Big Picture• Need to change energy management
• Renewables suddenly affordable
• Risks and uncertainties for traditional energy suppliers
• Pressure from customers and consumers
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 200%
20%
40%
60%
80%
100%
120%
140%
160%
180%
200%
Solar Loan vs Grid
GridSolar
Project Year
% o
f T
oday's
Ele
ctr
icit
y P
rice
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 2060%
80%
100%
120%
140%
160%
180%
200%
Wind PPA vs Grid
GridWind
Project Year
% o
f T
oday's
Ele
ctr
icit
y P
rice
Energy Prices ≠ Electricity Prices
• Rates set at the PUC; cover operating costs, capital costs, and return on capitalo Opposite of highly volatile energy commodity markets
• We’re just hedging
Energy Prices ≠ Electricity Prices
Jan-
2004
May
-200
4
Sep-2
004
Jan-
2005
May
-200
5
Sep-2
005
Jan-
2006
May
-200
6
Sep-2
006
Jan-
2007
May
-200
7
Sep-2
007
Jan-
2008
May
-200
8
Sep-2
008
Jan-
2009
May
-200
9
Sep-2
009
Jan-
2010
May
-201
0
Sep-2
010
Jan-
2011
May
-201
1
Sep-2
011
Jan-
2012
May
-201
2
Sep-2
012
Jan-
2013
May
-201
3
Sep-2
013
Jan-
2014
May
-201
4
Sep-2
014
0
2
4
6
8
10
12
14
16
Henry Hub Natural Gas Spot Price ($/mBtu)