How Green is My Muni

By Published On: February 13, 2014

Editor’s note: This is the second part of a series on public power agencies in California. Part one published Jan. 30 focused on California’s two largest public power agencies, the Los Angeles Department of Water and Power and Sacramento Municipal Utility District. Some of California’s public power agencies are well ahead of the state’s annual renewables obligation while others just meet the current 20 percent obligation.  A few of the municipal utilities plan to continue increasing their geothermal, wind and other alternative power resources above and beyond the 33 percent Renewable Portfolio Standard set for 2020. Others are watching and waiting to see what the state may require and the means—be it a renewables mandate, greenhouse gas standard or something different the next decade.     Public power agencies that exceed the state's annual renewables obligation, including Alameda Municipal Power and Silicon Valley Power, sell the green attributes of the alternative supplies in excess of their obligations to reduce the rate impacts of creating a carbon-lite portfolio. Others stick closely to the state's game plan, meeting the mandated increases set in three-year increments. Following is a representative sampling of the green energy portfolios of large and small munis in Northern and Southern California. Alameda Municipal Power is far above all utilities on the renewables front—public and private—with at least 60 percent renewables as defined by state law since 2011. Since last year and through to 2019, it has and will continue to sell off a large parts of the renewable credits or tags linked to its geothermal and landfill gas resources, which make up resources well above the state annual renewables obligation. The revenue from the sales of green power may be used to buy or develop additional renewable generation, said Alan Hanger, senior energy resources analyst. In 2012, Alameda’s renewable resources were 21 percent biomass, 32 percent geothermal, 6 percent wind and 1 percent small hydro (under 30 MW). The 2013 renewable levels have not been finalized but will be lower because of its sales of green tags, according to Hanger. Alameda’s annual renewables requirements through 2020 “will be met with remaining renewable resources and historic carryover of excess procurement,” he said. Market rates for renewable power are approximately $25/MWh higher than the grid operator’s non-renewable power costs. Hanger said that Alameda has managed to keep its rates below that of surrounding utilities, partly because it began investing in renewables before the state mandate and rush to buy green power. It has not decided if it will expand its renewables portfolio but “anticipates that such an increase is a likely means to further reduce our greenhouse gas emissions.” Alameda’s annual energy efficiency targets went well past the mark. The targeted savings in 2013 were 1,771MWh. The actual net savings were 3,076 MWh. The small muni by the San Francisco Bay, which serves 75,000 customers—largely residential—does not have demand response programs because of its cool summer temperatures. Anaheim Public Utilities is at the 20 percent renewable energy mark, the level required by law. The muni’s goal is to meet the 33 percent state mandate set for 2020. “We’re balancing our ratepayer impacts,” said Steven Sciortino, Anaheim assistant general manager. So far, implementing renewable energy has added what he estimates to be about 1 cent/kWh to the cost of power in the city. The utility serves 345,000 people and 15,000 businesses, including major energy users like Disneyland. Its renewable energy supply breaks down as follows: Biomass and waste provide 4 percent of the utility’s energy, geothermal 3 percent, wind 11 percent, and solar and small hydro each provide about 1 percent. Anaheim’s muni targets saving about 1 percent of the projected power demand each year by advancing energy efficiency programs, Sciortino said. Aside from right after the recession hit in 2008, it’s generally met that target, he said. Renewables make up close to 27 percent of Modesto Irrigation District’s power supplies. That consists of about 24 percent wind, about 2 percent solar and approximately 1 percent small hydro and biogas. The rate impact of the renewable supplies is about five percent. “On the average MID residential bill approximately $8.15 out of $160 each month is for green energy,” reflecting the cost of renewables and cutting greenhouse gases, said Melissa Williams, Modesto spokesperson. The District’s 2014 energy efficiency goal is 15,960 MWh. In the most recent reporting to the California Energy Commission, it saved 12,930 MWh in 2011. It has a residential demand response program targeted at lowering air conditioning use at peak times on hot days. The program affects about 10 MW, according to Williams. Pasadena Water & Power is at the 24 percent renewable energy level, said Wendy De Leon, muni customer service director. It is striving to meet the 40 percent renewable energy level by 2020. Today, biomass and waste provide 14 percent of the muni’s power, geothermal 3 percent, small hydro 5 percent, and wind 2 percent. A small amount of solar provides less than 1 percent. The utility serves a city of 140,000 people. De Leon noted that while the utility does not yet use demand response programs to trim peak loads, it does have a “robust portfolio” of energy efficiency programs. The utility offers rebates, she said, for a variety of household appliances. It further offers customized energy efficiency rebates for businesses, ranging from small stores and office buildings to hospitals. Each year since 2007, the utility has strived to meet 1 percent of total anticipated demand through these energy efficiency programs, with the goal of eventually cutting total demand by 10 percent as savings cumulate. Pasadena Water & Power this year is updating its integrated resources plan, noted De Leon. Local environmental activists are pushing for an early phase out of coal power that’s replaced by renewable energy and more efficiency instead of additional gas-fired power, according to Jack Eidt, Tar Sands Action SoCal. Riverside Public Utilities’ portfolio was 20 percent renewable a year ago, according to the most recent filing to the California Energy Commission. That includes 13 percent geothermal, 6 percent wind, 1 percent biomass, and less than 1 percent solar. The rate impacts of its renewable portfolio are intertwined with the closure of San Onofre Nuclear Generating Station and increase in large renewable projects. The utility increased its renewables “while maintaining electric rates,” according to Heather Raymond, utility spokesperson. Riverside, which has more than 107,400 customers—more than 96,200 who are residential—seeks to shave 1 percent of load each year through efficiency measures. That amounts to 18,000 – 20,000 MWh of annual savings. Last year it saved 19,300 MWh. It has a voluntary residential demand response program that can reduce peak load by 10 MW. Riverside also invested in a thermal storage unit on the grounds of its largest customer, the University of California, Riverside. According to Raymond, it reduces another 2.3 MW of demand. Roseville Electric, which serves about 54,000 customers with the 10 largest using more than a fourth of the power, is slightly above a 20 percent renewables level. According to its most recent filing to the Energy Commission, its renewables in 2012 consisted of 12 percent geothermal, 6 percent wind, 4 percent biomass and biowaste, and less than 1 percent solar. It focuses on meeting, not exceeding, the annual compliance obligation. “We’re trying to fully comply, but also manage rates for our customers,” said Mike Wardell, Roseville power supply manager. The renewable purchases increased rates 2-3 percent during the first compliance period of 2011-13, Wardell said. At the same time, the muni just northeast of Sacramento has gone gangbusters on rooftop solar installations, which do not count towards the renewables mandate. There is about 4 MW of installed capacity from 2.8 percent of customer rooftop solar systems. “We are the utility the most impacted by solar,” bragged Marty Bailey, muni electricity retail supplier. Next year, it plans to install a 40 MW solar project. To date, its energy efficiency investments from public good charges in customer bills meets about 5 percent of the load—about 7,700 negawatt hours. It strives for an annual efficiency growth of 0.62 percent. Roseville has a residential air conditioning demand response program, which drops between 4-5 MW of load when needed. Silicon Valley Power expects to have more than 25 percent of its energy resources supplied by renewables this year, which is five percent above the current year obligation. Its power portfolio is made up of 33 percent renewables but it plans to sell off the green attribute of up to one-fourth of its alternative energy supplies. Silicon Valley spokesperson Larry Owens said it was difficult to estimate how many renewable energy credits are to be sold in 2014 “due to the lack of small hydro resources this year, an important factor in this decision.” The mix of renewable resources this year is expected to be 14 percent wind, 11 percent geothermal, 5 percent small hydro, 2 percent landfill gas, and 1 percent solar. At this point, the Santa Clara muni doesn’t have plans to exceed the state 33 percent mandate. “We are waiting to see the results and impacts of the latest round of legislation before we make any decisions beyond 2020,” said Mary Medeiros McEnroe, SVP senior customer representative. The muni’s 52,000 customers are predominantly industrial and commercial, with less than 10 percent of its energy sales residential. The rate impact of rising renewable supplies has been moderated by the sale of renewable energy credits. Rates are expected to be impacted far more by hydropower shortages than the renewable portfolio. SVP will use natural gas generation to replace hydro as necessary, which is expected “to put upward pressure on rates,” said Owens. But like the Sacramento Municipal Utility District, SVP has a rate stabilization fund. Demand response programs in Silicon Valley, like other munis in the cool Bay Area, are not considered financially attractive. To react to surging energy demand, the Santa Clara muni operates an interruptible power program that allows it to cut industrial customers’ power at specific times in exchange for rate discounts. It also has a voluntary conservation program to cut supply during system shortages as determined by the California Independent System Operator. “Our system peaks are very, very mild and we have plenty of capacity to cover them,” Owens said.

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