TDV Workshop Presentation Dec 14, 2000
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Transcript TDV Workshop Presentation Dec 14, 2000
TDV Economic
Update
Brian Horii and Snuller Price
Energy & Environmental Economics, Inc.
for
Pacific Gas & Electric Co.
Codes & Standards Program
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Agenda
Methodology Overview
Conceptual Framework
Detail on TDV Derivation
• Electricity
• Natural Gas
• Propane
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Methodology Overview of TDV
TDV Method the Same for All Energy,
Sum of
•
•
•
•
•
Commodity Costs
Marginal T&D Costs
Rate Adjustments
Air Emissions Externalities
“1992 Adder”
Hourly Lifecycle values for each area,
class, and energy type
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Formulation Based on TDV Goals
Cost Component
Commodity Costs
Marginal T&D Costs
Rate Adjustments
Air Emissions
“1992 Adder”
Total TDV Value
TDV Goal
Include New Market Structure
System Efficiency Utilization
Improve Environment
Don’t Relax Standards
TDV values made with publicly available data.
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This is What it Looks Like!
Hour
1
2
3
4
5
6
7
8
9
10
11
12
Example of Electric TDV Spreadsheet
Electric TDV Values - 10/1/2000 - $/kWh - Year 2001 Dollars - Present Value
Oakland
China Lake
Fresno
Long Beach
Shasta
Res
Com
Res
Com
Res
Com
Res
Com
Res
Com
30-Year NPV 15 Year NPV 30-Year NPV 15 Year NPV 30-Year NPV 15 Year NPV 30-Year NPV 15 Year NPV 30-Year NPV 15 Year NPV
$ 2.20
$ 1.14
$ 2.03
$ 1.11
$ 2.09
$ 1.08
$ 2.28
$ 1.20
$ 1.94
$ 0.97
$ 2.19
$ 1.13
$ 2.02
$ 1.10
$ 2.07
$ 1.07
$ 2.26
$ 1.19
$ 1.92
$ 0.96
$ 2.17
$ 1.12
$ 2.00
$ 1.09
$ 2.05
$ 1.06
$ 2.25
$ 1.18
$ 1.90
$ 0.95
$ 2.17
$ 1.12
$ 2.00
$ 1.09
$ 2.06
$ 1.07
$ 2.25
$ 1.19
$ 1.91
$ 0.95
$ 2.22
$ 1.15
$ 2.05
$ 1.12
$ 2.10
$ 1.09
$ 2.29
$ 1.21
$ 1.95
$ 0.98
$ 2.29
$ 1.20
$ 2.12
$ 1.16
$ 2.18
$ 1.14
$ 2.37
$ 1.26
$ 2.03
$ 1.02
$ 4.77
$ 2.80
$ 9.93
$ 6.13
$ 5.55
$ 3.32
$ 23.03
$ 14.04
$ 28.26
$ 17.98
$ 3.77
$ 2.15
$ 10.25
$ 6.34
$ 5.66
$ 3.38
$ 7.17
$ 4.23
$ 18.56
$ 11.70
$ 3.02
$ 1.66
$ 5.42
$ 3.26
$ 5.69
$ 3.40
$ 3.10
$ 1.71
$ 2.24
$ 1.15
$ 2.65
$ 1.42
$ 2.35
$ 1.30
$ 4.30
$ 2.50
$ 2.60
$ 1.40
$ 2.26
$ 1.16
$ 2.53
$ 1.34
$ 2.36
$ 1.31
$ 3.49
$ 1.98
$ 2.61
$ 1.40
$ 2.27
$ 1.17
$ 2.52
$ 1.34
$ 2.35
$ 1.30
$ 2.41
$ 1.28
$ 2.60
$ 1.40
$ 2.26
$ 1.16
Down for 8760 Hours
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How TDV Works in Evaluation
Time Dependent
Energy Costing
$/kWh
Flat Energy
Costing
With TDV costing a kW saved
during a high-cost peak hour is
valued more highly than a kW
saved during an off-peak hour
With flat energy costing a kW
saved is valued the same for
every hour of the day
Monday
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Friday
Building up the Electric TDVs
1. Start with the PX Commodity Costs
2. Add the marginal T&D delivery costs
3. Use flat adder to bring to rate levels
4. Add environmental externality of reduced air pollution
5. Add 1992 adder to bring to current standard levels
$/kWh
Environment
T&D
PX
Rate Adder
1992 Adder
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Building up Gas and Propane TDVs
1. Start with the Gas Commodity Costs
2. Use flat adder to bring to rate levels
3. Add environmental externality of reduced air pollution
4. Add 1992 adder to bring to current standard levels
$/MMBtu
Commodity Cost
Rate Adder
Environmental Externality
1992 Adder (Nat. Gas Only)
January
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December
Annualized Rate Components of
Electric TDV Values
Weighted Average Electric TDV for Shasta
Levelized Annual Electric TDV $/kWh
Shasta Commercial Electric TDV Breakdown
$0.120
$0.100
6%
21%
$0.080
T&D
$0.060
34%
$0.040
8%
$0.020
31%
$0.000
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Environment
Annualized Rate Component
PX Generation
Rate Adder
1992 Adder
Annualized Rate Components of
Natural Gas TDV Values
Weighted Average Gas TDV for Shasta
Shasta Commercial Natural Gas TDV
Value Breakdown
No T&D
Component
for natural
gas or
propane
Levelized Annual Gas TDV $/MMBtu
$8.00
$7.00
8%
$6.00
$5.00
38%
Environment
Commodity
$4.00
Rate Adder
$3.00
$2.00
1992 Adder
48%
$1.00
$0.00
6%
Annualized Rate Component
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Annualized Rate Components of
Propane TDV Values
Weighted Average Propane TDV for Shasta
No 1992
Adder for
propane
Levelized Annual Propane TDV $/MMBtu
Shasta Commercial Propane TDV
Breakdown
$14.000
6%
$12.000
$10.000
$8.000
45%
Commodity
$6.000
$4.000
Rate Adder
49%
$2.000
$0.000
Annualized Rate Component
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Environment
Electric TDV Summary
TDV Lifecycle Cost Components
$/kWh
Commodity Cost
T&D Cost
Rate Adder
1992 Adder
Environmental Adder
Total TDV
Min
Average
Max
Min
Average
Max
Flat
Flat
Min
Average
Max
Min
Average
Max
$
$
$
$
$
$
$
$
$
$
$
$
$
$
Res
0.03
0.75
3.14
0.21
95.18
1.03
0.48
0.11
0.14
0.24
1.67
2.60
97.66
Com
$ 0.02
$ 0.45
$ 1.91
$ $ 0.14
$ 61.56
$ 0.28
$ 0.43
$ 0.06
$ 0.09
$ 0.14
$ 0.82
$ 1.39
$ 62.87
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$
$
$
$
$
$
$
$
$
$
$
$
$
$
Res
0.03
0.74
3.13
0.37
129.80
0.74
0.60
0.11
0.14
0.24
1.51
2.60
132.26
Com
$ 0.02
$ 0.45
$ 1.90
$ $ 0.17
$ 82.72
$ 0.32
$ 0.37
$ 0.06
$ 0.09
$ 0.14
$ 0.79
$ 1.39
$ 84.08
$
$
$
$
$
$
$
$
$
$
$
$
$
$
Res
0.03
0.75
3.14
0.32
150.01
0.91
0.48
0.11
0.14
0.24
1.56
2.60
152.37
Com
$ 0.02
$ 0.45
$ 1.91
$ $ 0.19
$ 97.02
$ 0.23
$ 0.43
$ 0.06
$ 0.09
$ 0.14
$ 0.76
$ 1.39
$ 98.27
Shasta
Long Beach
Fresno
China Lake
Oakland
$
$
$
$
$
$
$
$
$
$
$
$
$
$
Res
0.03
0.74
3.13
0.13
73.51
1.20
0.38
0.11
0.14
0.24
1.76
2.60
76.07
Com
$ 0.02
$ 0.45
$ 1.90
$ $ 0.07
$ 45.50
$ 0.55
$ 0.23
$ 0.06
$ 0.09
$ 0.14
$ 0.89
$ 1.39
$ 46.87
$
$
$
$
$
$
$
$
$
$
$
$
$
$
Res
0.03
0.75
3.14
0.47
637.40
0.76
0.48
0.11
0.14
0.24
1.41
2.60
639.56
$
$
$
$
$
$
$
$
$
$
$
$
$
$
Com
0.02
0.45
1.91
0.31
412.26
0.11
0.43
0.06
0.09
0.14
0.65
1.39
413.36
Natural Gas TDV Summary
TDV Values by Service Area
TDV Lifecycle Cost
Components $/MMBtu
Zone
TDV Component
Class
Res
Com
Min
$56.02
$31.46
Avg
$60.03
Max
Rate Adder
PG&E
Socal Gas
Com
Res
Com
$53.26
$29.62
$53.01
$29.48
$33.41
$59.91
$32.91
$59.78
$32.90
$63.44
$35.63
$67.77
$37.69
$70.31
$39.11
Flat
$62.55
$40.79
$70.52
$25.22
$70.54
$37.03
1992 Standard Adder
Flat
$53.73
$5.04
$45.88
$21.12
$45.98
$9.31
Environmental Adder
Flat
$11.90
$7.25
$11.90
$7.25
$11.90
$7.25
Min
$184.19
$84.55
$181.56
$83.20
$181.43
$83.07
Avg
$188.20
$86.49
$188.20
$86.49
$188.20
$86.49
Max
$191.61
$88.71
$196.07
$91.27
$198.73
$92.69
Commodity Cost
Total TDV
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Res
SDG&E
Propane TDV Summary
Statewide Propane Values
TDV Lifecycle Cost
Components $/MMBtu
Class
Res
Com
Min
$115.87
$50.93
Avg
$128.95
$53.97
Max
$137.89
$58.51
Rate Adder
Flat
$117.42
$82.96
Environment
Flat
$14.08
$8.58
Commodity
Total TDV
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Min
$247.38 $142.47
Avg
$260.46 $145.51
Max
$269.39 $150.04
Details of the
Electric TDV Estimation
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Electric Costs
Time Dependent Components
• Generation - Commodity
• Transmission and Distribution
• Emissions
Attributes
- Level
- Shape
Fixed Components
• Rate Adder
• 1992 Adder
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The Commodity Component:
Generation Market Price - Level
Price based on the “all-in” cost of a
combined cycle gas turbine
Gas price forecast is the major driver
All-in M ar k e t Pr ice ($/M Wh)
4 0 .0 0
3 5 .0 0
3 0 .0 0
2 5 .0 0
2 0 .0 0
1 5 .0 0
1 0 .0 0
5 .0 0
2030
2028
2026
2024
2022
2020
2018
2016
2014
2012
2010
2008
2006
2004
2002
2000
-
Ye ar
F u e l C o s t ( $ /M W h )
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V a r ia b le O & M ( $ /M W h )
L e v e liz e d C a p ita l & F ix e d O & M
The Commodity Component:
Generation Market Price - Shapes
Price[m,h] = All-in Cost * Monthly Price Ratio[m]
* Typical Shape[m,h]
Monthly Typical Shapes (normalized to average 1.0)
3.00
Jan
Feb
2.50
Mar
Apr
2.00
May
June
1.50
July
1.00
Aug
Sept
0.50
Oct
Nov
-
Dec
1
11
21
31
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41
51
61
71
81
91 101 111 121 131 141 151 161
Shapes mapped to 1997 chronology
1
349
The Commodity Component: Combining
Level and Shape Yield the Hourly Prices
180.00
140.00
120.00
100.00
80.00
60.00
40.00
20.00
Hour of the year
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8701
8353
8005
7657
7309
6961
6613
6265
5917
5569
5221
4873
4525
4177
3829
3481
3133
2785
2437
2089
1741
1393
1045
-
697
Generation Price ($/MWh)
160.00
The T&D Component:
T&D Marginal Cost - Levels
Marginal costs will always be in flux.
Use the most recent values available.
• SCE PTRD Proposal
• PG&E 1999 GRC Phase II
Use full “ratemaking” marginal costs
• DSM marginal costs can be lower
– Timeframe of impacts
– Pervasiveness of impacts
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The T&D Component:
T&D Cost - Shape
Concept
• T&D systems are built for peak loads
• Peak load is driven largely by weather
• Peak Capacity Allocation Factors (PCAFs) are
used to allocate the marginal costs to the high
load hours
– Used by PG&E and SCE
• Want price signals highest when load is highest
in an area. PCAFs reflect this.
– Allocate cost to hours in the peak period. The higher
the relative load, the higher the allocated cost.
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The T&D Component:
PCAFs and Temperature
Temperature
Drives
Loads
Drives
PCAFs
Load Information
Missing or Difficult to
Obtain in Many Areas
Temperature
We used temperature as a proxy for
load, and as the basis for allocating
costs to hours of the year.
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PCAFs
The T&D Component:
PCAF / Load Relationship
300
12%
250
10%
200
8%
150
6%
100
4%
Load (MW)
50
2%
PCAF
-
0%
6/1/99
6/21/99
7/11/99
Date
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7/31/99
8/20/99
PCAF Weight
PCAFs focus on the highest load hours
Load (MW)
The T&D Component:
Temperatures Drive the Peaks
Milpitas illustrates the strong correlation of
weekday temp with peak loads.
Load (MW)
300
120
Sunday
250
100
200
80
150
60
100
40
Load (MW)
50
20
Temp
-
0
6/1/99
6/21/99
7/11/99
Date
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7/31/99
8/20/99
Temperature
The T&D Component: Results of
Load & Temperature Correlation
Peak period is all weekday hours with
temperatures within 15 degrees of the
highest observed temperature in the area
(weekday only).
This 15 degree span defines the hours that
could drive peak demand, and thus drive
the need for capacity expansion.
This definition is independent of climate
zone.
This definition is spot-on with PCAFs in the
summer
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The T&D Component:
Sample Summer PCAF Results
C O N C O R D D P A in D IA B L O D i v i s io n .
W e a th e r S ta ti o n : C o n c o rd
Similarly good
correlation was
obtained for all
summer
peaking areas:
• San Jose
• Bakersfield
100%
90%
80%
Cumulativ e PCAF
70%
60%
50%
40%
30%
20%
10%
0%
20
40
60
80
100
T em p
A c tu a l P C A F s
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E s ti m a te d S h a p e
120
The T&D Component: Same Principles
Apply to the Winter - w/ Refinements
Same 15 degree bandwidth
Only consider 7am to 9pm
MONTEREY 21 KV DPA in CENTRAL COAST Division.
Weather Station: Monterey
100%
K - X D PA in EA S T B A Y D iv is io n .
W e a th e r S ta tio n : O a k la n d
90%
90%
80%
80%
Cumulative PCAF
Cumulative PCA F
100%
70%
60%
50%
40%
30%
70%
60%
50%
40%
30%
20%
20%
10%
10%
0%
0%
20
80
60
40
100
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20
40
60
80
100
Temp
Te mp
A c tu a l PC A F s
120
Es tim a te d S h a p e
Actual PCAFs
Estimated Shape
120
The T&D Component:
Winter PCAF Timing
Winter Areas
PCAF Totals by Hour of the Day
• Current areas peak in the evening. Do we need
to worry about a morning peak?
0 .6
NO R T H P E N W E S T 1 2 K V
0 .5
M O NT E R E Y 2 1 K V
0 .4
0 .3
S E A S ID E M A R INA 1 2 K V
0 .2
K - X ( O a k la n d )
0 .1
R A D IA L ( S F )
0
- 0 .1
10
15
H o u r o f th e D a y
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The T&D Component:
Hourly Costs
Hourly Cost is the T&D capacity cost (from the
utilities) times the temperature weight.
Temp weight is the total PCAF for each degree F,
divided by the number of hours that are at that
degree F.
TotalPCAF(Tem ph )
T & DCosta ,h CapacityCost a
Num
berofho
urs
(
Tem
p
)
h
Temph = temperature category for that hour. (nearest whole degree)
TotalPCAF[Temph] = total % of capacity cost allocated to that temp category
NumberofHours = # of hours that fall into that temp category in the year
CapacityCost = T&D marginal capacity cost in $/kW-yr
a = Area, h = hour
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The T&D Component:
Winter PCAF Problems
Assigning costs to the winter (in summer
peaking areas) doubles the T&D costs
for the area
• Favors measures that save in summer and
winter --- bit issue?
Spreading actual costs over summer and
winter would undervalue summer
reductions
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Environmental Adder:
Emissions
A realistic valuation of NOx emissions is on the order
of $3000-12,300/ton, centered on $7500-8000/ton..
A reasonable, albeit very tentative and highly
uncertain, range of values for CO2 emissions is about
$5-13/ton-CO2. Thus, the $9/ton-CO2 value used in
both the 1994 and 1998 CEC valuations appears to be
reasonable.
E3 concludes that a realistic valuation of
environmental externalities should be closer to the
CEC ER94 valuations, but perhaps at the lower end of
this range.
For common electric generation plants in California,
this level of externality valuation corresponds to a total
emission cost, or energy adder, of about $10/MWh.
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Environmental Adder:
Emission Cost Estimates
Table 1: Emission Cost Scenarios
Cost $/ton
NOx
ER94
9120
CEC internal 1998
1800
estimate
Other States Min
850
Other States Max
7500
E3 Recommendation 3000
SO2 VOC PM-10 CO2
4490 4240
4610
9
1780 530
910
9
150 1010
1700 5900
330
4600
1
24
9
70
60
2 0 0 5 M a r k e t Pr ic e
50
ER 9 4
40
C EC 1 9 9 8
30
O th e r S ta te s M in
O th e r S ta te s M a x
20
E3 R e c o m m e n d a tio n
10
Ho u r o f t h e Da y
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23
21
19
17
15
13
11
9
7
5
3
0
1
M ar k e t Pr ice or Em is s ion Cos t
($/M Wh)
“Other States” refers to values used in Massachusetts, Minnesota, Nevada, New York, and Oregon.
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$0.10
$0.09
$0.08
$0.07
$0.06
Total Marginal Cost
$0.05
Current Retail
Forecast
$0.04
$0.03
$0.02
2028
2025
2022
2019
2016
2013
2010
$-
2007
$0.01
2004
Flat adder to
adjust
marginal cost
up to retail
rate levels.
Shape still
represents
underlying
social
marginal
costs.
2001
Example for Fresno Commercial Building
Forecas t in 2001 $/kWh
1992 Adder: Comparison of Electric
Rate Forecasts
E lectr icity C o m p ar iso n o f E xistin g S tan d ar d B asis
$ 0 .1 6
$ 0 .1 4
$ 0 .1 2
$ 0 .1 0
$ 0 .0 8
$ 0 .0 6
$ 0 .0 4
$ 0 .0 2
E xis tin g S ta n d a r d B a s is
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2019
2017
2015
2013
2011
2009
2007
2005
2003
2001
1999
1997
1995
1993
1991
$-
1989
Annual Av e rage Price $2001 $/kWh
an d C u r r en t F o r ecast
C u rre n t C EC F o re ca st
Current rate
forecast is
much lower
than existing.
Adder up to
existing levels
removes any
IOU rate
differentials
Electric TDV Summary
TDV Lifecycle Cost Components
$/kWh
Commodity Cost
T&D Cost
Rate Adder
1992 Adder
Environmental Adder
Total TDV
Min
Average
Max
Min
Average
Max
Flat
Flat
Min
Average
Max
Min
Average
Max
$
$
$
$
$
$
$
$
$
$
$
$
$
$
Res
0.03
0.75
3.14
0.21
95.18
1.03
0.48
0.11
0.14
0.24
1.67
2.60
97.66
Com
$ 0.02
$ 0.45
$ 1.91
$ $ 0.14
$ 61.56
$ 0.28
$ 0.43
$ 0.06
$ 0.09
$ 0.14
$ 0.82
$ 1.39
$ 62.87
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$
$
$
$
$
$
$
$
$
$
$
$
$
$
Res
0.03
0.74
3.13
0.37
129.80
0.74
0.60
0.11
0.14
0.24
1.51
2.60
132.26
Com
$ 0.02
$ 0.45
$ 1.90
$ $ 0.17
$ 82.72
$ 0.32
$ 0.37
$ 0.06
$ 0.09
$ 0.14
$ 0.79
$ 1.39
$ 84.08
$
$
$
$
$
$
$
$
$
$
$
$
$
$
Res
0.03
0.75
3.14
0.32
150.01
0.91
0.48
0.11
0.14
0.24
1.56
2.60
152.37
Com
$ 0.02
$ 0.45
$ 1.91
$ $ 0.19
$ 97.02
$ 0.23
$ 0.43
$ 0.06
$ 0.09
$ 0.14
$ 0.76
$ 1.39
$ 98.27
Shasta
Long Beach
Fresno
China Lake
Oakland
$
$
$
$
$
$
$
$
$
$
$
$
$
$
Res
0.03
0.74
3.13
0.13
73.51
1.20
0.38
0.11
0.14
0.24
1.76
2.60
76.07
Com
$ 0.02
$ 0.45
$ 1.90
$ $ 0.07
$ 45.50
$ 0.55
$ 0.23
$ 0.06
$ 0.09
$ 0.14
$ 0.89
$ 1.39
$ 46.87
$
$
$
$
$
$
$
$
$
$
$
$
$
$
Res
0.03
0.75
3.14
0.47
637.40
0.76
0.48
0.11
0.14
0.24
1.41
2.60
639.56
$
$
$
$
$
$
$
$
$
$
$
$
$
$
Com
0.02
0.45
1.91
0.31
412.26
0.11
0.43
0.06
0.09
0.14
0.65
1.39
413.36
Details of the Natural Gas
Estimation
CASE Initiative Project
Copyrighted © 2000 PG&E All Rights Reserved
The Commodity Component:
Monthly Natural Gas Shape
S e a s o n a l Allo c a tio n F a c to r s fo r N a tu r a l G a s
1 .4
Monthly,
not hourly
variation
for natural
gas.
1 .2
Allocation Factors
1
0 .8
0 .6
0 .4
0 .2
PG&E
CASE Initiative Project
Copyrighted © 2000 PG&E All Rights Reserved
S o ca l G a s
SDG&E
Decem ber
Novem ber
October
Septem ber
Augus t
July
June
May
April
March
February
January
0
The Commodity Component:
Long Run Forecast
Long run
residential
natural gas
rate
forecast
R e s id e n t ia l C o r e N a t u r a l G a s F o r e c a s t
9 .0 0
8 .0 0
Re tail Cos t $2001/M M Btu
7 .0 0
6 .0 0
5 .0 0
4 .0 0
3 .0 0
2 .0 0
1 .0 0
PG & E
CASE Initiative Project
Copyrighted © 2000 PG&E All Rights Reserved
Socal Gas
S DG & E
19
20
17
20
15
20
13
20
11
20
09
20
07
20
05
20
03
20
01
20
19
99
0 .0 0
Environmental Adder:
Externality for Natural Gas
Natural Gas Externalities
• 0.058 ton-CO2/MMBtu
• 0.045 lb NOx/MMBtu.
Scenario
ER94
CEC Internal 1998 Estimate
Other States Min
Other States Max
E3 Recommendation
CASE Initiative Project
Copyrighted © 2000 PG&E All Rights Reserved
$/MMBtu
$
$
$
$
$
0.73
0.56
0.08
1.56
0.59
15 Year NPV
$8.94
$6.92
$0.95
$19.19
$7.25
30 Year NPV
$14.68
$11.36
$1.56
$31.51
$11.90
Rate Adder
Example for Commercial Fresno Customer
$8.00
CASE Initiative Project
Copyrighted © 2000 PG&E All Rights Reserved
$7.00
$6.00
$5.00
Marginal Cost
$4.00
Retail Rate
$3.00
$2.00
$1.00
2030
2027
2024
2021
2018
2015
2012
2009
2006
2003
$-
2000
Flat adder to
adjust
marginal cost
up to retail
rate levels.
No T&D
component in
marginal cost,
assumption is
flat allocation
across hours.
Forecast $2001 $/MMBtu
1992 Adder:
Comparison of Gas Forecasts
N a tu ra l G a s
C o m p a ris o n o f E x is tin g S ta n d a rd B a s is w ith C u rre n t F o re c a s t
$2001 D ollars per MMB tu
14
12
10
8
6
4
2
E xis ting
CASE Initiative Project
Copyrighted © 2000 PG&E All Rights Reserved
C urre nt F o re c a s t
19
20
17
20
15
20
13
20
11
20
09
20
07
20
05
20
03
20
01
20
99
19
97
19
95
19
93
19
91
19
19
89
0
Natural Gas TDV Summary
TDV Values by Service Area
TDV Lifecycle Cost
Components $/MMBtu
Zone
TDV Component
Class
Res
Com
Min
$56.02
$31.46
Avg
$60.03
Max
Rate Adder
PG&E
Socal Gas
Com
Res
Com
$53.26
$29.62
$53.01
$29.48
$33.41
$59.91
$32.91
$59.78
$32.90
$63.44
$35.63
$67.77
$37.69
$70.31
$39.11
Flat
$62.55
$40.79
$70.52
$25.22
$70.54
$37.03
1992 Standard Adder
Flat
$53.73
$5.04
$45.88
$21.12
$45.98
$9.31
Environmental Adder
Flat
$11.90
$7.25
$11.90
$7.25
$11.90
$7.25
Min
$184.19
$84.55
$181.56
$83.20
$181.43
$83.07
Avg
$188.20
$86.49
$188.20
$86.49
$188.20
$86.49
Max
$191.61
$88.71
$196.07
$91.27
$198.73
$92.69
Commodity Cost
Total TDV
CASE Initiative Project
Copyrighted © 2000 PG&E All Rights Reserved
Res
SDG&E
Details of the Propane
Estimation
CASE Initiative Project
Copyrighted © 2000 PG&E All Rights Reserved
The Commodity Component:
Long Run Trend for Propane
Propane Prices Follow Crude Oil
R e ta il/S p o t P rice s
13 5
R e ta il/S po t P ric e s
11 5
W TI C ru de
P ro pan e (M . Be lv ie u)
No . 2 (US G C )
S HO P P Propa ne
Cents per Gallon
PM M Prop ane
95
75
55
35
S o u rc e: D R I P la tt's S p o t P rice s
CASE Initiative Project
Copyrighted © 2000 PG&E All Rights Reserved
Jan-00
Jan-99
Jan-98
Jan-97
Jan-96
Jan-95
Jan-94
Jan-93
Jan-92
Jan-91
Jan-90
Jan-89
Jan-88
Jan-87
Jan-86
15
EIA
Crude Oil
Forecast
Used
Going
Forward
The Commodity Component:
Monthly Shape of Propane
Propane Seasonal Shape
(Based on Historical California Prices)
Seasonal Adjustment Factors
140%
120%
100%
80%
60%
40%
20%
0%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
CASE Initiative Project
Copyrighted © 2000 PG&E All Rights Reserved
Based on
EIA
Historical
California
Propane
Prices
Environmental Adder:
Propane Externalities
Propane Externalities
• 0.07 ton-CO2/MMBtu
• 0.045 lb NOx/MMBtu
Scenario Annual $/MMBtu
ER94
$
0.84
CEC Internal 1998 Estimate
$
0.67
Other States Min
$
0.09
Other States Max
$
1.85
E3 Recommendation
$
0.70
CASE Initiative Project
Copyrighted © 2000 PG&E All Rights Reserved
15 Year NPV
$10.27
$8.24
$1.10
$22.73
$8.58
30 Year NPV
$16.86
$13.54
$1.80
$37.32
$14.08
Rate Adder
CASE Initiative Project
Copyrighted © 2000 PG&E All Rights Reserved
$14.00
$12.00
$10.00
$8.00
Marginal Cost
Retail Price
$6.00
$4.00
$2.00
2030
2027
2024
2021
2018
2015
2012
2009
2006
$2003
Flat adder to
adjust
marginal cost
up to retail
rate levels.
No T&D
component in
marginal cost,
assumption is
flat allocation
across hours.
2000
Example for Commercial Customer
Forecast $2001 $/MMBtu
Propane TDV Summary
Statewide Propane Values
TDV Lifecycle Cost
Components $/MMBtu
Class
Res
Com
Min
$115.87
$50.93
Avg
$128.95
$53.97
Max
$137.89
$58.51
Rate Adder
Flat
$117.42
$82.96
Environment
Flat
$14.08
$8.58
Commodity
Total TDV
CASE Initiative Project
Copyrighted © 2000 PG&E All Rights Reserved
Min
$247.38 $142.47
Avg
$260.46 $145.51
Max
$269.39 $150.04