Projects & case studies

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Ratepayer benefit analysis | Delaney to Colorado River transmission line, 2012–14

E3 helped Berkshire Hathaway Transmission and Pinnacle West win approval from the board of the California ISO (CAISO) for a new 500 kV transmission project linking Arizona and Southern California. The Delaney to Colorado River (DCR) transmission line was the first economically driven transmission project approved by CAISO: Using CAISO’s Transmission Economic Assessment Methodology, E3 projected ratepayer benefits of $20 million to $30 million per year. E3 worked with CAISO staff to implement the correct network topology and provided information to help ensure that the CAISO’s GridView case included planned infrastructure additions needed for compliance with California’s clean energy policy. E3 also developed an approach for estimating capital cost savings based on the deferral of generation investments allowed by the DCR line; CAISO has adopted this approach in evaluating all future transmission projects.

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Resource assessment, economic benefit analysis, and expert testimony | Sunrise Powerlink, 2007–10

E3 Managing Partner Ren Orans provided expert testimony on behalf of the California ISO in San Diego Gas & Electric Company’s successful application to build the Sunrise Powerlink, a 500 kV transmission line that delivers renewable energy from the Salton Sea and Imperial Valley areas to San Diego. Our analyses demonstrated both the need for the proposed line and a net economic benefit. We performed a resource assessment and created a supply curve, including transmission costs, for each major renewable energy basin in the Western Electric Coordinating Council region. We quantified benefits in generation cost savings from reduced economic congestion across the region, reliability improvement and capacity market savings from increased firm-transfer capability into the San Diego area, and renewable procurement savings from improved access to low-cost renewable resources. Energized in June 2012, Sunrise helped prevent blackouts that summer by allowing replacement power to flow from Arizona when wildfires in the San Diego area shut down local infrastructure.

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Non-wires alternatives in transmission planning | Bonneville Power Administration, 2001–present

In 2001, E3 helped Bonneville Power Administration (BPA) develop a groundbreaking transmission planning process in which we considered non-wires alternatives—energy efficiency, demand response, and distributed generation—alongside conventional investments. BPA was one of the first major transmission providers in North America to use an economic screening for every potential bulk transmission investment. Since then, we have studied non-wires alternatives for other BPA project proposals, including the Hooper Springs line in southeastern Idaho and the 500 kV I-5 corridor reinforcement project in Washington. For the latter, E3 evaluated deferral options, including energy efficiency and demand response, as well as redispatch of generators. BPA is evaluating proposals for implementation of the redispatch option, with potential savings of up to $750 million for its customers.

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Transmission planning support, strategy, and financial analysis | TransCanyon, 2014–present

Since 2014, E3 has supported TransCanyon, a joint venture between Berkshire Hathaway and Pinnacle West, in developing high-voltage transmission in the Western Interconnection. We provide strategic advice and analysis for investment opportunities, help curate and prioritize TransCanyon’s project portfolio, and articulate how electricity sector policies will impact its transmission development business throughout the western U.S. E3 draws on the knowledge base within all our practice areas and our most recent pricing forecasts to provide insights on TransCanyon’s investment outlook.

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Evaluating benefits of regional market participation | Multiple utilities, 2014–present

E3 has completed studies for more than 10 utilities on the costs and benefits of participating in the western energy imbalance market (EIM), a regional 5-minute balancing market that became operational in 2014. The EIM aims to lower costs for consumers and assist states in meeting renewable energy goals through more-efficient dispatch, which reduces the need to carry costly reserves and curtail renewable generation. For each study, we ran a production simulation grounded in a detailed representation of the utility’s system. Our work has informed decisions by PacifiCorp, Arizona Public Service, NV Energy, and other utilities to join the EIM, as well as Chelan County Public Utility District’s decision not to participate. Consistent with E3 findings, the California ISO estimated that participants saved more than $85 million in the 20 months after the EIM became operational. Several more studies for utilities are under way.

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Modeling benefits of the Western EIM | WECC, 2011

The Western Electric Coordinating Council (WECC) engaged E3 to model the benefits of implementing an energy imbalance market (EIM) across the Western Interconnection. Working with WECC staff and many stakeholders, we modeled and compared simulated production costs for a scenario that maintained existing operational arrangements and a second scenario with a consolidated regional balancing market. The analysis found benefits from improved system dispatch, as well as from reductions in operating reserves needed to accommodate wind and solar variability. E3 devised an innovative technique to more accurately estimate the potential impact of the EIM, and pioneered applying “hurdle rates” to calibrate the GridView production simulation base case so that it more accurately reflected bidding and dispatch practices in the West. Since presenting our findings to WECC in 2011, we have developed similar EIM cost-benefit studies for 10 additional utilities.

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Valuation case for potential natural gas power plant acquisition | Large equity holder, 2013

E3 provided independent, comprehensive valuation and due diligence services to a client considering the acquisition of a natural gas power plant in the Pacific Northwest. We examined transmission options and associated costs, energy market revenue projections under various regulatory and environmental scenarios, capacity values, ancillary services revenues, and potential off-takers. Based on our low-valuation case, the buyer made the prudent decision not to acquire this plant.

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Litigation: pipeline toll restructuring proposal | Canadian Association of Petroleum Producers, 2013–14

The Canadian Association of Petroleum Producers (CAPP) retained E3 to develop regulatory strategy and testify before the Canadian National Energy Board (NEB) in proceedings opposing TransCanada’s proposal to restructure tolls on the Mainline, which transports natural gas from western Canada to eastern markets.  TransCanada had proposed restructuring tolls to maintain the line’s economic viability, as throughput declined due to soaring shale gas production in the northeastern U.S. The proposed change shifted fixed costs away from shippers, who were direct customers of the Mainline, toward producers, who were supplying gas to TransCanada’s own distribution network. Our alternative on behalf of CAPP offered a performance-based incentive with some pricing flexibility and balancing accounts that allowed TransCanada a reasonable opportunity to increase throughput and revenues and recover its investment. The NEB ultimately rejected TransCanada’s proposal in favor of CAPP’s, averting a shift of $300 million per year in fixed costs to western Canadian gas producers.

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