# Presentation: 786034

## Infrastructure Research

***Snapshot of the Nation, Focus on the West***
*Presented by*
*Norma McOmber*

- October 24, 2001

- Federal Energy Regulatory Commission

**Notes:**

Hello.  My name is Norma McOmber.   I work in the Policy and Communication Division of Markets Tariffs and Rates

I acknowledge:

The more than 50 regulators, industry leaders and organizations who have put their most current thoughts on infrastructure to paper

Ed Murrell, Debora Schweikart for helping summarize some of the infrastructure reports in this document and Jim Campbell for helping find some of the materials.

Copies of the more than 50 reports, Websites and presentations in Snapshot are available to the Commission on request.  There is a table of contents showing the reports by titles at the beginning of this document and a list sorted by author at the end of the report starting on page 30.

## Reasons  for Research

- Preparation for Infrastructure Conferences
- Provide Excerpts and Sketches
- Tell the Western Infrastructure Story

**Notes:**
I undertook this research to identify what answers organizations and individuals have to the types of questions the FERC will be asking at its upcoming regional infrastructure conferences. I distilled this information into a snapshot of the Nation, with a focus on the West—a compilation of Greatest Hits, if you will,  on the topic--for your use in preparing for the upcoming conferences.  

There are some specific questions we are trying to get answers to with these conferences.  

What system improvements are needed to provide adequate fuel diversity, prevent the exercise of market power and ensure adequate reliability?

How will this be paid for?

And how can government help achieve what needs to be done?

The FERC Snapshot  report provides excerpts and sketches of how energy industry and other energy regulators would answer these questions from a North American perspective based on the thoughts they have put to paper over the last year.

Snapshot  also graphically tells the Western Infrastructure Story, with pictures from some in energy industry as well as regulation .

Snapshot  represent the thoughts, analyses and conclusions of people from the “outside”  as we say.

Shortly, a team from OMTR’s Market Development Division will be going into much more detail on each area of the Western Energy Infrastructure Story.

In using the next few slides I acknowledge the work of the Western Governors and James L. Sweeney.

## Source:  Western Governors’ Association, Conceptual Plans for Electricity Transmission 

**Source:  Western Governors’ Association, *****Conceptual Plans for Electricity Transmission***** **

**Notes:**
Before I tell you the findings of the research by fuel and topic area, I’m going to take a few minutes to share with you the 10 most graphic depictions of the Western Infrastructure Story in the Snapshot Report.

This slide shows the fuel mix in the Western region.  As you can see, most of the electric supply in the West has resulted from using primarily gas and hydro in generators, and the Snapshot shows the conclusions of the Western Governors that the region will likely be using more gas.

## Material on this page is consider Non-Internet Public (NIP)

- Material on this page is consider **Non-Internet Public (NIP)**
- You would like a copy of this slide, please contact:
- Public Reference RoomTelephone: 202-502-8371Toll-free 1-866-208-3676Email: _[public.referenceroom@ferc.gov](mailto:public.referenceroom@ferc.gov)_

**Notes:**

This slide shows on one map, albeit a crowded one, all of the famous constrained paths in the West.

## Source:  Western Governors’ Association, Conceptual Plans for Electricity Transmission 

**Source:  Western Governors’ Association, *****Conceptual Plans for Electricity Transmission***** **

**vi**

**Notes:**
The size of the generation circle in this figure represents summer-installed capacity by generation type within each transmission-constrained area in the Western grid.  The key on the left shows they type of fuel being used. The width of the blue line connecting the circles shows the relative transfer capacity between the transmission-constrained areas. 

This is capacity as of January 2000.

## Source:  Western Governors’ Association, Conceptual Plans for Electricity Transmission 

**Source:  Western Governors’ Association, *****Conceptual Plans for Electricity Transmission ***

**Notes:**
This shows the location of loads in 1999 (in blue) and forecasted for 2010 (in red).  For reference, the Western Governors found that existing loads in 1999 totaled about 130,000 MW of peak summer demand and 755,000 gigawatt hours of annual energy requirements.  Forecast for 2010, the peak summer demand is expected to be about 162,000 MW and 960,000 gigawatt hours of annual energy requirements.  

As you can see, the greatest current and forecasted peak loads are in 

Southern California
Northern California
Oregon
Washington
British Columbia
Arizona
And
Colorado

## Source:  Western Governors’ Association, Conceptual Plans for Electricity Transmission 

**Source:  Western Governors’ Association, *****Conceptual Plans for Electricity Transmission***** **

**Notes:**
By showing us the export and import dynamic of 1999 in the West with this graphic, the Western Governors show that the greatest importers—the states or areas with the largest red circle—were Southern California and Colorado.  The largest exporter for the region—where you see the largest green circle on the slide—were, by far the hydro facilities on the Columbia River.

## Electricity Imports into California 

**Electricity Imports into California **

**Source:  James L. Sweeney, *****California Electricity:  From Opportunity, through Risk, Challenge & Crisis, Towards Blight***

**Notes:**
So that  is how the Western Governors tell their region’s Infrastructure Structure Story, now let me turn to the California part of the Story. Numerous reports and presentations on electricity describe and glean lessons from the effect of the California restructuring experience on Western markets. I acknowledge the work of James Sweeney in now showing you what the electricity imports into California looked like between 1990 and 2000.  

Details if asked:
The graph shows that 5 of the years between 1990 and 2000, California imported most of its energy from the Northwest (1991, 1992, 1996, 1999 and 2000), 4 of those years California imported most of its energy from the Southwest (1993, 1994, 1995, and 1998).  For two of the years 1990 and 1997), the amounts the State imported from the two regions were about equal.

## Source:  James L. Sweeney, California Electricity:  From Opportunity, through Risk, Challeng & Crisis, Towards Blight

**Source:  James L. Sweeney, *****California Electricity:  From Opportunity, through Risk, Challeng & Crisis, Towards Blight***

**Notes:**
This slide tells listeners of the Infrastructure Story in the West that there were hardly any applications in California to site new generators between 1980 and 1998, as well as the status of the most recent applications and projects.

## http://www.energy.ca.gov/electricity/1999-2001_monthly_off_line.html, cited by James L. Sweeney, California Electricity:  From Opportunity, through Risk, Challeng & Crisis, Towards Blight

- _[http://www.energy.ca.gov/electricity/1999-2001_monthly_off_line.html](http://www.energy.ca.gov/electricity/1999-2001_monthly_off_line.html)__, cited by_** ****James L. Sweeney, *****California Electricity:  From Opportunity, through Risk, Challeng & Crisis, Towards Blight***

**Notes:**
This graph tells the chapter of the Western Infrastructure story where significant amounts of average daily capacity went offline in California, beginning at the end of last year. 

## Reductions In CA Electricity Use,2001 vs 2000

- Source:  California Energy Commission cited by **James L. Sweeney, *****California Electricity:  From Opportunity, through Risk, Challeng & Crisis, Towards Blight***

**Notes:**
This graph shows how Californians reacted to the supply shortages in the West and reduced their electricity use in 2001.

## New Electric Generating Plants Under Construction

**New Electric Generating Plants Under Construction**

**0**

**2,000**

**4,000**

**6,000**

**8,000**

**10,000**

**12,000**

**Jun-01**

**Aug-01**

**Oct-01**

**Dec-01**

**Feb-02**

**Apr-02**

**Jun-02**

**Aug-02**

**Oct-02**

**Dec-02**

**Feb-03**

**Apr-03**

**Jun-03**

**Aug-03**

**Oct-03**

**Dec-03**

**Feb-04**

**Apr-04**

**Jun-04**

**Aug-04**

**Oct-04**

**Dec-04**

**MW New Capacity**

**Peakers**

**Units Over 300 MW**

**Sunrise Power **

**Sutter Power **

**Los Medanos**

**Huntington Beach **

**Modernization**

**Delta **

**Energy **

**La Paloma**

**Moss **

**Landing**

**Elk Hills**

**Pastoria**

**High Desert **

**Otay Mesa**

**Contra Costa Repower **

**Mountainview**

**Three Mountain Power**

**Blythe Energy **

**Midway-Sunset**

**Source:  James L. Sweeney, *****California Electricity:  From Opportunity, through Risk, Challeng & Crisis, Towards Blight***

**Notes:**
This graphic shows the new generating plants that are under construction to help alleviate the supply problems. 

## Snapshot’s  National Findings

**Notes:**
	So that’s is the focus on the West from the Snapshot report.  Now for the national infrastructure Snapshot, please keep in mind that I reviewed over 50 documents and Web sites related to energy infrastructure in North America in taking a North American snapshot of energy infrastructure.  It is organized into the following nine categories:

Electric
Price-responsive demand
Gas
Gas and electric
Hydro
Oil
Oil and gas
Coal/rail
Energy

According to the research—and remember this is mostly other people’s findings and analysis---you’ll be hearing the FERC Market Development’s assessment shortly:

There is the greatest amount of current information on electricity infrastructure.  So let’s begin with that topic

## Research Findings:  Electricity

- FTC:  Additional Benefits
- Regional Approaches
- Price Responsive Demand

**Notes:**
The most important findings in electricity resulting from this research are:

The Federal Trade Commission has found competition, once the transition is complete, will provide wholesale and retail electricity customers with additional benefits

Regional approaches are critical for an effective transition and subsequent operations

Price-Responsive demand is important and needs to be more widespread

## Research Findings:  Price-Responsive Demand

- Utility offerings
- Award
- Potential Benefits

**Notes:**
	With regard to price-responsive demand, the most significant finding is that more than a dozen utility companies in 17 states offer pilot programs with time-of-day pricing for electricity.  In the West, Puget Sound Energy has gotten an industry award for its innovative services for helping customers manage their electric use.  

This Snapshot report includes information on the price-responsive demand  program of some of the other utilities in the Midwest, the Northeast, and the South.  

According to one report found, if instituted nationally, time-of-day programs could save $10 billion to $15 billion annually while eliminating the need for 200 additional power plants over the next decade. 

Two side notes. Among other things we will be hearing about the Puget program next week in Western Infrastructure conference.  Second, the FERC is planning a conference focusing exclusively on the topic of price-responsive demand early next year.

## Research Findings:  Gas

- More Cooperation in Reviews
- Supply in Washington State

**Notes:**
	Snapshot found cooperation in  reviews of proposals to probably be the most effective way for facilitating the timely and efficient permitting of pipelines. As you know, FERC has a long-standing commitment to greater cooperation and coordination of reviews for projects. 

	Another important gas finding is that in Convergence: Natural Gas and Electricty in Washington,  the Washington State Office of Trade and Economic Development expresses concern about whether there will be enough gas for the facilities being planned to generate the electricity needed in the state and the region.

## Research Findings:  Hydro

- Centralized decision making could help

**Notes:**
	With regard to hydropower infrastructure, centralizing decision making could help streamline the process

## Research Findings: Oil Pipelines

**Coordinate Reviews**
**Land-Use Practices**

**Notes:**
	Similarly with oil, the Association of Oil Pipelines notes expansion of oil pipeline infrastructure would occur more quickly with coordinated reviews, as well as government provided guidance and leadership in land use practices to reduce encroachments on pipeline rights of way. 

## Research Findings:  Oil/Gas, Coal/Rail

- Oil and Gas Recovery
- Coal/Rail Relationship

**Notes:**
	And finally, the research found that there are various state and federal incentives to maximize oil and gas recovery and that the economics of the coal and rail relationship seem to be fine.

That concludes my presentation.  Are there any questions?