duke energy indiana presentation to indiana utility ......duke energy indiana presentation to...
TRANSCRIPT
Duke Energy IndianaPresentation to Indiana Utility Regulatory Commission
Jim Stanley, President, Duke Energy IndianaMay 13, 2009
SUMMER 2009 PREPAREDNESS
OVERVIEW OF PRESENTATION
Operational challenges/accomplishments since summer 2008
Summer 2009 capacity and energy needs
Steps taken to prepare for summer 2009
Challenges for summer 2009 and beyond
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OPERATIONAL CHALLENGES/ACCOMPLISHMENTS SINCE SUMMER 2008
Three major storms June 2008 flooding September 2008 Hurricane Ike January 2009 ice storm EEI Emergency Recovery Award
Start of Ancillary Services Market - January 6, 2009 Initiation of Clean Air Interstate Rule (CAIR) – January 1, 2009
Edwardsport Station – June 2008
Hurricane Ike – September 2008 Ice Storm – January 2009
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Operational Challenges
DUKE ENERGY INDIANA’S PEAK DEMAND FORECAST
Incremental Growth (MW)… -72 -96Percent Growth… -1.0 -1.4
Weather Normalized Peak Load
6,000
6,200
6,400
6,600
6,800
7,000
7,200
2007 2008 2009
Forecast*Historical
Meg
awat
ts
6,7596,855
6,927
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Summer 2009 Capacity and Energy Needs
* Using July, which is the peak load month
DUKE ENERGY INDIANA’S SUPPLY/DEMAND BALANCE FOR SUMMER 2009*
+219
Demand Supply
-172
0
6500
7000
6,7136,751-172
6,923 6,931 MW (5.35% PRMUCAP)
6000
6,579+352
Mega
watts
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Summer 2009 Capacity and Energy Needs
* Using August, which is the peak resource requirement month
GENERATION SYSTEM
Over 35 weeks of maintenance outages were performed this spring
Generation/equipment availability this summer: All generating units Environmental compliance equipment FGDs and SCRs on all Gibson units FGDs on both Cayuga units Baghouses on all four Gallagher units
Duke Energy Indiana continues to focus on: Summer reliability A program of “availability outages” System-wide and plant-wide contingency
planning
Gibson Station
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Steps Taken to Prepare for Summer 2009
PURCHASED CAPACITY AND ENERGY
Duke Energy Indiana’s current on-system reserve margin is below the Midwest ISO resource adequacy requirement of 5.35% on a UCAP basis Short-term PRC purchases of 219 MW for
July – August were made to comply with the requirement
Financial swaps or financial options may also be used to hedge against wholesale market price volatility
Duke Energy Indiana is also purchasing up to 100 MW of wind power energy from the Benton County Wind Farm under a 20-year agreement
Benton County Wind Farm
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Steps Taken to Prepare for Summer 2009
Photo source: Vision Energy LLC. Used by permission
DEMAND SIDE MANAGEMENT PROGRAMS
Between 1991 and 2009, Duke Energy Indiana demand side management programs have achieved: Approximately 172 MW of annual peak demand
reductions Over 695,939 MWh annual energy reductions
2009 projected peak load management reductions in August (adjusted for losses): Special contracts (e.g., interruptible): 69 MW PowerShare®
Call (customer contractual commitment): Demand Resources (DR) 68 MW Behind-the-Meter Gen. (BTMG) 10 MW Quote (voluntary, yet compensated): 63 MW
Power Manager – direct load control: 35 MW
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Steps Taken to Prepare for Summer 2009
TRANSMISSION & DISTRIBUTION SYSTEM
$143 M in long-term T&D investments for load growth and system enhancements Tipton West 230/69 kV substation Speed 138/69 kV transformer Carmel 146th 69 kV capacitor Wabash-Urbana 69 kV reconductor North Manchester 69 kV reconductor Shawswick-Pleasant Grove 138 kV
reconductor Fishers Bank #2 substation Columbus West Bank #2 substation Bloomington Rockport Road substation
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Steps Taken to Prepare for Summer 2009
Fishers Bank #2 Substation Construction – March 2009
CHALLENGES FOR SUMMER 2009 AND BEYOND – OVERVIEW
Managing commodity price volatility – market price trends
Evolving resource adequacy requirements
Planning for tighter and changing environmental requirements
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MANAGING COMMODITY PRICE VOLATILITY – SPOT MARKET PRICE TRENDS
60.09 57.56
88.31
41.50
0
50
100
2006 2007 2008 2009
$/MW
H
July MISO CIN Hub On-Peak Power Price
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6.05 6.21
11.32
3.86
0
5
10
15
2006 2007 2008 2009$/M
MBTU
July NYMEX Henry Hub Natural Gas Price
32.91 32.83
68.37
37.00
0
50
100
2006 2007 2008 2009
$/TON
Illinois Basin High Sulfur Coal
728.00
524.00
268.60
67.500
500
1,000
2006 2007 2008 2009
$/TON
SO2 Allowance
1,847.50
807.00 809.69 1,475.00
0
1,000
2,000
3,000
4,000
2006 2007 2008 2009
$/TON
NOx Allowance (Note 2)
Notes: (1) 2009 prices are forward prices as of May 4, 2009.(2) 2009 NOx Price includes annual NOx allowance price of $1,100/ton. Annual NOx program is a new program that started on January 1, 2009.
Challenges for Summer 2009 and Beyond
EVOLVING RESOURCE ADEQUACY REQUIREMENTS
Unknown Demand Resource UCAP (unforced capacity) methodology
After-the-fact assessment of load forecast (for potential underforecasting)
MISO is considering whether it should perform load forecasting function
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Challenges for Summer 2009 and Beyond
PLANNING FOR TIGHTENING AND CHANGING ENVIRONMENTAL REQUIREMENTS
Clean Air Interstate Rule (CAIR) remanded to EPA to rewrite requirements
Clean Air Mercury Rule (CAMR) overturned
New Source Review retrial – May 2009
Probable coal ash regulation
Probable CO2 emission regulations/legislation
Edwardsport IGCC Site – April 2009
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Challenges for Summer 2009 and Beyond
CONCLUSION
Duke Energy Indiana is prepared with adequate resources and infrastructure to meet its customers’ needs during summer 2009.
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