NorthWestern Energy Group, Inc. · NASDAQ:NWE
NorthWestern Energy — Corporate Update (February 2017)
26 slides from NorthWestern Energy's corporate update, Feb 27, 2017
Slide 1: NorthWestern Energy Resource Plan – Overview
NorthWestern Energy Resource Plan – Overview February 27, 2017 1
Slide 2: Commission Comments
Commission Comments 1. The stakeholder process 2. Resource adequacy constraint 3. The scope of resource alternatives 4. The multiple uncertainties; and 5. The competitive resource procurement process 2
Slide 3: Stakeholder Process
Stakeholder Process • Commission Comment: 2015 Plan failed to adequately engage stakeholder • NorthWestern Response: We agree we need to do more – NorthWestern commits to working with ETAC more effectively – Steps taken • Hired a new facilitator • Schedule meetings • Commission Comment: Seems to exp
Slide 4: Stakeholder Process
Stakeholder Process • Commission Comment: Access to modeling software • NorthWestern Response: – NorthWestern continues to offer access to the Ascend modeling software • NorthWestern is willing to discuss a structure under its contract to MCC and MPSC 4
Slide 5: Resource Adequacy Constraint
Resource Adequacy Constraint • Commission Comment: – Not clearly defined capacity types and needs – NorthWestern has not completed a system optimization study with its entire fleet of resources. • NorthWestern Response: Agree and disagree – We have defined capacity types and needs • Chapters 7, 11,
Slide 6: Physical Resources: Name Plate vs. Capacity Contribution
Physical Resources: Name Plate vs. Capacity Contribution 6
Slide 7: Resource Adequacy Constraint
Resource Adequacy Constraint • Commission Comment: 2015 Plan provides no analysis justifying a resource adequacy standard based solely on a NorthWestern specific LOLP – Region-wide capacity shortage, “A utility-specific measure of capacity need as the yardstick for the solution…is incongruous”. – No
Slide 8: Resource Adequacy
Resource Adequacy Planning Reserve Margins • NERC Reference Margin – WECC NWPP-US Reference Margin = 16.6% • Comparison of Select Regional Utilities – NorthWestern has no planning reserve margin and is actually negative NorthWestern Energy
Slide 9: NERC/WECC Reserve Margin Requirement
NERC/WECC Reserve Margin Requirement • Reserve Margin Requirement: – WECC–NWPP = 16.6% • Resource Adequacy Advisory Committee (RAAC) – Provided a report that shows the region being short in 2021 • PNUCC Annual forecast affirms our concern about winter capacity 9
Slide 10: Resource Adequacy / Capacity Planning
Resource Adequacy / Capacity Planning Capacity Planning / Resource Adequacy • Shift in Resource Planning Priorities • NWPCC – First Plan to recognize and place priority on capacity planning. • Energy planning no longer “good enough” • Peak and flexibility need to be considered • No renewable resourc
Slide 11: NWPCC – Resource Adequacy Assessment
NWPCC – Resource Adequacy Assessment • RAAC identifies resource adequacy concerns in 2021 – Resource retirements – Increased intermittent resource integration needs – Increases in Winter Peaks 11
Slide 12: PNUCC – Draft Northwest Regional Forecast
PNUCC – Draft Northwest Regional Forecast 12
Slide 13: PNUCC – Draft Northwest Regional Forecast
PNUCC – Draft Northwest Regional Forecast 13
Slide 14: Pacific NW vs. NorthWestern Coincidental Peak
Pacific NW vs. NorthWestern Coincidental Peak 14
Slide 15: Resource Adequacy Constraint
Resource Adequacy Constraint • Commission Comment: The Plan provides little analysis and documentation that supports its selected capacity acquisition rate produces “minimal resource adequacy” by 2028. • NorthWestern Response: We agree regarding the rate of acquisition – Ascend did perform an optima
Slide 16: Regional deficiency and Plant timing
Regional deficiency and Plant timing 16
Slide 17: Commission Comment: Resource Adequacy Constraint
Commission Comment: Resource Adequacy Constraint • Commission Comment: The 2015 Plan falls short of providing a thorough analysis of the capacity contributions of various resource alternatives, particularly large scale wind and solar resources • NorthWestern Response: We disagree, especially concern
Slide 18: Summer Peak - Wind and Solar Contribution
Summer Peak - Wind and Solar Contribution 18
Slide 19: Winter Peak - Wind and Solar Contribution
Winter Peak - Wind and Solar Contribution 19
Slide 20: Alternative Resources
Alternative Resources • Commission Comments: The 2015 Plan falls short of an “evaluation of the full range of cost-effective supply and demand-side management options” • NorthWestern Response: We are talking past each other. The Plan uses more conventional generation – Conventional – strong amount o
Slide 21: Commission Comment: Sources of Uncertainty
Commission Comment: Sources of Uncertainty • Resource Cost and Capacity Contributions – Wind and Solar • Transition to RBC Regulation – Agree – Due to timing of RBC, this information was not available for the Plan – An evaluation will be completed for the next Plan • Wind and Solar Integration Requi
Slide 22: Competitive Procurement Process
Competitive Procurement Process • Commission Comment: Does not identify that resources will be procured through an open, fair, and competitive process – Does not explain steps it will take to ensure integrity – Prudent to consult with the advisory committee and potential bidders • NorthWestern Respo
Slide 23: RFP Focus – Flexible Capacity Need and Resources
RFP Focus – Flexible Capacity Need and Resources 23
Slide 24: RPS Compliance Forecast
RPS Compliance Forecast NorthWestern Energy RPS Compliance Forecast Current Portfolio + CREP + Contracted (Greycliff and WKN) 5,000,000 4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 ~ 2,000,000 Renewable Energy Credits 1,500,000 1,000,000 500,000 NorthWestern Energy Delivering « Bright Future mm
Slide 25: RPS Compliance Forecast
RPS Compliance Forecast NorthWestern Energy RPS Compliance Forecast Current Portfolio + CREP + Contracted (Greycliff and WKN) + Crazy Mtn 6,000,000 5,000,000 4,000,000 3,000,000 + Renewable Energy Credits 2,000,000 + 1,000,000 + oO NorthWestern Energy lm Current Wind mm Current Hydro ll New CREP 25
Slide 26: RPS Compliance Forecast
RPS Compliance Forecast NorthWestern Energy RPS Compliance Forecast Current Portfolio + CREP + Contracted (Greycliff and WKN) + Crazy Mtn + One new 80MW Wind 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 Renewable Energy Credits 2,000,000 1,000,000 NorthWestern Energy Delivering « Bright Future
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