhibits
2:45-3:00 p.m.
Attendee Announcements
Any registered attendee
is invited to make a short
announcement on their com-
pany, new products, tech-
nologies or informational
updates. Announcements
may include showing a
product sample but not vid-
eos and power point slides.
Please limit announcement
to 5 minutes.
3:00-4:30 p.m.
Generation Vital Issues
Roundtable
4:30 p.m.
Networking Reception
 POWER SUPPLY PLANNING AND PROJECTS CONFERENCE
Planning in a Transforming Market

Thursday, 9:30-9:45 a.m.

March 8, 2018
8:00-8:45 a.m.
EPRI’s United States
National Electrification
Assessment and Future
Resource Planning Chal-
lenges
Adam Diamant, Technical
Executive, Electric Power
Research Institute (EPRI)
EPRI’s Efficient Electrifica-
tion Initiative explores
electrification in the context
of the global energy sys-
tem—analyzing the customer
value of advanced, end-use
technologies that efficiently
amplify the benefits of
cleaner power generation
portfolios. To help frame
this broad undertaking,
EPRI recently conducted a
U.S. National Electrification
Assessment (USNEA), which
assesses potential customer
adoption of electric end-use
technologies over the next
three decades, and describes
key implications for effi-
ciency, the environment, and
the grid. This presentation
summarizes the USNEA,
highlights key findings, and
identifies related resource
planning challenges electric
companies are likely to need
to address in the coming
years.
8:45-9:30 a.m.
Microgrid Case Studies:
Emerging Technologies,
Innovative Practices
and Successful
Implementations to Meet
Energy Priorities
David Morton, Energy
Innovation Program
Consultant, Arizona Public
Service
An in depth presentation of
11 MW and 25 MW opera-
tional Microgrids in APS ter-
ritory. This presentation will
include business reasoning
and technical details for the
operation of both units.
Networking Break &
Exhibits
9:45-10:30 a.m.
Load Growth Through
Economic Development
Tim O’Brien, Director,
Economic Development and
External Relations, Omaha
Public Power District
This session will provide an
overview of the role Omaha
Public Power District (OPPD)
plays in economic develop-
ment. A case study will
be covered regarding how
Facebook chose to locate
their new data center in
Papillion, Nebraska long with
innovative infrastructure
and rate solutions by OPPD
supporting Facebook’s 100%
renewable energy goal. The
session will also cover eco-
nomic development basics
for utilities, site development
and large business recruit-
ment lessons learned.
10:30-11:30 a.m.
Generation Vital Issues
Roundtable
11:30 a.m. - 4:30
(times include
transportation)
“Behind the Scenes”
NREL Facility Tour
NREL specializes in
renewable energy and
energy efficiency research
and development. NREL is
based in Golden, CO, and the
RMEL Generation Committee
thought this would be a
great opportunity to peek
behind the curtains on
some of the cutting edge
research at the facility.
We will visit the Energy
Systems Integration Facility.
Transportation will be
provided.
NREL focuses on creative
answers to today’s
energy challenges.
From breakthroughs in
fundamental science to new
technologies to integrated
energy systems that power
our lives, NREL researchers
are transforming the way
the nation and the world use
energy.
Thank You RMEL
Generation Committee
CHAIR Richard Threet
Jeff Karloff Director, Power Generation
Division Manager, Production PNM Resources
Engineering & Fuels
Omaha Public Power District Kellen Walters
Regional Sales Director
VICE CHAIR Mitsubishi Hitachi Power
Curt Brown Systems Americas, Inc.
Associate Vice President,
Retrofit and Plant Ed Seal
Betterment, Power Genera- Director, Design Engineer &
tion Services
Projects
Black & Veatch Corp. Arizona Public Service
David Aranda John Wester
Plant Manager - Rio Grande Director, Power
El Paso Electric Company Plant Operations
Austin Energy
Matt Ferguson
VP, Client Development Tom Wos
Leader Regulatory Program
HDR, Inc. Administrator
Tri-State Generation and
Jeff Kruse Transmission Assn.
Sr. Director, Coal Generation
Operations,
Power Generation
CPS Energy
The RMEL Generation Committee plans all
RMEL Generation events. If you’d like to send information to
the committee, email James Sakamoto at
jamessakamoto@rmel.org.
Increasing Value to a Broader Set
of Consumers: MWTG’s
Membership in SPP

Lanny Nickell
VP, Engineering
Southwest Power Pool
Increasing Value to a
Broader Set of Consumers:
MWTG’s Proposed Membership in SPP

RMEL Power Supply Planning and Projects Conference

March 7, 2018
Lanny Nickell
Vice President, Engineering
Southwest Power Pool, Inc.
2
OVERVIEW OF SPP

3
Our Mission
Helping our members work together to
keep the lights on …
today and in the future.

4
 Our Regional Footprint
SPP Snapshot
North American ISOs & RTOs
• FERC-approved RTO

• 14 states

• 546,000 miles of
service territory

• 17.5 million end users

• 95 members

• $15.8 billion market

• 185 market participants

• 50,622 MW peak load

• 726 generating plants

• Accredited generating
capacity of 65,410 MW
5
 Our Primary Services

• Transmission Service
• Reliability Coordinator
Provider

• Transmission Planner/
• Balancing Authority
Planning Coordinator

• Market Operator • Training

• Interchange Coordinator/
• Facilitation
Regional Scheduling

Our approach: regional, independent, cost-effective and focused on reliability!

• NERC Registered Entity 6

The SPP Difference
• Relationship-based
• Member-driven
• Independence Through
Diversity
• Evolutionary vs.
Revolutionary
• Reliability and
Economics Inseparable

7
SPP’s 95 Members:
Independence Through Diversity
Cooperatives (20)

Investor-Owned Utilities (16)

1
8
20 Independent Power
Producers/Wholesale
10 Generation (14)
Power Marketers (12)

Municipal Systems (14)

14
16 Independent Transmission
Companies (10)

State Agencies (8)

12
14
Federal Agencies (1)

8
SPP Member Engagement

9
 Value of SPP Services

• SPP’s services provide more

than $1.7 billion of annual net
benefits to its members, at a
benefit-to-cost ratio of 11-to-1

• A typical residential customer

using 1,000 kWh saves
$5.71/month because of the
services SPP provides

10
AN INDUSTRY OF CHANGE

11
ISO/RTO Coverage before 1996

12
ISO/RTO Coverage by 1996

13
ISO/RTO Coverage by 1998

14
ISO/RTO Coverage by 2000

15
ISO/RTO Coverage by 2002

16
ISO/RTO Coverage by 2004

17
ISO/RTO Coverage by 2006

18
ISO/RTO Coverage by 2008

19
ISO/RTO Coverage by 2010

20
ISO/RTO Coverage by 2012

21
ISO/RTO Coverage by 2014

22
ISO/RTO Coverage Today

23
ISO/RTO Coverage with MWTG in SPP

24
MOUNTAIN WEST
TRANSMISSION GROUP
(MWTG) AND SPP

25
MWTG and SPP Footprints
SPP MWTG
Service 575,000 165,000
Territory Sq. Miles Sq. Miles

Transmission 60,944 15,694

Lines Miles Miles

Population 17.5 6.4

mil mil

Peak 50,622 13,552

Load MW MW

Generating 85,726 21,300

capacity MW MW

26
 MWTG and SPP Capacity Mix
Solar Other Coal
Nuclear 2% 2% Wind 30%
Gas
0% 20%
34%

Wind Solar
17% 0.25%

Other
2%

Hydro Nuclear
9% 2%

Hydro
4%

Coal 36%

Gas
42%

MWTG Installed Capacity SPP Installed Capacity

27
MWTG Transmission Owners
1. Basin Electric Power Cooperative (BEPC)
2. Black Hills Energy (BHE)
a) Black Hills Power, Inc.
b) Black Hills Colorado Electric
c) Cheyenne Light, Fuel and Power

3. Colorado Springs Utilities (CSU)

4. Platte River Power Authority (PRPA)
5. Public Service Company of Colorado (PSCo)
6. Tri-State Generation & Transmission Association, Inc. (TSGT)
7. Western Area Power Administration
a) Loveland Area Projects (WAPA RMR)
b) Colorado River Storage Project (WAPA CRSP)
28
 Significant Work to Date
• Strong cooperative effort amongst MWTG TOs
over three years
 Conducted a Market Study to evaluate benefits of having a
joint tariff as well as a joint tariff with a full Day-2 market
 Developed a Request for Information for RTO response
 CAISO, MISO, PJM, SPP responded
 Selected SPP with term sheet being negotiated since
January 2017
 Significant success with resolving issues around rate
design and cost shift mitigation

• Engagement from SPP’s existing members and

stakeholders through New Member Integration
Process

29
SPP NEW MEMBER
INTEGRATION PROCESS

30
Communication Process
Prospective member(s) of SPP typically
experience the following five stages of integration
activity:
1. Initial Discussions
2. Due Diligence and Membership Agreement Discussions
3. SPP OATT and Governing Document Changes (if
applicable)
4. FERC and State Approvals as Necessary
5. Integration

SPP’s New Member Communication Process

focuses on stages 1, 2 and 3 due to confidential
nature of communications expected. 31
Completed Integration Steps
Stage 1 - initiated May 2016 when MWTG asked SPP to
provide information about SPP and its interest in
providing services to the members of the MWTG.
Stage 2 - initiated January 2017 when MWTG issued its
press release to begin negotiations to change the SPP
OATT, Governing Documents, or RSC Bylaws for
membership into SPP.
 Known as the First Triggering Event in the
communication process.
 SPP Staff established a Members Forum* and State
Commission Forum* to give guidance and assist SPP Staff
on due diligence during this stage.

32
* Execution of a confidentiality agreement was required to participate in the Members Forum or
State Commission Forum.
Current Status
Stage 3 - initiated September 2017 when MWTG
decided to publicly announce results of discussions
with SPP to date.
 Known as the Second Triggering Event in the
communication process.
 SPP Staff convened special all-member and stakeholder
meetings to discuss proposed document changes and
analyses conducted to date.
 Staff continuing to facilitate negotiation of the requested
policy changes between SPP members and MWTG
 Expect to present negotiated policies to Board for approval
on March 13th
 Governing document changes to be developed, using the
stakeholder process, and presented for Board approval
during third quarter of 2018

33
PROVISIONS OF MWTG
MEMBERSHIP IN SPP

34
Operational Provisions
• Market and Balancing Operations
 MWTG will adopt the existing SPP Integrated Marketplace
rules
 SPP will optimize the expanded Integrated Marketplace
across the four MWTG DC-Ties, including sharing of
contingency reserves
 SPP will operate East and West Balancing Authority Areas

• SPP will provide RC services to MWTG upon

receiving NERC certification
• SPP will evaluate the possibility of adopting a
single planning reserve margin for MWTG
• MWTG reserves the right to determine
accreditation rules for intermittent generation
in the MWTG footprint.
35
Planning and Competitive Bidding
• MWTG will adopt SPP’s existing ITP, transmission
service, and generator interconnection planning
processes
• Will incorporate Local Planning Process in
MWTG’s area
• MWTG will adopt the Order 1000 competitive
bidding process developed by SPP subject to
the following conditions and changes:
 Two separate FERC Order 1000 planning regions (East
and West) under a single SPP tariff
 No bonus points will be awarded with the MWTG project
proposal process

36
Cost Allocation And Rate Design
• Different cost allocation procedures are proposed
for facilities planned in SPP West versus SPP East
• Upgrades planned in SPP West will not be cost
allocated to SPP East and vice-versa
• Transmission Service and Generator
Interconnection upgrades will be directly
assigned to customers
• Regional cost allocation for eligible upgrades
based partially on benefits and voltage level
 Must be a network transmission facility with operating
voltage of 200 kV or above
 Must be part of a portfolio that has a benefit-to-cost ratio
greater than or equal to 1.25

37
SPP West and East Regional Cost Allocation

SPP West: Portion of upgrade costs allocated to benefitting zones

SPP WEST LOAD- ZONAL ALLOCATION

VOLTAGE RATIO-SHARE BASED ON BENEFITS
300 kV and above 50% 50%
200 kV to 300 kV 30% 70%
*Below 200 kV allocated to local zone

SPP East: Highway/Byway

VOLTAGE SPP EAST LOAD- LOCAL ZONE PAYS

RATIO-SHARE
300 kV and Above 100% 0%
< 300 kV and > 100 kV 33% 67%
100 kV and Below 0% 100%
38
 Other Membership Provisions*
• Zonal Construct Design: Eight license plate rate zones

• Cost Shift Mitigation: Seven-year mitigation agreement among

MWTG participants

• Regional Through and Out Rate (“RTOR”): Single average rate

for transactions exiting MWTG. After Cost Shift Mitigation, revenue
distribution 60% MW-Mile/40% ATRR.

• Cross-Interconnect RTOR Revenue Distribution: RTOR revenue

split between SPP East and SPP West on load ratio share basis

• DC-tie ATRR: New Schedule 11 DC-Tie applied to all loads and

exports

• Zonal Entry Criteria: Includes cost shift mitigation

• Creditable Upgrades: Auction Revenue Crediting process

• Definition of Transmission: 100kV and above for SPP West

*Note: list shown is not a comprehensive list of negotiated terms. 39

VALUE OF MWTG
MEMBERSHIP IN SPP

40
MWTG Membership Value to SPP Members
• SPP’s detailed cost-benefit analysis in progress
• Net benefits to SPP members expected to exceed
$265M in NPV over 10 years
• Quantitative cost/benefit metrics being considered
Transmission costs allocated
Reduced PtP transmission service revenues
Reduced SPP administration fee
APC savings
Reduced contingency reserves
Load diversity capacity savings

LEGEND
cost
benefit
Note: costs/benefit symbols are sized to reflect
approximate, not exact, scale of value expected.
41
 MWTG Value of SPP Membership
• MWTG cost/benefit metrics for consideration
Incurred SPP service administration fee
Increased FERC fees
Loss of PtP Transmission Service Revenues
Market Benefits*
Regional Transmission Planning & Cost Allocation
Resource Integration
Allocated Costs of DC Ties
De-pancaked Transmission Service Costs
Regional Transmission Service Revenues
Load Diversity Benefits
Contingency Reserves
Reduced Reliability Coordination Costs
* Preliminary studies performed to date estimate 1-year market benefits approaching $100 million.

LEGEND
cost
benefit
Note: costs/benefit symbols are sized to reflect
approximate, not exact, scale of value expected.
42
STAKEHOLDER REVIEW
PROCESS

43
 The Revision
Request Process, START HERE: SPP & MWTG draft SPP & MWTG approve Revision Request
drafts. SPP Staff submits Revision
Revision Request
at a Glance specific Request on behalf of MWTG

to MWTG
Integration
Comments due 5 Business Days prior to If needed, SPP conducts an
Primary Working Group Meeting. Impact Analysis

RR
Primary Working Group reviews the Recommendation Report
Revision Request, Comments, and
Impact Analysis

Secondary and Other Working Groups

review the Revision Request, Comments,
and Impact Analysis, and provide input
back to
Primary Working Group
MOPC Reviews
Recommendation Report

BOD Reviews

44
Recommendation Report

Last revised February 16, 2017

SPP Stakeholder Review Process
• Changes to any governing document (SPP Tariff, Bylaws and
Membership Agreement) must go through the SPP stakeholder
process for review and approval before they are considered by the
SPP Board

• Regional Tariff Working Group (RTWG) has primary responsibility to

consider changes to the SPP Tariff

• Corporate Governance Committee (CGC) has primary

responsibility to consider changes to the Membership Agreement
and SPP Bylaws

• Other working groups that will have to review some of the proposed
changes may include the Economic Studies Working Group,
Transmission Working Group, Market Working Group, Operations
Reliability Working Group

• In addition to information-sharing and education, the CAWG and

RSC may need to consider impacts to RSC Bylaws and other
impacted areas within their delegated authority
45
Next Steps
• Complete negotiations of policy changes
associated with MWTG joining SPP
• Complete revisions to SPP’s governing
documents
 Regulatory filings and approvals (mid to late summer ‘18)

• Reliability Coordinator certification process

with go-live Q3 2019
• Market implementation and go-live Q4 2019-
Q1 2020

46
 FERC Under the New
Administration

Randy Elliott
Regulatory Counsel
National Rural Electric Cooperative Association
 FERC Under the
Trump Administration
RMEL Power Supply Planning and Projects Conference
May 7, 2018
Lone Tree, Colorado

Randolph Elliott, NRECA Regulatory Counsel

March 5, 2018
Federal Energy Regulatory Commission

Chairman Kevin J. McIntyre

Commissioner Cheryl A. LaFleur
Commissioner Neil Chatterjee
Commissioner Robert F. Powelson
Commissioner Richard Glick

March 5, 2018 | Pg. 1

2017 was an unusual year.

• FERC began the year with 3

members — a bare quorum
• Lost quorum in early February
• Down to one member in July
(Cheryl LaFleur)
• Regained quorum on August 10
• Final member sworn in on
December 7
• First time with 5 members since
October 2015

March 5, 2018 | Pg. 2

 Cheryl A. LaFleur

(Moeller) Robert F. Powelson

(Clark) Neil Chatterjee

(Honorable) Richard A. Glick

(Bay) Kevin J. McIntyre

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

March 5, 2018 | Pg. 3

Chairman Kevin J. McIntyre

• Sworn in December 7, 2018

• Term expires June 30, 2018
• Expected to be nominated for an
additional 5-year term
• Lawyer at Jones Day firm
• Republican

March 5, 2018 | Pg. 4

Commissioner Cheryl A. LaFleur

• Sworn in July 29, 2014

• Term expires June 30, 2019
• Previous term 2010–2014
• Lawyer
• Former executive at National Grid
USA
• Democrat

March 5, 2018 | Pg. 5

Commissioner Neal Chatterjee

• Sworn in August 8, 2017

• Term expires June 30, 2021
• FERC Chairman from August 8 to
December 6, 2017
• Lawyer
• Former energy policy advisor to
U.S. Senator Mitch McConnell
• Former government relations
principal for NRECA
• Republican

March 5, 2018 | Pg. 6

Commissioner Robert F. Powelson

• Sworn in August 10, 2017

• Term expires June 30, 2020
• Former member and chairman of
Pennsylvania Public Utility
Commission
• Former NARUC President
• Republican

March 5, 2018 | Pg. 7

Commissioner Richard A. Glick

• Sworn in November 29, 2017

• Term expires June 30, 2022
• Lawyer
• Former general counsel to
Democrats on Senate Energy and
Finance Committee
• Former government affairs
official for Iberdrola, PPM
Energy, PacifiCorp
• Former advisor to Energy
Secretary Bill Richardson

March 5, 2018 | Pg. 8

What are FERC’s priority issues?

Depending on who you ask, you will hear the following …

• Resilience
• PURPA
• Pipelines
• State resource policies and RTO wholesale markets
• Electric storage and DER in RTO wholesale markets
• Reliability
• Cybersecurity
• Physical security

March 5, 2018 | Pg. 9

Resilience

DOE NOPR: “Grid Resiliency Pricing Rule”

• Proposed by Secretary Perry under section 403 of DOE Organization Act,

42 U.S.C. § 7173
• Issued September 29, 2017 [82 Fed. Reg. 46,940 (Oct. 10, 2017)]
• Gave FERC until December 11 to take final action
• Proposed that FERC impose rules on RTOs/ISOs to ensure that certain
reliability and resilience attributes of generation resources are fully
valued.
• Proposed quick implementation schedule by FERC and RTOs

March 5, 2018 | Pg. 10

Resilience

DOE NOPR: Basis for FERC action

• Retirements of “fuel-secure generation”

• 2014 Polar Vortex exposed resiliency problems
• Regulated wholesale markets are not adequately pricing resiliency
attributes of fuel-secure power
• Generation diversity benefits consumers
• DOE August 2017 staff report showed challenges to resiliency
• Congress is concerned about the loss of valuable generation resources
• FERC has the necessary information to act expeditiously

March 5, 2018 | Pg. 11

Resilience

DOE NOPR: “eligible grid reliability and resiliency resource”

1. Electric generation physically located in a FERC-regulated RTO/ISO

2. Able to provide “essential energy and ancillary reliability services,”
such as “voltage support, frequency services, operating reserves, and
reactive power”
3. Has a 90-day fuel supply on site
4. Complies with all federal, state, and local environmental laws and
regulations
5. “Is not subject to cost of service regulation by any state or local
regulatory authority”

March 5, 2018 | Pg. 12

Resilience

DOE NOPR: “Grid Resiliency Pricing Rule”

• Applied to all FERC-regulated ISOs and RTOs with energy and capacity
markets and a tariff with DA and RT market or functional equivalent.
• Each ISO/RTO must establish a just and reasonable rate for the
• Purchase of electric energy from an eligible reliability and resiliency resource; and
• “recovery of costs and a return on equity for such resource dispatched during grid
operations”
• Just and reasonable rate must “ensure that each eligible resource is fully
compensated for the benefits and services it provides to grid operations,
including reliability, resiliency, and on-site fuel assurance, and that each
eligible resource recovers its fully allocated costs and a fair return on
equity”

March 5, 2018 | Pg. 13

Resilience

DOE NOPR: FERC’s response

• FERC set short comment period and denied requests for extension
• Hundreds of comments filed in October and November
• Then-chairman Chatterjee expressed support; Powelson and LaFleur
skepticism
• In first official act, Chairman McIntyre on December 7 asked for an
extension of time to act
• On January 8, 2018, FERC issued an “Order Terminating Rulemaking
Proceeding, Instituting New Proceeding, and Establishing Additional
Procedures” [162 FERC ¶ 61,012]

March 5, 2018 | Pg. 14

Resilience

Forbes.com

March 5, 2018 | Pg. 15

Resilience

DOE NOPR: FERC’s January 8 Order

• Unanimous
• Separate statements by LaFleur, Chatterjee, and Glick
• FERC could not impose rule under section 206 of Federal Power Act:
• No showing that existing RTO/ISO rules were unjust, unreasonable, unduly
discriminatory or preferential
• No showing that the proposed grid resiliency pricing rule was just and reasonable
and not unduly discriminatory or preferential
• Terminated the rulemaking begun by Perry’s proposal
• But …

March 5, 2018 | Pg. 16

Resilience

FERC initiated a new information-gathering proceeding

• Perry’s proposal and record “have shed additional light on resilience
more generally and on the need for further examination … of the risks the
bulk power system faces and possible ways to address those risks.”
• Opened new proceeding: Docket No. AD18-7-000
• RTOs and ISOs must file reports by March 9; public comments by April 8
1. How do you define the resilience of the bulk power system?
FERC: “The ability to withstand and reduce the magnitude and/or duration of
disruptive events, which includes the capability to anticipate, absorb, adapt to, and/or
rapidly recover from such an event.”
2. How do you assess and evaluate threats to the resilience of your system?
3. How do you mitigate threats to the resilience of your system? E.g., operational
policies or procedures; market-based mechanisms; other generation or
transmission services; reliability standards; planning processes

March 5, 2018 | Pg. 17

PURPA reform

What can FERC do?

Any major changes to PURPA would have to originate in

Congress. The question is whether there are …steps we
can take … that will improve the overall playing field of
PURPA today even in the absence of congressional
action.

Chairman McIntyre (Feb. 13, 2018)

March 5, 2018 | Pg. 18

PURPA reform

Is the “PURPA put” outdated or still necessary?

• Section 210 of PURPA, 16 U.S.C. § 824a-3, sought to encourage the

development of cogeneration and small power production facilities by
requiring FERC “to prescribe, and from time to time thereafter revise,”
rules that, among other things, require electric utilities to offer to
purchase electric energy produced by qualifying facilities (QFs) at rates
up to the utility’s avoided costs
• Much has changed since 1978. What can FERC do under the statute?
• PURPA’s division of authority:
• FERC determines rules for QF status and for calculating avoided costs
• States or unregulated utilities determine avoided-cost rates for purchases, contract
terms and practices, etc.

March 5, 2018 | Pg. 19

PURPA reform

FERC technical conference June 2016 (Docket No. AD16-16-000)

• Avoided-cost calculations, assumptions and analyses, and whether they

are consistent with PURPA
• Application of FERC’s “one-mile rule”
• Under FERC’s regulations, all power production facilities using the same energy
resource and owned by the same entity or its affiliates and located within one mile
of a QF are considered to be at the “same site” as the QF and count toward the 80-
MW maximum for a small power production QF (18 C.F.R. § 292.204)
• Allegations of gaming by project developers to turn large projects into multiple
QFs

March 5, 2018 | Pg. 20

PURPA reform

FERC technical conference June 2016 (Docket No. AD16-16-000)

• FERC’s rebuttable presumption that QFs ≤ 20 MW do not have market

access
• PURPA subsection 210(m), added in 2005, authorizes FERC to terminate a
utility’s obligation to purchase from QFs that have nondiscriminatory access to
wholesale markets. 16 U.S.C. § 824a-3(m).
• Under FERC regulations, there is a rebuttable presumption that a QF eligible for
open access transmission service has nondiscriminatory access to the market.
18 C.F.R. § 292.309(c).
• Except, there is a rebuttable presumption that a QF ≤ 20 MW does not have
nondiscriminatory access to the market. 18 C.F.R. § 292.309(d).

March 5, 2018 | Pg. 21

PURPA reform

What should FERC do?

• October 2017 letter to FERC from 17 Members of Congress: fix the one-
mile rule
• December 2017 letter to FERC from NARUC:
• Move away from administratively determined avoided costs to measurement by
competitive solicitations and market prices
• Lower the 20-MW threshold for presuming QF market access
• Reform the one-mile rule

March 5, 2018 | Pg. 22

PURPA reform in Congress?

PURPA Modernization Act (H.R. 4476) – Rep. Walberg (R-MI)

• Directs FERC to reform the one-mile rule

• Amends PURPA section 210(m) to provide that a QF ≥ 2.5 MW is
presumed to have nondiscriminatory access to the market
• Electric utilities would not be required to enter into new QF contracts if
the state commission determines there is no need to purchase electric
energy from such QF, or if the electric utility uses IRP and conducts a
competitive resource procurement for long-term resources that provides
an opportunity for QFs to participate.

March 5, 2018 | Pg. 23

State resource policies & RTO markets

How should RTO wholesale markets accommodate state policies?

• States addressing different policy problems
• Nuclear and coal plant retirements (IL, NY, OH, CT, NJ)
• RPS and state-sponsored renewable procurements (NY, MA, CT)
• Supreme Court’s Hughes opinion (2016) invalidated state-ordered
development of gas generation because it effectively set a wholesale
price different from the RTO tariff—but how far does this “narrow”
decision reach?
• Illinois ZEC litigation (7th Cir.); New York Clean Energy Standard
litigation (2d Cir.)
• FERC May 2017 technical conference (Docket No. AD17-17)
• Pending complaints at FERC by merchant generators
• PJM and ISO New England proposals to accommodate state policies

March 5, 2018 | Pg. 24

Electric storage resources & RTO markets

Order No. 841, Docket No. RM16-23-000 (Feb. 15, 2018)

• RTOs must revise tariffs to provide a “participation model” for storage

participation in energy, capacity, and ancillary services markets
• Ensure storage is eligible to provide any service it can technically provide
• Ensure storage can be dispatched and can set market prices—as seller or
buyer—consistent with other resources
• Establish minimum size requirement for market participation ≤ 100 kW
• Sale of energy from RTO market to a storage resource that the resource
resells to the market must be at the wholesale locational marginal price
• Rule effective in 90 days; RTO tariff revisions due 270 days later
• Tariff revisions become effective 365 days later

March 5, 2018 | Pg. 25

DER aggregators & RTO markets

No action (yet) on proposals for DER aggregation

• FERC also had proposed that RTOs adopt rules to enable DER
aggregators to participate in RTO markets
• DER: “a source or sink of power that is located on the distribution
system, any subsystem thereof, or behind a customer meter,” including
but not limited to “electric storage resources, distributed generation,
thermal storage, and electric vehicles and their supply equipment”
• Concerns with proposals: jurisdiction, operations, reliability, safety,
economic/market effects
• On Feb. 15, FERC initiated separate a DER rulemaking (Docket No.
RM18-9-000) and announced a technical conference on April 10 and 11

March 5, 2018 | Pg. 26

Pipelines

FERC to review policies on certification of natural gas pipelines

• Section 7 of Natural Gas Act — FERC issues a certificate of public

convenience and necessity to authorize interstate pipeline construction
• Act gives eminent domain authority to pipeline with a certificate
• Increased opposition to pipeline construction and siting
• In 2017 D.C. Circuit held FERC must consider GHG emissions in NEPA
review of pipeline certificate
• Issues:
• Need for pipeline; use of “precedent agreements” with pipeline affiliates
• Nexus with electric reliability, grid resilience, fuel security
• NEPA review, including GHG emissions?
• Coordination with project review by other federal agencies and states

March 5, 2018 | Pg. 27

Pipelines

FERC to revisit 1999 pipeline policy statement

• FERC press release on December 21, 2017, states that Chairman

McIntyre said FERC will examine the “Policy Statement on Certification
of New Interstate Natural Gas Pipeline Facilities,” issued in 1999, as part
of a pledge he made during his Senate confirmation to take a fresh look at
all aspects of the agency’s work.
• Format and scope of review are still under discussion

March 5, 2018 | Pg. 28

Integrating Utility Scale Renewable
Energy and Battery Storage

Daniel Neville
Director
NextERA Energy Resources
 RMEL Power
Supply Planning
and Projects
Conference
March 7, 2018

1
• ~$45.5 B in total assets
• ~120 MW of storage in
operations
Energy Resources’ Tucson Electric Power (TEP) solar plus
storage project will be the largest of its kind in the country

TEP Solar Plus Storage Overview

• Location:
– Approximately 15 miles south of Tucson, AZ
• Size and Technology
– Solar: 100 MW at the Point of Interconnection sited on 710 acres
– Storage: 30 MW / 120 MWh Lithium-Ion chemistry
– 138 kV UniSource Energy point of interconnection
• Contract Terms
– 20 year term, 2nd Quarter 2020 COD
– Storage will be replenished to maintain nameplate system capacity
• Project will take approximately ten months to construct
Solar + Storage was a top storage product in 2017; Energy
Resources contracted 160 MWh of utility PV + storage

Why Solar + Storage is working

• Investment Tax Credit (ITC)
– 30% ITC on storage enhances storage projects economic
• Utilities
– Western utilities facing high renewable penetration need firm capacity
more than energy; need to shift solar capacity to new peak of ~4-9pm
– Where decisions are driven by need and not mandate (AZ vs. CA),
utilities can contract for a solar + storage resource
• Behind-the-meter
– Solar allows day-time battery recharging without setting new peaks,
enabling more peak shaving with smaller systems
– Duck-curve dynamics also apply to C&I; on-peak hours are shifting from
~2-6pm to ~3-8pm; solar + storage is a hedge against tariff changes
Duck curve creates new peaking and ramping opportunities
for batteries and pumped storage
Opportunity for Renewable Integration

High solar penetration creates a need for

load-shifting, firm capacity & grid services
1) Source: http://www.caiso.com/Documents/RenewableIntegrationUnlockingDividends.pdf
Arizona Solar plus Storage; utilities seek capacity value of
storage to mitigate high solar penetration issues

Arizona Solar Plus Storage

• Arizona utilities are experiencing high levels of distributed
solar reducing net load during the day and moving peak load
periods to after solar production hours
• Arizona utilities have either joined or will join the CAISO energy
imbalance market
• Negative pricing in California allows Arizona utilities to be paid
to take excess energy during California peak solar production
• Solar plus storage adds capacity and fuel diversity, while
shifting energy production to the more valuable period when
when solar generation falls off

Solar coupled with a battery storage system with four hour

duration at 30% - 50% of solar nameplate capacity allows flexibility
at a reasonable price point
 Firm renewables are coming – wind + solar + storage ++

Recent Solar + Storage RFP Guidance

Time More Preferred Less No Must Take
Delivered Preferred Preferred Energy
Pricing Ratio 900% 300% 100% 0%
Annual Hours 730 852 1,034 6,144
A A A A A A A A A A P P P P P P P P P P P P
AM M M M M AM M M M M M M M M M M M M M M M M M M

1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec
 The demand for electric vehicles is driving the Li-ion battery
storage market

300 Evolution of the Li-ion Market(2)

6%
250

200 36%
Annual
Demand 150
(GWh)
100
58%
50

0
2016 2018 2020 2022 2024

Stationary energy storage Consumer applications (e.g. mobile, laptop etc) Electric vehicles

Electric Vehicle and consumer electronics demand for lithium-ion will far
exceed stationary storage application demand

1) The Battery Series Part 3: Explaining the Surging Demand for Lithium-Ion Batteries, Visual Capitalist
2) Energy Storage Deployment by application, Bloomberg New Energy Finance
It is anticipated that longer duration applications will begin
to be deployed in an economic manner starting in 2020 or
sooner
Annual Market Size by Duration(1)
$4.0

$3.0 2020 TEP

2018 LIPA(2) 30 MW / 4 Hour
Annual (2) 2.5 MW / 8 Hour
CapEx
($ B) $2.0

$1.0

$0.0

Six to eight hours Three to five hours One to two hours Less than one hour

1) Source: IHS Inc. The use of this content was authorized in advance by IHS. Any further use or redistribution
of this content is strictly prohibited a without written permission by IHS. All rights reserved.
2) Reflects NextEra’ 50% ownership
Stationary energy storage applications span multiple
disciplines within a typical utility system
Energy Storage Applications
Generation Transmission Distribution Customer

Energy Storage

Renewable Ramping Frequency Regulation Peak Shaving Demand Charge Management

2014
Renewable Smoothing Voltage Support Congestion Relief Solar Self Consumption
2016
Applications

Wind Curtailment Load Following Power Quality Demand Response

Reduction
Renewable Spinning Reserve T&D Asset Deferral Transmission and Distribution
Asset Deferral
Capacity Firming

2018+
Capacity/
Short Duration Applications
UPS, Power Quality
Reserve Capacity
Medium Duration Applications Energy Time Shifting
Renewable Time
Shifting / Arbitrage Long Duration Applications Voltage Support

In the last 3 years, we have seen more and more of this “menu” be
selected for projects
Cycling and calendar degradation are the dominant mechanisms
which are considered in a pro forma

Common Degradation Mechanisms

What is considered when modeling projects

1. Cycling - Growth of the solid-electrolyte interphase (SEI)
2. Calendar Aging - Side reactions during resting

Other mechanisms
1. Oxidation of Electrolyte (gas generation)
2. Anode/Cathode active material crystal structure changes
3. Electrode binder decomposition
4. Current collector corrosion
5. Failure of cell structure and packaging

Product flaws and aggressive operation may affect degradation rates

NextEra Energy started the Battery Lab in 2012 with the
most recent expansion in 2016

Battery Lab Evolution

2012 - Validate Emerging Product

8 ft3
12 Channel Module Testing 80 Channel Cell Testing Two 32 ft3 environmental
environmental
(50V, 50 amps) (5V, 50 amps) chambers
chamber

92 channels, 72 ft3 of environmental chambers

WindLogics is actively developing strategies to provide
optimal dispatch algorithms for NextEra Energy’s storage
projects
Development of Battery Control Strategies
• Profitability of battery storage projects often depends on the
ability to utilize multiple use cases (“stacked-use”)
– Use cases include Demand Charge Management, Demand Response,
Energy/Capacity/Ancillary markets, Solar + Storage, EV-to-grid, etc.
– Optimized dispatch algorithms require complex logic based on
forecasting, real-time dispatch, market price signals, and state of
charge management
• Currently, WindLogics’ focus is on three (3) primary market
needs
– Pre-build forecasting (or simulations) of revenues for multiple market
use cases
– Dynamic Storage Dispatch Algorithms to realize forecasted revenues
in operations individually and as an aggregated resource
– Operational Assessments to monitor and characterize onsite control
software performance
Energy Resources has leveraged its existing portfolio of
storage projects to develop and test proprietary hardware
BaCON (controllers) and optimization software
After head-to-head testing, WindLogics’ controllers
outperformed legacy controllers by over 200%; NextEra is
now installing BaCON controllers across its entire fleet

BaCON Performance
$100,000

$80,000
Annual Bill Savings ($)

$60,000

$40,000
> 200% improvement

$20,000

$0

Competitor BaCON Competitor Average BaCON Average

1) NEE internal estimates based on publicly available information

 Thank You!

Dan Neville
Director, Development

Phone: (415)-318-5904
Daniel.Neville@nee.com

18
 Revving Up the Latest
Reciprocating Engine Technologies

Garrett Meyer
Thermal Engineer
Black & Veatch
 March 7, 2018

Revving Up the Latest Reciprocating Garrett Meyer

Engine Technologies Performance Engineer
Reciprocating engine power plants appear in surprising
places.

2
What is the
technology?

3
A reciprocating internal combustion engine (recip or
RICE) in a power plant operates much like in your car.

4
This presentation focuses on large (7+ MW) gas recips and
large (50+ MW) recip power plants in the US.

• Many more uses and vendors for smaller scales, listed below for reference.

Some Recip Applications Some OEMs of Smaller Recips

Combined Heat and Power Wärtsilä
Remote Power GE/Jenbacher
Backup Power Cummins
Chilled Water with Absorption Chiller Hyundai
Black-Start Capability Siemens/Dresser-Rand
Mechanical Drive MAN
Rolls-Royce
Mitsubishi Power Systems
GE/Waukesha

5
Recips pair well with newer intermittent power sources.

• Fast start times

• Fast load ramping
• Low wear from cycling
• Good engine part-load efficiency
• Short minimum offline periods

ERCOT Wind Integration Report 2/12/18 6

Reprinted with permission from ERCOT
Recips can work almost anywhere there is fuel.
• Performance independent of ambient conditions
• Low water consumption
• Low gas pressure required
• Low black start energy required
• Good energy density
• Light industrial design buildings with low profile
• Exhaust heat available for hot water demand
• Weaker in NOx and PM10 emissions

7
Their smaller size and modularity give several advantages.

• Blocks scale with power demand

• Quicker and simpler shipping and construction
• Good facility-level part-load efficiency
• Good facility-level forced outage rate

Wärtsilä 18V50SGs, Port Westward 2 PGE

8
The standard scope of supply allows plug and play.
Item Note
Gas Engine with Turbocharger
Generator & Flexible Coupling
Base Frame for Engine and Generator
Excitation System
Engine Maintenance Platform
Engine Lube Oil System
silencers, ducting, bellows, rupture discs, AQC
Exhaust Gas System
equipment (as applicable)
Gas Regulating Unit
Starting Air System
typically air-cooled radiators, sometimes intermediate
Cooling System
heat exchangers with open loop by others
Charge Air System for inlet air
Engine Controls

OEMs looking into packaging units to reduce construction time and cost.
9
Why not
combustion
turbines?

10
Today’s simple cycle market

Recips are the clear leader in simple cycle efficiency.

11
Today’s combined cycle market

Recips lose out in combined cycle power and efficiency.

12
Recips take no derate for most ambient temperatures.
1.25
1.20
1.15
1.10
1.05
Correction
1.00
Factor Output
0.95 Heat Rate
0.90
0.85
0.80
0.75
0 20 40 60 80 100
13
Ambient Temperature, deg F
Combustion turbines suffer at higher temperatures.

14
Recip part-load performance is strong compared to simple
cycle combustion turbines.

14,000

13,000

12,000
Gross Heat Rate,
11,000
Btu/kWh (HHV) Frame CTG
10,000 Recip

9,000

8,000
25% 50% 75% 100%
Load
15
Recips can be more capitally intensive than simple cycle
combustion turbines.
1,600
1,400
1,200
1,000
Simple Cycle Plant
EPC Overnight 800
Recip
Capital Cost, $/kW 600
CTG
400
200
0
0 100 200 300 400 500
Plant MW

Recips can recover in the levelized cost of electricity.

16
How is the
market?

17
Recips are growing more prevalent.
3,000

2,500

2,000

Operating/Planned
1,500
Capacity, MW
1,000

500

0
1950 1960 1970 1980 1990 2000 2010 2020

Some units are still in service after 67 years.

18
Today’s large recip product line
RECIP MODEL MW Engine Efficiency (LHV) lb-CO2/MWh-gross

Hyundai H46/60V 13.7-22.9 NA NA

Wärtsilä 18V50SG 18.8 48.6% 821
MAN 18V51/60G TS 18.5 49.6% 803
MAN 18V51/60G 18.5 48.8% 818
MAN 20V35/44G TS 11.6 NA NA
Wärtsilä 20V31SG 11.4 50.0% 796
Rolls-Royce B36:45V20A 11.2 49.8% 800
MAN 20V35/44G 10.2 47.2% 846
Caterpillar G20CM34 9.75 46.5% 859
GE Jenbacher J920 Flextra 9.35 49.9% 798
Wärtsilä 20V34SG 9.34 46.3% 862
Rolls-Royce B35:40V20AG2 9.00 47.9% 833
Kawasaki KG-18-V 7.50 49.0% 815
Wärtsilä 16V34SG 7.43 46.0% 868

19
 Large recip plants in the US are increasingly common.
Power Plant Cap MW Status COD State OEM Model
New Orleans Power Station 128 Planned 2020 LA Wärtsilä 18V50SG
Sundt Gen. Modernization 100 Planned 2019 AZ Wärtsilä 18V50SG
Denton Energy Center 113 Planned 2018 TX Wärtsilä 18V50SG
Coffeyville Power Plant 56 Operating 2017 KS Wärtsilä 18V50SG
Marquette Energy Center 50 Operating 2017 MI Wärtsilä 18V50DF
Red Gate Peaker Power Plant 225 Operating 2017 TX Wärtsilä 18V50SG
Pioneer Generating Station IC 112 Operating 2016 ND Wärtsilä 20V34SG
Stillwater IC Plant 56 Operating 2016 OK Wärtsilä 18V50SG
D.G. Hunter Expansion 60 Operating 2016 LA Wärtsilä 20V34SG 2+ GW of large
Sky Global Power One 52 Operating 2016 TX Jenbacher J920 FleXtra recip power
Eklutna Generating Station 170 Operating 2014 AK Wärtsilä 18V50DF plants operating
Port Westward Unit 2 224 Operating 2014 OR Wärtsilä 18V50SG
Rubart Station 108 Operating 2014 KS Caterpillar G20CM34
Antelope Station 167 Operating 2011 TX Wärtsilä 20V34SG
Humboldt Bay Repower 163 Operating 2010 CA Wärtsilä 18V50DF
Pearsall IC 202 Operating 2009 TX Wärtsilä 20V34SG
Goodman Energy Center 101 Operating 2008 KS Wärtsilä 20V34SG
Plains End Expansion Facility 116 Operating 2008 CO Wärtsilä 18V34SG
Basin Creek 52 Operating 2006 MT Caterpillar G16CM34
Western 102 GS 118 Operating 2005 NV Wärtsilä 20V34SG
Plains End 57 Operating 2002 CO Wärtsilä 18V50SG
20
Among the major OEMs, Wärtsilä has a clear lead in
operating and planned gas capacity in the US.
2,500
Large Plant Models
2,000 • W 18V50SG
• W 18V50DF
1,500
• W 18V34SG
MW
• W 20V34SG
1,000
• C G20CM34
500 • C G16CM34
• J J920
0 • J J624
Wärtsilä Caterpillar Jenbacher

Waiting to see other OEMs enter the market.

21
What are the
trends?

22
More aggressive technical characteristics

Characteristic Past Present/Future

Maximum Spark-Ignited Size < 10 MW > 18 MW

Ramp Rate 2 MW/min-engine < 1 min (min-to-full)
Start Time < 10 min 2 – 5 min
Minimum Load 40 – 50% 20 – 30%
Controlled NOx 8 ppm <= 5 ppm
Controlled CO 25 ppm 8+ ppm
Efficiency 42 – 46% 46 – 50%

23
Improved fuel flexibility

Other gas fuels (bio gas, coal

Natural Gas
seam, coke oven, propane)
Recip
Blending
Natural Gas Diesel

Recip

Natural Gas Diesel

Dual Fuel
Diesel
Capability Recip
24
Battery storage is a potential substitute or complement to
a recip power plant.

• Scaleable
Battery Storage • Starts in milliseconds
• Expensive (~$575/kWh), though coming down
• Time-limited

Battery Storage • Batteries (or ultracapacitors) dispatch immediately

• Engines load firm when batteries deplete or demand grows
• Jenbacher and Wärtsilä have their own battery integrators
Recip • Advantages over hybrid storage/combustion turbine plants in
fuel-side startup time, ramp rate, and efficiency
25
 March 7, 2018

Garrett Meyer
4555 Lake Forest Drive, Suite 310, Cincinnati, OH 45242
+1 913-458-2502
MeyerG@bv.com
Backup Slides

27
Stack emissions and water consumption are competitive.

Constituent ppmvd@15%O2 lb/MMBtu (LHV)

NOx 2.5 – 5.5 0.01 – 0.022

CO 8 - 49 0.02 – 0.12
VOC 8 – 54 0.01 – 0.07
PM10
n/a 0.023 – 0.036
(total, 0.2 gr/100cf S)

Cooling System Makeup, Gals/MWh

ACHX (Radiators, STD) Negligible

Wet Cooling Tower (5 COCs) 40 - 70

28
Choosing a Technology

Best lifecycle cost is application-dependent.

 Capital costs vary significantly job-to-job.
 Maintenance costs vary significantly from machine-to-
machine.
 Construction costs are based on level of modularization.
 Low capacity factors erode value of efficiency.
 Market drivers influence capital and operation costs.
Best lifecycle cost is not always most efficient.
Donald Von Raesfeld Plant

Maximize owner value with technology competition. 29

Recip Example
Project

30
PGE Port Westward Unit 2

• Wind chaser facility

• Black & Veatch involved from start to finish.
• Feasibility studies
• Technology selection
• Public RFP development
• PGE’s preferred EPC
• PGE self-build option selected in competitive public
bid process with award to B&V as EPCM w/
Mechanical S/C

Successful COD in December 2014 31

PGE Port Westward Unit 2

• Public RFP maximized:

• Owner control over final plant details
• Self-build competitiveness
GE LMS100s
• Shortlisted technologies:
Technology Capital Cost Operating Cost

GE LMS100 Low High

Wärtsilä 18V50SG High Low

• Final selection dependent on PUC’s load profile

Wärtsilä 18V50SGs, Port Westward 2 PGE
basis
32
PGE Port Westward Unit 2 Highlights

• Project next to the Columbia River – Very environmentally sensitive site with
corresponding local and governmental interest – finished with great relations with all
stakeholders
• Project next to an operating plant with numerous tie ins – no incidents or impacts to
PW1 operations
• Over 2600 stone columns driven in 4+ months before starting major undergrounds
• Very constricted site
• High seismic area
• Very demanding air permit and noise requirements
• Rigorous performance testing requirements
• Finished the project 30 days early
33
Tucson Electric Power (TEP) Sundt
Generation Modernization Project

Conrad M. Spencer
Director, Sundt Generation Modernization Project
Tucson Electric Power (TEP)
 TEP Sundt Plant
Generation Modernization Project

Conrad Spencer
Project Director

February 14, 2018

 TEP’s Future Generation

• Arizona Corporation Commission(ACC)

mandate is 15% retail sales from renewable
resources by 2025
• TEP Submitted its Integrated Resource Plan
(IRP) to the ACC in April 2017
• Goal to have 30% retail sales from renewable
resources by 2030

2
 Intermittent Generation Requirements

2016 Historical Requirements 2016 Requirements
10‐minute changes based on retail load only.  No renewables. 10‐minute changes in both retail load and renewable resources

275 MWac Utility Scale

50 MWac Distributed Generation
325 MWac Total Renewables

+ 100 MW

+ 50 MW

- 50 MW

-100 MW

The chart above represents the change in retail load on a 10-minute basis (52,560 intervals) over the course of a year.
3
 Intermittent Generation Requirements

2016 Historical Requirements 2024 Requirements
10‐minute changes based on retail load only.  No renewables. 10‐minute changes in both retail load and renewable resources

600 MWac Utility Scale

200 MWac Distributed Generation
800 MWac Total Renewables + 175 MW

+ 50 MW

- 50 MW

-175 MW

The chart above represents the change in retail load on a 10-minute basis (52,560 intervals) over the course of a year.
4
Renewable Generation Fluctuations
August 8, 2017 Renewable Fluctuations
300 100
145 MW drop in
80 MW drop in ACE
ACE 16:24, 54
14:25, 20 50
16:21, 251
250

200 14:45, 227

14:25, 220
-50
14:34, -60
137 MW drop in
14:34, 172 Total
16:47, -91
150 Renewables -100
48 MW drop followed by
55 MW rise in Total
Renewables 16:51, 114
-150
100

-200

50
-250

0 -300
12:01
12:09
12:17
12:25
12:33
12:41
12:49
12:57
13:05
13:13
13:21
13:29
13:37
13:45
13:53
14:01
14:09
14:17
14:25
14:33
14:41
14:49
14:57
15:05
15:13
15:21
15:29
15:37
15:45
15:53
16:01
16:09
16:17
16:25
16:33
16:41
16:49
16:57
17:05
17:13
17:21
17:29
17:37
17:45
17:53
18:01
18:09
18:17
18:25
Macho Springs Red Horse Total City Utility Renew UNSE Utility Renew TOT_RENEW_MW ACE
Typical 2030 Winter Day Load Profile

Source: TEP IRP page 68

6
 TEP Internal study

• TEP Generation and Resource Planning performed

high level economic study with internal resource
planning models
• Used replacement of two steam units with
reciprocating capacity as fundamental assumption
• Benefits were substantial improvement in heat
rates and ramp rates
• Approval given to pursue possible sites and air
permit modeling

7
 TEP Technology Assessment

• Technology assessment to review the lowest cost

options to assist in the integration of renewables
conducted by Burns and McDonnell Engineering
• Options considered were large frame gas turbines,
aeroderivative gas turbines, combined cycle,
reciprocating engines(10 MW and 20 MW class),
wind, solar, batteries
• Reciprocating engines were the lowest cost option
that met all of TEP’s needs. Reliability minimum
generation requirement and fast response.

8
Typical Reciprocating Engine Generator
 Site Selection Criteria

Environmental/Air Permit Requirements

Fuel Supply
Land Requirements
Community Impact
Transmission Requirements
System Control & Reliability Impact

• Five sites in the Tucson area were evaluated

11
LOCATION OF RICE PROJECT
13
 Large Generator Interconnection

• TEP Generation filed a Large Generator

Interconnect application on March 31, 2017 with
TEP LGIP department
• System Impact study was completed Oct 31, 2017
• Interconnection Facilities study is competed and
design is underway to meet a January 2019
energization of Generator Step-up
transformers(GSU)

14
 Recip Vendor Bid Process

• Only two vendors offered 20 MW class machines.

FairbanksMorse(MAN) and Wartsila

• TEP team went to Germany, France, & Italy to see

manufacturing facilities of both vendors

• RFP went out June 1, 2017. Scope of supply was broken

into each major system from tip of the stack to the low
side of the GSU.

• Both vendors submitted bids on August 17, 2017

• Wartsila was selected on cost basis from the tip of the

stack to low side of the GSU.
 EPC Bid Process –
Final Engineering Construction

• Accion Power hired as independent monitor and website

host

• RFP went out July 7, 2017

• Bid walk held July 21, 2017

• Technical specs for project with Wartsila scope of supply

posted on Sept 6, 2017

• Bids were due October 20, 2017

• Selection of Ashton Construction (local Tucson firm)

• Sargent & Lundy engineering

 Schedule

• Break ground April 2018

• Engines on site Oct 2018

• First five engines in commercial operation June 1, 2019

• Second five engines in commercial operation Oct 1, 2019

Site Arrangement
3 D Model of TEP RICE Project

19
Certificate of Environmental Compatibility

• Application for a Certificate of Environmental

Compatibility filed with the Arizona Power Plant
and Transmission Line Siting Committee of the
Arizona Corporation Commission(ACC), Filed
December 8, 2017
• Public Hearings were held on January 17-19, 2018
in Tucson
• Vote was 8-0 in favor of issuing the CEC
• The ACC commissioners will vote in next Open
meeting March2018

20
 Air Quality Permitting Process
• Sundt site is a major stationary source for purposes of the Prevention of
Significant Deterioration (PSD) program and holds a Class I Air Quality
Permit issued by Pima County Dept. of Environmental Quality.
• RICE project requires preconstruction PSD review and a Significant
Revision of the Class I Permit.
• Permitting process includes the following key steps:
• TEP requests accelerated permit process from PDEQ March 2017
• TEP submits permit application (8/3/2017)
• PDEQ determines application is administratively complete
(8/23/2017)
• PDEQ performs technical review and prepares draft permit and
supporting documentation
• Public notice and comment process
• PDEQ transmits proposed action to U.S. EPA for review
• Final action by PDEQ

21
 Status of Significant Permitting Process
• 8/23/2017– 2/9/2018– Technical Review Period
• Technical Review Working Group Meetings with
PDEQ, PDEQ Consultant, EPA Region 9, National Park
Service, TEP, and TEP Consultants
• The Technical Review Working Group has held
approximately 20 teleconference meetings
2/9/2018: Began public notice and comment
process and concurrent review by U.S. EPA
2/15/2018: Open House
3/1/2018: Public Hearing
3/12/2018: End public notice and comment process
3/26/2018: End U.S. EPA review period
4/16/2018: Final decision issued by Pima DEQ
22
 Air Study Results
• Dispersion modeling of the RICE project unambiguously
demonstrates de minimis air quality impacts (i.e., project will not
cause or contribute to violations of ambient standards or PSD
increments)
• Modeling performed using required modeling software and
procedures
• Analysis conservatively did not consider emission reduction
from retiring Units 1 & 2
• Modeling demonstrates project will cause no impairment to
visibility, including especially rigorous analyses in Saguaro
National Park and Galiuro Wilderness
• Analysis conservatively did not consider emission reduction
from retiring Units 1 & 2
23
Comparison of Tucson Area NOx Emissions
(Sum of all units at Sundt, DeMoss Petrie, and North Loop)

600

500

400
Tons Per Year

300

200

100

0
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032

Existing Steam Turbines Simple-Cycle Gas Turbines RICE

24
 Benefits

• Project Benefits:
• Fast start < 5 minutes (allows integration of more
intermittent renewables)
• 40% better fuel efficiency than steam units that will
be retired
• 60% reduction in NOx emissions from total plant
with the retirement of steam units 1 & 2 and
reduced use of units 3 & 4
• 70% reduction in ground water usage (current
usage is 685,000,000 gallons per year, new usage
will be less than 230,000,000 gallons per year
 TEP Long Term Resource Plan

2017 2018 2019 2020 December 2019 2021 2030

Battery Gila River Reciprocating Wind Navajo Generation Wind Target 30%
Storage Unit 2 Engines Project Station Retirement Project Renewables by 2030
20 MW 550 MW 200 MW 100 MW -168 MW 150 MW 1,000 MW

2017 2019 2020 2021 2023 2030

December 2017 2020

San Juan Unit 2 June 2022 July 2031
Solar-Battery San Juan Unit 1
Retirement Four Corners Power
Project Retirement
-170 MW Plant Retirement
100 MW - Solar -170 MW -110 MW
30 MW - Storage
 Conclusions

• This RICE project is the lowest cost option for TEP

to provide fast flexible generation to allow for
- the additional integration of renewables
- provide Reliability minimum generation
requirements
-provide a bridge to the future use of
additional battery technologies
 TEP

• Questions?

28
Electrification

Adam Diamant
Technical Executive
EPRI
Arizona Public Service Microgrid
Case Study

David Morton
SME Microgrids
Arizona Public Service
 RMEL Generation Conference

Case Studies: Emerging Technologies,

Innovative Practices and Successful
Implementations to Meet Energy
Priorities

David Morton
SME Microgrids
Arizona Public Service

1
Value of Utility Owned Microgrid
• Must add value to utility grid
health and also provide value to
customers where sited

• System value created from

various operating modes (island System
and parallel)
Value

• Microgrid integration and

operation requires interfacing MOST
VALUE
many organizations and
stakeholders Customer Distribution
Value Value

• Value proposition differs for each

microgrid, as they are all
uniquely designed

2
Valuing a Microgrid
Capacity Value:
• Microgrids are compared to CT’s
• Frequency Response
• Other uses: Arbitrage, T&D Deferral, etc.

Fixed & Variable Costs:

• O&M costs
• Fuels
• Project costs
• Useful life of systems

Risks:
• Cost of fuels
• Environmental
• Siting (location and leases/easements)
• Integration with utility grid and protection systems

3
APS Microgrid Program
• Identify mission critical customers with need of high reliability and
resiliency power requirements
• Most already have dual power feeds but also have back up power
requirements
• APS and Customer share in cost of microgrid system
• Customer uses microgrid resources in an outage (Islanded)
• APS uses the microgrid resources when grid is operating (Parallel)
• APS value streams:
– Capacity Value
– Frequency Response
– High/low Voltage mitigation
– Self healing/Reconfiguration
• All operating modes can be performed autonomously via embedded
microgrid control platform
• APS gets rate recovery on its cost share portion of the microgrid
project
4
APS Microgrid Projects

• Military Base
– 22MW Tier 4 Final diesel generation
– In service December 2016
– 26 Autonomous Frequency Response events since February 2017
– 1 dispatch for capacity event
– Capable of adding energy storage and solar PV in future

• Data Center
– 11MW Tier 4 Final diesel generation; Integrated UPS (Phase 1)
– In service December 2016
– 38 Autonomous Frequency Response events since April 2017
– 1 dispatch for capacity event
– Capable of adding solar PV and additional energy storage capacity
– DC has requested to begin Phase 2 planning (Add 22MW)
– DC full build out will be ~60MW
5
Modular Microgrid Design

Note: This is an example of a 22MW Microgrid 6

Military Microgrid – 22MW