Local Build out of Energy Resources of the Community Choice Aggregation Program Joint SF LAFCo SFPUC Meeting January 30, 2015

Transcription

1 Local Build out of Energy Resources of the Community Choice Aggregation Program Joint SF LAFCo SFPUC Meeting January 30, 2015

2 The EnerNex / Willdan Team EnerNex is an engineering and consulting firm that helps solve electric power related issues and on developing technology and expertise that improve the operation and reliability of electric power systems. EnerNex is well versed in electric utility operations, the technical details of distributed renewable energy, regulatory issues, and economic factors relevant to CCA operation. Willdan, specializes in providing financial guidance to more than 800 public agencies, investor owned utilities and private sector clients. Willdan has extensive experience in the development of comprehensive financial and economic models that are used to evaluate and analyze the funding and operation of utility projects and programs. EnerNex and Willdan collaborated with Lancaster, CA to develop a CCA feasibility study with a CCA implementation plan filed late summer of

3 Project Milestones Review of 55 prior reports and presentations formed the basis for this build-out report May Expedited Task 1 focusing on Utilizing SFPUC for CPSF Power Procurement May 5 Task 1 Meeting with SFPUC May 13 Task 1 Draft May 16 Updated Task 1 Draft for budgetary consideration July Meetings July 10 Meeting with Office of Economic Analysis July 10 & 15 Meetings with SFPUC July 15 Meeting with Advocates August 18 Interim Report September Comments September 4 SF Environment Staff Comments (follow up meeting September 12) September 10 San Francisco Clean Energy Advocates Comments September 11 & 18 SFPUC Comments (follow up meeting September 23) October October 1 Internal Draft Report October 30 Draft Report November Comments November 14 San Francisco Clean Energy Advocates Comments November 17 Supervisor John Avalos office comments November 20 SFPUC Comments November 26 & December 5 SF Office of Economic Analysis Comments December 8 Final Report December 8 Final Report December 10 SF Office of Economic Analysis Comments December 29 & January 14 Final Review with SFPUC January 30 Revised Final Report 3

4 Task 1: Utilizing SFPUC for CPSF Power Procurement The option of having the SFPUC PE provide procurement and portfolio management services directly in support of CPSF is consistent with and complimentary to PE s current and future functions and roles. CPSF could utilize a transfer price or some other mechanism to provide appropriate compensation to SFPUC for services rendered. Prior to procuring energy, it will be necessary to determine the power cost parameter ranges that can feasibly support the green renewable energy plan offerings. For both the 100% renewable energy and the recommended Light Green plan, the generation price points needs to be determined so that the energy procured is not too costly for the competitive customer rate structure envisioned. Working with the SFPUC and Commission, it should be possible for CPSF to become a customer that receives priority for Hetch Hetchy power after the current Raker Act mandated serving priorities are met 4

5 Task 2: Timing/Economic Benefits of Local Build Out The development of local renewable energy projects has the potential to realize economic benefits for the City from the employment and expenditures for implementation activities. The City will benefit from shifting energy spending to sources within the local and regional area rather procuring electricity from remote sources. $/W Average Construction Phase Jobs/$M Solar $ Wind $ Geothermal $ Small Hydro $ Behind the Meter N/A Average Operations Phase Jobs/$M 5

6 Build out Project Economic Impact Average Summary Locale Local / Regional In State (CA) Project Capacity (MW AC) Cost ($M) Construction Phase Jobs/$Million Construction Phase Jobs Operational Phase Jobs/$Million Operations Phase Jobs Large Solar 48 $ , Wind 328 $ , Geothermal 50 $ , Total Local / Regional 426 $1, , Large Solar 30 $ Wind 200 $ , Geothermal 90 $ , Total 746 $2, , Summary assumes ALL projects are constructed 6

7 Task 3: Locations of Potential Local and Regional Projects Solar # Wind Project # Project Sunol 2 Oceanside 10 Tesla Portal 3 Sunol (by 2) 11 SFO Parking Lot Hunters Point University Mound Sutro Reservoir Pulgas Reservoir SF Port Pier Tesla (by 3) 12 5 Altamont Pass 6 Montezuma Hills 7 Walnut Grove 8 Geothermal Project The Geysers 18 # 7

8 Task 4: Energy Efficiency Strategy CCA s, including CPSF, can use Energy Efficiency (EE) funds collected from their own customers as well as funds collected from the Investor Owned Utility (IOU) servicing their territory. The CPUC requires that EE programs be cost effective and lead to direct energy savings. Coordination with SFPUC the Department of Environment and BayREN is needed to design future EE programs. 8

9 Task 5: Commercial and Industrial Customers The former CPSF plan for Phase 1 focused on service for residential customers with a proactive participation request option for commercial and industrial customers. Some commercial customers have already indicated interest in CPSF and enrolling in a high content renewable energy plan. 9

10 Task 6: Renewable Energy Production Task 12: Hydroelectric Generation The cost of energy generation should be calculated using Levelized Cost of Energy (LCOE) methodology which will allow estimated costs to be compared across all sources being considered for renewable energy within comparable time frames. Existing cost estimates vary significantly for many of the proposed renewable energy projects. Thus, prior to build out, further analysis is necessary to validate the estimated cost of specific renewable energy projects. Build out of small hydro projects by SFPUC as well as PPAs to acquire solar and wind energy from local and regional projects are the most cost effective sources of renewable energy. 10

11 Customer Programs Task 7: Behind The Meter Deployment Strategies Behind the meter projects would save customers money by reducing their overall energy costs. Thus helping to fund BTM projects may attract customers to the CPSF BTM projects are typically owned by the customer who is responsible for the projects, including assuming liability and risks for the systems. Accordingly, the majority of the economic benefits of BTM systems will accrue to their owners Task 8: GoSolarSF Incentives and Projects Coordination of CPSF projects with the GoSolarSF program would leverage funding and would increase benefits for CPSF customers. Task 9: Net Energy Metering Tariffs A favorable Net Energy Metering (NEM) tariff is recommended as it would attract existing solar customers to the CPSF. Task 11: Feed In Tariffs and Power Purchase Agreements Feed in tariffs (FIT) offer key benefits to CPSF that include the ability to acquire local clean renewable energy at stable prices under multi year contracts. 11

12 Task 10: Financing Support The early establishment of sound financial policies and practices will be key in the success of the renewable program. A CCA s financial strength is critical to its long term viability and its ability to access financial markets. The stability of CPSF s customer base will affect the financial market s assessment of the systems revenue stability. CPSF should establish policies to ensure the electric utility maintains appropriate financial margins, including debt service coverage and operating reserve levels. It is recommended CPSF develop an Integrated Resource Plan (IRP) to assist in meeting forecasted annual demands, including both peak and an established reserve. 12

13 Next Steps EnerNex recommends adopting program management principals including lifecycle management and lifecycle costing to optimize the timing and planning of build out efforts. Estimated build out cost estimates from prior studies utilized in this report provided a range of costs for each project. Pursuit of build out will require design finalization and capital cost estimate verification. The build out projects listed in this report are in various stages of feasibility analysis. Environmental impact studies and other project planning will be required to move forward. A rate analysis will be required to determine whether the envisioned CPSF renewable portfolio can be provided to customers at a price competitive with PG&E rates. The CPSF Implementation Plan will need to be updated and filed with the CPUC 13

14 Questions