All right, I'm gonna go ahead and have to get started because I know we're asking you to do two hours and 90 minutes.

Um, and now it's like 86 minutes.

So I'm gonna kick it over to Aaron Keys.

Okay.

Thank you from Aaron Keys, Director of Utilities.

Uh I have uh Dwayne Hortius, our assistant director for Utilities, uh Electric.

Uh RT Kimming with the Energy Authority and Greg Lavvy, the Energy Authority here tonight to talk about our electric resource plan.

Uh and this is about uh fulfilling our capacity needs, our generation capacity needs for our community uh into the next 20 years.

So I will let them get going.

Thank you.

Thank you, everybody else.

Um we've worked very closely with uh utility, uh, myself and Marquise will do a quick introduction here momentarily, but we're gonna spend about the next 90 minutes going through our findings, our recommendations and where where we think utilities should go to meet these capacity requirements as you operate in these organized markets, particularly the MISO market here in the Midwest.

Um, you know, we're gonna do some quick don't know what everybody's background is on resource planning, particularly on the utility side.

So we're gonna use some terms that we're probably pretty familiar with, but maybe the community and the council might not be as so we're gonna start with some quick definitions, um, go through the forecast.

So um what really drives an IRP is what your future load looks like.

And so we've done a long-term econometric load forecast.

Start with that's really foundation to to what the utility is gonna need long term.

Um, what type of resources we considered for the IRP?

Um, you know, probably not gonna be building new coal plants, but like what other resources are we looking at, and what kind of resources are are in the current portfolio.

Um gonna look at what we call a load resource balance chart.

It's a very simple like bar chart with a line that just tries to determine and show what the utility's needs are over the next 20 years.

IRP is typically a long-term outlook.

Uh, we're not looking at next month, we're really looking decades in advance, right?

Um, the base case, we call it a reference case.

What did the models we use a production cost model?

It's a big optimization engine, tries to determine the least cost portfolio, meeting all the requirements, either the utilities put out there or the community is asked for, or the market itself.

Um, then we ran about six additional scenarios calling futures.

What else could we possibly see, you know, coming up into the future?

And what we're hoping is that when we look at all of these cases together, we see a very uh uniform portfolio.

So, regardless of whether there's administrative changes, whether there are econometric changes in the future.

Hopefully, we pick a portfolio that uh that really hedges the utility.

And then we're gonna open it up for some you know discussion at the end.

So it's gonna be very quick.

We're gonna try to cover a lot in a very short period of time.

If uh you all have questions, whether it's the council or whether we open it up for public comment, I don't know what the rules are, but we will be more than welcome to answer any questions in case now.

Um again, my name is Greg Lavvy.

I'm our director of corporate analytics at TEA oversee our our resource planning team uh with the energy authority.

I'm out of Jacksonville, Florida.

Uh we have an office in Jacksonville, we have an office in Bellevue, Washington, and we really work only exclusively with public power in the United States, right?

So no IOUs, no big utilities, just public utilities in the US.

That's our our our core focus.

Um this is the teams essentially that worked on it, as you can see.

Uh there's quite a few people from the Columbia side, quite a few people from um from the TEA side.

We spent a good part of almost eight months working on this project.

So this is not something that we just fly by night, you know, put together over a weekend, right?

It's a lot of time, a lot of effort from both sides.

Um we're a trading shop at TEA.

We are uh Columbia's market participant, and so we are their interface in the organized market.

So we do a lot with the utility.

This is just one of the facets.

Um a lot of words here, but just a couple of big takeaways, right?

One, Columbia is very proactive, right?

Um, there's a lot of change obviously in the US right now with load uh regulation, and so uh IRPs maybe in the past used to be done every five to ten years.

Uh you kind of did a resource plan, your load is relatively flat, and maybe in a couple years you add a new resource or or something like that.

It's a very dynamic industry now.

And so doing an IRP every two to three years, which the utility has done is really the right way to go about it.

We work very closely.

They integrate, you know, um incorporate a lot of feedback from from the community, right?

And you'll see that and it's some of the constraints and what we've considered in this resource plan.

We really value public input, right?

We've worked with other utilities in the past where they really didn't bring the community in early.

We got all the way to the end, showed a resource plan, and the community's like, no, right.

And then we went right back to to the start.

And so, really bringing in the community early on is and is integral to this process.

Um, and so yeah, couple definitions, right?

Quick back to school, right?

There's a couple of things I just want to define because this is our world, right?

Like every day we're working with utilities, and this terminology is very second nature to us.

But one of the things I want to start with is what we call capacity, and so capacity is how much energy the market needs in order to meet the peak event, right?

So that one hour in the summer or that one hour in the winter where the the system is screaming, right?

I think about it as like if you're on a highway, most of the time, two o'clock in the afternoon, a four-lane highway is very underutilized.

That's the transmission system in the US.

What the train what you know the highways really planned for is five o'clock, six o'clock.

And that's really what capacity is.

Capacity is planning for those extreme events, right?

So don't think about how much energy we need, you know, on a total basis.

It's the one time that one hour to ensure that the lights never go off.

That's capacity.

Now, on top of that is what we call the planning reserve margin.

So let's just, for simple numbers, let's say it's you know, Columbia's peak demand, the highest it ever gets is 100 megawatts.

So we measure things in megawatts.

The planning reserve margin is how much above that the utility needs to bring in order to be what we call a load serving entity in the markets.

So think about it.

If your peak is 100 and you have 100 megawatts of capacity, there's a good chance one of your generators might not be there, right?

Like they're machines, they break, they don't always work.

So the planning reserve margin is the number above your peak to ensure that the lights never go off.

And that's true across all the utilities in the organized markets.

Each market, Columbia operates in the MISO market.

Um, MISA is mid-continent ISO, it's planning reserve margins a little bit different than the markets around them.

It's all very dependent on what the geography is, the load profile is, the resources that are are in the area, right?

So the planning reserve margin is what you need above, and that's really the number we're going to be planning for um throughout the study, the study.

And the like I said, planning reserve margin just ensures the lights don't go off, or really the standard for FERC, which is the regulatory body, it's one in 10,000 days.

That's the standard, right?

Um, accreditation.

So the other piece was the demand side, how much energy you need.

Now we're going to talk about the resources.

So, how does each resource get accredited?

Uh, the first one I talk about is thermal.

So you're talking about um natural gas, coal, nuke, right?

These are thermal-based resources, and what they are accredited using is what we call an E4D.

What that tries to figure out is when that peak event happened, how much capacity could you actually count on?

So maybe like 10 years ago, whatever, 20 years ago, utilities used to run their gas plants in the middle of the summer for one hour.

And whatever that number was, if it's a hundred megawatt gas plant, if it you know, if you could get up to 100 megawatts, that's what they accredited for.

The markets, because of all the you know, winter storms, these summer storms, these things that are going on with it with really extreme weather events, the markets are getting more and more stringent on how they accredit these resources.

So, you know, let's say January, there was a peak event, and if your hundred megawatt gas plant only could offer in it 50 megawatts, you're gonna probably get close to that, right?

They're not gonna give you all your accreditation.

So the thermal units are getting you know hit by D-rating based on how much fuel they can get or whether they actually can operate in these really cold or really hot environments.

On the flip side is another acronym, ELCC, uh effective load carrying capacity, and that's what the markets are are accrediting uh wind, solar, and batteries.

And so very similar to the thermal, it's how much could those wind, solar, and batteries contribute during these peak events.

And so these are really the acronyms and the terms that I want to familiarize yourself because we're going to be using them a lot.

Because when we're looking at different resources, we're gonna in the model, we're gonna throw gas plants in there, solar projects, wind projects, batteries.

And based on how these numbers are accredited, you know, the model might like gas plants or really might like solar, or it might like batteries based on their attributes, right?

So these resources are not apples to apples, right?

They are very much apples to bowling balls sometimes, right?

They are not the same.

Um, so just quick example, right?

How does this all work?

Um, on the left over here, I just wanted to show uh like a simple bar chart.

This is not Columbia's actual numbers, but if the winter peak, you know, if your winter peak is 80 megawatts, once I apply that planning reserve margin, you actually got to be closer to 100 megawatts of actual capacity.

So if my peak is 80 megawatts, I gotta have closer to 100 in order to operate and participate in these markets.

And if I don't, then I get penalized, right?

So it's carrot or the stick, right?

Which one are we gonna go with?

And so the idea of a resource plan is trying to be proactive and see what is the least cost option.

Uh, to the right of that is just the summer uh equivalent, right?

So if my summer peak is 100, I got to come with more.

And so usually it's one of these two seasons that is the one that's driving the decision for the model, right?

And we'll talk about what types of resources are better in winter, which type of resources are better in summer.

Um what I tried to do over here is factor in the E4D and the ELCC numbers for wind and solar.

And so I put what is this five different types of resources gas, coal, new, solar, wind storage, so BS or battery storage on the right.

The gray, the red is I'm assuming each of these is a hundred megawatts.

So the same nameplate capacity, call it nameplate capacity, the most it could ever produce in one particular hour.

And then how each how MISO is accrediting each of these resources.

So the gray bar is the summer accreditation, and the green bar, the teal, is winter.

And you can see none of them get 100%.

So it's not like thermal is so much better than wind and solar, right?

But each of them, all of them get um derated.

Now, some of them do operate better.

Um, you know, probably the the most consistent accreditation is nuclear, right?

It doesn't it once those things are on, they typically just run, right?

They're like diesel trucks.

Once you turn them on, you don't turn them off until you got to refuel them, right?

And the accreditation of the winter, they're not affected by weather nearly as much.

Um, but natural gases, right?

Because people are heating their homes in the winter, right?

The residential usage for natural gas gets first right.

So sometimes the D or the thermal units get derated in the winter because people got to heat their homes first.

Um, one thing I want to point out though is solar accreditation has really been hit.

These are future projections by MISO, right?

This is what they think the accreditation is going to be in the future.

Um, the you know, if I get a hundred megawatt solar project, which is a really big project, I don't get a lot of accreditation.

And you'll notice the winter number is not even there.

Um, and the reason for that, right, is we typically peak maybe five, six, seven o'clock in the Midwest in the winter, it's pitch black, right?

So without uh really tying a storage unit to solar, the standalone solar does not get a lot of accreditation.

Wind's not bad.

I mean, you get some, it's not a difference between the two.

It's just the fact that wind is very uncontrollable, right?

Sometimes when it's cold, the wind is blowing.

Sometimes when it's cold, the wind ain't blowing.

And so it's just not as uh predictable.

And so you still get some accreditation, there's still value to wind, and there is to solar too.

These are future numbers, but you can just kind of see the model is gonna try to figure out what is the best part.

It's it's really beyond the capabilities of you would do it in an Excel spreadsheet or you know, back to the envelope math.

We have very advanced computational machines that can try to solve these problems at TBA, and then just the inputs, right?

And then I'm gonna hand it over here in a second to Marquise.

He's he's the one that did really most of the modeling.

But we always start with a load forecast, right?

The load forecast, how much energy the utility in the city are gonna need in the future is what's gonna drive the decision.

And when, right?

The timing of it, right?

Is the load going up extremely fast now?

Is it slow?

And then we have peaks later on, like those things are gonna really drive the decisions.

We look at the existing portfolio.

You have resources that are possible that could be possibly retiring in the next five to 10 years.

Those are inflection points, those are decision points for the utility.

And the idea is can you keep some of those resources on as long as possible, delay the decision?

There could be completely new technologies that come on in the next five to 10 years, right?

So delaying the decision usually is one of the better, better options.

Um fuel prices.

I mean, we all see what's going on, you know, fuel-wise.

US, we we have a high fuel, low fuel, run some different scenarios using different gas prices.

Um environmental regulations, right?

Are there renewable goals within the community, the state, the region?

Those things we have to take into account.

And sometimes the model will make an on-economic decision based on certain certain requirements.

Um and then reliability standards, right?

The reliability standards are really for the ISO, that's where the planning reserve margins come in, right?

My peak is 100.

I'm not just gonna get 100 megawatts to cover because I need to make sure that if one of those units is not online during a peak event, you know, we don't have outages, blackouts, and brownouts within the community.

So this is our our load forecast.

Um, these solid lines are your peak over the last um, you know, since 2005.

You can see the load is definitely been increasing over time.

Um, there's definitely years where we have decline.

Uh, you know, you go back and you look at COVID, right?

You can definitely see COVID wrapped up in there.

Um, but based on our econometric forecast, we're we're assuming now you notice we're not like trying to predict econometric events where we're going up and down, up and down over time.

It's it's what we call a 50-50 load forecast.

You know, half the time we're gonna be above, half the time we're gonna be below.

Uh, we know we're gonna be wrong.

We're gonna do the best we possibly can based on what we know.

But we, you know, we have the um the winter peak and then the summer.

So the utility is definitely a summer peaking resource um, you know, utility, and we're trying to make these decisions.

So these are what we're going to be, you know, forecasting.

Um, on top of that, we also do a market forecast, right?

Energy prices, right?

The utility buys all of its energy from the MISO market.

It also sells all of its energy to the MISO market.

So we want to have a predictor of what we think the market's gonna look like in the future.

If I was awesome at this, I'd own an island, right?

I mean, it is it is what it is, but like this is our forecast, the outlook on what we think energy prices are gonna be in the future for this region.

And then the idea is when we run our model, the you're gonna be buying your load from the market at that price, but you're also gonna be selling your energy.

So that's gonna give us an idea.

Energy revenues factor into this.

If you have a solar plant, you're gonna sell your solar into the market and get paid for it.

If you have a gas plant, we're gonna sell our gas plant into the market, get paid for it.

So we want to take those revenues into account, right?

So, some of these resources are very good energy resources, some of them are very good capacity resources.

We're trying to find the best mix between the two.

And then you want to start it?

Yeah, I'm gonna turn it over to Marquise.

He's the modeling expert, and then he's gonna take it from here.

All right, please.

Thanks so much, Greg.

And my name is Marquise Gimme.

Um, I've been at uh the energy authority for about four years.

You guys are actually my first portfolio.

I work with uh Columbia folks really close um month to month.

We we have our monthly meetings to work on um some hedging strategies uh with uh with our portfolio manager.

So I'm really in-depth with your guys' portfolio.

I I know all the existing resources, and I've done most of the modeling um for you guys here today.

So I'll be going over the rest of the presentation.

So moving on here, uh, for the just going over the resource options.

Um, this is all the resource options that we had a handful of uh modeling.

So you can see we had some solar contracts there, um, natural gas, which is most of the thermal, um, combined cycle units, combustion turbine units, um, a small modular reactor, um, which is which falls under the nuclear resource, and then some wind contracts as well.

Um, and then and the final piece right there, you can see um a little bit of battery storage.

We looked at some um battery tolling agreements.

So um a slew of competitive uh resource options that we've currently seen in the market um today, and we work with and many other IRPs.

Um, and uh we're let's see how the model actually utilizes them and builds them out in your um scenario.

So this is the summer load resource balance chart um for your existing portfolio.

So, like Greg had mentioned earlier in the descriptions.

This is this chart is going to serve as a baseline as how we compare each of the scenarios that the model has built out.

Piece um and uh we'll let's see how the model actually utilizes them and builds them out in your um scenario so this is the summer load resource balance chart um for your existing portfolio so like Greg had mentioned earlier in the descriptions this is this chart is going to serve as a baseline as how we compare each of the scenarios that the model has built out so this is kind of like um a pre look at what the model actually built out so if we did nothing um you can see that we're actually very short capacity so you can see that red line is the planning reserve margin for the summer that uh Greg was alluding to this is this is what we're trying to meet this is what we have the model trying to solve for so we feed it your existing resources which are those um uh the orange uh gray and white um dotted lines and all those other resources that what is what you guys currently have um that black line is your peak load um forecasted and then that red line is the planning reserve margin percentage applied to that load um so as you can see we're pretty short um with some expecting retirements um for some coal contracts as well as um most of the natural grass we we made some um pretty conservative assumptions just to um get most out of the model and and be proactive in um trying to solve uh the the shortage and capacity that we have yeah is your brown bar existing natural gas that uh red yeah the orange it looks kind of brown that orange bar is is uh existing natural gas yeah so it would be CC one through four and then the plant D A and I was kind of talking about the existing nuclear or gas yeah it's just thermal yeah yes I just wanted to add that um please do not take the dates at the bottom literal as Marquise mentioned these are assumptions we wanted to be conservative on purpose a lot can change between now and these upcoming years but uh we wanted to at least put in some estimate numbers in there to help drive our forecast and models yep are you okay if we ask questions right now I know we you are short on time so then on that point on your previous slide where you talked about accreditation um it almost seemed like we just shouldn't count for capacity solar win like I mean because they were so small in that but yet you do have boxes so theoretically they could be I guess I'm just a little bit confused.

Correct so yeah we are they are are all looking being looked at in the model so they are being all being considered um as part of the solution um so if they're if they're selected that could mean that it is the least cost most efficient solution but if they're not selected that means that they're not but there is not existing there's not existing wind and solar I think is that what you're asking no no um because I only have some contracts it's more of that on your accreditation when you were talking about like you don't have to go back to it but on the thermal base accreditation and then your renewable accreditation you you were kind of talking about when we got to that next page where it showed that there's no summer accreditation right or very little for solar and there's none for winter I guess that's my question is like wouldn't they wouldn't show up on this anyway right um so they could show up but for this specific slide this is your just existing portfolio.

So the model hasn't done any work yet we're just looking at what what problem are we currently facing what do you guys have just existing if we the current contracts that we do have don't even help correct yeah the lines between the gray and the scar that's very small.

But all right thank you also we will show like part of the scenarios where we are looking for different versions and you'll see a bit more about um solar theory how it would look like oh yeah and I see I see other charts coming forward there's lots of charts questions yeah I had a I had a related question on that piece which was when we were seeing the really really low bars for solar and for wind that was if we had those without also having battery correct that was if we were just reliant on the solar panel with no way to store standalone yeah yeah that's what we yeah so whereas if we added the battery it would have been that that much they can work together for sure but they're you it's twice I wouldn't say it's twice the cost but it's essentially it's maybe not one one plus one for the cost but yeah in order to firm up the the solar or firm up the the wind adding a storage unit with it yeah is what you would need to do.

Exactly yep all right so this is basically the same chart um but for the winter load balance so um the planning reserve margin is actually seasonal in the myself framework um but since you guys are summer peaking the model is mostly going to solve just for the summer requirement it does solve for the winter requirement in some scenarios as well but for the most part it it it's mostly trying to fix for summer so moving on to the base case so that was our what we have for existing portfolio that's kind of like the precursor to the model actually doing the work.

Now we're going to see what the model builds out um with no constraints on it.

Let's see what it actually did and how it solved it with the resources that it has available.

So you can see here it's actually meeting that red line.

So those those kind of dashed out resources, those are the proposed resources, the solar wind, thermal batteries, all that.

So main story here is the biggest constraint in the model is going to be lead time and resources.

What I mean by lead time is how long does it take for these resources to actually be contracted, built, and set into place so that they're actually part of your portfolio.

So for the first couple of years, you'll see that the only resource that the model had to work with was proposed capacity, bilateral capacity, meaning that you would purchase capacity from some other entity or just rely on the market to try and just fulfill that shortage that you have.

There's no other resources that we have that could reasonably come online before 2029.

And you can see in that blue line, um, the first proposed resource to come online is actually battery storage as in tolling agreement.

So that makes up the majority of the um proposed capacity in 2029.

Um as it continues to grow as we see with the load growth, it's a steady increase in the load growth as well as the peak.

You can see that it does rely on some more bilateral capacity until 2037.

So the lead time for thermal units is actually um pretty long.

It's about seven plus years.

So seven years being um the earliest for it to come online.

And with the model, it's selected 2037 as the earliest to come online.

Um, and then it tends to rely on the thermal and the storage as well as the bilateral capacity throughout.

And um, in 2040, we did set a 40% carbon-free um target.

Um, so 40% of the energy, not capacity.

You can see that um it's building slightly some wind.

You can see that little kind of blue in 2040.

You got the oh, yeah.

Sorry.

So you can see right here, it's in this little slip right here.

It's building some wind, and that's 40% of the energy.

So it doesn't look like 40% of the capacity, but it's actually 40% of the energy, even though um the accreditation for the wind is so low, it's still serving 40% of the entire energy stack for Columbia.

So that's the constraints we had.

It built around 120 megawatts of wind and 30 megawatts of solar.

So that's kind of the target that we set um by 2040, um, just trying to be proactive in that sense from the community.

So you'll see that for each scenario, um, the base case is consistent, especially in like the first couple years.

And it varies throughout the future as we add more constraints, but the base case still holds.

And I I do stand by that the biggest constraint in the entire scenarios is going to be the lead time on the resources.

So on that, yeah.

Are those so yes, right?

We've TA has been here before talking to us about the lead time for some of these things, even coming on to the mice market.

Are you talking about real capacity being built?

Or you are we just like we know there's a whatever farm coming in or another field or plant or whatever.

Um, yeah, like real steel in the ground.

Yeah, right.

So when I first started doing these maybe five, six years ago, uh, the lead time for maybe a combustion trip was like 18 months to 24.

Like as long as you had like a brown field site somewhere where you already had transmission and whatnot built, you could probably get a new CT built pretty quick.

Those now are probably closer to three to five years.

A combined cycle is probably seven years or longer, right?

And that's just the fact that there's obviously uh COVID, um uh tariffs.

Uh there's a there's an arms race with all the data centers out there to get their hands on these gas plants.

So, like it used to be utility A and utility B going toward to the developer and trying to get a new you know, CT.

Now it's a global problem, right?

So, yeah, the lead times used to be I'd probably get two to three years.

So, you know, maybe by 2028 we would have seen a gas plant come on here, but now going out and trying to find some bilateral capacity is probably the way or leveraging the the miceo um capacity auction.

And then batteries were used to be maybe less than a year, now those are probably two to three years, which is which is what he's talking about with respect to the lead times, right?

But these are actual physical assets, right?

These are you go out, you contract with a developer to get these things built.

Uh solar is probably no different, right?

We we've seen multiple contracts with solar go from like two years to five years out.

So the question is, please ask.

Well, I had this question early, but you mentioned new tech that may come online, and it seems to me that it's pretty dynamic in this way.

Is that included in the model in any way?

The anticipated changes that could happen in the technology.

I mean, really, probably the most advanced technology we have in here is the SMR, right?

The small modular reactor.

Um, could you, you know, some of the other technologies from batteries is going like we're assuming four-hour lithium batteries here, right?

Your very standard Tesla type battery, right?

Well, that in particular is one thing up to learn batteries in particular.

Yeah.

So we didn't throw in six hour or 10 hour batteries.

MISO really doesn't, I mean, they it does a credit them a little bit different, but it's not enough to like say, man, we should go all in on 10 hour batteries versus four hour batteries.

There is definitely some advantage, but again, you're probably gonna pay, you know, it's all very scalable.

If you had an eight-hour battery versus a four-hour battery, it's about twice as expensive, right?

If you get a 10-hour battery, it's about two and a half as expensive.

So we start with a four-hour batteries, and you know, and then the idea is this is like an action plan, right?

This is our recommendation that you know, this isn't you shouldn't do the exact you know, technology.

You would issue an RFP, see what kind of developers are out there, what are the technologies they have, what are the actual prices they're gonna quote?

You know, most of our stuff are discoveries, right?

We're working with other utilities and we have a general idea of what utilities are paying for batteries or new CTs, but until we actually go out there and issue an RFP, we don't really know what the what the costs are going to be, right?

So maybe maybe a six-hour battery would be cheaper than a four-hour battery with respect to you know per megawatt.

And just one more of this is all the questions I've written down.

Uh what about the retirement coal retirements that we're anticipating?

I mean, it looks like they remain the same in your base in your base model and and here as well.

Yeah.

But how are you?

How are you playing with that with that anticipated?

Yeah.

So the largest uh retirement that we currently have set in the model.

Um, it's not set in stone, but we wanted to be conservative with the retirement would be Sykston.

You can see the gray, that grid that dark gray bar that it just drops off from 2027 and 2028 and makes up a large majority of the portfolio.

Um, and then our next retirement, uh, I believe was Perry State one and two.

Um, that would be in 2045 near the end.

So those are the only retirements that we currently have.

So when you say you're being conservative, that's really what you're talking about.

Yeah, just the anticipation that we won't see a whole lot of change or any drastic change of what is already here, what we already are.

When I meant conservative is that uh Sykeston could retire earlier at than usual.

Um, it's not set in stone like it could it could be on till 2029 or 2028.

But you're on your you're considering that it's gonna stay in place for the for the length of for longer than that, right?

That's extinct.

No, not we're yeah, go ahead.

Yeah, I agree.

So for cycling specifically, right?

That's been a lot of discussions around it, and uh we wanted to assume that or yes, possible that we anticipate uh retirement plus ice, in which we should have drop off in 2028.

Now, theoretically, does it sound like it might stay on a bit longer?

Possibly, it's just to at least know for sure, so just to anticipate, you know, worst case scenario for an early retirement.

Um, we want to just sort of drop off in 2028 already.

Okay.

And that's right.

Yeah, when we're forecasting our um anticipated capacity requirement, um, what kind of conditions are we taking into account?

Um, I guess weather conditions are conditions in terms of um who our energy users are, are we taking into account like you mean two of a new large energy?

Yeah, when we're forecasting the load, like when we're forecasting like the load, like the black line, like your peak load, is that what you mean?

Uh well, I guess I was talking about the red dashed line, but honestly, I don't know.

Yeah, yeah, yeah.

They're hand in hand.

Yeah, all so both of them, right?

The black line takes into account what we think the demand is going to be for Columbia, right?

So you'll notice that there's not like a step function there.

So we're not really assuming any large loads or anything like that in the base case, right?

Well, we we've always recommended if let's say a data center comes to the city and says, we'd like to add a 500 megawatt load.

Well, you guys right now are 300.

So I mean, that's a big that's a big jump, right?

I mean, you the grab the whole the the y-axis would be much larger.

So we're not assuming that any significant large loads in in the base case.

Now you brought up weather, right?

And extreme weather events and things like that.

That's on the market, right?

So what sets the market's playing reserve margin?

They're stuck, they're doing what we call direct loss of load studies, and they're looking at all the new resources that are coming into the market, weather events, historical load, how is load uh reacted in those types of events, and that's where those plane reserve margins get set.

So ensuring that the lights stay on during extreme events during these large weather events, that's where the red dashed line comes in.

So our kind of gradual increase forecasted, is that based on population increase rate?

Population, um, yeah, and econometric drivers, whether it's population or whether it's um you know, gross income, things like that.

So effectively we grow at the rate that we grow, and if we have a large user come in, we tell them this is what we can do.

So you can do one of two ways, that's exactly right, or you could do an additional study just to serve that load.

So a lot of the organized markets now are requiring large loads to come with their own capacity.

So let's say a data center comes in, a Google and Amazon, whoever it is, and they want to bring in a large load to your area, they typically have to bring their own capacity, or we work with the utility to to contract that capacity.

But they're not the idea is not to put the onus on the existing customers.

Where is the modular reactor on this?

I'm having a trouble seeing the difference between the deadline and they're not.

There's no there's no SMR that's selected in this, yeah, right.

Um, and just to be honest, it's uh it's very cost prohibitive, right?

So you're talking about some of these are probably in the 1,000 to 2,000 dollars per kilowatt.

Uh SMR is probably like 10,000 of kilo, right?

So it's it's very cost prohibitive right now.

But again, emerging technologies, you know, you're seeing the data centers, the Amazon, the Googles, they're all backing different SMR technologies right now because they're gonna build their own SMRs to power these data centers.

And utilities don't usually want to be like, you know, registry number one, but like I might be number 50, right?

So if the the data center, the technologies could really get these SMRs, you know, having a 50 megawatt of 100 megawatt SMR, that's you know, maybe you partner with another utility, but really those would only come in in in scenarios where you have really um restrictive carbon goals, right?

Because Nuke is going to be carbon free.

Might not call it renewable, but if we're talking about like um, you know, carbon limits and trying to reduce this, that's really where the SMRs really start to come in.

But with the 40, just to bring it up, right?

The 40% carbon-free, the model, and based on you know, we've got a pretty good profile for wind and solar in in this part of the country.

So that's really what would what meets that goal.

And I apologize, we're getting a lot of our questions out, hopefully at the beginning, which is to ground set.

And I see you're on slide 17 of 44.

So at any point you need to go for it just so we know we still have the questions.

Yeah, eventually we got a little bit of a bit of a bit of a bit of a little bit of this, but I think Christina had a question.

So yeah, okay.

Why are we using 40% by 2040?

I thought we were going for 2035 based on our last work session.

Um, yeah, so on that question, we just wanted to uh maybe circle back that the purpose of the IRP is to solve for capacity and the base case model will basically just run whatever it can to fix and solve for capacity.

So we wanted to make sure that we at least throw in some ideas around carbon-free renewable energy, so they are factored in as part of a diversified portfolio.

I wouldn't get hung up exactly by that.

This is something that can be adjusted since, as we've seen earlier, the capacity accreditation for some renewables was lower.

Whatever you want to do on the renewable side can still be adjusted that won't impact the capacity forecast either way very much.

Okay.

So, like look, that's what yes.

So, for example, if you look at the graph up there, you see the proposed wind portion that comes online in 2040, right?

Yeah, whether this amount happens a few years earlier, it won't change the rest very much either.

So, and likewise the other way around, if it wasn't in there, it also wouldn't change the capacity graph too much.

So, in other words, the capacity gets addressed by the model, and that's the purpose of the IRP to solve for that.

We wanted to ensure renewables is calculated into it, but I wouldn't get hung up on 2040, could be earlier, it could be adjusted, it still wouldn't impact our plan either way, at least not much.

I guess I want to know how that affects our decision making and how we adjust it and how that affects the rate that you bring things to us for consideration in the future.

Um, because I I want to know that we have the information that we need to move forward, but also that we're continuing on the trajectory that we originally planned on.

Yes, correct.

So the base case is before we even put in any constraints minus what you see in the bullet points below.

Um, we are gonna show you several different scenarios and different versions.

They are hypothetical scenarios in the beginning, kind of to set some cornerstones.

What would scenario one through four kind of look like in extreme scenarios, and then we kind of uh finish out with something that's more realistic?

So more to come on various scenarios here.

Um again, the base case itself is just running the model without us forcing any specifics into it, minus the 2020 40 portion.

Yeah.

Hey, thanks for answering the questions.

So um I'm wondering if the capacity accreditation fluctuates between um governing bodies.

So, like we're under MISO.

Does it does that accreditation change based on what organization you uh underline?

Yes, it definitely changes between different ISOs.

Um we currently are using the the MISO accreditation for those resources, and then we we have um uh uh applied forecast percentage across the years.

Um it doesn't change much.

Obviously, the solar and wind and other renewables are are incredibly low, so it kind of just gets lower slightly as we continue on in the years.

Okay, I have a lot more questions, but I'll wait as the slide.

Yeah, please.

Yeah, let's let's try to get through this.

All right.

The first the first one is usually the hardest one.

Yeah.

You guys haven't seen it, right?

The rest are going to be very similar as we go through.

So um ask a lot of questions.

All right, moving on.

So this is similar to the last graph.

This just shows the winter side of the model build out.

So you can see that um it's also fulfilling that winter planning reserve margin as well.

Um, so it's not just just for the summer, it's also meeting the winter requirements.

You can see it's slightly over in some of the years, but that's just because it's summer solving as well.

So for some years it's it's winter solving, for some years it's summer, but those are the two main seasons that we're trying to focus on because that's when peak weather events happen.

But the build out is the same, there's no change in the build out.

It's it's gonna be exactly the same as listed below.

Um, and this this slide is um more of just like uh um uh informational slide.

There's a lot of data going on here.

This just shows a lot of the costs that are incorporated in the base case.

Um, it's not meant to, you know, for you to look at every single number and and nitpick.

It's more of just this is the cost that the model is looking at, um, fixed cost, variable cost, fuel costs, um, all your existing costs, all the proposed costs of these new resources, what their energy revenues are, um, and it compares it to overall come to that dark two, those dark two numbers in the bottom, uh net present value and level as cost of energy.

We're going to be using these two numbers as kind of like a baseline to compare the other two scenarios.

So as we add or remove constraints from the model, we can see how this affects the base case.

Um, either increasing the cost or decreasing the cost and uh the net present value is that entire cost um with the proposed resources as well as the existing resources and the energy revenues for the entire 20-year study, and the levelized cost of energy tries to apply a dollar per megawatt hour.

So for all the megawatts that are generated, um uh uh you're dividing it by the entire um uh net present value.

So all this is all that jargon is just just to say that we're using this as a way to compare the different scenarios.

Christine got your hand up.

Hi.

So um realizing what you just said, um, can you show me or is it common uh to include the cost of disposal and destruction?

So whatever uh tool or mechanism where we choose ultimately, what's that after we use it and the cost of destruction or storage or whatever required for that?

Yeah, I believe that would be included in the variable costs.

So for example, like if we had a thermal unit built, um, you can see that that this is in the millions.

So this would be around um, for example, like in 2037, um, some unit is built.

The variable cost includes like wages, um uh uh cost of machinery to be built, anything that is variable on by the megawatt for the resource.

I think I'm speaking more to after the energy source has been utilized.

Yeah, so I think you're talking about um decommissioning.

Yeah, decommissioning.

Like sitting here, like what's the word of the investment?

Sorry, I misunderstood the case.

So what we did not do that in this particular study, those costs are not included here.

One way you can incorporate them is if there was a resource that um Columbia owned, and you wanted to determine whether you want to retire it early.

And so we would factor in those, so it looks like a cost in the model and it could retire it earlier and replace it with something else.

But otherwise, um we just can kind of consider this like a sunk cost.

Whether I I had it in the base case or whether I had it in a different case, because those two things are identical, it would not really change the the final numbers.

It is a cost, it is a cost.

And the other thing I wanted to bring up is that everything the utility pays for or receives revenue for is not included here, right?

So, like the some of your resources get ancillary revenues for being in the market, those are not incorporated here.

There could be additional costs for operating in myself.

Those are not what we're trying to do is we're trying to have the values that would be slightly different between each of the scenarios and be able to compare those things.

So, like some people might gravitate towards that that you know 7576 number at the bottom, and like because that kind of equates into a dollar per kilowatt, so like seven and a half cents per kilowatt, like, oh, that's our rate.

Like not really, right?

I mean, it's like a good portion of it, but it's not everything that's encompassed there.

But you bring up a really good point.

There is a cost for decommissioning, absolutely, right?

And so one way to incorporate that, which we did not in this particular set of studies is to let the model to maybe retire something earlier than it could, and then that's when we factor in those decommissioning costs.

I'll just like general comment that's something I'll be looking for is like what is the total cost?

I guess total lifetime cost.

I guess my question for that would be like what if it's not our asset?

Like so many of our things we're purchasing from someone else's.

So would that affect us?

It should not I shouldn't say that with 100% certainty.

Um, but most I'm most likely if they have decommissioning costs, all that anything they want to get out of you is wrapped up in your PPA rate.

Right.

But sometimes your PPA rolls off before the the unit and they'll they'll just sell the remaining share to somebody else after your agreement is done.

So um most likely the decommissioning costs are not included or would not be on on you if it is not your asset.

Good great question.

Thank you.

Yeah.

I I think the major thing, just to add on that to that real quick, is that um those additional costs would not affect the build out of the base case or any other scenarios since we kept the retirement dates for these units the same.

So it could affect the overall cost, like if we were to go super deep into every single cost that it uh Columbia incurs, but it does not affect the overall action plan that we're proposing.

Um likewise, right?

So some of these resources that got picked are like a battery PPA that and I think our assumption for batteries are like a 15-year lifespan, right?

So once that, like, let's say you add something in 2028, you know, so essentially it would roll off in 2043.

My math is right.

Um you wouldn't have any, there's no cost for you, right?

The developer would would uh encapsulate that into whatever your PPA rate is, and then when the battery is no longer good, somebody comes and gets it and it's it's on the developer to to do something with it.

I'm sure there's gonna be a whole industry about recycling these batteries as well.

Yeah, that's what I'm thinking.

Somebody's gonna make money doing it.

So perfect.

Um, so with this slide, um, this slide is similar to the uh uh resource balance chart, just structured into a uh table.

Uh we're going to be using this um table to compare the base case to the other scenarios as well.

So you can see um on the bottom chart right there, you have the 10-year net present value.

So trying to put trying to put a short-term price on the um the build out there, and then the 20-year net present value as well um for the entire uh uh the entirety of the study, and then you have that 20-year levelized cost of energy, that's 7576 um for the base case.

Um, but this uh just shows the build out um in megawatts uh for the capacity that is available in your stack um uh for each year instead of like just showing it into a bar chart, it shows it into a graph or uh a chart.

But the this will be utilized to compare um the other scenarios as well to the that's the major driver of this slide.

And for this slide, um, so Greg explained earlier that there is a difference between capacity balance and energy balance.

So um capacity balance is what the model is trying to build to.

It's trying to fulfill that planning reserve margin.

Um, but you can see in here that it is actually short energy.

Um, the the gap from the total load of energy to your existing and proposed resources um is just assuming that it is going to the market to um fulfill these.

So from 2028 to 2039, that gap, um, you still have your natural gas resources to ramp up as well.

Um, it just in this specific model of it it's trying to meet the capacity um uh uh requirements instead of energy requirements.

I work really closely with the Columbia group every month to work on dispatching these units, um, trying to pinpoint the exact dispatch by hour for your existing units to see how it affects the energy market.

But since we're going so long term, we're more focused on capacity.

That does not mean that you will forever be energy short.

Only thing I'd like to add is um as Marquis said, we are trying to solve capacity here based on the earlier graph on our upcoming capacity shortage.

Uh, I would like to use this slide manuals as an anchor point because it will be relevant for future scenario, we'll be going over just you have something to compare it to.

That's that's the main intent here to be showing some energy versions.

I'll just point out one other thing.

I know we talked about capacity, capacity, capacity, capacity.

Um, but I just want to point out too if you look at like 2040, and I know you'd asked about um the goal for 2040 or 40, 40% by 2040.

If you remember back to the capacity, how small the wind was that's how much energy though comes from wind, right?

So it's really small here for the capacity, yeah, and then really big for the energy, right?

So it's a lot of energy.

Yeah, a lot of energy, not a lot of capacity.

There's still a place like not anti wind restroller by any means, but like, you know, we're we're solving for capacity.

So the markets have put these really restrictive um you know values on wind and solar because they they they are tasked to make sure the lights stay on across the the region, right?

But there is still a lot of value for having wind and solar on the system.

So I just want to make sure that we're 100% clear there.

You have a lot of gas.

Oh, what the other thing too is we had batteries staggered all throughout there.

You'll notice there's no energy from the batteries, right?

We do not count any energy from the batteries.

They charge, they discharge, they charge, they discharge, right?

They're actually a net negative value because it takes about five hours to charge a four-hour battery, right?

So, yes, are you selling battery energy into the market?

Yeah, but you also had to like buy from the market to charge them, right?

So I just want to kind of, you know, in the in the capacity, the bilateral capacity, there's no really energy assassin.

So it looks like you're you're short energy, but there's you know, it is a little fuzzy there too.

But I just definitely want to point out like there's a lot of energy that comes from some of these resources, and even though that there's not a lot of capacity.

All right, now now you really gotta get going because I shut up yes.

Okay, okay.

All right, so that's our base case.

Um, I I suspected that we spend the most time on that.

And that let's move into the scenarios.

We're going to be comparing the scenarios to the base case to see how these additional constraints are affecting the overall cost and the build out of each scenario.

So moving on to scenario 1A, we have a 1B as well.

But for this scenario, ultimately, what we did was we removed bilateral capacity after 2029.

The reason why it was after 2029 is because if you remember the reason why it's using bilateral capacity before 2029 is because that's the only resource that can come online at the time.

Um, so it kind of has to be um building by 2029, unless you're gonna be short capacity.

So once that is fulfilled, we kind of were proactive and said if we could not go to any other counterparty or rely on the auction, how would we build using our own resources, right?

So if you look ahead, um, it's very similar to the base case.

It relies on batteries from 2029 on and builds thermal in 2035, so two years sooner than the base case.

Um, but it still relies on the same stack.

So it's still a lot more batteries, a lot more thermal, and then it starts building that wind in 2039, actually a year sooner to meet that 40% carbon-free energy target by 2040.

So the build out is the same.

The numbers are slightly elevated because it cannot rely on bilateral capacity.

This is just a more proactive view, so that if we couldn't find any counterparties to give us bilateral capacity post-2029, this this is would be um this would be the solution to that.

And moving on to this chart right here, you can see how uh that affects the overall build out on the bottom.

So on the top is the actual build out um for scenario 1A, and the bottom is going to be the variance.

So the variance you can see, like for example, the bilateral capacity line, the white line on the bottom.

Sorry, I forgot I had laser.

Um, the white line right here, it's all negative because we're not building any bilateral capacity.

You can see in the later years, we're actually in the base case, it relies a lot on the bilateral capacity.

So this is just trying to be much more proactive and it actually builds much more thermal, uh, around 67 megawatts of thermal in 2040, and then um some battery as well as a little bit more wind.

Um, and overall, how that affects our net present value.

You can see in the short term, it's around 3 million, and in the in the entire study, it's about 19 million with about a dollar per megawatt hour of levelized cost of energy.

So that's what I meant when we showed these big numbers and that level as cost of energy.

This is how we're going to compare the scenarios to the base case.

Um, so overall, it's not a large change um relevant to the other scenarios.

You'll see that the other scenarios get pretty extreme just by adding a couple small changes.

Um, with this change, it's actually uh a pretty good insight because if you had to serve everything yourself, um, there's not much of increase in cost um uh associated with that.

So and then moving on here to scenario one B.

Scenario 1B is the exact same as scenario 1A with one caveat.

We did want to be proactive.

Um, we worked with Columbia and we got feedback that we would like to see what would happen if our load actually increased.

So um we went ahead and added a 10% um flat increase to the planning reserve margin for the entire year.

Um, so you can see the gap between that red line and the black line is much larger.

Um we're just trying to see what would happen if our load increased even more, like just to be proactive.

It's not like 500 megawatts of increased load, um, but it is um a steadier increase.

Um, you can see that the build out is exactly the same.

Um, there's no major changes in the resources that it selects, um, just larger margins.

Okay, quick.

Yeah, go ahead.

Go ahead.

Go back.

Yeah, yeah.

So that's why we have this one B scenario, my keys mentioned, yes, based on some input on being proactive.

So I just want to go back real quick and just uh say every single scenario that we're gonna go over now is driven with a lot of the community impact or input that we received in January for the two public meetings we had.

We collected a lot of feedback, uh, not just some generation sources, such as you know, different uh versions that you'll see here, but it was very overwhelming that we also wanted to assume um to be that we have to be proactive.

Like we gave the community a choice you want to be proactive or reactive, and it was very overwhelming.

Let's try to be proactive where it makes sense, and this is therefore reflected here as a as a version to the other base case.

So you can see um how it affects the overall um net present value, it's a much uh greater increase than scenario one A for the short term, it's around 26 million, and then for the long term, around 71 million um for increase in net present value with about three dollars and 76 cents, so shut just short of four dollar increase per megawatt hour versus one A was about just short of a dollar.

Um, so moving on to scenario two.

For scenario two, what we did was we just limited the resources to uh battering total agreements, so storage, the planning, uh the uh renewable PPAs, which is like solar wind, um batteries and bilateral capacity.

So no thermal.

We wanted to just see if it was just straight storage, um, solar wind and bilateral capacity and like relying on the auction.

So you can see on the build out for we should we're actually showing the winter load capacity balance, and this is for a pretty significant reason for the past scenarios, it was actually summer building, but for this one, it's going to be winter building, and that is because the battery accreditation for 2040 and beyond is gets incredibly low in our forecast.

Um, so in the sense it's actually and it's only specifically in the winter.

Um, so it's not for the summer.

So you'll see when I show you what the summer load capacity balance is, it's a significant overbuild of batteries just to meet that winter planning reserve margin.

The first couple of years are the same with the uh bilateral capacity meeting the summer.

That's why it's slightly over.

And then it's building batteries, it's building batteries as normal.

Um, and then it it's meeting that winter.

So you can kind of guess how the summer will look when the winter accreditation for batteries is so low.

Hold on, Christina has a quick question.

Oh, yeah, go ahead.

In terms of the um, is there degradation with the batteries in the winter, or is it purely just exactly right, yeah.

The sorry, I thought you asked question.

I'm trying to answer it before you finish.

Go.

Um, or is it purely just about the uh capacity or the accreditation?

Yeah, yeah.

Okay, so things.

Um, the accreditation goes down over time, and a lot of it has to do with like mice is trying to predict how much batteries are going to be added over time.

And so two things happen in the winter.

One, there is degradation batteries do not operate as well in the winter as they do during the during the summer.

At least the four-hour lithium batteries don't, right?

So, and then also what I I think this is miceo's rationale is the fact that it's more and more batteries come on the system, you're not going to be using them at the same time.

Right.

So, right now, maybe you're we're using all the batteries or the majority of the batteries for that afternoon peak.

But as more and more batteries come on, you'll start using them in the morning.

You might use them at night.

So every battery, what with the um ELCC, that effective load carrying capacity is trying to predict is how much will the next megawatt of that resource contribute towards meeting the peak.

But if the the market, as more and more batteries come on, they're moving them around different times of the day.

That next megawatt of coming on might not even have anything to do with the peak.

So it's it is actual performance in winter, that is true, but it's also how MISO anticipates using the resources in the future, it's more and more of them come on.

So our curve is going down over time, and that's why you'll see more and more batteries get added over time.

Whereas, like if we kept the ELCC the same, you know, there wouldn't be many batteries added.

Once you add up what whatever you needed, you'd incrementally add a little bit more as your load grows.

But forget about load growth.

Even if your load didn't change, it'd have to keep adding more batteries in order just to meet that that requirement because you're gonna get less accreditation over time.

And it and it's typically about winter.

We're seeing that already operationally for some batteries, particularly in like cold weather environments.

We get less and less in the winter.

Is there like a temperature threshold on that?

Is it like regional?

It is definitely above the Mason Dixon line, right?

It is definitely in cold weather places, particularly some of the read ones we've done in in the state of Washington, Minnesota, yeah.

Any Minnesota's way colder than us.

I yeah, I know.

So you're right, but it is a it is mice's accreditation, right?

Your resource might actually operate well, and maybe MISO changes it where it gives you the accreditation for your particular resource, but from a planning perspective, we're assuming a regional accreditation.

Thank you.

Yep.

Very great, great point though.

When you talk about the renewable PPAs, would that mean that even when we are purchasing capacity, we would only be purchasing capacity via of renewable energy, or would we potentially be purchasing capacity of coal of nuclear of natural gas?

No, those would be just wind or just solar.

Okay.

Yep.

Thank you.

The bilateral capacity is could be any could be any resource, right?

So you can go into a counterparty.

Now they'll have to point to that particular resource.

They'll have to name the resource for the market.

But like if you're just buying capacity, you know, 50 megawatts of capacity, it could be a coal plant, it could be a gas plant, it could be batteries, it could be something like that.

But if you're buying a specific wind or solar PPA, it is that technology.

So then on the chart that we're looking at here, does it differentiate?

Is one of those patterns the renewable PPA and one bilateral capacity, or would it so yeah.

So in this scenario, it actually didn't build any um renewable PPAs.

It didn't build any solar or any wind.

It just relies solely on storage and the bilateral capacity in general.

So that bilateral capacity is that you see that white line that's kind of like boxed in.

That's what he was explaining where it can come from anywhere.

Um, and then we have the um the storage, which is in that blue.

We do have we do have a solar PPA here.

Yeah, yeah, we have it, it's in it's being looked at by the model and it can be selected, but the model does not select it because the accreditation for those resources is so low that you would have to build hundreds of thousands of megawatts of it to for it to actually make an impact, unless we actually have in a um a constraint, which is the carbon-free constraint by 2040, where it force builds um some renewable energy to meet that carbon-free um requirement.

So actually, you can see that it's building 240 megawatts of solar PPA in 2030, like 2039, but you can't even see it.

That's because there's so much more batteries taking up that space that you can barely see that it barely makes a dent, the solar PPA for capacity for capacity.

Yeah, for capacity specifically.

But if you showed up that energy use again, it would be a lot bigger.

Exactly.

Exactly.

And we actually have a scenario where it's mostly solar and wind, and you'll see how much energy it actually does.

It's it's a third state.

Yeah, or something.

It's it's in order to it's pretty significant.

Yeah, yeah, okay.

Yeah, all right.

So uh moving on, you can see how um when we mentioned that the capacity accreditation for the winter for batteries is uh so low, it actually has to overbuild for the summer.

So there's actually significant overbuilding um that occurs for that um I would summer the balance scenario.

Keep going, just go.

And then for the net present value, you can see how it increases around 30 million for the 10 year, and then around 200 million for the 20 year.

So that's significant overbuild of batteries is a pretty significant increase in the net present value, um, which the last scenarios is about a dollar, three dollars.

You can see that this one is actually 10.

Um, so for scenario 3A, we did something similar to 1A and 1B, where the first one is um without planning reserve margin increase and the second one is with planning reserve margin increase.

But the commonality between the two is that we actually force-build a SMR, we force-built a small modular reactor, um, which the earliest one um that could come on is by 2036 with a 10-year lead time.

So if we started now, um, that is when it would be able to be built.

So you can see that it's in that red right there.

Um, but first thing uh you can see that the first uh build out is the same bilateral capacity with batteries ramping up, and then instead of the thermal coming online, you have that SMR coming online um with wind stem still being built for that 2040, and then some thermal coming on at the end of the year.

Good.

And just really quick.

So the reason why we included nuclear energy here or capacity is going back to the public input meetings.

It was actually one of our top three requested um resources for energy back in January.

So we absolutely wanted to have a couple models that showcase a portfolio with that.

So overall, in the long term in the short term, it it doesn't increase uh it actually does decrease slightly.

That's because it's relying on the bilateral capacity a little bit more and the bilateral capacity are one year agreements versus the storage agreements that are 15-year agreements that it gets locked in, but it's solving for the entire 20 years.

So for that 20-year net present value variants, it's about similar to scenario two, which is almost 200 million in net present value, which is that $10 um levelized cost of energy increase.

So it's pretty significant increase if we did decide to force build an SMR to be part of the portfolio.

And scenario 3B goes with the same thing.

Um, it just goes goes ahead and increases that planning reserve margin similar to 1B.

Um, and you can see that this is actually one of our largest increase in costs by around 241 million and around just short of 13 dollars for level as cost of energy.

So for this scenario, um, this is one of the extreme scenarios that I was just mentioning.

Um, we took a high gas and power scenario.

So if the gas prices were to skyrocket and the power prices falling behind it, what would the model be solving for?

So the model actually went ahead and solved for um a much different value.

Since the PPAs for solar and wind are not affected, like the costs are not affected, but the revenues are increasing because of the increase in power prices.

You can see that the model is actually very favoring solar here.

The caveat here is that we've been going over it time and time again, is that the accreditation for solar is so low that it's barely making a dent in all these other scenarios.

So if there's so much solar and wind showing up in these capacity scenarios, you can only imagine how much solar and wind needs to actually be built to fulfill the scenario, which leads me into my next slide, which this is how much it needs to be built.

So you can see that your actual your load right here doesn't even change because the scale of the amount of solar and wind that needs to be built, like Greg has said, a third of the state is so infeasible that it would it's just it's completely risk.

It's it's a lot of risk.

Let's just go with that.

It's a it's a lot of risk.

It's about 16 million gigawatt hours of energy by 2044, um, which would probably like 10 times your cost, also 10 times your revenue.

Um, but it's a significant risk that you're taking just because of high gas and high power scenarios that probably wouldn't even be in feed feasible to build all this or find the the contracts to build these at all.

So moving on to how that affects our overall net present value.

In the short term, it increases it by 115.

In the long term, you can see it actually decreases the net present value.

But this is a completely different scenario that it's trying to solve for.

It's trying, if you remember from the energy cost table that I showed, um, a couple slides in the beginning, it's trying to solve for energy revenues instead of capacity because solar and wind and all those other renewable resources are so much more profitable in this high power scenario.

It's overbuilding them to the point where it's trying to meet the capacity standards with that, but we obviously know that's not feasible due to this previous slide that we have.

So it may drop the net present value in total, but with incredible amounts of risk attached to that.

That's not including transmission costs.

That's not including the fact if power prices were to drop back down, you would just have all this excess energy that you would have to get rid of.

Yeah, Nick.

Do you have a way of measuring the risk?

Um, this yeah, I could easily show you the graph of the the table before with all the cost.

And around the cost, you guys sit around around 100 million um per year um in the later years.

And when you look at that table, it actually goes to the billions for cost.

Obviously, it goes to the billions for revenues because it's trying to counteract that, but you're you're basically 10 times in your portfolio.

You're building all this solar, all this wind to try to just shave off 63 million off your net present value with this with this build out.

So it's a significant amount of risk that is like it.

You don't even need to calculate it.

You can just kind of see like from the scrap, like this like the scale, the scale is immense um compared to what we were seeing in the base case.

That's why we showed the energy balance in the base case.

Um just for a shorter net present value that may not even be realized if you if the power prices don't even go that high.

I mean, we did not run this, but one way that you could quantify it is to run the other power price through this portfolio, right?

Assuming that power prices stay the way that they are with that higher solar portfolio, that negative three would be right.

So negative 63 would be something significantly higher, right?

So that'd be one way.

We didn't that's a good question.

We could maybe even get that.

Yeah, something that Marquise mentioned going back to the revenue is right.

This is a hypothetical extreme scenario on purpose just to see what something would look like.

If this were to be a real scenario in the future, gas prices are so high it would affect everybody, not just the city of Columbia.

It means pretty much everybody would have a similar portfolio, which is significant overbuild.

Who's gonna buy the energy?

Nobody would buy the energy from us, our revenue would not go away if anything would have to pay somebody else to take the energy from us.

So it is again not a not a realistic scenario, but just like the previous three, we purposefully just try to have different extreme versions to know what our starting point would look like.

All right, so trying to get here with the matter of time, we got uh about 13 more minutes here.

Um, so for scenario five, this is basically our do nothing scenario.

So if we just completely relied on the miceo auction price and didn't go ahead and build out anything, how would that affect our overall um uh portfolio?

So you can see that uh it's all bilateral capacity, but this is actually relying on the auction, which the planning reserve auction could clear much higher than what we are assuming for the bilateral capacity, and it's really hard to gauge um what the pricing is even in the short term, let alone the long term, because the price could get higher and higher and higher, depending on how the miceo stack looks for capacity.

Um we just kind of wanted to do this to show you guys like what would happen if we didn't we weren't proactive and selecting some resources that were available.

You can see that it increases our net prison value around 200 million for that do nothing scenario.

That's currently current plan we're on, right?

Yeah, so yeah, basically, yeah.

This is basically what the current plan is.

It's similar to the existing scenario, but if you just did nothing.

And it's really it's really rough, right?

Like it could go higher.

You're just giving yourself open to the market, just saying what what would the market do and just seeing how the market is right now, it's set to be 200 million.

It could go higher um significantly.

So sorry, go ahead.

Yeah, the biggest issue.

I mean, price obviously is expensive based on the forecast, but the biggest challenge here is the risk.

You just don't know what's going to happen.

We had a few years ago where price is skyrocketed in an auction.

The risk here is definitely an amplifier beyond the price.

So moving on here to our final scenario.

Um, this is our most realistic scenario.

This we worked with Columbia closely as a proposed scenario where we proposed uh some of the resources that they're actually looking at.

So you can see there's a 20 megawatt uh uh solar eight year PPA by 2027, uh some natural gas by 2029 and some batteries by 2029.

It kind of mimics how the base case is being built out, but it also incorporates some realistic um uh resources that Columbia is actually looking at currently.

Um so with that build out, you can see that the overall net prison value is around 124 um million increase or around six dollars and fifty-seven cents for level ass cost of energy.

And for the sake of time, um I have included all of the scenarios here so we can compare all of them by the levelized cost of energy as well as the build out stack.

So this is kind of like a consensus of how each scenario stacked up against each other.

So you have your base case here, around 75 and 8.

Um, and I think the main takeaway here is that the build out is pretty consistent in the short term.

It it relies on bilateral capacity for the first couple years with the uh mostly relying on batteries and um almost every scenario except the do nothing and the high gas power scenario, you can see that um battery storage is is is um uh heavily favored, especially uh post 2029 when it's first able to be built.

With battery storage being considered for all of those, why was I know you kind of explained this a little bit, but scenario two was a winter model, whereas the other models are all summer models.

So could those uh change the comparison there to me, it seems like it would.

So the reason so the reason why scenario two is so high is because it doesn't have any thermal to rely on, it doesn't have any other resources outside of just storage, solar wind, and the bilateral capacity.

The solar and wind is really low in the capacity accreditation, so all it has is batteries to work off of good go ahead.

Can utility scale batteries be installed indoors, and would that change the rating?

And do we have a building that could be used in that way?

I mean, they are in cased, right?

I mean, they are in like kind of modular type building.

Um it's a good question.

I don't know the technology or the answer to that.

I mean, one of the things people were kind of nervous about lithium ion for a while.

I mean, there has been fires.

I think they've kind of worked out that technology, and it's probably safer than it was, but I think that's probably one of the reasons why you probably wouldn't want to put it inside.

I don't know if I want to work in that building, but like, you know, um, but that's probably the reason why.

And and maybe there are different heating and cooling systems, but um, I don't know the answer to that, to be honest with you.

It's a good question, right?

Don't see what I could find out.

Possible to get the scenarios for the winners because I I want to see that so I can be able to compare.

Absolutely, yeah.

We can put it all in the appendix too.

I appreciate that.

Thank you.

So, yeah, just main consensus here.

You can see that uh heavily favors uh batteries in the short term with some thermal being built um throughout 2030 um for each of the scenarios.

Um these are the uh SMRs where it it force builds them, and then obviously some renewables there.

The renewable capacity stack is small, um, but it does serve a lot of the energy, especially with that constraint, and you can see that it doesn't increase the net present value much.

So it's it's definitely it's definitely valid to have a variable um stacked um resource plan here um where the main constraint is lead time, like I had mentioned the beginning.

So you kind of want to work with what you have, um, but definitely keep it variable as well.

That's what I would hold on.

I've got ballerie, then bear.

Yeah, let's go.

And I couldn't tell if that was a thing from Nick, and I mean come back to that right that the high degree of engagement.

So it's it's definitely it's definitely valid to have a variable um stacked um resource plan here um where the main constraint is lead time like I had mentioned the beginning so you kind of want to work with what you have um but definitely keep it variable as well that's what I would yeah hold on I've got Valerie then bear and I couldn't tell if that was a thing from Nick and then we can come back because you know right that a high degree of engagement um for the appendix would it be possible to get the 2035 40 scenario or not scenario but um goal goal yeah or yeah the the same analysis with the 35 percent in addition to the 40 percent um so we have that to look at 35 sorry but 40 by 235 35 I guess yeah the numbers sound too similar don't they all right just following up on the last two questions when can we expect to get that full report by the the 2035 40 percent is is that what you're talking about full report with the appendixes yeah the full report with the appendixes like the the data that went into the creation of this PowerPoint um open goes to put it all together pretty good I I don't know we'll work with Gwen soon I'll do it I'll do whatever you need me to Christina did you want to no no no you're good we we have all the slides we just have to put them yeah right like we've gone through every scenario with the the Columbia folks like we just gotta throw the kitchen sink in there for you guys so can you remind me one more time on scenario for there's wind and solar huge chunks but there's no battery on that was that intentional or did I forget yeah what you said on that yeah so the reason that it didn't select batteries was because it's it's working in a higher ballpark it's um mostly working with the energy revenues and since batteries yeah okay yeah the batteries don't really give off energy revenues so it's working off of just solar and wind which give off those really really high energy revenues okay any other questions how much time do we have how much time do we have one we have um five minutes yeah okay all right now let's go all right sweet all right um so overall in the conclusion um capacity short through 2045 um that's obvious as we saw with the uh existing resources and the do nothing case um and bilateral capacity is what we need short term for every single scenario that we had bilateral capacity needs to be leveraged before 2029 because it is the only resource that we can use to fulfill that capacity um shortage um uh natural gas is a potential option natural gas showed up as a really good option it serves as energy and capacity and it's really good to be leveraged on especially in the later years when it's able to come online um around 2035 and so on um and obviously what I had said before was the diverse portfolios is the main gist here having a diverse portfolio will limit your risk because you have you know you have more you have more cards in your bucket here you have more things to leverage you don't want to put all your eggs in one bucket you don't want to go all solar you don't want to go all thermal you don't want to go do nothing case because everything um can be leveraged off one another you just kind of want to meet the requirements where you can um which the biggest requirement is gonna be your lead time when can you get these resources online and do they meet the requirements that the uh market is setting for you guys so that's what we consider for our action plan um I I'd say that we follow similar to the base case um that is what the energy authority recommends um where you would have to leverage bilateral capacity in the early years and I'd say look for some um PPAs or some self-build opportunities for batteries and other storage um resources that you can while also definitely looking at some thermal resources that you can leverage as soon as possible the lead times are if they started today um so if they started in when we come when we completed the um the analysis is when those lead times are set so the the longer you take the longer those lead times are gonna go out and those queues are getting short longer and longer and longer so it's definitely work to be proactive as these resources are available to you and that's all I got yeah thank you so obviously this is not and we're gonna continue like renewable energy is going to be one of our work sessions coming up in the coming months is that correct Aaron the renewable energy ordinance is coming back to us so I just say like it's not all on you all to answer all of our questions.

They're gonna continue to answer you sweet I I got great questions.

Like you know we're here for right you guys throw out anything you can at us hopefully we're able to answer most of the and I think a question I just kind of want to like foundational set myself in these thinkings on this so part of this is is the capacity is based on like because there's we have a we get a negative ding from MISO if we don't have enough capacity for what they show that we're gonna need.

So part of this is is the capacity is based on like because there's we have a we get a negative ding from MISO if we don't have enough capacity for what they show that we're gonna need.

But it doesn't necessarily mean that we're using those resources.

Like so at the same time, the utility can be aggressively seeking power purchase agreements and builds for batteries, solar, wind, all of those things.

Is that that's correct when you mention those?

Yeah, yeah.

And you could have all the capacity you need and it could never run.

Right.

Right?

Right.

Honestly, that's the way the market, if the market is cheaper than all of your generators, then it's gonna operate that way, right?

It's just when when we have a winter storm year or we have something like that where we have to call everything online at one time, that's what the market is.

That's the capacity side of the market.

So I think when you're putting together those appendices, you know, the additional kind of things.

I think there's questions related to like how does like demand side, you know, how does our additional try to hope to bring down our load?

Right, you have us those percentage growth, but as we treat continue to try to bring down the demand, how does that play a role in this?

And it sounds like it really doesn't when it comes to capacity, except it's a sh it's not a 20-year maybe plan for those as much as your load factors.

Is that how I was understanding that chart increase?

Yeah, so we're assuming whatever demand side management programs and things like that you guys had in the plat the past are gonna continue.

Um that is another resource option you can consider too.

Like if there's new re uh demand side management programs you want to institute, and you know you can get two megawatts for X price, we can model those.

It's only gonna any megawatt you can reduce is a huge benefit, absolutely.

It's millions of dollars in in cost savings.

But would it be show up in your model?

Only if we add only it added it as an option, like a resource option.

Yeah.

So instead of a gas plan, or instead of, you know, it would it would reduce your load, but it we you need a price signal and you need uh a megawatt reduction.

So really how it shows up is in the load profile.

That's so the load profile going up as steep, maybe it would be a bit less.

And I think and I know we're I know we're at time, but I think that that's something because I think for these two things, we're we're looking to also signal to the utility what additional programs we want them to do, or for us on building codes, what we want the building type, you know, I mean, to invest in.

And the other thing is as you mentioned the market, and I know by us going out to the market, we're signaling to the market that we want these things.

And so I guess that's the question is like how much do we need to signal we want generated in our in our area to get development happening and and where does that play in?

Because you talk about lead time, right?

For even just a normal thermal three to five years now, or that's where demand sign you might be able to get a demand sign management program on in a year.

Well, right.

AMI will make a huge difference here, but what are we looking at time frame at this point?

Aaron, what's the time frame or Gwen?

What's the time frame with AMI for the advanced metering for our infrastructure?

Very active.

Very active discussions.

I would anticipate a lot more coming throughout this year, and uh I think uh we have plans to have some activity for rollout maybe next year or soon afterwards.

So quick.

Okay, okay.

And and I think well, I'm assuming we're gonna continue this these this conversation, and I apologize that we are at time and you all came out from wherever you want wherever the market is.

Yeah.

So I mean we're gonna continue this conversation, I assume for Aaron.

Okay, all right, because there's still a lot of questions.

This is a lot.

Yeah, it's a lot.

And one thing to keep in mind is everything here was uh modeled and calculated based on the best information we have as of today.

The energy and utility market is changing faster than it's ever been.

We'll do this more often in the future.

This is not a 20 year locked in plan.

There'll be many iterations coming.

And I appreciate that slide where you talk about how it used to be every five to 10 years where these things happening.

And I I applaud you for trying to wrangle this storm cloud because things are changing every day when you talk about data centers, AI, all these things.

I could spend hours you can come to the next council meeting when we're talking about thank you all so much.

Appreciate it.

Thank you guys for all your questions.

Appreciate you.

Yeah, thanks.

All right, we're now gonna take like two minutes to rearrange a little bit, and we've got planning and zoning uh applicant interviewees here.