southwestern power administration briefing- texoma region public meeting

Texoma Regional Public Meeting

April 4, 2014

Fritha Ohlson

Director, Division of Resources & Rates

Southwestern Power Administration

Topics

SWPA General Information

SWPA Customers

SWPA System

U.S. Electric Grid Interconnections & SWPA System Map

SWPA Rates

Denison Hydropower

Funds Returned to U.S. Treasury

SWPA Denison Drought Operations

Generation Data

SWPA Denison Outlook

Recap


Southwestern Power Administration (SWPA)

Agency of the US Department of Energy

Power Marketing Administration

Section 5 of the Flood Control Act of 1944“…encourage most widespread use at lowest

possible rates…

…sound business principles…

…preference to public bodies and cooperatives.”

Cost based rates; not for profit

Repay Federal Investment


SWPA Customers

SWPA markets cost-based, wholesale power

to not-for-profit preference customers in six

states: Arkansas, Kansas, Louisiana,

Missouri, Oklahoma, and Texas.

Over 100 customers

21 Cooperatives

78 Municipalities

3 Military installations

Over 8 million end users

SWPA System

SWPA markets hydropower from 24 Federal, multi-purpose hydropower projects owned by the U.S. Army Corps of Engineers (Corps).

Marketed capacity: 2,052.6 MW

Average annual energy: 5,570,000 MWh

SWPA operates 1,380 miles of high-voltage transmission line, 25 substations, and 46 communications sites.

Of the 24 hydropower projects, 19 are operated as an Interconnected System within the Southwest Power Pool (SPP) region (Eastern Interconnection).

Denison (Lake Texoma), which is one of the 5 remaining electrically isolated projects, is within the ERCOT region (ERCOT Interconnection).


U.S. Electric Grid Interconnections



SWPA System Map

Disconnected

SWPA Rates

Cost Based – 100% of hydropower cost and the allocated percent of joint-use costs unique to each project:

-Initial construction costs

-Interest during construction

-Interest on investment

-Annual operation and maintenance

-New replacement equipment

22 of 24 projects – including Denison – are blended

together to make the “Integrated System Rate.” There

are 2 other rate systems, Sam Rayburn and Robert Willis,

both isolated projects in Texas.

Although Denison, Narrows, and Whitney are electrically

isolated, they are financially integrated.


Denison Hydropower

Denison is located in the ERCOT region and contractually its full output is received by two Texas Electric Cooperatives: Tex-La and Rayburn Country

Based on current SWPA rates and an average hydrological year, the annual revenue returned to the U.S. Treasury from Denison generation is about $6 million. The estimated annual replacement cost is nearly $19 million.

Important power resource for the region providing quick-response peaking power.

In an average hydrological year, the clean, renewable generation from Denison prevents the emission of 182,200 tons of greenhouse gases by offsetting the need for fossil fuel generation (1.9 billion cubic feet of natural gas or 113,900 tons of coal).


Distribution of Funds Returned to

U.S. Treasury by SWPA


24 Projects Denison

Original Investment $788 Million $30 Million

Interest $772 Million $25 Million

Operations & Maintenance $1,255 Million $75 Million

Total $2,815 Million $130 Million

As of fiscal year ending September 30, 2013 (unaudited)

Funds Returned to U.S. Treasury

from Lake Texoma


Drought 2011-14 Texoma Inflow and Elev.




SWPA strictly adheres to the Corps’ Lake Texoma Water Control Manual and Drought Contingency Plan

Southwestern operates in full compliance with Public Law 100-71

Between 617-612 feet: Normal generation

Between 612-607 feet: Rapid response, short term peaking

Between 607-590 feet: Critical power needs

The project is designed so that inflows combined with the

conservation pool storage provide a reliable water source

for the water supply and hydropower authorized purposes

to which conservation pool storage is allocated,

especially during times of drought.



SWPA has been operating in drought mode since January 2011, generating only 25% of average.

Since May 2012, generation has been even less, about 19% of average.

2013 – Lowest year of power generation ever since generation began at Denison in 1945.

In 2013, SWPA customers spent over $5,000,000 to replace hydropower usually produced at Denison.

Historical Generation


2011-2014 Monthly Generation


SWPA Denison Outlook


Will continue to operate the generation at

Denison pursuant to PL 100-71, Corps

regulations and approved plans, and SWPA’s

Federal contracts.

Member of Lake Texoma Advisory Committee.

Generation outlook is mindful of drought

conditions. SWPA customers predict that this

trend will continue in 2014 if low water levels

persist, and that they will continue replacing

hydropower usually generated out of Denison

with power purchased from other sources.

Lake Texoma Pool Elevation 2014 Outlook

Assumptions: Current level water supply use; 2011 evaporation; Median Inflow at 2, 4, and 6

hours/day generation; Historical Low Inflow (2011) at 2 and 4 hours/day generation.

Recap


Lake Texoma drought conditions: 2011-present.

Denison hydropower generation at historical

lows.

Lake Texoma conservation storage is working as

designed.

SWPA will continue to operate in drought mode

until the Lake Texoma Red River watershed

recovers, pursuant to all applicable laws,

regulations, and Federal contracts.

southwestern power administration briefing- texoma region public meeting

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