IID Energy sees voluntary RPS as goal to beat
In states where renewable portfolio standards target investor-owned utilities, a growing number of municipalities and electric cooperatives have recognized the wisdom of diversifying energy resources and are voluntarily adopting their own standards, as IID Energy recently did.
The Imperial Irrigation District's board of directors voted in May to establish a 20 percent minimum for the use of green energy resources by 2017, paralleling California's RPS. Complying with the state law, which exempts IID's electric utility division, was a fringe benefit of the decision, said Systems Planning and Engineering Superintendent Juan Carlos Sandoval.
"The main reason was to reduce our dependency on fossil fuels and our customers' exposure to the economic risk of relying too heavily on one resource," he explained. "And, it's good for the environment."
"There are lots of good reasons," agreed Robert Fugett, energy services superintendent in charge of member services. "We'd like to actively pursue all possibilities, especially the ones in our own backyard."
Geothermal purchase exceeds RPS requirement
That attitude makes 20 percent into a mere benchmark that IID Energy expects to surpass easily. A 2001 agreement to purchase 170 MW of geothermal power from CalEnergy Company, Inc., will boost IID Energy's renewable resources above the required percentage by 2007. CalEnergy is building a 185-MW geothermal facility off the Salton Sea shore. Salton Sea Unit 6 is currently in the permitting process and is slated to be online in 2006.
The fact that geothermal is a baseload resource and that the plant is local helped to bring the cost of renewable energy into line with conventional resources. "Having the plant right here in our territory reduces the need for substantial transmission and improves system reliability," noted Sandoval, "and it stimulates local development. That doesn't affect the price of energy but it is good for the community."
Earlier this year, IID Energy agreed to invest $28.5 million in interconnection facilities to Salton Sea Unit 6 and ancillary services for the geothermal purchase. CalEnergy will pay just over $4 million for necessary system upgrades, receiving transmission credits in equal amount.
In a statement to the press, IID Energy General Manager Glenn Steiger called the agreement an important element in the utility's pursuit of clean, renewable energy resources to serve its growing customer base. "The added benefit is the increased independence from coal and fossil fuel," stated Steiger.
Projects may increase hydro resources, add solar and biomass
Renewable energy already plays a significant role in IID Energy's resource mix, which includes steam, diesel fuel, natural gas, nuclear and coal. The utility owns the All American Canal, which supplies 35 to 45 MW of "run-of-canal" hydropower. "The canal has an 85-MW capacity, but the generation comes from water delivery to our irrigation customers," said Sandoval, "so our hydro generation is dependent upon agricultural demand."
Western supplies additional hydropower of about 26 MW in the winter and 33 MW in the summer. IID Energy is also developing three new mini-hydro sites and upgrading some of its existing hydro facilities. Those projects could add up to 2.5 MW in the future.
The Imperial and Coachella valleys have other renewable resources that IID may be able to tap. The utility receives frequent inquiries about solar development. "Facilities that provide peaking power would be consistent with our goals," said Sandoval.
IID Energy has negotiated to buy biogas captured from local cattle feedlots. Although the project has changed from the initial plan to build four digesters, it could still yield 20 MW of renewable energy and offer a solution to the ongoing problem of agricultural waste disposal.
Sugar cane may present another opportunity to produce renewable energy while supporting the valley's agriculture industry. Sandoval mentioned a developer who is investigating the possibility of cultivating the crop in the Imperial Valley and building a processing facility. "Farmers would have a new cash crop that could be turned into ethanol," Sandoval said, "and the sugar cane waste could be used to generate electricity."
Currently, IID blends all its renewable resources into the power mix, a situation Fugett doesn't expect to change as more renewables are added. "Utilities have an obligation to the consumer to diversify their resource mix," he advised. "Natural gas showed us how quickly, and how much, the economic picture can change."
"The RPS is a means to an end," Fugett concluded. "Reliable power supply and stable rates. The scarcer fossil fuel becomes, the better diversity is going to look."