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RPS Program and Progress Senate Energy Committee

December 15, 2011

AGENDA - Presentation Topics

RPS Overview

Local Solar ProgramsFeed In Tariff

Solar Incentive Program

Utility Program

Coal Divestment

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City requests LADWP 20%

by 2017State Goal

20% by 2017

20062004 2005 2007 20082003 20092002 2010

LADWP Policy: 13% by 201020% by 2017

SB2 (1X) legislatively enacts

33% RPS target

2011

LADWP accelerates RPS goal to 20% by 2010

State Exec Order: RPS

33% by 2020

LADWP IRP RPS Goal of 33% by 2020

LADWP RPS policy changed to 35% by 2020

SB106 accelerates state goal to 20% by

2010

RPS Policy Amendment and

Enforcement Program Adopted

RPS Policy History

In 2002, the California Legislature passed Senate Bill 1078 that established the California Renewables Portfolio Standard,

Progressively, the RPS goals have increased:

Timeline

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SB2 (1X) RPS Compliance Targets

2011 –2013

(on avg.)

December 312016

December 312020

20% 25% 33%

YE

AR

RE

TA

IL S

ALE

S

On Dec. 9, 2011, the California Renewable Energy Resources Act, SB 2 (1X) became effective 4

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RPS Principles

Geographic & resource diversity of projects is important

Maximize use of existing LADWP transmission & land

Maintain options/flexibility

Regionally “cluster” renewable projects to achieve operational efficiency

Ownership of projects using proven technology is part of the current RPS Policy

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Renewable Projects Regional Map

Columbia River Corridor: PowerEx Small Hydro Pebble Springs Wind Willow Creek Wind Linden Wind Farm Windy Point Wind

Columbia River Corridor: PowerEx Small Hydro Pebble Springs Wind Willow Creek Wind Linden Wind Farm Windy Point Wind

Milford Wind I / IIMilford Wind I / II

Pleasant Valley SW Wy WindPleasant Valley SW Wy Wind

STS TransmissionSTS Transmission

Gas Pipeline – Landfill / Biogas Gas Pipeline – Landfill / Biogas

Small Hydro – Aqueduct Pine Tree Wind, Solar (future), Geothermal (Future)

Small Hydro – Aqueduct Pine Tree Wind, Solar (future), Geothermal (Future)

Barren Ridge-Inyo Transmission (Future)Barren Ridge-Inyo Transmission (Future)

Pacific DC TransmissionPacific DC Transmission

Local In-Basin SolarLocal In-Basin Solar

Mead TransmissionSolar (Future)Mead TransmissionSolar (Future)

Imperial Valley Geothermal (Future), Solar (Future)Imperial Valley Geothermal (Future), Solar (Future)

Renewable Resource PortfolioType of Resource Energy Mix

Renewable Portfolio Standard (RPS)

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Renewable Resource Portfolio

Renewable Portfolio Standard (RPS)

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LADWP vs. IOU - RPS Percentages

3%

6%

7%

6%

8%

14%

20%

5%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

2003 2004 2005 2006 2007 2008 2009 2010

PG&E

SCE

SDG&E

LADWP

Footnotes: 1. 2003-2008 IOU data from CPUC RPS Quarterly Report July 20092. 2009 IOU data from CPUC RPS Quarterly Report Q3 20103. 2010 IOU data from CEC report

LADWP RPS Progress

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Windy Point

LADWP Wind Projects – Site Photos

Pine Tree Milford Phase 1

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LADWP Wind Projects – Site Photos (continued)

Willow Creek - Oregon

Pleasant Valley - Wyoming Linden Ranch - Washington

Pebble Springs - Oregon

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PROJECTSIN SERVICE

PROJECTS UNDER CONSTRUCTION

PROJECTSPLANNED

DEFICIT

GOAL 33%

RPS Deficit

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Lessons Learned

RPS by technologyRPS by technologyLADWP Energy MixLADWP Energy Mix

2020 Energy Mix

Renewable34%

Coal27%

Natural Gas26%Nuclear

9%

Large Hydro5%

2020 RPS

Bio-mass6%

Geothermal24%

Solar18%

Wind44%

Small Hydro8%

Note that Coal is being reduced from 39% to 27% as shown

Projected 2020 Resource Mix

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Future LADWP Energy Projects

Solar:In-Basin SolarPine Tree SolarAdelanto SolarOwens Valley

Wind:Pine Canyon

Geothermal:Imperial County (Phase I) Owens Valley

Power Purchase Agreements:Over 200 responses to Jan 2011 RFPSolar, Geothermal, Wind, and Biogas

Transmission Upgrades:Barren Ridge Renewable Energy Project

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Resource Availability

Transmission Access

CEQA Environmental Constraints

Permitting/Zoning

Regulatory Uncertainty

Endangered Animals

Development Challenges Siting/Land Issues

Mojave Ground Squirrel Desert Tortoise Mojave Fringe-Toed Lizard

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Balancing RPS goals with system resource needs

Once through Cooling – OTC (316b)Aging Distribution System InfrastructureCoal Transition (SB1368 Compliance)Continued economic downturn with little load growthEnergy Efficiency investments

Maintain grid reliability with intermittent energy

Transmission Investments

Meeting SB2 (1X) provisions: buckets

Local Distributed Energy

Need to balance multiple regulatory compliance mandates within reliability and resource constraints

Getting to 33% Renewable Energy Levels

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LADWP – An Early Leader in Local Solar Generation

Started net-meter incentive program in 1999 (one of first programs in the state)

$150 Million Commitment

$55 Million Spent (10 MW) Prior to

SB1 Initiative (Oct 2007)

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LADWP’s SB1 Program:Higher rebates than required by State

In 2011, LADWP doubled annual investment

$313 million capped program through 2016 (SB1 compliant)

Pays customers $288 million for incentives

Average budget - $30 million in solar rebates annually through 2016

Seeks to achieve as many MWs as possible

Uses 10-step declining scale based on performance of solar installation

LADWP set incentives $0.70 to $1.70 per watt higher than State minimum to attract customers because of our lower rates

Local Solar ProgramsSB 1 Implementation

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Solar Incentive ProgramCumulative Requested & Paid Incentives

$0

$50

$100

$150

$200

$250

$300

Jul-07

Jul-08

Jul-09

Jul-10

Jul-11

Jul-12

Jul-13

Jul-14

Jul-15

Jul-16

Jul-17

Month

Requ

este

d In

centi

ves

($M

)

Requested Incentives Budget Paid Incentives

Rate of requested dollars is quadruple levels seen in 2007 and 2008

Removal of cap on Residential Federal Investment Tax Credit initiated a surge of Residential Solar Installations

Program total of $288M for direct incentives. Total is $313M w/ admin costs.

Program temporarily suspended to implement process improvements

Local Solar Programs Cumulative Budget and Requested Dollars

21*Estimated

  Incentive Funds MegaWatts

Installed Through Dec. 1, 2011$110 million SB1*, $165 million total

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Requested and in Process $91 million* 40

Remaining Unrequested SB1 $87 million 48

Total $288 million 130

4,520 Operating Solar Systems, with approx. 1,550 in process

Solar Incentive Program Status as of Dec. 1, 2011

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Comply with state mandate – Senate Bill 32

Create an additional solar power funding mechanism to augment the Solar Incentive Program

Provide a reliable, cost effective, dependable, sustainable, and streamlined program

Price Discovery

Encourage electrical generation from renewable resources close to load centers

Balance renewable portfolio for reliability via geographic and technology diversity

Provide local economic development

Local Solar ProgramsFiT Program Objectives

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Over 1 MW AC currently installed on City Roofs2 MW more will be constructed in 2012

10 MW AC Adelanto Solar Project is in Construction – Completion due in June 2012

8.5 MW AC Pine Tree Solar Project scheduled for construction from March to Sept. 2012

Both Adelanto and Pine Tree Solar Projects used ARRA subsidized financing

Local Solar ProgramsUtility Built Solar

Coal Divestment2011 Power Resource Mix

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Coal Divestment2030 Power Resource Mix

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Coal DivestmentReplacement Portfolio for Navajo Coal

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1800 MW Output

90% Capacity Factor

LADWP gets 44% to 66%

Until 2027

36 participants

Other Key Assets:

Southern and Northern Transmission Systems

Coal DivestmentIPP Coal

Questions or Comments?

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