Costs of generation with and without NGS for each NGS owner - NREL data

Column #: 1 2 3 4 5 6 Line # Low case High case Gas at $4/MMBtu Gas at $5/MMBtu Owner SCR cost SCR cost LMP w/ LMP w/ LMP w/ LMP w/

($MM/yr) ($MM/yr) NGS no NGS NGS no NGS
1 SRP $14.29 $17.33 31.08 32.44 36.66 38.46 2 LADWP $11.13 $13.64 34.26 35.28 40.53 41.71 3 APS $8.47 $10.24 31.39 32.72 37.05 38.77 4 NPC $6.85 $8.29 32.73 33.75 39.08 40.26 5 TEP $4.50 $5.45 31.34 32.64 37.02 38.71 6 BOR $12.00 $14.70
7 Total ex-BOR $45.24 $54.95 $32.30 $33.50 $38.21 $39.72 8 Increase ($/Mwh) $1.20 $1.51 9 Increase (%) 3.72% 3.95% 10 Increase at Table 3 gas price for 2016: 3.76%
11 WECC-wide 31.77 32.43 37.74 38.58
12 NREL source: pp. 14, 19, 47, pp. 14, 19, 47, p. 42 p. 42 p. 42 p. 42 61 61 Direct replacement costs before considering LMP effects
13 NGS replacement cost at owners' LMPs: $45.72 $154.54 14 Non-BOR owners replacement cost at owners' LMPs: $34.61 $116.99 15 SRP replacement cost at SRP-area LMPs: $5.89 $28.75 16 LADWP replacement cost at SRP-area LMPs: $16.29 $40.14 17 APS replacement cost at SRP-area LMPs: $4.48 $19.31 18 NPC replacement cost at SRP-area LMPs: $5.66 $18.53 19 TEP replacement cost at SRP-area LMPs: $2.30 $10.26 20 BOR replacement cost at owner's LMPs: $11.11 $37.55

21 Low-case SCR O&M: $11.95million (p. 47) 22 High-case SCR O&M: $16.71million (p. 47) 23 Annual NGS generation: 17500gwh (p. 32) 24 2012 NGS O&M cost ($/Mwh) $30.89www.amwua.org/pdfs/33

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_item 25a 2010 NGS cost estimates $30.90NREL, p. 23, Table 1-13 25b $24.45 NREL, p. 25, Table 1-15; see also NREL, p. 55, fn. 6 25c $30NREL, p. 55, fn. 6 25d $32.27 NREL, p. 55, fn. 6 26 2016 forward Henry Hub price $4.14per MMBtu, per Table 3, Line 137 8 9 10 11 12 13

Gas at $6.90/MMBtu Sales (proxy Cost of market procurement in $millions LMP w/ LMP w/ for load) due to NGS retirement w/ gas at: NGS no NGS (gwh) $4/MMBtu$5/MMBtu $6.90/MMBtu$13/MMBtu
47 49.48 32538 $44.25 $58.57 $80.69 51.92 53.57 26205 $26.73 $30.92 $43.24 47.5 49.88 28225 $37.54 $48.55 $67.18 50.71 52.49 29261 $29.85 $34.53 $52.08 47.51 49.82 9388 $12.20 $15.87 $21.69
$49.07 $51.18 125617 $150.57 $188.43 $264.88

$2.11 4.29%

48.84 50.13 $197 $502 $1,157 p. 40 p. 40 p. 19 WECC-wide impact on line 11 from pp. 36, 111 Direct replacement costs before considering LMP effects Implicit breakeven price of gas Breakeven gas price if all generation priced at LMP Low SCR cost High SCR cost Low SCR cost $355.12 $268.82 $4.13 $4.47 $1.22 $70.60 $4.37 $4.60 $1.91 $84.14 $3.78 $4.34 $0.28 $46.53 $4.27 $4.53 $1.36 $42.71 $4.09 $4.45 -$0.91 $24.85 $4.28 $4.53 $1.89 $86.29 $4.03 $4.39

At gas prices above those shown At gas prices above those shown above, it's economically preferable above, it's economically preferable to retrofit NGS rather than retire it to retrofit NGS rather than retire it even without considering LMP effects when all generation is priced at LMP

item5a.pdf NREL, p. 25, Table 1-15; see also NREL, p. 55, fn. 614 15 16 17 18

Ownership High case Change in gas NGS cost w/ share of SCR cost price to match high-case SCR $13/MMBtu NGS ($/Mwh) SCR cost ($/MMBtu) ($/Mwh) 21.7% $4.56 $0.82 $35.45 21.2% $3.68 $0.59 $34.57 14.0% $4.18 $0.74 $35.07 11.3% $4.19 $0.66 $35.08 7.5% $4.15 $0.73 $35.04 24.3% 75.7%

p. 14 Breakeven gas price if all generation priced at LMP High SCR cost $1.47 $2.12 $0.88 $1.52 -$0.60 $2.16
At gas prices above those shown above, it's economically preferable to retrofit NGS rather than retire it when all generation is priced at LMP19 20

Gas price ($/MMBtu) above which utility-area LMPs (absent NGS) would average more than cost of NGS with high SCR added

$4.50 $4.50 $3.89 $3.89 $4.39 $4.39 $4.20 $4.20 $4.40 $4.40
Calculated two different ways as a mutual check