Department of Water and Power City of Los Angeles

Electricity OutlookLA Chamber of CommerceEnergy Committee

”Planning to Meet the Challenge”

May 2007

2

Renewable Energy Percentage Trendsas reflected in 2007 POWER CONTENT LABEL

2

or www.energy.ca.gov/consumer.Label, contact the California Energy Commission at 1-800-555-7794

LADWP at 1-800-DIAL-DWP. For general information about the Power ContentFor specific information about this electricity product, contact

for File No. 03-2688 (RPS).**** In accordance with Los Angeles City Council's action on 10-5-04

California consumers during the previous year.Energy Commission based on electricity sold to

*** Percentages are estimated annually by the Californiafrom individual suppliers.

** 100% of LADWP Green Power is specifically purchasedfrom individual suppliers.

* 88% of LADWP Power is specifically purchased 100%100%100%TOTAL0%-<1%Other0%-9%Nuclear33%-29%Natural Gas24%-7%

Large Hydroelectric

38%-47%Coal<1%75%1%-- Wind<1%-<1%-- Solar1%25%6%

-- Small hydroelectric

4%-<1%-- Geothermal<1%-1%-- Biomass & waste5%100%8%

Eligible Renewable****

(for comparison)(projected)(projected)RESOURCESPOWER MIX***Green Power**Power*ENERGY

2005 CALADWPLADWP

2007 POWER CONTENT LABEL

First Quarter

•Eligible Renewable Energy in 2002 ~3%

•Renewable Energy2007 Projections, 8% as noted

•Renewable Energy 2009including Pinetree & UPC Wind ~ 12%

3

LADWP RPS Master Plan

LADWP plans to meet an RPS mandate of 20% by 2010 and the Mayor announced last week a new 35% RPS by 2020 and 35% GHG reduction by 2030

Eight general areas that make up the Master Plan

– Existing resources – Consisting of Aqueduct, Hyperion digestion, Lopez microturbines, solar rooftops, landfill gas contracts, Wyoming Wind project, and purchases

– Planned resources – Consisting of Pine Tree Wind Project, Powerex Small Hydro, and the ongoing solar rooftops program

– 2004 LADWP RFP – Resource acquisition consisting of originally seven projects

– 2005 SCPPA RFP – Resource acquisition consisting of seven projects

– 2006 SCPPA RFP – Resource acquisition consisting of twenty-eight projects.

– LADWP 2007 RFP – Resource development on LADWP owned properties or near LADWP transmission system issued RFP on January 30, 2007.

– Transmission Developments – Consisting of the Pine Tree Transmission Line, new Tehachapi Transmission System, Green Path Project, and Southern Transmission System upgrade

DSM Assumptions – Use the Maximum Achievable Level

44

2007 DWP RFP Projects,after preliminary screening

ResourceType

TotalTotalGWH

ENERGY

% of

Total

Biomass 1 50 1.2%

Geothermal 3 1400 32.5%

Solar 3 1535 35.6%

Wind 3 1325 30.7%

Total 10 4,315

Inside CA Outside CA

3050 126570% 30%

Preliminary Update

DWP RFP review on-going, preliminary results noted

Further analyzing & evaluating proposals

5

MAP 1SOLAR RESOURCE

MAP 4

MAP 3

MAP 2

6

MOJAVE

ADELANTO SWITCHING STATION

BARREN RIDGE SWITCHING STATION (PROPOSED)

INYO

-RIN

ALD

ITR

ANSM

ISSI

ON

LI

NE

HARPERDRY LAKEKRAMER

JUNCTION

MAP 3HIGH DESERT

77

Location of Proposed Renewable Energy Projects and LADWP Transmission

7

WindBiomassSolarGeothermal

Small Hydro

INYO

-R

INA

LDI

STS

COB / NOB

SP-15McCULLOUG

H-VICTORVILLE

GREEN PATH

•SCPPA6 / Solar•LADWP5 / Wind•Potential Solar and Wind

•SCPPA4 / Wind•Potential Solar•Potential Geothermal

•Solar Rooftops•BoS Waste Conversion•Small Hydro

•Potential Solar•LADWP3•Pine Tree

•Powerex•Potential Wind

•Potential Wind•PPM SW WY

•SCPPA3 / Wind

Projected RPS by Energy Type (GWh)

10%11%

32%17%

26%4%

Small HydroBiomass/MSWWindSolar Geothermalpurchases

8

2010Technology PPA/Own COD MW GWh %DWP Sales Source

ExistingSmall Hydro Small Hydro Own In service 166 670 2.8% ExistingHyperion Digester Gas Biomass Digester Own In service 22 143 0.6% ExistingLopez Microturbine Biomass Landfill Gas Own In service 2 5 0.0% ExistingCalifornia System Purch Various Types PPA In service 0 100 0.4% ExistingWM Bradley Biomass Landfill Gas PPA In service 6 36 0.2% ExistingSCS Penrose Biomass Landfill Gas PPA In service 6 45 0.2% ExistingShort-term Market Purchases Various Types PPA In service 0 266 1.1% ExistingSolar Rooftop Program Solar Photovoltaics Own In service 10 18 0.1% ExistingPPM SW Wyoming Wind PPA In service 82 230 0.9% 2005 SCPPA RFPPowerex - BC Hydro Small Hydro PPA In service 50 430 1.8% 2004 DWP RFP

344 1,944 8.0%Transmission LineSP15Solar Rooftop SB1 goal Solar Photovoltaics Own 12/31/17 270 405 1.7% DWP owned REC's?Water System Hydro Small Hydro Own 12/1/10 5 30 0.1% DWP ProjectsTerminal Island Fuel Cell Biomass Digester Gas Own 12/1/07 1 8 0.0% DWP/City of LATI Renewable Energy (TIRE) Biomass Digester Gas Own 7/1/12 4 25 0.1% DWP/City of LARenewLA-1,2,3,4 Waste to Energy Own 2010-2013 100 800 3.3% City of LABiomass Proposal Biomass Landfill Gas PPA 12/31/07 7 50 0.2% 2007 DWP RFPSmall Hydro Small Hydro PPA 11/1/08 8 42 0.2% 2006 SCPPA RFP Total SP15 395 1,360 5.6%

McCullough-VictorvilleSCPPA6 Solar Trough PPA 6/1/10 80 240 1.0% 2005 SCPPA RFPConcentrated Solar Solar Own 12/1/10 50 130 0.5% 2007 JDG RFISCPPA 13 Wind Own 12/31/10 100 304 1.3% 2006 SCPPA RFP Total McCullough-Victorville 230 674 2.8%

LADWP RPS Master Project List

9

Inyo-RinaldiPine Tree Wind Wind Own 7/1/09 120 340 1.4% 2001 DWP RFPLADWP3 Wind PPA/Own 7/1/09 150 500 2.1% 2004 DWP RFPAqueduct PP Improvements Hydro Own 4/1/12 4 30 0.1% Operational UpgradesWind Proposal Wind PPA/Own 6/30/09 150 400 1.7% 2007 DWP RFPConcentrated Solar - Phase 1 Solar PPA/Own 12/31/10 100 265 1.1% 2007 DWP RFPConcentrated Solar - Phase 2 Solar PPA/Own 12/31/11 100 265 1.1% 2007 DWP RFPConcentrated Solar - Phase 3 Solar PPA/Own 12/31/12 100 265 1.1% 2007 DWP RFPConcentrated Solar Solar PPA/Own 12/31/11 250 580 2.4% 2007 DWP RFP Total Inyo-Rinaldi 974 2,645 10.9%

STSSCPPA3 / UPC Wind PPA/Own 3/31/09 185 460 1.9% 2005 SCPPA RFPWind Proposal Wind PPA/Own 6/30/10 100 250 1.0% 2006 SCPPA RFPGeothermal Proposal Geothermal PPA/Own 3/31/10 40 340 1.4% 2007 DWP RFPWind Proposal Wind PPA/Own 12/31/10 300 750 3.1% 2007 DWP RFP Total STS 625 1,800 7.4%

COB/NOBSCPPA 2 Phase 1 Wind Own 12/31/08 55 150 0.6% 2006 SCPPA RFPSCPPA 2 Phase 2 Wind Own 12/31/09 100 280 1.2% 2006 SCPPA RFPWind Proposal Wind PPA/Own 12/31/10 60 175 0.7% 2007 DWP RFPGeothermal Proposal Geothermal PPA/Own 6/30/10 35 265 1.1% 2007 DWP RFP Total COB/NOB 250 870 3.6%

Green PathSCPPA4 Wind PPA/Own 12/1/10 65 220 0.9% 2005 SCPPA RFPSolar Proposal Solar PPA/Own 12/31/10 80 160 0.7% 2007 DWP RFPGeothermal Geothermal Owned Jt. 5/30/11 100 800 3.3% SCPPA/IID/DWPSalton Sea Geothermal Geothermal Own 12/1/12 100 800 3.3% 2007 DWP RFP Total Green Path 345 1,980 8.2%

Grand Total 3,163 11,273 46.6%

Percentages expected by 2010 Percentage potential by 20138.0% Already providing renewable resource 8.0%6.5% High likelihood of providing the specified amount of renewable resources 11.7%0.9% Marginal likelihood of providing the specified amount of renewable resources 0.9%4.2% Projects from 2006 SCPPA RFP meeting initial screen 7.5%9.4% 2007 DWP Renewable Energy RFP (preliminary) and JDG 2007 RFI 18.4%

29.1% 46.6%

10

Inyo - Rinaldi Line Upgrade Project

OWENS GORGE

COTTONWOOD

BARREN RIDGE

RINALDI

9 miles

81 miles

68 miles

76 miles

234 miles

INYO

SCE

CASTAIC

SYLMAR

NORTHRIDGE

71.6 miles

1. Reconductor Barren Ridge to Rinaldi w/ 1113 ACSS.

2. New line from Barren Ridge to Castaic w/ 1113ACSS.

OLIVE

500MW WTG

Pine Tree120 MW2007 COD

Wind 3100+ MW2009 COD

Wind 2150+ MW2008 COD

Barren Ridge

Pine Tree

Wind # 3 Substation

To Cottonwood/Inyo

To Rinaldi

To Castaic

1111

STS Background Information

Major STS Components

– Intermountain Converter Station– HVDC Transmission Line – Adelanto Converter Station – Adelanto Switching Station

Transmission System

– 488 Mile +/-500 kV DC Transmission Line

– Transmission Capacity – 1920 MW

– Transmission entitlement shares based on generation shares

– California Unit 1 & 2 Purchasers are able to use unused STS capacity

1212

(2)

(7)

(4)

GREEN PATH

13

Potential Impediments

•Uncertainty in Tax Credits or availability of Clean Renewable Energy Bonds

•CEQA completion prior to Governing Authority approval of Contract

•Manufacturing constraints – wind turbines & solar tubes and glass

•Intermittent nature of wind & solar requires cautious integration into grid, more costly regulation

•California environmental process for new projects is lengthy, 12 to 24 months and appears to promote development out of state

•Renewables aren’t perfect – impacts to birds, bats, visual blight, aviation - FAA & military aircraft, noise, tourism & recreation, etc.

•Lack of trained labor pool to operate and maintain renewable facilities

•Environmental Justice issues and NIMBY lawsuits in urban settings – MSW, landfill, biomass, etc.

14

PRESENT LADWP SOLAR PROGRAM INCENTIVE PAYMENTS

14

LADWP Solar PV Incentive Program Budget and Projected Reservations and Expenses

$-$2,000,000$4,000,000$6,000,000$8,000,000

$10,000,000$12,000,000

Jul-0

6

Sep

-06

Nov

-06

Jan-

07

Mar

-07

May

-07

Jul-0

7Date

Am

ount

$ Amount ReservedAmount PaidBudget

15

RECOMMENDED PROGRAM CHANGES NEEDED BY JANUARY 1, 2008

15

Proposed Incentive Rates for Step 1

*$/Wptc installed values assume a PV system under nearly ideal conditions. i.e. 95% eff. Inverter, 1% shading, 34 deg tilt. Less than ideal systems will receive lower incentive amounts. W-AC CEC =Wptc x 0.95

Customer Type Base Incentive Rate

($/kWh)

Base Incentive

Approximate* ($/Wptc)

Base Incentive

Approximate* ($/W-AC CEC)

LAMC or BIPV Supplement

($/kWh)

Maximum Incentive Rate

($/kWh)

Commercial $0.11 $3.40 $3.60 $0.01 $0.12 Govt. & Non-Profit $0.14 $4.30 $4.50 $0.02 $0.16

Residential $0.14 $4.30 $4.50 $0.02 $0.16

16

OVERALL SUMMARY:

FY 07-08 Energy Efficiency Work Program

Program

FY07-08 Budget

($1,000s)

Full Time Equivalent

Staff

Peak Energy Reduction

(MW)

Annual Energy Savings (GWh)

Lifetime Energy Savings (GWh)

Total Resource Cost

(TRC)

Program Adminstrator Cost (PAC)

LADWP $/kWh

LADWP $/kW

Residential Programs Refrigerator Recycling Program 866.90$ 0.50 1.13 7.3 43.8 1.45 2.42 0.020$ 771$ CFL Distribution Program 5,489.00$ 2.00 7.00 39.0 351.0 3.12 3.12 0.016$ 784$ Consumer Appliance Rebate Program 2,304.50$ 7.50 0.46 1.2 19.4 0.32 0.42 0.119$ 4,973$ Low-Income Refrigerator Program 25,559.60$ 2.50 6.14 37.5 675.6 0.64 0.64 0.038$ 4,162$ Point of Sale (CRP) 2,959.30$ 1.00 1.09 3.5 58.6 0.50 0.97 0.051$ 2,704$ CFL Buydown Program 3,320.60$ 2.00 8.40 46.8 421.2 5.56 6.19 0.008$ 395$ Subtotal Residential Programs 40,499.90$ 15.50 24.22 135.4 1,569.6 0.026$ 1,672$

Non-Residential Programs Commercial Lighting Efficiency Offer 7,152.60$ 7.00 10.16 67.6 775.8 1.91 7.17 0.009$ 704$ Chiller Efficiency Program 2,888.90$ 3.00 1.54 3.7 73.9 1.13 1.14 0.039$ 1,878$ Thermal Energy Storage Program 551.40$ 0.50 0.83 0.0 1.1 0.44 1.01 0.490$ 662$ Refrigeration Program 1,457.20$ 1.50 1.39 11.2 132.1 3.46 4.21 0.011$ 1,047$ Custom Performance-Based Efficiency 2,649.20$ 4.00 2.44 12.3 183.8 1.46 3.43 0.014$ 1,087$ Small Business Direct Install 10,095.40$ 0.75 4.95 30.3 274.4 1.22 1.22 0.037$ 2,040$ New Construction/LEED Incentive 2,553.80$ 3.50 0.56 3.6 71.1 0.81 0.97 0.036$ 4,571$ DSM Bid Program 1,001.50$ 0.50 0.39 2.3 34.3 1.71 2.47 0.029$ 2,555$ Retro-Commissioning 1,080.40$ 0.75 3.03 9.1 90.9 2.22 4.25 0.012$ 357$ Subtotal Non-Residential Programs 29,430.40$ 21.50 25.29 140.0 1,637.4 0.018$ 1,164$

General Program Support Program Administration 2,183.90$ 6.00 Residential Audits and Workshops 481.40$ 0.50 Commercial Audits 969.30$ 6.00 Technical Assistance & Education 1,701.40$ 5.00Subtotal General Program Support 5,336.00$ 17.50

TOTAL ENERGY EFFICIENCY PROGRAM 75,266.30$ 55 50 275 3,207 0.023$ 1,520$ Program Administrator Cost Test compares NPV of all avoided cost benefits relative to LADWP program costs.

Total Resource Cost Test compares NPV of all avoided cost benefits relative to LADWP and customer costs.

17

Historic and Projected Energy Savings:

FY 07-08 Energy Efficiency Work Program

LADWP Energy Efficiency Achievementsand Projections (Annual GWH)

65.0

164.2

52.3 34.5 37.016.6

80.0

275.0

0.0

50.0

100.0

150.0

200.0

250.0

300.0

00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08Fiscal Year

Ann

ual S

avin

gs

Inst

alle

d (G

WH

)

FY06-07 is projected based on data to date.FY07-08 is proposed budgeted.

18

LADWP ENERGY EFFICIENCYHistoric Expenditures and Projected Budgets

$10.9 $11.3 $12.1

$19.1

$15.0

$11.0 $9.9$7.7

$28.2

$75.2

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

$80.0

1998

-99

1999

-00

2000

-01

2001

-02

2002

-03

2003

-04

2004

-05

2005

-06

2006

-07

2007

-08

$ m

illio

ns

Note: FY01-02 does not include State funding during energy crisis.

FY 07-08 Energy Efficiency Work Program

19

FY06-07 Budget & Goals:

– Anticipate 50 MW of peak reduction and 275 GWh of annual energy savings.

– Overall cost effectiveness is $0.02/kwh.

– Eliminates the emission of nearly 200,000 tons of CO2 annually and more than 2 million tons over the life of the measures.

– Core programs are: Commercial Lighting, CFLs, and Low Income Refrigerators

– Other significant programs include Refrigeration, Custom Performance, Small Business Direct Install, Retro-Commissioning, and Chillers.

FY06-07 EE Budget by Program

Low Income Refrigerator Exchange CFL Distribution Sm Bus Direct Install Commercial Lighting Efficiency Offer Chiller Efficiency Program CFL Buydown Custom Performance New Construction/LEED Consumer Appliance Refrigeration Program Retrocommissioning DSM Bid

Low Income Refrigerator Exchange

CFL Distribution

Commercial Lighting

Sm. Bus. Direct Install

FY 07-08 Energy Efficiency Work Program