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HomeMy WebLinkAbout9 Renewable Portfolio Agenda Item # DistrictPublic Utility Memorandum To: Board of Directors From: Peter Holzmeister Date: March 2, 2007 Subject: Renewable Portfolio Standard Why this matter is before the Board: This matter involves review and possible amendment of the District's Renewable Portfolio Standard, as suggested recent Board meetings, as part of the foundation for active pursuit of renewable energy sources. History: During recent public meetings that discussed power supply options, many citizens of the community call attention to the need for the District to be far more proactive in securing a power supply mix that includes a significant portion of renewable power. It was suggested at that time, and several times since those meetings, that the District's Renewable Portfolio Standard should be revisited. The Board reviewed a draft revision to the RPS at the February you at 2007 meeting. No changes were suggested so it is being presented this meeting for adoption. New information: A copy of the suggested amendments is attached. Recommendation: I recommend that the Board adopt the revised Renewable Portfolio Standard. Truckee Donner Public Utility District Renewable Portfolio Standard(RPS)(Mar 07) Page 1 TRUCKEE DONNER Public Utility District Truckee Donner PUD Renewable Portfolio Standard PURPOSE: Truckee Donner Public Utility District's policy regarding SB1078—Renewable Portfolio Standard(RPS). This RPS will replace and update the RPS approved by the Board in 2003. BACKGROUND: State Senate Bill 1078 (SB1078)was signed into law on September 12, 2002 and was effective January 1, 2003. The SB1078 legislation modifies the California Public Utilities Code to include a specific renewable resource requirement for investor owned utilities (IOUs). SB1078 required IOU's to maintain a minimum of 20% of their power from eligible renewable resources by 2017. SB 107 (Simitan) was passed in 2006 and accelerates the IOU target to 20% by 2010.The legislation (SB1078) also includes provisions that apply to publicly owned utilities. These provisions would include: • Requirement that the governing body implement and enforce a renewable portfolio standard to encourage renewable resources • Each public utility governing board must define the terms of its RPS. The terms would include: o What qualifies as a renewable resource (i.e. whether or not to count large hydroelectric projects (in excess of 30MW) o The percentage of the total energy resources that are to be renewable o The time frame in which to meet the"goal" of the defined standard Discussion points: 1. Although excluded for the purposes of the IOU's requirements under SB1078, TDPUD's future critical component of the energy needs of share in"large"hydroelectric projects is a valuable and the community. TDPUD's allocation of the Western Area Power Administration(WAPA) started on January 1, 2005. This power is under a long term contract with the Department of Energy's Western Area Power Administration (WAPA). Truckee Donner Public Utility District believes that a separation of large and small hydroelectric projects at a 30MW level is arbitrary and ignores the unique nature of the resources provided by WAPA and the Department of Interior's Bureau of Reclamation. Truckee Donner Public Utility District will include all hydroelectric regardless of size and location as meeting the District's renewable portfolio standard. 2. The District's location in the Sierra Pacific Power transmission control area differs from all of the other publically-owned utilities in California. TDPUD is a transmission dependent utility (TDU) electrically internal to Sierra Pacific Power's control area. The interconnection points to Sierra Pacific Power's control area are Summit Intertie(to CAISO),Alturas Line(to near COB),Gonder Substation near Utah (this is the current location of our existing contract deliveries and includes the Pacific Corp and LADWP control areas), and Midpoint Substation (to Idaho Power). This transmission configuration must be taken into account when trying to identify future renewable resources. Truckee Donner Public Utili District-Renewable Portfolio Standard RPS Mar.07 Pa e 2 POLICY: Truckee Donner Public Utility district It Objectives • Meet the intent of SB 1078 to encourage renewable resources. • Maintain reliable overall energy supply portfolio. • Minimize adverse impact of acquiring new renewable energy resources on customer electric rates. Truckee Donner Public Utili District Electric Qualified RPS Resources Renewable resources are defined as non-fossil fueled electric generating resources, including hydroelectric. These would include but may not be limited( )any resource that meets the definition of "Eligible renewables" pursuant to section 398.4 h)(1 of the California SB 1305, which sets forth the requirements for power content labels: o Geothermal (including low-temperature geothermal heat pumps) o Hydroelectric o Solar o Wind o Biomass and waste o Fuel cells RPS Target: exceed projected demand, TDPUD will strive to At such time that projected resources do not include qualifying resources to meet projected demand. le Truckee Donner Public Utility District resource a ee l defined d as non-fossil fueled electric generating resources by 2010. Renewable resources resources, including hydroelectric. Strate ies for meeting RPS objectives: • Public benefit funds may be used to implement projects and may be used to supplement the production projects. • TDPUD's allocation of the Western Are pncludedn the RPS obJ'ectower Administration �ive.)TDPUD will str started on ave to 2005 is a non-fossil fuel resource will acquire small hydro electric from WAPA within the Sierra Pacific control area. In the future, TDPUD may contract for geothermal generation in Northern Nevada and Wind generation backed by Natural Gas. Onp_oin2 Review of Truckee Donner Public Utility District RPS An ongoing five-year review standard of the RPS will address changes in the Truckee Donner Public Utility District power portfolio including market power purchases, entitlement shares of projects and potential changes in the renewable energy technologies.