Integrated Resource Planning April 20, 2010 Judy Stokey, Executive Government and External Affairs Jack McGinley, Development Director, Renewables Gary Smith, Project Director-Smart Technologies
Presentation Overview Integrated Resource Planning (IRP) summary NV Energy IRP Strategy / Pending Filing Energy Efficiency Demand Side Mgmt. Advanced Service Delivery Supply Plan Renewable Energy Development Transmission Plan On-Line 2
NVE IRP Strategy Three Part IRP Strategy 1 Increasing investments in energy efficiency & conservation 2 Expanding renewable energy initiatives & investments 3 Adding transmission and highly efficient dispatchable generating plants 3
IRP Strategy Leading to: Energy independence Safe, reliable supplies Predictable prices Smaller carbon footprint lbs CO2/MWh 3000 2500 2000 1500 1000 500 NVE Shrinking Carbon Intensity 0 2004 2005 2006 2007 2008 4
Integrated Resource Planning (IRP) State law requires electric utilities to file IRP every three years, updates in the form of amendments Analyzes resource options over 20 and 30 years Action Plan identifies steps to be taken over 3 years Approves any generation option including all purchase power agreements over 3 years, all renewable Purchase Power Agreements, any transmission over 200 kv, and company owned generation Key Assumptions with sensitivity analysis Load forecast and market fundamentals 5
Integrated Resource Planning (IRP) Continued Evaluate supply options and demand side options (approx. 240 scenarios) Resources selected based upon least cost 20 year economics taking into consideration reliability, environmental impacts, and other factors specified by regulations Financial plan considers ability to finance plan and rate impact to consumers 6
Part 1: Investing in Energy Efficiency and Demand Response 20 Comprehensive Energy Efficiency and Conservation Programs Residential Commercial Demand Response Major Accomplishments 10 million CFL s distributed 140 MW of Load Control in 2009 1,554,172 MWh avoided in 2009 400 MW of demand reduction 1,049,866 tons of CO2 avoided in 2009 7
Energy Efficiency Continued Plan projected to achieve significant energy and demand savings In aggregate, every $1 of investment expected to yield $2.21 in savings to customers NVE South filed as part of its February 1st filing a three year energy efficiency Action Plan Budget of $174 million 8
Advanced Service Delivery (ASD) Nevada State-wide project 2010-2012 Links 1.4 million electric and gas customers Benefits 2.4 million Nevadans 99% Benefit to the State of Nevada Financial Summary 2010-2012 ASD Total Program NV Energy Investment 54% ARRA SGIG Investment 46% Nevada Statewide $301MM $163MM $138MM 9
Advanced Service Delivery (ASD) Smart Grid Investment Grant Notification of ~$138 million awarded to NV Energy on October 27, 2009 Four Required Plans: Project Execution Plan Cyber Security Plan Metrics and Performance Plan Consumer Behavior Plan Definitive grant agreement executed by DOE for NV on March 12, 2010 10
Advanced Service Delivery (ASD) Customer Ownership of their energy use Technology to help customers manage their energy usage Rate options Usage alerts and thresholds Operational Benefits ~$35 million annually Reduction in over 1-million annual truck rolls Reduction in 17-million monthly manual meter reads each year Revenue Protection (energy theft) Expanded Demand Response programs avoid future generation investment Secure, reliable, and expandable infrastructure for current and future Demand Response programs Additional 145 MW by end of 2012 11
Advanced Service Delivery (ASD) Consumer Confidence One Step at a time Step 1 - Security Step 2 - Accuracy Step 3 - Verification Step 4 - Ownership 12
Advanced Service Delivery (ASD) Step 1 - Cyber Security MITIGATING SECURITY & PRIVACY RISKS Protecting our networks Built-in message encryption Firewalls Communications encrypted and authentications with cryptographic certificates Extensive use of virtual private networks (VPN) End-to- End Encryption Isolating Network Traffic Virtual private network (VPN) Intrusion detection and logging Network management Monitoring Enabling Product Security Measures Secure configuration Authentication, built-in firewalls, encryption Security incident handling and response 13
Advanced Service Delivery (ASD) Step 2 System Accuracy Certification Acceptance Analysis of at risk meter population Sampling of existing mechanical meter population Testing accuracy of new smart meters Independent reporting and findings Factory meter testing NV Energy lab testing Field acceptance testing (10,000 meters) Sector testing (130,000 meters) 14
Advanced Service Delivery (ASD) Step 3 System Verification Validation Manual meter reads of new Meters Usage tolerance flags (Variance thresholds to determine usage spikes) Manual vs. Automated comparative analysis Random side by side meters verification Automated billing from ASD system 15
Advanced Service Delivery (ASD) Step 4 - Customer Ownership Phased Benefit Roll-out Customer (Benefit 1) Energy usage tools Bill to date - NV Energy My Account Daily updated energy use information Customer (Benefit 2) Bill to date - automated phone system Bill thresholds and alerts Rate comparison tools for customers Customer (Benefit 3) Nevada Dynamic Pricing Trial for eligible customers including technology Energy Self Serve Bill To Now $103 Usage To Now 989kwh Average Daily Use $4.85 Billing Cycle 23Days Projected Bill $110 to $165 16
Part 2: Renewable Energy Commitment Committed to large & small projects Contracts for over 1,240 MW Pursuing direct investments 17
Nevada Portfolio Standard Nevada leads the way - first purchases in 1986 Legislature approved RPS statute in 1997 One of first 3 states to adopt standards 20% of kwh sales by 2015, ramps up to 25% by 2025 Solar carve-out increased by 20% Up to one-quarter from energy efficiency 18
Renewable RFP NV Energy utilizes an RFP process to procure renewable energy Ensures lowest cost of energy through use of competitive solicitation Have issued annual Renewable RFPs for the past eight years resulting in a significant amount of contracted MWs In 2010, NV Energy will issue two RFPs for energy and portfolio credits combined and one portfolio only RFP In 2009 NV Energy issued a short term renewable RFP and procured energy and credits for Pacificorp and Idaho Power 19
Growth of Renewable Energy Supply MWhs 2,000,000 1,800,000 1,600,000 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0 2004 2005 2006 2007 2008 2009 Year 20
NVE Renewable Portfolio 44 projects totaling approx 1,240 MW 28 projects in commercial operation 6 projects in development 3 projects suspended/terminated 1 project in construction Seeking approval for 6 projects 2 of the U.S. s largest operating solar plants Nevada leading the way in solar & geothermal 21
Part 3: Transmission and Efficient Dispatchable Clean Generation Dispatchable peaking capacity Units capable of following intermittent solar & wind 24x7 efficient base-load generation 22
Transmission One Nevada Transmission Line (ON Line) 235-mile 500 kv line Co-Development w GBT NPC 95% SPPC 5% allocation Siting studies for new backbone transmission: Governor Gibbons RETAAC Facilitates greater development of renewable energy Individual projects will be built-out as indicated by generation project activity 23
New Efficient Generation Doubled company-owned capacity since 2006 Highly efficient gas-fired plants Able to assist intermittent renewable resources such as wind and large scale solar PV No new fossil fueled generation filed as part of NV Energy South filing 24
Thank You Questions? Vision: To be the premier provider of energy for Nevada 25