SUMMER OPERATIONS RECAP
INTRODUCTION BY:
Cris Eugster
Chief Operating Officer (COO)
PRESENTED BY:
Operations Executives
October 29, 2018
Informat ional Update
2
AGENDA
• RECORD SUMMER TEMPERATURES
• GREAT PLANT PERFORMANCE
• MARKET & FINANCIAL PERFORMANCE
• DELIVERY & RELIABILITY PERFORMANCE
• GAS SYSTEM
OPERATIONS TEAM
3
Cris EugsterChief Operating Officer (COO)
Kim StokerSr. Director
Benny EthridgeSr. Vice Pres
John BonninVice Pres
ESMO
Don StantonSr. DirectorGas Delivery
Paul BarhamSr. Vice Pres
DEIPST
Larry BlaylockSr. Director
Frank AlmarazSr. Vice Pres
Rudy GarzaSr. Vice Pres
Distrib Svs & Ops
Energy Delivery ServicesCommercial OperationsPower Generation
Environmental Planning & Compliance
Angela RodriguezDirector
Climate & Sustainability
Speaking Today
Nuclear Oversight
Krista DavisDirector
CSI Program
4
STARS ALIGNEDSTRONG OPERATIONAL & FINANCIAL PERFORMANCE
The Market
Plants & Resources
Our People
95
5
RECORD SUMMER TEMPERATURES
1 2 3 4
5 6 7 8 9 10 11
12 13 14 15 16 17 18
19 20 21 22 23 24 25
26 27 28 29 30 31
August 2018
S
93° 97° 96° 98° 99° 95° 88°
M T W T F S
99° 96° 97° 97°
99°
100° 97° 100° 101° 100° 100° 100°
83° 96° 97° 98° 100° 100°
99° 100° 100° 100° 98° 96°
Indicates record for that day
1 2
3 4 5 6 7 8 9
10 11 12 13 14 15 16
17 18 19 20 21 22 23
24 25 26 27 28 29 30
June 2018
S M T W T F S
95° 100° 101° 99° 98°
96° 92° 80° 86° 93° 98°
101°
99° 94° 98° 100° 98° 99° 100
100°
99°
97°
99° 98° 98° 96° 97° 96° 95°
99° • 27 days above 100°
• 85 days above 95°
• July was 3.8° hotter than average
1 2 3 4 5
6 7 8 9 10 11 12
13 14 15 16 17 18 19
20 21 22 23 24 25 26
27 28 29 30 31
S
May 2018
S M T W T F
85°
90° 90° 89° 88° 89° 90° 93°
84° 87° 90° 75°
99°
95°
87° 89° 92° 91° 93° 94° 98°
91° 90° 91° 94° 96° 97°
97° 97° 97° 98°
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 19 20 21
22 23 24 25 26 27 28
29 30 31
July 2018
S M T W T F S
98°
95° 97° 97° 99° 99° 100° 99°
103° 105° 102° 98° 97° 98°
95°
102° 100° 100° 100° 92° 96° 93°
93° 80° 93° 93° 95° 94°
100° 100° 93°
95° to <100°100° or above
6
CPS ENERGY & ERCOT HIT RECORD USAGE
Both ERCOT and CPS Energy broke all-time peak demand records in July 2018
Previous demand records broken
44,000
49,000
54,000
59,000
64,000
69,000
74,000
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
4,400
4,500
4,600
4,700
4,800
4,900
5,000
5,100
5,200
ERC
OT
Pe
ak D
em
and
-M
W
CP
S En
erg
y P
eak
De
man
d -
MW
CPSE Peak Demand MW ERCOT Peak Demand MW
7
REDUCING THE PEAKTHROUGH DEMAND RESPONSE
4,200
4,400
4,600
4,800
5,000
5,200
5,400
7/3 7/19 7/23 8/16 8/17 8/23
MW
CPS Energy Peak Load Demand Response
CPS Energy successfully partnered with 140,000 residential & 560 Commercial & Industrial customers across our community
to manage demand during the hottest days
8
GENERATION PERSPECTIVE
PRESENTED BY:
Benny Ethridge
Senior Vice President, Power Generation
9
STRONG DIVERSITY DELIVERING OPERATIONS EXCELLENCE
AVR Plant492 MW
Gas
Spruce Plants1,345 MW
Coal
Sommers Plants830 MW
Gas
Deely Plants840 MW
Coal
Braunig Plants859 MW
Gas
Milton B Lee Plants373 MW
Gas
Rio Nogales Plant785 MW
Gas
CPS Solar Plants (PPAs)
550 MWSolar
CPS Wind Plants (PPA)
1,059 MWWind
Plants delivered during the Summer
run
GENERATION AVAILABILITY
• Reliability-Centered Maintenance• Budget management & controls • Asset 360 monitoring program – JKS
• O&M Procedures & Checklists
• Behavioral Based Safety
• Near-miss Reporting & Review
10
MAY THRU SEPTEMBER PERFORMANCE
Plant Benchmarks:• Top Decile: 96.7%• Top Quartile: 92.5%• Median: 85.5%
92.7%99.0%
86.9%97.6%
92.9%
28.2% 30.6%
92.5%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Solar Wind Coal CombinedCycle
Gas Steam
GT Peakers
TraditionalFleet
Traditional Fleet Renewables Top Quartile
We also delivered when market prices were high with Summer
Portfolio Commercial Availability at 94.5%
976
1,459
1,093
531
2,082447 6,579
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
MW
s
0 - 9 10 - 19 20 - 29 30 - 39 40 - 49 50 + All Years (Total Capacity)
MLB 5-8Spruce 2
MLB 1-4RioAVR
Spruce 1STP 2
STP 1 Deely 1 & 2Sommers 1 & 2Braunig 3
Braunig 1 & 2
Years in Service
11
OUR PLANTS ARE AGING
Almost 40% of our capacity comes from plants that are
40+ years old
Proactive maintenance and solid budget controls are required to effectively manage investments in aging units
Safe &
consistent work
practices
• On-line monitoring
• Condition-based
maintenance
• Strategic outages
• Plant-centric structure
• Subject matter experts
• Enhanced training
• Procedures & checklists
• Work management system
• Behavioral-based safety
• Peer-to-peer checks
Accountability
& execution
Reliability
PEOPLE
PROCESS
PLANT
12
Reliable, competitively priced power to meet the needs of our Customers
2018 SUMMER DRIVING OPERATIONS EXCELLENCE
13
MARKET PERSPECTIVE
PRESENTED BY:
John Bonnin
Vice President, Energy Supply & Market Operations (ESMO)
14
POWER GENERATION AND ESMO PARTNERSHIP
ENERGY SUPPLY & MARKET OPERATIONS (ESMO)
POWER GENERATION
15
2018 SUMMER AVAILABILITY WHEN PRICES RISING
91%
100%96%
88%
72%
25%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
COAL GAS CC GAS PEAKERS GAS STEAM SOLAR WIND
Plant Availability When Prices Exceed $75 per MWh
16
FINANCIAL RESULTS
$42.8$52.3
$123.6
0
20
40
60
80
100
120
140
FY2017 FY2018 FY2019 Forecast
$ (
Mill
ion
s)
Wholesale Revenue net Fuel ($M)
0
50
100
150
200
250
300
350
400
1-J
un
8-J
un
15
-Ju
n
22
-Ju
n
29
-Ju
n
6-J
ul
13
-Ju
l
20
-Ju
l
27
-Ju
l
3-A
ug
10
-Au
g
17
-Au
g
24
-Au
g
31
-Au
g
7-S
ep
14
-Se
p
21
-Se
p
28
-Se
p
$/M
WH
ERCOT Daily Average Prices
High prices in the ERCOT market provided opportunity to earn revenue from off system sales
FY2019 LE
17
DIVERSITY = RESILIENCE
Our diverse generation portfolio protects customers from high prices caused by the tight reserves position.
Peak load is reduced by demand response programs.
*Demand Response programs: 197 MW; without it peak would have been 5,134 MW in hour 4-5 PM
We work to ensure our
transmission lines and
power plants are online &
available when usage is
highest22% 21% 20% 21%
16% 14% 12% 13%
39% 41%33%
42%
23% 24% 35%24%
0
1,000
2,000
3,000
4,000
5,000
6,000
May 31st 5-6 PM June 5th 5-6 PM July 23rd 6-7 PM August 22nd 5-6 PM
MW
Highest Usage Hour
Nuclear Renewables Coal Gas
4,744 4,9005,080*
4,968
18
ELECTRIC DELIVERY PERSPECTIVE
PRESENTED BY:
Paul Barham
Senior Vice President, Delivery Engineering, Integrated Planning, Substation & Transmission
&
Rudy Garza
Senior Vice President, Distribution Services & Operations
19
Safety Training Operational Equipment/Vehicle
SUMMER PREPAREDNESS ACTIVITIES
SUMMER READINESS
Preparation for high heat levels reinforced system performance in the Summer months.
• Snake bite awareness• Heat Stress• Hydration
• Inventory checks• Personal voltage detector checks• Vehicle checks
• Inspections & testing• Load shed plan updates• Load flow analysis
TRANSMISSION PERFORMANCE
• Close coordination with ERCOT during Summer months
• No events impacted customer load
• Good performance through Summer storms
20
Transmission crewre-insulating a tower
Cagnon-Kendall Transmission Line
DISTRIBUTION 24/7/365
• Summer heat stressed the system
• Hot summer transitioned into September storms
• System reliability was challenged
21
Service Restoration repairing damaged pole top equipment
Service Restoration climbing poles to restore power
Overall system performance is favorable.
RELIABILITY METRICS SEPTEMBER LIGHTNING & RAIN IMPACT
22
Month Rainfall SAIDI SAIFI
Sep. FY18 2.8 in 4.67 0.07
Sep. FY19 16.82 in 8.41 0.12
Metric % Increase 80% 71%
Sept. Lightning Strikes FY18 127FY19 10,000
Weather headlines retrieved from http://www.ksat.com
Combined Benchmarking First Quartile & Southern Company 2016 Data
53.97 54.75
5.00
15.00
25.00
35.00
45.00
55.00
65.00
75.00
FY18 FY19 Projection
SAIDI# of minutes
Top Decile
0.83
0.87
0.81
0.82
0.83
0.84
0.85
0.86
0.87
0.88
FY18 FY19 Projection
SAIFI
SAIFI reliability metric is at risk due to weather impacts
Top Quartile
Metric Target = .86
Metric Target = 61.00
23
USING TECHNOLOGY TO IMPROVE RESTORATION
VIDEO
24
GAS PERSPECTIVE
PRESENTED BY:
Frank Almaraz
Senior Vice President, Commercial Operations
25
2018 SUMMERCOMMUNITY SAFETY & PREVENTATIVE MAINTENANCE
As construction activity increases in the summer, Gas Delivery focuses on Public & Employee Safety Awareness & preventative maintenance activities
Trench safety for contractors
Lunch truck “Loncheras”Safety meetings
26
GAS DELIVERYCONTINUOUSLY IMPROVING COMMUNITY SAFETY
87.3% 87.8%89.44%
70.0%
75.0%
80.0%
85.0%
90.0%
95.0%
CY16 CY17 YTD CY18
Response Time to Odor Complaints (% < 30 Mins)
Top Decile
Source: 2017 American Gas Association Annual Benchmark Study
CPS Energy ranks #1 among our Big 4 peers in Texasin Response Time metric performance
System
27
People Operations Equipment
WINTER PREPAREDNESS ACTIVITIES
WINTER IS GAS PEAK SEASON
Gas Delivery is currently underway with seasonal preparedness activities for their winter peak season
28
GREAT EXECUTION = SUCCESSFUL PERFORMANCE
The Market
Plants & Resources
Our People
Thank You