board of directors meeting...• conduct siting study and establish transmission line route...
TRANSCRIPT
Board of Directors MeetingMay 31, 2018
Transmission Line at Meadow Springs Ranch
May 31, 2018
• Provide an update on the Platte River wind project• Discuss significant project milestone dates and overall
timeline• Communicate the upcoming city process and the roles of
city boards and commissions• Provide an opportunity for board member questions and
discussion
Purpose
• Jason Graham, Water Reclamation and Biosolids Manager• Daylan Figgs, Environmental Program Manager, Natural Areas• Carol Webb, WR&T Manager• Tim McCollough, L&P Operations Manager• Christine Mikell, ENYO Renewable Energy• Jeremy Call, Logan Simpson
Project core team
Joint Venture between MAP and Enyo, LLC
Enyo Renewable Energy
Enyo, LLCChristine MikellFounder & [email protected] S Power Plant LaneSandy, UT 84092801-455-1045
MAP Renewable EnergyAaron ZubatyManaging Director & President [email protected] El Camino Real 5 Palo Alto Square, Suite 700Palo Alto, CA 94306650-324-9095
Enyo Renewable Energy is a wind and solar development company specializing in developing utility-scale renewable energy projects. We treat our landowners as family and collaborate with local governments. Our specialized knowledge of the Intermountain West coupled with our focus on building relationships allows Enyo to build for the long-term and for the benefit of communities and our partners.
The Enyo Way
Enyo Renewable Energy
Roundhouse Renewable Energy project overview
Name RoundhouseProduct Renewable Electric Energy – all energy, capacity, and
environmental attributesAmount 150 megawatts (MW)
Start Date/ Commercial Operation
As early as March 31, 2020 but no later than December 31, 2020
Contract Term Approximately 21.5 years
Location 30,000 acres of private and state land in Laramie County, WY with transmission line in Larimer County, CO
Delivery Point Platte River’s Rawhide SubstationTransmission Output will be delivered directly into Platte River’s transmission
system through a high voltage lineBenefits Triple Platte River’s existing wind capacity and increase
delivered, non-carbon energy to owner municipalities to 48%.
Roundhouse Renewable Energy Project
Proposed transmission routes*
Rawhide Energy Station
*Routes subject to change
Roundhouse project schedule
2018 2019
Spring 2018:• Early outreach
meetings• Conduct siting
study and establish transmission line route alternatives
Summer 2018:• Proposed transmission
line route finalized• Resource surveys and
other supporting environmental analysis
• Public outreach• Prepare 1041 application
Fall 2018:• Water board review of
environmental analysis • Present to other City of Fort
Collins boards• Submittal of 1041 application • Referral agency review• Private easement acquisition
Winter 2018:• County Planning Commission
hearing• Board of County Commissioners
hearing• Water Board recommendation
of easement• City Council: two readings of
Ordinance Approving Easement
Spring 2019:• Acquisition of executed
easements from City and property owners
• Negotiation of Development Agreement (if required)
• Application and issuance of construction permit by county engineer
RHRE Website
Project core teamPartnership with Platte River and ENYOEnergy by DesignAgreed upon mitigationDetermine recommendation
Boards and commissions
Water Board (recommendation)Energy BoardNatural Resources BoardLand Conservation and Stewardship BoardOthers as needed
City council
Final decision maker on MSR Easement request
Questions?
Board of Directors MeetingMay 31, 2018
UPDATE – 2018 GENERAL
ASSEMBLYS A N D R A H A G E N S O L I N / C A P I TO L
S O L U T I O N S
CONTEXT
• 120-day session
• Split control of houses
– narrow Republican control of Senate
– Wider Democrat control of House
• Substantive issues from previous sessions– Transportation
– PERA
• Looming background issues that defined session– Upcoming 2018 elections
– Sexual harassment claims
PREPARATION FOR SESSION• Meetings with local delegations and
others with an interest in utility matters
– Discussion and eventual distribution of ZNC
• Review of bill titles
• Rumors
• Allies
ISSUES TRACKED
• Colorado Energy Office
• Climate Change
• Broadband
• Energy Storage
• Energy Subsidies
• Health Effects of Wind Generation
ISSUES WITH ACTIVE
INVOLVEMENT
• Electric Transmission Right of First Refusal
• 8-1-1 – Call Before You Dig
FATE OF LARGER ISSUES• Transportation Funding and Finance
• PERA
2018 ELECTIONRace for the Majority The Legislative Seats in Play
Governor’s Race
Board of Directors MeetingMay 31, 2018
Strategic Plan May 31, 2018
Purpose
• Strategic initiatives
• Changes• Incorporated board suggestions• Market participation
• Three to five year time horizon
• Look and feel
• July board meeting - Approval
Strategic initiatives• Enhanced customer experience
• Collaborative communications and community outreach
• Resource diversification and alignment
• Infrastructure advancement
Changes• Incorporated board suggestions
• Energy markets
• Headquarters
• Formatting
Board of Directors MeetingMay 31, 2018
2018 Solar + Storage RFPProgress Update and Next Steps
May 31, 2018
• RFP Issued on 2/21/18• Non-binding offers received from approximately 36 distinct bidders• Over 80 bid structures across three delivery years = 240 bids to
evaluate
Overview
2018Feb 21
RFP released
Mar 30Bids due
Apr 24Short list
Mid-JuneTerm sheet negotiations
Late-summerSign PPA
• 36 individual counterparties submitted solar and storage bids
RFP Respondents
174 Power Global Community Energy Geronimo PNW Solar
AES DE Cypress Creek groSolar Recurrent Energy
Altus Ecoplexus iBV Energy Partners RES Distributed
Apex Enel Green Energy juwi Sandhills Energy
BioStar Enyo Lendlease Saturn Power
Bofat Forefront Power LightSource Strata Solar
Bona Terra/NGI Frontier Renewables NextEra SunPower
Cenergy GCL New Energy Nikola Torch Clean Energy
Clenera GE Solar Origis Wirsol/Wircon
Cost • Evaluation based on proposed PPA price; estimated value of energy and capacity; as well as the cost of transmission and losses for energy delivered to Platte River.
• First cut based on price of solar portion of proposals.Location • Evaluation based on identified site at Rawhide versus
other siting options proposed by bidders.• Projects over 40 MW in size removed from
consideration as pricing at scale was not a significant differentiator.
Project Viability • Evaluation based on project viability and estimated probability that bidder will be able to successfully complete the development on schedule.
• Bidder’s experience with solar development (based on total installed capacity) and the number of projects 20 MW or larger.
• Viability of proposed energy storage technology.Risk Management • Based on financial qualifications review and term
sheet negotiations.
Short-List Selection Criteria
C
C
C
AB
A Preferred location for additional solar panels
B Secondary location for additional solar panels
C Executed third-party land lease options
Rawhide Land Use
SolarAverage = $37/MWh
Tightly-clustered pricing
Pricing for existing RH solar
Storage
Wide pricing range which requires further review
Bid Ranges – Projects < 40 MW
Average = $1.2 million/MW
• Platte River’s share of carbon-free resources is approximately 30 percent• Relative to municipal deliveries• 50 MW wind additions add about 5 percent • 150 MW wind additions add about 15 percent
Share of Carbon-Free Resources
0%
10%
20%
30%
40%
50%
60%
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031
Carbon Free Energy Produced/Native Load
Base % Carbon Free Carbon Free % with Wind Carbon Free % with Solar and Wind
2021 Wind Additions
2020 Solar Additions
Share of Carbon-Free Resources
≈48%
≈32%
≈50%
• Platte River will focus on four areas of optimization and risk management
Operational Risk Management
Negotiate for the flexibility needed from the vendors to facilitate the handling of surplus energy
Supply Management
Determine methods to manage Platte River’s existing resources to accommodate surplus energy
Generation Management
Look for market opportunities to manage Platte River’s long position
Market Operations
Perform studies to evaluate the most economic interconnection strategyInterconnection
Next Steps• Narrow short-list RFP candidates down to 3 - 4 vendors• Develop draft term sheet(s)• Conduct an in-depth evaluation of bid structures:
• Interconnection• Counterparty financial health• Operational impacts
• Finalize term sheet with the preferred vendor• Make regular progress updates to the board• Negotiate a final PPA with the preferred bidder late-summer 2018• Wholesale solar pricing program will be evaluated along with the
overall rate design
Summary• We appear to have cost-effective options for adding
additional solar to our portfolio that will give member options.
• While storage options are currently not cost effective, it will provide Platte River with valuable experience operating battery storage systems.
• Additional details will be provided on our short list providers of solar and storage systems during the July Platte River board meeting.
Questions?
Board of Directors MeetingMay 31, 2018
Managing Renewables in Markets
May 31, 2018
• Market Structures• Bilateral Markets (current)• Organized Markets (future)
• Managing wind and solar, intermittent resources, in these different markets
• Summary
Introduction
Market Structures
Bilateral Organized
Platte River actively manages the market through counterparty
relationshipsAn independent operator manages
the market through electronic structures and market rules
A reciprocal obligation between a willing buyer and a willing seller under mutually agreeable terms for a specified period of time
Bilateral Agreements / Markets
• Energy, capacity, or a related product • Provides price certainty through short and long-term contracts and generation ownership
• Loads and resources are balanced • Differences between contracted energy and produced / consumed energy are handled financially through the purchasing / selling of coordination transactions and changing the output levels of owned generation resources
• Units are dispatched by owner / operator • Match resources to load
• Operate with a set of pooled resources with independent operations of wholesale markets for energy, capacity and ancillary services
• Transmission is central in market design – a single tariff exists with open access and non-discriminatory services
• Load and resources settle individually in an organized market
• A Regional Transmission Organization (RTO) serves as the centralized operator for committing generation and serving load on a least-cost basis
• Day-2 Markets include day-ahead unit commitment, real-time unit commitment and real-time dispatch
Day-ahead loads
Day-ahead generation
Bids/Schedules
Determination of Clearing
Prices
Day-aheadPosting/
Recalibration
Market Operations
Organized Markets
• Renewable generation is intermittent which can be difficult to manage
• Intermittent generation requires backup reserves on the system
• Staff are required to make every reasonable effort to balance loads and resources on a day-ahead and hourly basis
• Managing resources is a binding commitment requiring up to 90 minutes before the start of the hour
• Minute-to-minute balancing is handled by our Balancing Authority; PSCo
• Once a decision has been made and the hour begins, there are only two options to manage that decision in a bilateral market:
• Follow intra-hour changes in load with increases or decreases in our generation output; or
• Purchase regulation from our Balancing Authority; PSCo
• The current cost for these services is $3.35/MWh for wind and $0.97/MWh for solar
Managing Intermittent Generation in a Bilateral Market
Bilateral Market Balancing
500 MW Load
500 MW Load
500 MW Resources
Resources• Rawhide• Craig• Wind• Solar• Hydro
Bilateral Market Balancing
500 MW Resources
500 MW Load
170 MW Renewables
Resources• Rawhide• Craig• Wind• Solar• Hydro
Renewables• New Wind• New Solar
Bilateral Market Balancing
500 MW Resources
500 MW Load
170 MW Renewables
170 MW Sales
Resources• Rawhide• Craig• Wind• Solar• Hydro
Renewables• New Wind• New Solar
Bilateral Market Balancing
• Intermittent generation is much easier to manage in an organized market
• Balancing loads to resources is no longer required as a market manages imbalance within the hour
• Load and generation are separate
• The market buys your generation
• The market sells you what you need to serve your load
• The market effectively allows regulation up / down to be done on a regional-wide basis within the hour. For instance, a single generating unit may regulate or balance generation and load for several companies
• Reserve charges for renewable wind resources would be significantly less which would save Platte River approximately $2.5 million in 2021
Managing Intermittent Generation in a Market
500 MW Load
Organized Market Balancing
500 MW Load
500 MW Resources
Resources• Supplied by Market
Organized Market Balancing
• More renewable generation can be integrated within an organized market
• Easier to manage imbalance
• Reduces costs
• Even without an organized market, we can manage a carbon footprint of 50 percent
• Resources will become more difficult to manage as we climb the renewable ladder
• Platte River will continue to be a leader and an innovator to find an organized market to help us integrate more renewables
Summary
Questions?
Board of Directors MeetingMay 31, 2018
WAPA Hydropower Contracts
LAP and CRSP
WAPA Hydropower Contracts
• Loveland Area Project/Colorado River Storage Project
• Resources• Rates• Drought Impacts
Loveland Area ProjectLAP
LAP Resources
Loveland Area Project (LAP)Contract Rate of Delivery (CROD):
• Summer Season = 30 MW (April through September)
• Winter Season = 32 MW (October through March)
Rates:• Rates posted annually in September• Current: Demand Charge $4.12/kW-month and Energy Charge
$15.72/MWh• Rate terms are on an annual calendar year basis
• Current rate effective through December 31, 2018 and projected to remain the same through December 31, 2019
• Contract ends September 30, 2054
Drought-Adder:• Drought-Adder Rate Component to recover costs when necessary
• Drought-Adder paid off in FY2018 and is not a 2018 rate component
$-
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
$45.00
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
$/MWh
LAP 10-Year Annual Blended Rate
LAP 10-Year Annual EnergyMWh
105.0
106.0
107.0
108.0
109.0
110.0
111.0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Thou
sand
s
Colorado River Storage Project
CRSP
UPPER BASIN
LOWER BASIN
CRSP Resources
Contract Rate of Delivery (CROD):• Summer season = 106 MW (April through September)• Winter season = 136 MW (October through March)
Sustainable Hydro Power (SHP):• How much customer is guaranteed to receive, regardless of water conditions• CRSP purchases energy to firm SHP
Rates:• Rates reviewed annually in May• Current: Demand Charge $5.18/kW-month and Energy Charge $12.19/MWh• If rate adjustment is necessary, it becomes effective the next term (Fiscal Year Oct.
1-Sep. 30)• Current rate in effect through September 2020• Contract ends September 30, 2057
Basin Fund:• Established under Section 5 of the Colorado River Storage Project Act in 1956• Fund is generally used for the repayment of operations and maintenance of the
transmission and generation portions of CRSP• Fund is also used to firm power during drought conditions• Approximately $120M in revenue is needed each year to fund Reclamation and
Western operation and maintenance needs; currently projected to end the fiscal year at $112M
• When Basin Funds drops below $120M, it can trigger a cost recovery charge, but we recently received notification that no charge will be assessed as a result of being below the $120M target
Colorado River Storage Project (CRSP)
CRSP 10-Year Average Hydro Capacity by Month
0
20
40
60
80
100
120
140
160
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
MW
Sustainable Hydro Power Available Hydro Power Unused Capacity
Unused capacity can be used as Customer Displacement Power (CDP) or Western Replacement Power (WRP)
$-
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
$/MWh
CRSP 10-Year Annual Blended Rate
0
100
200
300
400
500
600
700
800
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Thou
sand
s
MWh
CRSP 10-Year Annual Energy
Summary• Long term hydro contracts thru 2050• Rates are economical and stable• Allows operational flexibility to balance energy with load• Provides more than 600,000 MWh of our total annual
energy supply• Reliable source of energy representing almost 20
percent of our non-carbon portfolio delivered to owner municipalities
Questions?
Board of Directors MeetingMay 31, 2018
April Operational Results
Variance Key: Favorable: >2% | Near budget: +/- 2% | Unfavorable: <-2%
Category April Variance YTD Variance
Municipal Demand (1.3%) (0.4%)
Municipal Energy (1.3%) (0.9%)
Baseload Generation (9.9%) (7.5%)
Wind Generation 3.9% (1.0%)
Solar Generation (8.7%) (5.0%)
Surplus Sales Volume (6.3%) (3.7%)
Surplus Sales Price (2.3%) (5.4%)
Dispatch Cost 2.6% (0.9%)
Board of Directors MeetingMay 31, 2018
CategoryApril
Variance from Budget($ in millions)
Year to DateVariance from Budget
($ in millions)
Net Income $0.3 $1.9
Debt Coverage .10x .26x
Revenues ($0.2) ($0.9)
Operating Expenses $0.4 $3.1
Capital Additions $2.7 $8.5
Financial Summary
> 2% Favorable | 2% to -2% At or Near Budget | < -2% Unfavorable
Board of Directors MeetingMay 31, 2018