APPA guidebook aims to increase small utilities' use of renewables
Small and medium municipal utilities face unique challenges in trying to add more renewable energy to their power mixes, but a new tool will soon be available to answer questions and aid in the planning process.
The American Public Power Association's Demonstration of Energy-Efficient Developments Program, Gila Resources, Western Area Power Administration, the U.S. Department of Energy GeoPowering the West Program, DOE Wind Powering America Program and the Public Renewables Partnership teamed up to create An Implementation Guidebook to Expand the Role of Renewables in an Energy Supply Portfolio.
The step-by-step manual targets smaller, member-owned utilities, and draws on strategies other utilities have used to increase their percentage of renewable energy.
"The guidebook lays out the process for considering renewable resources—especially wind and geothermal—in smaller public power system resource portfolios, an analytical process normally afforded to larger utility companies," said Western's Renewable Resource Program Manager Randy Manion.
Scheduled for release in August 2004, the guide walks utility managers through key resource planning considerations, including measuring, analyzing and comparing alternatives. An available Excel-based software tool allows utilities to evaluate the costs, benefits and risks of adding renewable energy to their resource mix in increments of 2, 5, 10 or 20 percent. Suggestions for presenting a resource plan to boards of directors, consumers and other key decision makers are also mapped out.
"Basically, it takes planning strategies typically used by investor-owned utilities and makes them accessible to the small public power provider," explained Brian Walshe, president of Altera Energy Consultants.
The company teamed with Larry Barrett of Barrett Consulting Associates to serve as the contractors on the project, researching and writing the guidebook.
Western builds partnership to meet small utilities' needs
The project began with a conversation between Walshe and Manion. "Every six months, APPA's DEED program reviews proposals for funding [only DEED members are eligible to receive APPA grants]," recalled Manion. "When I discovered Brian's success in supporting IOU analysis of renewable generation in supply portfolios, I knew we had the makings of a team to submit a proposal."
Western identified Gila Resources as a potential partner in the effort. Gila President and CEO Ken Mecham responded quickly and enthusiastically.
Working with Gila Resources to review their integrated resource plan, Walshe soon discovered that the Safford, Ariz., municipal utility had very different needs from an IOU. Figuring out how to meet the specific needs of a small public utility was a valuable learning experience for both Altera and Gila Resources, which became a test case for the guidebook and the project sponsor.
"A critical difference is that compared to investor owned utilities, public power providers are usually understaffed and have less money," said Walshe. "When you don't have the staff or budget for planning, it's more difficult to evaluate and understand the trade-offs with whatever green power product the provider offers."
Small utilities also have different types of contracts, making the cost-vs.-risk of adding renewables to their portfolio different from IOUs, noted Mecham. Like many small utilities, Gila Resources is a full requirement customer, meaning that it purchases all its power from a power wholesaler.
"Typically, we might contract for firm delivery of a small portion of renewable energy at a higher cost than what we are paying for conventional generation," Mecham said. "We can plug those numbers into the spreadsheet program and see what the effect of the purchase will be. If the renewable energy replaces peaking power bought at market rates, the cost might be offset."
Brian Walshe agreed, "With the guidebook and software, a small utility can see the benefits of adding renewables from other sources, including their own small generation."
Web casts used to refine, premiere report
The completed Implementation Guidebook to Expand the Role of Renewables in an Energy Supply Portfolio will be available to APPA's DEED members, and available for purchase by other interested parties. APPA and PRP held a Web cast in June to preview the guidebook where attendees discussed the draft with the authors and project participants and offered feedback on what they wanted to see in the final report.
Another series of Web casts will introduce the completed guidebook, starting with a session in September. The first will explain the scope and goals of the project, and the methods used in developing the guidebook. A later Web cast will introduce and demonstrate the software tools. These Web casts will be reproduced twice through December 2004.
The guidebook will help to remove some constraints that stand in the way of small utilities wishing to add more renewables to their portfolio, Walshe believes.
"It will give them the ability to create their own customized, comprehensive resource plan," he said, "and that's where renewable energy emerges as a cost competitive option."
Manion agrees that small utilities will find the publication an invaluable tool. "There are many reasons to invest in renewable resources, from environmental stewardship to energy price risk mitigation," said Manion. "The Guidebook will serve as a roadmap to determine why to invest in renewable resources, how to conduct resource analyses, how to determine safe project investments, how to involve the public and how to deliver information to the board of directors or city council."