Power Plant BI

POWER GENERATION

Evolution of Plant Ownership

From Regulated Era

Regulated Utility Monopolies

To “Partially” Deregulated Era

Independent Power Producers (IPP)Unregulated “Arms” of Utilities

NERC develops and enforces reliability standards; monitors the

bulk power system; assesses future adequacy

Power Plant BI

Advent of ISOs and RTOs(Independent System Operator) (Regional Transmission Operator)

A federally regulated regional organization which coordinates, controls and monitors the operation of the electric power system.

•Acts as a marketplace

•Monitors reliability of the system

•Coordinates supply of power

Power Plant BI

Power Plant BI

Currently Eight ISOs and RTOs

• California ISO (CAISO) • Electric Reliability Council of Texas (ERCOT) • ISO New England (ISO-NE) • Midwest Independent Transmission System Operator (MISO) • New York ISO (NYISO) • PJM Interconnection (PJM) • Southwest Power Pool (SPP)• Florida Reliability Coordinating Council (FRCC)

Power Plant BI

Generators Transmission/

Distribution

Consumers

Wholesale

Brokers

Retail

Brokers

ISO Overview

Power Plant BI

Generation Plant Sales

• Contracted

Power Purchase Agreements (PPA)

Fixed pricing over term

• Merchant

No long term contract

Market price based sales

Power Purchase Agreements

• Pricing Components

Capacity ($/MW)

Energy ($/MWh) - Tolling, Efficiency

Variable O&M ($/MWh)

Start Charge ($/start)

• Other Terms/Conditions

Availability (Bonus/Penalty)

Power Plant BI

Power Plant BI

Merchant Plants

Market Pricing Components

• Day Ahead• Ancillary

• Balancing (15 min.)• Spinning Reserve (Actual)

Day Ahead

Balancing

Power Plant BI

Generation “Stack”

Nuclear

Coal

Combined Cycle

Peaker

Time of Day

Demand (MW)

Power Plant BI

IF PPA

BI claim is fairly straightforward

Develop model to predict sales

Test against operating history

BUT IF MERCHANT

More difficult

Examine how does Assured sell his power

Is there history?

Power Plant BI

Expected Claim Process

“But for” Case (model)

- Actual Case (supported by financial documentation)

Claim

But sometimes…..

“But for” Case (model)

- Actual Case (model, to identify pricing)

Claim

Power Plant BI

If the model must be utilized for both:

“But For” and “Actual” cases

Then the claim can be developed as a “differential” product within the model

[ “Normal” Capacity - Loss Period Capacity ] x Actual Price ($/MWh) = Claim

Single Model Ensures Consistency of Logic

Power Plant BI

Business Interruption Claim Analysis

• Gather Assumptions - performance data• Develop Generating Logic• Model Differential Results with Independent Data

Power Plant BI

BI Claim Analysis - Assumptions

• Plant Performance• Fuel In & Power Out = Heat Rate (Efficiency)• Variable O&M costs

Note: Care must be taken on “partial” outages to examine incremental plant performance data.

Power Plant BI

Configuration Power Out (MW)

Fuel In

(MMBtu/hr)

Heat Rate

(Btu/kWh)

Base Load 500 3500 7000

w/o one GT 240 1750 7290

Claim Basis 260 1750 6730

Simplified Example

BI Claim Analysis - Generating Logic

DAY AHEADIF : (Fuel Price x HR) + Vari. O&M < Power Price

THEN: Plant unit would run

BALANCINGIF: Capacity is available AND (Fuel Price x HR) + Vari. O&M < Power Price

THEN: Additional energy would be generated

Power Plant BI

Power Plant BI

BI Claim Analysis - Example Results

MARGINDA Price Output Revenue Price Fuel Cost VOM Cost Cost

Date Hour ($/MWh) (MW) ($) ($/MMBtu) (MMBtu) ($) ($/MWh) ($) ($)June 10 1 48.00 206 9888.00 7.035 1381 9715.34 0.56 115.36 57.30

2 48.00 206 9888.00 7.035 1381 9715.34 0.56 115.36 57.303 48.00 206 9888.00 7.035 1381 9715.34 0.56 115.36 57.304 48.00 206 9888.00 7.035 1381 9715.34 0.56 115.36 57.305 48.00 206 9888.00 7.035 1381 9715.34 0.56 115.36 57.306 48.00 206 9888.00 7.035 1381 9715.34 0.56 115.36 57.307 66.25 206 13647.50 7.035 1381 9715.34 0.56 115.36 3816.818 66.25 206 13647.50 7.035 1381 9715.34 0.56 115.36 3816.819 66.25 206 13647.50 7.035 1381 9715.34 0.56 115.36 3816.8110 66.25 206 13647.50 7.035 1381 9715.34 0.56 115.36 3816.8111 66.25 206 13647.50 7.035 1381 9715.34 0.56 115.36 3816.8112 66.25 206 13647.50 7.035 1381 9715.34 0.56 115.36 3816.8113 66.25 206 13647.50 7.035 1381 9715.34 0.56 115.36 3816.8114 66.25 206 13647.50 7.035 1381 9715.34 0.56 115.36 3816.8115 66.25 206 13647.50 7.035 1381 9715.34 0.56 115.36 3816.8116 66.25 206 13647.50 7.035 1381 9715.34 0.56 115.36 3816.8117 66.25 206 13647.50 7.035 1381 9715.34 0.56 115.36 3816.8118 66.25 206 13647.50 7.035 1381 9715.34 0.56 115.36 3816.8119 66.25 206 13647.50 7.035 1381 9715.34 0.56 115.36 3816.8120 66.25 206 13647.50 7.035 1381 9715.34 0.56 115.36 3816.8121 66.25 206 13647.50 7.035 1381 9715.34 0.56 115.36 3816.8122 66.25 206 13647.50 7.035 1381 9715.34 0.56 115.36 3816.8123 48.00 206 9888.00 7.035 1381 9715.34 0.56 115.36 57.3024 48.00 206 9888.00 7.035 1381 9715.34 0.56 115.36 57.30

61527.32

REVENUE EXPENSES

DAY AHEAD SALES

Power Plant BI

BI Claim Analysis - Example Results cont

DIFF.MCPE Available Revenue Available Revenue Available Revenue Available Revenue Revenue

($/MWh) (MW) ($) (MW) ($) (MW) ($) (MW) ($) ($)67.8050 155 4845.61 0 0.00 0 0.00 0 0.00 4845.61

183.1300 155 22720.98 0 0.00 0 0.00 0 0.00 22720.9837.7800 155 191.73 0 0.00 0 0.00 0 0.00 191.7338.2825 155 269.62 0 0.00 0 0.00 0 0.00 269.6234.4325 155 0.00 0 0.00 0 0.00 0 0.00 0.0040.3275 155 586.59 0 0.00 0 0.00 0 0.00 586.5931.1925 0 0.00 155 829.33 0 0.00 46 0.00 829.3336.9350 0 0.00 155 0.00 0 0.00 46 0.00 0.0038.7500 0 0.00 155 0.00 0 0.00 46 0.00 0.0052.9375 0 0.00 155 0.00 0 0.00 46 0.00 0.0037.6675 0 0.00 155 0.00 0 0.00 46 0.00 0.0037.0275 0 0.00 155 0.00 0 0.00 46 0.00 0.0038.1525 0 0.00 155 0.00 0 0.00 46 0.00 0.0055.5425 0 0.00 155 0.00 0 0.00 46 0.00 0.0046.6325 0 0.00 155 0.00 0 0.00 46 0.00 0.0056.9250 0 0.00 155 0.00 0 0.00 46 0.00 0.0046.4425 0 0.00 155 0.00 0 0.00 46 0.00 0.0044.5975 0 0.00 155 0.00 0 0.00 46 0.00 0.0042.9950 0 0.00 155 0.00 0 0.00 46 0.00 0.0034.1200 0 0.00 155 375.57 0 0.00 46 0.00 375.5734.1200 0 0.00 155 375.57 0 0.00 46 0.00 375.5732.7475 0 0.00 155 588.31 0 0.00 46 0.00 588.3148.3300 155 1826.98 0 0.00 0 0.00 0 0.00 1826.9834.7150 155 0.00 0 0.00 0 0.00 0 0.00 0.00

32610.29

UP DOWNUP DOWN

BALANCING ENERGY SALESWithout Outage With Outage

Power Plant BI

SUMMARY

• Must be aware of type of market

• Analysis can be complex• Look for incremental capacity loss• Verify fuel and power prices• Verify plant performance assumption• Apply applicable logic

Power Plant BI