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Home My WebLink About15 FY18 Purchase Power LoadWORKSHOPTo:BoardofDirectorsFrom:JoeHorvathDate:March06,2019Subject:DiscussionofFY18PurchasePowerLoad,Resources,Peaks,andComparisontoFY18BudgetForecast1.WHYTHISMATTERISBEFORETHEBOARDThisworkshopitemprovidestheBoardwithareviewoftheDistrict’sactualversusbudgetedpurchasepowercostsandenergyconsumptionforFYi8.2.HISTORYOnOctober4,2017,aworkshopwaspresentedtotheBoardtodiscusstheDistrict’sproposedpurchasepowerplanaspartoftheproposedFY18andFY19budget.Thisworkshopcoveredthefollowingtopics:renewableportfoliostandardtargets;conservationasfirstresource;diversifiedpowersupplyplan;futurerenewableresources;CARBCapandTradeprogram;andproposedresourcesandforecastcostsforFY18andFY19.TheFYi8andFYi9PurchasePowerandResourcePlanwasapprovedbytheBoardonNovember15,2017.TheFY18PurchasePowerPlanbudgetedamounts,basedonaforecastedenergypurchaseof165,095MWh,areshowninthefollowingtable:CostitemBudget$perMWhTotalEnergySupply-Various$11,855,109$71.81TransmissionWheeling-NVtnergy$990,057$6.00$12,845,165$77.803.NEWINFORMATIONSummarybudgetedversusactualamountsforFYi8areshowninthefollowingtable:DescriptionBudgetActual%ChangeTotalEnergyPurchases$12,845,165$11,105,932-13.5%TotalEnergyConsumption,MWh165,095161,548-2.1%PurchaseCostperMWh$77.80$68.75-11.6%TheDistrict’stotalenergyconsumptionwas2.1%less,andpurchasedpowercostswere13.7%lessthanbudgetedduringFY18.Thetwomajorfactorsthataffectthetotalpurchasedpowercostareenergyconsumptionbyourcustomersandresourcecosts.A2.1%reductioninenergyusage,byitself,shouldequateapproximatelytoaAgendaItem#15TRUCKEEDONNERPublicUtilityDistrict corresponding2.1%reductioninpurchasepowercosts.However,severalotherfactorscontributedtofurtherreducetotalpurchasepowercoststo13.7%.Thewinterof2018wassignificantlymildercomparedtothepreviouswinter,whichresultedinanexcessofDistrictgenerationresources.UAMPSsoldthisexcessgenerationintothemarketforanoverallnetgaintotheDistrict.AnotherfactorwastheHorseButteWindprojectbondrefinancing,completedinlate2017.Thelowerinterestrateresultedinareductiontothecostofthisresource,withsavingsrealizedstartingin2018.Inaddition,NVEnergyreducedtheDistrict’stransmissionaccesschargefrom$2.65to$2.47perMWhstartinginMay,2018asaresultofthedecreaseinfederalcorporateincometaxrates.AllthesefactorshelpedreducetheDistrict’sactualpurchasedenergycostto$68.59perMWh,about11.8%underbudget.EnergycostsandconsumptionbymonthforFYi8aregraphicallydepictedbythefollowinggraphsincludedinAttachment1..Budgetedvs.ActualPowerPurchaseCost,2018.Budgetedvs.ActualMWhConsumptionbyMonth,2018.PeakLoadinMWbyMonth,2009-2018.Budgetedvs.ActualPowerSales,2003-2018.ResourceMixbyPercentages,2018.ResourceMixinMWhPurchases,2014-2030Historicalenergyusagedatafortheyears2005through2018aredepictedinthefollowingtablesincludedinAttachment2..EnergyPurchaseswithTransmissionSystemLosses.Actualvs.BudgetedEnergyPurchases.EnergySalestoCustomers.DistributionSystemLossesRenewablePortfolioStandard(RPS)OnOctober2,2013theBoardapprovedtheRenewableEnergyResourcesProcurementPlanpertherequirementsofSenateBillXl-2(2011).Thisplandefinestheminimumrequiredpercentage(RPS)ofrenewableenergyresourcescomparedtoretailsalesperthree-yearcomplianceperiodtotheendof2020.OtherlegislationhasincreasedtheRPSrequirementsandextendedthecomplianceperiodstotheendof2030.In2015,SB350wassignedintolaw,whichmandateda50%RPSbyDecember31,2030.In2018,SB100wassignedintolaw,whichagainincreasestheRPSto60%by2030andrequiresallstate’selectricitytocomefromcarbon-freeresourcesby2045.ComplianceperiodsandRPSrequirementsareasfollows:Period1-January1,2011throughDecember31,2013-20%RPS;Period2-January1,2014throughDecember31,2016-25%RPS;Period3-January1,2017throughDecember31,2020-33%RPS;Period4-January1,2021throughDecember31,2024-44%RPS;Period5-January1,2025throughDecember31,2027-50%RPS;andPeriod6-January1,2028throughDecember31,2030-60%RPS.TheRPSamountisbasedontheDistrict’stotalretailenergysales,asdefinedbytheCaliforniaEneravCommission(CEC.Section3201(bb’ofCECreaulationsdefine retailenergysesas:“SaleofectricitybyaPOUtoend-use-customersandtheh’tenants,measuredinMWh.ThisdoesnotincludeenergyconsumptionbyaPOU,electricityusedbyaPOUforwaterpumping,orelectricityproducedforonsiteconsumption(self-generation).”TheretailenergysalescalculationfortheDistrictaccordingtothisdefinitionisshowninthefollowingtable:MWhRetailSalesperCECRetailSalestoCustomersWaterPumpingOtherDistrictUsageTotalRetailSalesforRPS151,944-7,166-499144,279TheDistricthasadiverseportfolioofrenewableandcarbon-freeresourcesincludinghydroelectric,landfillgas,wind,heatrecoverygenerationandasmallamountoflocalsolargenerationbysomecustomers.Inaddition,theDistricthasreserveda5MWportionofaproposedUAMPSsolargenerationprojectthat,ifapprovedbytheBoard,isprojectedtocomeonlinein2022.Mostoftheseresourcesincluderenewableenergycredits(RECs)thataretransferredtotheDistrictinaccordancewiththeenergygenerated.However,severalresourcesincludingStampedehydroelectric,TCIDhydroelectric,andVeyoheatrecoveryprojectscomewithapartialamountofRECs,ornoRECsatall.SincetheseareRPSeligibleand/orcarbonfreeresources,theDistrictpurchasedanadditional19,559REC’stosupplywhatwaslackingfromtheseresources.Theseresourcesactuallygeneratedabout21,802MWhinFYi8.TheDistrict’sestimatedrenewableenergyportfoliopeilormanceforFY18isshowninthetablebelow:EligibleRenewablesMWhRECs%RetailSalesHydroelectric(Stampede)4,8383.4%LandfillGas(Transjordan)25,58517.7%Wind(HorseButte,PleasantValley)41,76428.9%HeatRecovery(Veyo,carbonfree,w/oRECs)00.0%UnbundledRECs(SmallHydro&HeatRecovery)19,55913.6%TotalEstimatedRPSforFY1863.6%**Requirementis60%RPSby2030CaliforniaAirResourcesBoard(CARB)CapandTradeProgramTheCARBstartedtheirCapandTradeauctionsin2013.Section95892(d)(3)oftheregulationstatesthefollowing:“Auctionproceedsandallowancevalueobtainedbytheelectricdistributionutilityshallbeusedexclusivelyforthebenefitoftheretailratepayersofeachdistributionutility,consistentwiththegoalsofAB32,andmaynotbeusedforthebenefitofentitiesorpersonsotherthansuchratepayers.”TheBoarddecidedtousetheauctionproceedstooffsetthecostoftheDistrict’srenewableenergyresources,thereforemeetingthegoalsofAB32.Fourauctionswereheldin2018,withtheDistrictparticipatingin3withresultsasshown:SettlementRevenueto2018CapandTradeAuctionsPriceDistrictAuction14,February2018$14.53$0Auction15,May2018$14.65$380,900Auction16,August2018$15.05$391,300 Auction17,November2018$15.31$414,120$1,186,320InFY19,$1,186,320hasbeenallocatedasrevenuetohelppayforrenewableresources.4.FISCALIMPACTSummarybudgetedversusactualcostsfor2018areshowninthefollowingtable.Summary2018BudgetvsActualPowerPurchases,MWhTotalEnergyPurchase,MWhPercentDifference,Actualvs.BudgetPowerPurchaseCostsTotalEnergySupply-UAMPS,WAPA,etcTransmission-NVEnergyMiscCosts:WECC,WREGIS,etc.TotalPowerPurchaseCost$Over/(Under)BudgetPercentDifference,Actualvs.BudgetActual$10,212,081$868,948$24,903$11,105,932t$1,739,233)-13.5%PurchaseCostperMWh$77.80$68.75PercentDifference,Actualvs.Budget41.6%PeakLoadInformationDistrictPeakLoad,MWPercentDifference,Actualvs.Budget5.RECOMMENDATIONProvideinputanddirectiontostaff.Actual36.2-7.2%JoeHorvath,kzMichaelD.HoIIeyActual161,548-2.1%Budget165,095Budget$11,855,109$990,057$0$12,845,165Budget39.0ElectricUtilityDirectorGeneralManager AttachmentIDiscussionof2018PurchasePowerLoad,Resources,Peaks,andComparisonto2018BudgetForecast$14,000,000$13,000,000$12,000,000$11,000,000$10,000,000$9,000,000$8,000,000$7,000,000$6,000,000$5,000,000FY18PowerPurchaseCost$12,845,16F—Transmission.MiscCosts:‘“‘—IBTotalEnergyBudgetActual2018MonthlyEnergyConsumption20,00018,00016,00014,000Mw12,000h10,0008,0006,0004,0002,0000IBudgetedMWhSActualMWhJANMARMAYJULYSEPTNOVPage1 ....MonthlyPeakMW2009thru201840.035.030.025.020.015.010.05.00.0—2018PeakMWS2017PeakMWI2016PeakMWI2015PeakMWI2014PeakMW_2013PeakMWn2012PeakMWI2OllPeakMW.2010PeakMWS2009PeakMWJANFEBMARAPRMAYJUNEJULYAUGSEPTOCTNOVDECTotalBulkPowerActualvsBudgetvsSalesMWh4170,000160,000150,000140,000130,000120,000ActuaIMWh—*--.BudgetMWh—--SaIesMWh1),(,‘b0)(,co‘bPage2 2018RESOURCEMIXHeatRecovery6%SmallHydro12%INaturalGasSUnspecifiedPoolSHeatRecoveryUSmallHydro.LandfillGas•WindResources(MWh)ByYear2014-2030200,000180,000160,000140,000120,000100,00080,00060,00040,00020,000IOpenPosition-UAMPSPool/MktIVeyoHeatRecovery2017IHorseButteWind-WindNeboPowerPlant-NaturalGasNTUAKayentaIll-SolarUPleasantValley-Wind.FallonExchangeforStampedeIStampede-SmallHydro.TransJordan-LandFillGasIICIDSmallHydroSFive-yearMarket2017-22IFive-yearMarket2012-17Page3 Attachment2SummaryHistoricalEnergyUsageData2005through2018EnergyPurchases-MWhDeliveredtoTransmissionTotalBulkEnergyYearSubstationsSystemLosses(1)Purchased2005142,8523,767146,6192006153,2104018157,2282007154,3424,042158,3842008156,1134,076160,1892009153,6774,018157,6952010154,4834,011158,4942011156,4074,137160,5442012150,9963,980154,9762013154,2803,870158,1492014154,8743,372158,2452015149,6012,609152,2102016158,3242,760161,0842017161,5172,807164,3242018158,7902,758161548Actualvs.BudgetedEnergyPurchases-MWhYearActualBudget%Difference2005146,619145,3820.9%2006157,228150,16847%2007158,384156,9630.9%2008160,189161,60409%2009157,695163,220-3.4%2010158,494160,00009%2011160,544162,000-0.9%2012154,976162,000-43%2013158,149163,082-3.0%2014158,24516471339%2015152,210164,729-7.6%2016161,084163,778-1.6%AverageDifference2017164,324163,4210.6%overl4Years2018161548165,095-21%+/25%Page1of2 Attachment2SummaryHistoricalEnergyUsageData2005through2018EnergySalestoCustomers-MWhChangefromPreviousYearEnergySales,MWhYear,%2005136,3392006144,2695.8%2007147,0912.0%2008148,3050.8%2009146,875-1.0%2010147,64705%2011149,9781.6%2012146,014-2.6%2013147,3890.9%2014142,584-33%2015140,819-1.2%2016151,5277.6%AverageChange2017156,5623.3%overl4Years2018151944-29%+126%DistributionSystemLosses-MWhDeliveredtoLossesasa%EnergyYearLosses(2)SubstationsDeliveredtoSubs20056,513142,8524.6%20068,941153,21058%20077,251154,3424.7%20087,808156,11350%20096,802153,6774.4%20106,836154,48344%20116,429156,4074.1%20124,982150,99633%20136,891154,2804.5%201412,290154,87479%20158,782149,6015.9%20166,797158,3244.3%AverageLosses20174,955161,5173.1%overl4Years20186,846158,79043%47%Notes:1TransmissionSystemLosses:ThisistheamountofMWhthatNVEnergyrequirestheDistricttopaybytariffasaloss.ThisisdefinedasafixedpercentageofMWhDeliveredtotheDistrict2DistributionSystemLosses:ThisisthedifferencebetweenenergydeliveredtooursubstationsandwhatissoldtoDistrictcustomers.Historicallythisvaluehasbeenbetween4%and7%.Page2of2