Title
Discussion on San Juan Replacement Energy Plan for the Current ECA Term (led by Jordan Garcia, Power System Supervisor)
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As Los Alamos County’s impending exit from the San Juan Generating Station (SJGS) approaches, Power Operations has investigating ways to meet the Power Pool’s load obligations for the current ECA contract term. One of the Power Operations team’s many roles is to secure generation on both short and long-term bases as needed. Short-term energy procurement is a vital piece of our business model as we have a negative reserve margin and are net buyers on the open market. The exit from SJGS will create a large energy shortfall for the Power Pool.
Most generating stations on the grid have their own pricing, and trade individually. Los Alamos has historically subscribed to Mid-Columbia (Mid-C), Palo Verde, and Four Corners. Mid-C is a major trading point in the Pacific Northwest, Palo Verde is a major trading point in the Southwest and Four Corners is one of the most active hubs that the Power Pool has access too. All these market hubs are very volatile depending on the conditions of the market itself. The past year has hosted some of the most intense market fluctuations Operations has witnessed in decades. For illustrative purposes, think about the energy market as three separate markets: long-term, short-term, and real-time. The long-term market sells large amounts of energy for periods greater than one year and incorporates risk and volatility with a market adder. Long-term purchasing really favors standard blocks of energy roughly 25MW increments. The market will offer shaping of energy (non-standard blocks) for additional costs and risks premium. Short-term energy is a one year or less offering (either annually, quarterly, monthly or day ahead). This pricing is more market-based with less risk priced in and less of an adder because conditions are somewhat more predictable. Lastly, the real-time market is now ruled by an optimization...
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