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Planning gives Los Angeles head start on California RPS

The beauty of a carefully thought out plan is that it can prepare you for the unforeseen, the way the Los Angeles Department of Water and Power’s 2000 integrated resource plan paved the way for the utility’s voluntary compliance with the renewable portfolio standard California enacted in 2002.

As John Schumann, LADWP’s director of power system planning and projects, explained, “The city could adopt a position mirroring the state standard without going back to add an entirely new component to the plan.”

Instead, the municipality’s IRP pointed the way forward in January 2004, when the mayor and the city council formally committed to incorporating more solar, biomass and wind energy into the utility’s energy portfolio.

IRP anticipates need for more renewable sources
Deregulation and a growing energy crisis were on the power industry’s collective mind in 2000 when the Los Angeles City Council approved LADWP’s IRP. The main objectives of the comprehensive blueprint included providing reliable service to customers at the lowest possible rates while demonstrating environmental leadership.

The IRP put forth a two-pronged strategy to meet those objectives. The first half, the installation of emission control equipment and a massive “repowering” program, aimed to increase the efficiency of 10 of the city’s natural gas-fired powerplants. Over the last three years, the improvements have cut NOx emissions by 1,500 tons (about 70 percent). Repowering will improve efficiency by more than 30 percent and reduce the utility’s exposure to natural gas price volatility.

The second part of the plan called for meeting 50 percent of the city’s annual load growth through a combination of demand-side management, energy efficiency and renewable energy. “So, when the state set the standard of generating 20 percent of its power from ‘green’ sources by 2017, we were already working on ways to move in that direction,” said Schumann.

Like most state portfolio standards, California’s RPS targeted investor-owned utilities. Even then, Schumann added, “The RPS is a goal, rather than a requirement.”

The bill did require local jurisdictions to enact similar programs to encourage renewable resources, subject to considerations such as rates, reliability, financial resources and environmental improvements.

Los Angeles moves fast to diversify energy portfolio
At the time LADWP submitted its IRP, about three percent of the utility’s power came from renewables, mostly small hydro and digester gas. LADWP has since purchased an additional 1 percent, and has two projects in the pipeline that will diversify its mix and boost total renewable energy to 7 percent by 2008. The 120-MW Pine Tree wind project, now going through the siting process and environmental assessment, is expected to be commissioned in late 2005.

Earlier this year, the city council approved a contract to buy 40 MW of renewable energy from a biogas plant that will go into service in 2008. Owned by BioConverter LLC, the facility will use recycled green waste to generate electricity.

In late June, the city council passed a resolution recommending that LADWP report back with a formal plan to achieve the 20 percent by 2017. With an eye on reaching an interim goal of 13 percent of its load by 2010, LADWP issued an RFP in July to acquire up to 1,320,000 MWh of additional renewable energy.

The city is more interested in projects in which it can retain ownership and operation of the facilities, and hopes that tapping new sources of energy will create jobs. “Ideally, the projects will develop local resources, then in Southern California, then those connected to LADWP’s transmission grid,” Schumann stated.

Mayor forms commission to get public insight on RPS
Shortly after the RFP was issued, the Green Ribbon Commission held its first meeting. Mayor Jim Hahn appointed an advisory panel that included city council members, commissioners, environmentalists, labor, academics, neighborhood council members and business leaders to move the development of Los Angeles’s RPS forward. City Councilman Tony Cardenas and LADWP Acting General Manager Henry Martinez are co-chairing the Green Ribbon Commission.

The panel will review acquisition plans, promote public participation and awareness of renewable energy sources and set milestones for integrating the RPS into the IRP. Its report, due in January 2005, will be incorporated in the utility’s recommendations to the city council in February.

That draft will lay the groundwork for LADWP’s 2005 IRP. Schumann recalled that the municipal utility had hoped to revisit its IRP every two years. “With deregulation and the renewable portfolio standard, evaluation became more of an ongoing process,” he admitted.

But the experience undoubtedly prepared the Los Angeles Department of Water and Power well for the next round of planning, demonstrating yet another benefit of a good plan. Not only does it help you deal with the unexpected—it gives you a head start on the expected, too.