2010 Renewable Energy Standard Compliance Report Public Service Company of Colorado June 2011 Docket No. 09A-772E

Transcription

1 2010 Renewable Energy Standard Compliance Report Public Service Company of Colorado June 2011 Docket No. 09A-772E xcelenergy.com 2011 Xcel Energy Inc. Xcel Energy is a registered trademark of Xcel Energy Inc. Public Service Company of Colorado, an Xcel Energy Company

2 2010 RENEWABLE ENERGY STANDARD COMPLIANCE REPORT I. Introduction Pursuant to Colorado Public Utilities Commission (the Commission ) Rule 3662, investor-owned Qualifying Retail Utilities ("QRU's") are required to file an annual Compliance Report ("Report") to report on the status of the QRU s compliance with the Renewable Energy Standard ("RES") for the most recently completed Compliance Year. Public Service Company of Colorado ( Public Service or the Company ) is providing this Report pursuant to this rule in order to signify its compliance with the Renewable Energy Standard for the most recently completed Compliance Year. Attachment A to this Report, Rule Requirements, sets forth the filing requirements in Commission Rule Attachment A shows the rules in effect during the 2010 Compliance Year 1. Among other things, the QRU is to include the following information in the Report: 2010 Actual Energy Sales and Resulting RES Compliance Requirements Attachment B; Comparison of Actual vs. Forecasted RECs Generated by resource - Attachment C; RESA Deferred Balance of Actual vs. Forecasted - Attachment D; 1 Docket No. 10R-243E -- the "RES rulemaking" -- was initiated as a result of the enactment of HB That rulemaking resulted in rule modifications which became effective on December 30, Page 1

3 On-Site Solar RFP Information - Attachments E, Attachment F (Highly Confidential), and Attachment F (Public); Public Service remains committed to creating a clean energy future for Colorado and providing safe, reliable energy at a reasonable cost. Public Service remains well-positioned to meet Colorado s RES, which requires the Company to obtain 30 percent of electric retail sales from renewable resources by As reported in the Company's 2012 Renewable Energy Standard Compliance Plan filed on May 13, 2011, the Company is on target to meet the requirement before the deadline. Solar energy continues to play a large role in the Company s renewable energy portfolio. In 2010, the Solar Electric Power Association ranked Public Service No. 5 in the nation in terms of total solar capacity. In 2010, the Company began purchasing 20.1 MW DC from SunPower s new Greater Sandhill I plant in Alamosa, Colorado. In 2010 Public Service also continued to purchase 8.2 MW DC from the SunE Alamosa station near Alamosa, Colorado. A major part of Public Service s solar power comes from its on-site solar program, Solar*Rewards. The Company has paid $178.5 million in incentives through These incentives have helped finance 7,788 on-site solar systems that produce a total of MW. In 2010 alone, the Company paid a total of $67.3 million in Solar*Rewards incentives. These incentives helped finance 2,561 on-site solar systems that added 27.5 MW DC to the Company's renewable energy portfolio. Earlier this year in Docket 11A-135E, the Company entered into a Commission-approved settlement with several stakeholders that implemented Page 2

4 changes to the Solar*Rewards program that are to remain in place until the Commission approves the Company s 2012 RES Compliance Plan. The settlement was approved in Commission Decision C The approved changes established a total spending cap for the Solar*Rewards program of $97.3 million, and an acquisition limit of 60 MW of on-site solar energy -- including Solar Gardens which is explained below -- for the "Settlement Period" as that phrase is defined in the settlement. The settlement also moved the incentive structure from up-front rebates to performance based incentives paid over time. The performance based incentives are paid when the solar energy is produced. In 2010, the General Assembly enacted HB , which opened a new market for retail solar generation in Colorado. This "Solar Gardens" legislation creates an opportunity for customers to participate in solar production in our service territory who might otherwise not have the ability to participate through Solar*Rewards. The Commission has opened a Rulemaking Docket No. 10R-674 for the establishment of rules governing Solar Gardens. In addition to solar, wind energy continues to play a large role in the Company s renewable portfolio. For seven consecutive years, the American Wind Energy Association has named Xcel Energy the nation s No. 1 wind energy provider. At the end of 2010, Public Service had 1,265 MW of wind capacity on its system, and Xcel Energy had more than 3,400 MW, company-wide. In 2010 the Company signed purchase power agreements to buy approximately 250 MW of wind energy from Renewable Energy Systems America, Inc s Cedar Point Wind project in Elbert and Lincoln Counties in Colorado, and 250 MW from BP Wind Energy s Cedar Page 3

5 largest renewable energy purchasers in Colorado. While the program originally focused solely on adding small increments of wind energy, Public Service received Commission approval in 2009 to allow Windsource customers to receive electricity from the Company s entire renewable resource portfolio, which includes wind, solar and biomass facilities. Since 2008, Xcel Energy s wind forecasting efforts with the National Center for Atmospheric Research (NCAR) in Boulder, Colorado, has resulted in a state-of- the-art, real-time wind energy forecasting system that is capable of predicting wind energy 72 hours out into the future. These forecasts are helping operators make critical decisions about powering down traditional coal- and gas-fired power plants when sufficient winds are predicted, enabling the increased use of wind energy. Creek II in Weld County in Colorado. This new 500 MW of wind generation is scheduled to be online by October 1, The Company s Windsource program began in 1998 and continues to be one of the largest, voluntary green-energy programs in the United States. By the end of 2010, 39,031 customers in Colorado subscribed to Windsource, representing 212,900 MWhs of renewable energy. Many commercial Windsource customers participate in the program to obtain LEED certification points. In 2010, the Denver Broncos, the U.S. Mint and the LEED-certified building at 1800 Larimer Street, where Xcel Energy is a major tenant, were among the new customers subscribing to Windsource. The U.S. Mint now purchases 100 percent of its electricity through Windsource and is one of the Page 4

6 II. Results of the 2010 Compliance Plan Public Service filed its 2010 RES Compliance Plan ("Plan") on October 27, In the Plan the Company outlined its acquisition plans for non-solar, central solar, and on-site solar eligible energy resources. Under Commission RES rules during 2010, the Company was obligated to generate or cause to be generated certain amounts of energy from solar and non-solar resources as a percentage of retail electric sales. HB went into effective August 11, The statute modified the Renewable Energy Standard in that it eliminated the solar carve out. The solar carve out prior to HB was 4 percent of the prevailing RES percentage of energy sales, half of which must be on-site solar or (5% x 2010 retail sales x 4%)/2. HB modified the solar carve out by substituting a distributed generation requirement; a requirement starting in A Commission order conforming the RES rules to HB did not go into effect until December 30, 2010; therefore, the Company treated all of 2010 as if the solar carve out remained in effect past August 11, 2010, consistent with the Commission rules in effect during the time period. Non Solar On May 19, 2010, the Company executed a power purchase agreement for capacity and energy from the MW Cedar Creek II facility. The facility is expected to begin commercial operations no later than June 30, 2011 and is Page 5

7 expected to generate approximately 843,000 MWh annually. The energy generated by the facility is eligible for the 125% in-state REC multiplier. On March 29, 2010, the Company executed a power purchase agreement for capacity and energy from the MW Cedar Point facility. The facility is expected to begin commercial operations no later than October 1, 2011 and is expected to generate approximately 880,900 MWh annually. The energy generated by the facility is eligible for the 125% in-state REC multiplier. On April 22, 2011, the Company executed a power purchase agreement for capacity and energy from the MW Limon Wind facility. The facility is expected to begin commercial operations no later than December 31, 2012 and is expected to generate approximately 810,000 MWh annually. The energy generated by the facility is eligible for the 125% in-state REC multiplier. Central Solar In Decision C , the Commission approved a contract for the purchase of energy and capacity from the proposed Greater Sandhill I facility located in the San Luis Valley. The first phase of Greater Sandhill I began commercial operations on September 23, 2010 with MW DC installed. The final phase of Greater Sandhill I began commercial operations on December 23, 2010 with an incremental 9.50 MW DC for a total system size of 20.1 MW DC. The project is expected to generate approximately 47,500 MWh of energy in its first full year of operation. The energy generated by the facility is eligible for the 125% in-state REC multiplier. In addition, as a wholesale renewable distributed generation resource, RECs from the Page 6

8 Greater Sandhill I project are eligible for compliance with the minimum renewable distributed generation standards beginning with the 2011 compliance year. On June 23, 2010, the Company executed a power purchase agreement for capacity and energy from the Cogentrix 30 MW AC Solar project. The project is expected to enter commercial operations no later than April 1, 2012 and generate approximately 75,500 MWh in its first full year of operation. The energy generated by the facility is eligible for the 125% in-state REC multiplier. In addition, as a wholesale renewable distributed generation resource, RECs from the Cogentrix Solar project are also eligible for compliance with the non-distributed generation standards beginning with the 2011 compliance year. On August 10, 2010, the Company executed a power purchase agreement for capacity and energy from the 30 MW AC San Luis Solar project (aka Iberdrola ). The project is expected to enter commercial operations no later than March 31, 2012 and generate approximately 78,000 MWh in its first full year of operation. The energy generated by the facility is eligible for the 125% in-state REC multiplier. In addition, as a wholesale renewable distributed generation resource, RECs from the San Luis Solar project are also eligible for compliance with the non-distributed generation standards beginning with the 2011 compliance year. On-Site Solar Acquisition in the Solar*Rewards program exceeded expectations in Most notable was a dramatic upswing in participation in the Medium programs, both Tiers 1 and 2. Several school districts with large, multi-building projects and the City Page 7

9 and County of Denver participated in the Medium program and completed projects this year. This meant that while 5 MW of acquisition was initially forecast, 9.5 MW of capacity was actually installed. Acquisitions in the Small Customer-owned program remained consistent with 2009 performance in addition the Company experienced growth of the Small Third Party Developer program. The structure of declining REC prices, introduced at the end of 2009, was in effect for all of Despite these declining prices, acquisitions increased. The year was so successful, in fact, that the Colorado Solar Energy Industry Alliance ("CoSEIA") reported a 91% growth in the industry in 2010 alone. Windsource Public Service received approval from the Commission in Docket No. 08A- 260E to revise its Windsource program. The program revision expands the program to allow for renewable resources to be added to our portfolio under a voluntary costbased tariff service for customers that desire more renewable energy than is nominally available in our standard portfolio. Based on the approved settlement agreement in Docket No. 08A-260E, Windsource customers now receive their energy from the Company s entire Eligible Energy Resource portfolio. Premiums from sales under the Windsource tariff are credited back through the RESA. In 2010, 95% of the RECs obtained from 100% Windsource customer sales were retired for Windsource, with the remaining 5% retired for RES Compliance. Page 8

10 Consistent with Commission approval 2 and Green-e Energy program standards, and after further discussion with the Center for Resource Solutions, the Company retired 5% of the RECs attributable to Windsource customers that purchase 100% of their energy from the Windsource program for RES compliance. The Company s marketing materials disclosed the method of retiring RECs attributable to the Windsource program to those customers. This notification was made to customers in May, 2010 and appears on the Xcel Energy website. Per Decision C in Docket No. 09A-772E, the Company committed and the Commission accepted the Company s compliance filing of the 2010 Windsource premium calculation. As stipulated, if the rate calculation is within twenty percent, plus or minus, the Windsource premium will not change for RES Compliance years 2010 or The Company made its filing on December 14, 2010 and the Windsource premium calculation was within the twenty percent, plus or minus tolerance band. Therefore, the Windsource premium calculation approved by the Commission was not adjusted for 2010 or III. Statement of Compliance The 2010 RES Plan was filed in October 27, 2009 consistent with the Commission RES rules in effect at the time. Public Service is pleased to report that the Company is in compliance with the 2010 RES standard (5% retail sales from renewable energy of which 4% solar and half of the solar from on site solar) for nonsolar, central solar, and on-site solar components for the calendar year This 2 Decision No. C and R in Docket No. 09A-772E Page 9

11 report complies with the Commission s rules in effect during the relevant time period as well as the 2010 RES Compliance Plan that was approved by the Commission. Included as attachments to this report are tables providing the data requirements identified in Rule 3662 and set forth in Attachment A, Rule Requirements. Attachment B shows the Company s 2010 actual energy sales and resulting Renewable Energy Standard compliance requirements. Attachment C, Renewable Energy Credit Compliance Summary, is a reproduction of Table 4-2 and 4-3 originally filed in the Company s 2010 RES Compliance Plan, Volume 2. Attachment D shows a comparison of 2010 RESA forecasted expenditures and revenues vs. actual expenditures and revenues and shows the comparison of the forecasted RESA deferred account balance versus the 2010 actual RESA deferred account balance. Attachment E, Attachment F (Highly Confidential), and Attachment F (Public) provide data on the Company s 2010 On-Site Solar RFP results. Because the Company is not claiming that the retail rate impact cap limitation inhibited its ability to meet the requirements, there is no need to report the data required in Subsection (XV) (c) of Rule In compliance with Rule 3662 (XV), the Commission has approved the Company s methodology for calculating the retail rate impact for the 2010 RES Compliance year. 3 Because the Company is not claiming that the retail rate impact cap limited its ability to comply with the 2010 RES, no modifications pertaining to the calculation of the retail rate impact for 2010 were necessary. HB increased the rate the Company can collect on the 3 Docket No. 09A-772E, 2010 RES Compliance Plan, Volume 1, Section 6, provides a detailed description of the Company s retail rate impact calculation methodology. Page 10

12 RESA deferred balance. As of August 12, 2010 the Company is now assessing its after-tax weighted average cost of capital on the deferred balances of the RESA. The Company is providing the Commission with an electronic copy of this filing, as well as posting it on the Company s website at under Renewable Energy Solutions in the Renewable Energy Programs directory. Western Renewable Energy Generation Information System (WREGIS) Western Renewable Energy Generation Information System ("WREGIS") is a third-party REC tracking and verification system for the western states (including Colorado), developed through a collaborative effort between the Western Governors Association, the Western Regional Air Partnership, and the California Energy Commission. Public Service, through Xcel Energy Services Inc. ("XES"), the service company subsidiary of Xcel Energy Inc., participates in the Stakeholder Advisory, Policy and Change Control Committees of WREGIS. Public Service believes that WREGIS and other regional REC tracking and verification systems add significant credibility to, and aid in the development of, REC markets. Xcel Energy s registered generating facilities have been uploading data to WREGIS since the last quarter of The Company used its internal REC tracking database to retire all RECs for 2010 RES compliance. Any WREGIS RECs that were used for 2010 compliance or Windsource will also be retired in WREGIS. The Company currently maintains the internal REC tracking database and WREGIS in tandem, to ensure synchronization between the two systems. Page 11