pasadena water and power 2009 power integrated resource plan update august 16, 2010

Pasadena Water and Power

2009 Power Integrated Resource Plan Update

August 16, 2010


IRP Balanced Key Objectives

RiskRisk

EnvironmentEnvironment CostCost

GHG Emissions Reductions

Renewable Energy Procurement

Competitive Rates

Reliability

Focus on Cost

Focus on Risk

Focus on Environment

Compromise onTradeoffs

Cost Minimization

Rate Stability

Regulatory Uncertainty

Balanced Objectives


2009 IRP Progress ReportSummary Table – Part I

RecommendationsTarget

QuantityTarget Date

Status

Coal Power Displacement 35 MW 2016 Negotiations in process

Local Gas-Fired Generation: Replace Broadway Unit 3 with a similarly-sized CC Upgrade controls and equipment on GT-1 and GT-2

65 MW (approx.) 2014

Timely decisions will keep project on track

Scope of work may be expanded due to GT-1 failure

Energy Efficiency: Cumulative annual energy savings from Fiscal Year 2007

45.5 GWh/yr 124.0 GWh/yr 211.5 GWh/yr

- FY10- FY15- FY20

On trackCumulative savings estimated

at 53 GWh/yr as of FY2010

Peak Load Savings: Reduce peak load by 10% below expected levels

33 MW 2012 Unlikely 11 MW (3.4%) as of FY2010

Demand Response: Incentives to reduce or curtail electric use during peak load

5 MW 2012Delayed.

To be developed in conjunction with smart grid


2009 IRP Progress ReportSummary Table – Part II

RecommendationsTarget

QuantityTarget Date

Status

Renewable Portfolio Standard (energy used for PWP’s retail electric customers)

15% (187 GWh)33% (381 GWh)40% (460 GWh)

201020152020

On Track 8% for CY 2009

15% for CY 201017% for CY 2011

Solar photovoltaic installations in Pasadena (SB-1 goal is 14 MW by 2017)

3 MW10 MW15 MW19 MW

2010201520202024

On track1 MW Completed4.6 MW Pending

Feed-In Tariff for Local Renewable Resources

8 MW10 MW

20202023 In development

GHG Emissions Reductions (base year 2008 emissions = 905,000 tonne)

5% (45,250 tonne)25% (226,250 tonne)40% (362,000 tonne)

201020152020

On Track 5% reduction in CY 2010


Gas Turbine 1 (GT-1)

GT-1 Fire on May 4, 2010 Initial Repair Estimate = $8,017,552 Repair Has Been Ruled Out - Lack of

Parts Insurance Company:

> Authorized replacement study…expected by August 25th

> Offered partial payment = $6,314,041> Whole loss and damage …to be determined

(Replacement cost and lost revenues)


PWP Portfolio Energy MixActual to 2009; 2010-2011 Projected


Estimated Portfolio MixFor Retail Sales – Calendar Year 2010

4%6%

15%

2%

15%

58%

Coal

Natural Gas

Market Purchases

Renewables

Nuclear

Large Hydro

25% GHG-Free


Rate Impacts

Rate Component

Approx. Avg. Rate

Rate Pressures

PBC 0.58¢ Solar and Energy Efficiency Programs

Energy 8.53¢

Renewable Resource Acquisition Feed-in Tariff Fuel and Spot Market Energy Costs

GHG Mitigation, Credits/Tax

Transmission 0.82¢ CAISO Transmission Rate

Distribution 4.28¢ Infrastructure Replacement Smart Grid

Total 14.21¢


Monthly Residential BillAs of June 2010

SCE has tiered rates Pasadena has flat rates with no subsidies between

rate classes

An

ahei

m

An

ahei

m

LA

DW

P

LA

DW

P

Bu

rban

k

Bu

rban

k

Gle

nd

ale

Gle

nd

ale

Pas

aden

a

Pas

aden

a

SC

E

SC

E

$0

$25

$50

$75

$100

$125

$150

$175

500 kWh 1,000 kWh


Rate Challenges

Evolving Legislative and Regulatory Mandates > Federal and State climate initiatives, EPA, CEC, CARB

Shortage of Renewable Energy… Higher prices Operational Constraints … transmission Compounded Rate Impact

> Buy high price renewable power > Sell excess existing energy at discount

Future Staff Requests for MSC/Council Approval> Resolution authorizing PWP GM to trade RECs and

other environmental attributes> Renewable energy contracts


2009 Power Integrated Resource Plan

Update - End


IRP RPS Goals vs. Proposed Regulatory Requirements

15%

33%

40%

24%

28%33%

25%

20%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020Calendar Year

Perc

ent o

f Sal

es

PWP RPS GoalCARB RPS ProposalSB 722 Proposal


Project Resource Calendar Year 2010 Calendar Year 2011

Type MWh % of Load MWh % of Load

Long-Term Contracts

Azusa Hydro Small Hydro 0 0.0% 0 0.0%

Solano High Winds Wind 16,176 1.3% 16,176 1.3%

Covina/Tulare Landfill Landfill Gas 66,047 5.3% 75,729 6.3%

Ormat-Heber South Geothermal 18,353 1.5% 17,476 1.4%

Chiquita Landfill Landfill Gas 14,054 1.1% 55,757 4.6%

Milford Wind I (Utah) Wind 8,916 0.7% 11,826 1.0%

Subtotal Long-Term 123,546 10.0% 176,964 14.6%

Short-Term Contracts

Glendale Landfill Gas Landfill Gas 35,040 2.8% 35,040 2.9%

Iberdrola Renewables Wind 31,060 2.5% - 0.0%

Subtotal Short-Term 66,100 5.3% 35,040 2.9%

Total Renewables 189,646 15.3% 212,004 17.6%

Expected Renewable Energy Resources


Pasadena Solar InitiativeProgress Towards 14 MW Goal

0.8

0.5

4.6

0.6

4.0

8.6

3.5

5.2.4

115

207

39

179

208

47

514

351

95

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

SDG&E

PG&E

SCE

PWP Total

PWP Residential

PWP Non-Res

Installed Pending Remaining


Energy Efficiency Progress

Cumulative Energy Efficiency (% of Load)

0%

1%

2%

3%

4%

5%

2007 2008 2009 2010 2011Fiscal Year

Actual

Goal


Market and Regulatory Update

Rising renewable energy cost Softened natural gas prices (near to short term) Reduced electricity demand (near to short term) Inadequate supply of deliverable renewable

energy Wind/Solar deliverability

> CAISO restrictions on import of intermittent resources

Regulatory uncertainty:> RECs for RES/RPS compliance? CARB…no limits;

SB722…10%?> Proposition 23 / Next Governor?> GHG emission calculation methodology? > Cap and Trade program?> Federal regulations… pre-emption?


PWP Power Content Label

ENERGY RESOURCES

2005PWP

2006PWP

2007PWP

2008PWP

2009PWP

2008 CA Pwr Mix

(actual) (actual) (actual) (actual) (actual) (for comparison)

Eligible Renewable 2% 2% 8% 8% 8% 5%

-- Biomass & waste 0% <1% 5% 6% 5% <1%

-- Geothermal 0% 1% 1% 1% 1% 4%

-- Small hydroelectric 0% <1% 0% 1% 0% <1%

-- Solar 0% <1% 0% 0% 0% <1%

-- Wind 1% 1% 1% 1% 1% <1%

Coal 70% 67% 65% 60% 60% 29%

Large Hydroelectric 7% 10% 7% 6% 6% 31%

Natural Gas 15% 16% 15% 20% 20% 35%

Nuclear 6% 5% 5% 6% 6% <1%

Other 0% 0% 0% 0% 0% 0%

TOTAL 100% 100% 100% 100% 100% 100%

Purchased From Specific Resources

84% 78% 89% 91% 92% --


Renewable Energy Contract Status

Milford Phase I, UT - wind (5 MW)> Delivery started late April 2010

Ameresco Chiquita Canyon, CA - landfill gas (6.67 MW)> Delivery expected from 10/2010

Ameresco Skunk Creek, AZ - landfill gas (4 MW)> Developer not proceeding due to cost escalation

IID, CA - MOU for exploration of geothermal energy (~6 MW) > On hold due to differences in major participant

Milford Phase II, UT - wind (10 MW)> Withdrawn due to:

» CAISO prohibition on wind/solar imports » Uncertainty of alternative transmission» Prepayment contractual obligation for future

power


PWP Initiatives

Renewable Energy Contracts Under Negotiation > Geothermal…….. 5-10 MW> Solar/Wind……… 20 MW> Landfill to energy…8 MW> Bio gas ………… 6 - 8 MW

Transmission > Enhanced Import/Export right at TM Goodrich..336

MW> Southern Transmission System upgrade by 26 MW

Outreach:> RFPs issued by PWP and SCPPA


Strategies to Meet IRP Goals

Procure Renewable Resources That:> Are cost effective> Can deliver energy to Pasadena> Preferably located in California

Procure RECs to Meet Regulatory RPS Short Falls Proactive Legislative / Regulatory Involvement Keep MSC and the City Council Informed

Future Staff Requests for MSC/ City Council Approval> Resolution authorizing PWP GM to trade RECs and

other environmental attributes.> Renewable energy contracts

pasadena water and power 2009 power integrated resource plan update august 16, 2010

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