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Home My WebLink About11 Budget Purchase Power PlanBUDGET To: From: Date. Subject: Board of Directors Stephen Hollabaugh September 16, 2015 FY16 and FY17 Budget: Purchase Power Plan 1. WHY THIS MATTER IS BEFORE THE BOARD This item begins the process for preparation of the FY16 & FY17 budget. 2. HISTORY In 2008 and 2009, the District started a diverse purchase power portfolio that now includes many different resources and has the goal of meeting the Renewable Portfolio Standard with conservation as a first resource. In 2010 and 2011 additional goals were to provide an adequate, reliable and high quality electric supply to meet the current and future needs of the District. Title 3, Section 3.02.010 of the District Code states, the General Manager shall submit to the Board of Directors a two year draft budget. The Purchase Power Plan is a part of the FY16 & FY17 draft budget. 3. NEW INFORMATION The 2016 and 2017 Purchase Power Plan continues with the goals of the 2014 and 2015 Plan. The District will maintain a more diversified purchase power portfolio that includes many different resources and has the goals of meeting the Renewable Portfolio Standard. The District adopted its "Procurement Plan" to implement SBx1 2, 33% RPS by 2020. The 2016 Purchase Power Plan projects a similar load compared to 2015 with energy conservation and energy efficiency measures accounting for 1 % to 3% of the load. Greater conservation has, and will continue to reduce future market purchases. The 2016 has a low growth rate compared which is similar in 2017. The budgeted load in MWh is shown below: Year Budgeted MWh 2015 164,729 2016 163,778 2017 1631421 The Purchase Power Plan resources including graphs are included as Attachment 1. The resource mix shown is as follows: FYI D Resource Type Payson - Natural Gas 5 Year Market Purchase UAMPS Pool Fallon Exchange for Stampede Veyo (Heat Recovery - Carbon Free) Renewables 11.3% 23.9% 17.0% 2.5% 43.5% Wind Pleasant Valley Small Hydro - Stampede Dam Wind - Horse Butte Land fill Gas -Trans Jordan FY17 Resource Type Payson - Natural Gas 11.3% 5 Year Market Purchase 4/2012-3/2017 7.4% 5 Year Market Purchase 4/2017-3/2022 UAMPS Pool Veyo (Heat Recovery - Carbon Free) Fallon Exchange for Stampede Renewables 15.0% 13.3% 6.6% 2.6% 43.8% Wind Pleasant Valley Small Hydro - Stampede Dam Wind - Horse Butte Land fill Gas - Trans Jordan Renewables 7.2% 24.4% 11.7% Renewables 0.3% 7.2 % 24.5% 11.8% Possible Future Resources: The District's 5-Year market purchase ends in April 2017. The District has replacing a portion of this resource with carbon -free resources. The Veyo heat recovery generation from Veyo natural gas compressor station is scheduled to come on line in October 2016, The District has invested in about 1.7 MW of this carbon -free resource. A carbon -free resource will enhance our Cap and Trade allocation. Change in RPS Calculation per CEC: The percentage shown in the resource mix table and graphs are based on the entire amount of resource purchased. The CEC definition of RPS uses a different denominator that will increase our RPS however the District does not receive 100% of the Stampede Dam REC's that will lower the percent RPS. California Air Resources Board (GARB) Cap and Trade The CARB has started their Cap and Trade auctions in 2013. Section 95892(d)(3) of the regulation states the following: 'Auction proceeds and allowance value obtained by the electric distribution utility shall be used exclusively for the benefit of the retail ratepayers of each distribution utility, consistent with the goals of AB32, and may not be used for the benefit of entities or persons other than such ratepayers." Wind Pleasant Valley Small Hydro - Stampede Dam Wind - Horse Butte Land fill Gas - Trans Jordan Renewables 7.2% 24.4% 11.7% Renewables 0.3% 7.2 % 24.5% 11.8% Possible Future Resources: The District's 5-Year market purchase ends in April 2017. The District has replacing a portion of this resource with carbon -free resources. The Veyo heat recovery generation from Veyo natural gas compressor station is scheduled to come on line in October 2016, The District has invested in about 1.7 MW of this carbon -free resource. A carbon -free resource will enhance our Cap and Trade allocation. Change in RPS Calculation per CEC: The percentage shown in the resource mix table and graphs are based on the entire amount of resource purchased. The CEC definition of RPS uses a different denominator that will increase our RPS however the District does not receive 100% of the Stampede Dam REC's that will lower the percent RPS. California Air Resources Board (GARB) Cap and Trade The CARB has started their Cap and Trade auctions in 2013. Section 95892(d)(3) of the regulation states the following: 'Auction proceeds and allowance value obtained by the electric distribution utility shall be used exclusively for the benefit of the retail ratepayers of each distribution utility, consistent with the goals of AB32, and may not be used for the benefit of entities or persons other than such ratepayers." Board decided to use the auction proceeds to offset the price of renewable therefore meeting the goals of A1332. Four auctions have been held in 2015, below are the results: Settlement Price ($/Allowance) TDPUD Revenue from Sale of Allowances $12.21(Auction 1, 2015) $231,990 $12.29 (Auction 2, 2015) $233,510 $12.52(Auction 3, 2015) $237,880 $12.52 (Auction 2015 4, 2015) Nov $261,079, Estimated (To be used in 2016) Total $ $964,449 In FY16, $965,000 has been budgeted as revenue to help pay for renewable resources and in FY17, $992,000 has been budgeted in the same manner. PURCHASE POWER PLAN EXPENDITURES DETAIL 2016 BUDGET 2015 to 2016 Budget Budget $ BUDGET Purchased Power and Resource Costs 2015 2016 CHANGE Total Energy Supply - Various $11,331,030 $111200,896 ($1307134) $68.79 $68.39 Transmission - NVEnergy $1,216,674 $927,156 ($289,518) Scheduling - NCPA $75,423 $0 ($75,423) WAPA costl(credit) toward MM's ($28,012) $0 $28,012 Total Bulk Power Costs $12,595,115 $12,128,052 $ (467,063) pr -3.9% Total Annual MWh 1641729 163778 -951 -0.58% Total Delivered Cost $/MWH $76.46 $74.05 -$2.41 -3.25% PURCHASE POWER PLAN EXPENDITURES DETAIL 2017 BUDGET 2016 to 2017 Budget Budget $ BUDGET Purchased Power and Resource Costs 2016 2017 CHANGE Total Energy Supply -Various $111200,896 $11,681,375 $480,479 $68.39 $71.48 Transmission - NVEnergy $927;156 $927,156 $0 Total Bulk Power Costs $121128,052 $12,6083531 $ 4807479 3.8% Total Annual MWh 163,778 163,421 -357 -0.22% Total Delivered Cost $/MWH $74.05 $77.15 $3.10 4.02% 4. FISCAL IMPACT There is no direct fiscal impact at this time. The final Purchase Power Plan will become part of the draft budget for FY16 & FY17. 5. RECOMMENDATION Receive this report and provide comments to staff. Stephen Hollabaugh Assistant General Manager ichael D. MHolley General Manager \ir ML _ �0 NTMI = O _ c� L I— a� ca o a3i � _ a� C7 f6 L +0+ o � z � 0 ca a N O N n N O N L o M U L � L' a� Y L co x C7 z w O ro Q ra N r*� ate+ E O ( N c-I O m N z Ln 0 0 >� 4 LO 2 N N > ' QJ fo J N u OhA O O a)'� 4 > U 41 O O N � N A N A m O m C _ aJ QJ O > = z a LL. (AF- LL LL Ln N ■ ■ ■ ® ■ O co N SRO N O i N i �O cl M > o. � ou m OC �+ 0clh � N C l c 0Abi N O� OC i S O Ocl O oc o� ® 1oclh W TMq N 9l0 C-lb Sl OF16 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 CD CD t No 0 coo coo