Testimony of the Northern California Power Agency

California State Senate
Energy, Utilities & Communications Committee

Renewable Portfolio Standard Informational Hearing

Tuesday, February 26, 2008

Testimony of the Northern California Power Agency

Madam Chair, members of the committee, thank you for the opportunity to address you today. My name is Ann McCormack, and I am the President of the Public Utility Board of the City of Alameda. I am speaking to you today on behalf of my community, as well as the other public power communities and districts that comprise the Northern California Power Agency.

NCPA is a nonprofit California joint powers agency established in 1968 to generate, transmit, and distribute electric power to and on behalf of its fifteen members: the Cities of Alameda, Biggs, Gridley, Healdsburg, Lodi, Lompoc, Palo Alto, Redding, Roseville, Santa Clara, and Ukiah; the San Francisco Bay Area Rapid Transit (BART), the Port of Oakland, the Truckee Donner Public Utility District, and the Turlock Irrigation District; and two associate members: Placer County Water Agency and the Plumas-Sierra Rural Electric Cooperative. Together, we serve nearly 700,000 electric consumers in Central and Northern California and approximately 3.2 percent of the state’s electricity load.

The topic of today’s hearing is extremely important. The need for my community, and all utilities, to be forward-looking is critical to provide the reliable electric service our customers demand. Each of NCPA’s member utilities has adopted RPS standards, and each is fully committed to meeting the goals of AB 32. For my utility, and for all of NCPA’s member communities, the two policies are inextricably linked-- increasing the supply of renewable energy is a key part, together with energy efficiency, of meeting California’s AB 32 greenhouse gas reduction targets.

My vision of our utility, as we look down the road toward increased economic development and population growth, is a utility and a community that is committed to providing reliable, cost-effective electricity that exceeds state goals for efficiency, renewable energy, and greenhouse gas emission reduction. Most importantly, we want to continue to be a utility that responds to the needs of our customers, and are there for them when they turn on the lights at night, their heaters on cold days, and their efficient air-conditioners on hot days.

Agency-Wide Efforts

NCPA’s strong social and environmental ethic began in the 1960s with major investments in hydroelectric resources and later, geothermal resources. This principle of long-term planning and environmental stewardship continues today through public power systems’ aggressive investment in new renewable energy projects, innovative load shifting and efficiency efforts, and green power purchase programs for our customers. We undertake these efforts not simply because we’re told to by the State, but because our customers— who are also our owners— demand it.

Our longstanding agency-wide commitment to responsible energy sources have resulted today in NCPA’s owned generation being 95% carbon emission free. As public power systems, the interest of our member communities in clean generation resources has spurred us to be a leader in the renewable energy arena. Our geothermal facility at the Geysers, as well as our hydroelectric facilities in Calaveras County, reflect that commitment to clean and renewable generation. Although our hydroelectric facility, built in 1985, has been a higher-cost resource to our members in the financial sense, it has an even higher value to our communities as a source of clean generation.

Looking forward, NCPA has many interesting projects underway in the area of renewable energy. We are currently installing a 1 megawatt solar array at our Geysers geothermal facility to help power the pumping of treated effluent water from Lake County into our steam reservoirs. This innovative solution serves as a way to help ensure the health of nearby Clear Lake, and at the same time extends the life of our renewable geothermal resource. We are currently evaluating a proposal to install an additional 1 megawatt array there to further those efforts. We have also installed solar panels at our offices at our hydro facility in the town of Murphys. As well, NCPA has established a new Green Pool program through which NCPA members can join together to invest in sizeable renewable generation such as solar and wind energy facilities.

If all of NCPA’s members were combined into a single utility, that entity’s current level of eligible renewable resources would stand at 21 percent-- and 50 percent if large hydro were factored in. That means that half of the electricity that is used by customers in NCPA’s member communities comes from sources that emit no carbon.

*NCPA Pool members include Alameda, Biggs, Gridley, Healdsburg, Lodi, Lompoc, Palo Alto, Plumas-Sierra, Port of Oakland, and Ukiah

Individual Efforts

In addition to our joint efforts, our individual member communities continue to lead the way in this area as one of the benefits of public power is the ability to develop successful programs tailored specifically to local geography, load characteristics, and consumer interests.

A good example is the City of Roseville’s “BEST Homes program”, which to date has facilitated the construction of more than 200 zero energy homes with integrated solar panels, resulting in more than 1 million megawatt hours of electricity produced annually. Roseville has also created the “Green Roseville” program, which provides a renewable energy alternative to its consumers that is 98% powered by California-based wind energy. This program has been Green-e certified for meeting strict standards for environmental protection. Roseville also just opened its new state-of-the-art Utility Exploration Center which is designed to provide interactive learning experiences regarding the preservation of our environment through energy efficiency and other measures.

Further south, the Turlock Irrigation District is collaborating with the City of Turlock to install a 1.2 MW fuel cell to convert methane gas from the city’s Water Quality Control Facility into electricity. The City of Palo Alto’s City Council has made climate protection one of its top priorities, and Palo Alto’s electric utility boasts the #1 voluntary green energy program in the country, with more than 16% of customers receiving 100% green energy from California wind and solar facilities. Alameda partnered with another NCPA member, Santa Clara Silicon Valley Powera, to purchase a landfill gas project in Santa Cruz County. Plumas-Sierra Rural Electric Cooperative recently received the largest Clean Renewable Energy Bond allocation in the first distribution of this federal program, and is making significant investments in a new 22 megawatt Black Mountain Wind Energy Project.

Redding has recently made large direct investments in renewable energy sources for their customers. In the past year alone, Redding entered into a 15 year Power Purchase Agreement for 10 megawatts of biomass energy, and a 20-year power purchase agreement, in partnership with the Modesto Irrigation District and the City of Santa Clara, for wind energy supplied from a new 200 MW wind project in the Pacific Northwest. These efforts have raised Redding’s current renewable energy content to 34% from eligible sources by 2009—62% if large hydro is factored in.

Each of our member utilities is unique. We see the great diversity and individuality that NCPA’s membership enjoys as an asset in this effort—an asset that requires each community to target their efforts to create innovative and effective programs and resource decisions that are best tailored to their communities. The ability of pubic power communities to create community-tailored programs has resulted in our utilities making greater progress toward achieving the state’s renewable energy and greenhouse gas reduction goals than would be possible with a “one-size-fits-all” mandate, and has done so at lower cost to our customers.

Challenges

A lack of transmission resources and land use constraints have impacted our ability to construct and/or plan for additional renewable generation facilities.

In the area of transmission, we and other public power communities have been especially aggressive in advocating the need for increased infrastructure, both to serve already constricted areas and to bring in renewable energy resources such as wind, geothermal, biomass and hydro that are not close to the state’s load centers. A lack of transmission infrastructure to bring renewable energy to our major load centers has driven us, wherever possible, to site renewable resources closer to where they are needed. However those efforts are complicated by restrictions on siting those generation sources-- such as biomass-- near population centers. Alameda and Silicon Valley Power were provided the opportunity to invest in a landfill gas facility

As mentioned earlier, Alameda and Silicon Valley Power seized upon the opportunity to invest in a renewable electricity generation facility located near their load requirements, with no additional transmission infrastructure required. Unfortunately, these opportunities are too few and far between.

To that end, NCPA and several of its member communities are actively participating in the Transmission Agency of Northern California’s (TANC) long-term transmission planning process for the construction of urgently needed high voltage transmission lines that would provide new import capability to Northern California. This effort may have a lead time as long as 8-10 years, and will provide firm transmission access for 50+ years to come.

Stability in California’s legislative and regulatory environment gives electric utilities the ability to reasonably project future electricity requirements and provide a foundation for multi-million dollar long-term decisions. As the Legislature considers electricity and environmental issues in the future, we hope that consideration is given to the availability of new resources, implementation of existing programs, and a strategic plan for California’s energy future.

Both collectively and individually, NCPA’s members are leading the way on new renewable energy investment – and the differences in these programs demonstrate the value of programs tailored to local attributes. I can speak for all NCPA members when I say that Northern California’s public power systems and their governing boards are committed to doing their part to meet the energy needs of their communities as well as those of the state of California.

Thank you Madam Chair. I’d be happy to answer any questions that you or the other committee members may have.