Arizona Power AuthorityTransmission Workshop

August 7, 2015APA Offices/On-line Webinar

APA Transmission Workshop 7 Aug 2015.pptx 2

APA Transmission WorkshopAugust 7, 2015 Agenda

• Introductions• Review Existing Transmission Available to APA• Discuss Options for Transmission Post 2017

– Review Slideshow Coordinated by SRP• Review Process for Delivery of BCP Power to

Small Customers– Transmission Options– Net Metering/Billing

APA Transmission Workshop 7 Aug 2015.pptx 3

APA Transmission WorkshopAugust 7, 2015 Agenda

• Input from Balancing Authorities– AEPCO– APS– SRP– TEP– Western

• Summary and Recommendations• Next Steps/Adjourn

APA Transmission Workshop 7 Aug 2015.pptx 4

APA Transmission Workshop

• Introductions• Review Existing Transmission Available to APA• Discuss Options for Transmission Post 2017

– Review Slideshow Coordinated by SRP• Review Process for Delivery of BCP Power to

Small Customers– Transmission Options– Net Metering/Billing

APA Transmission Workshop 7 Aug 2015.pptx

5

Hoover GenFor APA

Parker

Mead 230kV

Liberty 230kV

Mead 345kV

Liberty 345kV

Parker-Davis 189 MW

Intertie 188 MW

377 MW (Post-2017 = 410MW + 13MW tribes)APA A = 190,869 kWAPA B = 189,860 kW

D1 = 30,823 kW D2 = 11,510 kW Tribes = 13,000 kW

APS = 94 MWSRP = 62 MW

WAPA = 24 MWTEPCO = 8 MW

AEPCO = 47 MWCAWCD = 163 MW

D2 = 12 MWTotal = 410 MW

APA Transmission Workshop 7 Aug 2015.pptx 6

APA Transmission Workshop

• Introductions• Review Existing Transmission Available to APA• Discuss Options for Transmission Post 2017

– Review Slideshow Coordinated by SRP• Review Process for Delivery of BCP Power to

Small Customers– Transmission Options– Net Metering/Billing

APA Transmission Policy Options

Perspectives Shared by AEPCO, CAWCD, IEDA and SRP

February 17, 2015

APA Transmission Workshop 7 Aug 2015.pptx 8

APA’s Mission

Acquire and market Arizona’s share of

HooverSource: www.powerauthority.org/about-us

APA Transmission Workshop 7 Aug 2015.pptx 9

Suggested APA Decision Sequence

Hoover Allocation Decisions

Dynamic Signal and Scheduling Entity

Decisions

APA Transmission Policy Decisions

Unnecessary to resolve transmission, dynamic signal or scheduling entity issues prior to making Hoover allocation decisions.

Unnecessary to resolve dynamic signal or scheduling entity issues prior to making APA transmission policy decisions.

Can be satisfactorily accomplished after the Hoover allocation and transmission policy decisions have been made.

1

2

3

APA Transmission Workshop 7 Aug 2015.pptx 10

The Framework for Transmission Decision Making Has

Changed1980s Today

1 Grid Access Law

• Transmission owners could deny service

• Non discriminatory access

• FERC 888 well established

2 Transmission Business Systems

• No transparency • OASIS• FERC 889 well

established

3 Transmission Capability

• Parker Davis System• Mead – Liberty 345

• Parker Davis System• Mead – Liberty 345• Mead – Westwing 500

APA Transmission Workshop 7 Aug 2015.pptx 11

APA Transmission Policy Options

Option APA’s Role

1 Maximum Involvement

APA plays a role in securing transmission services for all Hoover allocation recipients (Business As Usual)

2 Moderate Involvement

APA plays a role in securing transmission services for those Hoover allocation recipients that want APA to play such a role

3 Minimal Involvement

APA plays a minimal role, or no role, in securing transmission services for Hoover allocation recipients

APA Transmission Workshop 7 Aug 2015.pptx 12

Hoover Delivery in Arizona

• The fulfillment of APA’s mission can be accomplished without APA playing a role as an intermediary transmission service provider

Hoover Generation

Hoover Allocation Recipients

Transmission Service

Providers

APA Transmission Workshop 7 Aug 2015.pptx 13

Option 1: Maximum APA Involvement

Hoover Generation

Hoover Allocation Recipients

Transmission Service

Providers

APA

Advantage Disadvantages

• Business as usual is familiar.

• If, or to the extent that, transmission rights acquisitions are not customized to account for the specific circumstances of each Hoover allocation recipient:o Some Hoover allocation recipients will experience

unnecessary costs due to pancaked transmission tariff and transmission loss rates.

o Some Hoover allocation recipients will not be able to make full use of the transmission rights that they are paying for.

o Contract arrangements will be unnecessarily complicated.• Customizing transmission rights for Hoover allocation recipients

will result in cost redundancies and needless inefficiencies.

APA Transmission Workshop 7 Aug 2015.pptx 14

Option 2: Moderate APA Involvement

Hoover Generation

Hoover Allocation Recipients

Transmission Service

Providers

APA

Advantages Disadvantages

• Some Hoover allocation recipients will save money by avoiding pancaked transmission tariff and transmission loss rates.

• Some Hoover allocation recipients will be able to make better use of purchased transmission rights by dealing directly with the transmission service provider.

• Some Hoover allocation recipients will save money through less complicated contracting processes directly with transmission service providers.

• Same disadvantages as Option 1 for those Hoover allocation recipients who ask APA to act as a transmission service intermediary.

APA Transmission Workshop 7 Aug 2015.pptx 15

Option 3: Minimal APA Involvement All Hoover Allocations Are Delivered at Mead 230

Hoover Generation

Hoover Allocation Recipients

Transmission Service

Providers

Advantages Disadvantages

• Transmission delivery costs for Hoover allocation recipients are minimized. Hoover allocation recipients do not experience unnecessary costs due to the pancaked rates and inability to fully use transmission rights that would otherwise occur.

• Contract arrangements will be less complicated than today.

APA Transmission Workshop 7 Aug 2015.pptx 16

Alignment of Generation and Transmission

Today

Hoover Generation

377 MW

Reserved Transmission

434 MW

Alignment of reserved transmission rights with maximum available generation is a cost-effective, standard utility practice.

Post 2017

Hoover Generation

423 MW

Reserved Transmission

423 MW

APA Transmission Workshop 7 Aug 2015.pptx 17

Arizona’s Share of Hoover Generation Is Unlikely to Become Stranded

Hoover Generation 423 MW

Total Transmission Capability 2,207 MW

Available Transmission Capability 1,520 MW

Arizona has plenty of transmission to convey Hoover generation to Arizona’s Hoover allocation recipients.

APA Transmission Workshop 7 Aug 2015.pptx 18

Summary

• To ensure that all matters pertaining to Hoover are resolved by Oct 1, 2017, a sequential APA decision process is suggested.

• The framework for transmission business decision making has changed since the 1980s.

• The benefits of Hoover to Arizona may be increased by a shift from today’s APA transmission policy to a new approach.

• Arizona’s share of Hoover generation is unlikely to become stranded in the future.

APA Transmission Workshop 7 Aug 2015.pptx 19

APA Transmission Workshop

• Introductions• Review Existing Transmission Available to APA• Discuss Options for Transmission Post 2017

– Review Slideshow Coordinated by SRP• Review Process for Delivery of BCP Power to

Small Customers– Transmission Options– Net Metering/Billing

APA Transmission Workshop 7 Aug 2015.pptx

20

APS WAPAAEPCO TEP

SRP

Balancing AuthoritiesAPA Hoover Energy Delivery

Town of GilbertCAWCD

No WheelingBill Credit Program

Electrical DistrictTagged and Delivered

APA Transmission Workshop 7 Aug 2015.pptx 21

APA Transmission Workshop

• Input from Balancing Authorities– AEPCO– APS– SRP– TEP– Western

• Summary and Recommendations• Next Steps/Adjourn

APA Transmission Workshop 7 Aug 2015.pptx 22

APA Transmission Workshop

• Input from Balancing Authorities– AEPCO– APS– SRP– TEP– Western

• Summary and Recommendations• Next Steps/Adjourn