# Presentation: 793782

## Congressional Staff BriefingFebruary 22, 2001

- By
- RTO West Filing Utilities

## Background

**Drivers for Change 1992- Present**
- Energy Policy Act of 1992 set the stage for deregulation and open access transmission
- Snake River Salmon are listed as Endangered under the Endangered Species Act
- FERC issues Rules 888 & 889 to set guidelines for open access and industry restructuring
- 1996 Western system outages occur
- FERC issues Rule 2000 on RTO’s
- Some effects of deregulation on transmission reliability evident

**Previously...**
- Stable market
- Long term, firm contracts
- Few, large resources
- Bulk power transactions predictable
- Limited competition
- Stable operations
- System security assessment easier
- Significant margin
- Hydro system readily dispatched for transmission

- Transmission Adequacy and Reliability

**Now...**
- More volatile market
- Contracts shorter in duration and non-firm
- Smaller, more numerous resources
- Bulk power transactions less predictable
- Increasing competition
- More volatile operations
- System security assessment harder
- Hydro system more constrained
- Transmission system closer to limits

- Transmission Adequacy and Reliability

## Transmission Line Construction

## Reactive Support Additions

## Slide 7

## System Stress

- Transmission Dynamics Analogy

- x

- Transmission Dynamics Analogy

## Transmission Dynamics Analogy

## Which Generators Run??

**  ****P = V****S****V****R        **
**     ****__________________ ****SIN**
**X**** **
**Where:**
**P   ****	****=  ****	****Power Transferred Across Path**
**V****S **** =  ****	****Sending End Voltage**
**V****R****  =  ****	****Receiving End Voltage**
**X   ****	****=  ****	****Impedance of Transmission Path**
**      ****=  ****	****Difference in Power Angles Between ****	****	****	****Sending and Receiving Ends**

## Which Generators Run ??

- Which Generators Run ??

**Increase in Power Angle Allows Greater Power Transfer**
**But Reduces Security**

**P**

- Which Generators Run??

## August 4, 2000 Oscillation - Alberta Separation

**August 4, 2000 Oscillation - Alberta Separation**
**What Did Happen**

## This Is What We Thought Would Happen 

## Summary

- _Current Situation_
- The system is under stress.
- System Constraints are affecting our ability to utilize & care for the system.
- Approximately 15,000 MW of generation is potentially being sited in the Northwest.
- 	-The existing transmission system needs to be upgraded to integrate new generation to serve a fast growing load.

## The System is Under Stress

- The transmission system is stressed because it is operating at or new full capacity.
- System will become more stressed with the addition of generation if nothing else is done to reinforce the existing network.
- Likelihood of system failure is increasing.
- We must act now.

## How Did We get here?
Excess Capacity Has been used Up
We have built no major Transmission since 1987.
We have made incremental additions to reliably use the margin built into the system, but that margin is now gone.
Utilization of the system has increased by 1.3% per year since 1987.
California Market conditions are stressing the interties and existing congested paths.

- Excess Capacity Has been used Up
**We have built no** **major Transmission since 1987.**
**We have made incremental additions to reliably use the margin built into the system, but that margin is now gone.**
**Utilization of the system has increased by 1.3% per year since 1987.**
**California Market conditions are stressing the interties and existing congested paths.**

- The system is under stress(con’t)

## 	The Grid

- BPA has the majority of the transmission grid facilities which all other N.W. utilities depend upon for interconnection.

## Slide 21

**Notes:**
80 percent of PNW high-voltage transmission
Up to 350 customers, 2500 schedules/day 
Federal investment (1937-1998)	$5.1 billion
Unamortized federal investment:	$2.9 billion
Annual revenues (FY98 forecast)	$517 million
Treasury payment (FY98 forecast)	$301 million

## Slide 22

## System Stress (contd.)

- Transmission Is Not Keeping Up With Needs
-    (From NW Power Pool 10 - YR Forecast)
- 				  _1998__	__	__2008__	__	__% Increase_
- Winter Peak    59,972		66,952	 12%
- 	Load - MW
- Transmission   61,415		62,352	  2%
- 	Circuit Miles

## Additional Factors
Reliability criteria has been relaxed (by others) due to market pressure especially in California by generators and distributors.
Gaming may occur which could be detrimental to system.
Availability pressure to run the system harder.
Outages for Maintenance and Construction are more difficult to obtain and are compressed in time, due to high utilization by the markets
The system facilities are aging.
500kv Grid is over 35 years old.

- Reliability criteria has been relaxed (by others) due to market pressure especially in California by generators and distributors.
- Gaming may occur which could be detrimental to system.
- Availability pressure to run the system harder.
**Outages for Maintenance and Construction are more difficult to obtain and are compressed in time, due to high utilization by the markets**
- The system facilities are aging.
- 500kv Grid is over 35 years old.

- System Stress(con’t)

## Solutions

- Recognize that transmission investments are needed now.
- Encourage Generation be built near load or uncongested paths as possible.
- Seek all conservation & renewable resources available to reduce & manage loads

## Solutions (con’t)

- Understand the problem has been building over the last decade and there are no quick fixes.
- Under current state & federal regulations, it takes two to five years to plan, site & build a major transmission line.
- Seek cooperation and support of other transmission owners ( IOU’s & Publics)  in the Pacific Northwest to meet this challenge.

## Why can’t we wait for the markets to fix the problem?

- As we have seen in California (path 15), where there is transmission congestion, conflicting stakeholder interests stall congestion solutions
- The market place has been too slow to react.

## Why Can’t we wait for the RTO West?

## What does BPA need to fix the problem and how long will it take?

## Current FY2002 OMB Budget

**BPA’s Current Capital Budget requests total  $1,353 Billion.**

## Additional Capital Needs

**BPA will need an additional  $775 Million**

## Total Capital Needs

**Combined Capital Needs will be $2.2 Billion**

## Where will these infrastructure improvements occur?

## Challenges

- Resource Requirements will be large
- Capital
- Staff
- System & Processes
- Keeping the system going as we address these issues will be difficult.
- The system may fail before we can act.