HomeMy WebLinkAboutStaff Report 4296
City of Palo Alto (ID # 4296)
City Council Staff Report
Report Type: Informational Report Meeting Date: 12/9/2013
City of Palo Alto Page 1
Summary Title: Long-term Electric Acquisition Plan Update
Title: Long-term Electric Acquisition Plan (LEAP) 2013 Update
From: City Manager
Lead Department: Utilities
This update of the Long-term Electric Acquisition Plan (LEAP) is provided to the City Council as
information only. No action is requested. The purpose of the update is to keep the Council
apprised of staff’s efforts towards implementing the Council-approved LEAP Objectives,
Strategies and Implementation Plan (Attachment B).
Executive Summary
Much progress continues to be made towards implementing the tasks identified in LEAP. Since
the last LEAP update in September 2012, key accomplishments include Council approval of the
Carbon Neutral Plan for the electric supply portfolio to be implemented in calendar year 2013;
a redesign of the PaloAltoGreen program; execution of Power Purchase Agreements to further
the City’s efforts towards achieving its Renewable Portfolio Standard; and execution of nine
new Electric Master Agreements. Staff has also been actively involved in the Northern
California Power Agency’s efforts to revise several key governance documents; and has started
to evaluate options to reduce the cost of delivering electricity to Palo Alto.
The Utilities Resource Management Division currently has three vacant positions, requiring a
reprioritization of workload. As such, some of the LEAP implementation items have been put
on hold. Staff intends to provide the next LEAP update at the end of calendar year 2014. At
that time, staff will determine if any changes to LEAP are appropriate.
Attachments:
Attachment A: LEAP Update as of December 2013 (PDF)
Attachment B: LEAP Objectives, Strategies and Implementation Plan as Approved by
Council in April 2012 (PDF)
Attachment A
Page A-1 of 8
Long-term Electric Acquisition Plan (LEAP)
2013 Update
LEAP Implementation Plan Task
Estimated
Completion
in LEAP December 2013 Update Status
Strategy #1 - Resource Acquisition
1. Adjust planning and portfolio models to include an
integrated and least cost planning perspective which
evaluates demand and supply side resources in an
integrated manner and includes time of delivery,
locational and environmental costs and benefits.
Dec. 2010 Completed
2. Evaluate the impacts of energy efficiency, demand
reductions and electric vehicle penetration in Palo
Alto in the annual development of the electric load
forecast.
Dec. 2010 Completed
Strategy #2 – Electric Energy Efficiency and Demand Reduction
3. Provide quarterly updates on electric efficiency
program achievements including tracking against 10-
Year Energy Efficiency goals to the UAC and annual
updates to the City Council.
quarterly No update* On-going
4. Develop Energy Efficiency Implementation Plan for
the 2010 10-Year Electric EE Plan addressing certain
items identified in the May 2010 Council Colleagues
Memo and identification of resources and funding
needed to achieve EE goals.
Apr. 2011 Completed
5. Evaluate fuel switching energy efficiency measures
and include them, if cost-effective, in the Electric and
Gas EE Implementation Plans.
Feb. 2011 Completed
6. Develop a pilot Demand Response Program for large
commercial industrial customers for implementation
in summer 2011.
Apr. 2011 Completed
Attachment A
Page A-2 of 8
LEAP Implementation Plan Task
Estimated
Completion
in LEAP December 2013 Update Status
7. Assess the feasibility and cost-effectiveness of using
current and potential thermal energy storage (TES)
systems to shift load from on-peak periods to off-
peak periods, for use in a demand response program,
or for meeting any energy storage needs. Coordinate
with task 21 to develop targets, if appropriate.
Dec. 2011 Completed, report to UAC in Dec 2013 Report to
UAC in Dec
2013
8. Fully integrate the effects on energy efficiency in the
long-term electric load forecast.
Nov. 2010 Completed
Strategy #3 – Renewable Portfolio Standard (RPS)
9. Evaluate the merits of implementing a feed-in-tariff
(FIT) and the potential to meet RPS goals through
local renewable resources.
Jan. 2011 Completed
10. Seek UAC recommendation and Council approval of
the policy elements of a FIT to encourage local
renewable resource projects.
May 2011 Completed
11. Continue working with NCPA to identify
opportunities, including joint-ownership, for
developing qualifying renewable resources.
On-going Palo Alto is a participant to NCPA’s Green Power Pool
Program under a Third Phase Agreement between the
City and NCPA. Under that agreement, the City
subscribed as a participant to the Western Geo Project
a geothermal renewable resource project. In May
2013, NCPA officially terminated the Western Geo
Project with RAM Power, the developer of Western
Geo, as RAM Power could not meet the obligations
under the agreement.
Given the lack of projects developed under the Green
Power Pool Program (“Pool”), NCPA is considering
terminating the program. Should NCPA continue the
program, staff will work towards withdrawing from the
Pool, since staff sees little benefit to continuing in the
Pool due to high administrative costs assigned to Pool
Members.
On-going
Attachment A
Page A-3 of 8
LEAP Implementation Plan Task
Estimated
Completion
in LEAP December 2013 Update Status
12. Evaluate the use of renewable energy credits (RECs)
to meet a portion of the City’s RPS goal and/or
greenhouse gas emission reduction goals and monitor
the regulations and requirements regarding the use
of RECs to meet RPS goals.
On-going The assessment of the use of RECs was considered in
the development of a carbon neutral plan (see task
#26). Council determined that the use of long-term
renewable resources is preferable to the use of RECs,
but the use of RECs is acceptable on a short-term basis
for meeting the City’s aggressive RPS and Carbon
Neutral Plan goals.
In November 2013, Council expanded the authority
under the REC Master Agreements to purchase RECs to
meet the needs of the RPS and Carbon Neutral Plan.
On-going
13. Evaluate a proposed geothermal project being
considered by NCPA, including a pre-pay option and
the benefit, costs, and risks of a pre-pay structure.
June 2011 Staff determined that the geothermal project being
considered by NCPA with Calpine was not competitive
with the projects submitted in response to the City’s
own Requests for Proposals (RFPs) (see tasks #11 and
#14).
Completed
14. Conduct a Request for Proposals for eligible
renewable resources including RECs and evaluate
alternative renewable resource technologies and
contracting mechanisms.
RFP in June
2011
Staff issued RFPs for eligible renewable resources in
September 2011, August 2012, and September 2013.
The response to each RFP was very robust. Staff
negotiated, and Council approved, one Power Purchase
Agreement (PPA) for a solar photovoltaic (PV) project
from the 2011 RFP, and three PPAs for solar PV projects
from the 2012 RFP. Staff is now in the process of
selecting a finalist from the 2013 RFP and negotiating a
PPA to bring to the UAC and Council for consideration
in early 2014.
In process
Strategy #4 – Local Generation
15. Provide an update of past local generation feasibility
studies and actions to UAC and Council
Dec. 2010 Completed
Attachment A
Page A-4 of 8
LEAP Implementation Plan Task
Estimated
Completion
in LEAP December 2013 Update Status
16. Assess the potential for and feasibility of small local
distributed and non-distributed, renewable and
cogeneration projects, including using a FIT to
encourage these projects.
Jan. 2011 Renewable projects will be evaluated as part of the
City’s feed-in tariff program (see task #19). A re-
evaluation of City’s distributed generation program
(PLUG-In program) is underway.
UAC
discussion
planned for
Jan 2014
17. Assess the potential, benefits and costs of developing
and/or joint ownership of a 25 to 50 MW gas-fired
power plant located in or near Palo Alto to meet load,
reliability and local capacity needs.
Jun. 2011 Completed
18. Evaluate the City’s PLUG-In Program to encourage
cogeneration including rules, regulations, and buy
back rates and recommend modifications as needed.
Dec. 2011 A recommendation to discontinue the Plug-In incentive
program and replace it with CLEAN program based buy-
back rate (for all local non-PV, renewable electricity
supply) is being contemplated
UAC report
planned for
January
2014
19. Following receiving Council direction from
Implementation Plan Initiative #10, develop a FIT
proposal including rate, rules, regulations, standard
contract form and limits.
To be
determined
Completed
20. Assess the economics and potential of the anaerobic
digester as a local generation resource for CPAU
Sep. 2011 CPAU staff is actively involved in the Public Works
Department’s evaluation process.
In process
21. Assess the need for and value of energy storage to
support local renewable distributed generation
resources. Determine any appropriate energy storage
targets to be achieved by December 31, 2016, and
December 31, 2021. Report back to the Council
regarding what procurement targets, if any, are
deemed to be appropriate so that the Council may
adopt such procurement targets, if determined to be
appropriate, by October 1, 2014.
Oct. 2014 Evaluation of storage procurement needs have been
completed – recommendations to UAC/Council planned
for December 2013/January 2014
UAC – Dec
2013
Strategy #5 – Climate Protection
22. Promote the City’s Plug-in program to encourage
development of cogeneration systems.
On-going See task #18 above. On-going
Attachment A
Page A-5 of 8
LEAP Implementation Plan Task
Estimated
Completion
in LEAP December 2013 Update Status
23. Analyze electric vehicle (EV) charging patterns and
evaluate rates to incent nighttime EV charging.
Jun. 2011 Council approved a 150 person Time-of-Use (TOU) pilot
proposal in October 2012. Sixteen customers received
the rate in Feb 2013 and additional customers may be
brought on from December 2013 through June 2014.
In process
24. Meet AB32 mandated annual reporting requirements
to California Air Resources Board on annual volumes
of electricity purchases by resource.
Annually,
next in June
2014
Annual report to CARB of electricity purchase volumes
by resource was submitted on time on June 1, 2012.
Completed
25. Track and report annually on 6 major greenhouse gas
emissions (CO2, CH4, N2O, SF6, HFCs, PFCs) for all of
the City’s municipal operations and calculate electric
portfolio’s overall emissions coefficients (lbs of CO2,
CH4, and N2O per MWh of purchases).
Annually,
next in Dec.
2013
Report with emissions data for calendar year 2010
submitted to The Climate Registry in December 2011.
Utilities and Public Works staff is coordinating efforts to
submit calendar year 2011 and 2012 reports to The
Climate Registry by December 2013.
On-going
26. Evaluate the costs, benefits and impacts of the
implementation of an electric portfolio carbon
neutral policy and the setting of quantitative goals
(e.g. carbon intensity, total GHG emissions).
Jan. 2012 In March 2013 Council approved a Carbon Neutral Plan
with a goal of achieving carbon neutrality for the
electric supply portfolio by 2013 within a rate cap of
0.15 cents per kWh.
Completed
27. Evaluate PaloAltoGreen program design and
recommend modifications, as appropriate, including
constructing PaloAltoGreen to assist in meeting
Renewable Portfolio Standard goals.
Jun. 2012 In September 2013 Council approved a redesign of
PaloAltoGreen suspending the Full Needs rate and
reducing the Commercial Customer Block price to 0.2
cents per kWh. Additionally, Council directed staff to
come back to Council with a PaloAltoGreen Gas
program and a recommendation for how to allocate
accumulated revenues associated with PaloAltoGreen.
Completed
Strategy #6 – Hydro Resource Management
28. Evaluate potential rate adjustment mechanisms that
would adjust electric rates based on hydrologic year
type and develop a recommendation for a rate.
Apr. 2011 Implementation of this item has been delayed due to
staff turnover and due to upcoming changes and
clarifications to the City’s reserves structure and
policies. This item is expected to be presented in the
summer of 2014 for possible implementation in FY
2015.
In process
Attachment A
Page A-6 of 8
LEAP Implementation Plan Task
Estimated
Completion
in LEAP December 2013 Update Status
29. Assess the value related to Palo Alto’s participation in
the CAISO’s Metered Subsystem Agreement and the
use of the Calaveras hydroelectric project for load
following.
On-going No update * On-going
30. Identify long-term opportunities to maximize the
value of the Calaveras hydroelectric project as an
energy storage resource.
On-going No update * On-going
31. Work with NCPA to seek opportunities to increase the
efficiency of the Calaveras hydroelectric project and
implement operational value maximizing strategies.
On-going No update * On-going
Strategy #7 – Market Price Exposure Management
32. Evaluate a block purchase of up to 25 MW to meet
base load needs for Jan-Mar and Nov-Dec for a term
of up to 5 years.
Feb. 2011 No update * On hold
33. Conduct an RFP for new electric master agreement
counterparties.
Dec. 2011 In March 2013 Council approved a new set of electric
master agreements with nine electric counterparties.
Completed
34. Explore opportunities with NCPA, other municipal
utilities and/or third party suppliers to reduce
scheduling and/or operating costs.
On-going As part of an effort to revise several governance and
service agreements between the City and NCPA, staff is
exploring alternative power management and
scheduling services which may be provided by third
party vendors.
In process
35. Continue to implement a 3-year laddering strategy to
manage market price uncertainty.
On-going No update * On-going
Attachment A
Page A-7 of 8
Strategy #8 – Transmission and Reliability
36. Investigate transmission connection voltage upgrade
from 115 to 230 kV, and the potential for a
transmission reliability connection to west side.
On-going The City is coordinating with Stanford University (which
has also expressed an interest in participating in the
project) to work with SLAC and Department of Energy
(DOE) on a transmission bridge between SLAC and the
City to provide transmission backup and power delivery
efficiencies for all parties. City and Stanford have
completed a number of feasibility studies and are
finalizing a summary of project information for SLAC
and DOE. Staff anticipates bringing a project update to
Council in early 2014.
On-going
37. Explore transmission opportunities and strategies to
meet long-term renewable portfolio objectives
beyond 2020.
On-going No Update * On-going
38. Evaluate joint efforts for power plant ownership
opportunities or long-term agreements to meet the
City’s Resource Adequacy Program requirements.
On-going No Update * On-going
* No update – For these items, there is no update since the September 2012 LEAP update
Attachment A
Page A-8 of 8
Key for Acronyms:
AB – Assembly Bill
AB32 – Assembly Bill for Greenhouse Gas Emissions Reduction
AB 2514 – Assembly Bill for Energy Storage
CAISO – California Independent System Operator
CARB – California Air Resources Board
CH4 – Methane
CO2 – Carbon Dioxide
CPAU – City of Palo Alto Utilities
DOE – Department of Energy
EE – Energy Efficiency
EV – Electric Vehicle
FIT – Feed-in-tariff
GHG – Greenhouse Gas Emissions
HFCs – Hydrofluorocarbons
kV – Kilo volt
kWh – Kilowatt-hour
MSSA – Metered Subsystem Agreement
MW – Mega Watt
MWh – Mega Watt hour
N2O – Nitrous Oxide
NCPA – Northern California Power Agency
PFCs – Perfluorocarbons
PLUG-In – Power from Local Ultra-clean Generation Incentive
RFP – Request for Proposal
RPS – Renewable Portfolio Standard
SB2 1X – California Senate Bill for 33% RPS
SF6 – Sulfur Hexafluoride
SLAC – SLAC National Accelerator Laboratory
TES – Thermal Energy Storage
TOU – Time-of-Use
UAC – Utilities Advisory Commission
WAPA – Western Area Power Administration
B-1
Attachment B
Long-term Electric Acquisition Plan (LEAP)
Objectives, Strategies and Implementation Plan
Approved March 7, 2011 (Resolution No. 9152)
Modified by Council March 19, 2012 (Staff Report No. 2581)
Modified by Council April 16, 2012 (Staff Report No. 2710)
LEAP Objectives:
1. Meet customer electricity needs through the acquisition of least total cost energy and
demand resources including an assessment of the environmental costs and benefits
2. Manage supply portfolio cost uncertainty to meet rate and reserve objectives.
3. Enhance supply reliability to meet City and customer needs by pursuing opportunities
including transmission system upgrades and local generation.
LEAP Strategies and Implementation Plan Steps:
1. Resource Acquisition – Pursue the least total cost resources including an assessment of
environmental costs and benefits to meet the City’s needs in the long term by:
a. Evaluating each potential resource on an equal basis by evaluating rate impacts and
establishing costs and values for location, time of day and year, carbon, value of
renewable supplies and any secondary benefits attributed to the resource; and
b. Including all resources – conventional energy, local and remote renewable energy
supplies, energy efficiency, cogeneration, and demand reduction – in the evaluation.
Implementation Plan Items for Strategy #1 – Resource Acquisition Estimated
Completion
1. Adjust planning and portfolio models to include an integrated and least cost
planning perspective which evaluates demand and supply side resources in an
integrated manner and includes time of delivery, locational and
environmental costs and benefits.
Dec. 2010
2. Evaluate the impacts of energy efficiency, demand reductions and electric
vehicle penetration in Palo Alto in the annual development of the electric
load forecast.
Dec. 2010
2. Electric Energy Efficiency and Demand Reduction – Fund programs that maximize the
deployment of cost-effective, reliable and feasible energy efficiency and demand
reduction opportunities as the highest priority resources by:
a. Every three years, preparing a ten-year energy efficiency plan that identifies all cost-
effective energy efficiency opportunities;
B-2
b. Using the cost of long-term renewable energy resources adjusted for time of day
factors and location as the avoided cost when evaluating cost effectiveness of energy
efficiency measures;
c. Designing and making energy efficiency programs available to all customers; and
d. Considering the impacts (costs, benefits and GHG emissions) of substituting
electricity-using appliances for natural gas-using appliances and vice versa in the ten-
year energy efficiency plan.
Implementation Plan Items for Strategy #2 – Electric Energy Efficiency and
Demand Reduction
Estimated
Completion
3. Provide quarterly updates on electric efficiency program achievements
including tracking against 10-Year Energy Efficiency goals to the UAC and
annual updates to the City Council.
quarterly
4. Develop Energy Efficiency Implementation Plan for the 2010 10-Year Electric
EE Plan addressing certain items identified in the May 2010 Council
Colleagues Memo and identification of resources and funding needed to
achieve EE goals.
Apr. 2011
5. Evaluate fuel switching energy efficiency measures and include them, if cost-
effective, in the Electric and Gas EE Implementation Plans.
Feb. 2011
6. Develop a pilot Demand Response Program for large commercial industrial
customers for implementation in summer 2011.
Apr. 2011
7. Assess the feasibility and cost-effectiveness of using current and potential
thermal energy storage (TES) systems to shift load from on-peak periods to
off-peak periods, for use in a demand response program, or for meeting any
energy storage needs. Coordinate with task 21 to develop targets, if
appropriate.
Sep. 2011
3. Renewable Portfolio Standard (RPS) – Reduce the carbon intensity of the electric
portfolio by acquiring renewable energy supplies by:
a. Pursuing a minimum level of renewable purchases of at least 33% of retail sales by
2015 with the following attributes:
i. The contracts for investment in renewable resources shall not exceed 30 years in
term.
ii. Pursue only renewable resources deemed to be eligible by the California Energy
Commission (CEC).
iii. Evaluate use of Renewable Energy Certificates (RECs) to meet RPS.
b. Ensuring that the retail rate impact for renewable purchases does not exceed 0.5
¢/kWh on average; and
c. Performing an ongoing evaluation of the Palo Alto Clean Local Energy Accessible Now
(CLEAN) program.
B-3
Proposed Implementation Plan Items for Strategy #3 – Renewable Portfolio
Standard (RPS)
Estimated
Completion
8. Fully integrate the effects on energy efficiency in the long-term electric load
forecast.
Nov. 2010
9. Evaluate the merits of implementing a feed-in-tariff (FIT) and the potential to
meet RPS goals through local renewable resources.
Jan. 2011
10. Seek UAC recommendation and Council approval of the policy elements of a
FIT to encourage local renewable resource projects.
May 2011
11. Continue working with NCPA to identify opportunities, including joint-
ownership, for developing qualifying renewable resources.
On-going
12. Evaluate the use of renewable energy credits (REC) to meet a portion of the
City’s RPS goal and/or greenhouse gas emission reduction goals and monitor
the regulations and requirements regarding the use of RECs to meet RPS
goals.
On-going
13. Evaluate a proposed geothermal project being considered by NCPA, including
a pre-pay option and the benefit, costs, and risks of a pre-pay structure.
June 2011
14. Conduct a Request for Proposal for eligible renewable resources including
RECs and evaluate alternative renewable resource technologies and
contracting mechanisms.
RFP in June
2011
4. Local Generation – Promote and facilitate the deployment of cost-effective local
resources by:
a. Using the renewable market price referent (MPR) adjusted for time of day factors
and location as the avoided cost when evaluating cost effectiveness of local
resources;
b. Considering energy delivery cost uncertainty and strategic value options when
evaluating opportunities;
c. Evaluating a Feed-in-Tariff to promote locally sited renewable resources;
d. Evaluating cost-effective energy storage resources; and
e. Evaluating the feasibility of developing a 25 to 50 MW generating facility connect to
the City’s distribution system.
Proposed Implementation Plan Items for Strategy #4 – Local Generation Estimated
Completion
15. Provide an update of past local generation feasibility studies and actions to
UAC and Council
Dec. 2010
16. Assess the potential for and feasibility of small local distributed and non-
distributed, renewable and cogeneration projects, including using a FIT to
encourage these projects.
Jan. 2011
17. Assess the potential, benefits and costs of developing and/or joint ownership
of a 25 to 50 MW gas-fired power plant located in or near Palo Alto to meet
load, reliability and local capacity needs.
Jun. 2011
B-4
Proposed Implementation Plan Items for Strategy #4 – Local Generation Estimated
Completion
18. Evaluate the City’s PLUG-In Program to encourage cogeneration including
rules, regulations, and buy back rates and recommend modifications as
needed.
Dec. 2011
19. Following receiving Council direction from Implementation Plan Initiative #10,
develop a FIT proposal including rate, rules, regulations, standard contract
form and limits.
To be
determined
20. Assess the economics and potential of the anaerobic digester as a local
generation resource for CPAU
Sep. 2011
21. Assess the need for and value of energy storage to support local renewable
distributed generation resources. Determine any appropriate energy storage
targets to be achieved by December 31, 2016, and December 31, 2021.
Report back to the Council regarding what procurement targets, if any, are
deemed to be appropriate so that the Council may adopt such procurement
targets, if determined to be appropriate, by October 1, 2014.
Jun. 2012
5. Climate Protection – Reduce the electric portfolio’s carbon intensity by:
a. Supporting the City municipal government’s climate protection goals;
b. Promoting the use of technologies (e.g. incentives for cogeneration systems,
promotion of EVs, in-home energy displays) and programs that will reduce the
community’s carbon footprint at a cost of up to the City’s value of carbon;
c. Continuing to offer a renewable resource-based retail rate for all customers who
want to voluntarily select an increased content of non-hydro renewable energy; and.
d. Evaluating quantitative goals for possible future implementation.
Proposed Implementation Plan Items for Strategy #5 – Climate Protection Estimated
Completion
22. Promote the City’s Plug-in program to encourage development of
cogeneration systems.
On-going
23. Analyze electric vehicle (EV) charging patterns and evaluate rates to incent
nighttime EV charging.
Jun. 2011
24. Meet AB32 mandated annual reporting requirements to California Air
Resources Board on annual volumes of electricity purchases by resource.
Annually,
next in Jun.
2011
25. Track and report annually on 6 major greenhouse gas emissions (CO2, CH4,
N2O, SF6, HFCs, PFCs) for all of the City’s municipal operations and calculate
electric portfolio’s overall emissions coefficients (lbs of CO2, CH4, and N2O
per MWh of purchases).
Annually,
next in Sep.
2011
26. Evaluate the costs, benefits and impacts of the implementation of an electric
portfolio carbon neutral policy and the setting of quantitative goals (e.g.
carbon intensity, total GHG emissions).
Jan. 2012
B-5
Proposed Implementation Plan Items for Strategy #5 – Climate Protection Estimated
Completion
27. Evaluate PaloAltoGreen program design and recommend modifications, as
appropriate, including constructing PaloAltoGreen to assist in meeting
Renewable Portfolio Standard goals.
Jun. 2012
6. Hydro Resource Management – Actively monitor and manage cost uncertainty related
to variations in hydroelectric supply and maximize value of hydro resources by:
a. Planning for an average hydro year on a long-term basis;
b. Utilizing cost effective hydro resource management products; and
c. Implementing opportunities to maximize benefits and reduce costs of the Western
Base Resource and Calaveras hydroelectric resources.
Proposed Implementation Plan Items for Strategy #6 – Hydro Resource
Management
Estimated
Completion
28. Evaluate potential rate adjustment mechanisms that would adjust electric
rates based on hydrologic year type and develop a recommendation for a
rate.
Apr. 2011
29. Assess the value related to Palo Alto’s participation in the CAISO’s Metered
Subsystem Agreement and the use of the Calaveras hydroelectric project for
load following.
On-going
30. Identify long-term opportunities to maximize the value of the Calaveras
hydroelectric project as an energy storage resource.
On-going
31. Work with NCPA to seek opportunities to increase the efficiency of the
Calaveras hydroelectric project and implement operational value maximizing
strategies.
On-going
7. Market Price Exposure Management – Actively monitor and manage operational,
counterparty and wholesale energy price risk in the short-term (up to three to five years)
by:
a. Maintaining an adequate pool of creditworthy suppliers; and
b. Diversifying supply purchases across commitment date, start date, duration,
suppliers and pricing terms in alignment with rate stability objectives and reserve
guideline.
Proposed Implementation Plan Items for Strategy #7 – Market Price Exposure
Management
Estimated
Completion
32. Evaluate a block purchase of up to 25 MW to meet base load needs for Jan-
Mar and Nov-Dec for a term of up to 5 years.
Feb. 2011
33. Conduct an RFP for new electric master agreement counterparties. Dec. 2011
34. Explore opportunities with NCPA, other municipal utilities and/or third party
suppliers to reduce scheduling and/or operating costs.
On-going
35. Continue to implement a 3-year laddering strategy to manage market price
uncertainty.
On-going
B-6
8. Transmission and Reliability – Pursue the reliability of supply at fair and reasonable
transmission and delivery costs by:
a. Actively participating through collaborative efforts with other entities, in local,
regional, statewide and federal regulatory and legislative forums;
b. Participating in transmission and reliability market design forums to ensure that
adopted market designs result in adequate reliability, workably competitive markets
and equitable cost allocation;
c. Evaluating interconnection options to the City to increase service reliability and
lower delivery costs; and
d. Exploring transmission opportunities and strategies to meet long-term renewable
portfolio objectives beyond 2020.
Proposed Implementation Plan Items for Strategy #8 – Transmission and
Reliability
Estimated
Completion
36. Investigate transmission connection voltage upgrade from 115 to 230 kV, and
the potential for a transmission reliability connection to west side.
On-going
37. Explore transmission opportunities and strategies to meet long-term
renewable portfolio objectives beyond 2020.
On-going
38. Evaluate joint efforts for power plant ownership opportunities or long-term
agreements to meet the City’s Resource Adequacy Program requirements.
On-going