Northern Indiana Public Service Company - IN.gov · • The major loss of load is concentrated in...

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Preparation for Summer 2009Presentation to the Indiana Utility Regulatory Commission

May 13, 2009Eileen O’Neill Odum - Executive Vice President and Group CEO

Northern Indiana Public Service Company

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Supporting Staff

• Tim Dehring Senior VP Energy Delivery• Jerry Weeden Senior VP Generation• Ron Ragains VP Generation Dispatch &

Transmission• Curt Crum Director Generation Dispatch &

Energy Management

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Overview of Presentation

• 2008 Plan vs. 2008 Experience– Supply/Demand– Steam System Reliability– Notable Events

• Summer 2009 Preparation– Demand Forecast

• Supply/Demand Balance• Effect of economic downturn on demand

– Capacity & Wind Purchases– Generation– Transmission– Distribution

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2008 Plan vs. 2008 Experience

• Supply/Demand• Steam System Reliability• Notable Events

2008 Plan vs. 2008 Experience2008 Plan vs. 2008 Experience

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2008 Actual Supply/Demand Balance Actual Weather July 17, 2008 87.4°F HE1500 CST

2008 Experience2008 Experience2008 Plan vs. 2008 Experience2008 Plan vs. 2008 Experience

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

Projected Peak minusInterruptible plus 14.3%

Planning Reserve Margin

Actual Peak Existing Generation plusCapacity Purchases

Available Generation plusCapacity Purchases

Meg

awat

ts

Demand

3,575 3,587

Supply

3,4253,080

800

2,787

800

2,625

347

3,228

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2008 Plan vs. Actual-Steam System Reliability

2008 Experience2008 Experience2008 Plan vs. 2008 Experience2008 Plan vs. 2008 Experience

0

2

4

6

8

10

12

14

16

2003 2004 2005 2006 2007 2008

EFO

R %

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

Expe

nditu

res

for P

lann

ed O

utag

es -

$ M

illio

ns

EFOR SUMMER MONTHS EFOR EXPENDITURES FOR PLANNED OUTAGES

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Notable Events

• Unit 16A (Combustion Turbine Peaking Unit)– Last June 3, during the summer presentation, NIPSCO advised the Commission

that Unit 16A would be available by June 15, 2008– On June 11, 2008, during the final reassembly of the generator, it was

determined that the generator frame, the bearing brackets, and hydrogen seal gland brackets were distorted

– After repairs, Unit 16A was released to dispatch on July 17, 2008• Two Major Storms

– Early August• A thunderstorm with high winds caused significant structural damage to the electric

system, interrupting approximately one-third of our customers• NIPSCO utilized mutual aid in the six day restoration effort to more than double our

internal line resources– Late December

• An ice storm, along with continuous high winds, caused repetitive interruptions to many customers

• Mutual aid was also used in this five day restoration effort

2008 Plan vs. 2008 Experience2008 Plan vs. 2008 Experience

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Key Elements for Summer 2009 Preparation

• Demand Forecast– Supply/Demand Balance– Effect of economic downturn on demand

• Capacity & Wind Purchases• Generation• Transmission• Distribution

Summer 2009 PreparationSummer 2009 Preparation

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Summer 2009-Supply/Demand Balance


208.1 150.7150.0

3,024.02,815.9 2,994.1

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Projected Peak -July

Interruptibles Projected Peakwithout ServingInterruptibles

Reserves for5.35% PlanningReserve Margin

UCAP Generationincluding WindPPA Capacity

CapacityPurchases June2009 - May 2010

Meg

awat

ts

Demand Supply

2,966.63,144.1

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Peak Demand (MWs)


3,166

3,238 3,239

3,0243,119

3,155

3,208

3,139

3,024

3,080

2,700

2,800

2,900

3,000

3,100

3,200

3,300

2005 2006 2007 2008 2009 Forecast

Meg

awat

ts

Peak DemandPeak Demand - Weather Normalized

MW 3,166 3,119 3,238 3,155 3,239 3,208 3,080 3,139 3,024 3,024

Percent increase/decrease 8.4% 5.7% 2.3% 1.2% 0.0% 1.7% -4.9% -2.2% -1.7% -3.5%

MW increase/(decrease) 244 168 72 36 1 53 (159) (69) (52) (111)

2009 Forecast2005 2006 2007 2008

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Demand Forecast

• The major loss of load is concentrated in the steel manufacturing sector, and those companies that support steel manufacturing

• This loss is directly a result of decreased activity in the economy at large. Forward looking indicators (Chicago Purchasing Managers Index (PMI), Steel Scrap prices) indicate that this segment may have bottomed out


Segment First Qtr 2008 (kWh)

First Qtr 2009 (kWh) Difference Variance

Steel 1,162,944,202 888,860,779 (274,083,423) -23.57%Steel Related 488,282,952 388,403,312 (99,879,640) -20.46%Petroleum Refining 133,120,000 123,760,000 (9,360,000) -7.03%Foods 38,460,326 34,854,463 (3,605,863) -9.38%Metals 30,184,888 27,612,032 (2,572,856) -8.52%Consumer Products 13,176,000 12,636,000 (540,000) -4.10%Chemicals 7,308,756 7,430,976 122,220 1.67%Printing & Publishing 20,256,000 20,505,600 249,600 1.23%

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Demand Forecast


Internal Load

1,900

2,100

2,300

2,500

2,700

2,900

3,100

3,300

3,500

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

MW

200720082009

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Demand Forecast


Industrial Load

700

750

800

850

900

950

1,000

1,050

1,100

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

MW

200720082009

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Capacity & Wind Purchases

• On July 30, 2008, NIPSCO purchased 150 MWs of capacity from one supplier for June 1, 2009 through May 31, 2010 – This capacity purchase points to specific generation units to meet

the Midwest ISO requirements

• NIPSCO started receiving energy from Barton Wind and Buffalo Ridge on April 10 and April 15, 2009, respectively • NIPSCO is receiving 50MW from Barton and 50.4MW from Buffalo

Ridge• Includes receipt of renewable energy credits (“RECS”) under the

two purchased power contracts


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Summer 2009 Generation Preparation

• Sugar Creek was successfully dispatched into Midwest ISO effective December 1, 2008– Gaining operating experience and improving coordination of market

offers with purchase of gas– Optimizing ramp rates in offers to clear more in ASM– Combined Cycle operation has advantages

• Utilized by the Midwest ISO under its RAC process• Provides more regulation than steam units

• All units except Unit 10 are scheduled to be available from June 1, 2009 through the end of September– Unit 10 is projected to be available at the end of June 2009– NIPSCO performed over 34 weeks of planned maintenance outages

since last summer


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Summer 2009 Generation Preparation

• Continue Summer Preparation plans to minimize EFOR– Review of procedures and plans and performing preventative

maintenance– Identify EFOR Risks

• An excessive amount of debris from Lake Michigan has caused derates to Bailly Unit 8

– This unit has been derated for over 19,000 MWh and has been off line for over 300 hours this calendar year through April 30, 2009

– NIPSCO is working with the United States Corps of Engineers on a permanent solution to this issue

• Continue to invest to reduce SO2 and NOx


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2009 Plan-Steam System Reliability

0

2

4

6

8

10

12

14

16

2003 2004 2005 2006 2007 2008 2009 Plan

EFO

R %

$0

$20

$40

$60

$80

$100

$120

Expe

nditu

res

for P

lann

ed O

utag

es -

$ M

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ns

EFOR Summer Months EFOR Expenditures for Planned Outages


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Summer 2009 Transmission Preparation• Reliability - $15,200,000 invested

– Over 100 138kV potential transformers replaced, including about 25 in late 2008 and 80 in the first half of 2009

– Ten 138kV metering current transformers at various industrial substations scheduled to be replaced due to their condition by June 1, 2009

– New six mile 138kV transmission circuit constructed between Tower Road Substation and Flint Lake Substation to increase reliability of Porter County area electric system

– Three 345kV circuit breakers, one 138kV breaker, and two 34kV breakers replaced at various substations

– Three relay upgrades on 345kV circuits completed– Cyber security and physical security investments at key facilities and substations

• Capacity - $5,700,000 invested– Installation of second 345/138kV transformer at Hiple Substation, and purchase

of an identical spare 345/138kV transformer• Summer Preparation continues, involving inspection, maintenance and

planning


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Summer 2009 Distribution Preparation

• Will complete an infrared inspection of distribution substations by June 1,2009

• Completed annual review of storm response protocols• Settled labor agreement ahead of May 31, 2009 expiration

– Included provisions for better response to storm events• Additional improvements in storm response capabilities

– Enhanced website information for our customers related to outage status

– Consolidation of distribution and transmission field dispatch operations

– Ongoing early replacements for retiring linemen• Tree related outages continue to decline as spending was increased

in the 2005 to 2008 timeframe


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Updated Tree Trimming Policy

• Customer Contact– Website (www.nipsco.com/trees)

• Protecting your power• Right tree, right place, right way

– Improved communication, planning before work begins• Every property owner will be contacted during the work planning phase

either by direct communication or door hanger notice – Regular contact with community organizations, local government, media– Training on quality work techniques and customer service

• Work Specifications– Shorter tree trimming cycles– More selective tree removals

• Oversight– Arborist Work Planners– Quality control audits and inspections by internal forestry staff


http://www.nipsco.com/trees

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Conclusion

• NIPSCO has adequate resources and infrastructure to meet our customers’ needs during summer 2009

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