Summer 2004and Beyond
Lon W. House, Ph.D.
530.676.8956
www.waterandenergyconsulting.com
ACWA/Edison Joint Presentation
June 24, 2004
Stateof the State
Utilities financially stable
Electricity rates 20% higher thanprior to deregulation
Long term electricity contracts through2013
Exit fees, Customer ResponsibilitySurcharges
Increasing demand, increasinggeneration retirements, slow newgeneration construction
Opportunities/incentives for selfgeneration, demand curtailment
Natural gas $5-7/MMBTU
New LNG facilities in permittingstage, most withdrawn
This Summer
Warm spring - early snowmelt. 1 in 5 hydro years
Higher demand - +3.5%. 1/2 of the increase isdue to due to economic recovery and a/c in newhomes in the Central Valley and Southern California
Not much new generation
Continued intra- zonal congestion
Increased retirements
Import limitations
Pacific- DC Intertie limitation (estimated 750MW decrease in imports April to September2004, then out of service until end of year)
Already had one generation relatedblackout and several Stage 1 emergencies
Experts - if everything works accordingto expectations - we’ll make it
If not – a hot summer, a large powerplant or transmission line go down - wewon’t make it
Electricity Use DependsUpon Temperature
Historic Demands
New Generation
GoneGeneration
ISO Summer 2004
CEC Forecast
The Future
Electricity UseBecoming More Peaked
New Demand Side Options
CPP - Critical Peak Pricing. >200kW. TOU-8-CPP, Gs-2-TOU-CPP, TOU-PA-CPP
12 summer (June-Oct) weekdays/year max, notification the day before (by 3pm)
Non-CPP days - energy costs discounted
Bill protection available - never pay more than under old tariff
10 day rolling average energy baseline
can also participate in Scheduled Load Reduction Program (SLRP), DemandBidding Program (DBP), Demand Reserves Program (CPA DRP)
DBP - Demand Biding Program
You offer amount (MW) and hours you’re willing to curtail. Via Internet.
Between noon and 8pm weekdays
Day-ahead -triggered when energy price >15¢/kWh. Notified by 3pm daybefore
Day-of - triggered when ISO declares warning of system emergency($.50/kWh). 3-8pm. Notified by noon.
Emergency test trigger twice a year for less than 4 hours, will pay you 50¢/kWh
•Technical Assistance Available
–$50/kW. Can be either equipment or behavior. $25/kW when expected loaddrop certified by registered engineer, $25/kW when 50% of estimated load isdropped
–Has to have advanced meter (interval meter, communication pathway, andinternet-based access to usage information)
–Reduction = load drop from average of same hour in 3 highest use days duringthe past two weeks
Summary of CurtailmentPrograms
Can Still Add Self Generation
Self-Generation - CPUC D.03-04-030Departing Load Obligation - exemptions
Generating before February 1, 2001
Biogas digestors
<1 MW and subject to net metering (solar)
Eligible for CPUC/CEC self-generationprograms: photovoltaics; wind turbines; fuelcells; microturbines, small gas turbines andinternal combustion engines with waste heatrecovery. No diesel or back-up
>1 MW “ultra-clean and low emissions” do notpay DWR ongoing charges or HPC
3,000 MW cumulative total - do not have to payDWR ongoing charges: 1500 MW renewable,nonrenewable generation amounts caps:
2004600 MW
7/1/2008500 MW
2008+ 400 MW
CEC has adopted a set of regulationsgoverning the process for determiningwhich departing load customers areeligible for an exemption from CostResponsibility Surcharges. Fill out CECForm 03-CRS-01.
Conclusions/Recommendations
High electricity prices (through 2011) as we pay off our2000/2001 hangover
High natural gas prices ($5-$7) around for awhile
Changes are coming
Traditional tariffs (I-6) disappearing
Real-time pricing for everyone is coming
Some form of direct access (core/noncore) someday
Even more rate options will be available (e.g., 2-partRTP)
Recommendations - know your system and what you can do
Take advantage of technical assistance $$ now, figure outwhat you can do before you have to do it
Look into demand reduction pilot programs (e.g. CPP orDBP) to test your operational changes while you are stillprotected on the down side
Look into summer curtailment programs
Look into self generation options
Look into more storage
Figure out what will happen to your budget when you goto real time pricing
Flexibility is the key - the more flexible your operations arethe more opportunities you can take advantage of
This summer - make sure your backup generation is working,and you have operation plans for electrical blackouts