Resolution No. 94821
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RESOLUTION NO. 9482
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON APPROVING AND ADOPTING THE DEMAND FORECAST
FOR 2008, PLANNING RESERVE MARGIN AND QUALIFYING
CAPACITY CRITERIA
WHEREAS, the City of Vernon ("City") is a chartered municipal
corporation of the State of California that owns and operates a system
for the generation, purchase, transmission, distribution and sale of
electric capacity and energy; and
WHEREAS, the City serves electricity to consumers at retail
from the City's distribution system located within its municipal
boundaries; and
WHEREAS, the City has executed a Metered Subsystem Agreement
("MSS Agreement") with the California Independent System Operator
("CAISO"); and
WHEREAS, the City is considered a Load Serving Entity ("LSE")
under certain terms of the CAISO's Tariff; and
WHEREAS, on March 13, 2006, the CAISO submitted an amendment
to the CAISO Tariff to establish Interim Reliability Requirements
Program (the "IRR Program") to establish requirements for each LSE to
prepare a plan (a "Resource Adequacy Plan") for sufficient reserves to
meet reliability criteria established by the Western Electricity
(Coordinating Council for the CAISO's transmission control area; and
WHEREAS, under the IRR Program, the City is empowered to
Iestablish a Demand Forecast, a Reserve Margin and Qualifying Capacity
(Criteria upon which to base its Resource Adequacy Plan; and
WHEREAS, the City has reviewed the historical and expected
28 I1demand for and supplies of electricity within its distribution system,
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including the likely peak demand for electricity within the City's
distribution system throughout 2008, the available generation and other
capacity to serve that demand, and constraints which might impact the
availability of capacity to serve the City's projected peak demand; and
WHEREAS, based upon that review, the City finds that the
default 15% Reserve Margin set forth in the IRR Program is sufficient
for planning purposes; and
WHEREAS,,based upon that review, the City finds that the peak
demand for electricity within the City's distribution system throughout
2008 is likely to experience a load growth of approximately 1.5% over
the same months in calendar year 2007; and
WHEREAS, based upon that review, the City finds that the
Qualifying Capacity Criteria specified in the City of Vernon Demand
Forecast for 2008, Planning Reserve Margin and Qualifying Capacity
Criteria are sufficient and appropriate to be used in determining the
amount of Qualifying Capacity needed to meet the City's projected peak
monthly demand and 15% Reserve Margin.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF VERNON AS FOLLOWS:
SECTION 1: The City Council of the City of Vernon hereby
Ifinds and determines that the recitals contained hereinabove are true
land correct.
SECTION 2:
The City Council
of the City of
Vernon hereby
approves and adopts
the Demand Forecast,
Reserve Margin
and Qualifying
Capacity Criteria set forth in the City of Vernon Demand Forecast for
2008, Planning Reserve Margin and Qualifying Capacity Criteria, in
substantially the same form as the copy which is attached hereto as
Exhibit A and incorporated by reference.
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SECTION 3: The City Council of the City of Vernon hereby
authorizes the Light & Power Department to utilize the Demand Forecast,
Reserve Margin and Qualifying Capacity Criteria set forth in the City of
Vernon Demand Forecast for 2008, Planning Reserve Margin and Qualifying
Capacity Criteria in preparing the Resource Adequacy Plans for the
calendar year 2008; provided, however, that if there is a significant
change in the current year -over -year growth trend for monthly peak
demand, or if other information comes to the attention of the Light &
Power Department that warrants a change in the Demand Forecast, the
Light & Power Department may amend the Demand Forecast by not more than
ten percent (10%) as long as the City Council is notified of such
amendment at least fifteen (15) days before any Resource Adequacy Plan
lis submitted to the CAISO, any other entity, or any person not employed)
by the City.
SECTION 4: The City Council of the City of Vernon hereby
authorizes the Light & Power Department to continue to use such Reserve
Margin and Qualifying Capacity Criteria in preparing all subsequent
Resource Adequacy Plans for the City's electricity distribution system
until such time as the City Council shall affirmatively amend or
suspend such Reserve Margin and/or Qualifying Capacity Criteria by
further Resolution.
SECTION 5: The City Council of the City of Vernon hereby
authorizes the Light & Power Department to submit Resource Adequacy
Plans prepared in conformity herewith to the CAISO on a monthly,
seasonal and/or annual basis as requested by CAISO.
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SECTION 6: The City Clerk of the City of Vernon shall
certify to the passage of this resolution, and thereupon and thereafter
the same shall be in full force and effect.
APPROVED AND ADOPTED this 19th day of November, 2007.
ATTEST:
GIROI\i, Ci/Ey Clerk
Name:
Title: Mayor
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STATE OF CALIFORNIA )
ss
COUNTY OF LOS ANGELES )
I, MANUELA GIRON, City Clerk of the City of Vernon, do hereby
certify that the foregoing Resolution, being Resolution No. 9482, was
duly adopted by the City Council of the City of Vernon at a regular
meeting of the City Council duly held on Monday, November 19, 2007, and
thereafter was duly signed by the Mayor or Mayor Pro-Tem of the City of
Vernon.
4
MANUELA 4GI0N,(City Clerk
(SEAL)
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EXHIBIT A
City of Vernon
Light & Power Department
Demand Forecast for 2008
Planning Reserve Margin
[i I
Qualifying Capacity Criteria
Background:
On March 13, 2006, the CAISO submitted an amendment to the CAISO Tariff to establish
the Interim Reliability Requirements Program ("IRR Program"), which the CAISO proposes
to remain effective until the implementation of the Market Redesign and Technology
Upgrade ("MRTU") Tariff, which the CAISO filed on February 9, 2006. The CAISO's IRR
Program is a short-term proposal to implement the Resource Adequacy programs being
adopted by state authorities, including the California Public Utilities Commission ("CPUC")
and other Local Regulatory Authorities. The program requires that the Scheduling
Coordinators for Load Serving Entities submit annual Resource Adequacy Plans consistent
with approved Demand Forecast, Planning Reserve Margin and the Qualifying Capacity
criteria as approved by the Local Regulatory Authority. Therefore, the City Council of the
City of Vernon as the Local Regulatory Authority needs to establish (1) the Demand Forecast
for Vernon's load, (2) the Reserve Margin for planning purposes, and (3) the criteria for
determining resources that would be eligible to provide Qualifying Capacity and for
calculating Qualifying Capacity.
On April 10, 2006, the City Council adopted a Demand Forecast for Vernon's load for the
period June through December, 2006, a 15% Reserve Margin for planning purposes, and
criteria for determining eligible resources and calculating Qualifying Capacity. On October
4, 2006, the City Council adopted a Demand Forecast for 2007 and confirmed the Reserve
Margin and Qualifying Criteria. Vernon needs now to adopt a Demand Forecast for 2008,
and to review the Reserve Margin and Qualifying Capacity criteria. Pursuant to Vernon's
Metered Subsystems Agreement ("MSS") with CAISO, the new Demand Forecast, Reserve
Margin and Qualifying Capacity criteria for 2008 must be provided to CAISO as soon as
possible.I
Staff has compiled a Demand Forecast for 2008 based upon historical load data and
projections as to future load growth, as set forth below. Staff also recommends that Vernon
retain the same 15% Reserve Margin for planning purposes and the criteria for determining
If the City Council does not establish the criteria for Qualifying Capacity the CAISO proposes to
impose its default criteria reflected in the CAISO proposed section 40.13 of the CAISO Tariff.
N
eligible resources and calculating Qualifying Capacity. Vernon will then be responsible for
periodically providing the CAISO with a required Resource Adequacy Plan that takes into
account the established new Demand Forecast, the Planning Reserve Margin, and the
Resource Adequacy criteria established by the City Council.
Demand Forecast:
Vernon's municipal load resides within the CAISO control area. The CAISO, as the control
area operator, has the responsibility for meeting reliability criteria established by the Western
Electricity Coordinating Council ("WECC"). As such the CAISO has entered into
agreements with various market participants including, but not limited to, Generators,
Scheduling Coordinators, Participating Transmission Owners, Utility Distribution
Companies, and Metered Subsystems ("MSS"), which impose certain responsibilities on
parties to establish a reliable system. One of those responsibilities is to have operating
reserves that meet the WECC minimum requirements.
The CAISO's goal in considering reserve requirements is to balance available capacity with
demand across the entire CAISO control area and, therefore, CAISO's primary concern is
with the time and amount of peak demand on the CAISO-controlled transmission system (the
"system peak"). In order to reduce demand during the period of the system peak (and,
therefore, to lower the peak demand on the transmission system), utilities generally offer
retail rate structures designed to encourage load shifting away from the on -peak period. Such
efforts are intended to achieve on -peak demand reduction and lower the need to build new
generation to meet peak demand. Vernon has adopted such a rate structure and has
succeeded in shifting the peak demand period for Vernon's system to a time that is generally
earlier than the time of the CAISO system peak.
Vernon's share of needed capacity to meet CAISO control area requirements may be
established by determining the amount of Vernon's load that contributes to the CAISO
system peak. The Demand Forecast (forecast of Vernon's coincidental peak demand relative
to the CAISO monthly peak demand) for Vernon is developed by first forecasting Vernon's
peak load for each month without regard to the time of day, and then applying a coincidental
3
peak factor to reflect the portion of Vernon's peak load that contributes to the CAISO's
control area peak demand. The monthly Demand Forecast is, therefore, the monthly product
of Vernon System peak demand forecast and the coincidental peak factor as further
described below.
1. Monthly peak load forecast for 2008
The proposed monthly peak demand forecast was developed based on the analysis of
Vernon's historical load growth. Vernon has experienced an average increase in Peak
Demand of 1.5 % (Exhibit 5).
Therefore, Vernon's projected peak demand is based on a 1.5% load growth through the
2008 calendar year. The resulting projected peak demand for Vernon is shown below in
Table 1.
Table 1
Projected
Load
2008
MW
January
196.85
February
197.76
March
200.31
April
208.66
May
206.83
June
209.40
July
208.50
August
209.07
September
202.89
October
188.28
November
193.47
December
184.54
El
2. Establish coincidental peak factor
The coincidental peak factor is the ratio between Vernon's demand at the time of the
CAISO control area's peak demand and Vernon's peak demand for the month. The
coincidental peak factor is established based on last year's actual load data. The
CAISO's peak demand was obtained through the CAISO's OASIS online system.
Exhibit 3 reflects the date and time that the CAISO control area established its monthly
peak demand for October 2006 through September 2007. For July and September, the
third and second highest peak respectively were taken. This adjustment was made due to
the fact that the ISO system peaks occurred the days after a holiday which is not a good
representation of Vernon's typical load. Vernon's demand for those hours was acquired
from Vernon's records and used to develop the coincidental peak factor as shown in
Exhibit 4.
3. Vernon's Demand Forecast
Vernon Demand Forecast is the product of Vernon's peak demand and the coincidental
peak factor. The product reflects Vernon's projected demand at the time of the CAISO
control area's peak for each of the individual months. Exhibit 4 provides the calculation
of Vernon's projected Demand Forecast for the period of January through December
2008.
It is recommended that the Demand Forecast contained in Exhibit 4 and as shown below
in Table 2 be approved.
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Table 2
Demand
Forecast
2008
MW
January
154.9
February
155.4
March
167.4
April
180.4
May
192.1
June
193.7
July
196.3
August
198.5
September
194.9
October
150.5
November
155.8
December
145.9
Planning, Reserve Requirement
It is recommended that a Reserve Margin of 15% be adopted for planning purposes as set
forth in section 40.4 (c) of the filed CAISO Tariff.
Qualifying Capacity:
It is recommended that the following criteria be approved for determining the type of
resources that may be eligible to provide Qualifying Capacity and for calculating Qualifying
Capacity for such eligible resource types.
1. The two existing power supply contracts through the WSPP Agreement Schedule C
"firm" that were entered into in 2000 shall be eligible to count as Qualifying Capacity
until 2010. The amount of Qualifying Capacity is 50 MW through 2009 and 25 MW
through 2010.
2. Vernon Purchase Power Contract with SCPPA for 4.9% of SCPPA's share of Palo
Verde Nuclear Generating Station (Palo Verde) shall be eligible as Qualifying
0
Capacity. The power is scheduled as an import generally at Westwing Substation
through the CAISO's entitlement of transmission from Westwing to SP-15.
3. Contract NO DE-MS65-86WP39587 between United States Department of Energy
Western Area Power Administration Boulder Canyon Project and City of Vernon,
California for Electric Service shall be eligible to count as Qualifying Capacity. The
power is scheduled as an import at Mead Substation generally through the CAISO's
entitlement of transmission from Mead Substation to SP-15. The amount of
Qualifying Capacity will be based on the most current schedule for the available
capacity from the Boulder Canyon Project at the time of submittal of the Resource
Adequacy Plan.
4. Generating units and system units (but excluding Vernon diesel generating units)
within Vernon's MSS, as reflected in Schedule 14 of Vernon's MSS Agreement with
CAISO shall be eligible to count as Qualifying Capacity. The amount of Qualifying
Capacity of such units will be based on the projected dependable gross output
capacity on a day when the ambient air temperature is 90 degrees Fahrenheit.
5. All other capacity from a Participating Generator, a System Unit, or a System
Resource, as defined in the CAISO Tariff, shall be eligible as Qualifying Capacity.
System Resources, however, must have a firm transmission path from source to the
CAISO control area. Such criteria for firm transmission facilities over the CAISO
control area can be satisfied with the possession of a Firm Transmission Right from
the CAISO on the path associated with the System Resource. Firm Transmission
Rights provide physical priority right to schedule over congested paths.
6. The following scheduled outage criteria should be used for determining the level of
Qualifying Capacity ("QC") of any resource.
7
Scheduled Outages
Time Period
Description of How Qualifying CapacityCApacity of Resources Is Counted
Summer
Any month where days of scheduled outages exceed 25% of days in the
May
month, the resource cannot be counted as Qualifying Capacity. If
through
scheduled outages are less than or equal to 25% of the days in the
September
month, the resource is counted as Qualifying Capacity.
For scheduled outages of less than 1 week, the resource is counted as
Qualifying Capacity.
Non -Summer
For scheduled outages of 1 week to 2 weeks, the Qualifying Capacity of
Months
the resource is prorated using the formula:
October
[ 1 - (days of scheduled outage/days in month) - 0.25] * MW = QC
through
The formula will allow resources to be counted at between 50% and
April
25% of what would otherwise be their Qualifying Capacity.
For scheduled outages over 2 weeks, the resource cannot be counted as
Qualifying Capacity.
Conclusion:
1. Recommend approval of the following Demand Forecast for 2008 as follows:
Demand
Forecast
2008
MW
January
154.9
February
155.4
March
167.4
April
180.4
May
192.1
June
193.7
July
196.3
August
198.5
September
194.9
October
150.5
November
155.8
December
145.9
2. Recommend approval of a 15% Reserve Margin for planning purposes.
3. Recommend approval of the above stated Qualifying Capacity Criteria.
E
Exhibit 1
Jan ary through December 2008 Projected Load
Month
2006-2007
(Actual City
Peak Load)
2008
Projected
Load
A
B
C
1
January '07
193.94
196.85
2
Februa '07
194.84
197.76
3
March '07
197.35
200.31
4
April '07
205.58
208.66
5
May '07
203.78
206.83
6
June'07
206.31
209.40
7
Jul '07
205.42
208.50
8
Au ust'07
205.98
209.07
9
Se tember '07
199.89
202.89
10
October'06
185.50
188.28
11
November'06
190.61
193.47
12
December '06
181.81
184.54
A Month
B Source: (City Historical Peak Load Data)
C 1.5% Projected Load Growth for Vernon
Exhibit 2
ISO Historical Peak Demand
Hour Ending
Load
A
B
C
1
25-Oct-2006
1906
31,869
2
'6-Nov-2006
1800
33,249
3
18-Dec-2006
1900
34,218
4
15-Jan-2007
1800
. 34,008
5
27-Feb-2007
1900
32,761
6
12-Mar-2007
2000
32,481
7
27-A r-2007
1500
33,238
81
8-Ma -2007
1600
38,266
9
14-Jun-2007
1600
40,839
10
26-Jul-2007
1600
42,853
11
31-Au -2007
1500
48,535
12
3-Se -2007
1 16001
44,690
A ISO OASIS
B ISO OASIS
C ISO OASIS
Exhibit 3
September 2006 through August 2007 Coincidental Peak
Factor
Month
Vernon's
Peak
Load
Coincidental
Peak during
ISO's Peak
Demand
Coincidental
Peak Factor
(A)
B)
(C)
(D)
1
Janua '07
193.94
152.64
78.7%
2
Februa '07
194.84
153.14
78.6%
3
March '07
197.35
164.92
83.6%
4
April '07
205.58
177.74
86.5%
5
Ma '07
203.78
189.25
92.9%
6
June'07
206.31
190.80
92.5%
7
Jul '07
205.42
193.36
94.1%
8
Au ust'07
205.98
195.61
95.0%
9
Se tember'07
199.89
191.99
96.0%
10
October'06
185.50
148.29
79.9%
11
November'06
190.61
1.53.50
80.5%
12
December'06
181.81
143.72
79.0%
A Month
B Source: (City Historical Peak Load Data)
C Source: (City Historical Peak Load Data)
D Quotient of Columns C and B (C/B)
Exhibit 4
January throu h December 2008 Resource Adequacy Re uirement
Projected
Load
Coincidental
Peak Factor
Demand
Forecast
RA Capacity
Requirement
A
B
C
D
E
1
January
196.8
78.7%
154.9
178.2
2
February
197.8
78.6%
155.4
178.8
3
March
200.3
83.6%
167.4
192.5
4
April
208.7
86.5%
180.4
207.5
5
May
206.8
92.9%
192.1
220.9
6
J•une
209.4
92.5%
193.7
222.7
7
July
208.5
94.1 %
196.3
225.7
8
Au ust
209.1
95.0%
198.5
228.3
9
September
202.9
96.0%
194.9
224.1
10
October
188.3
79.9%
150.5
173.1
11
November
193.5
80.5%
155.81
179.2
12
December
I 184.5
79.0%
145.91
167.8
A Month
B Source: (Exhibit 1 Column C)
C Source: (Exhibit 3 Column D)
D Product of B and C
E Product of D and 115% (115% reflects Planning Reserve Margin)
Exhibit 5
Seven year Peak Demand
Load Growth
Peak
% Increase
A
B
C
1
2003
194.4
2
2004
195.9
0.787%
3
2006
190.8
-2.618%
4
2006
197.3
3.400%
5
2007
206.3
4.571 %
6
Average
196.9
1.5%
A Year
B Source: (City Historical Peak Load Data)
C % Increase from previous year.
CITY CLERK'S OFFICE
INTER -OFFICE MEMORANDUM
To: Donal O'Callaghan, Director of Light & Power
From: Nelly Giron, City Clerk
Date: ovember 19, 2007
Re: Resolution No. 9482 - Approving and Adopting the Demand
Forecast for 2008, Planning Reserve Margin and Qualifying
Capacity Criteria.
As requested by Mr. Abraham Alemu, transmitted herewith is a copy of
the above referenced resolution approved by the City Council on
November 19, 2007, for your transmittal to the ISO.
:ng
gt_� 6 C� o_
November 15, 2007
Resource Adequacy Staff Report
Interim Reliability Requirement Program (IRR Program) is the CAISO's short-
term proposal to implement the Resource Adequacy program being adopted by state
authorities. This program is in place until the implementation of MRTU (Market
Redesign and Technology Upgrade). This programs requires that Scheduling
Coordinators of Load Serving Entities submit the following as approved by the Local
Regulatory Authority:
1) Demand Forecast
2) Planning Reserve Margin,
3) The Qualifying Capacity approved by the Local Regulatory Authority.
The City Council of the City of Vernon as the Local Regulatory Authority for Vernon has
in the last two years approved a Demand Forecast, 15 % Reserve Margin, and the criteria
for determining eligible resources and calculating Qualifying Capacity.
The Light and Power Department recommends approval of the Demand Forecast for
2008; approval of a 15% Planning Reserve Margin; and, approval of the Qualifying
Capacity Criteria.