HomeMy WebLinkAboutStaff Report 4254
City of Palo Alto (ID # 4254)
City Council Staff Report
Report Type: Informational Report Meeting Date: 12/9/2013
City of Palo Alto Page 1
Summary Title: Review of Renewable and Carbon Neutral Energy Supplies
Title: Annual Review of the City's Renewable Procurement Plan, Renewable
Portfolio Standard Compliance and Carbon Neutral Energy Supplies
From: City Manager
Lead Department: Utilities
This is an informational item and no action is required.
Executive Summary
The City Council established a goal to provide at least 33% of the City’s electricity needs from
renewable energy resources by 2015. The City’s goal exceeds California’s Renewable Portfolio
Standard (RPS) mandate of 33% by 2020. The City has also adopted a Carbon Neutral Plan to
provide 100% of the City’s energy supply from carbon free sources starting in 2013. In
December 2011 the Council also formally adopted an RPS Procurement Plan and Enforcement
Program that recognizes certain elements of the state’s RPS law applicable to publicly owned
utilities. The RPS Enforcement Program requires the Utilities Director to conduct an annual
review of the Electric Utility’s compliance with the procurement targets set forth in the City’s
RPS Procurement Plan.
This staff report meets the reporting requirements of the City’s RPS Enforcement Program, and
also includes an update on the City’s internal renewable energy goals set forth in its Long-term
Electric Acquisition Plan (LEAP). The City is currently on track to meet its objectives under all of
the relevant Council-adopted plans (RPS Procurement Plan, LEAP, and Carbon Neutral Plan).
Background
The City currently has three procurement targets related to renewable and carbon neutral
energy contained in three different plans:
LEAP Renewable Energy Goal (33% by 2015): The first renewable energy goal is the
City’s renewable energy goal contained in LEAP: renewable energy supplies equal to at
City of Palo Alto Page 2
least 33% of retail sales starting in 2015, with no more than a 0.5 cents per kilowatt-
hour (¢/kWh) impact on rates. The LEAP goal was adopted in March 2011 (Resolution
9152, Staff Report 1317), and updated in April 2012 (Resolution 9241, Staff Report 2710)
to clarify that the 33% goal is a minimum and renewable energy supplies beyond the
33% level should be pursued as long as the 0.5 ¢/kWh rate impact limit is maintained.
RPS Procurement Plan (33% by 2020): The second goal is contained in the RPS
Procurement Plan that the City was required to adopt under Section 399.30 of
California’s Public Utilities Code. This was adopted in December 2011 and updated in
November 2013 and was accompanied by an RPS Enforcement Program (Resolutions
9214 and 9215, Staff Report 2225). The RPS Enforcement Program and Procurement
Plan complement each other: the Procurement Plan sets forth procurement targets,
while the Enforcement Program specifies the reporting and monitoring measures the
Utilities Director is required to take while working to achieve those targets. The
procurement targets in the City’s RPS Procurement Plan require that the City achieve
renewable supplies equal to 33% of retail sales by 2020, which is less ambitious than the
City’s LEAP goals. The RPS Procurement Plan contains interim targets for 2011-2013,
2014-2016, and 2017-2020, which are not part of the City’s LEAP goal.
Carbon Neutral Plan (100% Carbon Free Electricity by 2013): The Carbon Neutral Plan
was adopted in March 2013 (Resolution 9322, Staff Report 3550), and requires that the
City procure a carbon neutral electricity supply starting in 2013. In the long term, this
goal is expected to be achieved primarily through the purchase of long-term renewable
and hydroelectric resources. Until the long-term renewable resources are in place (and
in dry hydro years when hydro resources are lower than expected), the carbon neutral
goal may be achieved using Renewable Energy Certificates (RECs).
Discussion
LEAP Renewable Energy Goals
The City has set a goal of achieving a renewable supply equal to at least 33% of retail sales by
2015 with a maximum rate impact of 0.5 ¢/kWh. Staff is projecting that the portfolio will meet
the 33% objective in CY 2015 (perhaps in part through the purchase of RECs), and in CY 2017
renewable supplies will be 49% of retail sales (47% of total supply). Table 1 shows the
renewable resources currently under contract, the status of the projects, and the rate impact of
each resource as it was added to the electric supply portfolio.
City of Palo Alto Page 3
Table 1: Summary of Contracted Renewable Energy Resources
Delivery
Begins
Annual Generation
(GWh)
Rate Impact
(¢/kWh)
Small Hydro Before 2000 10.0 0
High Winds Dec. 2004 48.9 0.013
Shiloh Wind Jun. 2006 71.4 (0.048)
Santa Cruz LFG Feb. 2006 9.9 0.003
Ox Mountain LFG Apr. 2009 43.9 (0.039)
Keller Canyon LFG Aug. 2009 14.9 (0.020)
Johnson Canyon LFG Mar. 2013 10.4 0.060
Total Operating Resources 209.3 (0.030)
San Joaquin LFG Jan. 2014 30.3 0.132
Brannon Solar Aug. 2014 50.7 0.088
Elevation Solar C Dec. 2016 80.0 0.003
Western Antelope Blue Sky Ranch B Dec. 2016 50.0 (0.002)
Frontier Solar Dec. 2016 52.5 0.010
Palo Alto CLEAN program Unknown 3.3 0.027
Total Non-Operating Resources 266.9 0.258
Total Resources 476.2 0.228
The output from the projects listed in Table 1 is equal to 49% of retail sales and, when all are
operating, will result in a rate impact of 0.23 ¢/kWh. Staff recently released a Request for
Proposals (RFP) for additional renewable supplies and is currently evaluating responses.
RPS Procurement Plan Compliance
The City’s RPS Enforcement Program requires that the Director of Utilities conduct an annual
review of the Electric Utility’s compliance with the procurement targets set forth in the RPS
Procurement Plan. For 2013, the Utilities Director is required to report on the Electric Utility’s
projected compliance with the procurement target for Compliance Period 1, January 1, 2011
through December 31, 2013. Renewable procurement for that period is required by the
Procurement Plan to be equal to at least 20% of retail sales, as described by the following
equation.
City of Palo Alto Page 4
Compliance Period 1 Target ≥ 20% × (Retail Sales2011 + Retail Sales2012 + Retail Sales2013)
As shown in Table 2, below, the Electric Utility is projected to comply with that target.
Projected procurement is forecasted to be 21.2% of retail sales for Compliance Period 1.
Table 2: Compliance Period 1 Procurement Target
Data
Status
Retail Sales
(MWh)
Procurement
Target (MWh)
Actual/Projected
Procurement (MWh)
% of Retail
Sales
2011 Actual 949,517 189,903* 207,974 21.9%
2012 Actual 935,021 187,004* 200,621 21.5%
2013 Projected 955,968 191,194* 194,662 20.4%
TOTAL Projected 2,840,506 568,101 603,257 21.2%
* Annual procurement targets are “soft” targets. The Procurement Plan requires that the target
be met for the compliance period as a whole, not in each year of the compliance period.
All renewable energy procured in Compliance Period 1 is from resources with contracts
executed before June 1, 2010. In the Procurement Plan these contracts are considered
“grandfathered,” and since all of the renewable energy procurement for Compliance Period 1
was from these types of contracts, there was no need to meet the Portfolio Balancing
Requirements included in Section B.4 of the RPS Procurement Plan. The Portfolio Balancing
Requirements dictates what percentage of the renewable procurement must come from
resources interconnected to a California Balancing Area (as opposed to an out-of-state
transmission grid balancing area). These requirements only apply to newer resources, those
with contract execution dates on or after June 1, 2010.
The procurement target for Compliance Period 2 is 20% of CY 2014 and 2015 retail sales plus
25% of 2016 retail sales. Staff projects that CPAU will meet this goal with existing renewable
energy supplies combined with the output from the San Joaquin landfill gas project that is
expected to commence operation in January 2014. The other contracts shown in Table 1 are
expected to fulfill the City’s Compliance Period 3 requirements, which have procurement
targets of 27% of retail sales for 2017, rising 2% each year until reaching 33% of retail sales in
2020.
As required by State regulations and Section D of the Procurement Plan, staff reported all of the
above information to the California Energy Commission in October 2013 (Attachment A).
City of Palo Alto Page 5
Carbon Neutral Plan
With respect to the Carbon Neutral Plan, staff currently projects that roughly 58% of the supply
portfolio for CY 2013 will come from carbon free generating sources, with the remainder being
procured from unspecified sources. The carbon-free content of the portfolio is substantially
lower than average due to a dry hydro year. Wind resource deliveries were also lower than
expected. After 2013 is complete and staff can establish the actual carbon content of the 2013
supply portfolio, staff will procure RECs to offset the remainder of the portfolio’s emissions, in
accordance with the City’s adopted emissions calculation protocol.
Assuming the projects listed in Table 1 come online and additional resources are procured for
the City’s LEAP renewable goals, by 2017 almost the entire supply portfolio is expected to come
from carbon free sources under long-term contracts.
Policy Implications
This report implements Sections 4 and 5 of the City’s RPS Enforcement Program, which require
a status report on the Electric Utility’s compliance with the CPAU RPS Procurement Plan prior to
December 31, 2013.
Environmental Review
This report does not meet the definition of a “project” pursuant to Public Resources Code
Section 21065, thus California Environmental Quality Act review is not required.
Attachments:
Attachment A: City of Palo Alto Report to CEC on RPS Compliance for Calendar Years
2011 and 2012 (PDF)
STATE OF CALIFORNIA
Compliance Report Form for Local Publicly Owned Electric Utilities
CEC-RPS-POU (Revised 10/2013)CALIFORNIA ENERGY COMMISSION
Energy Commission staff may request additional information from the POU to verify the
generation and RPS procurement claims of electricity products reported in this report. If
requested, an authorized officer or agent of the POU must submit additional information.
Sacramento, CA 95814-5555
This report is due on July 1st of each year for retirements made for the previous reporting year.
The report for 2011 and 2012 data is due within 30 calendar days of the effective date of the
regulations for Enforcement Procedures for the Renewables Portfolio Standard for Local
Publicly Owned Electric Utilities .
Renewable Energy Office
California Energy Commission
e-mail: RPSTrack@energy.ca.gov
Attn: RPS Verification
California Energy Commission
1516 9th Street, MS-45
(TO BE COMPLETED BY
LOCAL PUBLICLY OWNED ELECTRIC UTILITIES)
COMPLIANCE REPORT to the CALIFORNIA ENERGY COMMISSION
ON THE RENEWABLES PORTFOLIO STANDARD PROGRAM
POU
Reporting for the Renewables Portfolio Standard Program (RPS), by tab:
Reporting Year(s) Covered in
Report 2011, 2012
Compliance Period Accounting: Complete at the end of each compliance period.
Palo Alto, City of
Annual Report Accounting: Complete and update annually for previous and forecasted years.
Static Contract Information: For reports submitted in 2013, complete with information from contracts
and ownership agreements executed on or before December 31, 2012. For reports submitted in 2014
and thereafter, complete with information from contracts and ownership agreements executed in the
previous calendar year.
Enter the name of the Local Publicly Owned Electric Utility (POU) submitting this report and the
Reporting Year(s) covered by the report. POUs that meet the criteria in subsections 3204 (a)(8) or
3204 (a)(9) of the Enforcement Procedures for the Renewables Portfolio Standard for Local
Publicly Owned Electric Utilities should not complete this form.
E-mail the electronic file of the completed report to the address shown below. Then print out the
file, sign the attestation, and mail the report and any attachments to the address shown below:
CEC-RPS-POU April 2013
STATE OF CALIFORNIA
Compliance Report Form for Local Publicly Owned Electric Utilities
CEC-RPS-POU (Revised 10/2013)
CALIFORNIA ENERGY COMMISSION
0 1 2 - Ren 2 - Inc 3
CPA-2011-1 2011 No Yes No No No NoJohnson Canyon, LLC 10/19/2009
CPA-2011-2 2011 No Yes No No No Noco Keller Canyon LLC 8/8/2005
CPA-2011-3 2011 No Yes No No No Noco Half Moon Bay LLC 1/19/2005
CPA-2011-4 2011 No Yes No No No Nosco San Joaquin, LLC 5/3/2010
CPA-2011-5 2011 No Yes No No No Noanta Cruz Energy LLC 11/9/2004
CPA-2011-6 2011 No Yes No No No Norola Renewables, LLC 11/9/2004
CPA-2011-7 2011 No Yes No No No Nooh I Wind Project, LLC 10/11/2005
CPA-2011-8 2011 No Yes No No No No County Water District 9/1/1982
CPA-2011-9 2011 No Yes No No No Noited States of America 10/26/2000
CPA-2012-10 2012 No No Yes No No No Brannon Solar, LLC 11/5/2012
CPA-2011-11 2011 No Yes No No No Nolifornia Power Agency 11/26/2008
Contract ID1 Reporting
Year2
Amendment to
Previously
Reported
Contract?3
Contract ID
of Previously
Reported
Contract4
Portfolio Content Category5 Seller or Utility
Owned6
Contract
Execution
Date7
CEC-RPS-POU April 2013
STATE OF CALIFORNIA
Compliance Report Form for Local Publicly Owned Electric Utilities
CEC-RPS-POU (Revised 10/2013)
CALIFORNIA ENERGY COMMISSION
CPA-2011-1
CPA-2011-2
CPA-2011-3
CPA-2011-4
CPA-2011-5
CPA-2011-6
CPA-2011-7
CPA-2011-8
CPA-2011-9
CPA-2012-10
CPA-2011-11
Contract ID1
N/A 5/12/2013 5/11/2033 Full output during contract 100.00%
N/A 8/1/2009 7/31/2029 Percent share of output during contract 50.00%
N/A 4/1/2009 3/31/2029 Percent share of output during contract 50.00%
N/A Full output during contract 100.00%
Yes 2/2/2006 2/1/2026 Percent share of output during contract 50.00%
Yes 12/1/2004 6/30/2028 Percent share of output during contract 12.35%
N/A 6/1/2006 5/31/2021 Percent share of output during contract 16.66%
No 9/1/1982 Percent share of output during contract 22.92%
No 1/1/2005 12/31/2004 Percent share of output during contract 11.62%
N/A Full output during contract 100.00%
N/A 11/26/2008 Percent share of output during contract
Contract
Percentage of
Annual Total
Generation
Procured12
Contract
Termination
Date13
Contract
Amount of
Annual Total
Generation
Procured
(MWh)12
For pre-January 1,
2005, Does the
Contract Specify
the Ownership of
the RECs?8
Contract
Start Date9
Contract
End Date10
Type of Ownership or Contract
Arrangement11
CEC-RPS-POU April 2013
STATE OF CALIFORNIA
Compliance Report Form for Local Publicly Owned Electric Utilities
CEC-RPS-POU (Revised 10/2013)
CALIFORNIA ENERGY COMMISSION
CPA-2011-1
CPA-2011-2
CPA-2011-3
CPA-2011-4
CPA-2011-5
CPA-2011-6
CPA-2011-7
CPA-2011-8
CPA-2011-9
CPA-2012-10
CPA-2011-11
Contract ID1
Yesn California Power Agency No NA N/A
Yesn California Power Agency No NA N/A
Yesn California Power Agency No NA N/A
Yesn California Power Agency No NA N/A
Yesn California Power Agency No NA N/A
Yesn California Power Agency No NA N/A
Yesn California Power Agency No NA N/A
Yesn California Power Agency No NA N/A termination of FERC license
Yesn California Power Agency No NA N/A
Yes Noconnected to CBA N/Act not yet under construction.
Yes No NA N/A Evergreen
Notes19
Bundled
purchase by
POU?14
Scheduling
Coordinator15
Resale
Agreement?16
PCC 1 Initial
Qualification17
Incremental
to POU?18
CEC-RPS-POU April 2013
STATE OF CALIFORNIA
Compliance Report Form for Local Publicly Owned Electric Utilities
CEC-RPS-POU (Revised 10/2013)
CALIFORNIA ENERGY COMMISSION
Contract ID1 RPS ID2 Facility Name3 WREGIS
ID4 County5 State6
Facility
Eligibility
Date7
Facility
Online
Date8
Renewable
Technology
On-line Date9
CPA-2011-1 61353A Ameresco Johnson Canyon W3397 Monterey CA 12/17/2010 5/12/2013
CPA-2011-2 61298A Ameresco Keller Canyon W2071
Contra
Costa CA 1/22/2010 6/1/2009
CPA-2011-3 60022A Ameresco Ox Mountain W2033 San Mateo CA 8/16/2004 4/1/2009
CPA-2011-4 Ameresco San Joaquin Calaveras CA
CPA-2011-5 61297A Ameresco Santa Cruz Energy W2014 Santa Cruz CA 11/22/2010 2/2/2006
CPA-2011-6 60726A High Winds Energy Center W229 Solano CA 10/3/2008 8/25/2003
CPA-2011-7 60488A Shiloh I Wind Project W231 Solano CA 11/16/2005 3/31/2006
CPA-2011-8 61580A New Spicer Meadows Hydroelectric Project W1260 Tuolomne CA 6/23/2011 11/30/1989
CPA-2011-9 61044A Western Small Hydro - Lewiston W1108 Trinity CA 2/8/2010 1/1/1964
CPA-2011-9 61045A Western Small Hydro - Nimbus W1161 Sacramento CA 2/8/2010 1/1/1955
CPA-2011-9 61046A Western Small Hydro - Stampede W1177 Sierra CA 2/8/2010 1/1/1987
CPA-2012-10 Brannon Solar Fresno CA
CPA-2011-11 Hydro Solar W1266 Calaveras CA 11/26/2008 11/26/2008
CEC-RPS-POU April 2013
STATE OF CALIFORNIA
Compliance Report Form for Local Publicly Owned Electric Utilities
CEC-RPS-POU (Revised 10/2013)
CALIFORNIA ENERGY COMMISSION
Contract ID1
CPA-2011-1
CPA-2011-2
CPA-2011-3
CPA-2011-4
CPA-2011-5
CPA-2011-6
CPA-2011-7
CPA-2011-8
CPA-2011-9
CPA-2011-9
CPA-2011-9
CPA-2012-10
CPA-2011-11
Facility Source Name - as
registered with
webRegistry10
Notes11
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A Facility not built yet, so name is not finalized
N/A
CEC-RPS-POU April 2013
STATE OF CALIFORNIA
Compliance Report Form for Local Publicly Owned Electric Utilities
CEC-RPS-POU (Revised 10/2013)CALIFORNIA ENERGY COMMISSION
Annual RPS Report: Accounting
Input Required
Actual Data
Forecasted Data
Forecasted
Annual RPS Procurement and Percentages
(MWh)2011 2012 2013
Annual Retail Sales 949,516.6120 935,020.6020 955,968.4910
Annual RPS Procurement Retired 207,974.4120 200,621.0000 194,662.0000
Soft Targets 20.00% 20.00% 20.00%
Annual RPS Procurement Percentage 21.90% 21.46% 20.36%
Procurement Target (MWh) 2011 2012 2013
Procurement Target
Category 0 RECs Retired 207,974.4120 200,621.0000 194,662.0000
Category 1 RECs Retired
Pre-June 1, 2010 Category 1 RECs Retired1
Category 2 RECs Retired
Pre-June 1, 2010 Category 2 RECs Retired2
Category 3 RECs Retired
Pre-June 1, 2010 Category 3 RECs Retired3
Soft Targets 20.00% 20.00% 20.00%
RECs Retired as Percentage of Retail Sales 21.90% 21.46% 20.36%
Forecasted Total RECs Retired (Compliance
Period)
568,101.1410
603,257.4120
Compliance Period 1
Compliance Period 1
Actual
CEC-RPS-POU April 2013