HomeMy WebLinkAboutStaff Report 2401-2564 PresentationUtilities Advisory Commission: May 1, 2024 www.cityofpaloalto.org
Presentation of Recommendation to
Retain the Current Resource Allocation
under the 2025 WAPA Hydroelectric
Contract
Lena Perkins, PhD, Utilities Dept., Senior Resource Planner
Tim Hall, Karl Knapp Stanford Energy Graduate Summer Fellow
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Federal organizational structure involved in WAPA contract
2
•Palo Alto has 12% share of the CVP Base Resource power
•20 dams, 10 power plants, 3 pumping stations & transmission
•Palo Alto’s share is about 350 GWh/yr (40% of electricity supply)
•1 of 4 Federal Power Marketing Admin. under Dept. of Energy
•Sell & transmit power of 57 federal hydro (USBR, etc…)
•WAPA has 10.5 GW of capacity
•Owns and runs dams & turbines of Central Valley Project
•Federal Division under Dept. of Interior
•Manages 53 power plants (40 TWh, 1% of US power)
U.S. Bureau of
Reclamation
(USBR)
Western Area
Power
Administration
(WAPA)
Central Valley
Project
(CVP)
•Palo Alto’s Contract for CVP Power is with SNR of WAPA
•1 of 5 Regions of WAPA, 2.25GW/5.20 TWh/yr
•Primarily the Central Valley Project
Sierra Nevada
Region
(SNR of WAPA)
-Central Valley Project (CVP) mostly built in 1930s & 1940s
-Federal water storage and conveyance project: 20 reservoirs, 10
generating power plants, 3 pump stations, 643 miles of canals
-Generates up to 2,000 MW, delivers ~7MAF/yr of water 500 miles south
(primarily to agriculture)
-Palo Alto has been purchasing power from CVP since 1960s
-Base Resource electricity is ~ 65% of the total generation of the CVP
power (extra power not needed for pumps)
-City currently purchases ~ 12% of the Base Resource hydroelectricity,
(~ 40% of City’s electricity supply)
-Current Base Resource contract (2005-2024) has option to extend 98%
of current share through 2054
-City has option to exit or reduce 2025-2054 share until June 30, 2024
-If extended, City will also have option to exit or reduce contract in 2030
CVP Background & CPAU History
3
WAPA and City have worked hard to increase value & flexibility
4
-City staff has worked with WAPA and USBR
since 2008 to increase flexibility
-Increased revenue from better flexibility has
lowered our costs
-WAPA has also worked with staff to contain
costs and is returning money to power
customers 2019-2030
-Staff is in active collaborations with WAPA and
USBR to:
-Improve the forecasts
-Add flexibility, potentially via pumped
storage, curtailing pumps, and batteries
-Optimize real-time emissions of
operations
Recommend keeping 100% of 2025 WAPA Contract Extension through 2030
Positive net value driven by:
-Increased flexibility from hardware & software
improvements
-High market electricity prices in evening hours
-Above average generation likely 2025 & 2026
Decreasing value over time driven by:
-decreasing power market prices
-Increasing chance of dry years from present
-Increasing cost projections
Uncertainty driven by:
-Electricity market price uncertainty & volatility
-Variability of precipitation
-Regulatory risks of lower generation & higher costs
5
Recommendation
•Staff recommends that the UAC recommend the City Council extend full share of
2025 WAPA Base Resource hydroelectric contract
Questions?
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