RESOLUTION NO. 6330 WHEREAS, - OPPDJul 07, 2019 · RESOLUTION NO. 6330 WHEREAS, the Board of...

Yoder/Fernandez

RESOLUTION NO. 6330

WHEREAS, the Board of Directors has determined it is in the best interest of the

District, its employees, and its customer-owners to establish written policies that describe and

document OPPD’s corporate governance principles and procedures; and

WHEREAS, each policy was evaluated and assigned to the appropriate Board

Committee for oversight of the monitoring process; and

WHEREAS, the Board’s System Management and Nuclear Oversight Committee

(the “Committee”) is responsible for evaluating Board Policy SD-9: Resource Planning on an annual

basis. The Committee has reviewed the 2019 SD-9: Resource Planning Monitoring Report and finds

OPPD to be sufficiently in compliance with the policy as stated.

NOW, THEREFORE, BE IT RESOLVED that the Board of Directors accepts the

2019 SD-9: Resource Planning Monitoring Report, in the form as set forth on Exhibit A attached

hereto and made a part hereof, and finds OPPD to be sufficiently in compliance with the policy as

stated.

Monitoring ReportSD-9: Resource Planning

System Management Committee Report

July 9, 2019

12019 SD-9 Monitoring Report

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Exhibit A

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SD-9 Resource PlanningThe Board of Directors recognizes that the District will have to adapt to the rapidly

changing electric utility business environment. The OPPD resource planning

process will provide the resources and analytical capability to adequately assess

OPPD’s Integrated Resource Portfolio (or Supply and Demand Portfolio) to ensure

reliable, competitive, cost-effective and environmentally sensitive service for our

customers.

To attain this goal, OPPD shall:

• Periodically assess, for strategic and integrated resource plans, OPPD’s mix of

generation assets, demand-side management programs, purchased power

agreements and renewable energy resources.

• Utilize multiple scenarios to properly evaluate the range of risks posed by

varying future assumptions such as, but not limited to fuel costs, economic

growth, regulations and emerging technologies.

• Ensure all integrated resource strategic plans support and align with OPPD’s

Strategic Directives.







customers.


• Periodically assess, for strategic and integrated resource plans, OPPD’s

mix of generation assets, demand-side management programs,

purchased power agreements and renewable energy resources.








Fundamentals – Load ForecastingProcess Workflow

4

Load Loss

Study

Load Research

Forecast Manager

Energy, Demandand Customer Count Model

System Peak

Models

Marketing/Energy

Marketing &

Trading/T&D/

Hyperion for DSM,Customer/COP

SPP, and EM&T

activities

MV90

Recorder Data

Generation

Production

,

Customer Data

Economic

Weather

EquipmentData

Accrued

Unbilled Price

Forecast/ Other

Models

Process Inputs Output Files

Modeling Tools Outcome Database Systems

Load Loss

Data

Load Research

Data

F&O

Energy &

Peak

Demand

Forecast

MV90

Forecast

Manager

2019 SD-9 Monitoring Report 5

Integrated Resource

Plan

• Legacy Platform (Pre 2018)– A fundamental electric market simulation solution that

incorporates:• Extensive details in generating unit operating characteristics

• Transmission grid topology and constraints

• Market system operations to support economic transmission planning.

• New Platform (2018)– A modern electric modeling forecasting and analysis

software that improves upon the features of the legacy platform.

• Developed to model a dynamic and volatile marketplace (wind and solar modeling, storage integration and long-term expansion)

• Capable of sub-hourly modeling and offers a suite of portfolio optimization capabilities

• Designed to be customizable and reduce time to deliver results

Fundamentals – Dispatch ModelingDispatch Models Continue to evolve


Risk Analysis

OPPD System Load

Forecast

Fuel & Power Price Forecasts

Generation Unit

Parameters

Environmental Regulation

Supply Side Resource Options

Demand Side

Resource Options

Dispatch Modeling

Financial Modeling

Budgeting Software

Organizational Inputs

Budget Targets

Financial Model Output

Gather Inputs

Dispatch Outputs

Stakeholder Outreach

Resource Planning OverviewShort-Term Outlook (0-5 Years)

COP

Process Inputs Output Files

Modeling Tools Outcome


Risk Analysis

OPPD System Load

Forecast

Fuel & Power Price Forecasts

Generation Unit

Parameters

Environmental Regulation

Supply Side Resource Options

Demand Side

Resource Options

Portfolio Optimization

Dispatch Modeling

Financial Modeling

Budgeting Software

Organizational Inputs

Budget Targets

Financial Model Output

Gather Inputs

Dispatch Outputs


Long-TermResource


Resource Planning OverviewLong-Term Outlook (20 Years)

TransmissionSystem

Planning

Long-Term

Long-Term

Resource

Decision

Process Inputs Additional Analysis Output Files

Modeling Tools Public Outreach Outcome

MTP - 345kV

FCS (502MW)

Grande Prairie

400MWSholes

160MW

North Omaha 1,2&3(291MW)

Walter Scott 1&2 (131MW)

George Neal 1&2(418MW)

Added Gen

Retired/Converted Gen

‘r’ plan - 345kV

New Load

f

NC2664MW

Prairie Breeze

200MW

Missouri River Flood (2011)

• OPPD Joins SPP (2009)

• Prairie Breeze 200MW wind PPA executed (2012)

• Grande Prairie 400MW wind PPA executed (2014)

• North Omaha Station / 300 MW DSM plans publicized (2014)

Rattlesnake300MW

8

• Sholes Energy Center Agreement is Executed (2017)

• Facebook’s Papillion Data Center is Announced (2018)

• Fort Calhoun Ceases Operations (2016)

• NC2 Achieves Commercial Operations (2009)


• Rattlesnake Wind Facility is Announced (2018)

• Extensive economic development scenario modeling

– Extensive economic modeling to understand potential capacity costs to serve new customers and their potential impact on local power prices, including batteries

– Extensive transmission modeling to understand the impact planned resource decisions and growing load on system resiliency margins

• Review of market trends impacting Variable Energy Resources (VERs)

– A detailed analysis of the changing monetary value of VERs

• Support of AEG Demand Side Management Potentiality Study

– Refreshing assumptions on DSM potential, technologies, and costs for 2019 program review

• Integration with OPPD’s new Alternative Energy Program

– Bringing subject matter expertise on the emerging capabilities of VERs and detailed simulation inputs and costs to improve modeling accuracy

• Ongoing study of growing reliability capabilities of VERs

– Conducting significant investigation into essential reliability services that may be provided by VERs


Periodically assess, for strategic and integrated resource plans, OPPD’s mix of generation assets, demand-side management programs, purchased power agreements and renewable energy resources.






customers.






varying future assumptions such as, but not limited to fuel costs,

economic growth, regulations and emerging technologies.





Optimization and Risk AnalysisLong-Term Planning Trends

• The electric industry is evolving at a rapid and

accelerating pace:

– Natural gas fracking

– Decreasing costs of renewables

– Emerging technologies

– Evolving perspective on environmental impacts

• Due to uncertain future environments and outcomes,

flexibility and optionality are highly valuable as the

industry changes.

• Opportunities for tremendous advancement but also

inherent financial and operational risks.

11


Optimization and Risk AnalysisRisk Accompanying Various Portfolio

• All portfolios have financial and operational risk.

• Operational risk can be mitigated by standards

promulgated by various regulatory bodies as well as

collaboration with transmission and production

operations staff.

• Financial risk can be mitigated by estimating and

avoiding the potential extreme financial outcomes from

some future portfolios using stochastic modeling.

• Reduced financial risk directly contributes to rate stability

and overall OPPD financial health.

12


Optimization and Risk AnalysisFinancial Risk Accompanying Various Portfolios

13

Fuel Assumptions: Resultant Power Prices:


Optimization and Risk AnalysisFinancial Risk Accompanying Various Portfolios

14

System Load:

SPP North Wind Penetration:

15

Utilize multiple scenarios to properly evaluate the range of risks posed by varying future assumptions such as, but not limited to fuel costs, economic growth, regulations and emerging technologies.

1. Market Assumptions 2. Portfolio Results 3. Efficient Frontier

• OPPD’s process of risk analysis incorporates extensive use of

stochastic simulation, varying inputs across ranges of potential

outcomes.







customers.








• Ensure all integrated resource strategic plans support and align with

OPPD’s Strategic Directives.


Ensure all integrated resource strategic plans support and align with OPPD’s Strategic Directives.

17

• The planning process intentionally captures the competing interests of many strategic directives:

- SD-2: Rates

- SD-4: Reliability

- SD-5: Customer Satisfaction

- SD-7: Environmental Stewardship

- SD-9: Resource Planning

- SD-11: Economic Development

- SD-13: Stakeholder Outreach and Engagement

- SD-15: Enterprise Risk Management



• Resource planning is the function to satisfy the competing interests for many strategic directives.

• Whether for short-term or long-term planning, OPPD uses best available data sources from dozens of data sources to derive the primary inputs for modeling.

• A comprehensive team of professionals participate in the review of the inputs each time the process is executed.

• When software and tool upgrades are warranted, OPPD pursues best in class platforms or services.

• Results are thoroughly reviewed using quantitative and visual methods and results are ‘stressed’ via stochastic analysis to estimate the potential financial exposure of various portfolios to reduce the overall financial risk borne by customer-owners.

18

Ensure all integrated resource strategic plans support and align with OPPD’s Strategic Directives.

Recommendation

• The System Management Committee has reviewed

and accepted this Monitoring Report for SD-9 and

recommends that the Board find OPPD to be

sufficiently in compliance with Board Policy SD-9.


RESOLUTION NO. 6330 WHEREAS, - OPPDJul 07, 2019 · RESOLUTION NO. 6330 WHEREAS, the Board of...

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