MPRP December 2008 Reliability Committee

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NEPOOL Reliability Committee MPRP Update

Upcoming PPA revisions and TCADecember 18, 2008

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Agenda

• Introduction: MPRP Needs & Alternatives & Proposed N5 & S1 Elm

• MPRP Scope changes since January 2008 PAC and June 2008 PPAs. – Major: Three Rivers, Section 254, Heywood/Section 83,

Rumford area– Other: Maxcys & Larrabee, Belfast, Browns Crossing, Middle

Street, Spring Street, Maine Yankee, Section 160, and others 

• Cost estimating overview (details in January 2009)

MPRP December 2008 Reliability Committee

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Phase 1 Progress

• Needs Assessment Published June 2007

• Transmission Alternatives Assessment Published May 2008

• PPA Report Published June 2008

• Maine Public Utilities Commission Certificate of Public Convenience & Necessity petition filed July 2008

• PPA Addendum Analysis for scope changes, expected December 2008

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Needs Assessment

• 2017 Peak Load Forecast

• Multiple Maine Generator Dispatch Scenarios

• Various Interface Flow scenarios with NB and NH

• Hundreds of Outage Events

• Nearly 5000 Cases Simulated

• Published June 2007

MPRP December 2008 Reliability Committee

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Transmission Alternatives Assessment

•Developed 5 Northern Solutions- Designated N1 – N5- Dropped N4 - Weakest Electrical Performance; Highest Cost- Analyzed 4 Solutions

•Developed 3 Southern Solutions - Designated S1 – S3 - Dropped S3 - Weakest Electrical Performance; Highest Cost- Analyzed 2 Solutions, each with a Moshers & Elm St. option

MPRP December 2008 Reliability Committee

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Preferred Alternative: N5

N5• Best electrical performance• Best longevity• Best operability• Best loss savings• Highest transfer capabilities

N1• Less robust electrical

performance• higher cost for operability

equivalence to N5• Lowest estimated initial cost• Fewer dwellings within 300ft

MPRP December 2008 Reliability Committee

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Preferred Alternative: S1

S1• Best electrical Performance• Highest transfer capability• Lowest Cost

MPRP December 2008 Reliability Committee

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MPRP December 2008 Reliability Committee

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Three Rivers vs. NewingtonMPRP southern termination

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MPRP Interconnection with PSNH• Southern Alternative S1 PSNH interconnection option was re-examined:

– 2017 Summer Peak with Gosling Road 345/115 kV Project• Needs & Alternatives Analyses base cases used

– 2012 Summer Peak without Gosling Road Project• Proposed Plan Analysis base cases used

• Two previously considered options

– New 345 kV Three Rivers Substation

• Interconnect with 345 kV Section 307

• Build new 345 kV substation – 6-breaker switchyard

– Existing 345 kV Newington Substation

• Extend the new line 6.33 miles from Three Rivers

• Includes 0.75 mi Piscataqua River Crossing

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MPRP Interconnection with PSNHConclusions Based on System Studies

• Performance between a Three Rivers & Newington Interconnection– Negligible difference in losses between Three Rivers and

Newington interconnections

– Newington had higher NH-to-ME transfer capability

– Newington had reduced N-1-1 generation restrictions

– Newington had slightly better system voltage and reactive performance

– Newington had lower 115 kV line loading in Seacoast area

– Three Rivers interconnection showed lower loading on 115 kV R169 Line (Dover-Three Rivers) for one outage and contingency combination

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Cost & Other Factors, and Determination

• NH Seacoast Area needs reinforcement per NH Needs Assessment (whether Gosling Road or elsewhere)

• If Three Rivers is constructed, a new line could be built from Three Rivers to Newington or another station in the future

• Preliminary cost estimates provided by NU and CMP show the Newington interconnection to be approximately $22M more:– S1 to Newington ~$362M– S1 to Three Rivers ~$340M

• MPRP is proceeding with alternative termination at Three Rivers, as NH Alternatives Assessment proceeds

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Orrington-Coopers Mills (Maxcys)Section 254

Discussion of Section 254 Construction

• N5 includes a new 115 kV line between Orrington and Maxcys

• ISO initially recommended constructing the line at 345 kV and operating it at 115 kV

– Based on cost information from other projects – assumed the additional cost to be on the order of 10%

• This issue was discussed at the November 2007 PAC

– The only concern raised was whether or not other 115 kV lines in the MPRP should also be constructed for 345 kV

• This issue was also discussed at the November 2008 PAC

– Updated costs provided. Comments were due December 4

Merits of Construction at 345 kV• 345 kV between Maxcys and Orrington

– May be desirable with the potential for new resources to be developed north of Orrington

– May be desirable for HVDC proposals which terminate in Maine – may facilitate power movement across the system to the HVDC terminal

– May support HVDC proposals which parallel this line – better system performance following loss of the HVDC line

• Significantly reduces cost and outage duration if the line needs to be converted to 345 kV in the future

• Smaller line impedance results in marginally lower real and reactive losses – not significant

Merits of Construction at 115 kV

• HVDC proposals which terminate at Orrington or other points north might (or might not) reduce the need to convert to 345 kV

• Cost

• Built to 115 kV standards = $59 million

• Built to 345 kV standards = $103 million

• Difference of approximately $43 million

– If originally built at 115 kV, but later rebuilt to 345 kV later cost = $117 million (after the initial 115 kV construction cost = $59 million)

MPRP Approach

• MPRP scope for PPA & TCA presently assume 345 kV construction, pending ISO recommendation

MPRP & Heywood RoadSection 83 Sensitivity Analysis

Heywood & MPRP Sensitivity Analysis

• Issue

– Heywood Road (formerly Benton) Project (PPA CMP-06-T13) includes an increase of the sag-limited rating of Section 83 between Wyman Hydro & Section 83C tap

– Detailed design [using Light Distance And Ranging (LiDAR) data] has indicated that re-rating is expensive, nearly $10 million

– A new 115 kV line parallel to Section 83 between Wyman Hydro and the Section 241 (Rice Rips) tap would be $19.6 million – there is room on the existing Right-of-Way (ROW) for a new line

– Heywood Road Substation will enter service this winter

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• Preliminary Analysis pre-MPRP Conclusions, June 2008

– A new 115 kV line parallel to Section 83 would reduce line losses by 4 to 6 MW under peak load conditions

– Northern Hydro export capability will be increased with a new 115 kV line parallel to Section 83

• MPRP Conclusions, Fall 2008

– MPRP system upgrade requirements are less in the Waterville/ Winslow/Skowhegan area with a new 115 kV line & Maxcys (Coopers Mills) 115 kV with breaker-and-a-half configuration

– The following system upgrades will no longer be required for MPRP

• 30 MVAR additional capacitors at Heywood

• 25 MVAR of capacitors at Winslow

• New 115 kV Section 245 (Albion to Winslow)

• Rebuild of 115 kV Section 259 (Albion to Heywood)

Heywood & MPRP Sensitivity Analysis

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• Combined Results of Heywood Road and MPRP analyses

– Estimated cost savings of not building these MPRP facilities = $12.8 million

– Net cost savings of building a new parallel 115 kV line from Wyman Hydro to Section 241 = $3.6 million

– New 115 kV line will reduce losses

– New 115 kV line will increase Wyman Hydro area export capability

• MPRP scope now excludes the upgrades no longer needed with the new 115 kV line

Heywood & MPRP Sensitivity Analysis

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MPRP Rumford area Sensitivity Analysis

MPRP & Riley-RumfordSensitivity Analysis

• MPRP Approved PPAs– The MPRP Alternatives Assessment recommended the following

upgrades in the Riley-Rumford Area:• New 115 kV line parallel to Section 89 (Livermore Falls-Riley)• New 115 kV line parallel to Section 229 (Rumford IP-Riley)• Expand Rumford IP & Riley to terminate the new lines• New 2nd 25 MVAR capacitor at Rumford IP

• MPRP Alternative– Due to space constraints in the area, the following changes have been

proposed as an alternative :• New 115 kV line from Livermore Falls to the Rumford, bypassing the Riley

and Rumford IP Substations• Construct a new 115 kV tap to terminate the new line from Livermore Falls

on Section 243

MPRP & Riley-Rumford Sensitivity Analysis

• Results:– After modeling the proposed changes, all reliability criteria is still

satisfied– Bus faults and stuck breakers were modeled near the new

Rumford area termination, without violations of reliability criteria

• Recommendation:– Existing & planned area substations have little/no expandability,

and are within 2 miles of each other– The reduction in scope of this option represents a $13 million

savings for MPRP– MPRP is proceeding with alternative Rumford area design

MPRP Other scope changes

Minor Scope Changes to PPA

• Larrabee Road (formerly Gulf Island 2 and Merrill Road)– Will connect existing area 115 kV lines now connected to Gulf Island

Possible elimination of Gulf Island from BPS List• Coopers Mills (formerly Maxcys)

– Reconfiguration at existing yard not practical - new 115 kV yard will be breaker-and-a-half, per PP-9

• Belfast Substation– Move 10.8 MVAR capacitor bank from 115 kV to 34.5 kV bus – Two 115 kV breakers added, consistent with Alternatives Analysis

• Spring Street Substation– Bus-tie breakers and line re-terminations to prevent overloads under N-

1-1 conditions, per Alternatives Assessment • Browns Crossing Substation

– Remove 115 kV distribution substation and establish 34.5 kV supply, to reduce scope and cost in area

• Maine Yankee– 345 kV re-terminations and breaker additions

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Minor Scope Changes to PPA

• Raven Farm (formerly Elm Street)– Eliminate the 345 kV K3039-1 breaker

• Days Corner– New 115/34.5 kV and 115/12.47 kV distribution substation – Necessary to retire 34.5 kV transmission line and two substations to make room

for 345 kV line in right-of-way• Section 160 (Cape to Hinkley Pond)

– Reconductor about 1 mile to prevent overloads under N-1-1 conditions, per Alternatives Assessment

• Wyman Hydro– Remove 25 MVAR capacitor, since addition of two 18 MVAR capacitors is now

underway • N133 Line Rebuild

– Remove 115 kV rebuild Schiller-Bolt Hill-Three Rivers (associated with Gosling Road)

• Middle Street Substation– 115/34.5/12.47 kV substation required for both area reliability needs and MPRP

115 kV Lewiston Loop

N5 & S1 Elm Map Updates

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RUMFORD IP

LIVERMORE FALLS

COOPER’S MILLS

ORRINGTON

ALBION ROAD

SUROWIECMAINE YANKEE

WINSLOWBUCKSPORT

BELFAST 115

HEYWOOD ROAD

MASON

NEWCASTLE

RICE RIPS

AUGUSTA EAST SIDE

HIGHLAND

LAKEWOOD

SAPPI(HINCKLEY)

HOTEL ROAD

LARRABEE ROAD

LEWISTON LOWER

Separate DCT

New 345 kV

New 115 kV

Rerate 345 kV

Rerate 115 kV

New Capacitor Bank

New Autotransformer

Transmission Alternative N5 (Current Scope)

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Scope Changes to N5 Map

• Removed Capacitor Banks at:– Wyman Hydro– Winslow– Heywood Road– Riley

• Changed Substation Names:– Maxcy’s to Cooper’s Mills– Benton to Albion Road– Gulf Island to Larrabee Road

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HINKLEY POND

RAVEN FARM

MAGUIRE RD

SO GORHAM

SUROWIEC

PRIDES CORNER

New 345 kV

New /Rebuilt 115 kV

Rerate 345 kV

Rerate 115 kV

New Capacitor Bank

New Autotransformer

Transmission Alternative S1 – Elm (Current Scope)

CAPE

THREE RIVERS

EAST DEERING

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Scope Changes to S1 Elm Map

• Removed 345 kV and 115 kV lines from Three Rivers to Newington

• Added 115 kV line Re-rate Cape to Hinkley Pond

• Changed Name: Elm Street to Raven Farm

Statistical Model for Estimating Costs

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Overview

• Numerous transmission and substation projects

• Most project estimates are deterministic, based on point estimates for all variables

• Any point estimate is bound to be wrong and cannot be known with any certainty

• Combined error of any construction project has the potential of varying significantly from its original point estimate

• Volatility in manufactured costs, availability of labor and project schedule

3535

Deterministic Estimate

• 54 transmission line and 24 substation projects• Utilizes a “bottoms-up” approach• Based on detailed design information• Unit price data compiled from vendors, contractors and

past projects• Incorporates “Lessons Learned” from recent project

overruns

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Cost Uncertainty & Handy Whitman

• Utility Plant cost indices back to 1912

• Transmission Plant Information Utilized– Total Transmission Plant

– Station Equipment

– Poles & Fixtures

– Overhead Conductors & Devices

• Historical volatility, mean reversion and correlations

• Basis differential between transmission escalation and inflation

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Handy Whitman Index

0

100

200

300

400

500

600

700

1968

1970

1972

1974

1976

1978

1980

1982

1984

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1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

Ind

ex

Total Transmission

Station Equipment

Poles

Overhead Conductors

CPI

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Transmission vs. CPI Inflation

5.4%

7.3%

4.9%

2.8%

0%

1%

2%

3%

4%

5%

6%

7%

8%

30 Year 5 Year

Handy WhitmanCPI Inflation

0.5% Basis 4.5% Basis

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Conductor Cost Indices4.5% Basis, $10,000 2009 Cost

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

Jun-09

Jun-10

Jun-11

Jun-12

Jun-13

Jun-14

Jun-15

Jun-16

Jun-17

Jun-18

Date

No

min

al P

rice

95th Percentile

Mean

5th Percentile

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Model Organization

• The key focus areas are time and cost

• The simulation will allow for the development of thousands of real-life outcomes

• Instead of a point estimate it will consider every possible outcome and the likelihood of those outcomes

MicrosoftProject

Project Sequence

@Risk

MicrosoftExcel

NorthbridgeScenario

Generator

Selection of Labor andCommodity Run Scenario

Selection of ProjectSchedule Scenario

Commodity and LaborCost Scenarios

Project Schedule Scenarios

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How the Model Runs

Segment 2

Start Date - 2010

@Risk selected Microsoft Project scenario #42, inthat scenario, segment 2's start date is 2010, wood pole

prices can then be determined

@Risk Chose the Commodity/Labor Scenario #190

Potential Range of

Commodity Prices

Scenario #190

2008 2009 2010 2011 2012 2013 2014 2015

Wood Pole Prices

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Representative Observations of Total Project Cost

• Each bar of the histogram represents the number of scenario runs that were observed in a specified range of total project cost.

• More observations around a mean value and less observations at extreme lower and higher levels

• Intuitive picture of the possible outcomes of the total project cost Total Project Cost

# o

f O

bse

rvat

ion

s

Representative Observations of Total Project CostFigure 7

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Probability of Program Schedule CompletionJuly 2009 Start

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Feb-12 Jul-12 Nov-12 Apr-13 Aug-13 Jan-14 Jun-14

MPUC CPCN Filing

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Total Project Costs$1.35 B $1.55 B

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1.25 1.30 1.35 1.40 1.45 1.50 1.55 1.60 1.65 1.70 1.75

$'s in Billions

90% of Outcomes

MPUC CPCN Filing

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Summary

• Path Forward

– Scope changes are being reviewed by task forces,

PPA Revisions forthcoming

– Formal TCA Submittal - January 2009

– Presentation to January 20, 2009 RC Meeting

– Presentation to Stakeholders, January 29, 2009 Meeting