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Home My WebLink About7 Green Tags Agenda Item # TRUCKEE - Public Utility District" I .L�k� Memorandum To: Board of Directors From: Kathleen Neus, Technical Program Administrator Date: January 14, 2008 Subject: Voluntary Green Renewable Energy Certificate Program (Green Tags) 1. WHY THIS MATTER IS BEFORE THE BOARD This is an informational discussion of voluntary Green Renewable Energy Certificate Programs. Objectives: 5. Manage the District in an environmentally sound manner. Goals: 5.2 District will strengthen its programs of water and electric power conservation. 5.4 District will conduct its business in an environmentally lawful manner. 5.6 District will seek to minimize any negative impact of its operations on the environment. 2. HISTORY In an effort to help District residential and commercial customers to reduce their individual environmental impact, I have been looking into voluntary Green Renewable Energy Certificate Programs. Green power or "renewable energy" is considered energy that is generated from resources that have relatively low impact on the health of humans, animals and the ecosystem; these resources contribute minimal carbon dioxide emissions if at all. Renewable energy sources are wind, PV, landfill gas, biomass, geothermal and hydro. Green Renewable Energy Certificate Programs are voluntary in nature; the generated green power is not necessarily fed back into the purchaser's power grid. One Renewable Energy Certificate (RECs), "Green Tag" is equal to 1000 kWh of clean wind or solar energy. 1000 kWh of renewable energy is the equivalent of offsetting 1500 miles of emissions from a standard car. I have been looking closely at Bonneville Environmental Foundation (BEF). BEF began as a support to the Bonneville Power Administration for watershed restoration programs and to develop new sources of renewable energy. BEF is a 501(c) (3) non-profit environmental organization. In 2000 BEF developed its Green Tags product due to the demand for renewable energy in places where utilities did not have the option. All revenues generated from the sale of Green Tags are reinvested in new forms of renewable energy. 3. NEW INFORMATION At the January 9th Board meeting questions regarding tax deductions and break even points were raised. In response to the question of the RECs being tax deductible from Bonneville Environmental Foundation (BEF) the answer is it "depends". If a rate payer purchases RECs directly from BEF then yes the RECs are tax deductible, if the RECs are purchased from the District the RECs are not tax deductible. As for recouping labor and invoicing costs; it is estimated that 10 minutes per customer of Customer Service time will be needed to set up, terminate or transfer an account; the Billing Supervisor would need 30 hours to set-up the rate, test the rate and install the rate on the bill (one time cost) plus an additional half hour every month for month end and statistic reconciliation. BEF requires two mailers a year at District Expense for printing and mailing costs. Since the District will be mailing quarterly newsletters and other methods to promote the program there are no anticipated costs. I have included three charts and an explanation sheet to the staff report showing the break-even points for$0.015, $0.02 and $0.025 kWh. 4. RECOMMENDATION I have spent a lot of time researching different Green Tag Retailers; I am requesting Board direction to continue to pursue a voluntary Green Renewable Energy Certificate Program with Bonneville Environmental Foundation; cost to participate in the program would be $0.02 per kilowatt hour (kWh) usage. The $0.02 per kWh usage includes all labor with overheads plus the cost to purchase Green Tags. a Alan a , Gen ral Services Ulric Interim GM S. SOURCE OF FUNDING Individual customers as they sign up to participate. 6. BOARD AUTHORIZATION TO TRANSFER FUNDS There is no request at this time EXPLANATION OF SPREAD SHEETS Billing: One Time cost— labor and overheads to set up the rate, test the rate and to install the rate on the bills (90 minutes @ $99.06 — information from Bob Mescher, Finance and Accounting Manager) Annual Cost— extra time involved for month end and statistic reconciliation (30 minutes per month for 12 months @ $33.02 per month) Customer Service: An additional 10 minutes per customer for sign up ($8.80 per customer) Mailings: At this time there is are no expected costs for mailing. The District will be mailing quarterly newsletters, free section in the newspaper, notices on the door and can include within Public Benefits notices. Participation: A good program has a 2-3% participation rate. I used 2.5%, broke it down into eight years, but hoping that we reach 2.5% faster. I have left the participation rate at 2.5% for the later years hoping that as people withdraw from the program a like number sign up. kWh: kilowatt hours, this is the number of participants times 761 kWh (average customer usage) The descending scale is the cumulative kWh for successive years. Revenue: The revenue is the amount collected beyond the cost of a Green Tag times kilowatt hours Net Costs: Equal to revenue minus total costs Cumulative Cost: The cumulative cost is equal to the prior year cumulative cost plus the cost of the current year. $0.015 kWh Usage 2008 2009 1 20110_1 2011 1 2012 2013 2014 1 2015 2016 2017 1 2018 1 2019 2020 COSTS Billin One Time 1 1982.001 1,982.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.001 0.00 0.001 0.001 0.00 Annual 396.241 396.24 408.13 420.37 432.98 445.97 459.35 473.13 487.33 501.941 517.001 532.511 548.491 564.94 Customer Service Per Cust. 8.80 528.00 484.00 435.60 392.04 352.84 264.00 220.00 184.80 184.80 184.80 184.80 184.80 184.80 Mailing-2 eF 300.00 Printin 550.00 Total Costs 1 3237.041 2,906.24 892.13 855.97 825.02 798.81 723.35 693.13 672.13 686.741 701.801 717.311 733.29 749.74 Participation: #of ICustomers kWh Year 60 45660 45660 Year 55 41855 87515 Year3 50 37670 125185 Year 45 33903 159087 Year 40 30512 189599 Year6 30 22830 212429 Year? 25 19025 231454 Year? 21 15981 247435 247435 247435 247435 247435 247435 Total Participation 325 Total kiloWatt Hours 247435 Revenue 1 228.30 437.58 625.92 795.44 948.00 1,062.15 1,157.27 1,237.18 1,237.181 1,237.181 1,237.181 1,237.18 1,237.18 Net Costs 1 -2,677.94 -454.55 -230.01.5 -29.59 149.19 338.80 464,141 565.05 550.431 535.371 519.861 503.89 487.43 Cum.Cost 2,677.94 -3,132.49 -3,362.54 -3,392.13 -3,242.94 -2.904.14 -2,440.00 -1,874.95 -1,324.52 -789.15 -269.29 234.60 722.03 $0.02 kWh Usage 2008 2009 2010 2011 2012 2013 2014 2015 COSTS Billin One Time 1982.00 1,982.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Annual 396.24 396.24 408.13 420.37 432.98 445.97 459.35 473.13 487.33 Customer Service Per Customer 8.80 528.00 484.00 435.60 392.04 352.84 264.00 220.00 184.80 Wailing-2 er year Folding Fee 300.00 Printin 550.00 Total Costs 3237.041 2,906.24 892.13 855.97 825.02 798.81 723.35 693.13 672.13 [Participation: #of CustomersT kWh Years 60 45660 45660 Year 2 55 41855 87515 Year 50 37670 125185 Year 45 33903 159087 Years 40 30512 189599 Year 30 22830 212429 Year? 25 19025 231454 Year 21 15981 247435 Total Participation 325 Total kiloWatt Hours 247435 Revenue 410.94 787.64 1,126.66 1,431.78 1,706.39 1,911.86 2,083.09 2,226.92 Net Costs -2,495.30 -104.49 270.69 606.76 907.59 1,188.51 1,389.96 1,554.79 Cum. Cost -2,495.30 -2,599.79 -2,329.10 -1,722.34 -814.75 . 1,763.72 3,318.51 $0.025 kWh Usage 2008 2009 2010 2011 2012 2013 2014 2015 COSTS Billin One Time 1982.00 1,982.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Annual 396.24 396.24 408.13 420.37 432.98 445.97 459.35 473.13 487.33 Customer Service Per Cust. 8.80 528.00 484.00 435.60 392.04 352.84 264.00 220.00 184.80 Mailin -2 er ear Folding Fee 300.00 Printing 550.00 Total Costs 3237.041 2,906.24 892.13 855.97 825.02 798.81 723.35 693.13 672.13 Participation: #of I Customers I kWh Year 1 60 45660 45660 Year 2 55 41855 87515 Year 50 37670 125185 Year 45 33903 159087 Year 40 30512 189599 Year 30 22830 212429 Year? 25 19025 231454 Year 21 15981 247435 Total Participation 325 Total kiloWatt Hours 247435 Revenue 1 639.24 1,225.21 1,752.58 2,227.22 2,654.39 2,974.01 3,240.36 3,464.09 Net Costs 1 -2,267.00 333.08 896.61 1,402.20 1,855.58 2,250.66 2,547.23 2,791.97 Cum. Cost 1 1 -2,267.00 -1,933.92 -1,037.31 _ 2,220.47 4,471.131 7,018.361 9,810.33