WEBVTT 00:00:00.000 --> 00:00:02.200 Unknown: s 00:03:00.000 --> 00:03:09.960 Unknown: Okay, everybody about ready? 00:03:09.960 --> 00:03:14.759 Unknown: You're ready. 00:03:14.759 --> 00:03:20.840 Unknown: Good evening and welcome to the Strategic Development Committee and Special Board Meeting 00:03:20.840 --> 00:03:23.240 SPEAKER_09: of June 9, 2026. 00:03:23.240 --> 00:03:24.800 SPEAKER_09: This room is equipped with a safety alarm. 00:03:24.800 --> 00:03:29.400 SPEAKER_09: If the alarm sounds, please leave in an orderly manner via the exits at the lobby or behind 00:03:29.400 --> 00:03:30.840 SPEAKER_09: the dais. 00:03:30.840 --> 00:03:33.719 SPEAKER_09: Assemble in front of the building and wait to hear the all clear announcement from the 00:03:33.719 --> 00:03:35.480 SPEAKER_09: security before reentering. 00:03:35.480 --> 00:03:39.560 SPEAKER_09: This meeting is being recorded and can be accessed on SMUD's website. 00:03:39.560 --> 00:03:43.259 SPEAKER_09: Please remember to unmute your microphone when speaking in order that our virtual attendees 00:03:43.259 --> 00:03:44.599 SPEAKER_09: may hear. 00:03:44.599 --> 00:03:50.060 SPEAKER_09: The microphone will display a green indicator light when the mic is on. 00:03:50.060 --> 00:03:55.200 SPEAKER_09: For members of the public attending in person that wish to speak at this meeting, please 00:03:55.199 --> 00:03:59.159 SPEAKER_09: fill out the speaker's request form located on the table outside this room and hand it 00:03:59.159 --> 00:04:01.079 SPEAKER_09: to SMUD security. 00:04:01.079 --> 00:04:04.780 SPEAKER_09: Members of the public attending this meeting virtually that wish to provide verbal comments 00:04:04.780 --> 00:04:10.699 SPEAKER_09: during the committee meeting may do so by raising their hand remotely and the feature 00:04:10.699 --> 00:04:15.799 SPEAKER_09: in Zoom or pressing star 9 while dialed into the telephone toll-free number at the time 00:04:15.799 --> 00:04:18.000 SPEAKER_09: the public comment is called. 00:04:18.000 --> 00:04:21.360 SPEAKER_09: Technical support staff will enable the audio for you when your name is announced during 00:04:21.360 --> 00:04:23.819 SPEAKER_09: the public comment period. 00:04:23.819 --> 00:04:29.079 SPEAKER_09: You may also submit written comments by e-mailing them to public comment at SMUD.org. 00:04:29.079 --> 00:04:33.259 SPEAKER_09: Written comments will not be read into the record but will be provided to the board electronically 00:04:33.259 --> 00:04:37.300 SPEAKER_09: and placed into the record of the meeting if received within two hours after the meeting 00:04:37.300 --> 00:04:38.540 SPEAKER_09: ends. 00:04:38.540 --> 00:04:41.379 SPEAKER_09: Chief legal officer, please conduct the roll call. 00:04:41.379 --> 00:04:42.379 SPEAKER_09: Director Fishman? 00:04:42.379 --> 00:04:43.379 Unknown: Here. 00:04:43.379 --> 00:04:44.379 Unknown: Dr. Herber? 00:04:44.379 --> 00:04:45.379 SPEAKER_07: Here. 00:04:45.379 --> 00:04:46.379 SPEAKER_07: Chair Samborn? 00:04:46.379 --> 00:04:47.379 SPEAKER_07: Here. 00:04:47.379 --> 00:04:48.379 SPEAKER_07: All committee members are present. 00:04:48.379 --> 00:04:51.100 SPEAKER_07: Also present are directors Rose, Kurth and present Tamayo. 00:04:51.100 --> 00:04:52.100 SPEAKER_09: Fantastic. 00:04:52.100 --> 00:04:53.100 SPEAKER_09: Thank you. 00:04:53.260 --> 00:04:57.980 SPEAKER_09: Item number one on tonight's agenda is to provide the board presentations by external 00:04:57.980 --> 00:05:04.500 SPEAKER_09: and internal experts regarding the resource adequacy and 2026 summer readiness followed 00:05:04.500 --> 00:05:07.680 SPEAKER_09: by a discussion on the topic. 00:05:07.680 --> 00:05:09.140 SPEAKER_09: This is an important presentation. 00:05:09.140 --> 00:05:14.379 SPEAKER_09: We go into every summer hoping that we have all the resources we need to keep the power 00:05:14.379 --> 00:05:17.140 SPEAKER_09: on during hot summers. 00:05:17.140 --> 00:05:22.340 SPEAKER_09: So we're excited tonight to welcome Elliott Mainzer, president and chief executive officer 00:05:22.339 --> 00:05:25.939 SPEAKER_09: at the California independent system operator. 00:05:25.939 --> 00:05:31.060 SPEAKER_09: Arne Wilson, senior partner at energy and environmental economics or E3. 00:05:31.060 --> 00:05:35.259 SPEAKER_09: And John Olson, the director of energy trading and contracts here at SMUD. 00:05:35.259 --> 00:05:37.939 SPEAKER_09: So I will turn it over to you. 00:05:37.939 --> 00:05:39.819 Unknown: What's that? 00:05:39.819 --> 00:05:40.819 Unknown: Yep. 00:05:40.819 --> 00:05:49.859 Unknown: Thank you very much for the opportunity to be here. 00:05:49.859 --> 00:05:52.139 SPEAKER_11: It's nice to see all of you. 00:05:52.139 --> 00:05:56.579 SPEAKER_11: Before we jump in, I had just a couple of things I had mentioned to a few of my friends 00:05:56.579 --> 00:06:00.219 SPEAKER_11: here tonight that I'm a very happy SMUD customer. 00:06:00.219 --> 00:06:01.219 SPEAKER_11: So thank you very much. 00:06:01.219 --> 00:06:05.259 SPEAKER_11: As is the ISO, as you know, we are squarely. 00:06:05.259 --> 00:06:10.500 SPEAKER_11: When I selected my home in Folsom five and a half years ago, I consciously selected for 00:06:10.500 --> 00:06:11.500 SPEAKER_11: SMUD. 00:06:11.500 --> 00:06:12.699 SPEAKER_11: It has paid off dearly. 00:06:12.699 --> 00:06:14.779 SPEAKER_11: I love my thermostat program. 00:06:14.779 --> 00:06:16.259 SPEAKER_11: I like my customer service. 00:06:16.259 --> 00:06:21.699 SPEAKER_11: And actually just today, I'm moving from a home into a new place in Folsom and swapped 00:06:21.699 --> 00:06:23.420 SPEAKER_11: service and it was seamless. 00:06:23.420 --> 00:06:25.379 SPEAKER_11: So thank you for that. 00:06:25.379 --> 00:06:26.379 SPEAKER_11: That was great. 00:06:26.379 --> 00:06:27.379 SPEAKER_11: Yeah. 00:06:27.379 --> 00:06:30.740 SPEAKER_11: And I also wanted just a quick nod out to John. 00:06:30.740 --> 00:06:36.300 SPEAKER_11: John has just been an incredible partner for us at the ISO as Paul and others as well. 00:06:36.300 --> 00:06:40.899 SPEAKER_11: But just particularly this last couple of years, the work that we've done together, 00:06:40.899 --> 00:06:43.740 SPEAKER_11: particularly on the development of the extended day head market and just generally staying 00:06:43.740 --> 00:06:46.579 SPEAKER_11: tied out on resource adequacy and everything that we're doing here in California. 00:06:46.579 --> 00:06:50.579 SPEAKER_11: The partnership with SMUD is very important to us. 00:06:50.579 --> 00:06:51.579 SPEAKER_11: And I just really appreciate that. 00:06:51.579 --> 00:06:54.699 SPEAKER_11: And just thanks a lot for including me tonight. 00:06:54.699 --> 00:06:59.500 SPEAKER_11: As some of you note, typically for this presentation, I'm going to see if I can get this right. 00:06:59.500 --> 00:07:00.500 SPEAKER_11: There we go. 00:07:00.500 --> 00:07:04.819 SPEAKER_11: Typically for this presentation, you have had the last several years, my chief operating 00:07:04.819 --> 00:07:10.259 SPEAKER_11: officer Mark Rothleader, who can typically run circles around me on the technical issues. 00:07:10.259 --> 00:07:11.699 SPEAKER_11: And so I'm going to try to keep up here. 00:07:11.699 --> 00:07:16.459 SPEAKER_11: I'm going to try to avoid any acronyms, but I'm going to really touch just on three key 00:07:16.459 --> 00:07:20.539 SPEAKER_11: topics that are major preoccupations for us at the CAISO. 00:07:20.539 --> 00:07:24.699 SPEAKER_11: Obviously summer outlook, how are we looking for this year? 00:07:24.699 --> 00:07:27.139 SPEAKER_11: Talk a little bit more about the regional market development. 00:07:27.139 --> 00:07:33.219 SPEAKER_11: It's been an extremely exciting time here in the last few weeks with the commencement 00:07:33.219 --> 00:07:37.060 SPEAKER_11: of the extended day head market, which we're going to talk about how that's going. 00:07:37.060 --> 00:07:40.419 SPEAKER_11: And then just talk a little bit about some of the work that we're doing on transmission 00:07:40.420 --> 00:07:46.020 SPEAKER_11: planning, both within California and outside of the state. 00:07:46.020 --> 00:07:49.420 SPEAKER_11: Obviously infrastructure development, the onboarding of new resources. 00:07:49.420 --> 00:07:54.980 SPEAKER_11: I started at the CAISO about six weeks after the rotating outages of 2020. 00:07:54.980 --> 00:08:01.300 SPEAKER_11: And as you can imagine, there was a lot of things flying around at that time and getting 00:08:01.300 --> 00:08:06.259 SPEAKER_11: ourselves back to a situation where the working relationships with all of the different entities 00:08:06.259 --> 00:08:09.900 SPEAKER_11: in the reliability patch and making sure that the state is sitting on a solid foundation 00:08:09.899 --> 00:08:13.539 SPEAKER_11: of resource adequacy really has been job number one. 00:08:13.539 --> 00:08:16.500 SPEAKER_11: And I'm guardedly optimistic that we're in better shape. 00:08:16.500 --> 00:08:18.859 SPEAKER_11: So we're going to start out with on the weather. 00:08:18.859 --> 00:08:24.819 SPEAKER_11: I think we all know, and I'm sure some of you have looked at these maps, that we're 00:08:24.819 --> 00:08:27.060 SPEAKER_11: gearing up for a hot summer, right? 00:08:27.060 --> 00:08:32.179 SPEAKER_11: There is definitely the meteorologists are all telling us that we've got increased chances 00:08:32.179 --> 00:08:37.419 SPEAKER_11: of above normal temperatures compared to recent summers, particularly along coastal California 00:08:37.419 --> 00:08:38.579 SPEAKER_11: and the Pacific Northwest. 00:08:38.580 --> 00:08:41.940 SPEAKER_11: And actually the forecasts have called for the hot start to summer. 00:08:41.940 --> 00:08:42.940 SPEAKER_11: And we're already seeing that. 00:08:42.940 --> 00:08:45.820 SPEAKER_11: I know it's going to be 90 and above up in the Northwest this weekend. 00:08:45.820 --> 00:08:47.540 SPEAKER_11: And it's already warm. 00:08:47.540 --> 00:08:55.420 SPEAKER_11: May was, I think, the highest recorded load in the WEC all time with the Northwest and 00:08:55.420 --> 00:08:57.740 SPEAKER_11: the desert Southwest already recording records. 00:08:57.740 --> 00:09:02.300 SPEAKER_11: And temperatures are indicating it's going to be a hot summer, particularly because of 00:09:02.300 --> 00:09:07.259 SPEAKER_11: the sea surface temperatures are much warmer this year than they were in recent years. 00:09:07.259 --> 00:09:10.639 SPEAKER_11: So you can see where some of the heat is concentrated. 00:09:10.639 --> 00:09:16.939 SPEAKER_11: This is the kind of year where we just have higher likelihood of things getting hot at 00:09:16.939 --> 00:09:22.819 SPEAKER_11: the same time, which we know is the kind of situation where notwithstanding our best planning, 00:09:22.819 --> 00:09:24.100 SPEAKER_11: we can run into some issues. 00:09:24.100 --> 00:09:27.819 SPEAKER_11: It's also been a really odd year. 00:09:27.819 --> 00:09:31.840 SPEAKER_11: Starting in California, I'm sure you all know this, it's been, we had a, actually a fairly 00:09:31.840 --> 00:09:34.019 SPEAKER_11: big water year in some ways, right? 00:09:34.460 --> 00:09:38.899 SPEAKER_11: The reservoirs in many places in California are at close to record levels, but we also 00:09:38.899 --> 00:09:43.139 SPEAKER_11: have record low snowpack in many parts of the Sierra. 00:09:43.139 --> 00:09:46.699 SPEAKER_11: So we're in a situation this year where the reservoirs are high, but we're going to have 00:09:46.699 --> 00:09:50.460 SPEAKER_11: to really sip from them across the course of the summer because by the time we get to 00:09:50.460 --> 00:09:53.939 SPEAKER_11: August and September, we're not going to have any more refill. 00:09:53.939 --> 00:09:59.639 SPEAKER_11: And this is actually a condition, as you can see from on the left side, just the tremendous 00:09:59.639 --> 00:10:03.139 SPEAKER_11: limited snowpack in many parts of the Pacific Northwest. 00:10:03.139 --> 00:10:07.779 SPEAKER_11: It's really only the upper Columbia, you know, up into British Columbia, that's got 00:10:07.779 --> 00:10:10.100 SPEAKER_11: a decent snowpack and still building precip. 00:10:10.100 --> 00:10:17.259 SPEAKER_11: But you can see across the west, some very, very low reservoir capacity conditions, particularly 00:10:17.259 --> 00:10:21.460 SPEAKER_11: in the desert southwest, scattered across the intermountain west and into the desert 00:10:21.460 --> 00:10:22.460 SPEAKER_11: southwest. 00:10:22.460 --> 00:10:26.340 SPEAKER_11: So this is a year where we're going to have to be very carefully manage our water situation 00:10:26.340 --> 00:10:28.259 SPEAKER_11: across the course of the summer. 00:10:28.259 --> 00:10:35.399 SPEAKER_11: And generally, as I said, you know, looking at fire season as well, this is the kind of 00:10:35.399 --> 00:10:40.100 SPEAKER_11: year we've already in California had a lot of grass fires, particularly in Southern California. 00:10:40.100 --> 00:10:41.620 SPEAKER_11: We're going to have to watch that very carefully. 00:10:41.620 --> 00:10:47.460 SPEAKER_11: But you can see the fire map looks quite risky, particularly in the Great Basin and up in 00:10:47.460 --> 00:10:48.460 SPEAKER_11: the Pacific Northwest. 00:10:48.460 --> 00:10:50.939 SPEAKER_11: And it sort of worsens as you get across the course of the season. 00:10:50.939 --> 00:10:51.939 SPEAKER_11: So, yes. 00:10:51.939 --> 00:10:53.019 SPEAKER_09: Can I ask you a question? 00:10:53.019 --> 00:10:54.019 SPEAKER_11: Yeah. 00:10:54.019 --> 00:10:59.019 SPEAKER_09: This goes through August, but if I recall, some of the worst months have been September 00:10:59.019 --> 00:11:01.179 SPEAKER_09: and October, if we don't have rain. 00:11:01.179 --> 00:11:02.179 SPEAKER_11: Exactly. 00:11:02.179 --> 00:11:03.179 SPEAKER_11: So it extends well. 00:11:03.179 --> 00:11:04.500 SPEAKER_11: But that's a great question. 00:11:04.500 --> 00:11:05.699 SPEAKER_11: It certainly extends into the fall. 00:11:05.699 --> 00:11:08.460 SPEAKER_11: And then, of course, you get the winds, you can really whip things up. 00:11:08.460 --> 00:11:11.460 SPEAKER_11: So you have very dangerous fire conditions. 00:11:11.460 --> 00:11:17.579 SPEAKER_11: We could see a little bit of relief down in the desert southwest, maybe a little bit of 00:11:17.579 --> 00:11:19.819 SPEAKER_11: a higher monsoon season. 00:11:19.820 --> 00:11:25.100 SPEAKER_11: But it's going to be a lot of vegetation buildup, some very, very dry and hot conditions, limited 00:11:25.100 --> 00:11:26.620 SPEAKER_11: stream flow. 00:11:26.620 --> 00:11:30.220 SPEAKER_11: And I think we all just generally know that climatically you're hearing our meteorologist 00:11:30.220 --> 00:11:33.700 SPEAKER_11: talking about moving into kind of one of these super El Nino's. 00:11:33.700 --> 00:11:36.060 SPEAKER_11: And we're sort of transitioning into that, right? 00:11:36.060 --> 00:11:41.540 SPEAKER_11: So hot, fire risk, these are the kind of things we're going to have to be watching out for. 00:11:41.540 --> 00:11:48.340 SPEAKER_11: Now fortunately, against these conditions, we really, certainly speaking for the California 00:11:48.340 --> 00:11:52.980 SPEAKER_11: independent system operators, Balancing Area, we're fortunate to be in much, much, much 00:11:52.980 --> 00:11:56.740 SPEAKER_11: better condition than we were just several years ago. 00:11:56.740 --> 00:12:01.540 SPEAKER_11: Just as a backdrop to these numbers, over the last five years, we've brought on over 00:12:01.540 --> 00:12:05.580 SPEAKER_11: 30,000 megawatts of new generation within our system. 00:12:05.580 --> 00:12:11.100 SPEAKER_11: So a huge amount of procurement through the investor and utilities and some of the embeddings. 00:12:11.100 --> 00:12:16.300 SPEAKER_11: We've also, as you know, we now have close to 17,000 megawatts of four-hour lithium 00:12:16.299 --> 00:12:21.779 SPEAKER_11: ion batteries on our grid, which have just truly been transformational in terms of helping 00:12:21.779 --> 00:12:26.579 SPEAKER_11: us to manage the net peak, which you're well familiar with after sunset. 00:12:26.579 --> 00:12:31.339 SPEAKER_11: So that has been a truly remarkable transformation in the system. 00:12:31.339 --> 00:12:34.859 SPEAKER_11: We've been building up the planning reserve margin and generally strengthening things 00:12:34.859 --> 00:12:39.379 SPEAKER_11: to the point that just even in the last several months, just from last year, from September 00:12:39.379 --> 00:12:43.019 SPEAKER_11: 1st through April, we added another 2,127 megawatts. 00:12:44.019 --> 00:12:48.419 SPEAKER_11: Then just in the last few months, another 6,000 megawatts of generation, including, 00:12:48.419 --> 00:12:54.100 SPEAKER_11: it's still a little bit of a kind of a worst secret, the Sunzia Wind Energy Project, which 00:12:54.100 --> 00:12:59.620 SPEAKER_11: is just about to be formally announced, is now operating in New Mexico, delivering energy 00:12:59.620 --> 00:13:00.620 SPEAKER_11: to California. 00:13:00.620 --> 00:13:04.579 SPEAKER_11: We're actually operating that wind plant as part of our balancing authority. 00:13:04.579 --> 00:13:05.579 SPEAKER_11: So it's part of the system. 00:13:05.579 --> 00:13:08.259 SPEAKER_11: It's contributing to the generation capability in the system. 00:13:08.500 --> 00:13:13.939 SPEAKER_02: It was very well publicized in the energy blogs, your notice of the FETs. 00:13:13.939 --> 00:13:18.860 SPEAKER_02: Yeah, it's been interesting. 00:13:18.860 --> 00:13:21.299 SPEAKER_11: Pattern has been a little bit hesitant to talk about it. 00:13:21.299 --> 00:13:25.939 SPEAKER_11: They just don't want to get too much in the headlines, developing big wind projects in 00:13:25.939 --> 00:13:26.939 SPEAKER_11: today's world. 00:13:26.939 --> 00:13:27.939 SPEAKER_11: But it's coming out. 00:13:27.939 --> 00:13:31.139 SPEAKER_11: We're actually going to New Mexico next week for the formal commercial ceremony on it. 00:13:31.139 --> 00:13:32.500 SPEAKER_11: So we'll be reading more about it. 00:13:32.539 --> 00:13:39.019 SPEAKER_11: The load forecast for September peaks at a bit higher than last year, 46,844 megawatts, 00:13:39.019 --> 00:13:44.340 SPEAKER_11: our ending 18, around 6 p.m., based on the California Energy Commission's integrated 00:13:44.340 --> 00:13:45.340 SPEAKER_11: policy report. 00:13:45.340 --> 00:13:51.019 SPEAKER_11: And our probabilistic assessment, when we look at the amount of installed generating 00:13:51.019 --> 00:13:59.379 SPEAKER_11: capacity in the system and adjust for the type of resources, characteristics, and outages, 00:13:59.379 --> 00:14:06.539 SPEAKER_11: shows us with a reasonable surplus of about 2,550 megawatts at the 1 in 10. 00:14:06.539 --> 00:14:12.580 SPEAKER_11: So that 1 in 10 loss of load expectation, that's the metric that we've been using. 00:14:12.580 --> 00:14:15.779 SPEAKER_11: That's when we go to the Public Utilities Commission, other forums that we advocate, 00:14:15.779 --> 00:14:21.860 SPEAKER_11: we think that's the right basic target for resource adequacy sufficiency within the system. 00:14:21.860 --> 00:14:24.340 SPEAKER_11: And we're fortunate today that we are meeting that. 00:14:24.340 --> 00:14:29.820 SPEAKER_11: Now this graphic, I'm not going to spend a ton of time looking at this, but you can 00:14:29.820 --> 00:14:38.620 SPEAKER_11: basically see the firm line, the bottom line, the black line, is the 2025 forecast out of 00:14:38.620 --> 00:14:42.780 SPEAKER_11: the integrated policy report from the California Energy Commission. 00:14:42.780 --> 00:14:45.620 SPEAKER_11: You can see that we're fairly comfortably meeting that. 00:14:45.620 --> 00:14:52.340 SPEAKER_11: And then the dotted line above that is that forecast plus the 17.5 percent planning reserve 00:14:52.340 --> 00:14:53.340 SPEAKER_11: margin. 00:14:53.340 --> 00:14:57.980 SPEAKER_11: And right above that is that hyper forecast plus a 25 percent planning reserve margin. 00:14:57.980 --> 00:15:02.500 SPEAKER_11: Right now, especially with the battery capacity, we're meeting all of those goals with that 00:15:02.500 --> 00:15:05.660 SPEAKER_11: 2,500 megawatt surplus in September. 00:15:05.660 --> 00:15:11.620 SPEAKER_11: But not all of that capacity is actually under contract with must offer obligations to California 00:15:11.620 --> 00:15:12.620 SPEAKER_11: utilities. 00:15:12.620 --> 00:15:14.340 SPEAKER_11: A significant amount of it is in the ground. 00:15:14.340 --> 00:15:18.820 SPEAKER_11: But one of the things that we're watching is we're watching resource adequacy prices, 00:15:18.820 --> 00:15:22.820 SPEAKER_11: we're watching some of that generation which is not under contract, could conceivably get 00:15:22.820 --> 00:15:24.620 SPEAKER_11: exported outside of California. 00:15:24.620 --> 00:15:25.620 SPEAKER_11: We've seen that before. 00:15:25.620 --> 00:15:27.700 SPEAKER_11: So that's one of the variables that we're watching. 00:15:27.700 --> 00:15:32.540 SPEAKER_11: And we're encouraging the PEC to keep a pretty careful watch on what the gas plant capacity 00:15:32.540 --> 00:15:33.540 SPEAKER_11: is doing. 00:15:33.540 --> 00:15:36.840 SPEAKER_11: Because if it starts exporting out of the state, it's not available for in-state needs. 00:15:36.840 --> 00:15:42.180 SPEAKER_11: But generally, all things considered, we've made enormous progress in the recent years. 00:15:42.180 --> 00:15:46.660 SPEAKER_11: When we are entering the summer, I would say cautiously optimistic, which you've heard 00:15:46.659 --> 00:15:51.620 SPEAKER_11: of, the scenario that really gets us, as I mentioned, is that scenario where it's just 00:15:51.620 --> 00:15:57.600 SPEAKER_11: big time high pressure system, that trough that settles over a big portion of the west, 00:15:57.600 --> 00:16:02.539 SPEAKER_11: like we saw back in 2020, where the ability for folks to be importing and exporting power 00:16:02.539 --> 00:16:04.819 SPEAKER_11: amongst each other gets really limited. 00:16:04.819 --> 00:16:10.299 SPEAKER_11: And that's the situation where we're likely deep, deep into our strategic reserve of gas 00:16:10.299 --> 00:16:12.939 SPEAKER_11: plants and other demand response resources. 00:16:12.940 --> 00:16:18.580 SPEAKER_11: And honestly, hoping for the best, which is never a great strategy when it comes to 00:16:18.580 --> 00:16:19.580 SPEAKER_11: unreliability. 00:16:19.580 --> 00:16:24.260 SPEAKER_11: But basically, the bottom line, much better conditions, still exposed in that worst case 00:16:24.260 --> 00:16:27.060 SPEAKER_11: to the super heater, west wide heat wave. 00:16:27.060 --> 00:16:30.420 SPEAKER_11: And I think probably mirrors your perspective as well, John. 00:16:30.420 --> 00:16:31.420 Unknown: Elliot? 00:16:31.420 --> 00:16:32.420 SPEAKER_02: Yes. 00:16:32.420 --> 00:16:33.740 SPEAKER_02: Can I ask you a question? 00:16:33.740 --> 00:16:34.740 SPEAKER_02: Yeah. 00:16:34.740 --> 00:16:40.180 SPEAKER_02: When I read the summer forecast, I don't know, probably like seven years ago, and it was still 00:16:40.179 --> 00:16:43.419 SPEAKER_02: that one in 10 loss of load expectation. 00:16:43.419 --> 00:16:49.819 SPEAKER_02: So it hasn't changed despite bringing on all these resources. 00:16:49.819 --> 00:16:57.579 SPEAKER_02: Would you have any perspective more like what's under the hood of the car, right? 00:16:57.579 --> 00:17:01.859 SPEAKER_02: Why are we having the same risk analysis despite so much more being done? 00:17:01.859 --> 00:17:03.339 SPEAKER_02: Well, that's a good question. 00:17:03.339 --> 00:17:07.179 SPEAKER_11: I want to, probably not the person's going to give you the definitive analysis, but at 00:17:07.180 --> 00:17:11.539 SPEAKER_11: the end of the day, I mean, seven, eight years ago, we were still retiring generation, 00:17:11.539 --> 00:17:13.940 SPEAKER_11: and we were bringing a lot of solar energy on the system. 00:17:13.940 --> 00:17:17.980 SPEAKER_11: And I don't think we had a great, super great, fine-tuned understanding of how it was going 00:17:17.980 --> 00:17:19.140 SPEAKER_11: to perform. 00:17:19.140 --> 00:17:22.940 SPEAKER_11: We didn't have the batteries or the other dispatchable capacity on the system. 00:17:22.940 --> 00:17:27.220 SPEAKER_11: I think our resource adequacy analytics were probably a little bit less mature, and Arne 00:17:27.220 --> 00:17:29.060 SPEAKER_11: may have a perspective on that. 00:17:29.060 --> 00:17:34.259 SPEAKER_11: But I think today, given a much sharper understanding of load, a much sharper understanding of how 00:17:34.259 --> 00:17:38.539 SPEAKER_11: the different resources perform and what their net qualifying capacity actually is, 00:17:38.539 --> 00:17:44.379 SPEAKER_11: all the behind the meter generation that's come onto the grid and displaced load, I think 00:17:44.379 --> 00:17:46.579 SPEAKER_11: the latest fresh tells us we're just in much better shape. 00:17:46.579 --> 00:17:48.420 SPEAKER_11: And Arne, you may have a point on that. 00:17:48.420 --> 00:17:50.019 SPEAKER_11: You've been watching it for years. 00:17:50.019 --> 00:17:54.779 Unknown: Yeah, I mean, I think what I heard you ask, when it comes to the one day in 10, that's 00:17:54.779 --> 00:17:57.599 SPEAKER_06: just the standard that we plan to. 00:17:57.599 --> 00:17:59.619 SPEAKER_06: And that's always been the standard that we plan to. 00:17:59.619 --> 00:18:02.660 SPEAKER_06: Now six years ago, we were a little bit short of that. 00:18:02.660 --> 00:18:07.700 SPEAKER_06: But I think your last slide showed that we actually have 2500 megawatts of surplus capacity. 00:18:07.700 --> 00:18:10.180 SPEAKER_06: So we're performing above one day in 10. 00:18:10.180 --> 00:18:13.820 SPEAKER_06: We're more like one day in 15 now, given how much capacity we have online. 00:18:13.820 --> 00:18:16.500 SPEAKER_06: But one day in 10 still is the standard that we plan to. 00:18:16.500 --> 00:18:17.500 SPEAKER_06: Yeah, that's a great. 00:18:17.500 --> 00:18:19.380 SPEAKER_11: So the standard hasn't changed that much. 00:18:19.380 --> 00:18:25.620 SPEAKER_11: But the net load resource balance relative to that standard has gotten much, much better. 00:18:25.620 --> 00:18:28.259 SPEAKER_11: We might be meeting the standard. 00:18:28.259 --> 00:18:29.259 SPEAKER_11: Okay. 00:18:29.259 --> 00:18:30.259 SPEAKER_11: Thank you. 00:18:30.259 --> 00:18:31.660 SPEAKER_11: We're getting close to meeting it. 00:18:32.259 --> 00:18:33.740 SPEAKER_09: Arne, you have a question. 00:18:33.740 --> 00:18:37.940 SPEAKER_09: So most of what you presented, I think, was all utility scale. 00:18:37.940 --> 00:18:45.460 SPEAKER_09: So with people adopting more behind the meter generation and storage, is that at all factored 00:18:45.460 --> 00:18:46.460 SPEAKER_09: into this? 00:18:46.460 --> 00:18:47.460 SPEAKER_11: Absolutely. 00:18:47.460 --> 00:18:53.779 SPEAKER_11: I mean, we work quite hard with the California Energy Commission and the utilities to be 00:18:53.779 --> 00:18:58.180 SPEAKER_11: able to sort of forecast what all that behind the meter generation is and how it sort of 00:18:58.180 --> 00:19:00.779 SPEAKER_11: nets against the aggregate load in the system. 00:19:00.779 --> 00:19:06.460 SPEAKER_11: As a matter of fact, we really manage the system to the net load of the system, the 00:19:06.460 --> 00:19:12.619 SPEAKER_11: gross demand minus the front of the meter and the behind the meter renewables, particularly 00:19:12.619 --> 00:19:13.619 SPEAKER_11: the solar. 00:19:13.619 --> 00:19:16.940 SPEAKER_11: So it's really that net demand on the system that we have to manage that puts the most 00:19:16.940 --> 00:19:19.339 SPEAKER_11: strain on the grid in August and September. 00:19:19.339 --> 00:19:20.740 SPEAKER_09: So it is accounted for and all that? 00:19:20.740 --> 00:19:22.339 SPEAKER_09: It is definitely accounted for. 00:19:22.339 --> 00:19:26.379 SPEAKER_09: Because another reason to love SMUD, we doubled our incentives for battery storage. 00:19:26.379 --> 00:19:29.059 SPEAKER_09: In case anybody's interested out there. 00:19:29.059 --> 00:19:30.059 SPEAKER_09: Good. 00:19:30.059 --> 00:19:35.859 SPEAKER_09: It shows up in your peak forecast, right, which is 46 or 47,000. 00:19:35.859 --> 00:19:41.980 SPEAKER_05: And I mean, years ago, it was over 50 often, or at least getting there. 00:19:41.980 --> 00:19:42.980 SPEAKER_05: Exactly. 00:19:42.980 --> 00:19:47.980 SPEAKER_05: And so that's reflecting that behind the meter that just shows up like less load. 00:19:47.980 --> 00:19:48.980 Unknown: Yeah. 00:19:48.980 --> 00:19:52.419 SPEAKER_11: I mean, I think it's really a big contributing factor to why the load forecast in California 00:19:52.419 --> 00:19:55.419 SPEAKER_11: are growing much more slowly than they are in other places, right? 00:19:55.419 --> 00:19:57.740 SPEAKER_11: We keep putting on more and more of that distributed resource. 00:19:57.740 --> 00:20:03.579 SPEAKER_11: I mean, in 2022, and we hit a 52,000 megawatt net peak, imagine how much higher that would 00:20:03.579 --> 00:20:07.299 SPEAKER_11: have been without the behind the meter generation. 00:20:07.299 --> 00:20:08.660 SPEAKER_06: We actually did some analysis of that. 00:20:08.660 --> 00:20:12.779 SPEAKER_06: And our estimate was about 58 gigawatts is what that would have been. 00:20:12.779 --> 00:20:13.779 SPEAKER_11: Yeah. 00:20:13.779 --> 00:20:16.180 SPEAKER_11: So there was another 6,000 megawatts right there. 00:20:16.180 --> 00:20:17.180 SPEAKER_11: Yeah. 00:20:17.180 --> 00:20:18.180 SPEAKER_01: I'm just curious. 00:20:18.180 --> 00:20:23.900 SPEAKER_01: You know, obviously, there's some value with rooftop solar. 00:20:23.900 --> 00:20:33.940 SPEAKER_01: But with the increasing demand and it coming from all over, is there added value in having 00:20:33.940 --> 00:20:43.019 SPEAKER_01: rooftop solar on homes where you can cut down a little bit of the energy that's needed? 00:20:43.019 --> 00:20:44.019 Unknown: Yeah. 00:20:44.019 --> 00:20:47.300 SPEAKER_11: I mean, look, there's no simple answer to that. 00:20:47.300 --> 00:20:51.700 SPEAKER_11: From our perspective at the ISO, we don't get involved with the utility programs and 00:20:51.700 --> 00:20:55.380 SPEAKER_11: designing the incentives or doing a fixed and variable cost recovery. 00:20:55.380 --> 00:20:59.259 SPEAKER_11: Certainly from a grid operations perspective, given the kind of extreme weather that we're 00:20:59.259 --> 00:21:06.620 SPEAKER_11: having and the costs of serving that load, and then just the onset of all the new technology 00:21:06.620 --> 00:21:11.460 SPEAKER_11: that's coming on the system to the extent to which folks are investing comfortably and 00:21:11.460 --> 00:21:15.900 SPEAKER_11: economically in rooftop solar and that works for them, it helps, right? 00:21:15.900 --> 00:21:17.100 SPEAKER_11: There's no doubt about it. 00:21:17.100 --> 00:21:21.539 SPEAKER_11: Whether it is the per megawatt hour unit cost cheapest way to do it, that's a bigger 00:21:21.539 --> 00:21:25.139 SPEAKER_11: debate and honestly at the ISO, that's not really our business. 00:21:25.139 --> 00:21:27.180 SPEAKER_11: Our business is just making sure it's factored in. 00:21:27.180 --> 00:21:31.859 SPEAKER_11: And I can tell you on a day when it's 52,000 megawatts, we'll take every last megawatt 00:21:31.859 --> 00:21:34.539 SPEAKER_11: a generation we can get from a reliability perspective. 00:21:34.539 --> 00:21:35.539 SPEAKER_11: Yeah. 00:21:35.539 --> 00:21:38.099 SPEAKER_11: I want to just make sure, checking on time, should I keep going? 00:21:38.099 --> 00:21:39.099 SPEAKER_11: Are we okay? 00:21:39.099 --> 00:21:40.460 SPEAKER_11: And we're okay? 00:21:40.460 --> 00:21:44.299 SPEAKER_11: I want to just make sure our other two presenters get their material in. 00:21:44.299 --> 00:21:46.099 SPEAKER_11: But those are great questions. 00:21:46.099 --> 00:21:47.099 SPEAKER_11: Thanks. 00:21:47.099 --> 00:21:48.099 SPEAKER_09: I'm never sure, John. 00:21:48.099 --> 00:21:50.539 SPEAKER_11: So, in the next six years, and we're going to have plenty of time for other questions 00:21:50.539 --> 00:21:59.099 SPEAKER_11: too, but I want to switch to the markets for a couple minutes because certainly when you 00:21:59.099 --> 00:22:03.619 SPEAKER_11: think about the evolution of the Western United States and California's relationship in the 00:22:03.619 --> 00:22:09.699 SPEAKER_11: last 10, 12 years, the development of the Western energy imbalance market, which started 00:22:09.699 --> 00:22:14.980 SPEAKER_11: back in 2013, 2014, where the KaISO sort of said to the rest of the West, look, we've 00:22:14.980 --> 00:22:18.360 SPEAKER_11: built a real-time energy market here. 00:22:18.360 --> 00:22:22.339 SPEAKER_11: We see you all starting to experience some of the same issues, you know, more renewables, 00:22:22.339 --> 00:22:25.079 SPEAKER_11: more volatility, bigger transmission constraints. 00:22:25.079 --> 00:22:30.500 SPEAKER_11: We can extend our market out to your system at relatively low cost on a voluntary basis. 00:22:30.500 --> 00:22:33.299 SPEAKER_11: Pacific Corps was the first entity to take us up on that. 00:22:33.299 --> 00:22:35.599 SPEAKER_11: They went live in 2014. 00:22:35.599 --> 00:22:43.339 SPEAKER_11: And 12 years later, we now have a total of 24 participants in the Western energy imbalance 00:22:43.339 --> 00:22:50.779 SPEAKER_11: market, including about 80 percent, representing about 80 percent of the load service in the 00:22:50.779 --> 00:22:51.779 SPEAKER_11: Western interconnection. 00:22:51.779 --> 00:22:57.980 SPEAKER_11: And this market has just been an incredibly important piece of not only bending the cost 00:22:57.980 --> 00:23:00.139 SPEAKER_11: curve in terms of production cost savings, we'll come back to that. 00:23:00.139 --> 00:23:06.699 SPEAKER_11: I think we're now over $8.6 billion of production cost savings, economic savings, but the reliability 00:23:06.700 --> 00:23:13.299 SPEAKER_11: benefits of this market, it just takes advantage of the physical transmission connectivity 00:23:13.299 --> 00:23:18.100 SPEAKER_11: that exists between California and the Northwest and California in the desert southwest and 00:23:18.100 --> 00:23:21.059 SPEAKER_11: right across Nevada into the intermountain west. 00:23:21.059 --> 00:23:22.059 SPEAKER_11: We just are blessed. 00:23:22.059 --> 00:23:25.980 Unknown: Even though we've got work to do on our grid, we have a very well-connected system. 00:23:25.980 --> 00:23:30.220 SPEAKER_11: We have a lot of resource diversity, the hydro in the northwest, California's renewables, 00:23:30.220 --> 00:23:34.299 SPEAKER_11: the gas in the desert southwest, the solar, the batteries. 00:23:34.299 --> 00:23:39.339 SPEAKER_11: This market leverages that connectivity and diversity and produces huge reliability and 00:23:39.339 --> 00:23:40.940 SPEAKER_11: economic value. 00:23:40.940 --> 00:23:47.339 SPEAKER_11: And as you can see, since 2019, when the Balancing Authority of Northern California and SMUD 00:23:47.339 --> 00:23:52.339 SPEAKER_11: went live in WEIM, it's also been a significant source of value. 00:23:52.339 --> 00:23:58.059 SPEAKER_11: I think talking to John, I think that if you make a few adjustments for some of the prices 00:23:58.059 --> 00:24:02.000 SPEAKER_11: and some extreme conditions, I think it's probably at least about $900 million of collective 00:24:02.000 --> 00:24:08.000 SPEAKER_11: value for Bank as a Whole and I think roughly $600 million, I think, for SMUD. 00:24:08.000 --> 00:24:12.839 SPEAKER_11: That's real value when affordability is paramount. 00:24:12.839 --> 00:24:17.880 SPEAKER_11: Also more broadly for all of the participants, it's been a tremendous... 00:24:17.880 --> 00:24:25.400 SPEAKER_11: Just Q1, 2026, we saw almost $400 million of economic benefits for participants. 00:24:25.400 --> 00:24:30.319 SPEAKER_11: Also this has become a tool for helping to displace higher costs, more polluting thermal 00:24:30.319 --> 00:24:34.220 SPEAKER_11: generation and to reduce the amount of curtailments of renewables. 00:24:34.220 --> 00:24:39.679 SPEAKER_11: So the clean energy and environmental greenhouse gas savings have been very significant in 00:24:39.679 --> 00:24:40.679 SPEAKER_11: this market. 00:24:40.679 --> 00:24:45.099 SPEAKER_11: And also across the footprint, it's allowed the participants over time as they become 00:24:45.099 --> 00:24:48.639 SPEAKER_11: more comfortable with the operation to reduce the amount of flexible reserves that they 00:24:48.639 --> 00:24:52.799 SPEAKER_11: need to carry on their systems to follow their load. 00:24:52.799 --> 00:24:56.919 SPEAKER_11: So it's just honestly been a real winner in many ways. 00:24:56.919 --> 00:24:59.759 SPEAKER_11: And of course, this is the market footprint. 00:24:59.759 --> 00:25:01.519 SPEAKER_11: I love this slide. 00:25:01.519 --> 00:25:02.519 SPEAKER_11: This slide is... 00:25:02.519 --> 00:25:04.319 SPEAKER_11: This is the one that scared me. 00:25:04.319 --> 00:25:10.660 SPEAKER_09: We call this the money slide because this is a map of the transmission connections that 00:25:10.660 --> 00:25:14.720 SPEAKER_11: exist between all of the different EIM participants. 00:25:14.720 --> 00:25:18.319 SPEAKER_11: These are known as the energy transfer path, the ETSRs. 00:25:18.319 --> 00:25:23.960 SPEAKER_11: It just shows you how much connectivity exists within this existing market. 00:25:23.960 --> 00:25:26.640 SPEAKER_11: You can see where bank fits into that. 00:25:26.800 --> 00:25:31.880 SPEAKER_11: It's really been the reason that we've seen both the economic and reliability benefits 00:25:31.880 --> 00:25:33.560 SPEAKER_11: of this market for so many years. 00:25:33.560 --> 00:25:35.120 SPEAKER_11: And that is the footprint. 00:25:35.120 --> 00:25:36.380 SPEAKER_11: That is the grid. 00:25:36.380 --> 00:25:41.440 SPEAKER_11: That's the connectivity on which we are building now our extended day ahead market. 00:25:41.440 --> 00:25:45.880 SPEAKER_11: The EIM showed the power of optimizing the next 5, 10, 15 minutes. 00:25:45.880 --> 00:25:51.400 SPEAKER_11: But we know that the majority of energy transactions are consummated in the day ahead time frame. 00:25:51.400 --> 00:25:56.960 SPEAKER_11: And so the ability now to move from real time to day ahead is a big part of the optimization 00:25:56.960 --> 00:25:57.960 SPEAKER_11: now. 00:25:57.960 --> 00:26:02.519 Unknown: Elliot, obviously some of the cost savings comes in not using thermal plants, not having 00:26:02.519 --> 00:26:03.920 SPEAKER_05: to pay for that gas. 00:26:03.920 --> 00:26:04.920 SPEAKER_11: Absolutely. 00:26:04.920 --> 00:26:10.200 Unknown: Have you done any studies on how much impact that's having on reducing the gas prices for 00:26:10.200 --> 00:26:11.840 SPEAKER_05: the gas we do have to use? 00:26:11.840 --> 00:26:13.680 Unknown: Yeah, it's a good question. 00:26:13.720 --> 00:26:22.840 SPEAKER_11: I don't know if I've seen an assessment that's specific to the EIM, but certainly in California 00:26:22.840 --> 00:26:27.279 SPEAKER_11: and in other parts of the state, the amount of gas consumption in California is way down 00:26:27.279 --> 00:26:29.560 SPEAKER_11: year on year, just the last two or three years. 00:26:29.560 --> 00:26:32.680 SPEAKER_11: Significantly, 30, 40 percent as we bring on all the solar. 00:26:32.680 --> 00:26:34.400 SPEAKER_11: Yeah, it's a huge amount. 00:26:34.400 --> 00:26:38.240 SPEAKER_11: And certainly that's contributing to lower gas, higher gas storage, lower gas prices, 00:26:38.240 --> 00:26:39.440 SPEAKER_11: lower volatility. 00:26:39.440 --> 00:26:42.440 SPEAKER_11: Just go straight to the customer bottom line. 00:26:42.440 --> 00:26:45.519 SPEAKER_11: And so the physics and economics of this market have been remarkable. 00:26:45.519 --> 00:26:50.920 SPEAKER_11: I will say, obviously, having been a Bonneville Power Administrator for seven years and having 00:26:50.920 --> 00:26:55.279 SPEAKER_11: brought BPA into this market, one of the things we're watching right now is whether Bonneville 00:26:55.279 --> 00:26:59.039 SPEAKER_11: is going to stay in this market or they're going to part for the alternative markets 00:26:59.039 --> 00:27:03.080 SPEAKER_11: plus market, which is being developed to the east of us in the Southwest Power Pool. 00:27:03.080 --> 00:27:04.480 SPEAKER_11: That's a whole other story. 00:27:04.480 --> 00:27:10.000 SPEAKER_11: But for me, I'm just on record having managed these grids for the last 25 years that breaking 00:27:10.000 --> 00:27:16.599 SPEAKER_11: this apart, especially with the passage last year of Assembly Bill 825, which is going 00:27:16.599 --> 00:27:21.799 SPEAKER_11: to allow us to manage these, both this market and the extended market under fully independent 00:27:21.799 --> 00:27:26.220 SPEAKER_11: governance is something that the West will regret for generations. 00:27:26.220 --> 00:27:29.039 SPEAKER_11: It will degrade economics and it will degrade reliability. 00:27:29.039 --> 00:27:33.039 SPEAKER_11: So we're going to watch how that plays out here in the next couple of years. 00:27:33.039 --> 00:27:34.519 SPEAKER_11: So I'm going to take about five more minutes. 00:27:34.519 --> 00:27:36.799 SPEAKER_11: And then I want to make sure we get Arnie and John on. 00:27:36.799 --> 00:27:38.519 SPEAKER_11: And we'll come back for some additional questions. 00:27:38.519 --> 00:27:39.519 SPEAKER_11: But if we take one. 00:27:40.039 --> 00:27:41.720 SPEAKER_11: No, I'll take that question now. 00:27:41.720 --> 00:27:43.599 SPEAKER_11: I just want to make sure. 00:27:43.599 --> 00:27:51.879 SPEAKER_01: I hear over and over and over about how our grid is unstable, statewide, that we really 00:27:51.879 --> 00:27:55.240 SPEAKER_01: have to put a lot of money into it. 00:27:55.240 --> 00:28:01.319 SPEAKER_01: And yet what you seem to be saying is that we're pretty well connected and we're pretty 00:28:01.319 --> 00:28:02.319 SPEAKER_01: strong. 00:28:02.319 --> 00:28:07.680 Unknown: Is that fair or is that too political of a question? 00:28:07.680 --> 00:28:10.480 SPEAKER_11: We unequivocally have challenges. 00:28:10.480 --> 00:28:13.080 SPEAKER_11: And there's a lot of infrastructure developed still. 00:28:13.080 --> 00:28:17.799 SPEAKER_11: If California wants to stay on track with its greenhouse gas goals and its decarbonization 00:28:17.799 --> 00:28:22.920 SPEAKER_11: goals and has no smud within your own service territory, very ambitious in that area. 00:28:22.920 --> 00:28:24.000 SPEAKER_11: It's not going to be easy. 00:28:24.000 --> 00:28:28.519 SPEAKER_11: It's going to require a ton of investment, a lot of new technology, a lot of new infrastructure. 00:28:28.519 --> 00:28:29.519 SPEAKER_11: We know it's California. 00:28:29.519 --> 00:28:32.380 SPEAKER_11: It's not easy to put anything in the ground in California. 00:28:32.380 --> 00:28:36.680 SPEAKER_11: But we are, in the grand scheme of things, sitting in a pretty good situation. 00:28:36.680 --> 00:28:38.840 SPEAKER_11: We have a diverse portfolio. 00:28:38.840 --> 00:28:45.120 SPEAKER_11: We've got natural gas, hydro, geothermal, batteries, solar, wind, we have fabulous transmission 00:28:45.120 --> 00:28:46.120 SPEAKER_11: connectivity. 00:28:46.120 --> 00:28:47.120 SPEAKER_11: We've got these markets. 00:28:47.120 --> 00:28:51.519 SPEAKER_11: And we know with clear and present purpose that we need to keep strengthening these things 00:28:51.519 --> 00:28:52.600 SPEAKER_11: and building. 00:28:52.600 --> 00:28:54.160 SPEAKER_11: So there are huge challenges. 00:28:54.160 --> 00:28:56.000 SPEAKER_11: But I think the state has come a long way. 00:28:56.000 --> 00:29:00.200 SPEAKER_11: And I know you guys have done the same thing within the smud service territory. 00:29:00.200 --> 00:29:02.920 SPEAKER_11: This graphic just shows it's very important. 00:29:02.920 --> 00:29:05.519 SPEAKER_11: Obviously I talk about the energy markets in three buckets. 00:29:05.519 --> 00:29:08.960 SPEAKER_11: There's the physics and the economics, which I described through the graphics, and how 00:29:08.960 --> 00:29:11.079 SPEAKER_11: powerful the EIM has been. 00:29:11.079 --> 00:29:13.440 SPEAKER_11: And then there's the politics or the governance. 00:29:13.440 --> 00:29:17.759 SPEAKER_11: And for many years, and I'm sure you've heard this, there have been concerns about the KISO's 00:29:17.759 --> 00:29:23.119 SPEAKER_11: markets, including at smud and at bank, about whether or not you're going to get a fair 00:29:23.119 --> 00:29:28.759 SPEAKER_11: shake participating in these markets if our board is appointed by the governor. 00:29:28.759 --> 00:29:32.500 SPEAKER_11: And that has been something that folks have been wanting to change for years. 00:29:32.500 --> 00:29:37.319 SPEAKER_11: We have been slowly but surely over the last 10 years providing greater and greater decision-making 00:29:37.319 --> 00:29:41.200 SPEAKER_11: authority to what's known as our Western Energy Markets governing body, which is another group 00:29:41.200 --> 00:29:47.180 SPEAKER_11: of five people that oversee the EIM and now the EDAM, to the point that that board today 00:29:47.180 --> 00:29:50.980 SPEAKER_11: has primary authority over filings with FERC. 00:29:50.980 --> 00:29:56.900 SPEAKER_11: This bill that was passed last year, AB825, now creates a new organization that is going 00:29:56.900 --> 00:30:01.259 SPEAKER_11: to be able to operate the energy markets under fully independent governance. 00:30:01.259 --> 00:30:06.660 SPEAKER_11: It will be the best structured governance model in the Western interconnection, if not 00:30:06.660 --> 00:30:07.660 SPEAKER_11: the country. 00:30:07.660 --> 00:30:13.619 SPEAKER_11: Participatory, fully independent, public purposed, great access to great participation by the 00:30:13.619 --> 00:30:14.619 SPEAKER_11: states, et cetera. 00:30:14.619 --> 00:30:15.859 SPEAKER_11: And I think we're moving in great shape. 00:30:15.859 --> 00:30:19.140 SPEAKER_11: And so we can talk about this a little bit more in the Q&A section. 00:30:19.140 --> 00:30:23.539 SPEAKER_11: But this evolutionary path to governance positions us with the physics and economics of this 00:30:23.539 --> 00:30:25.700 SPEAKER_11: wide area market and that governance. 00:30:25.700 --> 00:30:27.619 SPEAKER_11: And it's very important. 00:30:27.619 --> 00:30:31.140 SPEAKER_11: On May 1st, we launched the extended day ahead market. 00:30:31.140 --> 00:30:32.340 SPEAKER_11: It was a huge deal. 00:30:32.340 --> 00:30:36.900 SPEAKER_11: And I know, John, we share pride of getting to that point. 00:30:36.900 --> 00:30:42.100 SPEAKER_11: Arne, of course, too, has been a big protagonist for years of interconnected markets. 00:30:42.100 --> 00:30:43.900 SPEAKER_11: It was an amazing thing to be there at midnight. 00:30:43.900 --> 00:30:48.460 SPEAKER_11: I'm sure you guys have participated in that just to watch the cutover, absolutely seamless 00:30:48.460 --> 00:30:50.580 SPEAKER_11: cutover by the technology folks. 00:30:50.580 --> 00:30:54.860 SPEAKER_11: The next few days, fine-tuning connectivity and the way that the systems were modeled. 00:30:54.860 --> 00:30:56.259 SPEAKER_11: Now we're fine-tuning the settlements. 00:30:56.259 --> 00:30:58.200 SPEAKER_11: But this market has been kicked off. 00:30:58.200 --> 00:31:00.100 SPEAKER_11: First participant was Pacific Corps. 00:31:00.099 --> 00:31:02.019 SPEAKER_11: You guys go next year. 00:31:02.019 --> 00:31:03.019 SPEAKER_11: Really excited. 00:31:03.019 --> 00:31:04.019 SPEAKER_11: Thank you. 00:31:04.019 --> 00:31:06.980 Unknown: Along with LA, actually, and Turlock. 00:31:06.980 --> 00:31:07.980 SPEAKER_11: That's pretty amazing. 00:31:07.980 --> 00:31:11.699 SPEAKER_11: For the first time, we're going to have all the California utilities in our markets with 00:31:11.699 --> 00:31:13.259 SPEAKER_11: IAD coming in in 2020. 00:31:13.259 --> 00:31:15.740 SPEAKER_11: We're very proud of that and really appreciative. 00:31:15.740 --> 00:31:19.500 SPEAKER_11: And this market is just going to take what we've done with EIM and bring even greater 00:31:19.500 --> 00:31:23.899 SPEAKER_11: visibility and transactional physical connectivity. 00:31:23.899 --> 00:31:25.579 SPEAKER_11: And I think it's going to be really successful. 00:31:25.579 --> 00:31:27.699 SPEAKER_11: I'm excited to watch it evolve. 00:31:27.700 --> 00:31:32.340 SPEAKER_11: The last couple things I just wanted to mention, I'll give a couple highlights of these slides. 00:31:32.340 --> 00:31:36.140 SPEAKER_11: But obviously, for us, transmission planning and transmission development in California 00:31:36.140 --> 00:31:41.480 SPEAKER_11: are a key piece of our responsibilities at the ISO. 00:31:41.480 --> 00:31:47.740 SPEAKER_11: And we've all seen the load forecasts continue to grow in our service territory. 00:31:47.740 --> 00:31:51.940 SPEAKER_11: We're watching, especially when we start factoring in electrification and we start factoring 00:31:51.940 --> 00:31:52.980 SPEAKER_11: in the data center growth. 00:31:52.980 --> 00:31:53.980 SPEAKER_11: We're not Texas. 00:31:53.980 --> 00:31:54.980 SPEAKER_11: We're not Virginia. 00:31:54.980 --> 00:31:55.980 SPEAKER_11: We're not seeing crazy. 00:31:55.980 --> 00:31:56.980 SPEAKER_11: But it's coming. 00:31:57.059 --> 00:32:02.059 SPEAKER_11: So, 3, 5, 7, 9 gigawatts over the next 10, 15 years, it's coming. 00:32:02.059 --> 00:32:03.059 SPEAKER_11: And it's something we're having to watch. 00:32:03.059 --> 00:32:07.759 SPEAKER_11: The other thing that's happening is that we're going to start seeing our winter peak starting 00:32:07.759 --> 00:32:09.700 SPEAKER_11: to approximate our summer peak. 00:32:09.700 --> 00:32:10.700 SPEAKER_11: We're seeing a fundamental shift. 00:32:10.700 --> 00:32:14.299 SPEAKER_11: And that raises some huge questions for our resource portfolio. 00:32:14.299 --> 00:32:16.940 SPEAKER_11: And I'll be honest, I think this is going to be something we're going to have to have 00:32:16.940 --> 00:32:18.799 SPEAKER_11: some hard conversations about. 00:32:18.799 --> 00:32:24.059 SPEAKER_11: If you look at the way we're meeting demand, these are the base cases we've modeled in 00:32:24.059 --> 00:32:27.799 SPEAKER_11: our most recent transmission plan for both 2035 and 2040. 00:32:27.799 --> 00:32:33.619 SPEAKER_11: You can see this is still very much a solar and battery portfolio. 00:32:33.619 --> 00:32:35.099 SPEAKER_11: We've got a few other things in there. 00:32:35.099 --> 00:32:37.859 SPEAKER_11: A little bit of geothermal. 00:32:37.859 --> 00:32:38.940 SPEAKER_11: There's a little bit more. 00:32:38.940 --> 00:32:41.099 SPEAKER_11: There's a modest amount of in-state wind. 00:32:41.099 --> 00:32:43.700 SPEAKER_11: And there will be a little bit of out-of-state wind. 00:32:43.700 --> 00:32:48.659 SPEAKER_11: But it's still very much a solar and battery strategy, which has been very, very helpful 00:32:48.659 --> 00:32:50.339 SPEAKER_11: for the summer peak. 00:32:50.339 --> 00:32:54.039 SPEAKER_11: But it is not going to be sufficient in the wintertime. 00:32:54.039 --> 00:32:57.159 SPEAKER_11: And I think the next few years there's going to be a lot of conversation in California, 00:32:57.159 --> 00:33:00.519 SPEAKER_11: particularly at the PUC and at this energy commission, figuring out how are we going 00:33:00.519 --> 00:33:05.759 SPEAKER_11: to supplement this portfolio on both the supply side and the demand side to be able to meet 00:33:05.759 --> 00:33:07.639 SPEAKER_11: the winter peaks. 00:33:07.639 --> 00:33:08.639 SPEAKER_09: Question on that one. 00:33:08.639 --> 00:33:11.519 SPEAKER_09: And by the way, we're not in a rush. 00:33:11.519 --> 00:33:12.519 SPEAKER_09: Okay. 00:33:12.519 --> 00:33:13.519 SPEAKER_09: I just want to make sure that we're interested. 00:33:13.519 --> 00:33:14.519 SPEAKER_09: I know. 00:33:14.519 --> 00:33:20.119 SPEAKER_09: But the last slide, geothermal, it looked like it was staying steady. 00:33:20.119 --> 00:33:23.000 SPEAKER_09: And I just went and saw the Calpine facility in Napa. 00:33:23.000 --> 00:33:24.240 SPEAKER_09: I was super impressed. 00:33:24.240 --> 00:33:29.680 SPEAKER_09: And I looked at the map of California that's got a ton of geothermal potential that we 00:33:29.680 --> 00:33:31.960 SPEAKER_09: have not tapped into, which is baseload. 00:33:31.960 --> 00:33:33.200 SPEAKER_09: And I have a house in South Lake. 00:33:33.200 --> 00:33:35.839 SPEAKER_09: I know that they are winter peaking as well. 00:33:35.839 --> 00:33:38.240 SPEAKER_09: And we need more renewable baseload. 00:33:38.240 --> 00:33:43.680 SPEAKER_09: So is anybody looking at investing in geothermal across the state? 00:33:43.680 --> 00:33:44.960 SPEAKER_11: Yes, they are. 00:33:44.960 --> 00:33:47.920 SPEAKER_11: And it's gaining a lot of attention in the legislature. 00:33:47.920 --> 00:33:50.680 SPEAKER_11: There's a whole sort of advocacy group right now around geothermal. 00:33:51.680 --> 00:33:58.400 SPEAKER_11: The Fervo organization selling in Nevada, you're going to see the profile that had jump 00:33:58.400 --> 00:34:00.920 SPEAKER_11: quickly and they're going to have to take a look at the economics, the resource base, 00:34:00.920 --> 00:34:01.920 SPEAKER_11: the transmission. 00:34:01.920 --> 00:34:07.519 SPEAKER_11: But I think these questions are questions that have to start being addressed yesterday. 00:34:07.519 --> 00:34:12.599 SPEAKER_11: Because we can't afford to get to 2035 or 2040 and then suddenly start scrambling to 00:34:12.599 --> 00:34:13.599 SPEAKER_11: deal with this issue. 00:34:13.599 --> 00:34:16.760 SPEAKER_11: We have to do it 10 years in advance, just like the transmission. 00:34:16.760 --> 00:34:23.240 SPEAKER_11: So you'll hear us particularly as we get into the gubernatorial transition, Gavin Newsom 00:34:23.240 --> 00:34:27.320 SPEAKER_11: has really carried the flag for decarbonization. 00:34:27.320 --> 00:34:28.320 SPEAKER_11: Pretty pure. 00:34:28.320 --> 00:34:31.440 SPEAKER_11: In many ways the world has needed that probably. 00:34:31.440 --> 00:34:35.120 SPEAKER_11: I think as we move into the next phase we're going to have to have some hard conversations 00:34:35.120 --> 00:34:40.360 SPEAKER_11: around firm capacity and affordability and are we really building the right transmission 00:34:40.360 --> 00:34:42.680 SPEAKER_11: portfolio for the right resource base? 00:34:42.680 --> 00:34:45.520 SPEAKER_11: Is this going to keep the lights on in February? 00:34:45.759 --> 00:34:48.320 SPEAKER_11: I'm not convinced it is yet. 00:34:48.320 --> 00:34:52.719 SPEAKER_11: So we're going to be working very collaboratively with folks in California to try to make sure 00:34:52.719 --> 00:34:56.440 SPEAKER_11: those questions are getting raised, provide analytics and intellectual honesty. 00:34:56.440 --> 00:35:01.000 SPEAKER_11: We're obviously very proud to be in California and everything that's going on here. 00:35:01.000 --> 00:35:03.800 SPEAKER_11: But at the end of the day we're going to have to keep the lights on and we're going to have 00:35:03.800 --> 00:35:04.800 SPEAKER_11: to be very hard headed. 00:35:04.800 --> 00:35:08.079 SPEAKER_11: I'm sure Arne you'll have a few things to say about, I know you do, I've seen these 00:35:08.079 --> 00:35:11.719 SPEAKER_11: slides, the super saturation of batteries and solar. 00:35:11.719 --> 00:35:15.400 SPEAKER_11: Because it's not just happening in California, it's happening in other parts of the west. 00:35:15.440 --> 00:35:19.240 SPEAKER_11: We don't want to just get into a situation where we're all just sort of feeding over 00:35:19.240 --> 00:35:21.599 SPEAKER_11: supplied solar energy into the grid. 00:35:21.599 --> 00:35:23.200 SPEAKER_11: That's not going to be a great outcome. 00:35:23.200 --> 00:35:25.280 SPEAKER_11: So these questions need to be answered. 00:35:25.280 --> 00:35:27.860 SPEAKER_11: And so I just had a couple last slides just to show you. 00:35:27.860 --> 00:35:31.400 SPEAKER_11: It really has been a remarkable amount of transmission. 00:35:31.400 --> 00:35:32.400 SPEAKER_11: It's a lot of money too. 00:35:32.400 --> 00:35:38.079 SPEAKER_11: I mean the last five cycles our board has approved $27 billion worth of transmission 00:35:38.079 --> 00:35:43.920 SPEAKER_11: and we've identified many of what we think are going to be the major builds to keep the 00:35:43.920 --> 00:35:47.760 SPEAKER_11: state on track with SB100. 00:35:47.760 --> 00:35:51.760 SPEAKER_11: The projects on the right are ones that we've actually selected through our competitive 00:35:51.760 --> 00:35:58.119 SPEAKER_11: solicitation processes with independent transmission developers and sometimes in partnership with 00:35:58.119 --> 00:35:59.119 SPEAKER_11: the utilities. 00:35:59.119 --> 00:36:03.680 SPEAKER_11: And then that dotted red line is a line that we're studying a little bit further in our 00:36:03.680 --> 00:36:08.519 SPEAKER_11: study because we're now having to start dealing with south to north congestion on the system. 00:36:08.519 --> 00:36:10.920 SPEAKER_11: We've put a ton of solar energy. 00:36:10.920 --> 00:36:15.719 SPEAKER_11: That's SP to NP path that goes right through the middle of California is going to require 00:36:15.719 --> 00:36:18.480 SPEAKER_11: some reinforcements and that's something we're paying attention to. 00:36:18.480 --> 00:36:23.920 SPEAKER_09: Before you go off that slide real quick, having housed in South Lake Tahoe with what just 00:36:23.920 --> 00:36:28.559 SPEAKER_09: happened with Nevada energy pulling out, I mean there's a lot of questions about why 00:36:28.559 --> 00:36:33.400 SPEAKER_09: there was never transmission over the mountain to connect to the California grid because 00:36:33.400 --> 00:36:36.840 SPEAKER_09: now they're going to have to go through maybe Utah through Nevada. 00:36:36.840 --> 00:36:40.680 SPEAKER_09: But Californians aren't maybe going to get served or they're going to have to pay outrageous 00:36:40.680 --> 00:36:44.280 SPEAKER_09: amounts and rates which is not popular right now. 00:36:44.280 --> 00:36:45.280 SPEAKER_09: So it never is. 00:36:45.280 --> 00:36:51.200 SPEAKER_09: So I notice there's nothing going over that side but the Trout Canyon which is new is 00:36:51.200 --> 00:36:52.640 SPEAKER_09: in the south area. 00:36:52.640 --> 00:36:58.039 SPEAKER_09: Is there a way to get the power from the south over the mountain and up? 00:36:58.039 --> 00:37:00.240 SPEAKER_11: For physics there is. 00:37:00.240 --> 00:37:01.400 SPEAKER_11: Politically hard to say. 00:37:01.400 --> 00:37:03.519 SPEAKER_11: And you know I appreciate you raising that issue. 00:37:03.519 --> 00:37:06.079 SPEAKER_11: I have not spent a lot of time looking at it. 00:37:06.079 --> 00:37:09.159 SPEAKER_11: It's been a little bit out of our jurisdiction but I'm certainly going to check in with 00:37:09.159 --> 00:37:14.360 SPEAKER_11: NV energy and kind of see what's happening there and kind of understand if it does have 00:37:14.360 --> 00:37:18.759 SPEAKER_11: implications for us because to your point if you're going to do anything and it's even 00:37:18.759 --> 00:37:20.920 SPEAKER_11: feasible you got to start yesterday. 00:37:20.920 --> 00:37:21.920 SPEAKER_11: Yeah. 00:37:21.920 --> 00:37:22.920 SPEAKER_11: So understood. 00:37:22.920 --> 00:37:25.519 SPEAKER_02: The last thing, the last map I'll leave you with. 00:37:25.519 --> 00:37:30.759 SPEAKER_02: I would echo that as having family with a cabin also impacted by saying you'll have 00:37:30.759 --> 00:37:32.079 SPEAKER_02: no power next year. 00:37:32.079 --> 00:37:33.079 SPEAKER_02: Yeah. 00:37:33.079 --> 00:37:36.119 SPEAKER_11: I don't know how that situation materialized. 00:37:36.119 --> 00:37:38.079 SPEAKER_11: It's not something I'm glad it's not a problem. 00:37:38.079 --> 00:37:39.079 SPEAKER_11: We'll see what happens. 00:37:39.079 --> 00:37:40.639 SPEAKER_11: We'll be buying a generator again. 00:37:40.639 --> 00:37:45.039 SPEAKER_11: The City Council, South Lake Tahoe, there's nothing that all the public comment is since 00:37:45.039 --> 00:37:46.039 SPEAKER_09: March. 00:37:46.039 --> 00:37:47.039 SPEAKER_09: Yeah. 00:37:47.039 --> 00:37:48.039 SPEAKER_02: I mentioned that. 00:37:48.039 --> 00:37:49.960 SPEAKER_02: There's by 30,000 generators and you know. 00:37:49.960 --> 00:37:51.059 SPEAKER_02: That's a mess. 00:37:51.059 --> 00:37:52.559 SPEAKER_02: One question on the previous slide. 00:37:52.559 --> 00:37:58.440 SPEAKER_02: The red dotted line, I'm assuming I'm not a transmission in the weeds like some things 00:37:58.440 --> 00:38:00.079 SPEAKER_02: like I'd like to be. 00:38:00.079 --> 00:38:03.759 SPEAKER_02: But when you look at like the node pricing you can always see the big price difference 00:38:03.759 --> 00:38:06.599 SPEAKER_02: between the north and the south. 00:38:06.599 --> 00:38:09.159 SPEAKER_02: Is that, would that potentially help solve some of those issues? 00:38:09.159 --> 00:38:10.159 SPEAKER_02: Absolutely. 00:38:10.159 --> 00:38:11.159 SPEAKER_11: Yeah. 00:38:11.159 --> 00:38:13.599 SPEAKER_11: The reason you're seeing that is because generation's getting clustered up in the south side and 00:38:13.599 --> 00:38:17.199 SPEAKER_11: prices are going down, down, down and it can't get up north to serve. 00:38:17.199 --> 00:38:22.000 SPEAKER_11: So you have to use higher cost generation up north and that price separation is basically 00:38:22.000 --> 00:38:23.880 SPEAKER_11: the cost of congestion. 00:38:23.880 --> 00:38:25.960 SPEAKER_11: And for a long time we've been looking at this. 00:38:25.960 --> 00:38:29.880 SPEAKER_11: There hasn't really been enough economic justification. 00:38:29.880 --> 00:38:35.840 SPEAKER_11: I've encouraged my team to think longer term about this because it's a problem. 00:38:35.840 --> 00:38:39.960 SPEAKER_11: It's going to take a number of years to solve and it's clearly manifesting itself. 00:38:39.960 --> 00:38:46.840 SPEAKER_02: Where in that transmission planning process is something like that, is it years away? 00:38:46.840 --> 00:38:48.400 SPEAKER_02: Is it years away? 00:38:48.400 --> 00:38:49.400 SPEAKER_11: Oh no. 00:38:49.400 --> 00:38:50.400 SPEAKER_11: Well, the line itself? 00:38:50.400 --> 00:38:52.159 SPEAKER_11: No, but for approval. 00:38:52.159 --> 00:38:53.159 SPEAKER_11: Next year. 00:38:53.359 --> 00:38:59.199 SPEAKER_11: What we did in this case, the board just approved the 2025-2026 plan and we sketched this Wind 00:38:59.199 --> 00:39:04.319 SPEAKER_11: Hub to Tesla construct out but said it requires more engineering and costing analysis in the 00:39:04.319 --> 00:39:05.319 SPEAKER_11: next 12 months. 00:39:05.319 --> 00:39:06.319 SPEAKER_11: So next year we'll take it back. 00:39:06.319 --> 00:39:07.319 SPEAKER_11: Probably next year. 00:39:07.319 --> 00:39:08.319 SPEAKER_11: We'll have a solution for it. 00:39:08.319 --> 00:39:09.319 SPEAKER_11: Yeah. 00:39:09.319 --> 00:39:14.039 SPEAKER_11: And in the interim, you know, we're not going to, you know, it's going to take time to build 00:39:14.039 --> 00:39:15.039 SPEAKER_11: that. 00:39:15.039 --> 00:39:18.399 SPEAKER_11: We're going to have to look at other methodologies to manage congestion and you'll look at some 00:39:18.399 --> 00:39:20.559 SPEAKER_11: other technologies, et cetera. 00:39:20.559 --> 00:39:22.759 SPEAKER_11: This last map that I have, I just put it out here. 00:39:22.759 --> 00:39:25.599 SPEAKER_11: We're not going to, I'm not going to spend much time on it, but for those of you that 00:39:25.599 --> 00:39:30.719 SPEAKER_11: track the dialogue that's happened, there's a lot, there's still a lot of focus in the 00:39:30.719 --> 00:39:33.880 SPEAKER_11: West on transmission planning. 00:39:33.880 --> 00:39:37.000 SPEAKER_11: And look, none of us can argue with the benefits of transmission planning. 00:39:37.000 --> 00:39:39.079 SPEAKER_11: Transmission planning is important. 00:39:39.079 --> 00:39:43.639 SPEAKER_11: I like that, but I, I maybe a little bit cheekily quote an old friend of mine from the Northwest 00:39:43.639 --> 00:39:46.840 SPEAKER_11: that says, you know, planning is good, but doing is better. 00:39:46.840 --> 00:39:47.840 Unknown: Right? 00:39:48.440 --> 00:39:54.400 SPEAKER_11: And the region has been planning this transmission system almost incessantly for the last 30 00:39:54.400 --> 00:39:55.720 SPEAKER_11: years, right? 00:39:55.720 --> 00:39:57.079 SPEAKER_11: To the point of absurdity. 00:39:57.079 --> 00:40:01.160 SPEAKER_11: And the thing I'd like to point out is we're actually building a lot of transmission right 00:40:01.160 --> 00:40:03.760 SPEAKER_11: now and we are connecting the regions. 00:40:03.760 --> 00:40:07.240 SPEAKER_11: And in particular, we're connecting EDAM regions to each other, right? 00:40:07.240 --> 00:40:12.120 SPEAKER_11: We're building out transmission from New Mexico through Arizona into California. 00:40:12.120 --> 00:40:15.400 SPEAKER_11: We're building a line known as the Swift North line that's going to go all the way from El 00:40:15.400 --> 00:40:19.639 SPEAKER_11: Dorado across Nevada up into Idaho. 00:40:19.639 --> 00:40:23.039 SPEAKER_11: There's transmission coming across known as the Board of the Hemingway line that'll connect 00:40:23.039 --> 00:40:27.380 SPEAKER_11: the Bonneville system or the Idaho power system, Pacific, or is building out the gateway. 00:40:27.380 --> 00:40:31.360 SPEAKER_11: These are the transmission lines that are in production, that are in construction, that 00:40:31.360 --> 00:40:33.019 SPEAKER_11: are stitching the West together. 00:40:33.019 --> 00:40:37.360 SPEAKER_11: And any planning effort that comes in over the top of that shouldn't be asking questions 00:40:37.360 --> 00:40:42.320 SPEAKER_11: like gee, how should we build around California or gee, how should we connect Northwest and 00:40:42.320 --> 00:40:47.160 SPEAKER_11: Arizona when they're already massively connected and we should be using the energy imbalance 00:40:47.160 --> 00:40:49.519 SPEAKER_11: mark in an EDAM to optimize them. 00:40:49.519 --> 00:40:54.559 SPEAKER_11: So a little bit of editorial there, but this is a very important map for people to understand 00:40:54.559 --> 00:40:59.280 SPEAKER_11: because this is the grid we're building out and we should be building on top of that, 00:40:59.280 --> 00:41:00.680 SPEAKER_11: not around it. 00:41:00.680 --> 00:41:01.680 SPEAKER_11: So okay. 00:41:01.680 --> 00:41:02.680 SPEAKER_11: Thank you. 00:41:02.680 --> 00:41:06.100 SPEAKER_11: Real quick, is the North Plains connector the first one there? 00:41:06.100 --> 00:41:08.320 SPEAKER_05: Is that a connection between the Eastern and Western interconnection? 00:41:08.320 --> 00:41:09.320 SPEAKER_05: It is. 00:41:09.320 --> 00:41:10.320 SPEAKER_11: It is. 00:41:10.320 --> 00:41:13.880 SPEAKER_11: It's a SPP into WEC. 00:41:13.880 --> 00:41:15.720 SPEAKER_11: It's actually got quite a bit of interest. 00:41:15.720 --> 00:41:16.720 SPEAKER_11: We'll see. 00:41:16.720 --> 00:41:19.120 SPEAKER_11: The proof will be in the pudding on that one. 00:41:19.120 --> 00:41:24.840 SPEAKER_11: The solid lines are facilities that have already been built and many of these are in active 00:41:24.840 --> 00:41:25.840 SPEAKER_11: construction. 00:41:25.840 --> 00:41:30.080 SPEAKER_11: The Sunsea line is being energized officially next week. 00:41:30.080 --> 00:41:34.880 SPEAKER_11: The Boardman Hemingway, Swift North will be in production in 2027. 00:41:34.880 --> 00:41:37.000 SPEAKER_11: These are lines that are actively in construction. 00:41:38.000 --> 00:41:41.400 SPEAKER_11: The segments of Gateway have been built. 00:41:41.400 --> 00:41:42.840 SPEAKER_11: I look forward to some additional questions. 00:41:42.840 --> 00:41:44.840 SPEAKER_11: I want to make sure we get Arnie and John up here. 00:41:44.840 --> 00:41:46.159 SPEAKER_11: They've got important material. 00:41:46.159 --> 00:41:49.000 SPEAKER_11: Thank you so much and we'll look forward to the dialogue. 00:41:49.000 --> 00:41:53.000 Unknown: Good evening, everyone. 00:41:53.000 --> 00:42:00.280 Unknown: My name is Arnie Olson. 00:42:00.280 --> 00:42:01.599 SPEAKER_06: I'm a senior partner with E3. 00:42:02.599 --> 00:42:07.519 SPEAKER_06: If you're not familiar with E3, we're a consultancy that's almost entirely focused on the energy 00:42:07.519 --> 00:42:08.519 SPEAKER_06: transition. 00:42:08.519 --> 00:42:13.159 SPEAKER_06: We're headquartered in San Francisco, but we do a lot of work across California, across 00:42:13.159 --> 00:42:16.000 SPEAKER_06: the West, and really across the country. 00:42:16.000 --> 00:42:21.799 SPEAKER_06: I lead our integrated system planning practice, so I work on a lot of IRPs. 00:42:21.799 --> 00:42:26.480 SPEAKER_06: I'm often asked to just provide some, what's the state of the market today? 00:42:26.480 --> 00:42:31.319 SPEAKER_06: It's based on all the stuff that you're seeing here in California and all over the place. 00:42:32.039 --> 00:42:33.039 SPEAKER_06: What's the current state of play? 00:42:33.039 --> 00:42:37.280 SPEAKER_06: I have some slides that are intended to help you through some of the issues that we're 00:42:37.280 --> 00:42:42.680 SPEAKER_06: seeing as the major issues out there in the industry today. 00:42:42.680 --> 00:42:44.680 SPEAKER_06: One of them is just resource cost and affordability. 00:42:44.680 --> 00:42:46.519 SPEAKER_06: I'm going to hit that one first. 00:42:46.519 --> 00:42:50.160 SPEAKER_06: The second one, as Elliot teed up, is resource adequacy. 00:42:50.160 --> 00:42:53.680 SPEAKER_06: We talked about resource adequacy in California already, but we've done a couple of studies 00:42:53.680 --> 00:42:59.080 SPEAKER_06: just coming out this year that summarized the resource adequacy situation in our neighboring 00:42:59.119 --> 00:43:02.199 SPEAKER_06: jurisdictions, so in the desert southwest and then the Pacific Northwest. 00:43:02.199 --> 00:43:06.159 SPEAKER_06: I'm going to give you some of the highlights from those studies. 00:43:06.159 --> 00:43:10.519 SPEAKER_06: The last one that's hot right now is that I'm going to talk about is clean energy accounting. 00:43:10.519 --> 00:43:14.559 SPEAKER_06: That may be a bit of an obscure one, but if you're familiar, if you've been tracking at 00:43:14.559 --> 00:43:20.360 SPEAKER_06: all the greenhouse gas protocol, this is the protocol that's developed by a group that 00:43:20.360 --> 00:43:26.319 SPEAKER_06: all corporations use to report out their climate impacts. 00:43:26.320 --> 00:43:30.120 SPEAKER_06: There's a change that's been proposed to the way that they do accounting that's interesting 00:43:30.120 --> 00:43:33.039 SPEAKER_06: and potentially really meaningful. 00:43:33.039 --> 00:43:35.600 SPEAKER_06: Most utilities haven't really been paying attention to that debate. 00:43:35.600 --> 00:43:40.600 Unknown: Part of the reason why I focused on all these three topics is we're now in the process of 00:43:40.600 --> 00:43:43.400 SPEAKER_06: working through SMUD's next IRP. 00:43:43.400 --> 00:43:47.280 SPEAKER_06: All these are going to be live topics in that IRP and issues that we'll be exploring over 00:43:47.280 --> 00:43:50.440 SPEAKER_06: the next several months as we do the modeling for your system. 00:43:50.440 --> 00:43:54.280 SPEAKER_06: I don't have any SMUD specific results to talk about here, but I thought I would talk 00:43:54.280 --> 00:43:58.760 SPEAKER_06: about some of the debates that we're seeing elsewhere, just sort of tee up the issues 00:43:58.760 --> 00:44:02.120 SPEAKER_06: in your mind and maybe whet your appetite for what we'll come back and talk about later 00:44:02.120 --> 00:44:06.000 SPEAKER_06: in the summer and the fall. 00:44:06.000 --> 00:44:12.080 SPEAKER_06: Just with respect to resource costs, I'm going to start with where we were a few years ago. 00:44:12.080 --> 00:44:17.880 SPEAKER_06: I think last year when I came up here, I had a backward-looking picture of SMUD's seas 00:44:17.880 --> 00:44:22.920 SPEAKER_06: with a sailboat and how beautiful it was a few years ago. 00:44:22.920 --> 00:44:24.400 SPEAKER_06: Now, it didn't feel like that at the time. 00:44:24.400 --> 00:44:27.000 SPEAKER_06: I remember it always feels like we're in the midst of a storm. 00:44:27.000 --> 00:44:30.960 SPEAKER_06: It's only in retrospect that you see it's a way stormier now, so it must mean that things 00:44:30.960 --> 00:44:33.480 SPEAKER_06: were smooth sailing then. 00:44:33.480 --> 00:44:36.440 SPEAKER_06: There were some advantages that we had, and this is one of them. 00:44:36.440 --> 00:44:42.119 SPEAKER_06: The whole decade between 2010 and 2020, we're at a time of declining resource costs. 00:44:42.119 --> 00:44:44.599 SPEAKER_06: That's solar on the top left, it's wind on the top right. 00:44:44.599 --> 00:44:49.680 SPEAKER_06: That hump in the middle is right after 2008, so the decline is 2008 to 2020 is on the right 00:44:49.680 --> 00:44:52.360 SPEAKER_06: side there, and then batteries. 00:44:52.360 --> 00:44:57.680 SPEAKER_06: All of these resources coming down in costs, that's just made our jobs easier. 00:44:57.680 --> 00:45:02.079 SPEAKER_06: It's made it easier for us to have higher standards for clean energy, to go out and 00:45:02.079 --> 00:45:07.880 SPEAKER_06: procure more clean energy, so things are cheaper than they obviously they would otherwise be. 00:45:07.880 --> 00:45:10.640 SPEAKER_06: But it's also really important for project success. 00:45:10.640 --> 00:45:14.160 SPEAKER_06: I think this is maybe not as widely understood as it should be. 00:45:14.160 --> 00:45:20.599 SPEAKER_06: When you're in an area of declining costs, the developer can bid aggressively, and then 00:45:20.599 --> 00:45:24.639 SPEAKER_06: their panels come in, all their materials come in below their cost expectations. 00:45:24.639 --> 00:45:28.839 SPEAKER_06: They've got a really successful and profitable project, and they're going to turn somersaults 00:45:28.839 --> 00:45:32.839 SPEAKER_06: to make sure that project goes through so they can make that profit. 00:45:32.839 --> 00:45:36.719 SPEAKER_06: If we're in an area of increasing costs, which we are now, which we'll get to in a minute, 00:45:36.719 --> 00:45:38.159 SPEAKER_06: it's kind of the opposite. 00:45:38.159 --> 00:45:42.039 SPEAKER_06: They're having to figure out, gosh, how do I bid to win the bid, but I don't want to 00:45:42.039 --> 00:45:45.839 SPEAKER_06: regret that I win the bid, and sometimes they win the bid, and their prices come in higher 00:45:45.839 --> 00:45:48.519 SPEAKER_06: than they thought they would, and they can't meet them. 00:45:48.519 --> 00:45:52.159 SPEAKER_06: They don't have a profitable project, and they'll often, it will just drop out. 00:45:52.159 --> 00:45:56.400 SPEAKER_06: We're seeing a lot of project failures now because of what's happening with prices. 00:45:56.400 --> 00:46:01.860 SPEAKER_06: That's just something to be aware of and why it's much more difficult now than it was several 00:46:01.860 --> 00:46:02.860 SPEAKER_06: years ago. 00:46:02.860 --> 00:46:05.840 SPEAKER_06: I call it the roaring 20s now for power prices. 00:46:05.840 --> 00:46:07.519 SPEAKER_06: That was the area that we were in. 00:46:07.519 --> 00:46:09.440 SPEAKER_06: This is what's happened since 2020. 00:46:09.440 --> 00:46:16.239 SPEAKER_06: It really started with COVID and all the supply chain disruptions, the international trade 00:46:16.239 --> 00:46:20.399 SPEAKER_06: conditions, but it's continued through a lot of the political issues. 00:46:20.399 --> 00:46:25.119 SPEAKER_06: Some of the international trade issues started during the Biden administration with the foreign 00:46:25.119 --> 00:46:30.559 SPEAKER_06: entities of concern and some of the tariffs on China, but obviously since the Trump administration, 00:46:30.559 --> 00:46:32.919 SPEAKER_06: that's become much, much worse. 00:46:32.919 --> 00:46:38.039 SPEAKER_06: These prices don't reflect in yet all of the impacts from the federal policy changes. 00:46:38.039 --> 00:46:43.479 SPEAKER_06: Just to give you that caveat, but what we've seen since 2020, now these are national numbers, 00:46:43.480 --> 00:46:47.480 SPEAKER_06: California numbers will be a little bit better than this, but nationally we're seeing wind 00:46:47.480 --> 00:46:55.159 SPEAKER_06: PPAs have come up from $25 a megawatt hour in 2020 up to $71 a megawatt hour on average 00:46:55.159 --> 00:46:56.159 SPEAKER_06: nationally. 00:46:56.159 --> 00:46:58.159 SPEAKER_06: So, 160% increase. 00:46:58.159 --> 00:47:10.079 SPEAKER_06: Solar, from about 30, and then it declined a little bit still, but then up to $57 a megawatt 00:47:10.079 --> 00:47:11.079 SPEAKER_06: hour today. 00:47:11.079 --> 00:47:15.840 SPEAKER_06: So, 109% increase since Q2 of 2020. 00:47:15.840 --> 00:47:20.000 SPEAKER_06: And again, this doesn't reflect in all of the impacts of current federal policy. 00:47:20.000 --> 00:47:25.519 SPEAKER_06: So this next slide looks at what happens when we now start to bring in the passage of the 00:47:25.519 --> 00:47:33.440 SPEAKER_06: ABBA, I'm not going to call it beautiful, act, and the tariffs that are, you know, maybe 00:47:33.440 --> 00:47:36.799 SPEAKER_06: we won't have them now, but maybe we will, or maybe they'll find another way to implement 00:47:36.799 --> 00:47:37.960 SPEAKER_06: the tariffs. 00:47:37.960 --> 00:47:44.400 SPEAKER_06: So our estimates are that PPA prices could go up by another 36 to 124% in California 00:47:44.400 --> 00:47:45.820 SPEAKER_06: for solar. 00:47:45.820 --> 00:47:51.699 SPEAKER_06: And for batteries, the cost could go up by another 18 to 88%, depending on the outcome 00:47:51.699 --> 00:47:54.159 SPEAKER_06: of all of the stuff that's happening at the federal government. 00:47:54.159 --> 00:47:58.000 SPEAKER_06: Now there's still a lot of uncertainty about how all these policies will be implemented, 00:47:58.000 --> 00:48:01.760 SPEAKER_06: what stuff will be able to get through, what stuff won't, and what it will do to supply 00:48:01.760 --> 00:48:03.000 SPEAKER_06: chains and costs. 00:48:03.000 --> 00:48:07.380 SPEAKER_06: So just to give you a sense of both the magnitude of the cost increases, but also the sense 00:48:07.380 --> 00:48:11.860 SPEAKER_06: of uncertainty that's out there in the industry about what they can really bid and what stuff 00:48:11.860 --> 00:48:13.099 SPEAKER_06: really costs. 00:48:13.099 --> 00:48:19.700 SPEAKER_06: So it just makes bid evaluation really, really difficult right now. 00:48:19.700 --> 00:48:22.619 SPEAKER_06: And you know, of course, this plays right into affordability, right? 00:48:22.619 --> 00:48:27.340 SPEAKER_06: And we've seen this, you know, in California on was on the front lines of this, we haven't 00:48:27.340 --> 00:48:33.019 SPEAKER_06: seen the big increases from the IOUs recently, but within the last several years, PG&E rates 00:48:33.019 --> 00:48:35.820 SPEAKER_06: went up by 87%. 00:48:35.820 --> 00:48:40.380 SPEAKER_06: And since what rates went up by 79%, and San Diego is we're already high, they only went 00:48:40.380 --> 00:48:42.900 SPEAKER_06: up by 41%. 00:48:42.900 --> 00:48:47.700 SPEAKER_06: So this is just what's happening, you know, not very little of this we're seeing for the 00:48:47.700 --> 00:48:50.780 SPEAKER_06: for the municipal and for the public power entities in California. 00:48:50.780 --> 00:48:57.300 SPEAKER_06: This is mostly driven by distribution costs on the IOU systems, wildfire costs, both direct 00:48:57.300 --> 00:49:05.000 SPEAKER_06: payments to the wildfire fund, but also hardening of their systems through to avoid future sparks. 00:49:05.000 --> 00:49:08.719 SPEAKER_06: And it's also driven by net energy metering, which is a very significant cost shift on 00:49:08.719 --> 00:49:13.440 SPEAKER_06: the IOU systems that the ratepayer advocate estimated that is $8 billion per year. 00:49:13.440 --> 00:49:17.599 SPEAKER_06: So that would be something like 30 to 40% of this, it would be just due to net energy 00:49:17.599 --> 00:49:20.599 SPEAKER_06: metering on the IOU systems. 00:49:20.599 --> 00:49:24.599 SPEAKER_06: And you know, we do a lot of work in back east, as I mentioned, and this is a hot issue 00:49:24.599 --> 00:49:25.679 SPEAKER_06: back east as well. 00:49:25.679 --> 00:49:30.800 SPEAKER_06: So we do in New York, where we work, New Jersey, Massachusetts, the governors are under a lot 00:49:30.800 --> 00:49:34.960 SPEAKER_06: of pressure, because rates are going up, and their customers are really feeling the 00:49:34.960 --> 00:49:38.680 SPEAKER_06: pinch and it's not just power rates, they're feeling the pinch for a whole bunch of reasons, 00:49:38.680 --> 00:49:39.680 SPEAKER_06: right? 00:49:39.680 --> 00:49:44.800 SPEAKER_06: If you look at the, what is it, the University of Michigan consumer confidence index, people 00:49:44.800 --> 00:49:50.440 SPEAKER_06: are feeling really, really unconfident about the economy, like way below the how the economy 00:49:50.440 --> 00:49:52.960 SPEAKER_06: is actually performing. 00:49:52.960 --> 00:49:59.760 SPEAKER_06: And the literature that I read about that suggests that a lot of that is because of 00:49:59.760 --> 00:50:04.800 SPEAKER_06: people's perceptions of inflation, and just that things have things are much more expensive 00:50:04.800 --> 00:50:07.840 SPEAKER_06: now than they were a few years ago. 00:50:07.840 --> 00:50:11.680 SPEAKER_06: And that's just contributing to their sense of just economic unease, and it just makes 00:50:11.680 --> 00:50:12.680 SPEAKER_06: it really difficult. 00:50:12.680 --> 00:50:16.360 SPEAKER_06: Now, very little of this is because of clean energy and energy supply. 00:50:16.360 --> 00:50:20.480 SPEAKER_06: So this is mostly by wires and the other things that I mentioned distribution. 00:50:20.480 --> 00:50:24.440 SPEAKER_06: But that doesn't mean that this still means that they're feeling the pinch and are less 00:50:24.440 --> 00:50:32.280 SPEAKER_06: likely and less willing to pay extra costs for higher cost electricity supply. 00:50:32.280 --> 00:50:38.059 SPEAKER_05: Your bottom point there, net energy metering cost shift, I thought the IOUs have significantly 00:50:38.059 --> 00:50:43.599 SPEAKER_05: lowered what they're paying in an M rate, and specifically to deal with that. 00:50:43.599 --> 00:50:46.200 SPEAKER_05: Is there still, it's still out of balance? 00:50:46.200 --> 00:50:53.880 Unknown: Yeah, so the action that the Commission took with the net billing tariff was to eliminate 00:50:53.960 --> 00:50:56.640 SPEAKER_06: the export credit at the retail rate. 00:50:56.640 --> 00:51:01.640 SPEAKER_06: So retail rates are, let's say, 40 to 50 cents a kilowatt hour in the IOU service areas. 00:51:01.640 --> 00:51:07.720 SPEAKER_06: So as a solar customer, you're able to avoid paying those costs for the energy that you 00:51:07.720 --> 00:51:09.320 SPEAKER_06: consume on site. 00:51:09.320 --> 00:51:14.240 SPEAKER_06: But you're also able to receive that cost and just a credit against your bill if you 00:51:14.240 --> 00:51:16.140 SPEAKER_06: export your solar power to the grid. 00:51:16.140 --> 00:51:20.880 SPEAKER_06: So the action that they took was to reduce that credit from the full retail rate of 50 00:51:20.880 --> 00:51:26.039 SPEAKER_06: cents to something like the avoided cost of energy, which is much more like 12 cents. 00:51:26.039 --> 00:51:29.840 SPEAKER_06: But it's just for the exported portion, and it's just for new systems. 00:51:29.840 --> 00:51:32.079 SPEAKER_06: All of the existing systems are grandfathered. 00:51:32.079 --> 00:51:36.119 SPEAKER_06: So the $8 billion that the consumer advocate estimates, that's still there for all of the 00:51:36.119 --> 00:51:38.079 SPEAKER_06: existing customers. 00:51:38.079 --> 00:51:44.000 SPEAKER_06: Even the change to the export credit doesn't eliminate the growth of the cost shift. 00:51:44.000 --> 00:51:48.180 SPEAKER_06: So the cost shift is still growing as customers are continuing to add solar and continuing 00:51:48.179 --> 00:51:53.419 SPEAKER_06: to avoid paying the cost of the grid for all of the energy that they consume on site. 00:51:53.419 --> 00:52:03.419 Unknown: So what the commission did then didn't really solve anything and some of these made things 00:52:03.419 --> 00:52:04.419 SPEAKER_06: worse? 00:52:04.419 --> 00:52:05.960 SPEAKER_06: Well, no, it definitely made things better. 00:52:05.960 --> 00:52:09.419 SPEAKER_06: So it slowed the rate of bleeding, if you want to put it that way. 00:52:09.419 --> 00:52:17.480 SPEAKER_06: But it didn't stop the bleeding. 00:52:17.480 --> 00:52:20.599 SPEAKER_06: So just a couple of points on the state of the California market. 00:52:20.599 --> 00:52:22.800 SPEAKER_06: So it's going to be trickier to navigate in the future. 00:52:22.800 --> 00:52:27.159 SPEAKER_06: We've talked a little bit about the solar and battery saturation already. 00:52:27.159 --> 00:52:32.840 SPEAKER_06: But just to give you some sense of that, so we have so much solar online now that in 2024, 00:52:32.840 --> 00:52:38.199 SPEAKER_06: we had 1000 hours of negative prices in the Kaizo market in the SP15 zone. 00:52:38.199 --> 00:52:40.780 SPEAKER_06: So this gets a little bit to what Elia talked about. 00:52:40.780 --> 00:52:45.480 SPEAKER_06: The rationale for building south to north transmission is to bring some of this energy 00:52:45.480 --> 00:52:50.000 SPEAKER_06: that would otherwise have been curtailed to the north where it can be utilized. 00:52:50.000 --> 00:52:51.840 SPEAKER_06: But that's 1000 hours of negative prices. 00:52:51.840 --> 00:52:57.039 SPEAKER_06: Now solar can only ever produce during 4300 hours, half the hours of the year when the 00:52:57.039 --> 00:52:58.360 SPEAKER_06: sun is shining. 00:52:58.360 --> 00:53:00.920 SPEAKER_06: And most of its production is concentrated into half of those hours. 00:53:00.920 --> 00:53:07.159 SPEAKER_06: So most of it is concentrated into 2000 hours to maybe 2500 hours per year. 00:53:07.159 --> 00:53:12.199 SPEAKER_06: So this is negative prices during a significant portion of the times in which Southern California 00:53:12.199 --> 00:53:13.920 SPEAKER_06: solar was producing. 00:53:13.940 --> 00:53:20.200 SPEAKER_06: So this is a big economic hit for any owner of solar in the SP15 area. 00:53:20.200 --> 00:53:28.280 SPEAKER_06: On the top, the graphic on the right is a heat map of prices in 2023 and 2035. 00:53:28.280 --> 00:53:30.360 SPEAKER_06: So we project this to grow. 00:53:30.360 --> 00:53:33.960 SPEAKER_06: We project negative pricing to become more prevalent in the future. 00:53:33.960 --> 00:53:36.680 SPEAKER_06: That blue area in the middle is the middle of the day. 00:53:36.680 --> 00:53:39.079 SPEAKER_06: The blue means prices are negative. 00:53:39.079 --> 00:53:40.680 SPEAKER_06: And evening, we still see they're red. 00:53:40.680 --> 00:53:43.880 SPEAKER_06: So they're high in the evening, especially in the summer as you're having to ramp up 00:53:43.880 --> 00:53:44.880 SPEAKER_06: the gas plants. 00:53:44.880 --> 00:53:50.000 SPEAKER_06: But you can see that area of blue just grows over between now and 2035 as we continue to 00:53:50.000 --> 00:53:52.000 SPEAKER_06: add more and more solar in California. 00:53:57.000 --> 00:54:02.360 SPEAKER_02: We had a bunch of these charts in our solar valuation work a number of years ago. 00:54:02.360 --> 00:54:07.480 SPEAKER_02: How has that analysis, some of that core analysis, held up over the last five years or so? 00:54:07.480 --> 00:54:12.720 Unknown: I mean it's very much, you know, what we're seeing in the market today is very much what 00:54:12.719 --> 00:54:15.159 SPEAKER_06: we expected to see five years ago. 00:54:15.159 --> 00:54:18.239 Unknown: I mean it's really, it's actually kind of a simple phenomenon, right? 00:54:18.239 --> 00:54:19.959 SPEAKER_06: The sun comes up every day. 00:54:19.959 --> 00:54:22.559 SPEAKER_06: And so you know when the solar is going to produce. 00:54:22.559 --> 00:54:24.480 SPEAKER_06: And you know how much load you have during that period. 00:54:24.480 --> 00:54:26.119 SPEAKER_06: And you can just do the math. 00:54:26.119 --> 00:54:28.519 SPEAKER_06: You can really do it in a spreadsheet, honestly. 00:54:28.519 --> 00:54:33.599 SPEAKER_06: We do it in sophisticated models, but it's not that hard to just see and understand what's 00:54:33.599 --> 00:54:34.599 SPEAKER_06: happening. 00:54:34.599 --> 00:54:36.319 SPEAKER_06: We just have more solar than we can use. 00:54:36.319 --> 00:54:38.079 SPEAKER_06: Now we're building batteries, and that's helping. 00:54:38.079 --> 00:54:41.759 SPEAKER_06: So that's helping us to spread some of that solar out into the evening, which is a good 00:54:41.760 --> 00:54:43.040 SPEAKER_06: thing. 00:54:43.040 --> 00:54:46.920 SPEAKER_06: So what's, the prevalence of negative prices in the future is going to be, it's going to 00:54:46.920 --> 00:54:49.960 SPEAKER_06: be a bit of a race, kind of a push-pull between solar and batteries. 00:54:49.960 --> 00:54:52.360 SPEAKER_06: The more batteries we build, the more it alleviates this. 00:54:52.360 --> 00:54:55.400 SPEAKER_06: But that then allows you to build more solar. 00:54:55.400 --> 00:54:57.640 SPEAKER_06: And then more solar makes you want to build more batteries. 00:54:57.640 --> 00:55:02.080 SPEAKER_06: So that's, you know, the negative prices are what creates the economic opportunity for 00:55:02.080 --> 00:55:05.440 SPEAKER_06: batteries to make money because they charge up a night, or they get paid to charge at 00:55:05.440 --> 00:55:09.800 SPEAKER_06: night and then they discharge and get paid to discharge during the evening. 00:55:09.800 --> 00:55:15.360 SPEAKER_06: And also, needing longer duration storage as well, right? 00:55:15.360 --> 00:55:16.360 SPEAKER_06: Yeah, we, yeah. 00:55:16.360 --> 00:55:17.360 Unknown: No, that's right. 00:55:17.360 --> 00:55:20.039 SPEAKER_06: So this is all, yeah, what we're mostly seeing now is four-hour batteries. 00:55:20.039 --> 00:55:23.519 SPEAKER_06: And I'll get to that in a minute, that we're starting to get to the saturation point on 00:55:23.519 --> 00:55:26.640 SPEAKER_06: four-hour batteries in the KAISL system as well. 00:55:26.640 --> 00:55:29.360 SPEAKER_06: Now, these dynamics are different for every system. 00:55:29.360 --> 00:55:34.200 SPEAKER_06: So the SMUD system isn't quite as saturated with solar and batteries yet as the KAISL 00:55:34.200 --> 00:55:37.880 SPEAKER_06: system is, but these dynamics will happen to every system as they continue to build 00:55:37.880 --> 00:55:40.840 SPEAKER_06: out solar and storage. 00:55:40.840 --> 00:55:46.200 SPEAKER_06: So the saturation is also leading to future lower capacity values for batteries. 00:55:46.200 --> 00:55:49.920 SPEAKER_06: So we're getting to the point now where batteries are starting to become saturated with respect 00:55:49.920 --> 00:55:51.480 SPEAKER_06: to capacity. 00:55:51.480 --> 00:55:56.960 SPEAKER_06: And this was a little bit hard to read, but these are the most recent, what we call ELCCs 00:55:56.960 --> 00:56:04.760 SPEAKER_06: for storage in the states, the PUCs, IRP process where we do the modeling. 00:56:04.760 --> 00:56:11.600 SPEAKER_06: And just to zero in on the numbers that are the most interesting, which is in 2035, we're 00:56:11.600 --> 00:56:19.520 SPEAKER_06: seeing capacity values for our battery storage of 10 to 20% of nameplate. 00:56:19.520 --> 00:56:24.160 SPEAKER_06: That means you build 100 megawatts of batteries and you only get 10 megawatts of credit toward 00:56:24.160 --> 00:56:28.040 SPEAKER_06: meeting all the resource adequacy needs of the system. 00:56:28.040 --> 00:56:32.360 SPEAKER_06: And the reason for that is because as we just build more and more four-hour batteries, we're 00:56:32.360 --> 00:56:37.840 SPEAKER_06: taking care of the short events and what we have left to take care of are longer events. 00:56:37.840 --> 00:56:42.200 SPEAKER_06: So we end up with more extended energy shortages where you just need more duration to be able 00:56:42.200 --> 00:56:46.599 SPEAKER_06: to deal with those. 00:56:46.599 --> 00:56:50.200 SPEAKER_06: So I'm going to shift gears a little bit and talk about what's happening in the Southwest. 00:56:50.200 --> 00:56:54.160 SPEAKER_06: And again, these are a couple of studies that we just came out with. 00:56:54.160 --> 00:56:55.160 SPEAKER_06: Yeah. 00:56:55.160 --> 00:56:56.160 Unknown: Sorry. 00:56:56.160 --> 00:56:57.160 SPEAKER_02: Sorry. 00:56:57.160 --> 00:57:00.320 SPEAKER_02: Before we move on, on this last graph, it's really interesting. 00:57:01.320 --> 00:57:02.320 SPEAKER_02: I glanced at this earlier, right? 00:57:02.320 --> 00:57:08.240 SPEAKER_02: But when we look at that 100-hour, even the 100-hour, the orange bar, as it goes out into 00:57:08.240 --> 00:57:13.559 SPEAKER_02: that 2035 and 45 range, it's interesting that it's still, even 100 hours, is only running 00:57:13.559 --> 00:57:17.320 SPEAKER_02: at 50% capacity. 00:57:17.320 --> 00:57:21.720 SPEAKER_02: Is that just like what we just saw with the fog last year is 100 hours isn't going to 00:57:21.720 --> 00:57:25.000 SPEAKER_02: cover three weeks of new renewable generation? 00:57:25.000 --> 00:57:26.800 SPEAKER_02: I mean, yeah, it could be some of that. 00:57:26.800 --> 00:57:32.080 SPEAKER_06: I think what's happening is that we're starting to see some wintertime events come into our 00:57:32.080 --> 00:57:33.080 SPEAKER_06: loss of load modeling. 00:57:33.080 --> 00:57:36.039 SPEAKER_06: Mostly we've been a summer peaking system and a summer constrained system. 00:57:36.039 --> 00:57:39.680 SPEAKER_06: We're now starting to see, because we have a lot of solar in the summertime and we have 00:57:39.680 --> 00:57:44.280 SPEAKER_06: growing loads in the wintertime because of electric vehicles and building electrification, 00:57:44.280 --> 00:57:46.080 SPEAKER_06: that we're starting to see more wintertime events. 00:57:46.080 --> 00:57:48.120 SPEAKER_06: And those wintertime events are energy constrained. 00:57:48.120 --> 00:57:52.000 SPEAKER_06: So there just might not be enough energy to charge that 100-hour battery so that it can 00:57:52.000 --> 00:57:56.320 SPEAKER_06: perform at a high level during that extended. 00:57:56.840 --> 00:58:00.440 SPEAKER_02: How old is this analysis and what was it done for? 00:58:00.440 --> 00:58:05.240 SPEAKER_06: This was done for the PUC's IRP process and this is, I think, just within the last few 00:58:05.240 --> 00:58:06.240 SPEAKER_06: months. 00:58:06.240 --> 00:58:07.240 SPEAKER_06: Okay, so this is latest. 00:58:07.240 --> 00:58:08.240 SPEAKER_06: I've grabbed the most recent one. 00:58:08.240 --> 00:58:10.480 SPEAKER_02: I know you guys are up to some sophisticated work. 00:58:10.480 --> 00:58:11.480 SPEAKER_02: Thank you. 00:58:11.480 --> 00:58:17.880 Unknown: So it just gives you a sense, and I think, Ellie, I alluded to this earlier, that we're 00:58:17.880 --> 00:58:19.880 SPEAKER_06: now going to need another resource. 00:58:19.880 --> 00:58:24.120 SPEAKER_06: So we've had a long runway where building solar and batteries has helped us both from 00:58:24.119 --> 00:58:27.159 SPEAKER_06: a sustainability perspective but also from a reliability perspective. 00:58:27.159 --> 00:58:28.759 SPEAKER_06: So that's been a good place to be. 00:58:28.759 --> 00:58:33.279 Unknown: It's been a nice little run, but we're kind of getting to the end of that runway now and 00:58:33.279 --> 00:58:34.599 SPEAKER_06: we're going to need another resource. 00:58:34.599 --> 00:58:38.679 SPEAKER_06: And whether that's geothermal, maybe it's long duration. 00:58:38.679 --> 00:58:42.239 SPEAKER_06: And yeah, I mean, I'm really excited about all the developments that we're seeing in 00:58:42.239 --> 00:58:43.759 SPEAKER_06: the geothermal space. 00:58:43.759 --> 00:58:47.880 SPEAKER_06: I'm sure you saw the FERVO IPO, which came back with a much larger number than they were 00:58:47.880 --> 00:58:48.880 SPEAKER_06: hoping for. 00:58:48.880 --> 00:58:49.880 SPEAKER_06: So that's really, really exciting. 00:58:49.880 --> 00:58:53.279 SPEAKER_06: They now have a bunch of capital to go off and develop that technology, which looks really 00:58:53.280 --> 00:58:54.280 SPEAKER_06: promising. 00:58:54.280 --> 00:58:58.840 SPEAKER_06: I'm really hopeful that we'll get gigawatts of geothermal online in the West over the 00:58:58.840 --> 00:59:00.880 SPEAKER_06: next 10 to 15 years. 00:59:00.880 --> 00:59:04.440 SPEAKER_06: Now we need tens of gigawatts of capacity, so that's going to help. 00:59:04.440 --> 00:59:06.960 SPEAKER_06: It's not going to solve the whole problem for us. 00:59:06.960 --> 00:59:13.280 SPEAKER_02: Is the sort of joint here in this analysis between 2028 and the data in 2030, you see 00:59:13.280 --> 00:59:14.680 SPEAKER_02: those big reductions. 00:59:14.680 --> 00:59:16.640 SPEAKER_02: Is there a saturation point? 00:59:16.640 --> 00:59:17.640 SPEAKER_02: It's very small. 00:59:17.679 --> 00:59:23.400 SPEAKER_02: Is there a saturation point as we're up to, what, 17,000-ish megawatts of batteries? 00:59:23.400 --> 00:59:26.119 SPEAKER_02: Is there a saturation point in that analysis where you see that degradation? 00:59:26.119 --> 00:59:30.799 SPEAKER_02: Yeah, you start to see the curve, if I could just draw it with my hand for battery. 00:59:30.799 --> 00:59:34.440 SPEAKER_06: It kind of looks like this, and then it drops pretty rapidly, and then it kind of starts 00:59:34.440 --> 00:59:35.440 SPEAKER_06: to level out. 00:59:35.440 --> 00:59:38.159 SPEAKER_02: Do you go offhand just around what that number is? 00:59:38.159 --> 00:59:39.559 SPEAKER_02: No, you think you're about right. 00:59:39.559 --> 00:59:44.519 SPEAKER_06: Let's say 17,000 megawatts, and the Kaisel system is, let's say, 50-something, 50,000 00:59:44.519 --> 00:59:45.920 SPEAKER_06: megawatts, let's say. 00:59:45.920 --> 00:59:50.720 SPEAKER_06: So let's say about a third of peak capacity is about where that starts to drop off. 00:59:50.720 --> 00:59:52.320 SPEAKER_06: So we're coming up on it. 00:59:52.320 --> 00:59:53.320 SPEAKER_06: Yeah. 00:59:53.320 --> 00:59:54.320 SPEAKER_06: Interesting. 00:59:54.320 --> 00:59:55.320 SPEAKER_06: Thank you. 00:59:55.320 --> 00:59:56.320 SPEAKER_06: That will depend. 00:59:56.320 --> 00:59:59.680 Unknown: Every system's a little bit different, as I'll talk about. 00:59:59.680 --> 01:00:01.800 SPEAKER_06: So just briefly to give you a sense of what's happening. 01:00:01.800 --> 01:00:07.680 SPEAKER_06: So again, this was a study that was sponsored by the six large utilities in the southwest, 01:00:07.680 --> 01:00:09.519 SPEAKER_06: looking at resource adequacy in their jurisdiction. 01:00:09.519 --> 01:00:13.480 SPEAKER_06: I'm going to next show you a Northwest resource adequacy study after this. 01:00:13.480 --> 01:00:17.719 SPEAKER_06: The common theme from these is we have these aggressive clean energy goals, and everyone 01:00:17.719 --> 01:00:21.980 SPEAKER_06: does, but we also have a near-term resource adequacy need. 01:00:21.980 --> 01:00:26.519 SPEAKER_06: So what tools do we have available to us near-term to meet our resource adequacy needs, and 01:00:26.519 --> 01:00:28.639 SPEAKER_06: what does that do to us long-term? 01:00:28.639 --> 01:00:34.240 SPEAKER_06: Do those help us or hinder us from meeting our long-term clean energy goals? 01:00:34.240 --> 01:00:39.519 SPEAKER_06: And the other theme that we see in both regions and really everywhere is now much more rapidly 01:00:39.519 --> 01:00:40.519 SPEAKER_06: growing load. 01:00:40.559 --> 01:00:43.400 Unknown: So we talked a little bit about data center loads in California. 01:00:43.400 --> 01:00:47.880 SPEAKER_06: We're seeing still a surprising amount of that. 01:00:47.880 --> 01:00:49.440 SPEAKER_06: In the southwest, we're seeing a lot more. 01:00:49.440 --> 01:00:52.519 SPEAKER_06: So the Phoenix area is where a lot of entities want to be. 01:00:52.519 --> 01:00:55.400 SPEAKER_06: There's a lot of data center load moving into there. 01:00:55.400 --> 01:00:57.960 SPEAKER_06: There's a lot of manufacturing moving in as well. 01:00:57.960 --> 01:01:00.239 SPEAKER_06: Intel's building a huge new facility there. 01:01:00.239 --> 01:01:04.199 Unknown: So this one just kind of compares our most recent load forecast for the southwest to 01:01:04.199 --> 01:01:08.000 SPEAKER_06: that dash line, which was the one that we produced in 2021. 01:01:08.000 --> 01:01:10.880 SPEAKER_06: And you can see how much that line has come up. 01:01:10.880 --> 01:01:14.199 SPEAKER_06: It's several thousand megawatts more load that they're expecting than they were just 01:01:14.199 --> 01:01:15.679 SPEAKER_06: four years ago. 01:01:15.679 --> 01:01:20.480 SPEAKER_06: And between now and about 26 gigawatts, in 10 years, they'll be at about 36 gigawatts 01:01:20.480 --> 01:01:21.480 SPEAKER_06: of peak load. 01:01:21.480 --> 01:01:29.400 SPEAKER_06: So 10,000 megawatts of new load that they'll have to serve over the next 10 years. 01:01:29.400 --> 01:01:34.159 SPEAKER_06: What they're finding is that they're looking at a diverse portfolio of resources to meet 01:01:34.159 --> 01:01:35.440 SPEAKER_06: these loads. 01:01:35.440 --> 01:01:41.780 SPEAKER_06: So in our graphs, the blue is wind, the yellow is solar, and the purple is battery storage. 01:01:41.780 --> 01:01:43.559 SPEAKER_06: And the gray is natural gas. 01:01:43.559 --> 01:01:46.360 SPEAKER_06: And they are looking at building new natural gas in the southwest region. 01:01:46.360 --> 01:01:49.559 SPEAKER_06: In fact, the utilities are investing in a new pipeline capacity to ensure that they 01:01:49.559 --> 01:01:55.840 SPEAKER_06: have fuel to burn in their new natural gas plants as they see that as a critical resource 01:01:55.840 --> 01:01:58.920 SPEAKER_06: to help them meet their resource adequacy needs. 01:01:58.920 --> 01:02:02.480 SPEAKER_06: But you can also see all of the solar and wind and batteries that they're planning to 01:02:02.480 --> 01:02:03.480 SPEAKER_06: build. 01:02:03.480 --> 01:02:07.440 SPEAKER_06: And how far you go with the carbon, with clean energy, you can see that they might 01:02:07.440 --> 01:02:12.760 SPEAKER_06: end up with tens of gigawatts of new solar, wind, and batteries in the southwest as well. 01:02:12.760 --> 01:02:17.240 Unknown: In that graph, geothermal is almost negligible. 01:02:17.240 --> 01:02:19.240 SPEAKER_08: There's a little bit. 01:02:19.240 --> 01:02:20.240 SPEAKER_06: Right above the gas. 01:02:20.240 --> 01:02:23.119 SPEAKER_06: There's a small red line that's hard to see. 01:02:23.119 --> 01:02:24.119 SPEAKER_06: That's right. 01:02:24.119 --> 01:02:25.119 Unknown: Yeah. 01:02:25.119 --> 01:02:29.119 SPEAKER_06: And the reason for that is it's just not really a resource that you can look at today and 01:02:29.119 --> 01:02:33.360 SPEAKER_06: say that's a commercially available resource that I know I can go out and sign a contract 01:02:33.360 --> 01:02:37.599 SPEAKER_06: with tomorrow and have that be a viable resource that I can count on for reliability. 01:02:37.599 --> 01:02:42.920 SPEAKER_06: I think we're getting closer to being at that point, but we're really not quite there yet 01:02:42.920 --> 01:02:43.920 SPEAKER_06: as an industry. 01:02:43.920 --> 01:02:47.079 SPEAKER_06: I'm hopeful this would look different in five years. 01:02:47.079 --> 01:02:51.640 SPEAKER_06: And there's a lot of interesting technologies that are out there just around the horizon, 01:02:51.640 --> 01:02:56.599 SPEAKER_06: but you can't count on those until you have a track record of performance. 01:02:56.599 --> 01:02:57.599 SPEAKER_08: But we have. 01:02:57.599 --> 01:02:58.599 SPEAKER_08: We buy it. 01:02:58.599 --> 01:03:01.360 SPEAKER_08: I mean, NAPA's been working for 40 years. 01:03:02.360 --> 01:03:03.360 Unknown: Yeah. 01:03:03.360 --> 01:03:05.840 SPEAKER_06: And so that older technology we know works. 01:03:05.840 --> 01:03:09.360 SPEAKER_06: That's also very expensive and it doesn't work in every location. 01:03:09.360 --> 01:03:14.680 SPEAKER_06: So what's really exciting about the geothermal industry is that there are several new technologies 01:03:14.680 --> 01:03:15.680 SPEAKER_06: now. 01:03:15.680 --> 01:03:18.640 SPEAKER_06: Fervo is using fracking techniques to sort of access heat where they couldn't access 01:03:18.640 --> 01:03:19.640 SPEAKER_06: it before. 01:03:19.640 --> 01:03:20.640 Unknown: Right. 01:03:20.640 --> 01:03:23.559 SPEAKER_06: Part of the problem has been I can build 10 megawatts here in the middle of Nevada and 01:03:23.559 --> 01:03:26.920 SPEAKER_06: 20 megawatts here in the middle of Utah, but I can't build a thousand mile transmission 01:03:26.920 --> 01:03:27.920 SPEAKER_06: line to bring that. 01:03:27.920 --> 01:03:30.360 SPEAKER_06: It just doesn't pencil. 01:03:30.360 --> 01:03:35.360 SPEAKER_06: So yeah, I think some of what we're saying is maybe the ability to build more at scale. 01:03:35.360 --> 01:03:43.440 Unknown: Part of this graph that was really sort of having me study, it's basically showing the 01:03:43.440 --> 01:03:47.280 SPEAKER_02: same pattern that we modeled out for California's 2045, right? 01:03:47.280 --> 01:03:51.079 SPEAKER_02: Big growth in solar and just general renewables and batteries. 01:03:51.079 --> 01:03:53.680 SPEAKER_02: It sounds like that's sort of the, this is the same basic. 01:03:53.680 --> 01:03:55.120 Unknown: Yeah, that's very similar. 01:03:55.120 --> 01:03:58.880 SPEAKER_06: You know, the load patterns are very similar, more extreme than in California, right? 01:03:58.880 --> 01:04:06.039 SPEAKER_06: More heat in the summertime, you know, less need in the winter really. 01:04:06.039 --> 01:04:07.760 SPEAKER_06: But yes, and similar resource quality. 01:04:07.760 --> 01:04:09.599 SPEAKER_06: So solar resources are very good. 01:04:09.599 --> 01:04:11.039 SPEAKER_06: They're very easy to build. 01:04:11.039 --> 01:04:13.760 SPEAKER_06: The solar and batteries pair really well together. 01:04:13.760 --> 01:04:14.840 SPEAKER_06: They like California. 01:04:14.840 --> 01:04:17.880 SPEAKER_06: Our modeling is showing there's value to diversity. 01:04:17.880 --> 01:04:21.920 SPEAKER_06: So our models always like to build more wind than probably you can ever really get. 01:04:21.920 --> 01:04:24.640 SPEAKER_06: Not sure that they'll be able to get this amount of wind, but the model would like it 01:04:24.640 --> 01:04:27.059 SPEAKER_06: if they can. 01:04:27.059 --> 01:04:28.240 SPEAKER_06: But they are building some natural gas. 01:04:28.599 --> 01:04:30.919 SPEAKER_06: I'm going to show you the reason why they are. 01:04:30.919 --> 01:04:38.639 SPEAKER_06: With that amount of growing load, this is just an example of a seven-day period in December 01:04:38.639 --> 01:04:42.239 SPEAKER_06: from our model showing kind of why that resource is needed. 01:04:42.239 --> 01:04:45.639 SPEAKER_06: So this is a system that has a lot of wind and solar in it. 01:04:45.639 --> 01:04:50.159 SPEAKER_06: You can see in the first day, in the middle of that day, there's 80 gigawatts of generation 01:04:50.159 --> 01:04:52.439 SPEAKER_06: total from the wind and solar. 01:04:52.439 --> 01:04:54.679 SPEAKER_06: That drops off very quickly. 01:04:54.679 --> 01:04:59.119 SPEAKER_06: And by the time you get to nighttime, now you're having to ramp up that gray, which 01:04:59.119 --> 01:05:00.879 SPEAKER_06: is natural gas. 01:05:00.879 --> 01:05:05.359 SPEAKER_06: When you get into the third day, now you've had an event that's a cold weather event, 01:05:05.359 --> 01:05:09.119 SPEAKER_06: so loads are a little bit higher, but it's cloudy and it's still. 01:05:09.119 --> 01:05:12.519 SPEAKER_06: And so you just don't have the wind and solar generation available to you. 01:05:12.519 --> 01:05:16.519 SPEAKER_06: The purple is some battery discharge, but really you're relying on 20 gigawatts of 01:05:16.519 --> 01:05:20.000 SPEAKER_06: thermal to keep the lights on during that time period. 01:05:20.000 --> 01:05:23.919 SPEAKER_06: And if you're in California, we have about that amount of natural gas, which we do rely 01:05:23.920 --> 01:05:27.920 SPEAKER_06: on during those two-leaf fog type of events. 01:05:27.920 --> 01:05:32.000 SPEAKER_06: But if you're seeing a huge amount of growth in the Southwest, they're seeing that they're 01:05:32.000 --> 01:05:34.559 SPEAKER_06: just not going to be able to serve all that growth with wind and solar. 01:05:34.559 --> 01:05:38.440 SPEAKER_06: As much as good as those resources are and as helpful as they are, and batteries, they're 01:05:38.440 --> 01:05:42.159 SPEAKER_06: going to need some new gas to meet load during these events in the Southwest. 01:05:42.159 --> 01:05:46.800 SPEAKER_06: And this is a wintertime event that also becomes binding in that system. 01:05:46.800 --> 01:05:50.119 SPEAKER_05: In a year and a half or so, we'll be in EDAM and we won't have to worry about it anymore, 01:05:50.119 --> 01:05:53.200 SPEAKER_05: because the sun will be shining somewhere in the West. 01:05:53.199 --> 01:05:54.199 SPEAKER_06: It does help. 01:05:54.199 --> 01:05:55.199 Unknown: Cool. 01:05:55.199 --> 01:05:57.199 SPEAKER_03: We're really going to slide on that. 01:05:57.199 --> 01:05:58.199 Unknown: All right. 01:05:58.199 --> 01:06:00.079 SPEAKER_06: I'm going to have to speed up here a little bit, I think. 01:06:00.079 --> 01:06:03.519 SPEAKER_06: So just some quickly some results from our Northwest study. 01:06:03.519 --> 01:06:08.439 SPEAKER_06: So this again was sponsored by a group of 23 utilities and the IPPs in the Northwest 01:06:08.439 --> 01:06:10.439 SPEAKER_06: got together to sponsor this study as well. 01:06:10.439 --> 01:06:14.419 SPEAKER_06: So the Southwest is, you know, they're mostly resource adequate today and they're in good 01:06:14.419 --> 01:06:18.719 SPEAKER_06: shape as they look forward, because utilities have lots and lots of projects in the pipeline. 01:06:18.719 --> 01:06:20.480 SPEAKER_06: The Northwest is in a bit of a different position. 01:06:20.480 --> 01:06:24.440 SPEAKER_06: They're kind of in a hole right now with much less prospect for getting out of it, 01:06:24.440 --> 01:06:28.000 SPEAKER_06: because it's just much harder to build stuff in the Northwest than it is in the Southwest. 01:06:28.000 --> 01:06:31.880 SPEAKER_06: The solar battery combination just doesn't work as well on a system and that's winter 01:06:31.880 --> 01:06:36.199 SPEAKER_06: peaking and dominated by hydropower like the Northwest system is. 01:06:36.199 --> 01:06:43.280 SPEAKER_06: So we're seeing in the Northwest a 9,000 megawatt gap by 2030 and they're just not on track 01:06:43.280 --> 01:06:44.280 SPEAKER_06: to meet that. 01:06:44.280 --> 01:06:48.119 SPEAKER_06: Now that's about the size of the state of Oregon. 01:06:48.119 --> 01:06:53.679 SPEAKER_06: And that's a system that has about 50,000 megawatts of load. 01:06:53.679 --> 01:06:56.980 SPEAKER_06: So that's a big gap that they're facing and that's because of load growth, it's because 01:06:56.980 --> 01:06:59.000 SPEAKER_06: of resource retirements. 01:06:59.000 --> 01:07:02.519 SPEAKER_06: And we see about 3,000 megawatts of resources that are in the pipeline. 01:07:02.519 --> 01:07:08.559 SPEAKER_06: So that leaves about a 6,000 megawatt gap by 2030 and that grows to 14 to 18,000 megawatts 01:07:08.559 --> 01:07:10.519 SPEAKER_06: by 2035. 01:07:10.519 --> 01:07:13.759 SPEAKER_06: So that's they have a terrible challenge ahead of them. 01:07:13.760 --> 01:07:17.840 SPEAKER_06: They also have very aggressive carbon reduction goals. 01:07:17.840 --> 01:07:21.520 SPEAKER_06: And so, but they're just like elsewhere. 01:07:21.520 --> 01:07:23.680 SPEAKER_06: This is a winter peaking system. 01:07:23.680 --> 01:07:27.760 SPEAKER_06: The events that they see are low energy events. 01:07:27.760 --> 01:07:29.300 SPEAKER_06: So energy constrained. 01:07:29.300 --> 01:07:30.640 SPEAKER_06: It's a low hydropower year. 01:07:30.640 --> 01:07:32.640 SPEAKER_06: It's a multi-day cold snap. 01:07:32.640 --> 01:07:36.740 SPEAKER_06: It's typical that wind doesn't blow during a cold snap because it's a high pressure system 01:07:36.740 --> 01:07:39.280 SPEAKER_06: that sits over a large area and it's winter. 01:07:39.280 --> 01:07:40.920 SPEAKER_06: So there's not a lot of solar energy. 01:07:40.920 --> 01:07:45.440 SPEAKER_06: Even if it's sunny, it's a short day and it's at a low angle. 01:07:45.440 --> 01:07:49.400 SPEAKER_06: So they really just don't have a way to solve this without building gas in the near term. 01:07:49.400 --> 01:07:52.840 SPEAKER_06: It's the challenge that we're seeing from our modeling. 01:07:52.840 --> 01:07:56.519 SPEAKER_06: So then the question becomes if they do build gas in the near term, does that set Washington 01:07:56.519 --> 01:08:00.000 SPEAKER_06: and Oregon back on their long-term carbon goals? 01:08:00.000 --> 01:08:03.320 SPEAKER_06: I think here the answer is I think there's good news here. 01:08:03.320 --> 01:08:07.079 SPEAKER_06: So on the bottom you can see they're building all this wind, solar and batteries. 01:08:07.079 --> 01:08:13.440 SPEAKER_06: They're also building over 10 gigawatts of natural gas by 2045 to keep the lights on. 01:08:13.440 --> 01:08:18.319 SPEAKER_06: But you can see on the right-hand chart that gray area declines between now and 2045. 01:08:18.319 --> 01:08:23.920 SPEAKER_06: So as they add more wind, solar, and geothermal and other clean resources, the gas dispatch 01:08:23.920 --> 01:08:25.039 SPEAKER_06: declines. 01:08:25.039 --> 01:08:29.500 SPEAKER_06: So you have it there when you need it, but it's utilization and the emissions decline 01:08:29.500 --> 01:08:33.159 SPEAKER_06: over time because it's always the last resource that you call on. 01:08:33.159 --> 01:08:35.880 SPEAKER_06: So when you have wind and solar, you want to run that. 01:08:35.880 --> 01:08:39.960 SPEAKER_06: Then you do, but you have the gas there for those cold winter, multi-day events that happen, 01:08:39.960 --> 01:08:46.079 SPEAKER_06: especially during a low hydro year in the Northwest. 01:08:46.079 --> 01:08:53.440 SPEAKER_06: We did explore different carbon targets just to see what this does to price in the Northwest. 01:08:53.440 --> 01:08:55.440 SPEAKER_06: The good news here is this curve is very flat. 01:08:55.440 --> 01:08:59.800 SPEAKER_06: That means that you can reduce carbon emissions by a lot in the Northwest at a relatively 01:08:59.800 --> 01:09:00.800 SPEAKER_06: low cost. 01:09:00.800 --> 01:09:05.359 SPEAKER_06: But at some point it starts to tip up, and that's in the 90% range is when the cost curve 01:09:05.359 --> 01:09:06.719 SPEAKER_06: starts to really get steep. 01:09:06.719 --> 01:09:11.719 SPEAKER_06: So going from 90% to 100% is incredibly expensive, even though going to 90% is actually pretty 01:09:11.719 --> 01:09:12.960 SPEAKER_06: cheap. 01:09:12.960 --> 01:09:18.159 SPEAKER_06: And we see this actually repeated across a lot of the studies that we do. 01:09:18.159 --> 01:09:21.519 SPEAKER_06: These last few tons are the hardest ones to get out. 01:09:21.519 --> 01:09:26.479 Unknown: You can imagine. 01:09:26.479 --> 01:09:30.039 SPEAKER_06: Which brings me to this greenhouse gas protocol and the carbon accounting. 01:09:30.039 --> 01:09:31.759 SPEAKER_06: I won't spend too much time here. 01:09:31.759 --> 01:09:34.319 SPEAKER_06: I have more slides in it than I probably need. 01:09:35.319 --> 01:09:37.519 SPEAKER_06: At some point, why is carbon accounting important? 01:09:37.519 --> 01:09:41.519 Unknown: Well, at some point if we're trying to go to 100% clean energy, and you're trying to 01:09:41.519 --> 01:09:48.279 SPEAKER_06: do that with hourly matched 24-7 accounting, that becomes the same problem as the resource 01:09:48.279 --> 01:09:49.439 SPEAKER_06: adequacy problem. 01:09:49.439 --> 01:09:54.399 Unknown: Because now you have to build enough resources to serve all your load 24-7, but they all 01:09:54.399 --> 01:09:55.399 SPEAKER_06: have to be clean. 01:09:55.399 --> 01:09:58.719 Unknown: And if you're trying to do all that with wind and solar, then you have that hockey stick 01:09:58.719 --> 01:10:00.319 SPEAKER_06: curve that we showed you before. 01:10:00.319 --> 01:10:03.840 SPEAKER_06: So it's the same argument in a way. 01:10:03.840 --> 01:10:06.960 SPEAKER_06: It's the same problem. 01:10:06.960 --> 01:10:10.479 SPEAKER_06: So why are we seeing the push for 24-7 accounting? 01:10:10.479 --> 01:10:15.359 SPEAKER_06: Really it's some academic advocates and some of the hyperscalers sort of see this as a 01:10:15.359 --> 01:10:19.079 SPEAKER_06: way to achieve what they call consequential carbon reductions. 01:10:19.079 --> 01:10:23.399 SPEAKER_06: They think the carbon reductions might not be real if you're not serving your own load 01:10:23.399 --> 01:10:26.199 SPEAKER_06: on a 24-7 basis. 01:10:26.199 --> 01:10:30.000 SPEAKER_06: And they want this to maybe help transform the market for some of these clean firm technologies 01:10:30.000 --> 01:10:31.000 SPEAKER_06: like geothermal. 01:10:31.000 --> 01:10:35.199 SPEAKER_06: And maybe we can leverage the deep pocketbooks of the Google and the other hyperscalers to 01:10:35.199 --> 01:10:38.640 SPEAKER_06: help transform that market. 01:10:38.640 --> 01:10:42.159 SPEAKER_06: But what works for Google doesn't necessarily work for everybody. 01:10:42.159 --> 01:10:48.840 SPEAKER_06: And it's worth noting that even Google has 2030 as a goal for achieving their 24-7 matching. 01:10:48.840 --> 01:10:51.680 SPEAKER_06: And just given how much data centers they're building out, they're actually going backwards 01:10:51.680 --> 01:10:53.600 SPEAKER_06: on achieving that. 01:10:54.600 --> 01:10:59.680 SPEAKER_06: I just want to maybe take a minute to level set on clean energy accounting and what it 01:10:59.680 --> 01:11:00.680 SPEAKER_06: means. 01:11:00.680 --> 01:11:06.240 SPEAKER_06: First thing I understand, your clean energy isn't actually serving your load. 01:11:06.240 --> 01:11:08.039 SPEAKER_06: Your load is being served by the grid. 01:11:08.039 --> 01:11:11.079 SPEAKER_06: A whole combination of resources from all across the grid. 01:11:11.079 --> 01:11:14.800 SPEAKER_06: And when you generate power, it goes out into the grid and it displaces resources all across 01:11:14.800 --> 01:11:15.800 SPEAKER_06: the grid. 01:11:15.800 --> 01:11:21.000 SPEAKER_06: So no matter how much these contracts make money flow, not power flow. 01:11:21.000 --> 01:11:23.640 SPEAKER_06: Power flows where it flows. 01:11:23.640 --> 01:11:28.319 SPEAKER_06: So the idea that you're actually serving your load with your own resources is just not factual. 01:11:28.319 --> 01:11:31.079 SPEAKER_06: It's kind of a nonsensical idea in the first place. 01:11:31.079 --> 01:11:34.680 SPEAKER_06: So that's why I say that specified purchases are fiction. 01:11:34.680 --> 01:11:37.239 SPEAKER_06: But they're really important fiction. 01:11:37.239 --> 01:11:41.479 SPEAKER_06: Billions of dollars have been invested just based on the notion that that financial support 01:11:41.479 --> 01:11:46.319 SPEAKER_06: means that I can claim the environmental attributes of the resources that I'm supporting. 01:11:46.319 --> 01:11:50.439 SPEAKER_06: I can say that my load is being served by this clean generator that I'm paying for the 01:11:50.439 --> 01:11:51.439 SPEAKER_06: output from. 01:11:51.439 --> 01:11:55.399 SPEAKER_06: So this is a system that has facilitated hundreds of billions of dollars worth of clean energy 01:11:55.399 --> 01:11:58.759 SPEAKER_06: investment over the last couple of decades. 01:11:58.759 --> 01:12:01.279 SPEAKER_06: And what makes this all work is a wreck. 01:12:01.279 --> 01:12:06.399 SPEAKER_06: So when you support clean energy, the generator makes and delivers energy to the grid, they 01:12:06.399 --> 01:12:09.000 SPEAKER_06: get to mint a wreck. 01:12:09.000 --> 01:12:12.439 SPEAKER_06: This wreck is tracked and certified by tracking agencies. 01:12:12.439 --> 01:12:16.839 SPEAKER_06: And the wreck is the only thing that actually has any meaning with respect to clean energy. 01:12:16.839 --> 01:12:17.839 SPEAKER_06: The energy doesn't matter. 01:12:17.840 --> 01:12:23.199 SPEAKER_06: Actually, the wreck is the thing that is the clean energy attribute and the only thing 01:12:23.199 --> 01:12:25.159 SPEAKER_06: that demonstrates your claim. 01:12:25.159 --> 01:12:27.239 SPEAKER_06: And you can separate that from the energy and trade it. 01:12:27.239 --> 01:12:31.039 SPEAKER_06: So if you bought a wreck, you bought clean energy, even if you didn't buy the energy 01:12:31.039 --> 01:12:36.239 SPEAKER_06: with it, because that means someone generated that energy and it was certified. 01:12:36.239 --> 01:12:41.640 SPEAKER_06: It's also worth noting all state clean energy programs have either annual or maybe even 01:12:41.640 --> 01:12:45.760 SPEAKER_06: multi-year compliance programs, periods. 01:12:45.760 --> 01:12:46.760 SPEAKER_06: These are California's periods. 01:12:46.760 --> 01:12:49.960 SPEAKER_06: They're two and three year periods in the state RPS program. 01:12:49.960 --> 01:12:50.960 SPEAKER_06: Why is that? 01:12:50.960 --> 01:12:55.320 SPEAKER_06: Well, because they will always recognize it's really hard to balance on a smaller time period. 01:12:55.320 --> 01:12:57.520 SPEAKER_06: Load is variable year to year. 01:12:57.520 --> 01:12:59.079 SPEAKER_06: Reusable energy is variable year to year. 01:12:59.079 --> 01:13:00.079 SPEAKER_06: Hydro is variable. 01:13:00.079 --> 01:13:04.079 SPEAKER_06: Even wind can vary by 20, 30% at the same site year over year. 01:13:04.079 --> 01:13:07.360 SPEAKER_06: So it's really hard to balance over smaller time periods. 01:13:07.360 --> 01:13:11.520 SPEAKER_06: So all state RPS programs, every single one of them has at least annual balancing. 01:13:11.520 --> 01:13:15.800 SPEAKER_06: None of them has one hour or even monthly balancing. 01:13:16.320 --> 01:13:20.960 Unknown: 24-7 matching negates the benefits of the organized wholesale market. 01:13:20.960 --> 01:13:24.239 SPEAKER_06: So if you're in a place now where you have to go and sign a contract with all of your 01:13:24.239 --> 01:13:29.159 SPEAKER_06: own resources and serve your own resources every hour of the year, why do you need a 01:13:29.159 --> 01:13:30.159 SPEAKER_06: wholesale market? 01:13:30.159 --> 01:13:34.279 Unknown: You might as well just become an electrical island, right? 01:13:34.279 --> 01:13:39.440 SPEAKER_06: So it really just kind of ignores the benefits that you get from the scale and the law of 01:13:39.440 --> 01:13:43.560 SPEAKER_06: large numbers that you get from the organized wholesale market. 01:13:43.560 --> 01:13:46.600 SPEAKER_06: Again it ignores what happens when you export. 01:13:46.600 --> 01:13:52.160 SPEAKER_06: So when you're exporting power to the rest of the grid, some other resource is not operating. 01:13:52.160 --> 01:13:54.920 SPEAKER_06: And usually that other resource is a thermal resource. 01:13:54.920 --> 01:13:58.400 SPEAKER_06: So usually when you're exporting, that's saving carbon somewhere else. 01:13:58.400 --> 01:14:01.480 SPEAKER_06: And if you're only looking like this at your carbon accounting, you're missing all of these 01:14:01.480 --> 01:14:04.980 SPEAKER_06: dynamics about what happens across the whole grid. 01:14:04.980 --> 01:14:10.240 SPEAKER_06: So to me, this is why this 24-7, you know, it's an interesting idea. 01:14:10.240 --> 01:14:11.640 SPEAKER_06: And it sounds like a lot of fun. 01:14:11.720 --> 01:14:16.079 SPEAKER_06: We should try to be 24-7, you know, but when you get into how much, how hard it is to actually 01:14:16.079 --> 01:14:20.640 SPEAKER_06: do, you start to see that maybe this is really, you know, not the right thing to be doing. 01:14:20.640 --> 01:14:23.760 SPEAKER_06: And we just have a couple of last slides on studies that we've done. 01:14:23.760 --> 01:14:26.800 SPEAKER_06: This is one that we did for Silicon Valley Clean Energy. 01:14:26.800 --> 01:14:34.640 SPEAKER_06: And we found that they have to over procure by 181% to match every hour with clean energy. 01:14:34.640 --> 01:14:37.640 SPEAKER_06: That's because they have to buy enough clean energy to match the worst hour. 01:14:37.640 --> 01:14:40.440 SPEAKER_06: There's only one hour that they're actually fully hourly matching. 01:14:40.439 --> 01:14:41.839 SPEAKER_06: That's the worst hour. 01:14:41.839 --> 01:14:44.199 SPEAKER_06: Every other hour they have a little bit too much. 01:14:44.199 --> 01:14:46.399 SPEAKER_06: And some hours they have a lot too much. 01:14:46.399 --> 01:14:49.839 SPEAKER_06: It's because of the way that, you know, clean energy, you know, only comes during certain 01:14:49.839 --> 01:14:56.239 SPEAKER_06: hours of the year, but you have to try to match every hour of the year. 01:14:56.239 --> 01:15:01.639 SPEAKER_06: And then we did a similar exercise for Pasadena Water and Power and found very similar percentages. 01:15:01.639 --> 01:15:07.279 SPEAKER_06: So depending on the case, we had 167 to 183% over procured. 01:15:07.279 --> 01:15:11.800 SPEAKER_06: And that increases, that would increase their electric rates by 30 to 60%. 01:15:11.800 --> 01:15:15.840 SPEAKER_06: And just to compare that to a case on the right-hand side where you're buying just enough power 01:15:15.840 --> 01:15:20.399 SPEAKER_06: to match your load on an annual basis, and now you're displacing emissions elsewhere 01:15:20.399 --> 01:15:25.079 SPEAKER_06: in the system, and that's, you can do that much more affordably with a similar sort of 01:15:25.079 --> 01:15:27.479 SPEAKER_06: global carbon impact. 01:15:27.479 --> 01:15:35.279 Unknown: It's just like carbon, getting to a carbon neutral is a lot easier than getting to a 01:15:35.279 --> 01:15:36.279 SPEAKER_02: zero carbon. 01:15:36.279 --> 01:15:38.920 Unknown: Yeah, getting to absolute zero carbon is very, very difficult, that's right. 01:15:38.920 --> 01:15:43.119 SPEAKER_06: But getting to carbon neutral, recognizing what happens out there on the grid, right? 01:15:43.119 --> 01:15:46.639 SPEAKER_06: Because this is, you know, these impacts that happen out in the western grid, those are 01:15:46.639 --> 01:15:47.639 SPEAKER_06: real. 01:15:47.639 --> 01:15:48.639 SPEAKER_06: And we can measure them. 01:15:48.639 --> 01:15:52.119 SPEAKER_06: You know, we have metered data for every hour all the load, all the generation, all across 01:15:52.119 --> 01:15:55.639 SPEAKER_06: the west. 01:15:55.639 --> 01:15:59.159 SPEAKER_11: If I could, Arnie, would you be willing, I just declared this with John, would you be 01:15:59.159 --> 01:16:03.880 SPEAKER_11: willing to go back to your slide that showed the gas capacity declining over, gas generation 01:16:03.880 --> 01:16:04.880 SPEAKER_11: declining over time? 01:16:05.079 --> 01:16:11.920 SPEAKER_11: I wanted just to emphasize this point because I think this slide is incredibly important 01:16:11.920 --> 01:16:16.680 SPEAKER_11: and really resonates with what I was trying to say, which is that, you know, as we, over 01:16:16.680 --> 01:16:21.960 SPEAKER_11: the next several years, particularly as load patterns change and load growth, we, and we 01:16:21.960 --> 01:16:26.159 SPEAKER_11: look at the declining capacity value of the four hour lithium ion batteries and other 01:16:26.159 --> 01:16:31.480 SPEAKER_11: storage technologies, having that other form of base load generation that's reasonably 01:16:31.479 --> 01:16:38.599 SPEAKER_11: affordable coming into the system and picking up some of that slack in the form of gas, 01:16:38.599 --> 01:16:40.479 SPEAKER_11: has this dynamic, right? 01:16:40.479 --> 01:16:45.519 SPEAKER_11: And for me, the key thing, and even for California, which is still, and certainly for SMUD, focusing 01:16:45.519 --> 01:16:50.479 SPEAKER_11: on decarbonization, what you're seeing here is the gas capacity is coming into the system. 01:16:50.479 --> 01:16:56.319 SPEAKER_11: It's providing a very important source of dispatchable capacity when the wind and solar 01:16:56.319 --> 01:16:57.319 SPEAKER_11: aren't generating. 01:16:57.319 --> 01:17:04.679 SPEAKER_11: It's actually generating capacity decreases over time so it becomes more of a capacity 01:17:04.679 --> 01:17:07.319 SPEAKER_11: resource rather than an energy resource. 01:17:07.319 --> 01:17:09.359 SPEAKER_11: And it's been very fascinating to watch the states. 01:17:09.359 --> 01:17:12.840 SPEAKER_11: It's worth watching because it's very difficult in California, but it's worth watching how 01:17:12.840 --> 01:17:18.479 SPEAKER_11: the Salt River Project and Arizona Public Service have been messaging this, this sort 01:17:18.479 --> 01:17:21.039 SPEAKER_11: of like building your hybrid car, right? 01:17:21.039 --> 01:17:24.039 SPEAKER_11: Where you're saying we're all, we all want to have a, have electrification, but we know 01:17:24.039 --> 01:17:26.920 SPEAKER_11: we have range limitations basically. 01:17:26.920 --> 01:17:29.680 SPEAKER_11: And so it's sort of, you're building this kind of hybrid system where you've got the 01:17:29.680 --> 01:17:34.520 SPEAKER_11: capacity in the system when the other energy resources aren't producing, but over time 01:17:34.520 --> 01:17:38.079 Unknown: as the others become more cost effective and you're able to bring them in the system, you're, 01:17:38.079 --> 01:17:42.880 SPEAKER_11: you're not burning a ton of gas molecules, but you have it for dispatchability. 01:17:42.880 --> 01:17:47.480 SPEAKER_11: I think that's the conversation that a lot of us are going to have to have inside California 01:17:47.480 --> 01:17:48.480 SPEAKER_11: if you want to keep the lights on. 01:17:48.480 --> 01:17:49.480 SPEAKER_11: Yeah. 01:17:49.480 --> 01:17:50.480 SPEAKER_11: I just want to emphasize the very important conversation. 01:17:50.480 --> 01:17:53.680 SPEAKER_11: We're having that conversation everywhere and it's, it's challenging. 01:17:54.680 --> 01:18:01.920 SPEAKER_05: In my layman's kind of understanding of this, I mean, essentially a, I mean, maintaining 01:18:01.920 --> 01:18:07.880 SPEAKER_05: a certain level of thermal units, we get gas, fire power, just dispatchable, a base load 01:18:07.880 --> 01:18:14.000 SPEAKER_05: or that, that you can control allows you to walk a little bit closer to the edge with 01:18:14.000 --> 01:18:15.000 SPEAKER_05: wind and solar. 01:18:15.000 --> 01:18:19.720 SPEAKER_05: It gives you that insurance policy that says, okay, we can, we can get that. 01:18:19.760 --> 01:18:25.119 SPEAKER_05: We can go a little bit further with wind, solar, battery, non-grid forming resources 01:18:25.119 --> 01:18:28.280 SPEAKER_05: because we know that we've got this backup if we need it. 01:18:28.280 --> 01:18:30.280 SPEAKER_05: That's a really good way to put it. 01:18:34.280 --> 01:18:35.280 Unknown: Okay. 01:18:35.280 --> 01:18:36.280 SPEAKER_06: Any other questions? 01:18:36.280 --> 01:18:38.840 SPEAKER_06: I'm happy to stay up here, but I think, yeah. 01:18:38.840 --> 01:18:46.240 Unknown: John, have you, have we seen a holistic analysis looking at the weather data across the potential 01:18:46.239 --> 01:18:54.000 SPEAKER_02: entire EDM market that would say we see Sacramento has three weeks or the Valley has three weeks 01:18:54.000 --> 01:19:00.800 SPEAKER_02: of no wind and no sun, but that doesn't align with the North or the South, Southwest, right? 01:19:00.800 --> 01:19:05.519 SPEAKER_02: I'd be curious, which seems sort of overwhelming, but I'd great use of AI. 01:19:05.519 --> 01:19:06.519 SPEAKER_02: Yeah. 01:19:06.519 --> 01:19:12.960 Unknown: I mean, certainly diversity is your friend for, it's your friend for operations. 01:19:12.960 --> 01:19:15.119 SPEAKER_06: It's also your friend for resource adequacy. 01:19:15.119 --> 01:19:19.239 SPEAKER_06: So if it's cold in one part of the West, but it's not cold in another part and they've 01:19:19.239 --> 01:19:21.680 SPEAKER_06: got some surplus generation, they can send your way. 01:19:21.680 --> 01:19:24.199 SPEAKER_06: That's definitely helpful. 01:19:24.199 --> 01:19:28.279 SPEAKER_06: The RAP footprint covers a large area. 01:19:28.279 --> 01:19:34.519 SPEAKER_06: The EDM has a new resource adequacy program that I know some of the SMUD folks have been 01:19:34.519 --> 01:19:36.840 SPEAKER_06: instrumental in helping to get off the ground. 01:19:36.840 --> 01:19:40.800 SPEAKER_06: So that's going to have the diversity that exists within the EDM footprint, which is diversity 01:19:40.800 --> 01:19:41.800 SPEAKER_06: to some extent. 01:19:41.800 --> 01:19:51.600 SPEAKER_06: The more diversity you can get, the better off you'll be for resource adequacy. 01:19:51.600 --> 01:19:55.560 SPEAKER_11: I think that question is going to get, as a matter of fact, I hate to say it, but I 01:19:55.560 --> 01:20:00.360 SPEAKER_11: think that's a study in Arnie's future. 01:20:00.360 --> 01:20:05.720 SPEAKER_11: Because as we build out these markets, we really don't, I mean, the reason they're 01:20:05.720 --> 01:20:11.560 SPEAKER_11: so valuable right now is because they're diverse. 01:20:11.560 --> 01:20:18.880 SPEAKER_11: If we all build the same portfolio, we're just going to basically be competing to curtailment. 01:20:18.880 --> 01:20:23.160 SPEAKER_11: So I think there's some opportunities, even for some inter-regional resource planning. 01:20:23.160 --> 01:20:24.160 SPEAKER_11: Great. 01:20:24.160 --> 01:20:30.160 Unknown: We have the meteorologists here a month ago, but at the largest perspective, you know there's 01:20:30.160 --> 01:20:33.720 SPEAKER_02: a high pressure somewhere, a low pressure somewhere else, and it's going to be windy. 01:20:33.720 --> 01:20:40.600 SPEAKER_02: And so when you look at the Western continent, you know it's going to be there somewhere. 01:20:41.160 --> 01:20:42.160 SPEAKER_02: It's going to be interesting. 01:20:42.160 --> 01:20:45.240 Unknown: Yeah, someone said the grid needs to be bigger than the weather. 01:20:45.240 --> 01:20:51.240 Unknown: All right, well thank you. 01:21:00.240 --> 01:21:02.039 SPEAKER_03: Good evening, everybody. 01:21:02.039 --> 01:21:06.680 SPEAKER_03: It's always difficult following these two gentlemen in presentations, but I'll try to 01:21:06.680 --> 01:21:12.119 SPEAKER_03: bring the conversation back home to SMUD, but hopefully you'll be able to see the threads 01:21:12.119 --> 01:21:17.560 SPEAKER_03: that have gone through all of these conversations, and excellent slate of questions. 01:21:17.560 --> 01:21:23.000 SPEAKER_03: And that last one I really enjoyed because the e-MRA program is something that's looking 01:21:23.000 --> 01:21:24.000 SPEAKER_03: in. 01:21:24.000 --> 01:21:28.560 SPEAKER_03: So you're looking at a regional resource adequacy program, and the question would be, 01:21:28.560 --> 01:21:31.920 SPEAKER_03: well why would we join a regional RA program? 01:21:31.920 --> 01:21:38.720 SPEAKER_03: And the answer lies in the idea that as you are building out the grid to both decarbonize 01:21:38.720 --> 01:21:43.119 SPEAKER_03: and keep reliability and do it affordably, you're unleashing that diversity across the 01:21:43.119 --> 01:21:47.840 SPEAKER_03: West and getting that reliability at the most affordable context that you can. 01:21:47.840 --> 01:21:53.560 SPEAKER_03: Now this is probably multiple years out from coming into fruition, but it's just a super 01:21:53.560 --> 01:21:58.000 SPEAKER_03: exciting time to be talking about the idea of unleashing that diversity. 01:21:58.000 --> 01:22:02.119 SPEAKER_03: And diversity is that key, and it is your friend, and it's the thing we seek. 01:22:02.119 --> 01:22:06.199 SPEAKER_03: And I think one of the slides you'll see tonight, you kind of show how diverse SMUD's portfolio 01:22:06.199 --> 01:22:11.199 SPEAKER_03: is and how resilient it is because of that. 01:22:11.199 --> 01:22:14.239 Unknown: Okay, there we go. 01:22:14.239 --> 01:22:19.800 SPEAKER_03: So four broad topics, or three broad topics, it's always fun to look backwards and see, 01:22:19.800 --> 01:22:24.760 SPEAKER_03: okay, kind of what happened last year, and level set on what that means. 01:22:24.760 --> 01:22:28.600 SPEAKER_03: And then we're going to look a little bit at how we're set up for the remainder of this 01:22:28.600 --> 01:22:31.360 SPEAKER_03: year and what does the market kind of look like. 01:22:31.360 --> 01:22:36.020 SPEAKER_03: Any questions along the way, by all means, bring them up as they see fit or we'll do 01:22:36.020 --> 01:22:39.119 SPEAKER_03: it as a Q&A at the end. 01:22:39.119 --> 01:22:44.119 SPEAKER_03: I always level set or try to level set with this footprint, and this is more than anything 01:22:44.119 --> 01:22:47.320 SPEAKER_03: focused on the, not on the words, but on the graph. 01:22:47.320 --> 01:22:54.039 SPEAKER_03: And so as Elliot pointed out at the beginning, the EIM market has become 80% of the West 01:22:54.039 --> 01:22:57.359 SPEAKER_03: and Interconnect, and there is so much value in being able to do that. 01:22:57.359 --> 01:23:03.640 SPEAKER_03: That is really SMUD's addressable market from a wholesale bulk energy supply. 01:23:03.640 --> 01:23:09.560 SPEAKER_03: So everything from all the way up into BC, all the way to the Texas border and the Mexico 01:23:09.560 --> 01:23:10.560 SPEAKER_03: border. 01:23:10.560 --> 01:23:12.159 SPEAKER_03: So it's a very broad footprint. 01:23:12.159 --> 01:23:13.859 SPEAKER_03: And in there is that diversity. 01:23:13.859 --> 01:23:19.100 SPEAKER_03: So it is the California solar and the California wind, along with the Desert Southwest solar 01:23:19.100 --> 01:23:21.840 SPEAKER_03: and their gas fleet in the Northwest. 01:23:21.840 --> 01:23:25.560 SPEAKER_03: And a precursor to the thing that does keep everybody up at night or the one thing that 01:23:25.560 --> 01:23:31.400 SPEAKER_03: Elliot talked about is when that whole footprint kind of in the summer gets hot, that is the 01:23:31.400 --> 01:23:32.520 SPEAKER_03: trip line. 01:23:32.520 --> 01:23:37.279 SPEAKER_03: But we are in a radically different position, both SMUD as well as California, as well as 01:23:37.279 --> 01:23:45.520 SPEAKER_03: the West, than when we were in 2020 and 2022 when we had those last really difficult days. 01:23:45.520 --> 01:23:50.360 SPEAKER_03: So again, that diversity, both from a fleet perspective or from a fuel type perspective, 01:23:50.380 --> 01:23:55.539 SPEAKER_03: as well as from a regional perspective, is absolutely critical. 01:23:55.539 --> 01:23:57.279 SPEAKER_03: We do participate in bilateral markets. 01:23:57.279 --> 01:24:00.599 SPEAKER_03: That's where we just go with other counterparties and have a discussion back and forth, and 01:24:00.599 --> 01:24:03.299 SPEAKER_03: we agree to terms on how to trade power. 01:24:03.299 --> 01:24:09.019 SPEAKER_03: We also participate, obviously, heavily in the EIM market since 2019 when we went live. 01:24:09.019 --> 01:24:14.259 SPEAKER_03: And then, yeah, EDAM went live, as Elliot said, this last month, and we plan to be going 01:24:14.259 --> 01:24:16.099 SPEAKER_03: live in October of 2017. 01:24:16.100 --> 01:24:24.039 SPEAKER_03: And that really just allows for that deeper dive into your portfolio and additional benefits 01:24:24.039 --> 01:24:28.360 SPEAKER_03: that build on top of the EIM market. 01:24:28.360 --> 01:24:31.260 SPEAKER_03: So let's talk a little bit about 2025. 01:24:31.260 --> 01:24:34.660 SPEAKER_03: And so it's not an accident. 01:24:34.660 --> 01:24:39.660 SPEAKER_03: Yes, we had relatively moderate temperatures in the big picture, but we had few extreme 01:24:39.660 --> 01:24:41.700 SPEAKER_03: operating days compared to recent years. 01:24:41.700 --> 01:24:44.940 Unknown: And if you remember last year, I think last year was the first year I kind of used the 01:24:44.939 --> 01:24:45.939 SPEAKER_03: word cautiously optimistic. 01:24:45.939 --> 01:24:49.599 SPEAKER_03: And by the way, it was interesting to see Elliot use that this year. 01:24:49.599 --> 01:24:53.219 SPEAKER_03: And that's about as good as you're going to get, and outlook is you're going to get from 01:24:53.219 --> 01:24:58.419 SPEAKER_03: an operations-oriented person because I'm cautiously optimistic, but there could be 01:24:58.419 --> 01:25:00.379 SPEAKER_03: some bad things that happen, right? 01:25:00.379 --> 01:25:04.299 SPEAKER_03: So it's funny that we're aligned on our context. 01:25:04.299 --> 01:25:08.019 SPEAKER_03: But that's also the kind of how I view our SMUD setup for this year. 01:25:08.019 --> 01:25:09.639 SPEAKER_03: I'm also cautiously optimistic. 01:25:09.639 --> 01:25:14.779 SPEAKER_03: If anything, I'm maybe even a little bit more cautiously optimistic than last year, just 01:25:14.779 --> 01:25:18.819 SPEAKER_03: on how we're set up from a geographic standpoint that will come back out. 01:25:18.819 --> 01:25:21.380 SPEAKER_03: Our peak last year was July 11th. 01:25:21.380 --> 01:25:25.619 SPEAKER_03: So just a month and a half away from right now was when we peaked. 01:25:25.619 --> 01:25:28.259 SPEAKER_03: And we peaked at 2797. 01:25:28.259 --> 01:25:33.779 SPEAKER_03: So the important part about that is we had not – that's the lowest peak in 15 or 16 01:25:33.779 --> 01:25:35.159 SPEAKER_03: years. 01:25:35.159 --> 01:25:36.340 SPEAKER_03: So the timing is right. 01:25:36.340 --> 01:25:39.539 SPEAKER_03: July 11th is a very typical time that we might see a peak. 01:25:39.539 --> 01:25:42.139 SPEAKER_03: But to be 2797 is pretty short. 01:25:42.139 --> 01:25:44.719 SPEAKER_03: Our planning peak is about 3,600 megawatts. 01:25:44.720 --> 01:25:48.079 SPEAKER_03: So it's well underneath our planning peak from what we saw. 01:25:48.079 --> 01:25:53.560 SPEAKER_03: And so that kind of takes that, again, that few operating peak. 01:25:53.560 --> 01:25:59.119 SPEAKER_03: And interesting, 2024, we also peaked in July 11th as well, which happens to be my daughter's 01:25:59.119 --> 01:26:00.119 SPEAKER_03: birthday. 01:26:00.119 --> 01:26:04.199 SPEAKER_03: The generation fleet and transmission fleet system were healthy. 01:26:04.199 --> 01:26:09.960 SPEAKER_03: That is such a big difference in how we perform on any given year because if you've done 01:26:09.960 --> 01:26:14.800 SPEAKER_03: your outages and you've spent your money in making your system capable and resilient, 01:26:14.800 --> 01:26:19.000 SPEAKER_03: those things come forth when you are in an operating year. 01:26:19.000 --> 01:26:23.600 SPEAKER_03: And even though I kind of deflect a little bit that last year wasn't an extreme operating 01:26:23.600 --> 01:26:26.800 SPEAKER_03: condition, you still have those moments. 01:26:26.800 --> 01:26:30.520 SPEAKER_03: And our transmission was available and our resource fleet was available. 01:26:30.520 --> 01:26:36.880 SPEAKER_03: So PowerGen, GridOps folks did a great job to get us to the point where we could survive 01:26:36.880 --> 01:26:39.520 SPEAKER_03: or meet the challenges for the summer. 01:26:39.520 --> 01:26:45.320 SPEAKER_03: The interesting thing was the Tule Flog challenge was met and it's really met with our portfolio 01:26:45.320 --> 01:26:47.840 SPEAKER_03: as well as this market footprint. 01:26:47.840 --> 01:26:52.480 SPEAKER_03: And there's a slide coming up on that that's very interesting that speaks a lot to that 01:26:52.480 --> 01:26:57.240 SPEAKER_03: regional diversity and resource mix as well. 01:26:57.240 --> 01:26:58.880 Unknown: Okay. 01:26:58.880 --> 01:27:02.200 SPEAKER_03: So how did we serve load on our peak day last year? 01:27:02.200 --> 01:27:06.640 SPEAKER_03: Again, remember in July 11th, remember I said it wasn't an extreme peak? 01:27:06.640 --> 01:27:09.200 SPEAKER_03: So this is not an operational view. 01:27:09.199 --> 01:27:12.399 SPEAKER_03: This is really kind of like what Arne was talking about when you start looking at a 01:27:12.399 --> 01:27:14.840 SPEAKER_03: PCL or Power Content label. 01:27:14.840 --> 01:27:18.720 SPEAKER_03: So it really kind of says what were all our resources regardless of where they were. 01:27:18.720 --> 01:27:24.079 SPEAKER_03: And on this mix, there's some that are in bank, there are some that are in New Mexico 01:27:24.079 --> 01:27:28.439 SPEAKER_03: for that matter, or in the Kaiso BA and then we had some stuff coming in from the Pacific 01:27:28.439 --> 01:27:29.439 SPEAKER_03: Northwest. 01:27:29.439 --> 01:27:33.880 SPEAKER_03: So this is looking at like when our load, which is the dotted line, what was going on 01:27:33.880 --> 01:27:35.399 SPEAKER_03: in our system. 01:27:35.399 --> 01:27:40.719 SPEAKER_03: And so there's a couple things to highlight on here is, and I heard, I think it was Arne 01:27:40.719 --> 01:27:45.239 SPEAKER_03: that talked about the solar kind of does what it does in the middle of the day. 01:27:45.239 --> 01:27:49.779 SPEAKER_03: But if you look at our peak is coming right after that lump in the middle of the day. 01:27:49.779 --> 01:27:54.519 SPEAKER_03: So now what you see is that dark blue line, and this is a good takeaway slide, but that 01:27:54.519 --> 01:27:58.619 SPEAKER_03: dark blue that's on top of the yellow, that's our hydro system. 01:27:58.619 --> 01:28:04.679 SPEAKER_03: So you saw us and it wasn't, it was an okay hydro year last year, it wasn't a great year. 01:28:04.680 --> 01:28:08.400 SPEAKER_03: And that's where we reserve the use of our hydro is really for that time period to bridge 01:28:08.400 --> 01:28:13.600 SPEAKER_03: us over after the sun is going away, but we were still kind of in that middle peak. 01:28:13.600 --> 01:28:17.800 SPEAKER_03: The other thing that I'd like to point out is the, I'm terrible with colors, salmon color, 01:28:17.800 --> 01:28:19.560 SPEAKER_03: I guess, in the middle. 01:28:19.560 --> 01:28:21.400 SPEAKER_03: And this is EIM transfers. 01:28:21.400 --> 01:28:25.320 SPEAKER_03: For the most part, you can see outside of a few hours, we were mostly importing that 01:28:25.320 --> 01:28:31.159 SPEAKER_03: day, which if when in the low hydro year, that doesn't surprise me because it will put 01:28:31.159 --> 01:28:34.199 SPEAKER_03: an offer in at hydro and say you can have it at this level. 01:28:34.199 --> 01:28:35.840 SPEAKER_03: And the market says, hey, we're okay. 01:28:35.840 --> 01:28:37.599 SPEAKER_03: We don't, you don't need to spend that money. 01:28:37.599 --> 01:28:39.539 SPEAKER_03: We'll bring it in at a lower cost. 01:28:39.539 --> 01:28:44.199 SPEAKER_03: And so during the middle part of the day, in the solar part of the day, we were actually 01:28:44.199 --> 01:28:50.880 SPEAKER_03: taking a lot of resources in from the market from EIM at that point in time, which then 01:28:50.880 --> 01:28:54.159 SPEAKER_03: allowed us to keep that hydro for that later part of the day. 01:28:54.159 --> 01:28:58.559 SPEAKER_03: And the other thing is it's sunny in Sacramento, but it was also sunny in Fresno, it was sunny 01:28:58.560 --> 01:29:02.480 SPEAKER_03: in LA, it was sunny quite a bit of the place around the area. 01:29:02.480 --> 01:29:09.039 SPEAKER_03: So that was probably very low carbon intensity that we were able to bring into the market. 01:29:09.039 --> 01:29:12.140 SPEAKER_03: Having said all those good news, you can see on the gray that there's still a fair amount 01:29:12.140 --> 01:29:14.560 SPEAKER_03: of thermal that was running during those days. 01:29:14.560 --> 01:29:19.100 SPEAKER_03: And so you can, from a PCL perspective or from a power content label, everything above 01:29:19.100 --> 01:29:21.900 SPEAKER_03: the dotted line would be a market sale, if you would. 01:29:21.900 --> 01:29:24.500 SPEAKER_03: So that's what we made available to the market. 01:29:24.500 --> 01:29:29.399 SPEAKER_03: Everything underneath there is kind of the concept of serving your own load, even though 01:29:29.399 --> 01:29:33.800 SPEAKER_03: I absolutely agree with Arne said, you're really not serving your own load at this point. 01:29:33.800 --> 01:29:37.119 SPEAKER_03: But that's what we had to run locally. 01:29:37.119 --> 01:29:45.859 SPEAKER_03: So in summary, a relatively low peak, still a dependency on thermals, made most of our 01:29:45.859 --> 01:29:51.079 SPEAKER_03: hydro based on EIM transfers into our market, and the solar did what it did. 01:29:51.079 --> 01:29:54.539 SPEAKER_03: As we build our batteries, we'll be able to push some of that yellow bulge, it'll come 01:29:54.539 --> 01:29:58.979 SPEAKER_03: down a little bit at the top, it'll push out to the right side, as we've talked about. 01:29:58.979 --> 01:30:04.159 Unknown: I want to contrast that, though, with a day, this isn't last year, but it was a really 01:30:04.159 --> 01:30:07.979 SPEAKER_03: good slide to demonstrate it with, and this is March 12th of 2026. 01:30:07.979 --> 01:30:13.899 SPEAKER_03: I think a few years ago, I presented some slides like I called a bluebird day in spring. 01:30:13.899 --> 01:30:15.899 SPEAKER_03: So this is kind of a bluebird day in the spring. 01:30:15.899 --> 01:30:23.599 SPEAKER_03: So relatively low loads, really good production from renewables, so you see a nice good solar 01:30:23.599 --> 01:30:25.839 SPEAKER_03: day down there. 01:30:25.839 --> 01:30:31.960 SPEAKER_03: And then also from a hydro perspective, it was an early runoff season, or early a runoff, 01:30:31.960 --> 01:30:34.159 SPEAKER_03: so we had to run some hydro. 01:30:34.159 --> 01:30:36.519 SPEAKER_03: But we managed it, and we managed it outside of the solar day. 01:30:36.519 --> 01:30:39.879 SPEAKER_03: So you can see how the hydro really ran within that. 01:30:39.879 --> 01:30:44.439 SPEAKER_03: And if you stack in all of our renewables, whether they were within the bank BA or within 01:30:44.439 --> 01:30:51.219 SPEAKER_03: the KISO or EIM footprint, we got to the spot where we're serving load with clean 01:30:51.219 --> 01:30:56.739 SPEAKER_03: resources about three different points during the day, some for an extended period of time. 01:30:56.739 --> 01:31:02.939 SPEAKER_03: And so what I'm most excited about this would be when we're kind of doing this in EIM, let 01:31:02.939 --> 01:31:05.059 Unknown: me back up a half step. 01:31:05.059 --> 01:31:08.199 SPEAKER_03: So I'm going to use an example of a consummated power plant. 01:31:08.199 --> 01:31:12.239 SPEAKER_03: So right now, when we look on a day ahead basis, it's what we would call a long lead 01:31:12.239 --> 01:31:13.619 SPEAKER_03: time unit. 01:31:13.640 --> 01:31:18.340 SPEAKER_03: And so it might take you five, six, eight hours of notice to either bring online or 01:31:18.340 --> 01:31:20.039 SPEAKER_03: to take offline. 01:31:20.039 --> 01:31:23.239 SPEAKER_03: And so what a lot of times we'll have to do, and this is one of those days, even with the 01:31:23.239 --> 01:31:28.439 SPEAKER_03: turn down, we needed it in the morning and we needed it in the afternoon. 01:31:28.439 --> 01:31:30.760 SPEAKER_03: In the middle of the day, you didn't really need it. 01:31:30.760 --> 01:31:36.920 SPEAKER_03: But if you look at how we serve load that day, in EIM looks maybe zero to four hours 01:31:36.920 --> 01:31:39.939 SPEAKER_03: out, EIM will look at the entire day. 01:31:39.939 --> 01:31:44.019 SPEAKER_03: In this case, if there's enough transfer capability and resources available, this would 01:31:44.019 --> 01:31:49.819 SPEAKER_03: be a likely day that's consummated would have been turned off by the market, combined cycle 01:31:49.819 --> 01:31:53.599 SPEAKER_03: unit, and brought in the clean renewable energy that we would have been able to use during 01:31:53.599 --> 01:31:54.859 SPEAKER_03: the entire day. 01:31:54.859 --> 01:31:59.759 SPEAKER_03: So this is a really good example of what I think can happen when we get to E-DAM. 01:31:59.759 --> 01:32:04.759 SPEAKER_03: And that's why those thermal graphs that you showed over time, even though capacity was 01:32:04.760 --> 01:32:08.820 SPEAKER_03: steady, the actual output is declining dramatically. 01:32:08.820 --> 01:32:13.680 SPEAKER_03: And this is exactly the way we can be set up to be able to enjoy that same thing. 01:32:13.680 --> 01:32:16.840 SPEAKER_03: Thermal capacity does not equal emissions in that case. 01:32:16.840 --> 01:32:17.840 SPEAKER_03: Go ahead. 01:32:17.840 --> 01:32:18.840 Unknown: I understand. 01:32:18.840 --> 01:32:23.000 SPEAKER_09: So the black line is what we're actually using. 01:32:23.000 --> 01:32:25.119 SPEAKER_03: The black line is load. 01:32:25.119 --> 01:32:26.920 SPEAKER_03: The dotted line is what we're using. 01:32:26.920 --> 01:32:29.440 SPEAKER_09: So that's what we have to provide power for. 01:32:29.439 --> 01:32:33.119 SPEAKER_09: And we went way over on gas. 01:32:33.119 --> 01:32:35.919 SPEAKER_09: And then we sold it. 01:32:35.919 --> 01:32:39.399 SPEAKER_03: So take a swing at it. 01:32:39.399 --> 01:32:41.359 Unknown: Your microphone. 01:32:41.359 --> 01:32:46.639 Unknown: The gray over the load line is capacity. 01:32:46.639 --> 01:32:48.639 SPEAKER_05: It's not actually producing necessarily. 01:32:48.639 --> 01:32:49.639 SPEAKER_05: Is that correct? 01:32:49.639 --> 01:32:50.799 SPEAKER_03: Well, in this case, it was producing. 01:32:50.799 --> 01:32:51.799 SPEAKER_03: It was. 01:32:51.799 --> 01:32:52.799 SPEAKER_05: Okay. 01:32:52.799 --> 01:32:53.799 SPEAKER_03: Sorry. 01:32:53.799 --> 01:32:54.799 SPEAKER_03: I'm wrong. 01:32:54.799 --> 01:32:55.799 SPEAKER_03: I'll shut up. 01:32:56.560 --> 01:33:00.600 SPEAKER_03: What this is pointing out is, again, I said this is not an operational view. 01:33:00.600 --> 01:33:03.360 SPEAKER_03: This is like what all of our resources everywhere we're doing. 01:33:03.360 --> 01:33:08.000 SPEAKER_03: So some of these resources are in the Kaiso BA and some of those resources are here. 01:33:08.000 --> 01:33:11.680 SPEAKER_03: We have local constraints that we need to run a thermal for. 01:33:11.680 --> 01:33:17.360 SPEAKER_03: And so this is really taking that energy accounting view that Arne was kind of talking about, 01:33:17.360 --> 01:33:19.600 SPEAKER_03: of showing what we'd be selling to the market. 01:33:19.600 --> 01:33:20.600 SPEAKER_09: Let me. 01:33:20.600 --> 01:33:21.600 SPEAKER_09: Okay. 01:33:21.600 --> 01:33:23.000 SPEAKER_09: So that says SMUD thermal. 01:33:23.000 --> 01:33:24.000 SPEAKER_09: Jen. 01:33:24.000 --> 01:33:25.000 SPEAKER_03: Yep. 01:33:25.000 --> 01:33:27.760 SPEAKER_09: And that's gray SMUD thermal, Jen, above the line. 01:33:27.760 --> 01:33:28.760 Unknown: Yep. 01:33:28.760 --> 01:33:32.560 SPEAKER_09: So we produced power that we didn't use and we sold it. 01:33:32.560 --> 01:33:33.560 Unknown: Yep. 01:33:33.560 --> 01:33:36.720 SPEAKER_09: But now we can dial it back because we bought the new equipment. 01:33:36.720 --> 01:33:37.720 SPEAKER_09: Is that right? 01:33:37.720 --> 01:33:39.920 SPEAKER_09: So in the future we could stay closer to the line. 01:33:39.920 --> 01:33:40.920 SPEAKER_03: Yep. 01:33:40.920 --> 01:33:42.319 SPEAKER_03: And this one actually has that in there. 01:33:42.319 --> 01:33:47.319 SPEAKER_03: If you look at part of the drop, it's not completely evident. 01:33:47.319 --> 01:33:50.079 SPEAKER_03: But during that middle part of the day, that was at minimum. 01:33:50.079 --> 01:33:52.159 SPEAKER_03: So it reduces the amount it had to run. 01:33:52.399 --> 01:33:56.800 SPEAKER_03: What I'm talking about in the future is you might be able to take CPP completely offline 01:33:56.800 --> 01:33:58.960 SPEAKER_03: from a unit commit. 01:33:58.960 --> 01:34:04.439 SPEAKER_03: The problem with like, or the conundrum with a combined cycle unit is very efficient and 01:34:04.439 --> 01:34:05.439 SPEAKER_03: it's good base load. 01:34:05.439 --> 01:34:08.000 SPEAKER_03: But the problem is it's not very responsive. 01:34:08.000 --> 01:34:14.119 SPEAKER_03: And in this case, if there's enough other clean energy available in the market, instead 01:34:14.119 --> 01:34:19.319 SPEAKER_03: of having this eight hour period in between where it's not long enough to shut the unit 01:34:19.319 --> 01:34:24.279 SPEAKER_03: off and come back online again, the unit can just can decommit that in a day ahead 01:34:24.279 --> 01:34:28.199 SPEAKER_03: market and then we can be able to say we don't even have to have it online. 01:34:28.199 --> 01:34:29.199 Unknown: Oh, wow. 01:34:29.199 --> 01:34:30.199 SPEAKER_08: Okay. 01:34:30.199 --> 01:34:31.199 SPEAKER_03: So that's the big one. 01:34:31.199 --> 01:34:35.840 SPEAKER_02: Does that mean we have the fleet of four power plants, right? 01:34:35.840 --> 01:34:40.000 SPEAKER_02: Does that mean we would essentially pick and choose which power plant is best suited to 01:34:40.000 --> 01:34:41.000 SPEAKER_02: the conditions that day? 01:34:41.000 --> 01:34:42.000 SPEAKER_02: That's okay. 01:34:42.000 --> 01:34:44.079 SPEAKER_02: I guess the market would dispatch it though, right? 01:34:44.079 --> 01:34:48.719 SPEAKER_03: Well I'm going to answer it in two ways and then maybe Elliot will want to chime in too. 01:34:49.079 --> 01:34:55.079 SPEAKER_03: How I would say it is you have your portfolio that you bring to the market and being part 01:34:55.079 --> 01:35:01.840 SPEAKER_03: of by having a structured EIM and structured EDAM market, you bring the portfolio to the 01:35:01.840 --> 01:35:02.840 SPEAKER_03: market. 01:35:02.840 --> 01:35:04.880 SPEAKER_03: As Arne said, we're not serving our load. 01:35:04.880 --> 01:35:08.920 SPEAKER_03: What you're doing is you're buying the load from the system operator and the system operator 01:35:08.920 --> 01:35:14.760 SPEAKER_03: is going through the methodology to be able to say, what is the reliability is this constant? 01:35:14.760 --> 01:35:16.720 SPEAKER_03: It doesn't move. 01:35:16.720 --> 01:35:20.400 SPEAKER_03: To be able to hit that reliability, what's the most sustainable and affordable solution 01:35:20.400 --> 01:35:22.600 SPEAKER_03: that we can present? 01:35:22.600 --> 01:35:30.240 SPEAKER_03: By presenting your fleet to the market, the system operator, no pressure, it gives them 01:35:30.240 --> 01:35:33.640 SPEAKER_03: the opportunity to mix this thing out and say here's where we're doing. 01:35:33.640 --> 01:35:34.960 SPEAKER_03: We're bringing solar from here. 01:35:34.960 --> 01:35:36.240 SPEAKER_03: We're bringing wind from over there. 01:35:36.240 --> 01:35:39.880 SPEAKER_03: We're doing all these things together and this is that result. 01:35:39.880 --> 01:35:42.960 SPEAKER_03: That's where you actually get to enjoy that diversity. 01:35:42.960 --> 01:35:47.199 SPEAKER_03: To your point, what you might see in this, let's just say, for example, let's say there 01:35:47.199 --> 01:35:52.319 SPEAKER_03: was a peak year, evening peak for whatever reason there is here. 01:35:52.319 --> 01:35:58.159 SPEAKER_03: Right now, consummists can come in and kind of thump it all down on both sides. 01:35:58.159 --> 01:36:04.439 SPEAKER_03: You might see consummists get de-committed, but you might see Proctor Peaker, for example, 01:36:04.439 --> 01:36:09.520 SPEAKER_03: get committed for a very small period of time to be highly reactive and then go away. 01:36:09.520 --> 01:36:10.520 SPEAKER_03: Less carbon. 01:36:10.520 --> 01:36:15.760 SPEAKER_03: Yes, it's not as efficient plant, but it's less carbon and it's less total money to be 01:36:15.760 --> 01:36:17.320 SPEAKER_03: able to get to that solution. 01:36:17.320 --> 01:36:26.280 SPEAKER_03: That's right sizing the use of your thermal fleet to be able to meet the overall needs. 01:36:26.280 --> 01:36:32.760 SPEAKER_09: CalISO actually directs us and says I've got more efficient, more affordable resources 01:36:32.760 --> 01:36:33.760 SPEAKER_09: over here. 01:36:33.760 --> 01:36:38.000 SPEAKER_09: I'm suggesting Campbell be turned up. 01:36:38.000 --> 01:36:39.000 SPEAKER_09: Or off. 01:36:39.000 --> 01:36:40.000 SPEAKER_09: Or off. 01:36:40.760 --> 01:36:46.640 SPEAKER_11: I mean, the agreement is that SMUD comes to the table demonstrating that they have enough 01:36:46.640 --> 01:36:50.319 SPEAKER_11: generating capacity to meet their own load if necessary. 01:36:50.319 --> 01:36:55.880 SPEAKER_11: But the market, the economic optimization looks at the cost of that generation and if 01:36:55.880 --> 01:37:01.560 SPEAKER_11: there's some additional generation that's available that's surplus to somebody else's 01:37:01.560 --> 01:37:07.159 SPEAKER_11: needs but is cheaper and it can be moved across the transmission system, it will be delivered 01:37:07.159 --> 01:37:13.159 SPEAKER_11: effectively to offset SMUD's generation resources and it will apportion that across the footprint 01:37:13.159 --> 01:37:16.519 SPEAKER_11: based off the transmission topology and the cost of delivering it. 01:37:16.519 --> 01:37:22.000 SPEAKER_11: So it's a wide area optimization, but that is the basic philosophy is trying to solve 01:37:22.000 --> 01:37:27.319 SPEAKER_11: the net load needs of that footprint at the lowest possible cost without anybody leaning 01:37:27.319 --> 01:37:29.159 SPEAKER_11: on the system. 01:37:29.159 --> 01:37:30.559 SPEAKER_06: Or vice versa. 01:37:30.559 --> 01:37:34.880 SPEAKER_06: It may decide that SMUD's generation is more economic than generation elsewhere in the 01:37:34.880 --> 01:37:40.119 SPEAKER_06: system and it will run SMUD's generation more and turn the generation somewhere else 01:37:40.119 --> 01:37:42.319 SPEAKER_06: down and I think that's what you see here. 01:37:42.319 --> 01:37:47.319 SPEAKER_06: SMUD had more generation than it needed because its resources were more economic than the 01:37:47.319 --> 01:37:50.400 SPEAKER_06: other resources that were available to the market. 01:37:50.400 --> 01:37:53.319 SPEAKER_06: Which is again why I kind of said if you're just looking at this picture for your carbon 01:37:53.319 --> 01:37:58.079 SPEAKER_06: accounting, you're missing those market interactions that happen every hour of the year. 01:37:58.079 --> 01:38:01.440 SPEAKER_09: So this is better for the environment and for affordability, both. 01:38:01.440 --> 01:38:02.440 SPEAKER_09: Yes, absolutely. 01:38:02.440 --> 01:38:03.440 SPEAKER_09: Huge. 01:38:03.479 --> 01:38:09.719 SPEAKER_11: And it's a reason why in an environment where we're building a lot of solar energy, we're 01:38:09.719 --> 01:38:14.799 SPEAKER_11: more likely to be able to use natural gas as truly a capacity resource that's available 01:38:14.799 --> 01:38:18.799 SPEAKER_11: when the solar is in general, but you're not going to necessarily be producing a lot of 01:38:18.799 --> 01:38:21.719 SPEAKER_11: molecules, a lot of burning a lot of molecules. 01:38:21.719 --> 01:38:26.359 SPEAKER_11: So it's really the different, a clean energy system that displays a lot of capacity. 01:38:26.359 --> 01:38:29.039 SPEAKER_02: So John, I guess I'm going to go. 01:38:29.039 --> 01:38:31.039 SPEAKER_01: Rosanna would like to go. 01:38:31.039 --> 01:38:32.039 SPEAKER_01: Yeah, sorry. 01:38:32.479 --> 01:38:39.279 SPEAKER_01: I want to make sure I understand this because, you know, as part of our zero carbon plan, 01:38:39.279 --> 01:38:48.279 SPEAKER_01: we have made a commitment to take McClellan and one of the other plants out of operation. 01:38:48.279 --> 01:38:58.199 SPEAKER_01: But what you're saying here is that we should hang on to those plants because at different 01:38:58.199 --> 01:39:04.960 SPEAKER_01: times we can send thermal generation to the market when it's needed. 01:39:04.960 --> 01:39:05.960 SPEAKER_01: Is that right? 01:39:05.960 --> 01:39:15.399 SPEAKER_01: Because that seems to be, you know, counterintuitive to what our goals are with zero carbon. 01:39:15.399 --> 01:39:23.639 Unknown: Yeah, how I'll answer that is your decision to retire a plant or not retire a plant isn't 01:39:23.639 --> 01:39:25.760 SPEAKER_03: necessarily because of the plant itself. 01:39:25.760 --> 01:39:29.520 SPEAKER_03: It's the grid services that that plant provides to the grid. 01:39:29.520 --> 01:39:34.159 SPEAKER_03: And so from a condition-based perspective, whether you retire a plant or don't retire 01:39:34.159 --> 01:39:38.680 SPEAKER_03: a plant should be immaterial to Elliot in as far as like what we do. 01:39:38.680 --> 01:39:40.800 SPEAKER_03: We bring our resource fleet that we have. 01:39:40.800 --> 01:39:46.159 SPEAKER_03: So you carry that in the resource fleet that you bring forward and then it gets optimized 01:39:46.159 --> 01:39:47.640 SPEAKER_03: in that last window. 01:39:47.640 --> 01:39:52.440 SPEAKER_03: So I don't want to say that you should retire a plant or not a plant because of a certain 01:39:52.440 --> 01:39:53.440 SPEAKER_03: thing. 01:39:53.439 --> 01:39:57.399 SPEAKER_03: I do think that, you know, as you start thinking about reliability, there's conditions in 01:39:57.399 --> 01:39:59.639 SPEAKER_03: which you want to think through all of that stuff. 01:39:59.639 --> 01:40:05.479 SPEAKER_03: But this should by no means mean that you will be, you know, married to a portfolio 01:40:05.479 --> 01:40:08.119 SPEAKER_03: for some period of time and that you need to do these things. 01:40:08.119 --> 01:40:13.039 SPEAKER_03: The question is your portfolio you bring to the market gets re-optimized in that window. 01:40:13.039 --> 01:40:14.039 SPEAKER_03: Is that helpful? 01:40:14.039 --> 01:40:15.279 Unknown: Yeah, I think you're right. 01:40:15.279 --> 01:40:20.639 SPEAKER_01: But I think the real question is, you know, what do you want to bring to the market in 01:40:20.640 --> 01:40:25.560 SPEAKER_01: terms of, you know, thermal is not zero carbon. 01:40:25.560 --> 01:40:32.240 SPEAKER_01: So you know, these kind of decisions we the board has said we're going to eventually 01:40:32.240 --> 01:40:39.880 SPEAKER_01: have to make during the summer when, you know, we intend to be zero carbon. 01:40:39.880 --> 01:40:48.140 SPEAKER_01: And so it just seems to me that we were not thinking about zero carbon when we're thinking 01:40:48.140 --> 01:40:50.900 SPEAKER_01: about what we're sending to the grid. 01:40:50.900 --> 01:40:54.579 Unknown: Yeah, let me try to untangle that. 01:40:54.579 --> 01:40:59.900 SPEAKER_03: What you, SMUD controls their own destiny of whatever portfolio they want to have forward. 01:40:59.900 --> 01:41:02.740 SPEAKER_03: So that I want to say that upfront first. 01:41:02.740 --> 01:41:08.180 SPEAKER_03: After the portfolio that you that we plan for and deliver, that's what we bring to the 01:41:08.180 --> 01:41:12.740 SPEAKER_03: market for the re-dispatch or for the in that in that in that small period. 01:41:12.739 --> 01:41:18.059 SPEAKER_03: I think there's some interesting slides that showed up as far as like the carbon, though, 01:41:18.059 --> 01:41:22.420 SPEAKER_03: the thermal capacity versus thermal emissions. 01:41:22.420 --> 01:41:26.739 SPEAKER_03: You know, thermal capacity was fairly steady, but thermal emissions went like this. 01:41:26.739 --> 01:41:30.539 SPEAKER_03: And so that it doesn't I think if there was one thing to think about maybe from this would 01:41:30.539 --> 01:41:36.619 SPEAKER_03: be thermal or thermal emitter capacity doesn't necessarily mean emissions. 01:41:36.619 --> 01:41:42.539 SPEAKER_03: But SMUD controls its own destiny completely on what portfolio mix they want to have. 01:41:42.539 --> 01:41:43.539 SPEAKER_03: Or we want to have. 01:41:43.539 --> 01:41:44.539 Unknown: Thank you. 01:41:44.539 --> 01:41:47.819 SPEAKER_03: We've got about nine sides or 12 sides left. 01:41:47.819 --> 01:41:51.300 SPEAKER_09: So go ahead. 01:41:51.300 --> 01:41:56.420 SPEAKER_05: Paul and Laura and I had the opportunity to go to Portugal last year and meet with a bunch 01:41:56.420 --> 01:42:01.180 SPEAKER_05: of different people about the Iberian Peninsula outage, the cascading outage that took down 01:42:01.180 --> 01:42:04.380 SPEAKER_05: Portugal and most of Spain and threatened France. 01:42:04.380 --> 01:42:07.420 SPEAKER_05: The French said, no, we're not going to take it. 01:42:07.420 --> 01:42:14.779 Unknown: John, what you're telling me is we're getting market signals that might tell us to turn 01:42:14.779 --> 01:42:17.940 SPEAKER_05: off consumers for the day. 01:42:17.940 --> 01:42:20.140 SPEAKER_05: And that's great. 01:42:20.140 --> 01:42:25.500 SPEAKER_05: The market signal is telling us we can get cheaper wind solar from the market for you 01:42:25.500 --> 01:42:27.340 SPEAKER_05: and for Elliott. 01:42:27.340 --> 01:42:31.420 SPEAKER_05: What are the reliability constraints that say, wait a minute, we're getting a little 01:42:31.420 --> 01:42:37.940 SPEAKER_05: too much or we're not getting enough reactive power, enough grid forming power, choose your 01:42:37.940 --> 01:42:42.060 SPEAKER_05: ‑‑ I still don't completely understand the difference in those terms, but I understand 01:42:42.060 --> 01:42:45.539 SPEAKER_05: that they're important. 01:42:45.539 --> 01:42:51.340 SPEAKER_05: Where are the safeguards that tell us to keep enough spinning mass on the grid? 01:42:51.340 --> 01:42:54.500 SPEAKER_03: So I'll take the first part and then I'll give it back to Elliott on this. 01:42:54.500 --> 01:42:57.619 SPEAKER_03: So remember the first thing I said is reliability is the one constant. 01:42:57.619 --> 01:43:03.579 SPEAKER_03: So no solution is going to violate a constraint from a reliability perspective. 01:43:03.579 --> 01:43:06.019 SPEAKER_03: So in memory I talked about grid services. 01:43:06.019 --> 01:43:09.819 SPEAKER_03: So that it's really ‑‑ the grid is really just a sum of services. 01:43:09.819 --> 01:43:13.939 SPEAKER_03: And those services, sometimes they're energy, sometimes they're ancillary services, ramping 01:43:13.939 --> 01:43:16.260 SPEAKER_03: capabilities, sometimes there's, you know, capacity. 01:43:16.260 --> 01:43:21.140 SPEAKER_03: There's all kinds of things that black start that kind of go into those grid services. 01:43:21.140 --> 01:43:26.099 SPEAKER_03: And that's, you know, a solution from the kaiso is not going to violate any of those 01:43:26.099 --> 01:43:27.099 SPEAKER_03: constraints. 01:43:27.100 --> 01:43:28.100 SPEAKER_03: Anything else to add to that? 01:43:28.100 --> 01:43:33.420 Unknown: I would just say that we keep a close eye on the inertia of the system. 01:43:33.420 --> 01:43:38.900 SPEAKER_11: We also really hold our inverter‑based resources accountable for meeting their reliability 01:43:38.900 --> 01:43:43.820 SPEAKER_11: standards and making sure that the voltage settings across the interchange between the 01:43:43.820 --> 01:43:49.700 SPEAKER_11: systems are set to deal with the type of circumstances they ran into over in the Iberian Peninsula. 01:43:49.700 --> 01:43:54.740 SPEAKER_11: And there were big learnings for Spain and for Portugal on how to just make sure those 01:43:54.740 --> 01:43:56.460 SPEAKER_11: standards are enforced and put in place. 01:43:56.460 --> 01:43:59.899 SPEAKER_11: So there are years behind us in terms of catching up. 01:43:59.899 --> 01:44:05.300 SPEAKER_11: We are not anywhere near as exposed to the kind of thing that went down in Iberian Peninsula. 01:44:05.300 --> 01:44:07.300 Unknown: All right. 01:44:07.300 --> 01:44:14.659 Unknown: The area under the black dot is gray. 01:44:14.659 --> 01:44:16.859 SPEAKER_02: The area under the black dot is gray. 01:44:16.859 --> 01:44:20.260 SPEAKER_02: Is that the 14 percent, the thermal generation serving load? 01:44:20.260 --> 01:44:21.260 SPEAKER_02: Yeah. 01:44:21.260 --> 01:44:23.779 SPEAKER_02: So this is taking ‑‑ I'm sorry, we'll finish. 01:44:23.779 --> 01:44:27.899 SPEAKER_02: Does that mean we were 86 percent carbon free that day? 01:44:27.899 --> 01:44:29.099 SPEAKER_03: You can interpret it that way. 01:44:29.099 --> 01:44:34.300 SPEAKER_03: If you were looking at it from a PCL perspective, that is what the answer would be. 01:44:34.300 --> 01:44:35.300 SPEAKER_03: Yes. 01:44:35.300 --> 01:44:42.099 SPEAKER_03: The only question would be is all that salmon completely zero carbon or is there some of 01:44:42.099 --> 01:44:43.899 SPEAKER_03: the imports that we had coming? 01:44:43.899 --> 01:44:46.859 SPEAKER_03: So there will be some fringy kind of answers to that. 01:44:46.859 --> 01:44:51.939 SPEAKER_03: But I know that that's ‑‑ You're on point of exactly what the point is. 01:44:52.939 --> 01:44:53.939 Unknown: Awesome. 01:44:53.939 --> 01:44:58.699 Unknown: And so the big success here, too, if you really think about it, there's a lot to celebrate 01:44:58.699 --> 01:45:02.339 SPEAKER_03: on this slide on what we've done with our portfolio and our resources. 01:45:02.339 --> 01:45:09.539 SPEAKER_03: And eDAM and EIM release that ability to be able to claim that value a lot easier, whether 01:45:09.539 --> 01:45:14.939 SPEAKER_03: it's the SunZIA project that's coming up and will be operational next week or Grady or 01:45:14.939 --> 01:45:18.699 SPEAKER_03: any of those other projects we have within the KISO, even geothermal. 01:45:18.699 --> 01:45:21.139 SPEAKER_03: Geothermal is in this stack as well. 01:45:21.140 --> 01:45:23.940 SPEAKER_03: So it's a lot to celebrate. 01:45:23.940 --> 01:45:29.100 SPEAKER_03: So then let's talk about the one real edge operating condition we had was the Tully Frog. 01:45:29.100 --> 01:45:31.140 SPEAKER_03: And you've seen this slide. 01:45:31.140 --> 01:45:35.220 SPEAKER_03: It's actually director ‑‑ Josh Langdon, director of PowerGen. 01:45:35.220 --> 01:45:38.619 SPEAKER_03: It's his slide, but I love it so much because it tells a great story. 01:45:38.619 --> 01:45:40.619 Unknown: Well, it tells an interesting story. 01:45:40.619 --> 01:45:42.500 SPEAKER_03: I don't want to hear a great story. 01:45:42.500 --> 01:45:44.020 SPEAKER_03: So there's two things to look at. 01:45:44.020 --> 01:45:46.940 SPEAKER_03: The first one is the graph at the very top. 01:45:46.939 --> 01:45:51.460 SPEAKER_03: And the blue line is wind production and the yellow line is solar production. 01:45:51.460 --> 01:45:56.899 SPEAKER_03: And so you can see the day before Tully Frog came in, wind was really robust and so was 01:45:56.899 --> 01:45:58.500 SPEAKER_03: solar. 01:45:58.500 --> 01:46:04.659 SPEAKER_03: And then the Tully Frog set in and actually wind crapped out worse than solar did. 01:46:04.659 --> 01:46:08.859 SPEAKER_03: And so you really struggled if those were the two things in your portfolio that you 01:46:08.859 --> 01:46:12.299 SPEAKER_03: would ‑‑ you know, that you were depending on, you would have a very difficult week or 01:46:12.300 --> 01:46:19.699 SPEAKER_03: ten days that's represented in here to be able to be reliable for your footprint. 01:46:19.699 --> 01:46:23.659 SPEAKER_03: The really interesting thing is I wish I had a broader picture of the west on this picture, 01:46:23.659 --> 01:46:27.539 SPEAKER_03: but you can see that the Tully Frog really set in the Central Valley. 01:46:27.539 --> 01:46:29.340 SPEAKER_03: And so, yes, it hit a lot of our resources. 01:46:29.340 --> 01:46:32.579 SPEAKER_03: Now, we have some resources outside of that area that did very well that day, but they 01:46:32.579 --> 01:46:35.420 SPEAKER_03: were more towards the desert or southwest. 01:46:35.420 --> 01:46:38.699 SPEAKER_03: But it wasn't a ‑‑ it was a fairly localized problem. 01:46:38.699 --> 01:46:42.779 SPEAKER_03: If you want to talk about the Central Valley being local, it was a localized problem to 01:46:42.779 --> 01:46:43.899 SPEAKER_03: the Central Valley. 01:46:43.899 --> 01:46:48.420 SPEAKER_03: So this is that day where the market really ‑‑ we barely saw a blip on prices because 01:46:48.420 --> 01:46:50.859 SPEAKER_03: it was getting resupplied from somewhere else. 01:46:50.859 --> 01:46:53.340 SPEAKER_03: And so this is truly part of that diversity. 01:46:53.340 --> 01:46:58.179 SPEAKER_03: You can kind of see what concentration risk does to your portfolio when those events show 01:46:58.179 --> 01:46:59.179 SPEAKER_03: up. 01:46:59.179 --> 01:47:05.139 SPEAKER_03: And so this Tully Frog thing is a really important component and really learned a lot about the 01:47:05.140 --> 01:47:07.660 SPEAKER_03: mix between solar and wind on that day. 01:47:07.660 --> 01:47:10.700 Unknown: Did you have something to add? 01:47:10.700 --> 01:47:16.140 Unknown: This graph is so illustrative of the dynamic I was describing as well. 01:47:16.140 --> 01:47:20.420 SPEAKER_11: You look at the difference between the winter percent of back solar and the summer. 01:47:20.420 --> 01:47:22.900 SPEAKER_11: It's just two very different resources. 01:47:22.900 --> 01:47:27.300 SPEAKER_11: So trying to use that summer geared portfolio to solve your winter peaking problems, you're 01:47:27.300 --> 01:47:29.140 SPEAKER_11: going to just have a significant deficit. 01:47:29.140 --> 01:47:30.140 SPEAKER_11: Yeah. 01:47:30.140 --> 01:47:32.940 SPEAKER_03: And we didn't cover that on the bottom, but that's exactly what it's talking about, that 01:47:32.939 --> 01:47:37.699 SPEAKER_03: seasonality of your resource for what problem you're trying to solve and when are you trying 01:47:37.699 --> 01:47:39.139 SPEAKER_03: to solve it. 01:47:39.139 --> 01:47:41.099 Unknown: All right. 01:47:41.099 --> 01:47:43.519 SPEAKER_03: And so the next few slides should go relatively simple. 01:47:43.519 --> 01:47:49.179 SPEAKER_03: This is really how we're set up this year and really compares to last year as a setup. 01:47:49.179 --> 01:47:52.619 SPEAKER_03: And there's only two numbers that I really want to call out for your attention on this 01:47:52.619 --> 01:47:54.779 SPEAKER_03: is four numbers. 01:47:54.779 --> 01:47:56.779 SPEAKER_03: The first two are the load and the obligation. 01:47:56.779 --> 01:48:01.139 SPEAKER_03: So our load is a little bit higher than last year forecasted as well as then that rises 01:48:01.140 --> 01:48:03.180 SPEAKER_03: your RA obligation as well. 01:48:03.180 --> 01:48:04.180 SPEAKER_03: So a little bit higher. 01:48:04.180 --> 01:48:05.980 SPEAKER_03: But how did we meet that? 01:48:05.980 --> 01:48:11.180 SPEAKER_03: We have the 41 megawatts is largely the slough house solar project that's inside bank that 01:48:11.180 --> 01:48:12.500 SPEAKER_03: we added in. 01:48:12.500 --> 01:48:14.900 SPEAKER_03: And then we added a fair amount of Kaiso resources. 01:48:14.900 --> 01:48:20.860 SPEAKER_03: And I'm going to call them for the most part Kaiso and non-RA, which means you get the capacity 01:48:20.860 --> 01:48:22.579 SPEAKER_03: but you don't take the energy. 01:48:22.579 --> 01:48:27.060 SPEAKER_03: And we've heard a lot of things we've talked about today have energy coming at you all 01:48:27.060 --> 01:48:28.060 SPEAKER_03: the time. 01:48:28.060 --> 01:48:29.900 SPEAKER_03: Most of the time we have too much energy. 01:48:29.899 --> 01:48:33.500 SPEAKER_03: And this allows us to not take that energy so we get the capacity. 01:48:33.500 --> 01:48:39.699 SPEAKER_03: And then how we where we carved room in the portfolio was we're less reliant on Pacific 01:48:39.699 --> 01:48:44.779 SPEAKER_03: Northwest power from a forward sale perspective or purchase because guess what? 01:48:44.779 --> 01:48:47.979 SPEAKER_03: That's bundled capacity and energy. 01:48:47.979 --> 01:48:50.059 SPEAKER_03: So it comes at you in a 16 hour block. 01:48:50.059 --> 01:48:53.399 SPEAKER_03: So we're swimming in more power on those days that we're not at peak. 01:48:53.399 --> 01:48:55.539 SPEAKER_03: We're trying to figure out how do we get group rid of this. 01:48:55.899 --> 01:49:02.579 SPEAKER_03: It's a pretty difficult economic decision to make sometimes because it's you paid $70 01:49:02.579 --> 01:49:06.699 SPEAKER_03: for it and you're selling it for $25 sometimes on those occasions. 01:49:06.699 --> 01:49:11.260 SPEAKER_03: So it gets to be not a fun way to be able to manage the system. 01:49:11.260 --> 01:49:16.619 SPEAKER_03: So I think I'm very excited about the additional resources that we have inside the Kaiso coming 01:49:16.619 --> 01:49:18.619 SPEAKER_03: up for the summer. 01:49:18.619 --> 01:49:24.659 SPEAKER_03: And then the other thing on the Pacific Northwest, you know, this is a little good drawback to 01:49:24.659 --> 01:49:27.340 SPEAKER_03: some stuff you saw earlier from our slides. 01:49:27.340 --> 01:49:31.500 SPEAKER_03: They're going to be a resource deficit area probably in the next decade. 01:49:31.500 --> 01:49:33.460 SPEAKER_03: That's going to be harder and harder to get RA out of there. 01:49:33.460 --> 01:49:37.420 SPEAKER_03: So having those relationships elsewhere, it's always good to have access to the Pacific 01:49:37.420 --> 01:49:38.420 SPEAKER_03: Northwest. 01:49:38.420 --> 01:49:39.420 SPEAKER_03: That's not what I'm saying. 01:49:39.420 --> 01:49:43.779 SPEAKER_03: But from a RA and capacity perspective, it's probably a good space to go and it's been 01:49:43.779 --> 01:49:46.899 SPEAKER_03: more expensive actually lately. 01:49:46.899 --> 01:49:52.220 SPEAKER_03: And then this slide is really just the next through the balance of the year from an RA 01:49:52.220 --> 01:49:53.220 SPEAKER_03: perspective. 01:49:53.220 --> 01:49:57.020 SPEAKER_03: There's nothing here other than all the bottom line, all the bottom numbers are green, which 01:49:57.020 --> 01:50:03.180 SPEAKER_03: means we're fully sufficient for resource adequacy program for the balance of the year. 01:50:03.180 --> 01:50:07.860 SPEAKER_03: Now, you know, as long as units stay online and things like that, that can always change 01:50:07.860 --> 01:50:08.860 SPEAKER_03: it. 01:50:08.860 --> 01:50:10.940 Unknown: That's what I have to knock on wood. 01:50:10.940 --> 01:50:13.500 SPEAKER_03: But right now we're well set up for the summer. 01:50:13.500 --> 01:50:18.980 SPEAKER_03: And how that looks at from a geographic perspective, and this is allowing us to get some diversity, 01:50:18.979 --> 01:50:25.819 SPEAKER_03: the big changes from last year in our setup is that we are about 7% or about 8% lower 01:50:25.819 --> 01:50:29.099 SPEAKER_03: in the Northwest and about 9% higher in Kaiso. 01:50:29.099 --> 01:50:36.339 SPEAKER_03: So we've taken our RA and moved it or RA service from the Northwest and put it inside the Kaiso. 01:50:36.339 --> 01:50:40.299 SPEAKER_03: And so these would be some short term contracts, but they're non-RA. 01:50:40.299 --> 01:50:42.339 SPEAKER_03: So they're not energy based. 01:50:42.339 --> 01:50:47.099 SPEAKER_03: And about half of our supply continues to be local in that. 01:50:48.100 --> 01:50:55.579 Unknown: Just real quick, when you say to ISO is that tapping their battery resources? 01:50:55.579 --> 01:50:57.060 SPEAKER_02: So it's capacity only. 01:50:57.060 --> 01:51:02.100 SPEAKER_03: So in theory, it's a resource somewhere in the Kaiso. 01:51:02.100 --> 01:51:06.700 SPEAKER_03: And those resources tend to be thermal plants, but it doesn't mean they're going to run. 01:51:06.700 --> 01:51:09.100 SPEAKER_03: That's kind of what the marginal export is. 01:51:09.100 --> 01:51:11.620 SPEAKER_03: It's not driving emissions. 01:51:11.620 --> 01:51:16.980 SPEAKER_03: We're in the planning construct in the RA thinking, and it's just what is capacity available. 01:51:17.579 --> 01:51:23.659 SPEAKER_03: The capacity that we buy out of the Kaiso, it's tagged as such. 01:51:23.659 --> 01:51:29.139 SPEAKER_03: The reason that we use Kaiso RA is because it's not Kaiso's RA, it's our RA. 01:51:29.139 --> 01:51:33.699 SPEAKER_03: And so in theory, that gets exported to us when we need the capacity. 01:51:33.699 --> 01:51:35.339 SPEAKER_03: And there's no double counting. 01:51:35.339 --> 01:51:37.339 SPEAKER_03: There's all kinds of rules around that. 01:51:37.339 --> 01:51:39.979 SPEAKER_03: It's all really good. 01:51:39.979 --> 01:51:45.539 SPEAKER_09: John, real quick, diversity benefit going from 2% to 1%, what is that? 01:51:45.539 --> 01:51:56.899 SPEAKER_03: So the diversity benefit is as you build out your especially local resources, so clean energy, 01:51:56.899 --> 01:52:04.420 SPEAKER_03: how your load interacts with those resources, both from a forecast, this is on a forecasting basis, 01:52:04.420 --> 01:52:10.420 SPEAKER_03: yields you how that solar and solar and or battery would build. 01:52:10.420 --> 01:52:12.539 SPEAKER_03: We get a lot of diversity benefit when we start adding batteries. 01:52:12.539 --> 01:52:13.859 SPEAKER_03: We haven't got a lot of batteries. 01:52:13.859 --> 01:52:20.500 SPEAKER_03: So diversity benefit is relatively low, but it's how your variable resources interact with your load. 01:52:20.500 --> 01:52:28.059 SPEAKER_03: And so when to the extent that there's a 1% or 2% diversity benefit, that just means our renewable resources 01:52:28.059 --> 01:52:36.739 SPEAKER_03: are doing more benefit than just the name, than if we were treating it with a perfect capacity from somewhere else. 01:52:36.739 --> 01:52:43.099 SPEAKER_03: So there's like 1% less RA we need to buy, essentially, because our system between our load, 01:52:43.220 --> 01:52:48.660 SPEAKER_03: if this was negative 10%, that would be problematic and I'd be wondering what the heck are we doing? 01:52:48.660 --> 01:52:55.140 SPEAKER_03: As we build into the batteries, that number is going to go really, that's where you're going to see that number grow significantly. 01:52:55.140 --> 01:53:01.860 SPEAKER_03: Because we're able to use it from a, we don't use the name plate of our solar, like if we have a 100 megawatt solar farm, 01:53:01.860 --> 01:53:05.620 SPEAKER_03: we don't call it 100 megawatts, it's something less than that. 01:53:05.620 --> 01:53:10.539 SPEAKER_03: And how its shape interplays with our load shape gives you a diversity benefit. 01:53:10.539 --> 01:53:14.779 SPEAKER_03: And when you add a battery, that diversity benefit goes up dramatically. 01:53:14.779 --> 01:53:19.859 SPEAKER_03: And all of a sudden you can claim more of that solar from a capacity perspective. 01:53:19.859 --> 01:53:22.619 SPEAKER_09: Then why did it drop 1% if we're trying to increase it? 01:53:22.619 --> 01:53:26.979 SPEAKER_03: This is really probably a redo from a resource planning. 01:53:26.979 --> 01:53:28.380 SPEAKER_03: They'll always tweak numbers. 01:53:28.380 --> 01:53:30.340 SPEAKER_03: Our load might have shifted a little bit. 01:53:30.340 --> 01:53:33.100 SPEAKER_03: Our ELCCs might have shifted a little bit. 01:53:33.100 --> 01:53:39.500 SPEAKER_03: If this moved 4% or 5%, it's more of a thing to be worried about, a 1%. 01:53:39.500 --> 01:53:40.939 SPEAKER_03: Probably not worth worrying about. 01:53:40.939 --> 01:53:41.939 SPEAKER_03: Thank you. 01:53:41.939 --> 01:53:48.979 Unknown: So the good news here, diverse portfolio spread across a pretty broad region. 01:53:48.979 --> 01:53:54.180 Unknown: So this, Elliot spoke to this a little bit earlier. 01:53:54.180 --> 01:53:56.739 SPEAKER_03: And if you remember those slides, I simplified it a little bit this year. 01:53:56.739 --> 01:54:01.300 SPEAKER_03: But this is basically the RA, the value of RA in the spot market over time. 01:54:01.300 --> 01:54:02.699 SPEAKER_03: The green line is the spot market. 01:54:02.699 --> 01:54:08.859 SPEAKER_03: The blue line is kind of like the term market or the periods of time where we've been able to get ahead of this on a forward basis. 01:54:08.859 --> 01:54:15.579 SPEAKER_03: So what has happened, from left to right, it's June, July, August, September. 01:54:15.579 --> 01:54:26.059 SPEAKER_03: And then from the, and each one of those has June of, I think the first one is June of 2015, June of 2016, so on and so forth. 01:54:26.059 --> 01:54:29.819 SPEAKER_03: So we saw this spike started happening around 2017. 01:54:29.819 --> 01:54:37.819 SPEAKER_03: And that's really, it was a strong hint towards the market to say, hey, the market is probably not have enough capacity. 01:54:37.819 --> 01:54:40.460 SPEAKER_03: And then we kind of chased this thing for a long time. 01:54:40.460 --> 01:54:46.420 SPEAKER_03: Now it kind of peaked in that 2024, 23, 24 timeframe, came down a little bit last year. 01:54:46.420 --> 01:54:48.380 SPEAKER_03: It came down a lot this year. 01:54:48.380 --> 01:54:50.539 SPEAKER_03: Now September's still a little bit of an outlier. 01:54:50.539 --> 01:54:53.219 SPEAKER_03: Maybe I'd still call September elevated. 01:54:53.219 --> 01:54:59.979 SPEAKER_03: But as Elliot talked about earlier on, when you're having this conversation around resource adequacy prices, 01:54:59.979 --> 01:55:03.699 SPEAKER_03: we're back to what I would probably consider more normal prices. 01:55:03.699 --> 01:55:06.059 SPEAKER_03: And that's good for our ratepayers. 01:55:06.060 --> 01:55:13.220 SPEAKER_03: But if you're building a project though, you're trying to put money against the capacity you're building, there's some missing money here. 01:55:13.220 --> 01:55:18.780 SPEAKER_03: And so that still is a struggle for developers to be able to find, two or 01:55:18.780 --> 01:55:23.460 SPEAKER_03: three years ago if they were extending those prices out, yes, you could probably say there's more than enough money. 01:55:23.460 --> 01:55:26.980 SPEAKER_03: But when that price comes down, they've got to make that up in the energy markets. 01:55:26.980 --> 01:55:33.780 SPEAKER_03: And the energy markets, I'll show it in a second, have been, prices have gone down as well. 01:55:33.779 --> 01:55:41.380 SPEAKER_03: So takeaway here is RA prices for the little bit that we do participate in the market with, 01:55:41.380 --> 01:55:45.819 SPEAKER_03: they come down dramatically than three years ago, rather dramatically. 01:55:47.819 --> 01:55:50.420 SPEAKER_03: And then this is kind of a balance of decade. 01:55:50.420 --> 01:55:53.219 SPEAKER_03: This is more of a takeaway side, I don't want to have to spend too much on time on it. 01:55:53.219 --> 01:56:00.059 SPEAKER_03: But again, SMUD does a really good job, in my opinion, of forward looking planning and looking at different scenarios. 01:56:00.059 --> 01:56:01.819 SPEAKER_03: Now, this has some assumptions in it. 01:56:01.819 --> 01:56:03.500 SPEAKER_03: What is your resource fleet? 01:56:04.060 --> 01:56:08.899 SPEAKER_03: But given what our current fleet is and what we expect to build out by the end of the decade, 01:56:08.899 --> 01:56:13.939 SPEAKER_03: we don't have any glaring holes that we will need to be out in the RA market for. 01:56:13.939 --> 01:56:18.779 SPEAKER_03: So from that perspective, now, if a new project comes in, it bumps something else out. 01:56:18.779 --> 01:56:25.699 SPEAKER_03: That either raises the line up, or we could look to have a conversation about moving something out of the portfolio, so on and so forth. 01:56:27.819 --> 01:56:29.899 SPEAKER_02: That looks a lot better than it did. 01:56:29.899 --> 01:56:30.899 SPEAKER_03: Yeah. 01:56:30.899 --> 01:56:33.260 SPEAKER_03: Yeah, considerably better than a couple years ago. 01:56:33.340 --> 01:56:36.619 SPEAKER_01: It looks like a 4th of July slide. 01:56:36.619 --> 01:56:37.820 SPEAKER_03: We'll celebrate. 01:56:38.820 --> 01:56:39.420 Unknown: Yes. 01:56:39.420 --> 01:56:40.460 SPEAKER_03: No, you're right. 01:56:40.460 --> 01:56:41.460 SPEAKER_03: Thank you, Director Rose. 01:56:41.460 --> 01:56:42.420 SPEAKER_03: There were holes in a year ago. 01:56:42.420 --> 01:56:46.180 SPEAKER_03: Yeah, Director Rose, we had a number of holes over the last few years. 01:56:46.180 --> 01:56:47.260 SPEAKER_03: So a lot of progress. 01:56:49.340 --> 01:56:56.539 SPEAKER_03: All right, so then in summary, again, I'll say I'm cautiously optimistic about the balance of the year. 01:56:56.539 --> 01:56:58.980 SPEAKER_03: RA prices continue to ease. 01:56:58.979 --> 01:57:04.659 SPEAKER_03: September is still a little bit hot, but still it dramatically came into effect, 01:57:04.659 --> 01:57:09.339 SPEAKER_03: or came back to some normal prices. 01:57:09.339 --> 01:57:13.259 SPEAKER_03: Interesting thing, energy prices have continued to ease year over year as well. 01:57:13.259 --> 01:57:20.699 SPEAKER_03: And so looking at the on-peak prices for the Northwest, we're at about $60. 01:57:20.699 --> 01:57:23.099 SPEAKER_03: Last year, about $80, $88. 01:57:23.099 --> 01:57:27.779 SPEAKER_03: So prices are down even in the Northwest. 01:57:27.779 --> 01:57:29.579 SPEAKER_03: And then for August, it's a similar kind of thing. 01:57:29.579 --> 01:57:31.899 SPEAKER_03: That's kind of the peak dollar month. 01:57:31.899 --> 01:57:38.139 SPEAKER_03: We're about $75 this year, and last year we were about right around $120. 01:57:38.139 --> 01:57:41.500 SPEAKER_03: So energy prices are down as well. 01:57:41.500 --> 01:57:45.619 SPEAKER_03: That's good if you're buying energy, but remember, the more we have variable resources, 01:57:45.619 --> 01:57:46.659 SPEAKER_03: the more times we're selling. 01:57:46.659 --> 01:57:49.819 SPEAKER_03: So this can get to be a little bit of a struggle once in a while too. 01:57:49.819 --> 01:57:55.699 SPEAKER_03: Not so much for your peak day, but a lot of times, high energy markets can actually provide a lot of value to some of the rate payers, 01:57:55.699 --> 01:57:59.739 SPEAKER_03: because there's a lot of times we have excess energy with variable resources. 01:57:59.739 --> 01:58:02.539 SPEAKER_03: So there's a little bit of a tug and pull on that one. 01:58:02.539 --> 01:58:05.739 SPEAKER_03: The weather season, Elliott covered it really good. 01:58:05.739 --> 01:58:11.019 SPEAKER_03: The seasonal outlook suggests above average temperatures in Sacramento and the broader West 01:58:11.019 --> 01:58:15.699 SPEAKER_03: with developing El Nino or Super El Nino that is on its end. 01:58:15.699 --> 01:58:20.779 SPEAKER_03: So that's where you have to give pause, because even if I'm cautiously optimistic 01:58:20.779 --> 01:58:26.739 SPEAKER_03: and your resources are healthy, a West-wide event is still a problem. 01:58:26.739 --> 01:58:32.819 SPEAKER_03: And then from a required actions basis, we really don't have anything to look forward 01:58:32.819 --> 01:58:42.139 SPEAKER_03: into other than managing those imbalances that we have to sell or buy at any point in time. 01:58:42.139 --> 01:58:46.699 SPEAKER_03: All right, and then this is back to the big takeaway on this slide is really about the 01:58:46.699 --> 01:58:52.099 SPEAKER_03: snowpack too, and this is, I think, we had a presentation on this earlier, but the big 01:58:52.099 --> 01:58:57.420 SPEAKER_03: difference here is our snowpack is basically at zero of normal, and usually you're still 01:58:57.420 --> 01:58:59.880 SPEAKER_03: in a runoff season at this time, and we're done with that. 01:58:59.880 --> 01:59:04.059 SPEAKER_03: So even though the reservoir is in pretty good condition, there's no more water to add 01:59:04.059 --> 01:59:07.539 SPEAKER_03: to them, and so we're kind of stuck with the number that we got. 01:59:07.539 --> 01:59:13.659 SPEAKER_03: And kind of all that, the same thing across all of California. 01:59:13.739 --> 01:59:19.579 SPEAKER_03: The Pacific Northwest has a little bit of snowpack left, but still only 36% of normal, 01:59:19.579 --> 01:59:27.019 SPEAKER_03: so very low year, even though they have more than zero. 01:59:27.019 --> 01:59:32.340 SPEAKER_03: And then just energy prices, again, more detail than you probably need, but if you look at 01:59:32.340 --> 01:59:39.460 SPEAKER_03: the trend for the California-Oregon border, that's the Cobb heavy load, that is a point 01:59:39.859 --> 01:59:44.140 SPEAKER_03: of the interconnect between the Pacific Northwest and California. 01:59:44.140 --> 01:59:51.760 SPEAKER_03: And then NP is a California-specific node inside the California ISO, and you can see 01:59:51.760 --> 01:59:58.939 SPEAKER_03: overall prices are moderating over the next couple years, comparatively to where they 01:59:58.939 --> 02:00:01.100 SPEAKER_03: were for the last year. 02:00:01.100 --> 02:00:06.020 Unknown: Now, that's in California, John, so I think it's worth noting that that Cobb price is 02:00:06.020 --> 02:00:09.020 SPEAKER_06: reflective of that Northwest shortfall that we talked about earlier. 02:00:09.020 --> 02:00:10.900 SPEAKER_06: That's why it's so much higher. 02:00:10.900 --> 02:00:12.180 SPEAKER_03: And look at this is what's happening. 02:00:12.180 --> 02:00:15.220 SPEAKER_03: I brought this to your attention last year. 02:00:15.220 --> 02:00:17.020 SPEAKER_03: And again, we still had a fair amount. 02:00:17.020 --> 02:00:21.140 SPEAKER_03: Sometimes you have to go to the Northwest because for a while there was a resource crunch 02:00:21.140 --> 02:00:25.660 SPEAKER_03: kind of in the ISO area, so to be your RA you had to go by from the Northwest. 02:00:25.660 --> 02:00:30.460 SPEAKER_03: Well if you look at, like we've been talking a lot about 2020 and 2022, look what happened 02:00:30.460 --> 02:00:32.140 SPEAKER_03: in 2020 and 2022. 02:00:32.300 --> 02:00:38.980 SPEAKER_03: Yes, both numbers moved up in that timeframe, but the Northwest really moved up a lot. 02:00:38.980 --> 02:00:43.700 SPEAKER_03: And this was the first year that they kind of come back into line a little bit, but there's 02:00:43.700 --> 02:00:46.660 SPEAKER_03: still a premium, what I would call a premium market. 02:00:46.660 --> 02:00:51.220 SPEAKER_03: So if you're buying energy, you don't want to be buying from the Northwest. 02:00:51.220 --> 02:00:54.700 SPEAKER_03: And if you look back at how we set up the portfolio this year, we don't have as much 02:00:54.700 --> 02:00:56.480 SPEAKER_03: reliance on that Northwest market. 02:00:56.480 --> 02:01:01.720 SPEAKER_03: We have more reliance inside the ISO, and these prices have been much more moderated. 02:01:01.720 --> 02:01:06.980 SPEAKER_03: And so this is a really good look at where is that, where is the resource crunch coming? 02:01:06.980 --> 02:01:08.320 SPEAKER_03: It's probably coming in the Northwest. 02:01:12.220 --> 02:01:17.520 SPEAKER_03: So key takeaways, again, cost, cost, missed, generation, transmission, assets are healthy, 02:01:17.520 --> 02:01:21.039 SPEAKER_03: another good year of taking care of our system. 02:01:21.039 --> 02:01:25.780 SPEAKER_03: And then from energy and resource adequacy and natural gas, prices are relatively stable. 02:01:25.780 --> 02:01:29.980 SPEAKER_03: We have a highly, highly hedged portfolio at this point. 02:01:29.979 --> 02:01:33.639 SPEAKER_03: Now there's always going to be days where it's a little bit above what you plan to and 02:01:33.639 --> 02:01:35.079 SPEAKER_03: days that are below. 02:01:35.079 --> 02:01:39.399 SPEAKER_03: Those are what I call shape risk, but those are things that you just, in the business 02:01:39.399 --> 02:01:41.459 SPEAKER_03: we're in, you have to kind of take that on. 02:01:41.459 --> 02:01:47.119 SPEAKER_03: But to the extent of like really getting a portfolio that's highly hedged, we are very 02:01:47.119 --> 02:01:48.799 SPEAKER_03: much there. 02:01:48.799 --> 02:01:53.279 SPEAKER_03: Things to keep an eye on, obviously, wildfire is, you've heard that from all three of us 02:01:53.279 --> 02:01:58.379 SPEAKER_03: tonight and particularly in the Western transmission system. 02:01:58.400 --> 02:02:01.319 SPEAKER_03: And something that I think I brought to attention last year. 02:02:01.319 --> 02:02:09.440 SPEAKER_03: So the PSPSs that PG&E and the KISO's, some of the entities have been using, they're being 02:02:09.440 --> 02:02:15.239 SPEAKER_03: used by Pacific Core now, Portland Gen, by basically everybody in the Western Interconnect. 02:02:15.239 --> 02:02:20.760 SPEAKER_03: And there's been enough of this that like, I think Pacific Core's stated goal is if there 02:02:20.760 --> 02:02:25.500 SPEAKER_03: is a fire that's within five, regardless of which direction it's moving, if it's within 02:02:25.500 --> 02:02:29.220 SPEAKER_03: five miles of a high voltage line, they're de-energizing. 02:02:29.220 --> 02:02:34.119 SPEAKER_03: So I think you're going to see these occasional things happen more often. 02:02:34.119 --> 02:02:39.420 SPEAKER_03: So even though there's a, it might be a small fire, there's going to be de-energization 02:02:39.420 --> 02:02:42.119 SPEAKER_03: and then all of a sudden everybody has to re-rack it. 02:02:42.119 --> 02:02:46.600 SPEAKER_03: Another good reason to be involved in a structured regional market, you can find it, go ahead. 02:02:46.600 --> 02:02:49.159 SPEAKER_03: Can you tell me what Westside, what is Westside? 02:02:49.159 --> 02:02:50.159 SPEAKER_03: Westwide. 02:02:50.159 --> 02:02:53.000 Unknown: Westwide, so the whole like states. 02:02:53.020 --> 02:02:58.500 SPEAKER_03: That earlier map that Elliot had on there about like all of the interconnection across 02:02:58.500 --> 02:03:02.060 SPEAKER_03: there, it's a Westwide transmission system. 02:03:02.060 --> 02:03:07.500 SPEAKER_03: And you know, it didn't see it quite as much, but there's the intermountain west is very 02:03:07.500 --> 02:03:10.720 SPEAKER_03: dry and they are high risk for wildfire. 02:03:10.720 --> 02:03:14.739 SPEAKER_03: So even though it's not directly in our addressable market, it affects the Western Interconnects 02:03:14.739 --> 02:03:17.460 SPEAKER_03: because it is all connected. 02:03:17.460 --> 02:03:21.699 SPEAKER_03: And then some heat wave that sets up, especially the coastal heat wave, that's the stuff that 02:03:21.720 --> 02:03:23.359 SPEAKER_03: would keep me up at night. 02:03:23.359 --> 02:03:25.599 Unknown: All right. 02:03:25.599 --> 02:03:26.599 SPEAKER_03: Thank you for bearing with us. 02:03:26.599 --> 02:03:31.079 SPEAKER_03: There's a lot of information, but questions for me or the panel? 02:03:31.079 --> 02:03:33.359 SPEAKER_02: One is late. 02:03:33.359 --> 02:03:38.119 SPEAKER_02: So in terms of drivers for that change in the RA market, right, which is great to see 02:03:38.119 --> 02:03:41.300 SPEAKER_02: it's coming back into a normal way because we've been having these discussions the last 02:03:41.300 --> 02:03:45.319 SPEAKER_02: two or three years about how much it was costing us. 02:03:45.319 --> 02:03:49.079 SPEAKER_02: Is that because there's better conditions, like it's wetter in the Pacific Northwest? 02:03:49.340 --> 02:03:53.779 SPEAKER_02: Would you have a sort of commentary on why do you think that market has become more normalized? 02:03:53.779 --> 02:03:57.059 SPEAKER_03: So from the RA within California, you mean? 02:03:57.059 --> 02:03:58.059 SPEAKER_02: Yeah. 02:03:58.059 --> 02:04:00.960 SPEAKER_02: Well, just what we're buying. 02:04:00.960 --> 02:04:03.059 SPEAKER_02: So I think it has... 02:04:03.059 --> 02:04:05.059 SPEAKER_02: The line with the green lines? 02:04:05.059 --> 02:04:06.059 SPEAKER_02: Yep. 02:04:06.059 --> 02:04:10.439 Unknown: That one. 02:04:10.439 --> 02:04:18.539 SPEAKER_03: So it has to do with a lot of people, especially within California, rowing in the same direction 02:04:18.539 --> 02:04:19.859 SPEAKER_03: and building out the portfolio. 02:04:19.859 --> 02:04:23.359 SPEAKER_03: But not only what they're building out with their portfolio, it's a lot about the batteries 02:04:23.359 --> 02:04:24.960 SPEAKER_03: that got installed in California. 02:04:24.960 --> 02:04:27.539 SPEAKER_03: So now it's a uniquely different problem. 02:04:27.539 --> 02:04:31.640 SPEAKER_03: And so before, everybody was scrambling for something that was thermal and something was 02:04:31.640 --> 02:04:32.640 SPEAKER_03: dispatchable. 02:04:32.640 --> 02:04:39.479 SPEAKER_03: We now have those grid services inside the West and specifically inside California. 02:04:39.479 --> 02:04:43.800 SPEAKER_03: Anything to add to that, Elliot or Arne? 02:04:43.820 --> 02:04:50.779 SPEAKER_11: We have 96,000 megawatts of resources with signed interconnection agreements. 02:04:50.779 --> 02:04:56.220 SPEAKER_11: And we've awarded a lot of transmission deliverability out of our interconnection queuing process. 02:04:56.220 --> 02:05:01.779 SPEAKER_11: And so there's a very deep supply curve of resources inside California as well that are 02:05:01.779 --> 02:05:02.779 SPEAKER_11: ready to go. 02:05:02.779 --> 02:05:05.779 SPEAKER_11: And I think that contributes to some of the dynamics. 02:05:05.779 --> 02:05:11.699 Unknown: I would just add that I think a lot of this is due to the, let's say, more conservative 02:05:11.720 --> 02:05:16.559 SPEAKER_06: planning posture that we're seeing from the state agencies in California, and particularly 02:05:16.559 --> 02:05:18.920 SPEAKER_06: in the IRP. 02:05:18.920 --> 02:05:23.159 SPEAKER_06: So the state has ordered, you know, most of the 17 gigawatts of batteries that have been 02:05:23.159 --> 02:05:28.239 SPEAKER_06: built have been because of the midterm reliability orders that were issued by the commission. 02:05:28.239 --> 02:05:34.479 SPEAKER_06: I'll just say that there's some conservative assumptions embedded within the analysis that 02:05:34.479 --> 02:05:35.960 SPEAKER_06: where people wanted to be long. 02:05:35.980 --> 02:05:43.260 SPEAKER_06: So after the August of 2020 rotating blackout events and September of 2022 near-miss events, 02:05:43.260 --> 02:05:45.460 SPEAKER_06: people just didn't really want to go through that again. 02:05:45.460 --> 02:05:49.579 SPEAKER_06: So things like the state's not counting on Diablo Canyon capacity. 02:05:49.579 --> 02:05:55.340 SPEAKER_06: That's 2,000 megawatts of capacity that by law can't be counted in the IRP proceeding, 02:05:55.340 --> 02:05:57.420 SPEAKER_06: but it can be counted in the RA proceeding. 02:05:57.420 --> 02:05:59.020 SPEAKER_06: So that's one example. 02:05:59.020 --> 02:06:04.060 SPEAKER_06: There's a strategic reserve of the gas plants on the beach in Los Angeles that aren't also 02:06:04.080 --> 02:06:07.039 SPEAKER_06: being counted but are available. 02:06:07.039 --> 02:06:10.640 SPEAKER_06: And there are a few other things like that where they've just made conservative assumptions 02:06:10.640 --> 02:06:14.720 SPEAKER_06: that together add up to, you know, probably, you know, a few thousand megawatts of additional 02:06:14.720 --> 02:06:15.720 SPEAKER_06: capacity. 02:06:15.720 --> 02:06:19.280 SPEAKER_06: So that to me is a big part of this, is that we just went from a place where we were kind 02:06:19.280 --> 02:06:23.000 SPEAKER_06: of on the edge and that's when you saw the prices going up to where we now just have, 02:06:23.000 --> 02:06:25.560 SPEAKER_06: you know, we have a surplus of capacity. 02:06:25.560 --> 02:06:28.880 Unknown: I do want to connect the dots to this one more time though because this is going to 02:06:28.880 --> 02:06:31.080 SPEAKER_11: become an increasingly important issue. 02:06:31.100 --> 02:06:37.859 SPEAKER_11: And that is that, you know, that we're in an environment where these lower resource 02:06:37.859 --> 02:06:44.460 SPEAKER_11: adequacy prices, not only for the renewable resources but the gas which sometimes trades 02:06:44.460 --> 02:06:49.859 SPEAKER_11: at even a discount to those because they're existing resources and not really preferred 02:06:49.859 --> 02:06:56.140 SPEAKER_11: to the state is getting the attention of a lot of the owners of gas. 02:06:56.400 --> 02:07:02.720 SPEAKER_11: And they're saying, California for the reasons that Arne just described is really not paying 02:07:02.720 --> 02:07:07.160 SPEAKER_11: as much and then you've got Arizona and these adjacent states who are just on fire with 02:07:07.160 --> 02:07:12.400 SPEAKER_11: load growth and hyperscaling and data centers and they're on the market looking. 02:07:12.400 --> 02:07:16.920 SPEAKER_11: And I think for California, for the state agencies, they have a real question of, you 02:07:16.920 --> 02:07:21.880 SPEAKER_11: know, what point does that stuff start fleeing, you know, three, five, seven year term contracts 02:07:21.880 --> 02:07:25.240 SPEAKER_11: while they're waiting for gas plants to get built in Arizona? 02:07:25.939 --> 02:07:31.500 SPEAKER_11: And if we're not careful, the state's going to find itself, when I say the state, the 02:07:31.500 --> 02:07:35.579 SPEAKER_11: state, the PUC and the investor utilities are going to find themselves right back in 02:07:35.579 --> 02:07:39.380 SPEAKER_11: where they were in 2023 where suddenly that demand from out of state is going to jack 02:07:39.380 --> 02:07:43.219 SPEAKER_11: the price up again and they're going to be short in an elevated market. 02:07:43.219 --> 02:07:46.819 SPEAKER_11: So the best time to hedge is when prices are low, right? 02:07:46.819 --> 02:07:51.300 SPEAKER_11: So we're starting to have a conversation and again, it's nice that we're, that we can support 02:07:51.300 --> 02:07:57.119 SPEAKER_11: each other to have that adjacency and you guys can buy 610 megawatts of gas capacity 02:07:57.119 --> 02:07:59.560 SPEAKER_11: out of the KISO footprint because they're surplus right now. 02:07:59.560 --> 02:08:03.760 SPEAKER_11: But as that dries up for other people to export it, it may not be available or it could be 02:08:03.760 --> 02:08:05.320 SPEAKER_11: much higher priced. 02:08:05.320 --> 02:08:06.320 SPEAKER_11: All right. 02:08:06.320 --> 02:08:12.520 SPEAKER_11: So we need to say state, all of us need to have a firm capacity strategy here going forward. 02:08:14.320 --> 02:08:17.440 SPEAKER_09: Well, I don't see any more questions. 02:08:17.460 --> 02:08:28.539 SPEAKER_09: I would say just one thing that we spoke earlier about, that CO2, you know, where was my comment 02:08:28.539 --> 02:08:29.539 SPEAKER_09: here? 02:08:29.539 --> 02:08:31.819 SPEAKER_09: We talked about the other, I'll promote. 02:08:31.819 --> 02:08:36.299 SPEAKER_09: Oh, this whole, what you're doing is reducing carbon emissions. 02:08:36.299 --> 02:08:40.739 SPEAKER_09: I don't think the public understands that and that it's helping affordability because 02:08:40.739 --> 02:08:44.879 SPEAKER_09: we could just hear in the media constantly, oh, California is, you know, it's because 02:08:44.900 --> 02:08:48.779 SPEAKER_09: of the environmental stuff that it's causing the prices to go up. 02:08:48.779 --> 02:08:51.619 SPEAKER_09: And it seems like we can do both. 02:08:51.619 --> 02:08:57.020 SPEAKER_09: I know at SMUD we're doing both, but it'd be nice to have somebody at the state level 02:08:57.020 --> 02:09:03.500 SPEAKER_09: saying that into the media because it affects all of us when we're constantly countering 02:09:03.500 --> 02:09:06.460 SPEAKER_09: this misinformation. 02:09:06.460 --> 02:09:07.460 SPEAKER_09: So I just wanted to say that. 02:09:07.460 --> 02:09:12.699 SPEAKER_09: And then your comments about AB825, I thought at one point you said, Elliot, it's going 02:09:12.699 --> 02:09:17.119 SPEAKER_09: to degrade reliability, but then you said it's going to improve through better governance. 02:09:17.119 --> 02:09:18.880 SPEAKER_09: Did I misunderstand something? 02:09:18.880 --> 02:09:23.880 Unknown: Oh, yeah, I'm going to just, you know, I want to make sure I'm crystal clear on that. 02:09:23.880 --> 02:09:29.920 SPEAKER_11: The point I make, I was offering you a little unsolicited editorial there, which is that 02:09:29.920 --> 02:09:36.239 SPEAKER_11: the, you know, the energy imbalance market, that connectivity, that map I showed you has 02:09:36.239 --> 02:09:38.519 SPEAKER_11: been so effective. 02:09:38.520 --> 02:09:43.220 SPEAKER_11: And actually, John, I really appreciate your slides showing specifically how SMUD's using 02:09:43.220 --> 02:09:47.260 SPEAKER_11: the EIM not only just for direct imports, but as a way to save water and be able to 02:09:47.260 --> 02:09:49.580 SPEAKER_11: optimize your hydro into the net peak, right? 02:09:49.580 --> 02:09:53.520 SPEAKER_11: That is exactly what we're trying to accomplish with this EIM. 02:09:53.520 --> 02:09:56.780 SPEAKER_11: And so the energy imbalance market with all that connectivity and that diversity has been 02:09:56.780 --> 02:09:59.520 SPEAKER_11: incredibly economically valuable. 02:09:59.520 --> 02:10:05.260 SPEAKER_11: But for years, particularly in my old habitat up north, remember I worked in the Pacific 02:10:05.260 --> 02:10:06.260 SPEAKER_11: and Northwest for 18 years. 02:10:06.260 --> 02:10:09.539 SPEAKER_11: I was Bonneville administrator for seven years. 02:10:09.539 --> 02:10:12.380 SPEAKER_11: There was always this outstanding concern that, well, we're not going to get too close 02:10:12.380 --> 02:10:17.100 SPEAKER_11: to the California market because its governance is dictated by Gavin Newsom. 02:10:17.100 --> 02:10:20.380 SPEAKER_11: I think public power in California has similar concerns, right? 02:10:20.380 --> 02:10:22.900 SPEAKER_11: Are we going to get fair shakes here? 02:10:22.900 --> 02:10:30.619 SPEAKER_11: And so even with the passage of Assembly Bill 825 last year, we've seen the Northwest public 02:10:30.619 --> 02:10:35.099 SPEAKER_11: power utility still not get themselves comfortable with that governance. 02:10:35.099 --> 02:10:38.979 SPEAKER_11: And they're talking about joining this other market run by the Southwest Power Bowl. 02:10:38.979 --> 02:10:42.340 SPEAKER_11: But in the process of doing that, if they join that, they have to take themselves out 02:10:42.340 --> 02:10:47.739 SPEAKER_11: of the energy imbalance market along with others, which is going to fragment that really 02:10:47.739 --> 02:10:52.420 SPEAKER_11: valuable connectivity and economic and reliability value. 02:10:52.420 --> 02:10:58.659 SPEAKER_11: So what I'm saying to folks is the guy that brought Bonneville into the EIM in 2019 is 02:10:58.659 --> 02:11:03.420 SPEAKER_11: to say that for them to go backwards and start breaking that up and deoptimizing the 02:11:03.420 --> 02:11:08.420 SPEAKER_11: inner ties between the Northwest and California and creating these really tricky interfaces 02:11:08.420 --> 02:11:13.539 SPEAKER_11: known as seams between these markets, that is going to be exactly the wrong thing to 02:11:13.539 --> 02:11:19.340 SPEAKER_11: be doing for the Western grid at a time when we need more interconnection and more connectivity. 02:11:19.340 --> 02:11:25.800 SPEAKER_11: And especially now that the state stepped up and passed that bill, it's just inexcusable. 02:11:25.800 --> 02:11:27.539 SPEAKER_11: So we're going to get a new Bonneville administrator. 02:11:27.539 --> 02:11:30.460 SPEAKER_11: We'll see this new Bonneville administrator who wants to take a different look at it. 02:11:30.460 --> 02:11:35.060 SPEAKER_11: I encourage you guys to stay close to your brethren up north because it will be a significant 02:11:35.060 --> 02:11:42.380 SPEAKER_11: consequence to SMUD and WAPA in California if we deoptimize the EIM. 02:11:42.380 --> 02:11:47.819 SPEAKER_06: And just to underline that very quickly, so E3 has done some studies of the benefits of 02:11:47.819 --> 02:11:52.739 SPEAKER_06: these markets for most of the entities that are in the EIM now and a number of them that 02:11:52.739 --> 02:11:56.079 SPEAKER_06: have looked at the EDAM and the Markets Plus. 02:11:56.079 --> 02:12:01.840 SPEAKER_06: Our studies are saying that the West is better off with a large EIM than it is with two 02:12:01.840 --> 02:12:04.140 SPEAKER_06: separate day ahead markets. 02:12:04.140 --> 02:12:09.399 SPEAKER_06: In other words, if we lose the geographic diversity that we have in the EIM, total costs 02:12:09.399 --> 02:12:11.439 SPEAKER_06: in the West will go up. 02:12:11.439 --> 02:12:14.439 SPEAKER_06: That geographic diversity is more valuable than that earlier optimization. 02:12:14.439 --> 02:12:16.439 SPEAKER_06: So who do we have to take out to dinner? 02:12:16.439 --> 02:12:18.439 SPEAKER_06: It's basically what we're doing. 02:12:18.439 --> 02:12:19.439 SPEAKER_08: Okay. 02:12:19.439 --> 02:12:24.720 SPEAKER_08: That is one of the most important points in Western energy policy right there. 02:12:24.720 --> 02:12:25.720 SPEAKER_11: On your mic. 02:12:25.720 --> 02:12:26.720 SPEAKER_11: Oh, I'm sorry. 02:12:26.720 --> 02:12:32.440 SPEAKER_11: That is just, I just say as a long time Western grid operator, infrastructure manager, that 02:12:32.440 --> 02:12:38.440 SPEAKER_11: is one of the most consequential things that can be stated to folks in the Western interconnection, 02:12:38.440 --> 02:12:39.440 SPEAKER_11: right? 02:12:39.440 --> 02:12:42.360 SPEAKER_11: Because you know, in the grand scheme of things, sometimes people look at the dollars, but 02:12:42.360 --> 02:12:47.280 SPEAKER_11: what is it worth to you to keep the lights on on September 6th, right? 02:12:47.280 --> 02:12:48.280 Unknown: Thank you. 02:12:48.280 --> 02:12:51.199 Unknown: And Paul, I know you've been there with me. 02:12:51.199 --> 02:12:53.720 SPEAKER_11: I remember we were on the phone together on September 6th. 02:12:53.720 --> 02:12:55.159 SPEAKER_11: Well, I don't have a question. 02:12:55.159 --> 02:12:56.880 SPEAKER_00: I just have a couple of comments. 02:12:56.880 --> 02:13:01.119 SPEAKER_00: I really want to say thank you, Elliot, to you and Kaizo. 02:13:01.119 --> 02:13:05.840 SPEAKER_00: I also remember that she said when you came in California, the grid was not in good shape. 02:13:05.840 --> 02:13:10.319 SPEAKER_00: We had rolling blackouts and it's amazing the last five years what you've done in terms 02:13:10.319 --> 02:13:13.519 SPEAKER_00: of adding 15 gigs of no batteries. 02:13:13.519 --> 02:13:15.359 SPEAKER_00: You built transmission. 02:13:15.359 --> 02:13:20.960 SPEAKER_00: And then what's really, really, we all should be very grateful to you in terms of getting 02:13:20.960 --> 02:13:25.760 SPEAKER_00: the team together to get California to now go moving toward the pathway and getting 825 02:13:25.760 --> 02:13:28.720 SPEAKER_00: done, so creating this Westside regional market. 02:13:28.720 --> 02:13:32.279 SPEAKER_00: And I think, you know, Chair Stamborn is absolutely right. 02:13:32.279 --> 02:13:35.480 SPEAKER_00: I don't think people actually understand when you create a Westside market. 02:13:35.480 --> 02:13:38.840 SPEAKER_00: I know a study have shown that it's going to save California at least a billion dollars 02:13:38.840 --> 02:13:43.319 SPEAKER_00: or more per year and sharply reduces greenhouse gas emission. 02:13:43.319 --> 02:13:47.920 SPEAKER_00: And so and that's because of the fact that your team has done a fabulous job in terms 02:13:47.920 --> 02:13:50.000 SPEAKER_00: of getting the EIM market out. 02:13:50.000 --> 02:13:54.439 SPEAKER_00: You know, just for us, it saves a small $350 million in the five years that we've done, 02:13:54.439 --> 02:13:57.439 SPEAKER_00: which is like 10 times what the initial estimate was. 02:13:57.439 --> 02:13:59.439 SPEAKER_00: So I just want to say thank you. 02:13:59.439 --> 02:14:01.640 SPEAKER_00: I know usually, you know, you don't like the spotlight. 02:14:01.640 --> 02:14:05.319 SPEAKER_00: I just want to take this opportunity to say thank you in public because all the great 02:14:05.319 --> 02:14:09.960 SPEAKER_00: work that you've done and really all the progress that you've made, you know, putting California 02:14:09.960 --> 02:14:10.960 SPEAKER_00: in much better shape. 02:14:10.960 --> 02:14:14.439 SPEAKER_00: And then, I mean, we've been working together a long time. 02:14:14.439 --> 02:14:19.920 SPEAKER_00: I mean, all the work E3 has really helped shape the California energy portfolio market 02:14:19.920 --> 02:14:24.399 SPEAKER_00: and the strategy, but not only just California, but really the whole nation in terms of what 02:14:24.399 --> 02:14:30.640 SPEAKER_00: is the best way to look at energy portfolio, our RPs, and how do you best optimize right 02:14:30.640 --> 02:14:35.319 SPEAKER_00: between what you want to do for affordability, reliability, and then all the environmental 02:14:35.319 --> 02:14:38.520 SPEAKER_00: attributions and then really shedding some light on the very complex issues. 02:14:38.520 --> 02:14:40.359 SPEAKER_00: And then, John, can I say enough? 02:14:40.359 --> 02:14:46.239 SPEAKER_00: I mean, you team do day in and day out, really optimize our resources and working with CAISO, 02:14:46.239 --> 02:14:49.560 SPEAKER_00: looking at EIM market, look at the EDAM, I really want to set the market right. 02:14:49.560 --> 02:14:50.560 SPEAKER_00: So, I just want to say thank you. 02:14:50.560 --> 02:14:53.480 SPEAKER_00: I don't – a lot of times, I don't have a chance to say that, but I want to make an 02:14:53.480 --> 02:14:54.480 SPEAKER_00: opportunity to say that today. 02:14:54.480 --> 02:14:56.320 SPEAKER_00: Thank you for all the work that you do. 02:14:56.320 --> 02:14:57.320 SPEAKER_00: Moving California forward. 02:14:57.320 --> 02:14:58.320 SPEAKER_00: Paul, you're very kind. 02:14:58.320 --> 02:15:04.080 Unknown: And I will say that one of the joys I get in the industry is getting to work with fellows 02:15:04.080 --> 02:15:06.800 SPEAKER_11: like these, you know, it's a great partnership. 02:15:06.800 --> 02:15:11.800 SPEAKER_11: And, of course, to you, I mean, we know we're coming up on a big milestone for you, and 02:15:11.800 --> 02:15:15.280 SPEAKER_11: you've just been an amazing leader in so many different ways and a great partner, and 02:15:15.280 --> 02:15:19.000 SPEAKER_11: definitely one of the people who are picking up the phone on those tough moments. 02:15:19.000 --> 02:15:20.399 SPEAKER_11: So thanks for all the work together. 02:15:20.399 --> 02:15:21.399 SPEAKER_11: You guys have made a big difference as well. 02:15:21.399 --> 02:15:22.399 SPEAKER_11: I never guess September 6th, so I'd be all right. 02:15:22.399 --> 02:15:23.399 SPEAKER_00: I remember that, right? 02:15:23.399 --> 02:15:24.399 SPEAKER_00: We had the first bill in rolling black outfits. 02:15:24.399 --> 02:15:27.399 SPEAKER_00: We had two phones on either side of our head. 02:15:27.399 --> 02:15:28.399 SPEAKER_11: That's right. 02:15:28.399 --> 02:15:29.399 SPEAKER_11: I didn't remember cutting out. 02:15:29.399 --> 02:15:30.399 SPEAKER_11: We worked together. 02:15:30.399 --> 02:15:35.760 SPEAKER_11: Yeah, no, and congratulations again on just an unbelievable career. 02:15:35.760 --> 02:15:38.720 Unknown: Well, I just love to see this collaboration. 02:15:38.720 --> 02:15:42.319 SPEAKER_09: And, Elliot, I guess your homework is to tell the whole world about what you did with the 02:15:42.319 --> 02:15:45.600 SPEAKER_09: bill and how we're all benefiting from it. 02:15:45.600 --> 02:15:48.039 SPEAKER_09: Because honestly, I think the public needs to know. 02:15:48.039 --> 02:15:53.000 SPEAKER_09: We're in a time of scarcity, and people are afraid of things that are unaffordable. 02:15:53.000 --> 02:15:58.000 SPEAKER_09: And to see the government's working for them, I think they need to hear it right now. 02:15:58.000 --> 02:16:00.560 Unknown: Madam Chair, I have a question. 02:16:00.560 --> 02:16:05.600 SPEAKER_04: So first I wanted to say I really like the phrase, we'll always have September 6th. 02:16:05.600 --> 02:16:08.720 SPEAKER_04: It sounds like a movie. 02:16:08.720 --> 02:16:12.039 SPEAKER_04: But I just wanted to make sure I understand. 02:16:12.039 --> 02:16:22.600 SPEAKER_04: I wasn't quite clear what the situation is regarding the splitting of the EIM markets. 02:16:22.600 --> 02:16:28.199 SPEAKER_04: So is that something that was a danger in the past and that's been prevented? 02:16:28.199 --> 02:16:32.239 SPEAKER_04: Is it something that is possibly moving towards? 02:16:32.239 --> 02:16:37.120 SPEAKER_04: Yeah, no, it is something we're definitely moving towards. 02:16:37.120 --> 02:16:40.600 SPEAKER_11: The EIM was built over the course of the last 12 years. 02:16:40.640 --> 02:16:49.319 SPEAKER_11: As a matter of fact, five days after we started EDAM, we brought on two additional members of EIM. 02:16:49.319 --> 02:16:54.000 SPEAKER_11: We brought on the Black Hills Energy in South Dakota is now part of EIM, 02:16:54.000 --> 02:16:58.640 SPEAKER_11: as well as an affiliated balancing authority of Northwestern Energy, 02:16:58.640 --> 02:17:03.000 SPEAKER_11: of Berkshire, excuse me, of Berkshire Hathaway Energy, known as Power Watch, up in Montana. 02:17:04.840 --> 02:17:05.720 SPEAKER_11: Which is fabulous. 02:17:05.719 --> 02:17:11.239 SPEAKER_11: At the same time, there are a handful of utilities led by BC Hydro, 02:17:11.239 --> 02:17:15.799 SPEAKER_11: the Power Action of the Energy Trading Arm of BC Hydro and Bonneville Power Administration. 02:17:15.799 --> 02:17:23.519 SPEAKER_11: And I have to put Arizona Public Service and Salt River Project in there as well, 02:17:23.519 --> 02:17:33.039 SPEAKER_11: who have just never gotten themselves comfortable with being part of the broader California originated market. 02:17:33.040 --> 02:17:39.840 SPEAKER_11: Even after the passage of AB 825, they're still looking at joining an alternative data head market 02:17:39.840 --> 02:17:41.880 SPEAKER_11: that would be administered by the Southwest Power Bowl. 02:17:41.880 --> 02:17:43.960 SPEAKER_11: It's a much smaller footprint market. 02:17:43.960 --> 02:17:45.680 SPEAKER_11: It doesn't have the electrical connectivity. 02:17:45.680 --> 02:17:51.280 SPEAKER_11: It's fragmented as a different governance structure, but there's such anti-California angst, 02:17:51.280 --> 02:17:53.880 SPEAKER_11: they just can't get over that. 02:17:53.880 --> 02:17:58.960 SPEAKER_11: And so what it means is that if they're going to join this alternative data head market, 02:17:58.959 --> 02:18:05.599 SPEAKER_11: they have to leave the EIM and they have to get technologically connected to this other market. 02:18:05.599 --> 02:18:11.079 SPEAKER_11: Which just breaks that beautifully integrated footprint into a set of islands. 02:18:11.079 --> 02:18:18.239 SPEAKER_11: And it creates really complicated commercial and operational issues at the seams between those markets. 02:18:18.239 --> 02:18:19.599 SPEAKER_11: How do you manage congestion? 02:18:19.599 --> 02:18:21.319 SPEAKER_11: How do you manage interchange? 02:18:21.319 --> 02:18:23.599 SPEAKER_11: Who gets rights to the transmission capacity? 02:18:23.599 --> 02:18:26.359 SPEAKER_11: What happens under extreme events? 02:18:26.360 --> 02:18:33.520 SPEAKER_11: Right now we have one big reliability coordinator that looks over the footprint and suddenly you've got two markets dispatching resources and 02:18:33.520 --> 02:18:41.040 SPEAKER_11: two reliability coordinators tripping over the top of each other in the middle of extreme winter or summer of great events. 02:18:41.040 --> 02:18:44.720 SPEAKER_04: So I get what the problem is. 02:18:44.720 --> 02:18:53.640 SPEAKER_04: So what needs to happen to get them to over their angst about being in that? 02:18:54.639 --> 02:18:57.959 Unknown: You know, it's really difficult to say. 02:18:57.959 --> 02:19:02.079 SPEAKER_11: I mean, unfortunately, it's very deep-seated. 02:19:02.079 --> 02:19:03.760 SPEAKER_11: These things have been going on for years and years. 02:19:03.760 --> 02:19:09.559 SPEAKER_11: You guys have known your peers up north. 02:19:09.559 --> 02:19:13.719 SPEAKER_11: There's just been – it goes back, honestly, to the California power crisis. 02:19:13.719 --> 02:19:23.319 SPEAKER_11: I think my hope is that certainly for – I don't feel like I have a lot of insider influence in Arizona and New Mexico. 02:19:23.319 --> 02:19:24.840 SPEAKER_11: They're kind of doing their thing. 02:19:24.840 --> 02:19:40.440 SPEAKER_11: But up in the north where there's so much connectivity and so much kindred interest between California and the northwest, we've built those inner ties to optimize and so much really relationship between the public power utilities down here in the northwest. 02:19:40.440 --> 02:19:52.399 SPEAKER_11: My hope is that with the new transition that there's an opportunity to support the new administrator and, you know, for the DOE to take a look at this and see if – 02:19:52.479 --> 02:19:56.600 SPEAKER_11: you can look at the whole package of governance, physics, and economics and maybe rethink it. 02:19:56.600 --> 02:20:04.119 SPEAKER_11: I think that having Bonneville in, staying in EIM, will have a really important impact on integrating the northwest. 02:20:04.119 --> 02:20:08.119 SPEAKER_11: And that'll make the seams challenge much less difficult. 02:20:08.119 --> 02:20:08.879 SPEAKER_03: Two things. 02:20:08.879 --> 02:20:18.000 SPEAKER_03: First off, I want to applaud Elliot for kind of taking the high road in all these conversations because this is a big regional issue and has been – 02:20:18.000 --> 02:20:24.000 SPEAKER_03: you know, he and his staff have been really level and consistent in all the conversations. 02:20:24.000 --> 02:20:30.120 SPEAKER_03: But also, you know, you asked about like Director Tamayo what kind of has to happen. 02:20:30.120 --> 02:20:46.680 SPEAKER_03: I would argue that SMUD took a big step in that action through leadership from both Jim Shetler, Bank and Paul from – and the exec staff here locally around supporting AB – you know, getting the bill passed that we'd be able to get the governance in the situation we have. 02:20:46.680 --> 02:20:58.000 SPEAKER_03: But most importantly, the most important thing to happen for – you know, to compete with that market is to get EDAM live and get EDAM robust and performing. 02:20:58.000 --> 02:21:04.079 SPEAKER_03: And that's where this – you know, you all approved the – to be able to participate in the market coming up. 02:21:04.079 --> 02:21:10.079 SPEAKER_03: That's the best thing you can do to be able to get this off the ground and win that battle. 02:21:10.120 --> 02:21:17.200 SPEAKER_04: Senator, I was curious that – so we're not actually going to be part of it until the fall of next year. 02:21:17.200 --> 02:21:23.799 SPEAKER_04: What is it that needs to happen in our shop that takes that long? 02:21:23.799 --> 02:21:26.879 Unknown: I'm not saying that it's too long. I'm just wondering what it is. 02:21:26.879 --> 02:21:29.280 Unknown: Well, so there's always a beta project, right? 02:21:29.280 --> 02:21:31.159 SPEAKER_03: And so Pacific Corps was the beta project. 02:21:31.159 --> 02:21:33.959 SPEAKER_03: And sometimes it's good to be that, sometimes it's not. 02:21:33.959 --> 02:21:39.680 SPEAKER_03: But, you know, we're going to benefit from Pacific Corps going live and getting it up and running. 02:21:39.680 --> 02:21:43.559 SPEAKER_03: There's a number of reasons why it's not spring of next year. 02:21:43.559 --> 02:21:45.559 SPEAKER_03: And it's a collective class. 02:21:45.559 --> 02:21:50.920 SPEAKER_03: Kaisou kind of – and Elia can speak to this better, but generally we'd like to have one onboarding session per year. 02:21:50.920 --> 02:21:54.239 SPEAKER_03: And then the other part of the year, they do upgrades to their systems. 02:21:54.239 --> 02:22:01.440 SPEAKER_03: So they swapped them for 2027, upgrading their systems in early 27, because there was other – there's a number of other entities. 02:22:01.440 --> 02:22:07.040 SPEAKER_03: Public service New Mexico, LA, a bank, and within bank we've got WAPA. 02:22:07.040 --> 02:22:11.840 SPEAKER_03: There's a lot of things to herd, and there's a lot of system upgrades. 02:22:11.840 --> 02:22:17.000 SPEAKER_03: It's a key project, both for this year, mostly in the planning period. 02:22:17.000 --> 02:22:20.960 SPEAKER_03: But next year from an execution period, it's going to take that much time. 02:22:20.960 --> 02:22:22.480 Unknown: Good. Thank you. 02:22:22.480 --> 02:22:24.080 SPEAKER_04: Yep. 02:22:24.080 --> 02:22:26.800 Unknown: Any other questions? 02:22:26.800 --> 02:22:31.400 Unknown: Okay. Well, gentlemen, really do want to say thank you. 02:22:31.400 --> 02:22:33.240 SPEAKER_01: Quite insightful. 02:22:33.239 --> 02:22:44.840 SPEAKER_01: I appreciate your patience with all of us who are not as, you know, seeped in this information, but very insightful. 02:22:44.840 --> 02:22:51.840 SPEAKER_01: Let me ask the Chief Legal Officer if we have any requests to speak. 02:22:51.840 --> 02:22:53.079 Unknown: No, we do not. 02:22:53.079 --> 02:22:54.879 Unknown: Okay. 02:22:54.879 --> 02:23:01.280 SPEAKER_01: The next item on the agenda is public comment for items not on the agenda. 02:23:01.280 --> 02:23:02.719 SPEAKER_01: Do we have any? 02:23:02.719 --> 02:23:03.719 Unknown: No, we do not. 02:23:03.719 --> 02:23:04.719 Unknown: Okay. 02:23:04.719 --> 02:23:10.719 Unknown: How about – okay. 02:23:10.719 --> 02:23:27.719 SPEAKER_01: So the last thing here is that we do want everyone to know who's listening in, that written comments received on items not on the agenda will be included in the record if they're received within two hours of the end of the meeting. 02:23:27.719 --> 02:23:32.719 SPEAKER_01: The last item on the agenda is to provide a summary of committee direction. 02:23:32.719 --> 02:23:34.719 SPEAKER_01: I do not have anything. 02:23:34.719 --> 02:23:35.719 Unknown: Okay. 02:23:35.719 --> 02:23:38.719 SPEAKER_01: So with that, our meeting is ended. 02:23:38.719 --> 02:23:40.719 Unknown: Thank you.