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Home My WebLink About19 Green Rate Programenda Item # To: Board of Directors From: Joe Horvath Date. June 06, 2018 Subject: Proposed Green Electricity Rate Program 19 1. WHY THIS MATTER IS BEFORE THE BOARD This workshop item provides the Board with a discussion of a proposed District Green Electricity Rate Program that would enable customers to purchase 100% renewable electricity from the District. 2. HISTORY District staff met with representatives from the Town of Truckee in August, 2017 to discuss a request from the Town regarding 100% renewable or green electricity rates. The Town was exploring the possibility of purchasing 100% renewable electricity from the District. The District had a similar program in the past, but it was canceled for lack of customer participation. District staff asked for written assurances from the Town before beginning the process of Board review and approval for the addition of a formal Green Electricity Rate Program. District staff prepared a draft frequently asked question (FAO) document to describe a proposed Green Electricity Rate Program and sent a copy to the Town in October, 2017 (Attachment 1). On November 28, 2017 the Town Council adopted a resolution to establish several renewable energy goals, one of which was to procure electricity from 100% renewable sources for the Town's municipal facilities by 2020. The resolution states that the Town will "engage with and encourage special districts and all utility customers to shift towards 100% renewable electricity". In early May, 2018, staff received emails from Town personnel indicating that Town staff has included additional funds in their proposed FY18-19 budget to purchase 100% renewable electricity from the District. The proposed Town FY18-19 budget will be considered for approval by the Town Council in June, 2018. 3. NEW INFORMATION The proposed Green Electricity Rate Program is a new District rate structure where an additional kWh charge, that represents 100% renewable electricity, can be purchased by our customers. The proposed green electricity rate premium is 4 cents per kWh. The proposed program will be made available to all customer classes as an add -on rate to existing rate schedules. Participation in the program would be entirely voluntary. The District will actively promote this new program to all customers through Al stuffers, a press release, advertising, website, social media, and community outreach. The District has proactively added renewable electricity to our energy resource mix over the last 10 years while keeping our rates stable and very competitive compared to other California utilities. For the last 2 years, the District has achieved a Renewable Portfolio Standard (RPS) value in excess of 60 percent, surpassing California requirements. The Green Electricity Rate Program is separate from and incremental to the State's RPS requirement. However, there are some ways in which this proposed program and the RPS portfolio interact. The renewable electricity associated with District sources is counted toward the RPS requirement and is provided to all District customers. Electricity for the Green Electricity Rate Program will be delivered from two of the District's renewable energy facilities, one of which is located near Idaho Falls, Idaho and the other in Murray City, Utah. These facilities are the Horse Butte Wind project and the Transjordan Landfill Gas project, respectively. Due to the way electricity is transmitted and distributed, electricity purchased from these renewable resources may not be specifically delivered to a particular customer. However, customer participation in the proposed Green Electricity Rate Program will help the District to offset the higher cost of these sources and participate in other renewable electricity projects sooner. The proposed Green Electricity Rate Program will make a positive impact to our community. Our customers will receive the following benefits when they enroll in the program: • Purchase 100% renewable electric resources to cover their load; • Reduce the District's dependence on non-renewable electric sources like natural gas and other unspecified sources using fossil fuels; • Promote an environmentally -conscious electricity market through the use of clean resources; • Drive further expansion of wind, solar, and other renewable or carbon -free sources; and • Decrease greenhouse gas emissions. District staff proposes the following for the Green Electricity Rate program: Electricity Cost Premium: 4 cents per kWh Rate Class: The program would be available as an add -on rate to all existing rate classes. Term: The minimum term is twelve months, or until electric service is discontinued by a customer, whichever occurs first. Enrollment: Customers can enroll at any time during the year. Once enrolled in the program, there will be a 30-day window every year to drop out (unless the Board makes changes outside of this time period). If a customer does not drop out in this 30- day window, enrollment will automatically renew for an additional twelve month period. Revenue: The revenue received by the District will be used to offset the purchase power costs of the Horse Butte Wind and the Transjordan Landfill Gas projects, and help the District to develop and participate in other renewable electricity projects sooner The adoption of the proposed Green Electricity Rate Program would be according to the following schedule: • June 6, 2018 -Workshop to discuss the Green Electricity Rate Program (tonight); • July 18, 2018 - Consideration of Scheduling a Public Hearing; • August 1, 2018 - Conduct a Public Hearings and • August 1, 2018 -Possible Approval of Green Electricity Rate program. If approved by the Board, the new program would become effective 60 days after approval. 4. FISCAL IMPACT There is no fiscal impact associated with this Workshop Item. 5. RECOMMENDATION Provide input and direction to staff. Joe Horvath Electric Utility Director Michael D. Holley General Manager Proposed 1006 Green Electricity Rate Program Truckee Donner PUD The Green Electricity Rate Program is a proposed rate structure subject to Board review and approval. This information should be considered preliminary in nature, with a high likelihood of modifications occurring to the program before being adopted by the Board. What is the Green Electricity Rate? The Green Electricity Rate is an additional kWh charge that can be added to the existing rate schedules. The proposed rate is $.04 per kWh. What percentage of my electricity will be green electricity? By participating in the Green Electricity Rate Program, you will be purchasing 100 percent renewable electricity resources to cover your load. Will the program only be offered to one customer class? The Green Electricity Rate will be made available to all customer classes as an add -on rate. Participation in the program is entirely voluntary and optional. Will the Green Electricity Rate change over time? The Green Electricity Rate will typically be reviewed by the Board bi-annually and modified as required. What is the term? The minimum term is twelve months, or until your service is discontinued, whichever occurs first. There will be a 30-day window every year to drop out of the Green Electricity Rate Program unless the Board makes changes outside of this time period. If a customer does not drop out, the account will automatically renew for an additional twelve month period. What fuel sources are used for this program? The Green Electricity Rate Program includes the following sources on average: wind (65%), and landfill gas (35%), subject to change based on availability. Where does the Electricity come from? Electricity for the program will be delivered from the District's renewable electricity facilities, one of which is located in Idaho (wind) and the other in Utah (landfill gas). Some portion of the renewable electricity from these facilities is used to meet the District's current renewable electricity requirements. With the Green Electricity Rate Program, your purchase will help the District to develop and participate in other renewable electricity projects sooner. Preliminary 6/6/18 Page 1 Does the green electricity come directly to my meter? Due to the way electricity is transmitted and distributed, electricity purchased or produced from renewable electricity resources may not be specifically delivered to you. However, your participation in the Green Electricity Rate Program will help stimulate and support the production of renewable electricity resources. What if the wind is not blowing? Wind production typically occurs during daylight hours, peaking in the afternoon and dropping off during the night. Landfill gas production is consistent over 24 hours every day of the year. Therefore the renewable electricity you purchase through Green Electricity Rate Program is always delivered to the grid, allowing you to receive reliable electricity, day and night. Is the District mandated to procure electricity from renewable sources? Yes. Under SB 350, named the "Clean Energy and Pollution Reduction Act of 2015," California increased its RPS requirement to 50 percent renewables by 2030 (up from 33 percent by 2020). The RPS also includes interim targets of 40 percent renewables by the end of 2024, and 45 percent by the end of 2027. The District has proactively added renewable electricity to our electricity resource mix over the last 10 years while keeping our rates stable and very competitive compared to other California utilities. For the last 2 years, the District has achieved an RPS in excess of 50 percent, surpassing California requirements. The Green Electricity Rate Program is separate from and incremental to the RPS requirement. However, there are some ways in which this program and the RPS portfolio interact. The renewable Electricity associated with current District electricity sources is counted toward the RPS requirement and is provided to all customers. Customer participation in the Green Electricity Rate Program will help stimulate and support the production of renewable and carbon -free electricity resources now and into the future. What are the benefits to enrolling in the Green Electricity Rate Program? The renewable electricity you purchase will make a positive impact to our community. By enrolling, you'll be choosing to: • purchase 100 percent renewable resources to cover your load • reduce our dependence on non-renewable electricity sources like natural gas • promote an environmentally -conscious electricity market through the use of clean resources • drive further expansion of wind electricity and other renewable or carbon -free sources • decrease greenhouse gas emissions Preliminary 6/6/18 Page 2