CCA is a public-private mix

Transcription

1 Community Choice Aggregation in Marin CCA is a public-private mix IOU CCA (investor-owned utility/pg&e) Public Utility (municipal utility like SMUD) IOU Purchases Power IOU Maintains Transmission Lines IOU Provides Customer Service Gov. Purchases Power IOU Maintains Transmission Lines IOU Provides Customer Service Gov. Purchases Power Gov. Maintain Transmission Lines Gov. Provide Customer Service

2 Marin Clean Energy Basics Local governments purchase power for their communities JPA created 2009 at earliest Energy Service Provider selected to provide all services Power purchased from outside Marin initially Customers chose between MCE and PG&E for power source PG&E continues to deliver electricity, maintain transmission lines and provide customer service Other California Communities considering MCE-type programs San Joaquin Valley CCA formed; Contract finalized San Francisco CCA business plan complete Oakland, Berkeley, Emeryville, Chula Vista drafting CCA business plan West Hollywood, Beverly Hills, Pleasanton, San Luis Obispo, Davis actively considering CCA

3 Marin Clean Energy: Customers Choose Light Green Initially 25% renewable Same Costs as PG&E Dark Green 100% renewable Cost: initially 8-10% higher than PG&E, decreasing MCE rates over time $ $ $ $ $ $ $ $95.00 $90.00 $85.00 $80.00 Year 1 Year 5 Year 10 Year 15 PG&E Light Green Deep Green Note: This assumes a 3.4% rate increase for PG&E s, their average rate increase over the last 10 years.

4 GHG Reduction Plan: Sample sustainability measures 400, ,000 CO2 Reduction (tons per year) 300, , ,000-11,800 11,800 Encourage Community Car Sharing 10,000 10,000 Expand Local or Regional Bus Service 1,100 1,100 Install Solar Panels on Municipal Facilities Perform Energy Efficient Lighting Retrofits 70,000 Marin Clean Energy Who will administer MCE? Administration and staffing: About 20 staff including technical experts, an operations team and energy professionals Policy and rate setting: JPA, and potentially Energy Commission

5 Who are Energy Service Providers? Sell power to Public Utilities and IOU s Some offer green portfolios (Alameda City buys 70% renewable) Some own more generation assets and trade more power each day than SCE and PG&E combined Are there economic benefits? Renewable energy & energy efficiency businesses fostered Green image marketing for local businesses More stable rates for local businesses and residents Ability to offer economic development rates

6 Where will renewable energy come from? Outside Marin initially, then phase in local assets by providing incentives. For example: Small local solar (net metering, rebates, over sizing systems) Large local solar (map) Methane capture (landfill) Local Renewables MW (Megawatts) Deployment Potential Solar 220 High Small Wind 11 Medium Large Wind 182 Low Offshore Wind 280 Low Methane Capture 6.5 High Biomass 7-16 Medium Ocean Power 150 Low (currently) Total Marin used 240 MW in 2005

7 Solar Energy: Marin Solar Map Marin Clean Energy: Next Steps Participating Jurisdictions: City of Belvedere Town of Fairfax County of Marin City of Mill Valley Town of Ross Town of San Anselmo City of San Rafael City of Sausalito Town of Tiburon December 2008: JPA formed

8 Next Steps and Off-Ramps Phase III Now November 2008: Cities and County vote on participation 1. Study sessions 2. Ordinance: 1 st Reading 3. Ordinance: Merit Hearing December 2008: JPA formed Phase IV

9 Customer Off-ramps 60 days before launch: Customers receive 1 st opt-out notice 30 days before launch: Customers receive 2 nd opt-out notice Final bill before launch: Customers receive 3 rd opt-out notice First MCE bill: Customers receive 4 th opt-out notice After MCE enrollment: Customers can still return to PG&E Questions?

10 Energy Efficiency: Cheapest way to reduce impacts Goal: double energy savings beyond status quo to achieve 5 MW reduction initially Energy Efficiency Market Potential Existing Residential 53.0% Existing Commercial 18.0% Existing Industrial 14.0% PG&E analysis of Business Plan Used a gas forecast that assumes gas will be 14% cheaper in 12 years than it is now (gas costs have increased 30% in the last 5 years) Shortened term of wind financing from 30 to 20 years (resulting in a $6 per MWh disparity) Reduced capacity factor of wind from 35% to 23% (resulting in a $6 per MWh disparity) Assumed above market purchase of natural gas generation capacity (resulting in a $10 per MWh disparity) Assumed below inflation (1.5%) increase in their rates (resulting in a $11 per MWh disparity)

11 Cents Per kwh PG&E Rate Projections PG&E Electric Rate History and F (System Average Rate) % Growt 3% Growt Since 1998, PG&E generation rates have increased an average of 3.4% per year. On June 10, 2008 PG&E requested a 10% increase in generation rates from the CPUC Partnership with PG&E? Proposed 100% green tariff Would use renewable energy credits to green power Requires CPUC approval (3 mos 3 yrs) Does not offer local benefit of ownership Does not offer rate stability

12 Why did energy fluctuations in 2000 impact IOU costs? In 1996 utilities were prevented from entering into long-term power purchase contracts Costs on the spot market skyrocketed and were manipulated CPUC regulations have changed to avoid this recurrence Note: MUNI s did not suffer the same impacts due to owned assets and long-term contracts. Can local governments provide power competitively? California s s 39 public utilities have 25% lower rates on average. For example, rates in 2005 per kwh: City of Palo Alto $.07 Los Angeles Dpt. Water & Power $.09 SMUD $.09 Alameda City $.12 PG&E $.12 Southern CA Edison $.12

13 Percent of Energy Content that is Renewable Current Rates

14 What is the cost & availability of renewables? Cost of all energy sources increased 30% in the last 5 years but renewable premium (1.5 cents/kwh) remained constant 530 MW of renewable power offered to Modesto Irrigation District in recent bidding process for 150 MW All solar projects were located in-state and multiple projects were planned within MID s service territory Costs for wind and solar can not be distributed publicly but were well within the projected range of costs. CPUC reports unprecedented response to 2007 renewable solicitations IOU RPS Bids by Fuel Type Energy (GWh/yr) 90,000 80,000 70,000 60,000 50,000 40,000 30, renewable energy offers of 75,000 GWh dwarf MCE need of 860 GWh. 20,000 10, RFO 2004 RFO 2005 RFO 2006 RFO 2007 RFO Other Small Hydro Biogas Biomass Geothermal Wind Solar Chart shows projects bid into the renewable solicitations issued by CA s three large IOUs: PG&E, Southern California Edison, and San Diego Gas & Electric. 28

15 How can MCE light green rates stay at or below PG&E? Low overhead & not-for-profit structure reduces costs Few MCE staff competitively solicit services Lower regulatory costs Low overhead/facility costs and no shareholder profits MCE will have low borrowing costs Tax-exempt financing of assets Discounts for prepayment of energy Ability to initiate long-term contracts from scratch 29