LA Utility to Accelerate Goal of 20% from Renewables by 2010

January 11, 2006

LOS ANGELES, California, US, January 11, 2006 (Refocus Weekly) The municipal power utility in Los Angeles has taken the first step to increase its supply from renewable energy sources to 20% of the city's power mix by 2010, seven years ahead of the renewable portfolio standard goal adopted by city council last year.

Mary Nichols, president of commissioners for the Department of Water & Power (LADWP), asked management to start meeting with local groups, homeowners, companies and other stakeholders to discuss the accelerated RPS goals. The accelerated plan, which was presented to the board on December 13, outlines how LADWP would diversify its retail energy mix to meet the 20% goal by procuring green power resources to own or to purchase.

The renewable energy resources will include a mix of wind, geothermal, biomass, landfill gas, small hydro and solar power.

"This board believes we must plan for a greener Los Angeles and that we can meet future energy needs with cleaner resources while continuing high standards of reliability and maintaining a competitive price," says Nichols. "We are all concerned about potential requirements to cut emissions of CO2 and about the wild fluctuations in natural gas prices. LADWP needs to be investing in renewable energy as a form of self protection as well as to benefit the environment by reducing greenhouse gas emissions.

"To achieve the accelerated RPS goal, utility management has six months to update the ten-year Integrated Resource Plan to incorporate a 20% by 2010 RPS, develop a timeline to reduce GHG emissions and increase efficiency of the older in-basin power plants, increase efficiency of customer energy use, and plan for expanding transmission facilities to transport the renewable energy to Los Angeles. It must also proceed with negotiation and contract development of green power resources as proposed and selected in the LADWP's 2004 request for proposals and the 2005 RFP issued by the Southern California Public Power Association.

Staff were also directed to prepare and submit a renewable energy surcharge to support the cost of accelerating the RPS and to maintain the financial integrity of LADWP's power system during times of natural gas price volatility, and to plan public meetings with stakeholders to review and discuss the proposals.

"LADWP is prepared to move forward with an accelerated RPS," says general manager Ron Deaton. "We realize it is in the best interests of the ratepayers and the city to be proactive in terms of diversifying our energy resources by increasing the level of wind, geothermal, solar and other renewable energy sources."

LADWP must procure an additional 3,500 GWh of renewable energy by 2010 to meet the accelerated RPS goal, as well as to sustain that level in the future. Currently, 5.5% of LADWP's energy comes from renewables, including landfill or digester gas, small hydro, solar, and short-term renewable power purchases.

Among the projects already planned are a 120 MW windfarm that will be operational by next year. The Pine Tree facility will generate 340 GWh and boost the level of renewable energy by 1.4%.

The utility has a long-term contract for a biomass facility to supply 333 GWh, or 1.4% of the RPS, through conversion of organic matter to energy. Its Solar Rooftop Program will generate an additional 24 GWh per year by 2010, which will add 697 GWh when completed.

LADWP anticipates that it will gain another 6.9% of green power through proposals that were submitted in 2004. It is negotiating with companies to acquire or develop 1,694 GWh (395 MW of capacity) of future green power.

LADWP expects to receive an additional 5.4%, or 1,261 GWh, by 2009 through a RFP issued in August. On a long-term basis, it plans to develop geothermal power in the Imperial Valley through a partnership with the irrigation district, in which LADWP will build new transmission lines to access geothermal resources. Known as the Green Path Project, the geothermal project is under development, and is expected provide a long-term renewable energy supply for Los Angeles.