Document ID: EPA-HQ-OAR-2009-0491-4399
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2011-07-11T04:00Z

Resource Adequacy and Reliability in the IPM Projections for the Transport Rule
This document describes resource adequacy and reliability results in the IPM 2014 projections for the base case and Transport 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 addresses reliable delivery of generation resources 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 adequate 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 retirement.   Since most regions are projected to have excess capacity above their target reserve margins, most of these retirements are absorbed by a reduction in reserves that are not needed to meet the target level.  Operational capacity changes from the base case in 2014 are summarized below: 
                Table 1.  Operational Capacity Summary in 2014
Base case operational capacity (MW)

                                                                      1,029,215

                                                                               
    Adjusted for Changes in Policy Case:

                                                                               
       (-)  Coal retirements

                                                                         -4,772
       (-) Coal capacity derated

                                                                           -487
       (+)New Capacity Additions

                                                                            +73
       (+)Lower non-coal retirements

                                                                         +1,288
        Net Change in Policy Case

                                                                         -3,898

                                                                               
Equals Policy Case Operational Capacity

                                                                      1,025,317

Since the model must maintain adequate reserves in each region, the reduced operational capacity of 3,898 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 on greater new capacity additions.  As the table shows, the reduction in capacity (excess reserves) 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 below.
Notably, the "retirements" examined here are IPM forecasts that could be muted by utility decisions to hold on to these generating units and make other changes for compliance, which they have the freedom to do under the Transport Rule.
Reduction in Excess Reserves
IPM uses a target reserve margin in each region 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 2014 if it is not 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 2014 will not need to be replaced for resource adequacy until later years when demand increases and reserves approach the target reserve margin.  
Table 1 above shows that operational capacity is reduced by less than one half of percent nationwide in 2014 under the policy.  This reduction will have little overall impact, since 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 decrease less than 2% in their reserve margins and the reserve margin for the combined area remains over 20%.  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 transfers of reserves, but limits their level to ensure the reliability of the bulk power system (see discussion below.)     
Although there are substantial existing regional variations in reserve margin, IPM adjusts regional capacities in 2014 to meet the specific 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 2014 projections is described below. 
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, combustion turbine and nuclear retirements are 1,288 MW lower in the policy case compared to the base case.  Lower combined cycle retirements contribute 126 MW, lower combustion turbine 307 MW, and lower nuclear 854 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 base case are considered.  Only 73 MW of new capacity are added compared to the base case, all landfill capacity.   
Reserve Transfers
In cases where it is economic to transfer reserves 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 noteworthy.  For example, the net decrease in coal capacity in RFCP (838 MW in West Virginia and parts of Ohio) is to a large extent offset by a net increase in transfer of reserves into the region (807 MW).  Reserve transfers by region are provided in the appendix.	 

                                       
                                       
                                       
                                       
                        Appendix: Tables by IPM Region
                  A1. Projected Operational Capacity in 2014
          A2. Summary of Target and Projected Reserve Margins in 2014
       A3. Policy Case Retired Capacity Incremental to Base Case in 2014
       A4. New Capacity in Policy Case Incremental to Base Case in 2014
      A5. Capacity Transfers Region in Base and Policy Scenarios in 2014
                              Map of IPM Regions
                                       
                                       

A1. Projected Operational Capacity in 2014(MW)

                                   Non-Coal

                            All Generation Sources

                                   Coal Only
                                  Additional
Region
                                     Base
                                    Policy
                                    Change
                                       
                                     Base
                                    Policy
                                    Change
                                   in Policy
AZNM
                                                                         35,544
                                                                         35,560
                                                                             16

                                                                          9,845
                                                                          9,818
                                                                            -27
                                                                             43
CA-N
                                                                         40,930
                                                                         40,930
                                                                              0

                                                                            217
                                                                            217
                                                                              0
                                                                              0
CA-S
                                                                         32,676
                                                                         32,676
                                                                              0

                                                                            213
                                                                            213
                                                                              0
                                                                              0
COMD
                                                                         24,699
                                                                         25,234
                                                                            535

                                                                          4,238
                                                                          4,229
                                                                             -9
                                                                            544
DSNY
                                                                          9,717
                                                                          9,717
                                                                              0

                                                                            369
                                                                            366
                                                                             -3
                                                                              3
ENTG
                                                                         40,109
                                                                         40,384
                                                                            275

                                                                          8,397
                                                                          8,397
                                                                              0
                                                                            275
ERCT
                                                                         90,405
                                                                         89,843
                                                                           -562

                                                                         18,456
                                                                         18,401
                                                                            -55
                                                                           -507
FRCC
                                                                         55,650
                                                                         55,632
                                                                            -18

                                                                          9,191
                                                                          9,173
                                                                            -18
                                                                              0
GWAY
                                                                         31,970
                                                                         31,518
                                                                           -452

                                                                         19,647
                                                                         19,009
                                                                           -638
                                                                            186
LILC
                                                                          5,494
                                                                          5,485
                                                                             -9

                                                                             -9
MACE
                                                                         30,866
                                                                         30,808
                                                                            -58

                                                                          2,438
                                                                          2,379
                                                                            -59
                                                                              1
MACS
                                                                         12,141
                                                                         12,122
                                                                            -19

                                                                          5,153
                                                                          5,107
                                                                            -46
                                                                             27
MACW
                                                                         31,295
                                                                         30,830
                                                                           -465

                                                                         11,325
                                                                         10,860
                                                                           -465
                                                                              0
MECS
                                                                         27,713
                                                                         27,607
                                                                           -106

                                                                         10,926
                                                                         10,820
                                                                           -106
                                                                              0
MRO
                                                                         50,193
                                                                         50,249
                                                                             56

                                                                         20,796
                                                                         20,788
                                                                             -8
                                                                             64
NENG
                                                                         33,136
                                                                         33,480
                                                                            344

                                                                          2,697
                                                                          2,699
                                                                              2
                                                                            342
NWPE
                                                                         19,666
                                                                         19,657
                                                                             -9

                                                                         12,262
                                                                         12,263
                                                                              1
                                                                            -10
NYC
                                                                          9,333
                                                                          9,333
                                                                              0

                                                                              0
PNW
                                                                         48,671
                                                                         48,671
                                                                              0

                                                                          1,989
                                                                          1,989
                                                                              0
                                                                              0
RFCO
                                                                         48,981
                                                                         48,521
                                                                           -460

                                                                         30,773
                                                                         30,313
                                                                           -460
                                                                              0
RFCP
                                                                         45,347
                                                                         44,539
                                                                           -808

                                                                         33,269
                                                                         32,431
                                                                           -838
                                                                             30
RMPA
                                                                         18,464
                                                                         18,417
                                                                            -47

                                                                          7,960
                                                                          7,960
                                                                              0
                                                                            -47
SNV
                                                                          9,196
                                                                          9,196
                                                                              0

                                                                          2,555
                                                                          2,555
                                                                              0
                                                                              0
SOU
                                                                         62,895
                                                                         62,845
                                                                            -50

                                                                         24,633
                                                                         24,583
                                                                            -50
                                                                              0
SPPN
                                                                         17,048
                                                                         17,228
                                                                            180

                                                                          8,559
                                                                          8,125
                                                                           -434
                                                                            614
SPPS
                                                                         40,738
                                                                         40,355
                                                                           -383

                                                                         12,023
                                                                         12,023
                                                                              0
                                                                           -383
TVA
                                                                         37,846
                                                                         36,933
                                                                           -913

                                                                         13,009
                                                                         12,096
                                                                           -913
                                                                              0
TVAK
                                                                         13,352
                                                                         12,997
                                                                           -355

                                                                          9,800
                                                                          9,445
                                                                           -355
                                                                              0
UPNY
                                                                         15,743
                                                                         15,731
                                                                            -12

                                                                          2,295
                                                                          2,283
                                                                            -12
                                                                              0
VACA
                                                                         49,131
                                                                         48,679
                                                                           -452

                                                                         18,879
                                                                         18,427
                                                                           -452
                                                                              0
VAPW
                                                                         22,259
                                                                         22,251
                                                                             -8

                                                                          4,333
                                                                          4,325
                                                                             -8
                                                                              0
WUMS
                                                                         18,007
                                                                         17,889
                                                                           -118

                                                                          8,489
                                                                          8,183
                                                                           -306
                                                                            188
Total
                                                                      1,029,215
                                                                      1,025,317
                                                                         -3,898

                                                                        314,736
                                                                        309,477
                                                                         -5,259
                                                                          1,361

A2. Summary of Target and Projected Reserve Margins in 2014 (MW) 

                           Projected Reserve Margins
                                  IPM Region
                             Target Reserve Margin
                                   Base Case
                                  Policy Case
                                     AZNM
                                     13.6%
                                     28.7%
                                     28.6%
                                     CA-N
                                     14.6%
                                     17.2%
                                     17.2%
                                     CA-S
                                     14.8%
                                     14.8%
                                     14.8%
                                     COMD
                                     15.3%
                                     18.6%
                                     21.3%
                                     DSNY
                                     18.0%
                                     18.0%
                                     20.8%
                                     ENTG
                                     15.0%
                                     38.8%
                                     37.1%
                                     ERCT
                                     12.5%
                                     25.6%
                                     24.8%
                                     FRCC
                                     19.3%
                                     22.2%
                                     22.2%
                                     GWAY
                                     11.9%
                                     61.7%
                                     59.3%
                                     LILC
                                     18.0%
                                     24.6%
                                     20.4%
                                     MACE
                                     15.3%
                                     15.3%
                                     15.3%
                                     MACS
                                     15.3%
                                     15.3%
                                     15.3%
                                     MACW
                                     15.3%
                                     55.1%
                                     51.2%
                                     MECS
                                     15.3%
                                     47.8%
                                     47.2%
                                      MRO
                                     15.0%
                                     15.0%
                                     15.0%
                                     NENG
                                     15.0%
                                     25.7%
                                     27.1%
                                     NWPE
                                     12.0%
                                     79.0%
                                     78.9%
                                      NYC
                                     18.0%
                                     18.0%
                                     18.0%
                                      PNW
                                     20.0%
                                     44.9%
                                     44.9%
                                     RFCO
                                     15.4%
                                     25.1%
                                     21.3%
                                     RFCP
                                     15.3%
                                     15.3%
                                     15.3%
                                     RMPA
                                     12.3%
                                     12.3%
                                     12.3%
                                      SNV
                                     13.6%
                                     46.6%
                                     46.6%
                                      SOU
                                     15.0%
                                     27.8%
                                     26.7%
                                     SPPN
                                     13.6%
                                     73.2%
                                     75.2%
                                     SPPS
                                     13.6%
                                     20.2%
                                     19.1%
                                      TVA
                                     15.0%
                                     15.5%
                                     15.0%
                                     TVAK
                                     15.0%
                                     41.0%
                                     37.2%
                                     UPNY
                                     18.0%
                                     21.1%
                                     21.0%
                                     VACA
                                     15.0%
                                     15.0%
                                     15.0%
                                     VAPW
                                     15.3%
                                     15.3%
                                     15.3%
                                     WUMS
                                     15.0%
                                     33.5%
                                     32.6%

A3. Policy Case Retired Capacity Incremental to the Base Case in 2014 (MW) 

IPM Region
CC
Coal
CT
Nuclear
OG Steam
AZNM
                                                                              0
                                                                             27
                                                                              0
                                                                              0
                                                                              0
CA-N
                                                                              0
                                                                              0
                                                                              0
                                                                              0
                                                                              0
ENTG
                                                                              0
                                                                              0
                                                                              0
                                                                              0
                                                                           -275
ERCT
                                                                              0
                                                                             15
                                                                              0
                                                                              0
                                                                            507
GWAY
                                                                              0
                                                                            621
                                                                              0
                                                                              0
                                                                           -186
LILC
                                                                              0
                                                                              0
                                                                              0
                                                                              0
                                                                              8
MACE
                                                                              0
                                                                             55
                                                                              0
                                                                              0
                                                                              0
MACS
                                                                              0
                                                                             45
                                                                              0
                                                                              0
                                                                              0
MACW
                                                                              0
                                                                            424
                                                                              0
                                                                              0
                                                                              0
MECS
                                                                              0
                                                                             82
                                                                              0
                                                                              0
                                                                              0
NENG
                                                                              0
                                                                              0
                                                                              0
                                                                              0
                                                                           -344
NWPE
                                                                              0
                                                                              0
                                                                              0
                                                                              0
                                                                              0
PNW
                                                                              0
                                                                              0
                                                                              0
                                                                              0
                                                                              0
RFCO
                                                                              0
                                                                            374
                                                                              0
                                                                              0
                                                                              0
RFCP
                                                                              0
                                                                            751
                                                                              0
                                                                              0
                                                                              0
SPPN
                                                                           -126
                                                                            431
                                                                           -307
                                                                              0
                                                                           -181
SPPS
                                                                              0
                                                                              0
                                                                              0
                                                                              0
                                                                            347
TVA
                                                                              0
                                                                            915
                                                                              0
                                                                              0
                                                                              0
TVAK
                                                                              0
                                                                            326
                                                                              0
                                                                              0
                                                                              0
UPNY
                                                                              0
                                                                              0
                                                                              0
                                                                              0
                                                                              0
VACA
                                                                              0
                                                                            427
                                                                              0
                                                                              0
                                                                              0
VAPW
                                                                              0
                                                                              0
                                                                              0
                                                                              0
                                                                              0
WUMS
                                                                              0
                                                                            279
                                                                              0
                                                                           -854
                                                                            123
Grand Total
                                                                           -126
                                                                           4772
                                                                           -307
                                                                           -854
                                                                             -1
                                       
A4. New Capacity Policy Case Incremental to Base Case in 2014 (MW) 

                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
Region
                                                                             CC
                                                                             CT
                                                                           Wind
                                                                          Other
                                                                          Total
AZNM
                                                                              0
                                                                              0
                                                                             43
                                                                              0
                                                                             43
CA-N
                                                                              0
                                                                              0
                                                                              0
                                                                              0
                                                                              0
CA-S
                                                                              0
                                                                              0
                                                                              0
                                                                              0
                                                                              0
COMD
                                                                              0
                                                                              0
                                                                              0
                                                                            544
                                                                            544
DSNY
                                                                              0
                                                                              0
                                                                              3
                                                                              0
                                                                              3
ENTG
                                                                              0
                                                                              0
                                                                              0
                                                                              0
                                                                              0
ERCT
                                                                              0
                                                                              0
                                                                              0
                                                                              0
                                                                              0
FRCC
                                                                              0
                                                                              0
                                                                              0
                                                                              0
                                                                              0
GWAY
                                                                              0
                                                                              0
                                                                              0
                                                                              0
                                                                              0
MACE
                                                                              0
                                                                              0
                                                                             28
                                                                            -27
                                                                              1
MACS
                                                                              0
                                                                              0
                                                                              0
                                                                             27
                                                                             27
MACW
                                                                              0
                                                                              0
                                                                              0
                                                                              0
                                                                              0
MECS
                                                                              0
                                                                              0
                                                                              0
                                                                              0
                                                                              0
MRO
                                                                              0
                                                                              0
                                                                             21
                                                                             43
                                                                             64
NENG
                                                                              0
                                                                              0
                                                                             -2
                                                                              0
                                                                             -2
NWPE
                                                                              0
                                                                              0
                                                                            -10
                                                                              0
                                                                            -10
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
                                                                            -47
                                                                              0
                                                                            -47
SNV
                                                                              0
                                                                              0
                                                                              0
                                                                              0
                                                                              0
SOU
                                                                              0
                                                                              0
                                                                              0
                                                                              0
                                                                              0
SPPN
                                                                              0
                                                                              0
                                                                              0
                                                                              0
                                                                              0
SPPS
                                                                              0
                                                                              0
                                                                            -36
                                                                              0
                                                                            -36
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
                                                                           -544
                                                                           -544
Total
                                                                              0
                                                                              0
                                                                              0
                                                                             73
                                                                             73
                                       
A5.  Net Capacity Transfers by IPM Region in Base and Policy Scenarios in 2014 (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
                                                                        -11,014
                                                                              0
                                                                              0
COMD
                                                                            749
                                                                            321
                                                                            749
                                                                            321
                                                                              0
                                                                              0
DSNY
                                                                            447
                                                                          2,494
                                                                            447
                                                                          2,325
                                                                              0
                                                                           -169
ENTG
                                                                              0
                                                                            142
                                                                              0
                                                                            902
                                                                              0
                                                                            760
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
                                                                            399
                                                                              0
                                                                            168
MACE
                                                                              0
                                                                         -4,414
                                                                              0
                                                                         -4,496
                                                                              0
                                                                            -82
MACS
                                                                           -899
                                                                         -2,875
                                                                           -920
                                                                         -2,896
                                                                            -21
                                                                            -21
MACW
                                                                          2,860
                                                                          5,787
                                                                          2,881
                                                                          5,870
                                                                             21
                                                                             83
MECS
                                                                          1,968
                                                                          1,880
                                                                          1,968
                                                                          1,880
                                                                              0
                                                                              0
MRO
                                                                            256
                                                                         -3,072
                                                                            256
                                                                         -3,031
                                                                              0
                                                                             41
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
                                                                          1,832
                                                                          5,944
                                                                          2,656
                                                                          6,767
                                                                            824
                                                                            823
RFCP
                                                                         -4,432
                                                                         -6,291
                                                                         -5,239
                                                                         -7,098
                                                                           -807
                                                                           -807
RMPA
                                                                              0
                                                                             87
                                                                              0
                                                                             71
                                                                              0
                                                                            -16
SNV
                                                                              0
                                                                            648
                                                                              0
                                                                            648
                                                                              0
                                                                              0
SOU
                                                                              0
                                                                            699
                                                                              0
                                                                          1,188
                                                                              0
                                                                            489
SPPN
                                                                              0
                                                                            570
                                                                              0
                                                                            570
                                                                              0
                                                                              0
SPPS
                                                                              0
                                                                              0
                                                                              0
                                                                              0
                                                                              0
                                                                              0
TVA
                                                                              0
                                                                              0
                                                                              0
                                                                           -745
                                                                              0
                                                                           -745
TVAK
                                                                              0
                                                                            166
                                                                              0
                                                                            166
                                                                              0
                                                                              0
UPNY
                                                                          2,325
                                                                          1,259
                                                                          2,325
                                                                          1,259
                                                                              0
                                                                              0
VACA
                                                                              0
                                                                          1,131
                                                                              0
                                                                            680
                                                                              0
                                                                           -451
VAPW
                                                                              0
                                                                           -459
                                                                              0
                                                                           -466
                                                                              0
                                                                             -7
WUMS
                                                                              0
                                                                            256
                                                                              0
                                                                            256
                                                                              0
                                                                              0