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Home My WebLink About9 SB100 Impacts to DistrictAqendaItem#9TRUCKEEDONNER.PublicUtilityDistrictWORKSHOPTo:BoardofDirectorsFrom:JoeHorvathDate:October03,2018Subject:DiscussionofCaliforniaSB100andImpactstotheDistrict1.WHYTHISMATTERISBEFORETHEBOARDThisinformationalitemisbeforetheBoard,asthesigningofSB100byGovernorBrownwillinitiateaseriesoflegislativeandregulatoryproceedingsthatwillimpacttheDistrict’selectricutility.2.HISTORYTheDistricthasbeenrespondingtothecommunity’sdesiretomoveawayfromfossil-fuelbasedelectricresourcestorenewableand/orcarbonfreeresources.Assuch,theDistrictaggressivelyprocuredrenewableresourcesforthecommunityandtodayprovides66%RenewablePortfolioStandard(RPS).TheDistrict,whilepursuingcarbonfreeelectricresources,hasalsoconsideredtheimpactstoelectricratesandelectricsystemreliability.ThisistheDistrict’swell-known‘3-LeggedStool’whichsymbolizesthebenefitsofbalancingelectricrates,renewables,andreliability.WhiletheDistrict’s66%RPSisimpressivethishasbeenachievedwhilekeepingrateslowandinvestinginsystemreliability.Stableandcompetitiveelectricratesarebricksandmortarforavibranteconomyandcommunity.Byandlarge,theDistrict’selectricratesareamongstthelowestinCalifornia.TheDistrict’s10-yearfinancialmasterplanhasrateincreasesatorbelowinflation,asdirectedbytheBoard.TheDistricthasimprovedthereliabilityofourelectricsystembymakingsignificantinvestmentsinvegetationmanagement/tree-trimming,modernequipment,andahighlytrainedworkiorce.AlltheabovebeingachievedwhilebuildingtheDistrict’sdiversifiedportfoliowhichincludes:wind,solar,smallhydro,landfillgas,heatrecovery,andflexiblebase-loadelectricresources.TheDistricthasalsorespondedtodecadesofregulatoryrequirementsfromtheStateregardingrenewableenergy.Todate,California’seffortshavefocusedonRPSwhichwasfirstestablishedin2002andcontinuallyreestablishedanumberoftimesacceleratingrequirements. TheDistricthasbeenandremainswellpositionedtomeettheStatemandatesduetotheearlyinvestmentsinrenewableandcarbon-freeelectricresources.BelowisasummaryofStatemandatesandDistrictachievements:YearRPSMandeDistrict’sRPS201020%22%201320%45%201625%61%2020___3%66%in2017203050%66%in2017ItshouldbenotedthattheDistrict,alongwiththemajorityoftheCalifornia’sPublic-OwnedUtility(POU)community,havehadconcernswiththedefinitionofRPSwhichfavorsprimarilyintermittentresourceslikewindandsolaroverotherbase-loadrenewableorcarbon-freeelectricresources.Specifically,thecurrenteligibleelectricresourcesunderRPSdonotincludecarbon-freeresourcessuchaslargehydro(>30MW),andheatrecovery.3.NEWINFORMATIONOnMonday,September10th,GovernorBrownsignedSB100whichfurtherincreasestheRPSmandate.SB100increasesthe2030RPSrequirementfrom50%to60%,andalsospeedsupinterimrequirements.SB100furtherestablishesagoalofproviding100%carbon-freeelectricityby2045.SB100willtakeeffectonJanuary1,2019buttheregulatoryprocesstoimplementthenewlawwilltakelonger.Inparticular,theimportantdistinctionthattheDistricthasbeenstatingcomestofruitionthorughtthisbill.Whichis,theacknowledgementthatinordertoobtain100%renewableresources,Statedefinitionswillneedtobechangedtoincorporatetypicalcarbonfreeresources.ThishasbeenparamountfortheDistrictaswecontinuetobalancerates,renewaleandreliabiltiy.Staffwillleverageresourcesforaseatatthetablewhenthestatedefinescarbonfree.TheDistrictisalreadypositionedtomeetthenew2030RPSrequirementof60%andstaffareworkingcloselywithNCPAandCMUAtotracktheimplementationofthislandmarklaw.HowtheStatewilldefinethegoalof100%‘carbonfree’remainsunknownanditwillalmostcertainlyincludealongregulatoryprocessandadditionallegislationtofindout.Lookingtothefuture,staffisinvestigatingrenewableresourceoptionsthroughUAMPS.Utility-scaleprojectsaremoreeconomicalcomparedtotheDistrictowningandoperatingalocalsolarprojectforexample.UAMPShastwoprojectsinthepreliminarystagesofinvestigation.OneisaheatrecoveryprojectinWyomingsimilartotheVeyoprojectincludingsolarcomponent.Theotherisautility-scalesolarprojectinUtah.Moreinformationwillbeavailablein2019.Asstatespreviously,windandsolarareintermittentresourceswhichisproblimaticforrampingpowerduringdemandpeaks.Concluding,abalancedanddiversifiedpowersupplyportfoliomustincludek-I-.1kI-+,-k-I+-—;++--+ UcttIUctU,IIeAIUItILLIILIUUIILUUcLI.LUJiiictiiiiicceiicyIIIctLIUII.4.FISCALIMPACTTheimpactsofSB100ontheDistrict’selectricratesisunknownatthistime.Thereisnofiscalimpactassociatedwiththisworkshopitem.5.RECOMMENDATIONProvideinputtostaff.,bJoeHorvathMichaelD.HolleyElectricUtilityDirectorGeneralManager