From: Carl Nolen Energy Resource Analyst Approved by: /s/ Ronald V. Stassi Interim General Manager

Transcription

1 AGENDA ITEM NO: 5.B.1 ADMINISTRATIVE REPORT NO.: To: Honorable Public Utilities Board Submitted by: /s/ Don Rushton Interim AGM Energy Resource Planning From: Carl Nolen Energy Resource Analyst Approved by: /s/ Ronald V. Stassi Interim General Manager Subject: By Resolution, Approve Renewable Energy Credits Sales Revenue Expenditures Plan RECOMMENDATION By resolution, approve Alameda Municipal Power s (AMP) Renewable Energy Credits (REC) Sales Revenue Expenditure Plan (REC Expenditure Plan). BACKGROUND Senate Bill X1 2 (SB X1 2), signed into law in April 2011, established the California Renewable Energy Resources Act to advance the state s Renewable Portfolio Standard (RPS) goal of providing at least 33 percent of total retail sales of electricity with energy from eligible renewable resources by the end of 2020 and expanded the RPS to all publicly owned electric utilities (POUs). As a POU, AMP is subject to the requirements of SB X1 2. The Public Utilities Board (Board) adopted a policy in November 2011 (Resolution No. 4887, Exhibit E) that established augmented minimum amounts of renewable energy that must be maintained in AMP s portfolio that are greater than those required by SB X1 2. These minimum amounts are: 25 percent for the years 2011 through 2013; 35 percent for the years 2014 through 2016; and 40 percent for the years 2017 through 2020 and beyond. Furthermore, AMP staff has projected that its power portfolio will have more renewable energy than is required to comply with the Board approved minimum amounts. At its January 2012 regular meeting, the Board approved AMP s Renewable Power Sales Policy and the use of resulting revenues. Specifically, through Resolution 4889, the Board directed that all eligible renewable power not required to comply with AMP s RPS through December of 2019 could be sold. The key objectives of this resolution are below:

2 AGENDA ITEM NO: 5.B.2 ADMINISTRATIVE REPORT NO.: ) Revenues accruing from the sale of renewable energy that are not required to comply with Board approved policy should be retained only for the benefit of utility ratepayers and should be used to support AMP directed initiatives to reduce greenhouse gas (GHG) emissions associated with electricity use by AMP s retail residential, business and municipal customers; 2) A plan to support AMP directed initiatives should be developed that determines policies, projects, timelines and other related criteria; 3) Preference will be given to GHG reduction projects with the most attractive cost to benefit ratio; 4) Expenditures will be made only after approval by the Board; and 5) An accounting of the revenues received, the expenditures made and the GHG reductions achieved will be provided to the Board on an annual basis. Staff evaluated each of AMP s renewable resources using several criteria including market value, resource availability, resource reliability, and the cost/complexity of entering into a potential transaction for a specific resource. Staff determined that the most highly valued resources were those with high reliability and availability, and as such, the utility s geothermal and Ox Mountain/Half Moon Bay Landfill-Gas-to-Energy (LFGTE) facilities were found to be the optimal resources from which to sell renewable power. Additionally, both resources represent Category 1 renewable power as defined by SB X1 2. Category 1 renewable resources are those located within the state, are directly connected to the grid and include the physical energy output along with environmental attributes. A REC represents the environmental attribute associated with one mega-watt hour (MWh) of eligible renewable generation and is the primary unit used to measure compliance with the RPS set forth in SB X1 2. In July 2012, AMP issued a solicitation of interest for the sale of the renewable energy generated by AMP s share of the Geothermal 1 and 2 Projects and the Ox Mountain/Half Moon Bay facilities. The total REC sales revenues over the term of the agreement are estimated to be approximately $25 million. Accrued cash receipts for RECs will be approximately $7.2 million at the beginning of FY 2015, and REC sales revenue are kept in a designated account held specifically to fund GHG-reducing projects associated with electricity use by AMP s customers. The terms of the final agreement are summarized in Table 1 below. Staff is also evaluating the sale of additional renewable power as approved by the Board through 2019.

3 Table 1: Contracted REC Sales AGENDA ITEM NO: 5.B.3 ADMINISTRATIVE REPORT NO.: Resource Geothermal Plants 1 and 2 Ox Mountain/Half Moon Bay LFGE Est. Annual MWh 180,900 Term Oct 15, 2012 Dec 31, 2016 REC Price $/MWh $33 DISCUSSION The purpose of this report is to present for the Board s consideration a REC Expenditure Plan which provides a framework and methodology regarding the use of REC sales revenue and details how the objectives of Resolution 4889 will be achieved. Plan Goals The primary goals of the REC Expenditure Plan are to: 1) Fund projects, programs and activities (Projects) that reduce GHG emissions attributable to AMP under Alameda s Local Action Plan for Climate Protection (LAPCP); 2) Develop a list of reasonable projects that reduce GHG emissions associated with electricity provided to AMP s customers; 3) Provide the Board with preliminary information concerning Projects in order to greenlight further exploration and study of specific Projects; 4) Fully evaluate a potential Project to understand and quantify the pros and cons associated with its implementation such as costs, GHG reduction potential, project feasibility, rate impact, and other considerations; 5) Provide insight into how REC revenue is utilized as well as a forum for discussion for the use of REC sales revenues; and 6) Track the progress of GHG reduction related to REC revenue sales expenditures. Funding Process The process for funding Projects with REC sales revenue is outlined in Figure 1 and described in further detail on the following page of this report.

4 AGENDA ITEM NO: 5.B.4 ADMINISTRATIVE REPORT NO.: Figure 1: Project Funding Process Proposal The Board will consider adding Projects proposed by staff to the List of Potential Projects for Funding with REC Sales Revenue (List of Projects) at regular Board meetings. The public may also submit project ideas for staff s consideration. The proposal phase is intended to provide the Board with an up-to-date, broad pool of reasonable projects that can be further evaluated to determine and quantify the pros and cons associated with each. A Project must be on the List of Projects to be funded with REC Sales Revenue. Proposed Projects should clearly and directly reduce GHG emissions associated with electricity use by AMP s customers. Types of Projects can include, but are not limited to the following: Equipment changes that result in a reduction of electricity usage in devices, appliances and lighting e.g. replacing residential, commercial, or municipal lighting with more efficient lighting such as light-emitting diodes (LEDs); Programs and/or infrastructure that encourage fuel switching from natural gas or fossil fuels to electricity resulting in a net reduction in GHG emissions e.g. development of electric vehicle charging stations and capability; Projects that reduce GHG emissions from the electricity provided to AMP s customers e.g. studying and remedying distribution line losses, procuring additional long-term renewable power; and Encouragement of behaviors that reduce GHG emissions associated with electrical energy consumption e.g. creating an awareness campaign to encourage customers to reduce phantom plug loads.

5 AGENDA ITEM NO: 5.B.5 ADMINISTRATIVE REPORT NO.: To assist the Board in determining whether to place a Project on the List of Projects, the following minimum pieces of information should accompany proposed potential Projects presented to the Board: 1) a description of the Project, 2) an estimate of the Project s GHG reduction potential, and 3) any other relevant information, costs, and benefits that would assist the Board in preliminarily assessing the Project s appropriateness for further consideration. It is important to note that a project s inclusion on the List of Projects does not guarantee its eventual approval for funding with REC sales revenue. The List of Projects is intended to serve only as a pool of potential projects. AMP will also maintain an up-to-date copy of the List of Projects on its website. Evaluation During the evaluation phase, the General Manager (GM), with direction from the Board, will direct staff to further evaluate specific Projects selected from the List of Projects. Evaluation of a specific Project will serve to fully understand the scope, timeline, cost, GHG reduction potential, rate impact, operation and maintenance impacts, fit into resource planning and current power mix, and any other criteria recommended by the GM or the Board. The evaluation phase allows staff to refine a Project before making a funding recommendation to the Board. Costs associated with complying with the REC Expenditure Plan include but are not limited to studies, development, consulting, labor, third-party and other evaluation and implementation costs needed to recommend a comprehensive project to the Board. These upfront costs will be funded through REC sales revenues and will comply with AMP s existing purchasing and contract requirements for specifications and awards for materials or services. Approval Once a Project has been vetted and evaluated, staff will present the Project to the Board for consideration of approval for funding with REC sales revenue. All or a portion of a Project can be approved. Staff will report on the criteria above that was identified during the evaluation phase and make a recommendation to the Board to fund with REC sales revenue. Projects that should receive primary consideration are those that, given the information available at the time, are expected to perform best when reviewed comprehensively against all criteria, including costs and GHG emissions reduction as well as other criteria mentioned above. Projects that are approved will be added to AMP s budget if they were not previously included. Projects that upon further evaluation are not deemed eligible to pursue will be removed from the List of Projects. Implementation Approved Projects will be funded with the approved portion of REC sales revenue and implemented accordingly. As a continuing part of the implementation process, an accounting of the revenues received, expenditures made, and GHG reductions achieved by executed Projects will be provided to the Board on an annual basis, pursuant to Resolution No

6 AGENDA ITEM NO: 5.B.6 ADMINISTRATIVE REPORT NO.: Plan Risks Risks to be considered when funding projects include underproduction from renewable facilities as well as counterparty risk, each of which may reduce REC sales revenues below forecast. Options to mitigate these risks include: waiting until all necessary cash from REC sales has been received before approving funding a project; planning to fund certain Projects through rates in the event anticipated REC sales proceeds become unavailable; and funding projects that can be discontinued without material negative economic impact on ratepayers. FINANCIAL IMPACT According to Resolution 4889, AMP will continue to retain the REC proceeds and use them to fund GHG reduction programs that benefit retail ratepayers. Expenses associated with REC Expenditure Plan Projects will be funded from this account. Some programs, such as installing LED streetlights or implementing a strategy to reduce AMP s distribution system losses, will also reduce AMP s operating costs. LINKS TO BOARD POLICY AND OBJECTIVES Strategy 2: Strategy 9: Strategy 10: Ensure utility financial health is preserved through short and long-term risk management and planning. Endeavor to maintain local control over utility programs including energy efficiency, renewable power and distribution system standards. Manage short-term and long-term power supply reliability and cost, while maintaining a loading order of efficiency and demand response, renewable energy resources, and clean and efficient fossil generation. EXHIBITS A. Approval of AMP s REC Proceeds Expenditure Plan Resolution B. REC Sales Expenditure Plan C. Potential Projects for Funding with REC Sales Revenue D. Presentation Materials E. Resolution No. 4887

7 CITY OF ALAMEDA ALAMEDA MUNICIPAL POWER RESOLUTION NO. APPROVAL OF ALAMEDA MUNICIPAL POWER S RENEWABLE ENERGY CREDIT SALES REVENUE EXPENDITURE PLAN WHEREAS, in April 2011, the State of California adopted into law Senate Bill (SB) X1 2, the California Renewable Energy Resources Act, effective December 10, 2011, establishing minimum quantities of eligible renewable resources that load serving entities must procure through 2020, ranging from 20 percent of retail sales by 2013, to 33 percent by 2020; and WHEREAS, Alameda Municipal Power s (AMP) Public Utilities Board (Board) adopted, in November 2011, by Resolution No. 4887, a Renewable Portfolio Standard (RPS) Policy that exceeds the state s goals, specifying that the percentage of eligible renewable energy used to supply AMP s retail end-use customers will be maintained at no less than 25 percent for the years 2011 through 2013, 35 percent for the years 2014 through 2016, and 40 percent thereafter; and WHEREAS, AMP has projected that its energy portfolio will have more eligible renewable energy than is required to comply with its RPS Policy; and WHEREAS, the Board directed AMP to monetize eligible renewable energy not required to comply with its RPS Policy and use the resulting revenues only for the benefit of utility ratepayers and to support AMP directed initiatives to reduce greenhouse gas (GHG) emissions associated with electricity use by AMP s retail residential, business and municipal customers, per Resolution No. 4889; and WHEREAS, AMP s General Manager or designee is authorized to enter into and approve agreements for the purchase and sale of electric energy or other related attributes pursuant to Resolution No. 4890; and WHEREAS, AMP is under contract to sell renewable energy and associated renewable energy credits (RECs) from certain generation facilities through 2016, and plans to possibly enter into additional sales contracts; and WHEREAS, staff has prepared the Renewable Energy Credit Sales Revenue Expenditure Plan (REC Expenditure Plan), which includes a List of Potential Projects for Funding with REC Sales Revenue (List of Projects); NOW, THEREFORE, BE IT RESOLVED that the Public Utilities Board of the City of Alameda hereby adopts Exhibit A, AMP s Renewable Energy Credit Sales AGENDA ITEM NO.: 5.B. EXHIBIT A - Page 1 of 2

8 Revenue Expenditure Plan and Exhibit C, a List of Potential Projects for Funding with REC Sales Revenue, and authorizes AMP s General Manager or designee to implement the Renewable Energy Credit Sales Revenue Expenditure Plan. BE IT FURTHER RESOLVED, that in addition to adopting the REC Expenditure Plan and List of Projects, the Public Utilities Board also approves for funding with REC sales revenue the following projects that are scheduled to be completed in fiscal year 2015 and are included and described in the List of Projects: Project 1: LED Streetlight Replacement Cobra Head and Shoe Box Project 2: Electric Vehicles and Chargers for AMP s Fleet Project 3: Commercial Lighting Retrofit Rebate Program Project 4: LED Light Bulbs for Existing Alameda Residential Customers BE IT FURTHER RESOLVED, that should California s RPS program, California Energy Commission regulations for RECs, and/or AMP s contracts for the sale of RECs be suspended, discontinued, or materially altered such that AMP no longer receives monetary value for the sale of RECs, the Board reserves the right to terminate the REC Expenditure Plan and discontinue any projects funded with revenues from the sale of RECs. The REC Expenditure Plan shall be effective upon approval by the Board. Approved as to Form By: /s/ Janet C. Kern City Attorney AGENDA ITEM NO.: 5.B. EXHIBIT A - Page 2 of 2

9 ALAMEDA MUNICIPAL POWER RENEWABLE ENERGY CREDIT SALES REVENUE EXPENDITURE PLAN Introduction Adopted by the Alameda Public Utilities Board: May 19, 2014 This document presents Alameda Municipal Power s (AMP) Renewable Energy Credit Sales Revenue Expenditure Plan (REC Expenditure Plan), the purpose of which is to ensure compliance with Resolution No by detailing how the resolution s objectives described below will be addressed. 1) Revenues accruing from the sale of renewable energy that are not required to comply with Public Utilities Board (Board) approved policy should be retained only for the benefit of utility ratepayers and should be used to support AMP directed initiatives to reduce greenhouse gas (GHG) emissions associated with electricity use by AMP s retail residential, business and municipal customers; 2) A plan to support AMP directed initiatives should be developed that determines policies, projects, timelines and other related criteria; 3) Preference will be given to GHG reduction projects with the most attractive cost to benefit ratio; 4) Expenditures will be made only after approval by the Board; and 5) An accounting of the revenues received, the expenditures made and the GHG reductions achieved will be provided to the Board on an annual basis. 1. Terms and Definitions REC Sales Revenue: Revenue resulting from the sales through 2019 of renewable energy and RECs that are not needed for compliance with AMP s RPS Policy, net of the costs of complying with both AMP s REC Sales Policy and REC Expenditure Plan. The costs of compliance with AMP s REC Sales Policy include, but are not limited to, costs associated with transacting renewable power such as contract development costs, attorney s fees, NCPA fees and ongoing power and REC transfer fees. Similarly, the costs of compliance with AMP s REC Expenditure Plan include but are not limited to the evaluation, development, labor and implementation of eligible GHG reduction projects and other relevant, third-party or associated costs. REC Sales Revenues will be retained in a designated fund and included in AMP s monthly financial reporting to the Board. AGENDA ITEM NO.: 5.B. EXHIBIT B - Page 1 of 4

10 Project: Any project, program or activity that directly reduces GHG emissions associated with electricity use by AMP s customers. Projects can include, but are not limited to: 1) equipment changes that result in a reduction in electricity usage in devices, appliances and lighting, 2) fuel switching from natural gas or fossil fuels to electricity that results in a net reduction in GHG emissions, 3) projects that reduce GHG emissions of the electricity provided to AMP s customers, and 4) projects that advance the modification or adoption of behaviors that would reduce GHG emissions associated with electric energy consumption. Examples include: Programs and infrastructure that develop or promote electric vehicle charging stations; Customer energy efficiency programs; Light-emitting diode (LED) streetlights; Distribution system improvements that reduce electric losses; Development of community solar; and Purchases or investment in renewable and/or carbon-neutral resources renewable attributes List of Potential Projects for Funding with REC Sales Revenue (List of Projects): Catalog of Projects deemed by the Board as eligible for further examination and study. Projects will be added to the List of Projects as directed by the Board and will be further evaluated by staff and eventually considered by the Board for funding with REC Sales Revenue. A Project must be on the List of Projects to be funded with REC Sales Revenue. 2. Project Funding Process Figure 1 provides an overview of the Project funding process, which includes the proposal, evaluation, approval and implementation phases. AGENDA ITEM NO.: 5.B. EXHIBIT B - Page 2 of 4

11 Figure 1: Project Funding Process I. Proposal Staff proposes List of Projects believed to be eligible for REC funding Board accepts or modifies the List of Projects for approval II. Evaluation General Manager directs staff to further evaluate specific Projects selected from the List of Projects Staff makes recommendation regarding funding of a specific Project at a regular Board Meeting. III. Approval Board considers Project for funding with REC Sales Revenues IV. Implementation Project implemented Annual reports on: Project status GHG reduction Expended REC sales revenue The Process is explained in more detail as follows: I. Proposal: Staff will propose Projects to be further evaluated for possible funding with REC Sales Revenue and present them at regular Board meetings. The public may also submit Project ideas to staff for consideration. Board action is required for a Project to be added to the List of Projects, and a Project must be on the List of Projects to be funded with REC Sales Revenue. The Board may accept and/or modify the List of Projects as needed, and the Board will consider the List of Projects for approval at least annually, pursuant to Resolution No. 4889, or more frequently as needed or directed by the Board. AMP will maintain an up-to-date copy of the List of Projects on its website. To assist the Board in its decisions, Project submittals should include at minimum the following information: a description of the Project an estimate of the annual GHG reduction potential other potential benefits and relevant information II. Evaluation: The General Manager (GM) or designee will direct staff to further evaluate Projects on the List of Projects to better define project scope, clarify potential benefits and issues, secure scoping estimates, quantify GHG emissions reduction potential and overall refine a Project s candidacy for funding with REC Sales Revenues prior to further discussion by the Board. The costs of these additional evaluation and development activities will be funded from REC Sales Revenue. AGENDA ITEM NO.: 5.B. EXHIBIT B - Page 3 of 4

12 III. Approval: The Board, in conjunction with the GM or designee, will make a final determination to fund all or a portion of specific evaluated Projects from accrued REC Sales Revenue. Projects that should receive primary consideration are those that, given the information available at the time, are expected to perform best when reviewed comprehensively against all criteria and considerations for achieving overall AMP GHG reduction goals, including, but not limited to: Costs and benefits as measured in [tons CO2e reduced per year] and [cost per ton of CO 2 e reduction]; Feasibility of project implementation; Impact on rates; Operation and maintenance costs; and Impact on resource planning objectives. It is important to note that a Project s presence on the List of Projects does not guarantee its selection for funding with REC Sales Revenue. Projects that are approved will be added to AMP s budget if they were not previously included. Those Projects that upon further evaluation are not deemed eligible to pursue will be removed from the List of Projects. IV. Implementation: Approved Projects will be funded up to 100 percent with REC sales revenue and implemented accordingly. 3. Reporting An accounting of the revenues received, the expenditures made, and GHG reductions achieved by executed Projects will be provided to the Board on an annual basis, pursuant to Resolution No Plan Modifications & Amendments AMP s REC Expenditure Plan may be modified or amended by an affirmative vote of the Board during a public meeting. AGENDA ITEM NO.: 5.B. EXHIBIT B - Page 4 of 4

13 POTENTIAL PROJECTS FOR FUNDING WITH RENEWABLE ENERGY CREDIT SALES REVENUE BACKGROUND Pursuant to Board-approved Resolution No. 4889, the purpose the funding of Projects from Renewable Energy Credit (REC) Sales Revenue is to benefit ratepayers and support AMP directed initiatives to reduce greenhouse (GHG) emissions associated with electricity use by Alameda Municipal Power s (AMP) retail residential, business and municipal customers. Preference will be given to GHG reduction Projects with the most attractive cost to benefit ratio. According to AMP s REC Sales Revenue Expenditure Plan (REC Expenditure Plan), the List of Potential Projects for Funding with REC Sales Revenue (List of Projects) is defined as a catalog of Projects deemed by the Board as eligible for further examination and study by AMP staff, and inclusion on the Schedule does not necessarily indicate that the Project will ultimately be funded or implemented. Projects to be evaluated for funding with REC Sales Revenue will be presented to AMP s Public Utilities Board (Board) at its regular meetings. Projects will be added to the List of Projects as directed by the Board and will be further evaluated by staff and considered by the Board for funding with REC Sales Revenue. To assist the Board in its Project approval process, Projects submitted for consideration should include at minimum the following information: 1) General description of the Project 2) Estimate of GHG reduction potential i.e. a preliminary quantitative or qualitative estimate of the potential for GHG reduction on an annual basis in terms of tons CO 2 equivalent reduction or subjective description 3) Additional information to consider e.g. reduction in operating and maintenance costs for AMP, increase in community awareness of energy-related issues/consumption, long-term procurement of renewable power, reduction in ratepayer energy costs, other qualitative and quantitative benefits AGENDA ITEM NO.: 5.B. EXHIBIT C - Page 1 of 9

14 SCHEDULE OF POTENTIAL PROJECTS Projects Included in FY 2015 Budget Project 1 Title: Description: GHG Reduction Potential: LED Streetlight Replacement Cobra Head and Shoe Box Replacement of the approximately 3,300 high pressure sodium (HPS) Cobra Head/Shoe Box streetlight fixtures in the City of Alameda that are operated by AMP with more energy efficient light-emitting diode (LED) streetlights. 315 metric tons CO 2 e per year Additional Information: 1) Reduction in energy consumption and costs 2) Improved light distribution, color and road visibility 3) Longer streetlight operational life 4) Reduced maintenance cost 5) Peak demand reduction 6) Decreased cost borne by ratepayers 7) FY 2015 Budget Cost Estimate: $1,342,000 AGENDA ITEM NO.: 5.B. EXHIBIT C - Page 2 of 9

15 Project 2 Title: Description: GHG Reduction Potential: Additional Information: Cost Estimate: Electric Vehicles and Chargers for AMP s Fleet Installation of two EV charging stations with the associated infrastructure for up to six charging stations. AMP will replace two existing cars with EVs (e.g. Nissan Leaf, Chevy Spark, etc.) and charge them at night. 3.5 metric tons CO 2 e per year per vehicle, based on average of 3,200 miles per year driven per vehicle 1) FY 2015 Budget $50,000 per vehicle replacement and $25,000 per charging station Project 3 Title: Description: GHG Reduction Potential: Commercial Lighting Retrofit Rebate Program Provide rebate to commercial customers for building retrofits, LED applications, etc. Retrofit solution will most likely be provided by a 3 rd party and will be a comprehensive, turnkey approach that delivers cost-effective, reliable energy savings. 650 to 1,000 metric tons CO 2 e year per Additional Information: 1) Energy savings of 1,500 to 2,500 MWh per year 2) FY 2015 Budget Cost Estimate: $600,000 AGENDA ITEM NO.: 5.B. EXHIBIT C - Page 3 of 9

16 Project 4 Title: Description: GHG Reduction Potential: Additional Information: Cost Estimate: LED Light Bulbs for Existing Alameda Residential Customers Distribute one or more light-emitting diode (LED) bulb to every AMP customer Assuming 3 hours per day of use, replacing older bulbs (2/3 incandescent, 1/3 CFL) with an LED would result in a reduction of approximately metric tons CO 2 e per year per bulb and 490 metric tons total per year 1) FY 2015 budget 2) Longer bulb operational life 3) Peak demand reduction 4) Reduction in energy consumption and costs $13 per bulb for materials and shipping; approximately $400,000 total for one bulb per residential customer Post-FY 2015 Projects Project 5 Title: Description: GHG Reduction Potential: Replacement of AMP s SF 6 Breakers Replacement of AMP s high-voltage sulfur hexafluoride breakers with breakers that use less SF 6 to reduce leakage SF 6 has a global warming potential (GWP) of 23,600 times that of CO 2. For example, reducing one kg of SF 6 leakage would equate to a reduction of 23.6 metric tons of CO 2. Additional Information: Cost Estimate: $500,000 1) FY 2016 Budget AGENDA ITEM NO.: 5.B. EXHIBIT C - Page 4 of 9

17 Project 6 Title: Description: GHG Reduction Potential: Additional Information: LED Streetlight Replacement Decorative Replacement of the approximately 1,900 high pressure sodium (HPS) decorative streetlight fixtures in the City of Alameda that are operated by AMP with more energy efficient light-emitting diode (LED) streetlights. 178 metric tons CO 2 e per year 1) Reduction in energy consumption and costs 2) Improved light distribution, color and road visibility 3) Longer streetlight operational life 4) Reduced maintenance cost 5) Peak demand reduction 6) Decreased cost borne by ratepayers 7) May require approval by Alameda Historical Advisory Board 8) FY Budget Cost Estimate: $3,000,000 Project 7 Title: Description: GHG Reduction Potential: Additional Information: Cost Estimate: Development or Purchase of Power from Other Renewable Resources Study, quantify, develop, or purchase generation of power from additional renewable resources such as wind, solar, biogas, landfill gas, etc. Dependent on power type and/or technology 1) Consideration should be made to possibly explore the future procurement of clean energy resources as AMP s current contracts expire, current renewable generation resources diminish and load increases Dependent on power type and/or technology AGENDA ITEM NO.: 5.B. EXHIBIT C - Page 5 of 9

18 Project 8 Title: Description: GHG Reduction Potential: Additional Information: Cost Estimate: Community Solar Develop a community solar project that allows Alameda citizens to own shares of the project in terms of either kwhs produced or kwp installed capacity. 680 metric tons CO 2 e per year per installed MWp capacity 1) Reduce transmission costs for on-island generation 2) Take advantage of economies of scale to reduce install costs compared to equivalent capacity for rooftop solar 3) Provide access to solar generation for Alameda s ~50% renters who are unable to site PV on their rooftops 4) Possibility for eventual coupling with energy storage technology to reduce peak demand 5) Reduce transmission losses $2,000,000 to 2,500,000 per installed MW capacity Project 9 Title: Description: GHG Reduction Potential: Additional Information: Cost Estimate: AMP Distribution System Quantitative Loss Study and Remediation Conduct quantitative phase of distribution system loss study and/or implement recommendations such as strategic transformer replacements, line reconductoring etc. A reduction in AMP s distribution system losses of 1% would equate to approximately 3.5 GWh saved per year, or 1,500 metric tons CO 2 e per year 1) More robustness to AMP s distribution system 2) Substantial long-term technology and infrastructure upgrade Dependent on distribution system enhancements/replacements made AGENDA ITEM NO.: 5.B. EXHIBIT C - Page 6 of 9

19 Project 10 Title: Description: GHG Reduction Potential: EV Charging Stations in Alameda Fund installation of electric vehicle charging stations throughout Alameda. Up to 3.5 metric tons CO 2 e year per vehicle, but dependent on miles driven per year and portion of charge that comes from AMP-funded EV charging stations vs. at-home charging Additional Information: Cost Estimate: $12,000 for a Level II 240 V charging station installation and materials; $55,000 for a Level III 420V charging station installation and materials; economies of scale can be achieved by installing and purchasing multiple chargers at the same site. Project 11 Title: Description: GHG Reduction Potential: Replace and Expand AMP Solar Installation on Rooftop Replace aging solar installation at AMP with an approximately 48 kwp behind-the-meter system 32 metric tons CO 2 e year per Additional Information: Cost Estimate: $167,120 AGENDA ITEM NO.: 5.B. EXHIBIT C - Page 7 of 9

20 Project 12 Title: Description: GHG Reduction Potential: Additional Information: Cost Estimate: Energy Storage Capital Investment Invest in cost-effective energy storage technology that could store AMP s wind or solar generation, for example, and use the stored generation to reduce more expensive, GHG-intensive market energy during periods of higher/peak demand. Market, or unspecified, power purchased during peak demand times, which emits approximately kg CO 2 /kwh, would be replaced with AMP s excess renewable generation during certain periods. 1) Technology is still in infancy stage for some types of storage 2) Multiple types of storage including: pumped hydro, compressed air mechanical flywheel, thermal, and battery storage Dependent on type of storage Project 13 Title: Description: GHG Reduction Potential: Solar Installations on Public Buildings Develop and fund a subsidy for solar installations on rooftops of public buildings, schools, etc. in Alameda. 680 metric tons CO 2 e per year per installed MWp capacity Additional Information: Cost Estimate: $2,000,000 to 2,500,000 per installed MWp capacity AGENDA ITEM NO.: 5.B. EXHIBIT C - Page 8 of 9

21 Project 14 Title: Description: GHG Reduction Potential: Additional Information: Cost Estimate: Advanced Metering Infrastructure Fund a portion of materials for the implementation of AMP s advanced metering infrastructure development and upgrade. A reduction in energy consumption of 1% would equate to approximately 3.5 GWh saved per year, or 1,500 metric tons CO 2 e per year 1) Improves efficiency through increased customer awareness of energy use and price incentives 2) Integration with smart grid technology could improve system reliability and reduce losses $197,000 included in FY 2015 budget for AMI; a portion of this could be funded with REC proceeds if approved by the Board AGENDA ITEM NO.: 5.B. EXHIBIT C - Page 9 of 9

22 AGENDA ITEM NO.: 5.B. MEETING DATE: 05/19/2014 EXHIBIT D Renewable Energy Credits Sales Revenue Expenditure Plan May 19,

23 REC Sales History and Timeline April 2011: SB X1 2 established California s Renewable Portfolio Standard 20% for period 1 ( ) 25% for period 2 ( ) 33% for period 3 and onward ( and beyond) June 2011: PUB established and adopted AMP s augmented RPS policy Set higher RPS standards for AMP 25% for period 1 ( ) 35% for period 2 ( ) 40% for period 3 and onward ( and beyond) December 2011: Staff recommended selling AMP s excess renewable power not needed for compliance with AMP s augmented RPS 2

24 REC Sales History and Timeline 2012 AMP Renewable Energy Projection SB 1X 2 Target AMP Policy Projected Renewables 80% 70% January 2012: Board approved staff recommendation to sell AMP s excess renewable power not needed for compliance with AMP s augmented RPS through 2019 (Resolution 4889) % of Retail Sales 60% 50% 40% 30% 20% 10% 0% May 2012: Board authorized GM to execute renewable sales October 2012: AMP entered into contract with CDWR to sell renewable power from Geothermal and Ox Mountain/Half Moon Bay LFGTE facilities 180,900 annual MWh $33/MWh REC price Estimated total of $25M through end of

25 REC Expenditure Plan Objectives Compliance with Board Resolution Develop a REC spending plan 2. Fund only projects with REC sales revenue that reduce GHG associated with electricity use by AMP s retail customers 3. Give preference to projects that have an attractive cost to benefit ratio 4. Account for revenues, expenditures and GHG reductions 5. Provide an approval process to the Board 4

26 1) Proposal REC Expenditure Plan Funding Process Staff will provide to the Board a List of Projects and propose additional projects at future Board meetings List will include for each project: description, GHG reduction potential, cost estimate, and additional information Currently 14 projects on List Four proposed in FY 2015 budget Inclusion on the List does not necessarily equate to funding with REC revenue Outlines projects, timelines and other related information Provides Board with a broad pool of projects to further be evaluated 5

27 2) Evaluation REC Expenditure Plan Funding Process Board and GM direct staff to analyze specific projects picked from the List of Projects Staff further determines project characteristics such as: Cost/benefits [GHG reduction and costs] Impact on O&M costs Allows staff to fully refine a project before presenting to the Board for funding approval with REC revenue 6

28 3) Approval REC Expenditure Plan Funding Process Staff brings vetted project to Board for approval for funding with REC revenue, reporting on information gathered from evaluation Board approves project for funding 4) Implementation Approved projects are funded with REC revenue and implemented Annual accounting of REC revenues and expenditures, along with GHG reductions achieved by projects 7

29 List of Projects Project GHG Reduction Method 1 LED Streetlight Replacement Cobra Head and Shoe Box* Energy Efficiency 2 Commercial Lighting Retrofit Rebate Program Energy Efficiency 3 LED Light Bulbs for Existing Alameda Residential Customers Energy Efficiency 4 LED Streetlight Replacment Decorative* Energy Efficiency 5 Advanced Metering Infrastructure* Energy Efficiency 6 Development or Purchase of Power from Other Renewable Resources Power Supply GHG Reduction 7 Community Solar Power Supply GHG Reduction 8 Replace and Expand AMP Solar Installation on Rooftop* Power Supply GHG Reduction 9 Energy Storage Capital Investment* Power Supply GHG Reduction 10 Solar Installations on Public Buildings Power Supply GHG Reduction 11 EV Charging Stations in Alameda* Fuel Switching to Electricity 12 Electric Vehicles and Chargers for AMP's Fleet* Fuel Switching to Electricity 13 Replacement of AMP's SF 6 Breakers* Distribution System Improvement 14 AMP Distribution System Study and Remediation* Distribution System Improvement *Denotes capital improvement project (CIP). 8

30 List of Projects Project Proposed in FY 2015 Budget GHG Reduction Method 1 LED Streetlight Replacement Cobra Head and Shoe Box Energy Efficiency 2 Electric Vehicles and Chargers for AMP's Fleet Fuel Switching to Electricity 3 Commercial Lighting Retrofit Rebate Program Energy Efficiency 4 LED Light Bulbs for Existing Alameda Residential Customers Energy Efficiency 9

31 List of Projects Proposed in FY 2015 Budget Project Cost Annual GHG Reduction [mt] Annual Energy Change [MWh] Lifetime Annual $/mt CO2 Reduction Annual $/kwh Cost of Saved Energy Other 1 LED Streetlight Replacement Cobra Head and Shoe Box $1,400, $146 $0.063 Reduced O&M; peak demand reduction; improved light/visibility Two vehicles have poor fuel economy; includes infrastructure for more chargers Reduce daytime peak demand 2 Electric Vehicles and Chargers for AMP's Fleet $150, $957 NA 3 Commercial Lighting Retrofit Rebate Program $600,000 2, $25 $0.058 LED Light Bulbs for Existing 4 Alameda Residential Customers $400, , $68 $0.030 Peak demand reduction TOTAL $2,550,000 2,811 2, $41 $

32 Next Steps Direct staff to incorporate the four GHG reducing projects planned in 2015 into the FY 2015 budget Adopt the REC Expenditure Plan and associated List of Projects Approve for funding with REC revenue the four FY 2015 GHG reducing projects 11

33 Questions? Carl Nolen Energy Resource Analyst (510)

34

35