Xcel Energy Inc. · NASDAQ:XEL
Xcel Energy — Technical Presentation (September 2020)
43 slides from Xcel Energy's technical presentation, Sep 1, 2020
Slide 1: 2020 Tolk Analysis: Session 2 of the 1st Technical Conference
2020 Tolk Analysis: Session 2 of the 1st Technical Conference 09/01/2020 © 2020 Xcel Energy 1
Slide 2: Today's Meeting Agenda
Today’s Meeting Agenda 1. Prior and Future Technical Conferences 2. Updates from Prior Technical Conference A. Independent Evaluator B. Request for Information for generating resources 3. Encompass – Production Cost Modeling Software 4. Responses to Parties Comments and Questions A. SPS Load Forecas
Slide 3: Agenda for Future Technical Conferences
Agenda for Future Technical Conferences Future Technical Conferences will include the following topics: 1. Harrington Station 2. Tolk Analysis – Retirement dates and operating scenarios 3. Value of Tolk water rights 4. Modeling Parameters 3
Slide 4: Agenda Item 1: Prior and Future technical conferences
Agenda Item 1: Prior and Future technical conferences © 2020 Xcel Energy 4
Slide 5: Prior & Future Technical Conferences
Prior & Future Technical Conferences • SPS held the first technical conference on June 18th 2020 • Agenda Items included: • SPS’s general approach to the Tolk Analysis • Request for Proposal (“RFP”) to acquire the services of an IE • Draft Request for Information (“RFI”) to obtain pricing of replace
Slide 6: General Approach
General Approach • A Present Value Revenue Requirement (“PVRR”) Analysis using the Encompass production cost modeling software • Encompass will be discussed in detail later in this presentation • Evaluate multiple retirement and operating scenarios • Each scenario will include an optimized expansion
Slide 7: Process
Process Present Incorporate preliminary Issue RFI for Update the results from PVRR results at Appoint IE Replacement Encompass RFI in analysis future Resources Model Encompass technical conference(s) 7
Slide 8: Agenda Item 2A: Independent Evaluator
Agenda Item 2A: Independent Evaluator © 2020 Xcel Energy 8
Slide 9: Independent Evaluator
Independent Evaluator Actions taken during, or since, the previous technical conference: • Solicitated feedback for draft RFP and associated questionnaire • Issued the RFP to obtain the services of an Independent Evaluator • Recommended selection of Guidehouse (f/k/a Navigant Consulting, Inc.) • App
Slide 10: Introduction to Guidehouse
Introduction to Guidehouse • Expert-based, international consulting firm with diverse technical capabilities and a deep understanding of resource planning & procurement, interconnection studies, infrastructure planning and grid operations • Over a decade of experience conducting Independent Evaluati
Slide 11: Agenda Item 2B: Request for Information
Agenda Item 2B: Request for Information © 2020 Xcel Energy 11
Slide 12: Recap: RFI for Replacement Resources
Recap: RFI for Replacement Resources • SPS will issue an all-source solicitation for replacement generating resources to provide capacity and associate energy • SPS will consider all ownership structures including, but not limited to, purchased power agreements, build-own-transfers, and company self
Slide 13: Request for Information
Request for Information Actions taken during, or since, the previous technical conference: • Solicitated feedback during first technical conference for draft RFI • Provided draft RFI to Guidehouse for IE review Next Steps • Issue RFI within 5 business days • Receive proposals within 60 days of issua
Slide 14: Southwestern Public Service Company Request for Information
Southwestern Public Service Company Request for Information Introduction: This announcement constitutes a Request for Information (“RFI”) notice soliciting current pricing, technical characteristics, and other relevant information for potential generating resources. This is not a Request for Proposa
Slide 15: Qualifications and Assumptions
Qualifications and Assumptions: • Expressions of interest should be from existing or proposed generating facilities within the SPS zone or delivered to the SPS zone from existing or proposed sites within the Southwest Power Pool. • Expressions of interest should include a proposed Commercial Operati
Slide 16: Bidders Meeting and Proposal Submission Deadline
Bidders Meeting: Date: September 21, 2020 Time: 1:00PM – 3:00 PM Mountain Daylight Time Join Zoom Meeting: https://xcelenergy.zoom.us/j/93175193060?pwd=cVpNeTZvTEkycURlMUhqMlZWL2 I4dz09 Meeting ID: 931 7519 3060 Passcode: 270511 One tap mobile +17209289299,,93175193060#,,,,,,0#,,270511# US (Denver)
Slide 17: Confidentiality
Confidentiality SPS recognizes that certain information contained in a Proposal submitted may be deemed by the submitter to be confidential. To the extent a submitter believes portions of its Proposal (or any subsequent responses to follow-up questions) constitute confidential material, the submitte
Slide 18: Agenda Item 3: Encompass
Agenda Item 3: Encompass Jon Landrum | Manager of Resource Planning Analytics © 2020 Xcel Energy 14
Slide 19: Impetus for Change
15 Impetus for Change Need for more detailed analyses around operational impact of plans; Increasing reliance on intermittent and storage resources Stakeholder requests for more detailed modeling in the complex and evolving resource environment Opportunity to improve visibility and transparenc
Slide 20: Replacement Options, Identification and Evaluation
16 Replacement Options, Identification and Evaluation Developed and issued RFI on Aug 17, 2017 (Received responses from 12 vendors) ABB (Capacity Expansion) Abacus Solutions(Saturn) NREL (RPM) EPIS (Aurora) PCI (GenTrader) Ascend Analytics (PowerSimm) Energy Exemplar (Plexos) EPRI (EGEAS)
Slide 21: Replacement Options, Identification and Evaluation (cont)
17 Replacement Options, Identification and Evaluation (cont) Selected two finalists based on detailed discussions with vendors and evaluation of materials presented; conducted in-house evaluation of finalist systems EPIS (Aurora) Anchor Power (EnCompass) Xcel demos/training conducted Nov 2018
Slide 22: Model Features
18 Model Features Encompass Functionality • Modern “solve anything” algorithm • Hourly operation detail (accurately captures ramp rates, start ups, etc.) • Enhanced storage logic and ancillary services • Able to perform utility capital accounting (revenue requirements) • National database, regional
Slide 23: Key Stakeholder Issues Addressed
19 Key Stakeholder Issues Addressed Concern Encompass Advantages over Strategist Transparency / Access • Fully functional low-cost license for regulators/stakeholders • All inputs/outputs are readable in non-proprietary Excel Storage Modeling • Enhanced storage modeling with hourly detail • Capable
Slide 24: Questions & Discussion
QUESTIONS & DISCUSSION © 2020 Xcel Energy
Slide 25: Agenda Item 4A: SPS Sales and Demand Forecast Update
Agenda Item 4A: SPS Sales and Demand Forecast Update Jannell Marks | Director of Energy Sales and Demand Forecast © 2020 Xcel Energy 21
Slide 26: SPS Forecast Assumptions
SPS Forecast Assumptions • Current economic outlook shows significant COVID-19 impacts in 2020 with impacts moderating through 2024 – Most significant impact in Q2 2020 • Residential use per customer is higher than recent past and Small C/I use per customer is lower – Both Residential and Small C/I
Slide 27: SPS Retail Sales
SPS Retail Sales SPS Total Retail Sales (GWh) SPS Residential Sales (GWh) 26,000 4,500 History History Forecast Forecast 24,000 4,000 22,000 3,500 Use per Customer declines from high 2020 levels 20,000 3,000 2015-2019 CAGR = 1.9% 2020-2030 CAGR = 1.5% 18,000 2,500 2014 2016 2018 2020 2022 2024 2026
Slide 28: SPS System Peak Demand
SPS System Peak Demand Retail Peak Demand 4,500 4,000 Total Net Peak Demand (Retail, Full Req Whls, and Partial Req Whls) MW 3,500 6,000 3,000 2,500 2014 2016 2018 2020 2022 2024 2026 2028 2030 5,000 History Forecast MW Wholesale Peak Demand 4,000 1,600 1,200 3,000 800 2014 2016 2018 2020 2022 2024
Slide 29: Questions & Discussion
QUESTIONS & DISCUSSION © 2020 Xcel Energy
Slide 30: Agenda Item 4B: Sierra Club Follow-up Discussion
Agenda Item 4B: Sierra Club Follow-up Discussion © 2020 Xcel Energy 26
Slide 31: General Modeling Questions
General Modeling Questions Q. Market power, both firm and non-firm: Is Xcel modeling just resources from the RFP process, or is the Company also planning to model market power as an option to replace some generation and capacity? What cost and availability assumption is Xcel using for these potentia
Slide 32: General Modeling Questions
General Modeling Questions Q. Reliability: How is Xcel planning to model the firm capacity contribution of solar and wind? Does the Company plan to conduct reliability modeling to inform its ELCC assumptions? Is the Company planning to use resource blocks to reflect the changing contribution of each
Slide 33: General Modeling Questions
General Modeling Questions Q. Optimized modeling vs scenario modeling: We would like to understand the main factors driving Xcel / EnCompass’ selection of optimal retirement date. We believe that optimized retirement runs should be foundation of this analysis. However we would encourage Xcel to also
Slide 34: Harrington Station Questions
Harrington Station Questions Q. Does SPS plan to use the IRP process to make the final decision on whether to retire, repower on natural gas, or install scrubbers at Harrington? Or does the Company plan to make a decision prior to or outside the IRP process? A. “The IRP process will not itself be us
Slide 35: Harrington Station Questions
Harrington Station Questions Q. Does SPS plan to model seasonal operation of Harrington when operating both on coal and natural gas in its analysis? A. No. When operating on coal, seasonal operations alone will not bring Harrington into compliance with NAAQS. When operating on gas, Harrington will p
Slide 36: Next Meeting
NEXT MEETING Date: Mid to Late October Time: Mountain Time TBD Location: Zoom Meeting © 2020 Xcel Energy
Slide 37: Appendix: Questions For Future Discussions
Appendix: Questions For Future Discussions © 2020 Xcel Energy 33
Slide 38: Sierra Club June 26th Model Input Clarifications
Sierra Club June 26th Model Input Clarifications Questions not yet answered will be addressed in future technical conferences • Staggered Retirement scenarios: please confirm that both units will be economically committed and dispatched at all times, and that the no unit’s retirement date would be l
Slide 39: Sierra Club June 26th Model Input Clarifications
Sierra Club June 26th Model Input Clarifications • Optimized modeling vs scenario modeling: We would like to understand the main factors driving Xcel / EnCompass’ selection of optimal retirement date. We believe that optimized retirement runs should be foundation of this analysis. However we would e
Slide 40: Sierra Club June 26th Request for SPS Model Runs
Sierra Club June 26th Request for SPS Model Runs 1. Tolk has to comply with Regional Haze regulations by installing dry scrubbers by 2024 (this is likely the earliest there would be any such requirement as it takes at least three years to install). 2. Harrington has to install scrubbers for SO2 NAAQ
Slide 41: Sierra Club August 20th Request for SPS Model Runs
Sierra Club August 20th Request for SPS Model Runs 1. Does SPS plan to use the IRP process to make the final decision on whether to retire, repower on natural gas, or install scrubbers at Harrington? Or does the Company plan to make a decision prior to or outside the IRP process? * 2. When evaluatin
Slide 42: Sierra Club August 20th Request for SPS Model Runs
Sierra Club August 20th Request for SPS Model Runs 7. Will the Company incorporate the results of its Tolk RFP into its modeling assumptions for Harrington’s replacement costs? More specifically, we believe that the Company should use those RFP results (including costs for solar, wind, and battery s
Slide 43: © 2020 Xcel Energy
© 2020 Xcel Energy 39
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