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HomeMy WebLinkAboutReso. 1989-232 - Adopting the city of redding electric utility 1988 - t i • 411 Ill II loo RESOLUTION A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF REDDING ADOPTING THE CITY OF REDDING ELECTRIC UTILITY 1988 RESOURCE PLAN. li WHEREAS , the City Council of the City of Redding has considered the Electric Utility 1988 Resource Plan of the City of Redding, a true copy of which is attached hereto and incorporated herein by reference; and WHEREAS , it is in the best interests of the City of Redding to adopt said Plan as the City of Redding Electric Utility 1988 Resource Plan; NOW, THEREFORE, IT IS HEREBY RESOLVED that the City Council of the City of Redding hereby adopts the attached Plan as the City of Redding Electric Utility 1988 Resource Plan. I HEREBY CERTIFY that the foregoing Resolution was introduced and read at a regular meeting of the City Council of the City of Redding on the 5th day of July, 1989 , and was duly adopted at said meeting by the following vote: AYES: COUNCIL MEMBERS: Buffum, Dahl , Fulton, Johannessen, & Carter NOES: COUNCIL MEMBERS: None ABSENT: COUNCIL MEMBERS : None ABSTAIN: COUNCIL MEMBERS: None II II � II SCOTT CARTER, Mayor City of Redding ATTEST: ORM-f'PROVED: ETHEL A. NICHOLS, City Clerk RAWDALL A. HAYS , City , ttorney 3 i Ill ♦ j ! Eu � CITY OF REDDING Electric Utility � I 1' 1988 RESOURCE PLAN Ali June , 1989 it 011 S • r TABLE OF CONTENTS SECTION PAGE I. EXECUTIVE SUMMARY 1 A. Introduction and Purpose 1 B. Resource Plan Development 3 C. Recommendations 3 II. PLANNING GOALS 5 III . CHANGES IN CONDITIONS AND EVENTS SINCE THE 1986 RESOURCE PLAN 7 A. Load Forecast Changes 7 B. Rate Changes 8 C. Regulatory and Legislative Changes 8 D. Price of Supplemental Resources 9 E. Natural Gas Industry Changes 9 F. Contractual Changes 9 G. Deferred or Abandoned Projects 9 H. Availability of Wood Waste Fuel 10 IV. FORECAST OF ELECTRIC POWER NEEDS 11 A. Forecasting Methodology 11 B. Energy Conservation and Load Management 15 C. Other Power Considerations 18 D. Adopted Forecast 18 614 : 002 -i- TABLE OF CONTENTS SECTION (Continued) PAGE V. RESOURCE CONSIDERATIONS 31 A. Economics 31 hi B. Autonomy 34 C. Types of Resources 34 D. Transmission 38 E. Reserve Requirements 38 VI. RECOMMENDED POWER RESOURCE DEVELOPMENT PLAN 41 A. Avoid High-cost Supplemental Power Purchases 41 II B. Pursue Arrangements to Shape Loads and Resources42 C. Pursue Development of Spring Creek Pumped Storage Project 42 li D Pursue Economic Hydroelectric Projects 43 II E. Pursue Development Negotiations with Independent Power Producers (IPP) 43 F. Pursue Transmission Rights 43 G. Enhance Relationships with Western 43 H. Pursue Other Interutility Contracts 44 I . Pursue Conservation and Load Management Programs 44 J. Selectively Participate in Baseload Projects 44 VII. APPENDICES 47 A. Resource and Transmission Projects Recommended for Continued Investigation or Operations 48 B. Definitions 59 C. Acronyms 73 614 :002 -ii- 4 411 TABLE OF CONTENTS (Continued) TABLES PAGE 1 - Parameter Projections 1987-2007 20 2 - Coincident Peak Demand for Electricity by Customer Class 21 3 - Electrical Energy Use by Customer Class 22 4 - Historic and Projected Parameter Growth Rates 23 5 - Estimated Effects of Conservation & Load Management Programs 24 6 - Monthly Peak Demand 25 7 - Monthly Energy Requirements 26 8 - Total City Peak Demand Needs 27 9 - Total City Electrical Energy Needs 28 10 - Recommended Plan 45/46 FIGURES 1 - Growth of Redding by Annexation 19 2 - Coincident Peak Demand 29 3 - Electric Energy Need 30 614 : 002 -iii- 411 411 i 1 CITY OF REDDING Electric Utility 1988 RESOURCE PLAN I . EXECUTIVE SUMMARY A. Introduction and Purpose Historically, the City of Redding (City) has relied upon wholesale purchases from other utilities to meet its power requirements . However, during the early 1970s , it became evident that continued reliance upon other utilities could not ensure the availability of reliable ,I! and low-cost power to meet the City' s future long-term electrical demands . Therefore, in 1976 , the City began to develop a broad-based program to provide the oppor- tunity for the City to exercise some control of the cost and availability of its long-term electrical needs. The program includes suitable City-owned generating re- sources , participation in joint powers agency resources , and power purchases . Essentially, in 1976 , the City initiated a program to develop sufficient power resources to meet the future power requirements of its customers in a reliable and cost-effective manner. During 1981 , the program was consolidated into the first City of Redding Electric Utility Resource Plan. The Plan was adopted early in 1982 by the Redding City Council and is updated and resubmitted to the Council for approval biennially. The need for developing a resource plan which contains a well balanced mix of power resources has been clearly substantiated in recent years. During the five-year period beginning in 1982 , the cost of power purchased by the City from its major supplier, the Western Area Power Administration (Western) , escalated over 300% . In addition, in 1984 , the City' s electric load exceeded Western' s contractual limit and required the City to purchase more expensive supplemental power from PG&E during one month, at a total cost of $64 , 000 . By 1988 , the City' s electric load had grown to 154MW, requiring the purchase of supplemental power from PG&E during four months , at a total cost of $3 , 100 , 000 . The cost for purchased supplemental power is expected to continue to grow rapidly unless the City develops other lower cost sources of power. 614 : 002 . 5 -1- I If the rate of growth for the Citv' s electrical demand continues at the same rate as experienced over the past ten years , the City could expect its load to double every nine years . The forecast included in this plan, however, projects a reduction, not an increase , in the rate of growth. The projected reduction in growth rate is primarily due to the reduction in the volume of developed property which will become available for annexation over time . The forecast for the 1988 Resource Plan (1988 Plan) projects the City' s peak load to grow by approximately 53% during the next nine years . The 1988 Plan updates the Planning Goals , Forecast of Electric Power Needs , Preliminary Assessment of Resources , and Resource Planning included in the 1986 Resource Plan. The changes in conditions and events which properly reflect the City' s most recent projection of power needs , and the City' s current power resource plan to meet those needs are included in this update of the 1986 Plan. The 1988 Plan includes assumptions and data which are current as of November 1988 . The 1988 Plan should not be interpreted to represent a commitment by the City to a specific course of action. Rather, the purpose of the 1988 Plan is to serve as an aid to the process of decision making for individual projects. Decisions will be influenced by future conditions which may not neces- sarily match the assumptions used to prepare this 1988 Plan. In evaluating the potential for developing new generat- ing resources , the Electric Department staff compares the economics of such resources to the City' s incremen- tal cost for acquiring additional power. Currently, the incremental cost of power is governed by the cost of power supplied by the Pacific Gas and Electric Company (PG&E) through a supplemental power purchase contract. Before a commitment to a specific project is made, detailed analyses which incorporate the most recent data available are conducted for the project to consider the benefits , costs , risks , need, timing, acceptability, and environmental and financial impacts . These analyses are repeated, as appropriate, with the most up-to-date information available at each critical decision point in the project development process so that mid-course corrections can be made, including possible termination of a project. The City' s Electric Utility Commission reviews the analyses and forwards recommendations to the City Council. The Redding City Council by specific action and the City' s voters (who own the electric system) ultimately, through referendum, decide upon the projects selected for implementation. 614 : 002 . 6 -2- 411 411 ! i B. Resource Plan Development The 1988 Plan (Section IV) provides a probable twenty- year assessment of the City' s future need for power to meet projected customer growth. The power need assess- ment was conducted as suggested by the California Energy Commission (CEC) in its forecasting guidelines known as the Common Forecasting Methodology (CFM) . Through use is of the CEC guidelines , the assessment considered several parameters which influence the future need for power. Section V discusses the merits of several resource development options which could be used to meet the power requirements forecasted by the power need assess- ment. Section VI discusses the recommended plan as of November 1988 , to meet the forecasted need. The planning goals utilized as the primary criteria for the 1986 Plan are listed in Section II. C. Recommendations If the City is successful in the development of several resources alternatives , in addition to an aggressive load management program, it will be able to avoid higher-cost supplemental power purchases . The long-term savings to the City' s ratepayers under this approach could be substantial. Specific recommendations are as follows: 1 . The City should continue an aggressive and fore- sighted power resource development program which emphasizes the need to acquire long-term economical sources of reliable power. 2 . The City should develop projects , inter-utility agreements, or agreements with private developers which provide support for City-owned generation resources , and provide supplemental power require- ments needed to meet City loads in excess of the power received from Western and City resources . 3 . In order to maximize the benefits of future genera- tion resources, the City should develop agreements with the Western Area Power Administration (Western) which will allow the City to schedule Western power. Such agreements would maximize benefits by: (a) Reducing the amount of excess energy available during off-peak time periods . (b) Reducing the amount of supplemental purchases required to meet the City' s peak load require- ments. 614 : 002 . 7 -3- 411 4 . The City should develop firm transmission rights to the Pacific Northwest and implement appropriate agreements to acquire peaking capacity (preferably under a capacity/energy exchange type of arrange- ment) from Pacific Northwest entities . 5 . The City should continue to work closely with Western to ensure that it obtains an equitable share of the United States Central Valley Project (CVP) peaking capacity (if and when allocated) and to protect its existing 116MW CVP allocation. 6 . The City should continue with the implementation of the active load management program. A commercial program has been in operation since 1985 and the peak load reduction obtained is significant. More publicity concerning the conservation program, which reduces our peak demand, should be undertaken to obtain more widespread participation in the program. 7 . The City should continue to participate in power pooling planning activities . Continued partici- pation will ensure that the City will have the opportunity to participate on an equitable basis within the power pool if and when it becomes opera- tional. Table 10 in the 1988 Plan, contains the projected energy and capacity requirements and resources for the City, on an annual basis , through fiscal year 2007 . 614 : 002 . 8 -4- 4111 II . PLANNING GOALS II The City of Redding' s Electric Utility will support Redding ' s continued economic growth and development by providing the citizens of Redding with long-term, econom- ical , efficient, reliable , and environmentally responsible electric power. A. Present and future power costs for the City' s customers will be held as low as practicable The long-term cost of electricity to the City' s custom- ers is a primary consideration in the analysis of alter- native power resources and programs . The ultimate test of any resource plan is the ability to provide econom- ical power resources to the City' s customers. B. Reliability and service levels will be maintained and improved whenever possible [ Dependable p e and safe electrical service must continue to be provided to the City' s customers . C. Local control and independence will be retained Local control ensures that the City' s power system is responsive to customer needs. Independence allows the City more freedom in buying and selling power from various power projects and various utilities . This freedom will allow the City the flexibility to acquire the least costly power. D. Development of economic , local power resources is Ij preferred Whenever the costs are reasonably competitive , the development of power projects which benefit the local economy will be preferred over equivalent, but geo- graphically distant projects . Sources of competitively priced power will be sought from generation which is ancillary to the primary business of a local firm -- typically, power produced from waste heat. E. Power resources will be developed in an environmentally responsible manner New City power projects will provide for protection of the environment in compliance with applicable laws and regulations . When economically feasible, new City power projects will be developed to benefit the local environ- ment. 614 : 002 . 9 -5- it S • F. A diversified power supply is preferred Projects will be preferred when they allow the City to economically diversify its power supplies by using different locations , fuels , or technologies . Diversity can reduce future risks to the City from interruption of power production from one location, fuel, or technology. G. Promote and develop load management and conservation programs Load management will provide a means of reducing crit- ical peak load growth and will better utilize the City' s power resources. Conservation programs will inform customers of ways to efficiently utilize electricity and will thus reduce the demand on the electrical system. H. Promote a healthy local economy Reasonably priced, reliable , electrical power is attrac- tive to business. Jobs created by the availability of reasonably priced, reliable, electrical power will benefit the local economy. 614 : 002 . 10 -6- III . CHANGES IN CONDITIONS AND EVENTS SINCE THE 1986 RESOURCE PLAN The City of Redding Electric Utility operates in a complex, changing environment. This strategic resource plan consid- ers numerous factors which may play a role in shaping City policy regarding its electric utility. Most of these factors are constantly changing. This section presents some of the major changes which have occurred since adoption of the 1986 Resource Plan. Examples are: O Load forecast changes O Rate changes O Regulatory and legislative changes 0 Price of supplemental resources O Natural gas industry changes O Contractual changes O Deferred or abandoned projects O Availability of wood waste fuel A. Load Forecast Changes In 1987 , the City submitted its second biennial Common Forecasting Methodology (CFM) filing with the California Energy Commission (CEC) . Two forecasting methodologies were used to prepare the City' s 1987 CFM filing. Data was collected from a residential end-use survey and in- corporated into an end-use model, wherein electric energy consumption was forecasted based upon appliance saturation rates and energy consumption values compiled SII by the CEC. The end-use model results were found to be consistent with the results of the second methodology, the econometric forecast. The econometric forecasting methodology, which was also used to prepare the 1986 Resource Plan, involves the preparation of a computer model based on historical data. The econometric model develops a relationship between several economic variables and the associated load growth. The projected values of the economic variables used to develop the load forecast in the 1986 Resource Plan were updated to prepare the load forecast for the 1988 Resource Plan. Changes included a re- duction in the rate of growth for the prices of elec- tricity and natural gas and a slight decrease in in- flation rates. ' t IIS 614 : 002 . 11 -7- 411 411 The Redding area continues to see high commercial and residential development. This development, combined with additional electrical load growth from annexations , has caused peak demand to grow by 13 . 8% , and energy con- sumption to grow by 8 . 3% in 1987 . In 1988 , the CEC adopted a forecast of Redding' s load growth with rates averaging 4 . 9% for energy and 4 . 7% for demand for the period 1987-1995 , with a slight decline in growth rates thereafter. Redding' s estimated growth continues to exceed expected state-wide averages . The expected monthly load for the Redding Electric Utility over the next 20 years can be found in Section IV of this Plan. The load forecasts for the 1988 Resource Plan are slightly higher for the near term than were the load forecasts adopted for those same years for the 1986 Resource Plan. In later years , both forecasts are virtually identical. B. Rate Changes In September, 1986 , City electric rates increased 10 . 3% . In September, 1987 , rates were increased 7 . 2% . Those increases represented the final steps in absorbing a five-year, 300% wholesale rate increase imposed by West- ern. The magnitude of those increases in Redding ' s retail rates are expected to slightly decrease the rate of growth in consumption of electricity in the City. Also since 1986 , expenses for supplemental power pur- chases from PG&E increased substantially, by 55% , due primarily to higher summer peak purchases . In May 1988 , Western established new rates through 1993 . The new rates initially reduced Western' s power rates to the City by approximately 10% ; however, the rates will gradually increase over the next five years . C. Regulatory and Legislative Changes The CEC has exclusive siting jurisdiction over all thermal plants and related facilities located in the State of California having a rated capacity of 50MW or greater. The CEC is attempting to lower the 50MW output qualification. Such a move could bring all thermal resource options the City is considering under CEC jurisdiction. In 1987 , FERC approved a 21 . 8% demand-charge reduction in PG&E ' s wholesale rates to the City. The key factor in that reduction was the Tax Reform Act of 1986 . However, in December 1988 , the CPUC approved PG&E' s request for a retail rate increase designed to incorpo- rate the capital cost of the Diablo Nuclear Power Plant. It is likely that the CPUC decision will cause a FERC 614 : 002 . 12 -8- L . . wholesale rate review in 1990 , which will result in a 70% - 90% increase in demand charges from PG&E. D. Price of Supplemental Resources Since the 1986 Resource Plan, the City' s forecasts for capacity and energy charges for PG&E supplemental power have been reduced by an averaae of 19% and 15% , respec- tively. The primary reasons for the reductions are j; downward revisions in anticipated prices for natural gas dpi and oil, inflation rates , and rate increases associated ,II with the effects of adding the Diablo Nuclear Power Project into the energy rate base. However, as stated above , demand rates are expected to increase if the Diablo Nuclear Power Project is added to the demand rate base. These changes are significant since the primary test of cost effectiveness for any resource option is to compare 11' its cost with the alternative cost of PG&E supplemental purchases . k'i E. Natural Gas Industry Changes � I Several recent regulatory and market events have in- , I� creased the availability and reduced the price of natural gas. These events have thus increased the viability of natural gas-fired turbine generators as an alternative to purchases from PG&E. F. Contractual Changes 1I; In August 1988 , a contract between Western and the City fl of Redding was executed, providing for transmission ser- vice from Western to the City. The contract specifies 11' the terms and conditions for the City to receive power from locations which are remote from the City. I , II G. Deferred or Abandoned Projects In 1987 , Sierra Pacific Industries terminated nego- tiations on the CAMAGE Cogeneration Project. Therefore, II the CAMAGE Project is not included in the 1988 Resource Plan. However, several other Independent Power Produc- ers (IPPs) are negotiating actively with the City. New contracts with IPPs are expected to replace the power which would have been available from CAMAGE. The projected operational dates of several general proj- ects which were included in the 1986 Resource Plan have been delayed one to three years in the 1988 Resource Plan as a result of a number of regulatory and economic I influences . The revised operational dates are provided in Section VI of this plan. I 1 614 : 002. 13 -9- II 410 41! H. Availability of Wood Waste Fuel During preparation of the 1986 Resource Plan, fuel gen- erated by waste from the lumber industry was relatively abundant. However, several cogeneration projects have since become operational which, have severely curtailed the availability of wood fuel, and has caused the price of wood fuel to rise. 614 : 002 . 14 -10- 411 IV. FORECAST OF ELECTRIC POWER NEEDS it The forecast of future electric power needs of the City is a cornerstone of the 1988 Plan. The forecast defines the need for additional City power resources , the potential for conservation savings , and, to some degree , the level of future City rates for electricity. This section describes the development of the City' s forecast of peak demand in megawatts (MW) and the total City energy requirements in gigawatthours (GWH) for the planning period of City fiscal years 1988-2007 . A. Forecasting Methodology 1 . Energy Historic energy consumption by customer class was compiled on a monthly basis for the approximate ten-year period of January 1977 through June 1987 . ji Residential and commercial class customers have historically been responsible for about 90% of Redding' s total energy sales . Recognizing the significance of these customers to total system load, the parameters which affect load growth for each of these two classes were evaluated. A comput- er model, using several of the parameters , was then developed to forecast energy usage for the residen- t ! tial and commercial classes. Energy projections for other customer classes including industrial, agricultural, and govern- mental, were based on the historic load growth of each class as compared to the residential class . Several parameters which may affect load growth were tested to determine their effects on the City' s historical load growth between the ten-year period January 1977 and January 1987 . Regression analysis was used to determine the relationship, if any, of the tested parameters to the amount of energy sold. The following parameters were found to have a significant statistical effect, and were, therefore, used in the computer model to project energy con- sumption through 2007 . (a) Number of Electric Customers : As expected, this parameter significantly determines the amount of energy needed by the 1 City. Historically, the number of Electric Utility customers does not match the ratio of the Redding population divided by the average number 614 : 002. 15 -11- • of persons per household. This anomaly is due to the fact that once an area has been annexed into the City, several years may pass before all of the customers are transferred over to the City ' s Electric Utility. This time lag is primarily due to the protracted negotiations and legal actions required to acquire PG&E facil- ities . (b) Disposable Personal Income: Historic personal income was determined to have an effect on electricity consumption. An in- crease in income contributes to a slight in- crease in electricity consumption. Shasta County income per capita was used to establish the historic relationships . Future growth is estimated to be improved significantly from that represented in the historic period due to the projected evolution of the local economy toward the manufacturing and services sectors . (c) Heating and Cooling Degree Days : These parameters were used to account for electric usage associated with space heating and cooling. Heating and cooling degree days are a measure of space heating or cooling require- ments . The greater the value of heating and cooling degree days , the greater will be the electric requirements for space heating and cooling. (d) The Price of Electricity: Customer decisions to use electricity are determined partly on the basis of the average price of electricity. The historic, real average price of electricity to City electric customers was approximated using total custom- er-class revenues divided by total custom- er-class kilowatt-hour sales and was adjusted by the Consumer Price Index to constant 1985 dol- lars. (e) Annexations: Annexations by the City of Redding have played an important role in load growth of the City' s electric system over the historic period (see Figure 1) . Some areas have been annexed but have not yet received electric service from the City. The areas within the Redding city limits which have not yet received electric service 614 : 002 . 16 -12- F � 1 i 411 represent future increases in load. These increases have been explicitly considered in developing the load forecast by adjusting the forecast number of customers within the commercial and residential classes , by the li estimated number of customers associated with each annexation. The effect of minor future annexations was included in the number of customers projection. Major future annexations II were not included in the base forecast of future need but were accounted for explicitly by their addition to projected levels . The other parameters tested did not have any apparent statistical effect on energy usage. The other parameters tested were: price of natural gas, level of employment, and daylight hours . Table 1 presents projections for the period 1987-2007 of the parameters used to forecast future electricpower needs . Heating/cooling degree days projections were essential for explaining the historical test period. However, in the forecast, due to the unpredicable nature of the weather, the projection of degree days was held constant at a value equal to the historical average daily temper- ature in Redding. 2 . Demand System peak demand was determined by using the forecasts made for energy usage and the average system load factor for the period 1978-1986 . As the City' s system expands and diversity increases , and with the consideration of future effects of load management and energy conservation programs , it was estimated that slight improvements in average load factors will result. Although annual load factors will certainly fluctuate with yearly weather con- ditions , the Redding system annual load factor was assumed to improve steadily from 45 . 4% in 1987 to ti 51 . 3% by the year 2007 . 3 . Forecast of Customer Needs II Table 2 lists historical and projected electrical demand by customer class. Table 3 lists historical and projected electrical energy use by customer class . The effects of existing energy conservation and load management programs are included in Tables 2 and 3 . ° 614 : 002 . 17 -13- 4 . Plausibility The plausibility of the forecast is dependent primarily on the validity of the projections of the model parameters . Historic and projected growth rates for each of these parameters are shown in Table 4 . While there are significant differences in the growth rates of the historic and the projected parameter values , such differences are explained as follows . a) Price of electricity: The historic and ongoing increases in the price of electricity are caused primarily by two factors. First, the cost of power purchases from Western has increased by 300% during the 1983-1986 time period. Second, in 1984 , the City began to purchase high-priced supplemental power from PG&E. The rate of growth for the real price of elec- tricity is expected to decrease since future dramatic rate increases from Western are not expected, and since the City is actively pursu- ing more economical resources for supplemental power than purchases from PG&E. b) Personal income: The per capita personal income projections differ significantly from the historic series due to current trends in the Redding economy. Historically, the economy was based predominant- ly on the lumber industry. The lower historic growth in personal income is directly attribut- able to the protracted depression of the lumber industry during the late 1970s and early 1980s. Recent trends in local economic growth have shifted to the service and manufacturing sec- tors, providing a more stable base for future growth. Economic growth is expected to be supported further by present and anticipated stable energy prices . c) Number of customers: The number of City Electric Utility customers grew at a compound annual rate of 10 . 9% during the period 1977-1985 , while the population of Redding grew at a compound annual rate of 3 . 2% over the same perjod. These high growth rates 614 : 002 . 18 -14- i k • 410 were due largely to the effects of several annexations during the period 1977-1983 . Over 1� the longer term of the forecast period ( from 1987 to 2007) , the effects of annexation, natural increases and net in-migration are projected to result in a compound annual popu- lation growth rate of 3 . 2% , with a similar pro- jected rate of growth in residential and commer- cial customers. 1' B. Energy Conservation and Load Management , Forecasts of the City' s future need for electricity are dependent upon the effectiveness of conservation and load management programs . Many State and Federally mandated programs currently affect the amount of elec- trical energy consumed by City customers . These programs include new building and appliance efficiency standards , tax credits , etc . Conservation effects from such programs are partially considered in the historical regression analyses , since some energy savings have already occurred due to these programs . Several conser- vation and load management programs recently established by the City are in various stages of development and are °' expected to expand as described below. Table 5 lists ll' each of the programs , with estimates of the impact of II existing and future programs . In order to show the effects of not developing the proposed conservation and load management programs in the final forecast of power needs , the capacity and energy expected to be saved by Ii these programs were added to the forecasted customer-use projections . The conservation and load management programs considered were: ' 1 . Air Conditioning Load Management (ACLM) The ACLM program is designed to reduce peak elec- trical capacity during summer months. The program requires the installation of radio-activated control switches on customer air conditioning units, thus ' allowing the City to selectively cycle the air conditioners from a central location. I I In 1984 , load control switches were installed on all till eligible City-owned air conditioning equipment. An ,I, ACLM program for commercial customers was started in ��' April 1985 . It is estimated that each commercial ACLM switch will control about 6 tons of air condi- tioning, which is approximately equal to 6kW of electrical capacity reduction. i 614 : 002 . 19 -15- ii III i 410 • • . A total of 276 load control switches , controlling 1 , 870 tons of cooling, have been installed. The total load reduction, using a cycling strategy of 10 minutes every half hour, is approximately 623kW. Under emergency conditions, the load reduction is estimated at 1 , 870kW. 2. Swimming Pool Load Management (SPLM) The SPLM Program initiated in 1980 provides a reduction of peak demand by shifting the operation of swimming pool filters , pumps , and sweeps to off-peak hours . A request to operate pool equipment before 2 : 30 p.m. and after 6 : 30 p.m. is periodically mailed to pool owners . The Residential Energy Survey completed in the second quarter of 1987 , revealed that approximately 11% of residential customers (i.e. , about 2 , 450 customers) have some type (above or below ground) of swimming pool. The Residential Energy Survey also revealed that about 13% of residential customers who have swimming pools operate their pool filters be- tween the hours of 2 : 30 p.m. and 6 : 30 p.m. on hot summer weekdays. Thus , only about 313 customers with pools were not participating in the program at the time of the survey. It was assumed that each pool uses a 1 . 5 horsepower pump system. From these approximations , the SPLM load reduction was es- timated to have been 2 . 5MW in 1987 , and is projected to be 4 . 0MW by 2007. 3 . Load Curtailment Program (LCLM) The LCLM program consists of the voluntary reduction of electrical usage by certain large-use customers and by the general public. Most City pumping loads are also shut down or placed on standby generators. This program is put into effect only at such times as the electrical system is approaching peak load conditions . Customers are notified of the need to reduce their use of electricity by telephone and by radio and television announcements. In 1987 , this program reduced peak demand by an estimated 3 . 2MW, and is projected to reduce peak demand by 3 . 7MW in 2007 . As a supplement to the LCLM program, an extensive advertising campaign is conducted from May to September to encourage the reduction of electrical usage between 2 : 30 p.m. and 6 : 30 p.m. Radio adver- tisements are broadcast daily on the four leading local radio stations and a newspaper advertisement is published once a week in the local newspaper. 614 : 002 . 20 -16- 1 • 1 4 . Appliance Efficiency and Building Standards It is expected that mandatory Residential Building and Appliance Standards implemented in 1978 will continue to reduce the energy consumption of space heating, air conditioning, water heating, refrigera- tion, and other major appliances . Estimates devel- ,i oped from the Residential Energy Survey project energy and load reduction impacts of 9 , 100MWH and 2 . 0MW by 1992 , and 29 , 100MWH and 7 . 0MW by the year 2007 . 5 . Other Conservation Activities Residential customers are provided residential energy audits and general conservation information and materials. To further encourage the conserva- tion of energy, recording meters are loaned to customers to monitor the electrical usage of various appliances. Commercial customers are provided technical assis- tance in evaluating a wide range of conservation measures designed to encourage energy efficient lighting, water heating, heating and air condi- tioning, pumps and motors , pools and spas , res- taurant operations, and other equipment and pro- cesses. 6 . Street Light Conversion Program The City has an ongoing program of installing energy efficient, high-pressure sodium street lamps when existing, less efficient, mercury vapor lamps need replacement. It is estimated that this program saved 1 ,000MWH in 1987 and will save 3 , 000MWH by 2007 . 7 . Interruptible Load In 1984 , the City established a rate for inter- ruptible service which provides a reduction in the cost of power for eligible customers who volunteer for the rate. This class of service requires that customers reduce or eliminate consumption of power during peak usage times at the City' s request. Al- though there were no customers receiving electrical service under the Interruptible Rate as of December 1987 , the Electric Department estimates that up to 12 .5MW of interruptible load will be available by 2007. 614 : 002 . 21 -17- it +! • C. Other Power Considerations 1 . Losses Losses account for electricity which is used to energize the transmission and distribution system, and for electricity that is used but not metered (power theft) . The City' s 10-year historical energy losses have averaged 7 . 5% . During the forecast years an improving load factor was used in the 1988 Plan to account for efficiency improvements in the City' s distribution system. 2 . Monthly Power Requirements The monthly power requirements projections provide an indication of when power will be used by the City' s customers . Power usage is usually higher in the summer months and lower in the spring and fall months. Monthly power requirements projections of total customer load plus losses for 1986-1987 for capacity and energy are shown by Tables 6 & 7 , re- spectively. These projections were based on com- puter modeling of the City' s historic monthly power usage, normalized to temperature. D. Adopted Forecast Tables 8 & 9 list the City ' s historical and anticipated need for capacity and energy, respectively, from 1978 to 2007 . Figures 2 and 3 , respectively, illustrate the forecast of the City' s total need for capacity and energy. The compound annual growth in capacity for the historical period 1978-1987 was 8 . 2% and is expected to be 3 . 3% for the period 1988-2007 . The compound annual growth in energy for the historical period 1978-1987 was 6 . 4% and is expected to be 4 . 6% for the period 1988-2007 . These growth rates are higher than the growth rates discussed in Section III . Section III discussed customer needs only, while this section includes customer needs plus losses. As discussed in Section V, the City' s need for capacity will be higher than the demand forecast since the capacity needed to meet demand will need to include reserve requirements . 614 : 002 . 22 -18- 1 I • . I CITY OF REDDING 1988 POWER RESOURCE PLAN ':. . •-'''' k :::,' . 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'', , •• . 'V • I.. ANNEXATIONS . ' e Ad' <7. PRIOR TO 1949 ...- ....... i 1950 — 1959 e, I 1960 — 1969 1 1 F ,t 970 — FIGURE 1 1979 r•-•-•-•'. ••••• 4,,•_•_•_•_, t 1980 TO PRESENT -19- 1- 11, 40 • TABLE 1 - CITY OF REDDING 1988 Resource Plan Parameter Projections 1987-2007 1/ Real Personal 2/ Real Price 3/ Number of Income of Electricity Year Customers Per Capita Residential Commercial 1987 26 , 299 12 , 022 4 . 27 5 . 05 1988 27 , 261 12 , 262 4 . 13 4 . 89 1989 28 ,223 12 ,507 3 . 99 4 . 71 1990 29 , 192 12 , 757 4 . 22 4 . 99 1991 30 ,068 13 , 013 4 . 04 4 . 78 1992 30 , 970 13 , 273 4 . 14 4 .90 1993 31 , 899 13 , 358 4 . 30 5 . 09 1994 32 , 856 13 , 809 4 . 26 5 . 04 1995 33 , 842 14 ,085 4 . 35 5 . 15 1996 34 , 857 14 , 367 4 . 44 5 .26 1997 35 , 903 14 , 654 4 . 21 4 . 98 1998 36 , 980 14 , 947 4 . 16 4 .93 1999 38 , 090 15 , 246 4 . 11 4 . 87 2000 39 , 232 15 , 551 3 . 90 4 . 62 2001 40 , 409 15 , 862 3 . 93 4 . 65 2002 41 , 621 16 , 180 3 . 82 4 . 51 2003 42 , 870 16 ,503 3 . 62 4 . 28 2004 44 , 155 16 , 833 3 . 68 4 . 35 2005 45 , 481 17 , 170 3 . 71 4 . 39 2006 46 , 845 17 , 513 3 . 52 4 . 17 2007 48 , 250 17 , 863 3 . 53 4 . 18 1/ Residential customer growth rates are based on City of Redding, Department of Urban Planning, Planning and Progress Guide: Budget Preparation Information for 1987-1988 . These projections include growth attributable to expected future annexations . Commercial customer growth is estimated at 3% . 2/ 1985 dollars . 3/ 1985 cents/kWh, projections recognize an intent to gradually equalize the average costs of electricity for commercial and residential customers. 614 : 002 . 24 -20- TABLE 2 CITY OF REDDING 1988 Resource Plan 1 Fiscal Year i Coincident Peak Demand for Electricity by Customer Class (Megawatts) i Total* IYearCustomer Ending Residential Commercial Industrial Agricultural Governmental Demand 1/ I 1978 25 31 1 0.1 3 60 1979 32 35 2 0. 1 3 72 1980 47 43 2 0.1 4 96 l 1981 53 42 3 0. 1 4 102 1 1982 56 45 3 0. 1 4 108 1983 53 41 3 0. 1 3 100 1984 54 42 3 0. 1 3 102 1985 57 46 3 0. 1 4 110 1986 61 50 3 0.1 4 118 1987 64 53 3 0.1 4 125 1988 68 57 3 0.1 4 133 1 1989 74 60 3 0. 1 4 142 1990 72 60 5 0.1 6 144 , 1991 73 61 5 0. 1 6 145 li, 1992 73 62 5 0.2 6 147 1993 75 63 5 0.2 6 150 1994 77 66 5 0.2 6 155 1995 79 69 5 0.2 6 159 I 1996 82 73 5 0.2 6 166 1997 84 75 5 0.2 6 170 1998 88 79 5 0.2 7 179 1999 90 82 5 0.2 7 184 11 2000 93 86 5 0.2 7 191 2001 97 90 5 0.2 7 199 2002 99 93 5 0.2 7 204 t 1 2003 103 96 6 0.2 7 211 2004 106 100 6 0.2 7 219 2005 109 103 6 0.2 7 224 i 2006 111 106 6 0.2 7 230 2007 115 110 7 0.2 7 239 i *Compound Annual Growth Rate: 1978-1987 = 8.5% 1988-2007 = 3.1% j 1/ Totals may not add due to rounding. 614 : 002. 25 -21- i III • TABLE 3 CITY OF REDDING 1988 Resource Plan - Fiscal Year Electrical Energy Use by Customer Class (Gigawatthours) Total* Year Customer Ending Residential Commercial Industrial Agricultural Governmental Use 1/ 1978 111 134 9 0.2 13 267 1979 145 145 12 0.3 13 315 1980 196 174 17 0.4 15 402 1981 211 185 19 0.4 16 431 1982 221 190 17 0.4 15 443 1983 218 187 19 0.4 13 437 1984 213 190 17 0.4 15 435 1985 236 210 19 0.5 17 483 1986 236 211 19 0.5 17 484 1987 224 213 18 0.4 18 473 1988 242 227 20 0.5 16 506 1989 290 274 31 0.5 25 621 1990 288 275 38 0.5 31 632 1991 294 284 39 0.6 31 648 1992 300 293 39 0.6 31 664 1993 309 306 40 0.6 31 687 1994 319 321 41 0.6 31 713 1995 331 335 42 0.6 31 740 1996 341 349 44 0.6 32 767 1997 356 366 46 0.6 32 801 1998 372 384 48 0.7 33 837 1999 385 401 50 0.7 33 870 2000 402 421 52 0.7 34 909 2001 417 439 54 0.8 35 946 2002 433 458 56 0.8 35 983 2003 449 479 58 0.8 36 1022 2004 466 499 60 0.8 36 1062 2005 480 518 62 0.8 36 1098 2006 497 538 67 0.9 37 1140 2007 514 561 72 0.9 37 1185 *Compound Annual Growth Rate: 1978-1987 = 6.67 1988-2007 = 4.6% 1/ Totals may not add due to rounding. 614 : 002 . 26 -22- �? 1 • • TABLE 4 CITY OF REDDING 1988 Resource Plan Historic and Projected Parameter Growth Rates Projected Annual Average Annual Average Compound Growth Compound Growth PARAMETER Rate 1977-1985 Rate 1985-2007 Real Residential Price of 4 . 8% -0 . 5% Electricity Real Commercial Price of 6 . 3% -0 . 5% Electricity Real Personal Income -0 . 5% 2 . 2% Per Capita Number of Customers 10 . 9% 3 . 2% (' I II II 111 It; it II 614 : 002 . 27 -23- II e • TABLE 5 CITY OF REDDING 1988 Resource Plan Estimated Effects of Conservation & Load Management Programs 1985 1992 1999 2007 GWH MW GWH MW GWH MW GWH MW PROGRAM 1/ Air Conditioning N 0 . 3 N 3 . 3 N 8 . 0 N 15 . 8 Load Management Program (ACLM) Swimming Pool N 2 . 2 N 2 . 8 N 3 . 3 N 4 . 0 Load Management Program (SPLM) Load Curtailment 0 . 1 3 . 1 0 . 2 3 . 3 0 . 2 3 . 5 0 . 2 3 . 7 Load Management2/ (LCLM) Program - Efficiency 2 . 1 0 . 5 9 . 1 2 . 0 17 . 1 4 . 0 29. 1 7 . 0 Standards Other Conserva- N N 0 . 6 0 . 3 1 . 7 0 . 5 2 . 4 0 . 6 tion Activity Street Lights 0 . 8 N 1 . 8 N 2 . 9 N 3 . 0 N Interruptible Customers NN N 4 . 0 N 7 . 5 N 12. 5 Total: 3 . 0 6. 1 11 . 7 15 . 7 21 . 7 26 . 8 34 . 7 43 . 6 N = negligible 1/ Effects of existing and proposed load management and conservation programs are combined. 2/ Includes STEP advertising campaign. 614 : 002 . 28 -24- s • TABLE 6 CITY OF REDDING 1 1988 Resource Plan 1 4 Projected i. Monthly Peak Demands (MW) 1/ (Fiscal Years 1988-2003) 1 MONTH 1988 1989 1990 1991 1992 1993 1994 1995 i JUL 145* 154* 157 159 161 165 170 175 1 AUG 144* 146* 152 154 156 160 165 170 j SEP 136* 147* 144 146 148 152 156 161 i' OCT 116* 108* 99 100 101 104 107 111 NOV 93* 95* 121 122 124 127 131 135 H DEC 114* 114* 130 132 133 137 141 146 JAN 105* 125 127 128 132 136 140 145 FEB 103* 121 122 124 127 131 135 140 MAR 86* 111 113 114 117 121 125 129 1 APR 83* 97 98 100 102 105 109 113 r MAY 97* 135 136 138 142 146 151 156 JUN 141* 146 147 149 154 158 163 174 ! MW-MO 1,363 1,499 1,546 1,566 1,597 1,642 1,693 1,755 Peak Demand 145* 154* 157 159 161 165 170 175 MONTH 1996 1997 1998 1999 2000 2001 2002 2003 ri JUL 182 187 196 202 209 218 224 232 111 AUG 176 182 190 196 203 211 217 225 1 SEP 167 172 180 186 192 200 206 213 1 OCT 114 118 123 127 132 137 141 146 NOV 140 144 151 156 161 168 172 179 DEC 151 155 163 168 174 181 186 193 I" I JAN 150 157 162 167 174 179 186 192 FEB 144 151 156 161 168 172 179 185 I MAR 133 139 144 148 155 159 165 171 i APR 116 121 125 130 135 139 144 149 I MAY 161 168 174 180 187 193 200 207 JUN 174 182 188 194 202 208 216 224 ' MW-MO 1,808 1,876 1,952 2,015 2,092 2,165 2,236 2,316 I Peak Demand 182 187 196 202 209 218 224 232 I *Actual data. I 1/ Includes effects of present load management programs, however does not include reserves. 1 1 ! 614 : 002 .29 -25- '1 III ' • TABLE 7 CITY OF REDDING , 1988 Resource Plan Projected Monthly Energy Requirements (GWH) i/ (Fiscal Years 1988-2003) MONTH 1988 1989 1990 1991 1992 1993 1994 1995 JUL 53* 67* 65 67 69 71 73 76 AUG 58* 61* 62 64 65 68 70 73 SEP 47* 51* 54 56 57 59 61 64 OCT 44* 45* 49 50 51 53 55 57 NOV 43* 46* 55 56 57 60 61 64 DEC 63* 53* 62 64 65 67 69 72 JAN 52* 63 65 66 68 70 73 76 FEB 41* 51 52 53 55 57 60 62 MAR 42* 53 55 56 58 60 62 64 APR 40* 46 47 48 50 51 53 55 MAY 43* 49 50 51 53 55 57 59 JUN 50* 55 57 59 60 61 66 67 TOTAL 576 640 673 690 708 732 760 789 High 63 67 65 67 69 71 73 76 Low 40 45 47 48 50 51 53 55 MONTH 1996 1997 1998 1999 2000 2001 2002 2003 JUL 79 82 86 90 93 98 101 105 AUG 76 78 83 86 89 93 97 101 SEP 66 68 72 74 78 81 84 88 OCT 59 61 65 67 70 73 76 79 NOV 66 69 72 75 78 82 85 88 DEC 75 78 82 85 88 92 96 100 JAN 79 83 86 90 94 97 101 105 FEB 64 67 70 73 76 79 82 85 MAR 67 70 73 76 79 82 86 89 APR 57 60 63 65 68 71 74 77 MAY 61 65 66 70 73 75 78 82 JUN 69 74 75 77 83 86 88 91 TOTAL 818 855 893 928 969 1,009 1,048 1,090 High 79 83 86 90 94 98 101 105 Low 57 60 63 65 68 71 74 77 *Actual data. 1/ Includes effects of present energy conservation programs. 614 : 002 . 30 -26- i 1 ' i i . • HTABLE 8 ` CITY OF REDDING 1988 Resource Plan L} Fiscal Year I 1 Total City Peak Demand Needs Megawatts Total Total Total Net Future i� * Year Customer Demand Customer Load Total 1/ I i,1' Ending Demand Losses Demand Management Demand — '1' 1 11 (1) (2) (3) (4) (5) (6) (2) + (3) (4) + (5) 1 1978 60 7 67 2/ 67 1979 72 5 77 2/ 77 1111 1980 96 7 103 2/ 103 11 1981 102 7 109 2/ 109 . '11 1982 108 8 116 2/ 116 V 1983 100 7 107 2/ 107 1984 102 7 109 2/ 109 1985 110 8 118 2/ . 118 1 f 1986 118 8 126 2/ 126 li 1987 125 11 136 2/ 136 1988 133 12 145 2/ 145 1989 142 12 154 2/ 154 1990 144 13 157 2/ 157 1991 145 14 159 2/ 159 'I k 1992 147 14 161 2/ 161 1 I' 1993 150 15 165 1 166 1 11 1994 155 15 170 1 171 i 1995 159 16 175 1 176 1996 166 16 182 1 183 1997 170 17 187 1 188 l 1998 179 17 196 1 197 1999 184 18 202 1 203 2000 191 18 209 4 213 2001 199 19 218 5 223 2002 204 20 224 5 229 1 1 2003 211 21 232 5 237 2004 219 21 240 5 245 1 ii 1, r 2005 224 22 246 6 252 , 2006 230 23 253 6 259 li 2007 239 23 262 6 268 i 1 . II *Compound Annual Growth Rates : 1978-1987 = 8 . 2% ji 1988-2007 = 3 . 3% 1/ Total demand (Col. 6) excludes reserves. 2/ Effects of present load management are included in Total I, Customer Demand (Col. 2) . J iIF 614 : 002. 31 -27- ; II I:. 411 • TABLE 9 / CITY OF REDDING 1988 Resource Plan Fiscal Year Total City Electrical Energy Needs Gigawatthours Total Total Total Future Year Customer Energy Net Load Energy * Ending Use Losses Energy Use Management Required (1) (2) (3) (4) (5) (6) (2) + (3) (4) + (5) 1978 267 23 290 1/ 290 1979 315 24 339 Ti 339 1980 402 28 430 Ti 430 1981 431 30 461 T/ 461 1982 443 39 482 1/ 482 1983 437 29 466 1/ 466 1984 435 29 464 1/ 464 1985 483 29 512 Ti 512 1986 484 31 515 Ti 515 1987 473 34 507 1/ 507 1988 506 36 542 1/ 542 1989 621 39 660 0 660 1990 632 41 673 0 673 1991 648 42 690 0 690 1992 664 44 708 1 709 1993 687 45 732 1 733 1994 713 47 760 1 761 1995 740 49 789 1 790 1996 767 51 818 1 819 1997 801 54 855 1 856 1998 837 56 893 1 894 1999 870 58 928 1 929 2000 909 60 969 1 970 2001 946 63 1009 1 1010 2002 983 65 1048 1 1049 2003 1022 68 1090 2 1092 2004 1062 70 1132 2 1134 2005 1098 73 1171 2 1173 2006 1140 76 1216 2 1218 2007 1185 78 1263 2 1265 *Compound Annual Growth Rates : 1978-1987 = 6 . 4% 1988-2007 = 4 . 6% 1/ Effects of present load management are included in Total Customer Use (Col. 2) . 614 : 002 . 32 -28- CITY OF REDDING 1988 POWER RESOURCE PLAN COINCIDENT PEAK DEMAND 375 HISTORIC PROJECTED f'....-::::::.1„?..V.::•RW:;-::::4.:: :]::0::m.•-,...4.*:.:.:::. 3 2 5 ,.;:*•<=w ? :>s>: - 300 ! TOTAL DEMAND• illi 275 ::; :::::::> ::::: > :: ••••".::::.:..::::::.!::•$1::..1:11::.:M:,,,.„,,,::„.,,,,:,::.,,„,..,,„,7,, am , FUTl1iE LOAD MANr ACElE�ff ,,,:,:::::::::,,,,,,,::::,„:,...::::„.„,::::::„„,„..::,::::......:„...:,..::::::, ... . ..........,.:.„....„:....,,:....:,:.:....:.:,...,....:...............,........... . . „ WArine A ! g :...1.._. •. .' .1 T: .CUSTOMER DEMAND DIV ; I Z 200 ;. • V j 41 ' < • • • ••• LOSSES - / W 1 7 6 k::::... _ * O . r Ill.. ' OTHER CLASSES s 1 50 ` >�::`:? < < _:s`:>: ::;; .'>:::`` : W • I a IMII d IMPAIU 100 L>: :.�'.::•r::?{:��:is 50 lEt�iTK I 26 78 82 87 82 97 2002 07 YEARS ENDING JUNE 30th ;.v. _ lla 11181111111 FIGURE- 2.: i�pi.-,,r -2 9_,- ' — .umnr--1 1i • • CITY OF REDOING • 1988 POWER RESOURCE PLAN ELECTRIC ENERGY NEED HISTORIC PROJECTED TOTAL ENERGY REQUIREMENT.. MiCf: > \U I r A iiip7:m icii*.io::: ::..0„,:,. .0.:0m.4;,. ,::,..:ii::;i:?:,0.4 ..„ ....::::::::.:.:..:.:.:..„.:.:::.:.::.,:,:. ...:::::::.:::::::::::.1:•::::::.:.::::!.,:z::::::1.::::::3...;::,:;:.:::::.:4 1100 ::?.....:::.:„..:::::::i...:::::::::.,:::i*::1...:::::::i:.::.:*:::: :::i:::: *3.:;:::L;;;; .,.. ...::::::::::.....::..7:Y:::.:::!!..:::';'. :.::::.Vi .....:ii.3.M..:E;icr4f.: FUTURE LOAD MANAGEMENT /APPMI 1 000 rvr: 900 .::::..,...::...: : Mr TOTAL NET ENERGY SALES oft ' PPP"' LOSSES ::::...:::..:...„,::.„...,:,..- ...:.....:.,...........::: -...- ,- ....-or-A Ail OTHER CLASSES >, CC ::: W Z W ,::;::; : h: >: :;:; VcCMIERC M+IL 400 y:: :.:...'' .. .... . ..:.....:.:....... :.,......:: :.:...:....:.,::-...:::.::.::::: Milliall 300 200 >-..: : ...:..:;:;::r7. :•:.:::::> : : - RESIDENTIAL .: ,-:=•.:: ::: 7$ !t_ 87 92 97 2002 07 YEARS ENDING..AJ.U11E 301,h__ r�� tea FIGURE,3 • may- / _ I _ ti I ' -30- \ • HS f • V. RESOURCE CONSIDERATIONS Development of a reliable and economical power resource plan to meet forecasted load requirements is a complex process which requires more consideration than merely choosing the cheapest resource in terms of price per unit of output. Several other resource considerations as described below need to be evaluated to determine which resource (s) should it be developed by the City. A. Economics Several factors affect the economics of a resource , a project, or a purchase contract. 1 . Fixed Costs The fixed costs of a resource are those costs which are incurred regardless of how much power is ob- tained. The most notable fixed cost is debt service for the capital investment to build the project which must be paid even if the resource does not provide power for a long time period. Fixed costs are usually associated with the cost of capacity produced by the resource and are expressed in $ per kW-year or $ per kW-month. 2 . Variable Costs The variable costs of a resource are those costs which are the result of the amount of power produced. The most significant variable cost is the f' fuel cost. The fuel cost during a time period when a resource does not provide power could be zero. Variable costs are usually associated with the cost 11 of energy produced by the resource and are expressed in mills per kWh. 3 . Summer Dependable Capacity The amount of power a resource can reliably generate during summer peak electric load time periods deter- mines its summer dependable capacity. Some re- sources such as small hydro projects , which generate 4I inexpensive energy during high river flow conditions and cannot generate during the City' s summer peak load, are lower in value than resources which pro- duce reliable summer capacity for similar energy costs. 4. Reliability Resources which have a history of unexpected outages or a nondependable fuel supply are not as valuable 614 : 002 . 35 -31- I • • as projects which can be depended on for nearly continuous operation. 5 . Useful Life Resources which can continue operation without major overhaul, long past the time when the debt service is paid (such as hydroelectric projects) , are eco- nomically more attractive than projects which re- quire major overhaul before debt service is paid and/or have little useful life after debt service is paid. 6 . Fuel Supply Future costs of most resources are primarily depen- dent on the availability and future cost of the fuel supply. Therefore , availability and cost of the future fuel supply are important factors in determining the economics of a particular resource. 7 . Ability to Schedule Resources which have the ability to schedule and can "follow load" are capable of reducing or increasing their generation coincident with the City' s re- duction or increase in demand for power. If the City has too many resources which must generate energy during off-peak hours , the City will have to sell the excess energy at a rate that would usually be below the City' s cost to produce the energy. Resources which can increase their generation during on-peak hours will help the City economically meet the need for on-peak power. Resources which have the ability to schedule are more valuable than fixed operation resources. 8 . Contingencies Some resources have high capital risks , such as geothermal projects where high investment costs may be required to drill exploratory holes to determine whether enough steam is available. Others have a high environmental risk, such as hydroelectric proj- ects which may require post-project mitigation costs. These contingency risk factors must be eval- uated when determining project economic feasibility. 9 . Residual Capacity Charges When a utility purchases wholesale power from anoth- er utility, the price paid is primarily determined by the energy component and the capacity component of the applicable rate structure. Under most 614 : 002 . 36 -32- wholesale purchase contracts , residual capacity charges are imposed. These charges are commonly referred to as ratchet charges , reserve charges , standby charges , firming charges and/or customer service charges. Such charges are also common when one utility must depend on another to provide power when the utility' s resource (s) become unavailable. Whereas each charge may have its own particular justification, utilities justify these charges on the basis that they have incurred significant capi- tal expenditures to supply peak capacity and that the charge allows them to obtain a just and reason- ! able return on the investment made to meet the peak load requirements throughout the year. For example , 1 some rate schedules require up to 94% of the peak value of power capacity supplied in the summer must also be paid for in the next 11 billing months . If one assumes a rate for wholesale capacity in the $10-$15 per kW-month range, it is possible that peak summer capacity may effectively cost from $115-$170 per kW of demand for the peak month. Residual capacity charges are becoming increasingly popular as the costs for new capacity continues to rise. This factor will become more important in the future since the peak summer loads for the City may require payment of the charge during off-peak months . Alternatively, the savings made available by avoiding these charges can be used to support further City development of power projects and load management programs which minimize residual capacity charges . These charges must be considered when determining the economic feasibility of purchasing supplemental power. When a power project is developed to meet a utili- ty' s load requirements , provisions must be made to 1' replace the power from the project when the project { is off line for scheduled or unscheduled mainte- nance. Such provisions are commonly referred to as "firming" . A utility which can not firm its own resources with other projects may be required to pay firming charges (a type of residual capacity charge) to another utility even if the utility has enough resources to meet its need under normal conditions. The cost to firm a project must be considered when determining the economic feasibility of a power project. I 10 . Diversity Diversity is a measure of the ability of a utility to develop and maintain a mix of power resources. 614 : 002 . 37 -33- 411 S Without diversity, a utility may be forced to sig- nificantly raise its retail rates if the cost for its main source of power increases . The City cur- rently relies primarily on power purchased from Western. Therefore , the City' s diversity is cur- rently low. When Western imposed a 300% rate in- crease , the City had no choice but to pass the rate increase on to its retail customers . The magnitude of the City' s recent rate increases was primarily driven by Western ' s rate increase. A better diver- sification of resources would reduce the rate impact to our customers caused by a dramatic increase in the cost of power from a single resource. The abil- ity of a resource to add diversity to Redding' s mix of power resources must be considered when determin- ing the economic feasibility of a resource. B. Autonomy The City is one of the few public power entities in California that is not directly interconnected to a major IOU system. As a result, one other consideration in developing power resources for the City is its abil- ity to remain independent from constraining power ar- rangements which would preclude the City from taking advantage of the most economic sources of power avail- able. The existing PG&E contract is an example of such a constraint. The contract is automatically terminated if Redding utilizes a power resource other than PG&E or Western. In the future , by pursuing the development of power projects and contractual arrangements which would pro- vide peaking capacity, coupled with arrangements which defer City financial burdens or offer energy sales options , the City will be able to retain its flexibility and independence. Thus, the City will be able to retain its autonomy as a separate electric utility controlled by the City' s elected representatives . C. Types of Resources A host of environmental , technical, contractual, and political issues must be addressed for every possible resource. The following discussion addresses some of the key considerations for most industry-accepted elec- tric power resources: 1 . Large Hydroelectric Projects Large hydroelectric projects are virtually nonexis- tent due to increased difficulty to site, finance, and develop. 614 : 002 . 38 -34- II/ 411 2 . Small Hydroelectric Projects Small hydroelectric projects have also inherited their share of environmental siting problems. Unmanageable siting time can seriously hamper the usefulness of these smaller projects to smoothly fit into a resource plan. The availability of local sites for such projects and the dependable, cost-effective nature of their output, however, help keep these projects potentially attractive. 3 . Geothermal Projects Geothermal projects suffer from a limited known supply of accessible steam. Known production drill- ing areas have become saturated with wells . Recent indications of health hazards associated with work- ing in and around the steam fields and plants are becoming a major concern of the industry as well as recent reduction in generation from several existing projects . 4 . Wind Projects Wind projects saw a great deal of development work in the early 1980s, with the forced transfusion PURPA injected into the industry. As the tax cred- its have dwindled, so has the research and develop- ment support for this technology. In the local region, dependable winds seldom occur during peak electrical load conditions , so at best, this tech- nology could only supply nondependable energy. 5 . Cogeneration Projects Cogeneration projects have , in the last six years, moved to the forefront of the venture capital mar- ket. During the early 1980s , the private developer ii interest was due primarily to PURPA mandates that require utilities to purchase all qualified cogeneration output at the utilities "avoided cost" . Recently, however, several IPPs have proposed devel- opment which benefit both the utility and the devel- oper without the need for the regulatory incentives provided by PURPA. In the Redding area, bio-fuel based cogeneration plants have developed at a rapid rate with entre- preneurs taking advantage of PG&E' s high "avoided cost" purchase contract. Since PG&E has established a waiting list for transmission capacity and subse- quently reduced their Standard Offer purchase rates, the cogeneration markets are looking toward Redding to make electricity sales . Reduced prices for 614 : 002 . 39 -35- I lip natural gas has also caused several IPPs to investigate the possibilities of supplying power to Redding. Opportunities for "quick" deals abound, however, each IPP proposal must be individually evaluated based on the availability, dispatchability, and contractual transmission constraints associated with each project. 6 . Nuclear Projects Through membership in the Modesto-Santa Clara-Red- ding Power Agency (M-S-R) , the City was offered 22 .5MW of firm capacity from the Arizona Nuclear Power Plant. In June 1982 , City voters passed a referendum prohibiting City involvement in the proj- ect. The City is , therefore, constrained from con- sidering future participation in nuclear power proj- ects. 7 . Coal Projects Coal projects remain as a viable resource option where purchase into an existing plant is possible. However, the California Energy Commission (CEC) has exclusive siting jurisdiction over all proposed coal-fired steam generating plants greater than 50MW located in the State of California. The State has identified certain preferred technologies which are given preference in siting consideration. "Pre- ferred technologies" from the CEC' s perspective include wind, hydroelectric , geothermal , and cogeneration. Coal is not a "preferred technology" , and, as a matter of State policy, there is no sup- port for a coal-fired plant located in California. In light of these issues, it would be extremely difficult to license a coal plant in California, especially in the Redding area. Therefore, a key factor in considering most remote coal projects will be the availability of firm transmission capacity from the project to Redding. 8 . Fuel Cells Fuel cells soon will provide a fast, environmentally clean way to add small (10-15MW) increments of gen- eration resource directly to the local electrical system. However, the technology is still in the research and development stage with production units planned for the late 1990s . Installed capacity costs are still projected to be high in comparison to a gas turbine. 614 : 002 . 40 -36- i f II/ Ali 9 . Gas Turbines Gas turbines are relatively inexpensive to con- struct, but are expensive to operate. They are designed to operate for relatively short periods of time and to respond quickly during emergencies and use natural gas or distillate oil as fuel. They are ideally suited for use as peaking or reserve units . In the Redding area, natural gas availability and air quality constraints may limit the application of this resource type. The addition of steam injection reduces air quality concerns and increases the effi- cient operating range of a combustion turbine. 10 . Combined Cycled Projects Combined cycled projects have high efficiency, and are ideally suited for converting natural gas to electric energy on a continual basis . However, combustion turbines or gas-fired boilers are pre- ferred over combined cycled projects when signifi- cant cycling of the project is needed. 11 . Gas-fired Boilers it Gas-fired boilers have the advantage of increased efficiency over a wider range of output than a gas-fired combustion turbine . However, gas-fired boilers have a higher installed cost than a com- bustion turbine. 12 . Biomass Projects Biomass projects typically use products such as wood waste , agricultural waste , or municipal solid waste. Although some of these projects tend to utilize new technology, they are becoming increasingly popular since they are becoming economically competitive with other resources . However, they may have sig- nificant fuel supply and air pollution difficulties to resolve. 13 . Hydroelectric Pumped Storage Units Hydroelectric pumped storage units, though basically net energy users, are designed to supply power dur- ing the peak-load periods and to utilize low-cost, base-load generation to pump the water back to an upstream reservoir during off-peak periods. Their economic operation depends heavily on the availabil- ity of low-cost, off-peak, base-load resources . Without these low-cost resources , the installation of pumped storage facilities is not economical. 614 : 002 . 41 -37- i 411 14 . Purchase Contracts With the construction of the California-Oregon Transmission Project (COTP) , the City will be able to enter into purchase contracts with several other utilities. In addition, several IPPs have expressed an interest in limiting their relationship with the City to a purchased power contract. Although pur- chased power contracts reduce the need for the City to make capital expenditures , they usually have lower long-term economic benefits than many of the power projects discussed above . 15 . Support Contracts Support contracts support a utility' s resources by providing such things as : emergency power, spinning and planning reserves , voltage and frequency control and power exchanges . In some instances , support contracts provide an economic alternative to con- struction of the facilities which are needed to provide support. If such facilities are not avail- able, a support contract (s) may be necessary to reliably meet the load. D. Transmission Currently, Redding' s Electric Utility operates as an island within the transmission system of PG&E. The Utility is interconnected with Western and is not inter- connected with PG&E. Therefore , any power Redding re- ceives from PG&E ' s system must be received by Western at Tracy, near the Bay Area, and then delivered by Western from Tracy to Keswick. With construction of the COTP, Redding will be able to receive up to 44MW of power from the COTP at the Olinda Substation, near Cottonwood, for delivery by Western to Redding. Potential resources which may seem to be close to Redding' s Utility may be , electrically, very far, if the resource ' s interconnection is with PG&E. The cost in both dollars and losses to wheel power through PG&E' s transmission system down to Tracy and from Tracy to Keswick over Western' s system is usually too high to provide for an economical source of power. E. Reserve Requirements Every electric utility strives to provide dependable electric service to its customers. A utility' s failure to meet customer loads due to insufficient capacity will result in a variety of economic and technical problems. Therefore , utilities must plan for and develop suffi- cient reserves to meet customer load requirements. 614 : 002 .42 -38- 411 4110 Within the utility industry, there are several important standards that generally determine reserve requirements. One such standard is to maintain a Loss of Load Probability (LOLP) of not more than one day (24 continu- („ ous hours) in ten years . Such a standard requires that generation and power purchases must exceed customer f loads at all times except for one day in ten years . All uncertainties such as weather, forced and planned out- ages , and other factors such as routine maintenance must be included. Utilities employ several strategies to provide sufficient reserves to reduce their LOLP, howev- er, the reserves of most utilities are divided into two major types . 1. Planning Reserves Planning reserves in the utility industry are typi- cally 15% - 20% of system peak demand. Planning reserves are designed to account for demand forecast errors , long-term weather extremes , delays in the construction of new power plants , and lengthy forced outages . I I 2 . Spinning Reserves Spinning reserves in the utility industry are typi- cally 5% - 10% of system peak demand. Spinning reserves are designed to account for sudden loss of existing generation. If, under emergency sit- uations , existing generation is lost, spinning re- serves are used to quickly (within a few minutes) replace the sudden loss in generation. 3 . Redding' s Present Reserves Planning and spinning reserves for Redding are cur- rently provided under the present supplemental power agreement with PG&E. Likewise, the City' s CVP power has planning and spinning reserves included, pursu- ant ( to the Western/PG&E agreements . Planning and spinning reserves will, however, be needed for fu- ture power resources exclusive of CVP and PG&E purchases. 614 : 002 .43 -39- i, 411 4 . Reserves Applied in This Plan In planning for the City' s future power require- ments , a reserve margin equal to the largest single non-firm resource used to meet the City' s load was utilized in the 1986 Plan to determine the City' s total need for reserves . This strategy provided a total of planning and spinning reserves between 13%-29% over the 20-year forecast period. Table 10 documents the amount of reserves provided in the 1988 Resource Plan. 614 : 002 . 44 -40- 411411VI . RECOMMENDED POWER RESOURCE DEVELOPMENT PLAN Based upon the City' s planning goals , future power require- ments , and the available alternatives , the following plan is recommended to meet the City' s power requirements through fiscal year 2007 . Table 10 provides a summary of the City' s ability to meet its electrical power needs , if most of the resources which are currently under active consideration are included in Table 10 . Information regarding several re- sources which are currently undergoing very preliminary investigations is insufficient to include those resources in Table 10 . The City ' s contract with Western expires after the calendar year 2004 . Therefore, any planning past the fiscal year 2005 , at this time, is very uncertain. For the purpose of preparing Table 10 , it was assumed that the City' s Western allocation will continue through 2007 . More should be known about the validity of this assumption after Western has completed its 1994 Remarketing Plan, a process which is slated to begin during 1989 . The City should become prepared for the consequences of not receiving a total reallocation of Western' s resources in 2004 and the conse- quences of not developing some or all of the undeveloped resources identified in Table 10 . The City should continue to develop a resources plan which will reduce its dependence on PG&E supplemental power, thereby reducing electric cost to its customers . By provid- ing and alternative the City would be providing PG&E an in- centive to maintaining its prices as low as possible. A more detailed discussion of the recommended plan follows. li 4I, A. Avoid High-cost Supplemental Power Purchases Since future supplemental power purchases from PG&E are likely to be expensive , the City should try to avoid supplemental power purchases from PG&E by developing power resources which are lower than the projected cost of supplemental power purchases. As was noted in Sec- tion V, it is possible that residual capacity charges may make supplemental peaking capacity quite costly. Table 10 includes every project which the City has iden- tified and currently believes can be developed for a production cost which is , in the long term (first 10 years of operation) , more economical than supplemental purchase power options from PG&E. If the recommended plan shown in this table is developed as scheduled. The City' s purchase of supplemental power will be minimal. However, the need to purchase supplemental power will increase to the extent that the City does not success- `i fully develop the projects as scheduled in Table 10 614 :002 . 45 -41- it ��i I I lip a unless other yet-undefined projects are developed. If too large a percentage of the City ' s supplemental power is purchased from a California IOU, then the City' s rate to its customers may become equal or even exceed the California IOU' s rate to its retail customers . B. Pursue Arrangements to Shape Loads and Resources The City needs to continue to develop arrangements that can provide on-peak capacity and dispose of excess ener- gy during those time periods when the City' s energy requirements are reduced. The following is a list of the most promising alterna- tives which are not listed in any particular order: o Scheduling of power from Western 0 Peaking capacity purchases o Sale of excess energy to Western o Pacific Northwest peaking capacity purchases 0 Capacity-for-energy exchange agreements o Spring Creek Pumped Storage Project 0 Large interruptible customers 0 Supplemental power purchase contract with PG&E o Other possible suppliers and purchases (DWR, MID, SMUD, etc. ) C. Pursue Development of Spring Creek Pumped Storage Project Development of the Spring Creek Pumped Storage Project will allow the City to maximize the benefits of other projects by allowing off-peak energy to be stored for later use as on-peak capacity and energy. The pumped storage project will also allow the City to use off-peak energy which is often available at attractive rates from other utilities. Finally, by maintaining a minimum pool in the upper reservoir, the project may be able to pro- vide some of the necessary reserve requirements for the City' s other projects . 614 : 002 . 46 -42- • D. Pursue Economic Hydroelectric Projects Two small-to-medium size hydroelectric power projects remain available for development by the City. The proj- ects can be developed using proven technology and can provide additional direct construction benefits for the local economy. Three hydroelectric projects in various states of development are listed in Table 10 . The Whis- keytown Project is operational. The other two hydro- electric projects are the Lake Redding Project and the Lake Red Bluff Project. E. Pursue Development Negotiations with Independent Power Producers (IPP) The IPP project known as the "CAMAGE Project" in the 1986 Plan offered the City an opportunity to reduce its long-term cost of power and would have increased the City' s diversity. However, the City has received sever- al inquiries and preliminary proposals from several other IPPs which could supply at least as much power as the CAMAGE Project. Table 10 includes an unidentified IPP project which is estimated to provide up to 25MW and 150GWH. F. Pursue Transmission Rights For the City to have free access to economical power supplies , transmission rights must be obtained. The Cityis presently a 6 .4% participant in TANC, which is the project manager of the COTP. The COTP includes upgrading and construction of new transmission facil- ities from the Pacific Northwest to Central California. Studies are currently underway for the COTP. Table 10 includes 18 . 5MW of purchased firm peaking capacity from the Pacific Northwest and delivered over the COTP begin- ning in fiscal year 1992 . Pacific Northwest firm peak- ing capacity is expected to gradually increase to 27 . 7MW by the year 2000 . The City' s interest in the COTP south of Redding will enable Redding to make power trans- actions with other California utilities . Redding, through its membership in M-S-R is developing access to connect its San Juan entitlement to the COTP. G. Enhance Relationships with Western Since Western is the City' s primary source of power, and since Western is the City' s transmission link to other utilities , it is important for the City to maintain and enhance its working relationships with Western. Since adoption of the 1986 Resource Plan, the City has exe- cuted a new transmission contract which increases the City' s opportunities for utilizing transmission services li from Western. Other contracts are currently under 614 : 002 . 47 -43- li negotiation for such interutility services as scheduling and emergency support. Those contracts need to be finalized to allow Redding maximum flexibility to economically and reliably supply power to its customers . H. Pursue Other Interutility Contracts Prior to completion of the COTP Redding should develop resources in the Pacific Northwest for delivery over the COTP. Some of the most promising resources are inter- utility purchase contracts with other utilities in the Pacific Northwest. When Redding utilizes another re- source, its current contract with PG&E will terminate. Even so, Redding may need to purchase support services or additional supplemental power. Redding should con- tinue negotiations with PG&E such that all of Redding' s options are available should PG&E offer services which are in the long-term more economical than alternatives . I . Pursue Conservation and Load Management Programs As the City' s conservation and load management programs are implemented, the City' s ability to avoid its excep- tional summertime capacity peaks will increase. Elec- tric loads in the City that can be safely and efficient- ly reduced during the peak demand time periods will directly benefit the City' s ratepayers through lower costs from avoided supplemental power purchases . J. Selectively Participate in Baseload Projects Whenever the overall economics are favorable and the diversity of power supply can be enhanced, the City may wish to selectively participate in base load power proj- ects . Although base load projects generate a lot of off-peak and usually unneeded power, the cost per kWh generated is usually very low. When base load projects are pooled with other utilities, as the San Juan Project is with M-S-R and if the project offers some flexibility in energy deliveries , they may be beneficial to the City. The City should selectively examine and partici- pate in base load projects whenever such participation meets the planning goals of the City. 614 : 002. 48 -44- 410 IF • TABLE 10 CITY OF REDDING 1988 Resource Plan Recommended Plan Fiscal Year 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 ENERGY (CWH) REQUIREMENTS 1 Sales 621.0 632.0 648.0 664.0 687.0 713.0 740.0 767.0 801.0 837:0 Losses (1) 39.0 41.0 42.0 44.0 45.0 47.0 49.0 51.0 54.0 56:10 EnergyConserv. 0.0 0 0 0.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 Contract Exp. 243.4 243.4 243.4 243.4 242.4 242.4 205.3 148.4 126.3 126.4 1 , TOTAL 903.4 916.4 933.4 952.4975.4 1,003.4 995.3 967.4 982.3 1,020.4 ENERGY (CWH) i RESOURCES ' Western 587.4 591.3 588.2 585.6 597.0 608.7 611.3 604.3 602.1 612.3 i' Energy Conserv. 0.0 0.0 0.0 1.0 1.0 1.0 1.0 1.0 1.0 1.10 San Juan 127.2 127.2 127.2 127.2 127.2 127.2 127.2 127.2 127.2 127.2 Whiskeytown 8.2 8.2 8.2 8.2 8.2 8.2 8.2 8.2 8.2 8.�2 Spring Creek 0.0 0.0 0.0 0.0 0.0 -0.0 -0.0 -0.0 -0.0 -0.i0 Lake Redding 0.0 0.0 0.0 0.0 0.0 0.0 24.1 71.0 93.7 93.7 Lake Red Bluff 0.0 0.0 0.0 0.0 0.0 0.0 0.0 12.1 35.6 47.0 Northwest Imports 0.0 0.0 5.1 12.4 18.9 27.9 26.0 12.4 9.6 19:0 1„ Southwest Imports 108.0 108.0 108.0 108.0 108.0 108.0 72.0 18.0 0.0 0.0 IPPs 0.0 0.0 54.1 110.1 115.1 122.4 125.5 113.2 104.9 112.0 1I' Other Purchases 72.6 81.7 42.6 0.0 0.0 0.0 0.0 0.0 0.0 0:0 1 TOTAL 903.4 916.4 933.4 952.5 975.4 1,003.4 995.3 967.4 982.3 1,020.4 I 1 CAPACITY (MW) REQUIREMENTS Customer Demand(2)142.0 144.0 145.0 147.0 150.0 155.0 159.0 166.0 170.0 179:0 i Losses 12.0 13.0 14.0 14.0 15.0 15.0 16.0 16.0 17.0 17:10 it Interrupt. Load 0.0 0.0 0.0 0.0 1.0 1.0 1.0 1.0 1.0 1.0 Reserves 0.0 0.0 0.0 25.0 25.0 42.4 50.0 51.0 47.1 39.1 Contract Exp. 0.8 0.8 0.8 0.0 0.0 0.0 0.0 0.0 0.0 0.0 TOTAL 154.8 157.8 159.8 186.0 191.0 213.4 226.0 234.0 235.1 236.j1 CAPACITY (MW) RESOURCES Western 116.0 116.0 116.0 116.0 116.0 116.0 116.0 116.0 116.0 116.0 Load Mgmt. 0.0 0.0 0.0 0.0 1.0 1.0 1.0 1.0 1.0 1.0 Whiskeytown 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0:8 II Spring Creek 0.0 0.0 0.0 0.0 0.0 50.0 50.0 50.0 50.0 50:0 jl Lake Redding 0.0 0.0 0.0 0.0 0.0 0.0 11.6 11.6 11.6 11.6 Lake Red Bluff 0.0 0.0 0.0 0.0 0.0 0.0 0.0 6.0 6.0 6.0 i Northwest Imports 0.0 0.0 0.0 18.5 19.5 20.6 21.6 23.6 24.7 25.7 IPPs 0.0 0.0 0.0 25.0 25.0 25.0 25.0 25.0 25.0 25.0 Other Purchases 38.0 41.0 43.0 19.2 28.7 0.0 0.0 0.0 0.0 0.0 I TOTAL 154.8 157.8 159.8 186.0 191.0 213.4 226.0 234.0 235.1 236.1 (1) Includes effects of anticipated expansion of existing energy conservation programs. (2) Includes effects of anticipated expansion of existing load management programs. I i 11 614 :002 . 49 -45- i I; TABLE 10 (Cont.) CITY OF REDDING 1988 Resource Plan , Recommended Plan Fiscal Year 1999 2000 2001 2002 2003 2004 2005 2006 2007 ENERGY (GWH) REQUIREMENTS Sales 870.0 909.0 946.0 983.0 1,022.0 1,062.0 1,098.0 1,185.0 1,240.0 Losses 58.0 60.0 63.0 65.0 68.0 70.0 73.0 76.0 78.0 Energy Conserv.(1) 1.0 1.0 1.0 1.0 2.0 2.0 2.0 2.0 2.0 Contract Exp. 126.3 126.4 126.3 137.0 130.9 123.0 105.6 24.3 0.0 TOTAL 1,055.3 1,096.4 1,136.3 1,186.0 1,222.9 1,257.0 1,278.6 1,287.3 1,320.0 ENERGY (GWH) RESOURCES Western 628.2 643.7 654.7 663.5 670.6 680.6 682.4 672.5 669.1 Energy Conserv. 1.0 1.0 1.0 1.0 2.0 2.0 2.0 2.0 2.0 San Juan 127.2 127.2 127.2 127.2 127.2 127.2 127.2 127.2 127.2 Whiskeytown 8.2 8.2 8.2 8.2 8.2 8.2 8.2 8.2 8.2 Spring Creek -0.1 -0.1 -0.2 -0.5 -1.5 -2.1 -3.3 -4.9 -7.5 Lake Redding 93.7 93.7 93.7 93.7 93.7 93.7 93.7 93.7 93.7 Lake Red Bluff 47.0 47.0 47.0 47.0 47.0 47.0 47.0 47.0 47.0 Northwest Imports 29.9 46.8 68.9 95.9 125.7 150.5 169.0 185.3 203.9 Southwest Imports 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 IPPs 120.2 128.9 135.8 150.0 150.0 150.0 150.0 150.0 150.0 Other Purchases 0.0 0.0 0.0 0.0 0.0 0 .0 2.4 6.3 26.4 TOTAL 1,055.3 1,096.4 1,136.3 1,186.0 1,222.9 1,257.1 1,278.6 1,287.3 1,320.0 CAPACITY (MW) REQUIREMENTS Customer Demand(2)184.0 191.0 199.0 204.0 211.0 219.0 224.0 230.0 239.0 Losses 18.0 18.0 19.0 20.0 21.0 21.0 22.0 23.0 23.0 Interrupt. Load 1.0 4.0 5.0 5.0 5.0 5.0 6.0 6.0 6.0 Reserves 34.1 27.6 25.0 44.9 44.9 47.1 66.1 59.1 50.1 Contract Exp. 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 TOTAL 237.1 240.6 248.0 273.9 281.9 292.1 318.1 318.1 318.1 CAPACITY (MW) RESOURCES Western 116.0 116.0 116.0 116.0 116.0 116.0 116.0 116.0 116.0 Load Mgmt. 1.0 4.0 5.0 5.0 5.0 5.0 6.0 6.0 6.0 Whiskeytown 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 Spring Creek 50.0 50.0 50.0 50.0 50.0 100.0 100.0 100.0 100.0 Lake Redding 11.6 11.6 11.6 11.6 11.6 11.6 11.6 11.6 11.6 Lake Red Bluff 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 Northwest Imports 26.7 27.2 27.7 27.7 27.7 27.7 27.7 27.7 27.7 IPPs 25.0 25.0 25.0 25.0 25.0 25.0 25.0 25.0 25.0 Other Purchases 0.0 0.0 5.9 31.8 39.8 0.0 25.0 25.0 25.0 TOTAL 237.1 240.6 248.0 273.9 281.9 292.1 318.1 318.1 318.1 (1) Includes effects of anticipated expansion of existing energy conservation programs. (2) Includes effects of anticipated expansion of existing load management programs. 614 : 002 .50 -46- • II. 411 w III SECTION VII �IIi APPENDICES 1 (A) Resource and Transmission Projects Recommended for Continued Investigation or Operations (B) Definitions ; I (C) Acronyms 1 t I I � 614 : 002 .51 -4'7- i VII . A. RESOURCE AND TRANSMISSION PROJECTS RECOMMENDED FOR CONTINUED INVESTIGATION OR OPERATION I . PROJECTS WHICH CITY HAS COMMITTED TO FULL DEVELOPMENT A. Whiskevtown B. San Juan II . PLANNED HYDROELECTRIC PROJECTS A. Lake Redding B. Lake Red Bluff III . OTHER PLANNED PROJECTS A. Spring Creek Pumped Storage Project B. Generic IPP IV. TRANSMISSION PROJECTS UNDER REVIEW A. COTP B. Multi-utility Trans-Sierra Line C. Mead-Phoenix Direct Current Project D. Mead-Adelanto-Lugo Direct Current Project E. Palo Verde-Dever Line No. 2 614 : 002 . 52 -48- Appendix A I.1 • • • • ' E SECTION VII . APPENDIX A A. I . PROJECTS WHICH CITY HAS COMMITTED TO FULL DEVELOPMENT I f !u i f I WHISKEYTOWN HYDROELECTRIC PROJECT Information Sheet April, 1989 Location: At the USBR Whiskevtown Dam on Clear Creek, in Shasta County, California. Status: Construction 99% complete. Expected to be operational in 1986 . Physical: Project Size . 65 Acres Powerhouse Size 36 ' x 43 ' Number of Units One Type of Turbine Horizontal Francis Size of Generator 4 , 600kVA Head 239 ' Maximum Powerhouse Flow 195 cfs Power Output: Expected Operational Date June , 1986 Maximum Capacity 3 . 24MW Summer Dependable Capacity 0 . 8MW Average Annual Generation 8 , 200 ,000kWh Average Annual Oil Savings 15 , 000 Barrels Costs : (1985 Dollars) Development Costs (to date) $ 250 , 000 Civil and Mechanical 3 , 760 , 000 Environmental Mitigation -0- Total Capital Cost, 1985 $ (Does Not Include Financing Costs) $4 , 010 , 000 Approximate 1st-Year Cost (Mills/kWh) (Includes Financing Costs) 66 614 . 002.53 -49- Appendix A s SAN JUAN PROJECT Information Sheets April, 1989 In November 1982 , the M-S-R Public Power Agency (M-S-R) purchased fl, an option on 28 . 8% of San Juan Unit No. 4 which represents approximately 143MW of the 498MW net Unit No. 4 generation. The City has a 15% share of the 143MW which is equal to about 21 .5MW. The San Juan arrangements are fairly complex and provide for a number of services and benefits . M-S-R and the Tucson Electric Power Company (TEP) entered into an Interconnection Agreement (Agreement) which provided the terms of the sale of energy by TEP to M-S-R as follows: M-S-R Annual Redding' s Calendar Energy Share Year (GWH) (GWH) 1983 400 60 1984 500 75 1985 600 80 1986-1994 800 120 1995 267 40 The Agreement permits M-S-R to defer and carry over to later years the delivery of energy due to transmission constraints. At the end of 1985 , M-S-R had a carry forward balance of 442 . 8GWH. Since the end of 1985 , TEP has refused to make available the SI' required annual energy. M-S-R and TEP are currently engaged in litigation over the energy sales issue. M-S-R' s price for this energy is three mills per kWh plus TEP' s weighted average cost per kWh for its coal-fired generating plants , under the terms of the Agreement. Only interruptible transmission will be available to M-S-R prior to the early 1990s . The interruptible nature of the transmission arrangements in the early years should prove sufficient to allow M-S-R to utilize the Project since M-S-R is only purchasing energy from TEP in the first few years of the Project. The Agreement also provides for the exchange of M-S-R capacity and energy at the San Juan Generating Station for TEP capacity and energy at the Arizona Nuclear Power Plant Switchyard or the Westwing Switchyard. M-S-R and PNM executed an Early Purchase and Participation Agreement (EPPA) on September 26 , 1983. The terms of the EPPA provided for the transfer of the 28 . 8% Ownership Interest in San 614 : 002. 54 -50- Appendix A li � 411 • Juan Unit No. 4 . The transfer was completed on December 31 , 1983 . The EPPA also provides for the sale of 73 . 53% , approxi- mately 105MW, of M-S-R' s capacity and associated energy from San Juan Unit No. 4 during the period beginning with the transfer of the Ownership Interest through April 30 , 1995 unless partially terminated by M-S-R. If M-S-R elects not to use or sell to others the approximately 38MW uncommitted share of San Juan Unit No. 4 , the Public Service Company of New Mexico (PNM) will market the 38MW for M-S-R until 1995 . 614 : 002 .55 -51- Appendix A 1 ; 1 SECTION VII . APPENDIX A A. II . PLANNED HYDROELECTRIC PROJECTS 1 • 1 1 1 1 ► II • PROPOSED LAKE REDDING HYDROELECTRIC PROJECT Information Sheet November, 1988 Location: On the Sacramento River in the City of Redding, Shasta County, California. Status: FERC Application for License filed in February, 1982 . A Draft EIR was released in December 1986 . Physical: Project Size 34 Acres Powerhouse Size 145 ' x 131 ' Number of Units Three Type of Turbines Bulb Size of Generators 5 , 000kVA Head 14 .5 ' Maximum Powerhouse Flow 15 ,000 cfs Power Output: Expected Operational Date Summer, 1991 Maximum Capacity 15MW Summer Dependable Capacity 8MW Average Annual Generation 92 , 000 , 000kWh Average Annual Oil Savings 167 , 000 Barrels Costs: (1986 Dollars) Permit Process (to date) $ 615 ,000 Civil and Mechanical 61 , 800 ,000 Environmental Mitigation 20 , 000 , 000 Total Capital Cost (does not include financing costs) $82 , 415 , 000 Approximate 1st-Year Cost (Mills/kWh) 130 Miscellaneous : (1) Project' s power production curve closely follows City ' s load curve. (2) Cost estimates provided in a 1986 report from CH2M Hill are expected to significantly decrease after design changes are con- sidered during 1989 . 614 : 002.56 -52- Appendix A • • I 1 , SECTION VII. APPENDIX A A. III . OTHER PLANNED PROJECTS 1 I I I I 1 i 410 • • PROPOSED LAKE RED BLUFF HYDROELECTRIC PROJECT Information Sheet November, 1988 Location: At the existing Red Bluff Diversion Dam on the Sacramento River, in Tehama County, California. Status: FERC License Application filed April 1983 . The Application for License processing has been delayed to allow the Department of Interior to complete ongoing studies near the dam. Physical: Project Size 40 Acres Powerhouse Size 70 ' x 150 ' Number of Units Two Type of Turbine Kaplan Bulb Size of Generators 4 , 000kVA Head 11 ' Maximum Powerhouse Flow 9 , 000 cfs Power Output: Expected Operational Date 1992 Maximum Capacity 8MW Summer Dependable Capacity 4MW Average Annual Generation 47 , 400 , 000kWh Average Annual Oil Savings 86 , 000 Barrels Costs: (1987 Dollars) Permit Process (to date) $ 450 , 000 Civil and Mechanical 28 , 850 , 000 Environmental Mitigation 7 ,000 , 000 Total Capital Cost $36 , 300 ,000 Approximate lst-Year Cost (Mills/kWh) 98 Miscellaneous : (1) Project' s power production curve closely follows City' s load curve. (2) Cost estimates provided in a 1983 report from Sverdrup & Parcel. 614 . 002 . 57 -53- Appendix A • 410 i 4 it PROPOSED SPRING CREEK PUMPED STORAGE PROJECT Information Sheet November, 1988 Location: On Spring Creek, west of Keswick Reservoir, Shasta County, California. Status: ( ll The FERC License Application will be filed on May 31 , 1989. Physical: Project Size 100MW Powerhouse Size - Underground Cavern 50 'W x 90 'H x 210 'L Number of Units Two Type of Turbine Francis reversible pump/turbine i Size of Generators 58MVA ' Head 1 , 155 ' { Maximum Powerhouse Flow 1 , 200 cfs Power Output: Expected Operational Date 1995 Maximum Capacity 100MW j , P 1' Summer Dependable Capacity 100MW r, Average Annual Generation* N/A Average Flow-through Generation 14GWH Costs : (1989 Dollars) Permit Process (to date) $ 400 ,000 Total cost for Permit Process (est. ) 1 , 000 , 000 Civil and Mechanical 195 ,500 ,000 Total Capital Cost $196 , 500 , 000 I j Approximate Cost ($/kW) $1 ,965 Miscellaneous: (1) Cost provided in Draft FERC License Application as prepared by Black & Veatch. Pumped storage projects use more energy to pump than they produce. ' 614 : 002.58 -54- Appendix A 410 • GENERIC INDEPENDENT POWER PROJECT Information Sheet November, 1988 Location: In or near Redding, in Shasta County, California. Status : Special negotiations are ongoing. Physical: Project Size 25MW Powerhouse Size N/A* Number of Units N/A* Size of Boilers N/A* Size of Turbine Generator N/A* Power Output: Expected Operational Date 1992 Maximum Capacity 25MW Summer Dependable Capacity 25MW Average Annual Generation 150 , 000 , 000kWh Average Annual Oil Savings Costs : (1985 Dollars) Permit Process (to date) $ N/A Total Cost for Permit Process (est. ) N/A Civil & Mechanical N/A N/A Approximate 1st-Year Cost (Mills/kWh) N/A Miscellaneous : * N/A - Not available at this time. 614 : 002. 59 -55- Appendix A W • ff I � SECTION VII. APPENDIX A A. IV. TRANSMISSION PROJECTS UNDER REVIEW it I i i t I � I II I I � II o I I I lip 4 IV. TRANSMISSION PROJECTS UNDER REVIEW The projects listed below are transmission projects major which could provide the City with opportunities for power purchases . Those listed are now undergoing various degrees of technical investigation. It is not expected that all of the projects listed will be constructed. The projects which will finally be constructed will depend upon many complex and interrelated economic , technical, political, and environmental factors . A. California-Oregon Transmission Project (COTP) Total Capacity/ (Available to City) : 1600MW/ ± (43 . 3MW) Project Cost (1989 $) : $443 , 000 , 000* Date of completion: 1992 Location: From a point near Malin, Oregon to Tracy, California Comments: Line would open up purchase opportunities with the Pacific Northwest. Joint feasibility studies are underway with California utilities and Pacific Northwest entities participating. More than one set of studies are in progress. *The Transmission Agency of Northern California and M-S-R may incur additional costs associated with certain improvements to PG&E' s system. The improvements are known as the Los Banos-Gates (LB-G) Project. Neither TANC nor M-S-R will have ownership interest in LB-G but will receive firm bidirectional transmission service between Midway Substation and Tesla Substation. 614 : 002 . 60 -56- Appendix A 4 1 B. Multi-utility Trans-Sierra Line Total Capacity/ (Available to City) : 1600MW/ (Undetermined) Project Cost (1983 $) : Undetermined Date of Completion: Undetermined Location: Trans-Sierra Line north of Lake Tahoe and south of the Oregon border. Eastern terminal points - Possibly, Garrison, Montana, or, the Thousand Springs Project in Nevada, and the western terminal point is the 500kV system in the Sacramento Valley. Comments : Project would be joint utility owned and would open up resource areas in the Northwest, Utah, Wyoming, Idaho, Montana, and Nevada. Preliminary electrical studies are complete , corridor studies are underway by PG&E, Sierra Pacific Power Company, and Idaho Power. C. Mead-Phoenix Direct Current Project Total Capacity/ (Available to City) : 1600MW/ (15MW) I' I Project Cost (1986 $) / (cost to City) : $440 , 000 , 000/ ($4 , 125 ,000) Date of Completion: 1993 Location: Between Phoenix, Arizona, and Southern Nevada Comments : The City is a participant via its participation in M-S-R. The City would be entitled to use 15% of M-S-R' s capacity share in the project. 614 : 002 . 61 -57- Appendix A 410 • D. Mead-Adelanto-Lugo Direct Current Project Total Capacity/ (Available to City) : 2 ,000MW/ (22 . 5MW) Project Cost (1986 $) /Cost to City: $387 , 000 , 000/ ($4 , 353 , 750) Additional liability for system modification to SCE' s system: $80 , 000 ,000 to $120 , 000 , 000 Project Cost Additional liability to City: x900 , 000 to $1 , 350 , 000 Date of Completion: 1993 Location: Between Southern Nevada and the Los Angeles area Comments : This project was developed as an alternative to the McCullough-Victorville Project which is not under consideration at this time (Spring 1989) . The City is participating in the development of this project through M-S-R and would be entitled to use 15% of M-S-R' s capacity share in the project. E. Palo Verde-Dever Line No. 2 Total Capacity/ (available to City) 1200MW/ (22 . 5MW) Project Cost (1987$) / (Cost to City) : $251 ,000 , 000/ (4 , 706 , 360) Date of completion: Uncertain Location: Between Phoenix, Arizona and the Los Angeles area Comments: The date of completion is uncertain due to CPUC conditioning SCE' s CPCN on SCE dropping plans to merge with San Diego Gas and Electric or undergoing a reevaluation of need. CPUC staff indicated 1993 or more probably 1997 as an in-service date. The City is participating in the development of this project through M-S-R and would be entitled to use 15% of M-S-R' s capacity share in the project. 614 : 002 . 62 -58- Appendix A • • • SECTION VII . I APPENDIX B kj B. DEFINITIONS 11 i i I II� I � II III . • B. DEFINITIONS Term Definition Ampere (Amp) The unit of measurement of electrical current. It is analogous to the flow of a cubic foot of water past a given point during a specified time period. An ampere is the unit of current produced in a circuit by one volt acting through a resistance of one ohm. Avoided Costs The costs an electric utility would otherwise incur to generate power if it did not purchase electricity from another source. Backup Power Electrical energy supplied by a utility to replace power and energy lost during an unscheduled equipment outage. Base Load The minimum demand for service of an electric or gas utility over a stated period of time. Base Rate A fixed amount charged each month for any of the classes of utility service provided to a customer. Biomass Organic Materials (such as trees , plants , and crop residues) used as a source of energy. Boiler Fuel Fossil fuel used as the primary energy source to generate steam. Btu Abbreviation for British thermal unit. The quantity of heat necessary to raise the temperature of one pound of water one degree Fahrenheit at a specified temperature and pressure ( from 59° F to 60° F at atmospheric pressure of 29 .92 inches of mercury) . Capability The maximum production level which a generating unit or electrical apparatus can maintain under specified conditions for a given period of time without exceeding approved limits of temperature and stress. 614 : 002 . 63 -59- Appendix B • 411 Capacity The production level for which an electric generating unit or other electrical apparatus is rated, either by the user or manufacturer. Also , the total volume of natural gas that can flow through a pipeline over a given period of time, considering such factors as compression and pipeline size. The maximum load that a machine, station, or system can carry under existing service conditions . In trans- mission, the maximum load a transmission 'j line is capable of carrying. (See DEMAND definition) a I Capacity Factor The ratio of the average load on a generating resource to its capacity rating during a specified period of time, expressed in percent. Charge - Connection An amount levied on a customer in a lump Charge sum, or in installments , for connecting his facilities to those of his supplier. Charge - Customer An amount charged periodically to a Charge customer for such utility costs as bill- ing and meter reading without regard to demand or energy consumption. Charge - Energy Charge That portion of the charge for electric service which reflects a customer' s energy (kWh) use over a specified billing period. Charge - Termination A charge levied on a customer when ser- Charge vice is terminated at his request. Charge - Wheeling An amount charged to one electrical Charge system, by another electrical system, to transmit the energy of, and for, the other system. Circuit A system of conductors through which an electric current is intended to flow. Sometimes normally open paths which do ! not ordinarily conduct in a network can also be considered part of a circuit. Classes of Service Groups of customers with similar char- acteristics (e.g. , residential, commercial, industrial, etc. ) which are identified for the purpose of setting a rate for electric. 614 : 002 . 64 -60- Appendix B 4 • Code of Federal A compilation of the general and perma- Regulations nent rules of the executive departments and agencies of the federal government as published in the Federal Register. The Code is divided into 50 titles which represent broad areas subject to federal regulation. Title 18 contains the Federal Energy Regulatory Commission' s regulations . Cogeneration The sequential production of electricity and useful thermal energy from the same energy source. Combined Cycle When otherwise wasted heat is converted into electricity rather than discharged into the atmosphere . One of the tech- nologies of cogeneration in which elec- tricity is sequentially produced from two or more generating technologies . Combustion Turbine A machine in which high pressure gases from the combustion of fuel, usually natural gas or oil, expand through fan-type blades to drive a rotating shaft. Commercial Service Service to customers engaged primarily in the sale of goods or services, including institutions and government agencies . Conservation Making the wisest use of energy over the long term, usually without any compro- mise of lifestyle. It can be voluntary or mandatory. Cost of Service A ratemaking concept used for the design and development of rate schedules to ensure that the filed rate schedules recover only the cost of providing the gas or electric service at issue. This concept attempts to correlate the utili- ty' s costs and revenues with the service provided to each of the various customer classes. Costs - Fixed Costs Costs associated with capital investment such as equipment, overhead, and property taxes. 614 : 002 . 65 -61- Appendix B I i • Costs - Costs other than those associated with Fixed Operating Costs capital investment which do not vary with the operation such as maintenance, payroll. Current A movement of electricity and the rate of such movement. Refers to current intensity or strength = as a current of five amperes . Technically, a flow of electrons in an electrical conductor. Curtailment Reduction of deliveries of electricity because of a shortage or other reasons. II Curtailment Plan A plan to accommodate shortages of ' electric energy which restrict the utility' s service to its customers. Electric curtailment plans are developed to assure public health and safety and the equitable treatment of customers . Declining Block Rates A rate structure in which the charge for I energy decreases as the amount of energy consumed increases . Demand Demand is expressed in kilowatts. The rate at which electric energy is deliv- ered to or by an electric utility system over any designated period. Dependable Capacity The load-carrying ability of a gener- ating station or system under adverse conditions for a specified time period. Distribution System Also , network, grid. That portion of an electric system used to deliver electric energy to an end-user from points on the li transmission or the bulk power system. Dump Energy Energy generated which is in excess of the needs of the electric system produc- ing the energy. Economy Energy Energy produced from a source in one system and substituted for energy that could have been produced by a less economical (more costly) source in another system. 614 : 002 . 66 -62- Appendix B 410 • r Economy of Scale A proposition that relatively larger production facilities have lower unit costs than relatively smaller facilities . Economy of scale may exist for any of the phases of operation: generation, transmission, or distri- bution. Energy The capacity for doing work. There are several forms of energy, and one form may be changed to another - such as burning coal to 'produce steam to drive a turbine which produces electricity. Most of the world' s convertible energy comes from fossil fuels which are burned to produce heat. Energy is measured in terms of the work it is capable of doing. Electric energy is usally measured in kilowatt hours . Energy Load In a power system, the demand averaged over a substantial period of time. Federal Energy The federal agency which has Regulatory Regulatory Commission jurisdiction over natural gas pricing, (FERC) wholesale electric rates , hydroelectric licensing, oil pipeline rates and gas pipeline certification. Federal Power Act Enacted in 1920 , the Act, as amended in 1935 , consists of three parts. The first part incorporated the Federal Water Power Act administered by the Former Federal Power Commission. It confined FPC activities almost entirely to licensing non-federal hydroelectric projects . With the passage of the Public Utility Act, which added parts II and III , the Commission' s jurisdiction was extended to include regulating the interstate transmission of electric energy and rates for its sale at whole- sale for its sale at wholesale in interstate commerce. Federal Power Predecessor of the Federal Energy Regu- Commission latory Commission. The Federal Power Commission was created by an Act of Congress under the Federal Water Power Act on June 10 , 1920 . It was originally charged with regulating the nation' s water power resources , but later was given responsibility for regulating the electric power and natural gas 614 : 002 . 67 -63- Appendix B 1 I 4 industries . It was abolished on September 30 , 1977 , when the new it Department of Energy was created and its functions were embraced by the Federal Energy Regulatory Commission, an j independent regulatory agency. Firm Energy Energy which is intended to have assured availability to the customer to meet all or any agreed-upon portion of his load 1 requirements over a defined period. 1 1 Firm Power The highest quality of electric power which has a very low probability of interruption. I Firm Service The highest quality generation and/or, transmission service offered to customers under a filed rate schedule which anticipates no planned 1 interruption. i I Firm Transmission Transmission of energy by a utility over its system for the account of another { party with the service intended to be 1 available at all times. 1 Fiscal Year Government ' s 12-month financial year. I The federal govermnent' s is from Octo- ber 1 , through September 30 . The City of Redding' s is July 1 to June 30 . 1 Flat Rate Schedule A schedule that provides for a specified charge regardless of the energy consumed or demand. I Fuel Cost Adjustment A clause in a rate schedule that adjusts Clause the amount of the customer' s electric bill as the cost of fuel varies from a specified base amount. Full Requirements A sale of power and energy by a utility II to a purchaser in which the seller . 1 pledges to meet all of the purchaser' s ' 1 electric requirements . 1 Generation The process of producing electric energy. I ! I 614 : 002 . 68 -64- ! ' 6 ' Appendix B 1 • Geothermal Energy Natural heat contained in the rocks , hot water, and steam of the earth' s subsur- face . Geothermal energy can be used to generate electric power, to heat resi- dences and for industrial needs . In the United States, such energy is nearest the earth' s surface and most accessible in the western United States . Giga A prefix indicating a billion; thus a gigawatthour (GWH) equals 1 , 000 , 000 , 000 watthours , or 1 , 000 , 000 kilowatthours . Gigawatt (GW) 1 million kilowatts (kW) . Gigawatt-hour (GWh) 1 million kilowatt hours (kWh) . Gross Generation The total amount of electric energy produced by a generating station or stations , measured at the generator terminals . Headwater Benefits The benefits resulting from the storage or release of water by a reservoir proj- ect upstream. Hydroelectric Energy The production of electricity from kinetic energy in flowing water. Installed Capacity The total manufacturer rated capacity of such kinds of equipment as turbines, generators, condensers , transformers , and other system components . Interruptible Power Power that may be interrupted through curtailment or cessation of delivery by the supplier by agreement with the cus- tomer. Intertie A transmission line or system of trans- mission lines permitting a flow of energy between major power systems . Intertie, Pacific The Pacific Northwest/Pacific Southwest Northwest/Pacific Intertie was approved by Congress in Southwest 1964 . Five investor-owned utilities , the City of Los Angeles and the Federal Government agreed to join in Intertie construction. The Intertie consists of three extra-high-voltage transmission lines and appurtenant substation facil- ities . Two of the lines, operating at 500kV alternating current, extend from a connection with the U.S. Columbia River 614 : 002 . 69 -65- Appendix B Power System at John Day Dam to various points of connection with the system of PG&E, and to a connection with the Southern California Edison Company system near Los Angeles. The nominal capacity of each of these lines is 1 ,000 , 000 kilowatts . The other line ' operates at 750kV direct current, with a capacity of about 1 , 440 , 000 kilowatts. The direct current line connects with the federal system at Celilo, Oregon, near the Dalles Dam. It extends to a connection with the system of the City of Los Angeles at Sylmar, California and thence , through the City' s system, to a connection with the system of Southern California Edison. , i I � Inverted Rate Design A rate design for a customer class for 16 which the unit charge for energy in- 'i creases as usage increases . Kilo A prefix indicating a 1 , 000 ; thus , a kilovolt (kV) equals 1 , 000 volts . Kilovolt (kV) A unit of measurement of electrical force equal to 1 , 000 volts . Kilowatt (kW) A unit of power equal to 1 , 000 watts or 1 , 341 horsepower. It is a measure of electrical power or heat flow rate and equals 3 , 413 Btu per hour. An electric motor rated at one horsepower uses elec- tric energy at a rate of about 3/4 kilo- watt/hour. Kilowatthour (kWh) The common unit of electric energy equal to one kilowatt of power supplied to or taken from an electric circuit for one hour. ii License Authorization by the Federal Energy Regulatory Commission to construct, operate, and maintain non-federal hydro projects for a period of up to 50 years. Load The amount of electric power or energy i ; required at any specified point or points on a system to supply the energy-consuming equipment of the user customers . Load Factor The ratio of average load to the peak load during a specified period of time. 614 : 002 . 70 -66- Appendix B A 100% load factor would mean average load equals peak load or complete utilization of the transmission system. Load Management Influencing the level and shape of the demand for electrical energy so that demand conforms to present supply situations and long-run objectives and constraints . Maintenance Expenses That portion of operating expenses con- sisting of labor, materials , and other direct and indirect expenses incurred for preserving the operating efficiency or physical condition of utility plants which are used for power production, transmission and distribution of energy. Master Metering Use of one central meter for several customers so that individual customers have no means of judging their individ- ual energy consumption. Mega A prefix indicating a million; thus a megavolt (MV) equals 1 , 000 , 000 volts and a megawatt (MW) equals 1 , 000 , 000 watts . Megawatt (MW) 1 , 000 kilowatts or 1 million watts . Net Generation Gross generation less plant use, measured at the high voltage terminals of the station ' s step-up transformer. Non Firm (Energy or Energy or power, or power-producing cap- Power or Capacity) acity supplied or available under an arrangement which does not have the guaranteed continuous availability feature of firm power. Peak Load The maximum electrical demand in a stated period of time. It may be the maximum instantaneous load or the maximum average load within a designated interval of the stated period of time. Peaking Capacity Generating capacity available to assist in meeting that portion of the load which occurs during peak load periods. The maximum output of a generating plant or plants during a specified peak-load period. 614 : 002 . 71 -67- Appendix B ii • 1 1 , Pool Capacity Total capacity provided by a power pool in order to meet installed or reserve capacity obligations . Power The time rate of transferring or transforming energy. Electrically, power is expressed in watts , which is the product of applied voltage and resulting in in-phase current. Power Pool A power pool consists of two or more interconnected electric systems which operate as a single system to supply power to meet combined load requirements and maintenance programs . Preliminary Permit A permit granted by the FERC which gives the permittee priority over anyone else to apply for a hydroelectric license. The preliminary permit enables the permittee to prepare a license appli- 1 cation and conduct various studies such as economic feasibility and environ- 1 mental impacts . The period for a preliminary permit may extend to three years . Public Utility One part of the National Energy Act, Regulatory Policies PURPA contains measures designed to of Act 1978 (PURPA) encourage the conservation of energy, more efficient use of resources , and equitable rates. Principal among these were suggested retail rate reforms and new incentives for production of elec- tricity by cogenerators and users of renewable resources . The FERC has primary authority for implementing several key PURPA programs . Pumped Storage An arrangement in which water is pumped into a storage reservoir at a higher j elevation during off-peak periods when excess generating capacity is available. II During on-peak periods , when additional generating capacity is needed, the water can be released from the reservoir through a conduit to turbine generators located in a power plant at a lower level. Rate Base The value, specified by a regulatory authority, upon which a utility is permitted to earn a specified rate of return. Generally, this represents the 1 614 : 002 . 72 -68- Appendix B � i • . amount of property used and useful in public service and may be based on the following values or combinations thereof: fair market value , prudent investment , reproduction cost, or original cost; and may provide for cash working capital, materials and supplies , and deductions for accumulated provis- ions for depreciation, contributions in aid of construction, and accumulated deferred income taxes . Renewable Energy An energy source which is regenerative Source or virtually inexhaustible . Typical examples are wind, geothermal energy, and water power. Requirements , Power The power required by designated load plus losses from the points of supply. Reserve Generating Extra generating capacity available to Capacity meet peak or abnormally high demands for power and to generate power during scheduled or unscheduled outages. Run-of-River Refers to hydroelectric projects whose operation cannot be regulated for more than a few hours from storage at or above the site, but are controlled mainly by the volume of water flowing in the stream. These flows must be used as they occur or their energy volume will be lost forever. Sales for Resale Sales (wholesale) covering energy sup- plied to other electric utilities , co- operatives , municipalities , and federal and state electric agencies for resale to ultimate consumers . Scheduled Maintenance Capacity and/or energy provided by a utility during the period that genera- ting facilities of the receiving party are inoperative due to scheduled mainte- nance on the facilities . Seasonal Rate A schedule containing an electric rate Schedule available only during a certain specified season of the year. 614 : 002 . 73 -69- Appendix B • Seasonal Rates The rates charged by an electric or gas utility for providing service to consum- ers at different seasons of the year, taking into account demand based on weather and other factors . Service Area Territory in which a utility system or distributor provides service to consum- ers. Short-Term Firm Capacity and/or energy provided on a daily or weekly basis , generally for periods not to exceed one month, with II assured availability during the period of reservation. Short-Term Non-Firm Capacity and/or energy provided on a daily or weekly basis, generally for periods not to exceed one month with limited or no assured availability during the period of reservation. Spinning Reserve Generating capacity which is connected, operating, and ready to take load. Units which are operating at less than full capacity. Standby Charge Fixed monthly charge for the potential use of a utility service. Standby Service Capacity and/or energy provided or made II available when the purchaser ' s gener- ation is unable to meet its entire load or has dropped below a stated level of reserve capacity. Standby Facility A facility that is not regularly used but is available to replace or supple- ment a facility normally in service. Station Service Energy that is used in the operation of an electric generating plant. It in- cludes energy consumed for plant light- ing, power, and auxiliaries regardless of whether the energy is produced at the plant or comes from another source. Substation An electrical power station which serves II as a control and transfer point on an electrical transmission or distribution system. It serves the following pur- poses: 614 : 002. 74 -70- Appendix B I 411 • . (1) To route and control electrical power flow. (2) To transform a voltage to higher or lower voltage. (3) To serve as a delivery point to a private or publicly-owned utility, or to a large industrial customer, such as an aluminum plant. A substation can be designed to include equipment for one , or any combination, of the above purposes. Surplus Energy Energy generated that is beyond the immediate needs of the producing system. Switching Station Equipment used to tie together two or more electric circuits through switches . The switches are selectively arranged to permit a circuit to be disconnected, or to change the electrical connections be- tween the circuits. Transformer An electrical device for changing the voltage of alternating current. Transmission The movement or transfer of electric energy in bulk. Ordinarily, trans- mission is considered to end when the energy is transformed for distribution to the consumer. Volt The unit of measurement of electrical force. It is analogous to water pres- sure in pounds per square inch. It is the electrical force which, if steadily applied to a circuit with a resistance of one ohm, will produce a current of one ampere . Waste Heat Heat contained in exhaust gases or liq- uids that is usually discharged to the environment. Watt See POWER. Watthour The amount of electric energy used by a one watt load in one hour. A 100-watt light bulb will use 100 watt-hours of electricity every hour it is in use. 614 : 002 . 75 -71- Appendix B • AO . Wheeling The use of the transmission facilities of one system to transmit power of and for another system. 1 11 1 I f II 1 4I� i Y{41 1 1 � 614 : 002.76 -72- Appendix B • • . . SECTION VII. APPENDIX B C. ACRONYMS ir r C. ACRONYM LIST ACID Anderson-Cottonwood Irrigation District ACLM Air Conditioning Load Management (Program) APPA American Public Power Association I BPA Bonneyville Power Administration CCPA Central California Power Agency r CEC California Energy Commission CFM Common Forecasting Methodology I , CMUA California Municipal Utilites Association COTP California-Oregon Transmission Project CVP Central Valley Project DWR Department of Water Resources ECLM Energy Conservation/Load Management 1 FERC Federal Energy Regulatory Commission GWH Gigawatthour IOU Investor-Owned Utility ! IPP Independent Power Producer KGRA Known Geothermal Resource Area 1 KWH Kilowatthour LADWP Los Angeles Department of Water & Power LOLP Loss of Load Probability 1 MID Modesto Irrigation District MSR Modesto-Santa Clara-Redding Power Agency MSW Municipal Solid Waste MW Megawatt NCPA Northern California Power Agency PG&E Pacific Gas & Electric Company PURPA Public Utility Regulatory Policy Act 1 PUC Public Utilities Commission RCS Residential Conservation Service SCE Southern California Edison Company SDGE San Diego Gas and Electric Company SMUD Sacramento Municipal Utility District 1 l ' SPLM Swimming Pool Load Management (Program) STEP Shave the Energy Peak (Program) , 1 TANC Transmission Agency of Northern California 1 USBR U.S . Bureau of Reclamation WAPA Western Area Power Administration 1 I I 11 I 1 i 614 : 002. 77 -73- I Appendix C 1 l 4 .l i