WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. 

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE.

MEMORANDUM 

SUBJECT: Summary of AEO2017 Electricity Working Group Meeting held on 

September 1, 2016 

DATE: September 29, 2016

TO: Ian Mead

Assistant Administrator for Energy Analysis 

Jim Diefenderfer

Director,

Office of Electricity, Coal, Nuclear, and Renewables Analysis

Paul Holtberg

Team Leader,

Analysis Integration Team

FROM: Thad Huetteman

Team Leader for Electricity Analysis Team 

PRESENTERS: Thad Huetteman, Chris Namovicz, Nancy Slater-Thompson

ATTENDEES: 32 external, 15 EIA (see attached list)

The first AEO2017 Electricity Working group presentation covered policy assumptions and critical 

model updates for 2017, including 1) extension of the projection horizon to 2050, with consequent 

issues raised, including prospects for nuclear re-licensing, 2) continued inclusion of Clean Power 

Plan in Reference Case, 3) enhancement of modeling coal unit performance, and 4) the impact of 

distributed generation on load. The presenters emphasized that AEO2017 would be a shorter 

version, similar in concept with AEO2015 (i.e., with a limited number of alternative scenarios).

Extension of Projection Horizon to 2050/Nuclear Re-licensing

One of the participants expressed concern that it would be difficult to evaluate the range of possible 

alternatives which could arise for consideration by extending the projection to 2050 during the 

shorter AEO cycle. The participant further noted that the need to consider nuclear plant relicensing would become particularly significant in that time frame. A second participant noted that 

the extension to 2050 should be the occasion for broadening EIA’s analysis across a wider range of 

choices for the industry, given the significance of 2050 as a nominal target date for emissions 

reductions. They further noted that some of the options that should be included were currently 

considered somewhat speculative, such as the use of carbon capture and storage with biofuels.

EIA responded that it was aware of the importance of the nuclear re-licensing during the extended 

timeframe and discussed the possibility of developing a graduated approach to addressing the issue

over the next few AEO cycles, beginning with a most likely retirement case in AEO2017. EIA also 
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. 

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE.

described its plan to work with a contractor to evaluate the prospects for nuclear plant relicensing at 

a unit level, with the potential to use the results of that study to support AEO2018.

General Issues Related to Nuclear Power

In addition to the focus on long term nuclear relicensing, there was also a discussion of a variety of 

issues related to nuclear power. One participant asked if EIA had retained its assumption of a fixed 

amount of generic (as opposed to unit-specific) retirements in the near term, and if so what was the 

time frame for those retirements. EIA responded that the AE2017 would include near term generic 

retirements, and that they would be distributed across the early years of the projection, from 2018-

2022. The participant also inquired as to whether nuclear uprates were modeled endogenously, and 

EIA indicated that for the current cycle they would be specified exogenously. 

Another participant questioned if EIA included small modular reactors (SMR) as a new technology 

choice option, noting that there were initial projects underway internationally. EIA noted that with 

the early stages of this new technology there was not reliable cost information to include it as an 

endogenous technology choice. Another participant noted that the issue of how to handle 

retirements and uprate decision as generic issues ran the risk of ignoring the complex unit-by-unit 

decisions that must be made, which EIA acknowledged.

Improving Modeling of Renewable Generation

EIA outlined the enhancement for the AEO2017 cycle which involved modeling the generation 

profile of distributed photovoltaics (PV) to make it consistent with the approach for utility scale PV; 

this will also enable better representation of the affected end-use load shapes. One participant asked 

how EIA represented transmission capacity expansion in considering additions of renewables 

generating capacity, which they noted was a critical element in their decision as to whether or not to 

invest in specific renewables projects. EIA noted that while it does not explicitly model 

transmission in the NEMS EMM model, a cost for incremental transmission investment is included 

in the supply curve representation for the cost of renewable generation additions. EIA also 

discussed its intent to model energy storage in subsequent cycles of the AEO.

Modeling of State compliance approaches to the Clean Power Plan

One participant questioned EIA’s choice of allocating Clean Power Plan allowances to load-serving 

entities, given some of the cross-cutting regulatory and procedural issues that would pose for some 

states. EIA noted the focus on minimizing the impact of tighter CO2 standards on ratepayers in 

both the Northeast’s RGGI and California’s AB 32 rulemaking processes, and the precedent of the 

California approach to the mandatory use of AB 32 allowance auction revenues.

Similarly, the participant felt that the use of new source complement to avoid “leakage” to new 

combined cycle generators was legally problematic. EIA noted that the alternative to the use of the 

new source complement was for EIA to specify actions that individual states might take to ensure 

that leakage did not occur. This approach would require EIA to make policy-decisions that it is not 

in a position to make and would likely result in a patchwork results that could be highly variable 

based on adjustments in compliance position.
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. 

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE.

Additional Issues

 One participant noted that among the issues that must be considered with the extension of 

the projection horizon was the impact of aging on fossil steam plants. A principle focus of 

aging is understanding how the increased cycling of coal-fired plants affects their cost and 

performance. EIA noted that the Coal and Uranium Analysis Team has created a separate 

task to study the impact of aging on coal-fired generators, with the intent of improving the 

modeling of coal units in subsequent AEO cycles. In addition, EIA reiterated that the coal 

unit heat rates can now be modelled at the load segment level, providing a better 

representation of unit operation. 

 EIA noted the efforts in this AEO cycle to reflect the impacts of the significant installation 

of control technologies to comply with EPA’s Mercury and Air Toxics Standards. One 

participant questioned how EIA reflects the operating costs for new control technologies, 

which can be significant in the case of certain options. EIA noted that it generally reviews

the cost assumptions in conjunction with the publication of EPA’s regulatory impact 

analysis.

 One participant asked if EIA was addressing the subsidy of New York’s nuclear power 

plants under its new long term clean energy policy. EIA indicated that there was not enough 

detail at the time to include these changes.

 Another participant noted that many states in the Northeast were currently considering long 

term carbon goals, including possible economy-wide approaches, and EIA acknowledged 

that it was tracking such polices and considering ways to represent them as they become 

more concrete.
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. 

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE.

Industry/Industry Representatives

1 Arguello, E Colorado Springs Dept Public Utilities

2 Bowles, Mark C Entergy

3 Frauenheim, Steve Edison Electric Institute

4 Holdsworth, Eric Edison Electric Institute

5 Fisher, Emily Edison Electric Institute

6 Williams, Alison Edison Electric Institute

7 James, Reavis Nuclear Energy Institute

8 Crozat, Matt Nuclear Energy Institute

9 Eyster, Jerry GE Capital

10 Katofsky, Ryan Advanced Energy Economy

11 Goggin, Michael American Wind Energy Association

12 Coleman, Leslie National Mining Association

13 Nethercutt, Elliott North American Electric Reliability Corporation

14 Roche, Madelyn NRECA

15 Baca, Justin Solar Energy Industries Association

Consumer Advocacy

16 Vahling, Julie AARP

17 Shields, Daniel Office of Ohio Consumer Counsel

Consultant/Academia

18 Schmalzer, David Argonne

19 Showalter, Sharon OnLocation

20 Wood, Frances OnLocation

21 Wright, Evelyn DecisionWare

22 Luckow, Patrick Synapse Energy

23 Gülen, Gürcan The University of Texas at Austin

24 Sattler, Sandra. Union of Concerned Scientists

25 Tsai, Chenhao University of Texas

Other Government

26 Spitsen, Paul (HQ) DOE

27 Schmitt, Robert DOE

28 Zelek, Charles A. DOE

29 Anderson, Robert (HQ) DOE

30 Hagen, Ronald (HQ) DOE

31 Satsangi, Ann (HQ) DOE

32 Smith, Alex FERC
WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES. 

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE.

EIA Participants

1 Jones, Jeffrey EIA

2 Martin, Laura EIA

3 Hodge, Tyler EIA

4 Manzagol, Nilay EIA

5 Jell, Scott EIA

6 Namovicz, Christopher EIA

7 Adams, Greg EIA

8 Slater-Thompson, Nancy EIA

9 Gospodarczyk, Marta EIA

10 Jones, Ayaka EIA

11 Kearney, Diane EIA

12 Johnson, Elias EIA

13 Bowman, Michelle EIA

14 Huetteman, Thaddeus EIA

15 Diefenderfer, Jim EIA