## Resource Adequacy and Reliability in the IPM Projections for the Toxics Rule

This document describes resource adequacy and reliability results in the IPM 2015 projections

for the base case and Toxics rule policy cases. As used here, the term Resource Adequacy

means the provision of adequate generating resources to meet projected load and generating

reserve requirements in each region, while Reliability includes the ability to deliver the

resources to the loads so the overall power grid remains stable . IPM is specifically designed to

ensure generation resource adequacy, either by using existing resources or through the

construction of new resources. IPM address es reliable delivery of generation resources only for

the delivery of electricity between regions, by setting limits to the ability to transfer power

between regions using the bulk power transmission system. Within each model region, IPM

assumes that adeq uate transmission capacity exists to deliver any resources located in, or

transferred to

, the region.

Summary of Changes in Operational Capacity

Total operational capacity is lower in the policy scenario, primarily as a result of increases in

coal retireme nt. Since most regions are projected to have excess capacity above their target

reserve margins, most of these retirements are absorbed by a reduction in excess reserves.

Operational capacity 1



### Table 1. Operational Capacity Summary in 2015

changes from the base case in 2015 are summarized below:

Base case operational capacity (MW) 1,028,242

Minus Changes in Policy Case:

(

- ) Coal retirements

- 9,871

(

- ) Coal capacity derated

- 9 23

(+) New Capacity Additions + 86

(+) Lower non

- coal retirements + 1, 410

Net Change in Policy Case

- 9, 29 8

Equals Policy Case Operational Capacity 1,018, 943 2



### Since the model must maintain adequate reserves in each region, the reduc ed operational

capacity of 9,298 MW in the policy case is taken from excess reserves that are not needed. In

order to maintain resource adequacy in each region where coal resources retire, the model

relies on this excess reserve reduction, on lower retirements of non

- coal capacity and o n

greater new capacity additions. As the table shows, the reduction in capacity (excess reserves)

1 Operational capacity is any existing, new or retrofitted capacity that is not retired.

2 Numbers in this table may not sum due to independent rounding.

### is the largest source of change , followed by lower non

- coal retirements and new capacity

additions. Each of these policy case changes is discussed further b elow.

Reduction in Excess Reserves

IPM uses a target reserve margin in each region 3



### Table 1 above shows that operational capacity is reduced by less than one percent nationwide

in 2015 under the policy. This reduction will have little overall impact, sin ce the weighted

average reserve margin at the national level are projected to be approximately 25% in the base

case, compared to a default NERC level of 15%. Moreover, coal retirements are distributed

throughout the power grid, so there will be only small impacts at the regional level. For

example, the coal generating areas in western Pennsylvania, West Virginia, Ohio and Indiana all

have significant excess generation resources: these areas combined see a decreas e less than 2%

in their reserve margins and the reserve margin for the combined area remains over 20%. as the basis for determining how much

capacity to keep operational in order to preserve resource adequacy. IPM retires capacity if it is

no longer needed to provide energy for load or to provide capacity to meet reserve margin

during the planning horizon of the projections. Since current regional reserves are generally

higher than the target reserve margin for the region, IPM may retire reserve capacity in 2015 if

it is no t economic to maintain relative to alternatives such as building new capacity or

transferring capacity from another region. As a result, many of the coal plants that are

projected to retire in 2015 will not need to be replaced for resource adequacy until later years

when demand increases and reserves approach the target reserve margin.

4



### Although there are substantial existing regional variations in reserve margin

, IPM adjusts

regional capacities in 2015 to meet the specif ic target reserve margin in each region, through

reduction in non

- coal retirements, construction of new generating capacity and transfers of

capacity among regions to meet the specific reserve margin in each region . Each of these

adjustments in the 2015 p rojections is described below. These excess regional reserves above the target margin can be shared among subregion to

ensure adequate reserve margins within a larger reliability region. IPM permits these transfe rs

of reserves, but limits their level to ensure the reliability of the bulk power system (see

discussion below.)

3 Reserve margin targets are generally based on the NERC 2010 10 Year Assessments for the region, except in cases

where there are more stringent state requirements or other exceptions.

4 See map of IPM regions and Table of target and projected reserve margi ns in the Appendix. The three regions

referenced in the text are MACW, RFCO and RFCP.

### Reduction in Non

- coal Retirements

Reducing non

- coal retirements relative to these retirements in the base case is the second

largest adjustment needed to balance the loss of coal capacity. Overall combined cycle,

combusti on turbine a nd nuclear retirements are 1,410 MW lower in the policy case compared

to the base case. Lower combined cycle retirements contribute 183 MW, lower combustion

turbine 455 MW, and lower nuclear 772 MW to the total capacity made available through

reduced retirements of non

- coal capacity. The distribution of these retirements across IPM

regions is shown in the Appendix.

New Capacity Additions

Very few new capacity additions are needed to accommodate coal retirements, once excess

reserves and non

- coal retirements relative to the bas e case are considered. Only 86 MW of

new capacity are added compared to the base case, consisting of 24 MW of wind and 62MW of

landfill capacity

.

Reserve Transfers

In cases where it is economic to transfer reserv es from a neighboring region rather that supply

reserves from within a region, IPM will transfer reserves, subject to summer and winter limits

that are designed to ensure that these reserves can be transferred reliably. The transfer of

reserves can occur, for example, if a region must retire a large amount of coal capacity that was

used in the base case to meet reserve requirements. Although there are only a few significant

differences between the base and policy cases in reserve transfers, some are impor tant. For

example, the retired coal capacity in TVA (1134 MW) is replaced by a net increase in transfer of

reserves to TVA ( 1145 MW). Reserve transfers by region are provided in the appendix.

# Appendix : Tables by IPM Region

A1. Projected Operational Capacity in 2015

A2. Summary of Target and Projected Reserve Margins in 2015

A3. Policy Case Retired Capacity Incremental to Base Case in 2015

A4. New Capacity in Policy Case Incremental to Base Case in 2015

A5. Capacity Transfers Region in Bas e and Policy Scenarios in 2015

Map of IPM Regions

## A1. Projected Operational Capacity in 2015 (MW)

Non

- Coal

All Generation Sources Coal Only Additional

Region Base Policy Change Base Policy Change in Policy

AZNM 35,577 34,146

- 1,431 9,878 8,447

- 1,431 0

CA

- N 40,930 40,930 0 217 184

- 33 33

CA

- S 32,676 32,647

- 29 213 184

- 29 0

COMD 24,963 25,141 178 4,233 4,215

- 18 196

DSNY 9,717 9,712

- 5 369 364

- 5 0

ENTG 40,109 40,128 19 8,397 8,147

- 250 269

ERCT 90,402 89,077

- 1,325 18,456 17,814

- 642

- 683

FRCC 55,650 55,093

- 557 9,191 8,608

- 583 26

GWAY 31,953 31,341

- 612 19,630 19,018

- 612 0

LILC 5,494 5,219

- 275

- 275

MACE 30,861 31,186 325 2,434 2,759 325 0

MACS 12,095 12,000

- 95 5,107 5,012

- 95 0

MACW 31,256 30,896

- 360 11,286 10,915

- 371 11

MECS 27,692 27,230

- 462 10,905 10,443

- 462 0

MRO 50,236 50,110

- 126 20,796 20,670

- 126 0

NENG 33,138 33,140 2 2,695 1,706

- 989 991

NWPE 19,667 19,342

- 325 12,263 11,938

- 325 0

NYC 9,333 9,333 0 0

PNW 48,671 48,638

- 33 1,989 1,978

- 11

- 22

RFCO 48,964 48,640

- 324 30,756 30,432

- 324 0

RFCP 44,710 44,133

- 577 32,632 32,025

- 607 30

RMPA 18,464 18,443

- 21 7,960 7,939

- 21 0

SNV 9,196 9,196 0 2,555 2,555 0 0

SOU 62,857 62,682

- 175 24,595 24,420

- 175 0

SPPN 17,046 17,032

- 14 8,404 7,779

- 625 611

SPPS 40,738 40,398

- 340 12,023 11,951

- 72

- 268

TVA 37,713 36,533

- 1,180 12,876 11,696

- 1,180 0

TVAK 13,109 12,572

- 537 9,557 9,020

- 537 0

UPNY 15,741 15,719

- 22 2,293 2,271

- 22 0

VACA 48,942 48,497

- 445 18,690 18,245

- 445 0

VAPW 22,255 22,110

- 145 4,329 4,184

- 145 0

WUMS 18,087 17,679

- 408 8,470 7,486

- 984 576

Total 1,028,242 1,018,943

- 9,299 313,199 302,405

- 10,794 1,495

### A2. Summary of Target and Projected Reserve Margins in 2015 (MW)

Projected Reserve Margins

IPM Region Target Reserve

Margin Base Case Policy Case

AZNM 13.6% 28.8% 23.1%

CA

- N 14.6% 17.2% 17.2%

CA

- S 14.8% 14.8% 14.8%

COMD 15.3% 19.9% 20.8%

DSNY 18.0% 18.0% 18.0%

ENTG 15.0% 38.8% 34.7%

ERCT 12.5% 25.6% 23.6%

FRCC 19.3% 22.2% 21.0%

GWAY 11.9% 61.7% 58.4%

LILC 18.0% 24.6% 18.0%

MACE 15.3% 15.3% 15.3%

MACS 15.3% 15.3% 15.3%

MACW 15.3% 54.8% 54.6%

MECS 15.3% 47.7% 45.0%

MRO 15.0% 15.0% 15.0%

NENG 15.0% 25.7% 25.6%

NWPE 12.0% 79.0% 75.4%

NYC 18.0% 18.0% 18.0%

PNW 20.0% 44.9% 44.8%

RFCO 15.4% 23.0% 19.3%

RFCP 15.3% 15.3% 15.3%

RMPA 12.3% 12.3% 12.3%

SNV 13.6% 46.6% 46.1%

SOU 15.0% 27.2% 26.1%

SPPN 13.6% 73.2% 73.0%

SPPS 13.6% 20.2% 19.2%

TVA 15.0% 15.1% 15.0%

TVAK 15.0% 38.4% 32.6%

UPNY 18.0% 21.1% 20.9%

VACA 15.0% 15.0% 15.0%

VAPW 15.3% 15.3% 15.3%

WUMS 15.0% 34.2% 30.9%A3. Policy Case Retired Capacity Incremental to the Base Case in 2015 (MW)

CC Coal CT Nuclear OG Steam

AZNM 0 1426 0 0 0

CA

- N 0 33 0 0

- 33

CA

- S 0 29 0 0 0

ENTG 0 213 0 0

- 269

ERCT 0 583 0 0 683

FRCC 0 550 0 0 0

GWAY 0 521 0 0 0

LILC 0 0 0 0 275

MACE 0

- 325 0 0 0

MACS 0 88 0 0 0

MACW 0 344

- 11 0 0

MECS 0 409 0 0 0

MRO 0 38 0 0 0

NENG 0 993 0 0

- 961

NWPE 0 299 0 0 0

PNW 0 0 0 0 22

RFCO 0 256 0 0 0

RFCP 0 539 0 0 0

SOU 0 98 0 0 0

SPPN

- 183 601

- 444 0 16

SPPS 0 0 0 0 267

TVA 0 1134 0 0 0

TVAK 0 532 0 0 0

UPNY 0 12 0 0 0

VACA 0 399 0 0 0

VAPW 0 132 0 0 0

WUMS 0 967 0

- 772 0

Grand Total

- 183 9871

- 455

- 772 0A4. New Capacity Policy Case Incremental to Base Case in 2015 (MW)

CC CT Wind Other Total

AZNM 0 0 0 0 0

CA

- N 0 0 0 0 0

CA

- S 0 0 0 0 0

COMD 0 0 0 196 196

DSNY 0 0 0 0 0

ENTG 0 0 0 0 0

ERCT 0 0 0 0 0

FRCC 0 0 0 26 26

GWAY 0 0 0 0 0

MACE 0 0 0 0 0

MACS 0 0 0 0 0

MACW 0 0 0 0 0

MECS 0 0 0 0 0

MRO 0 0 0 0 0

NENG 0 0 24 6 30

NWPE 0 0 0 0 0

NYC 0 0 0 0 0

PNW 0 0 0 0 0

RFCO 0 0 0 0 0

RFCP 0 0 0 30 30

RMPA 0 0 0 0 0

SNV 0 0 0 0 0

SOU 0 0 0 0 0

SPPN 0 0 0 0 0

SPPS 0 0 0 0 0

TVA 0 0 0 0 0

UPNY 0 0 0 0 0

VACA 0 0 0 0 0

VAPW 0 0 0 0 0

WUMS 0 0 0

- 196

- 196

Total 0 0 24 62 86

### A5. Net Capacity Transfers by IPM Region in Base and Policy Scenarios in 2015 (MW)

(Net outflows are positive; net inflows negative)

Base Case Policy Case Net Change in Policy Case

Region NetWinter NetSummer NetWinter NetSummer NetWinter NetSummer

AZNM 0 2,307 0 2,307 0 0

CA

- N 0 3,515 0 3,515 0 0

CA

- S 0

- 11,014 0

- 11,043 0

- 29

COMD 749 321 749 321 0 0

DSNY 447 2,494 447 2,490 0

- 4

ENTG 0 142 0 1,311 0 1,169

ERCT 0 0 0 0 0 0

FRCC 0 0 0 0 0 0

GWAY 0 385 0 385 0 0

LILC 0 231 0 235 0 4

MACE 0

- 4,419 0

- 4,093 0 326

MACS

- 946

- 2,922

- 1,040

- 3,016

- 94

- 94

MACW 2,908 5,791 3,003 5,459 95

- 332

MECS 1,968 1,880 1,968 1,880 0 0

MRO 256

- 3,029 256

- 3,159 0

- 130

NENG 1,803 0 1,803 0 0 0

NWPE 0 1,966 0 1,966 0 0

NYC

- 437

- 2,670

- 437

- 2,670 0 0

PNW 0 2,945 0 2,945 0 0

RFCO 2,482 6,617 3,071 7,553 589 936

RFCP

- 5,069

- 6,929

- 5,646

- 7,505

- 577

- 576

RMPA 0 87 0 66 0

- 21

SNV 0 648 0 678 0 30

SOU 0 922 0 1,280 0 358

SPPN 0 570 0 570 0 0

SPPS 0 0 0 0 0 0

TVA 0 0 0

- 1,145 0

- 1,145

TVAK 0 166 0 166 0 0

UPNY 2,325 1,259 2,325 1,259 0 0

VACA 0 941 0 496 0

- 445

VAPW 0

- 464 0

- 608 0

- 144

WUMS 0 256 0 256 0 0