6.3. ERMUSR 06-14-2005 - Laserfiche WebLink

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Elk River Municipal 13069 Orono Parkway Elk River, MN 55330 June 8, 2005 To: Elk River Municipal Utilities Commission Jerry Takle John Dietz Jim Tralle From: Bryan Adams Subject: Electric Resource Planning phone: 763.441.2020 Fax: 763.441.8099 Your staff has had a number of discussions recently with Connexus and Great River Energy concerning electric generation resource planning. How Great River Energy as well as most of the electric industry plans for generation capacity is somewhat disturbing. In the organization I was previously associated with, we planned from a generation perspective for our peak day plus the 15% reserve per MAPP guidelines of which 5% of these reserves must be spinning or on line. For example, if your projected peak load is 2000 MW, you must control or have under contract and deliverable, 2300 MW of capacity. The 15% reserve is to ensure the utilities are doing their planning and can meet their projected loads without gaming the other utilities. If your current load is, for example 1000 MW, you must have 1050 MW on line and spinning. The extra 5% is to ensure if a power plant trips off line due to electrical or mechanical failure, there is enough spinning capacity on line to pick up the load thus preventing a major blackout. In today's environment as generations and transmission capacity becomes tight; many of the utilities have been hedging on the 15% reserves due to the cost and desire not to build more power plants. Utilities are also hedging on the peak load. Instead of planning for the peak load, Great River Energy plans for the 90% confidence level not 100% of the possible load. Statistically, they are saying they cannot satisfy the load one day in ten years and either the 15% reserves or market purchases will allow them to satisfy 100% of their load. Due to the way the industry does URGE tests, 15% reserve is more like 5%. 7'he purchased power marked has also tightened up because of shortage of excess generation with limited transmission capacity. In Great River Energy's case, 90% confidence level at time of peak (7:00 p.m. +) is 88°F and 65 MW per degree Fahrenheit. We have also had mild summers with no long sustained hot spells for a number of years. ities