Pasadena Water and Power Amend Regulation 23 to

Pasadena Water and Power Amend Regulation 23 to Require New Self-Generation Interconnections to Utilize Only Renewable Fuel Sources City Council April 30, 2018 Item 13

Recommendation Pasadena Water and Power • Adopt Resolution to Amend Interconnection Requirements - Regulation 23 > Require New or Modified Customer-Owned Self-Generation to be Renewable Resource § CEC “Renewable electrical generation facility” definition § Initial and annual certifications required for biofuels § Would apply to capacity increase or replacement of existing self-generation § Would not apply to “as-is” existing self-generation - renewable or emergency backup resources > Other technical and language changes • CAP - Prohibit fossil fueled generation at customer’s premises • Effective May 1, 2018 (Day after City Council adoption) • Recommendation endorsed by EAC on April 10 th 2

Outreach Pasadena Water and Power • Met With Large Customers > Large Customer Group meeting February 21 > Chamber of Commerce > Individual customer meetings February through April • MSC Information Item – January 9, 2018 • EAC Action Item - April 10, 2018 3

What is Distributed Generation? Pasadena Water and Power • Power Generated at the Point of Consumption • Customer Side of Meter (Self-Generation) > Primarily serves on site customer load > Net metered rate (qualifying renewables) > Self-generation rate (other resources) • Utility Side of Meter (none currently): > PWP-owned small generators > Feed-in-tariff, community solar 4 Proposed Amendm ent

Regulation 23 Pasadena Water and Power • Applies to All Customer-Owned Generation Facilities • Technical Requirements and Conditions to Interconnect with PWP Distribution Grid • Standards Ensure that Safe and Reliable Electric Operation Can Be Accomplished • Requires Customer-Generator to Sign Interconnection Agreement with PWP 5

Typical Types of Self-Generation Pasadena Water and Power • Renewables as Defined by State > No Change > Examples § Photovoltaic Solar Systems § Wind § Biogas fueled fuel Cell, micro turbine • Emergency Backup Generation > No Change > Examples § Diesel or gasoline fueled engines • Fossil-Fueled > Propose to Discontinue > Examples: § Diesel, gasoline or natural gas 6 Self-Generation Engine Types • • • Internal combustion Microturbines Steam turbines Combustion turbines Cogeneration CT/SG Fuel Cells

Fossil Fueled Self-Generation Issues Pasadena Water and Power • Environmental Impacts > Operates and emits continuously > GHG emissions > Local air pollution NOx, VOCs, CO • Cost Shift to Other Customers > PWP obligated to maintain infrastructure and back-up capacity to provide power “On-Demand” > Insufficient cost recovery under current rates § Grid infrastructure and distribution services § Backup generation, RA capacity, Load balancing 7

Typical GHG Emission Rates Pasadena Water and Power • DG can have lower emissions per MWh produced • DG runs continuously • Local plant runs about 5% of the time Generator Type Tonnes* per MWH DG - Fuel Cells 0. 41 - 0. 47 DG - Microturbines Large Combined Cycle Plant PWP Local Generation Avg > Far less total GHG Tonnes = Metric Tons 1, 000 kg ~2, 205 pounds 8 0. 6 - 1. 7 0. 36 - 0. 40 0. 60

2017 Local Generation (MW) Pasadena Water and Power 173 MW PWP Generation 76, 375 MWh 20 MW DG Produces ~167, 000 MWh

GHG Emissions - 2017 (tons) Pasadena Water and Power 80, 000 70, 000 PWP Local Generation (173 MW) 60, 000 50, 000 40, 000 30, 000 20, 000 10, 000 0 10 Typical DG (20 MW)

Policy Change / Benefits Pasadena Water and Power • Prohibit Interconnection of Customer-Owned Fossil-Fueled Self-Generation Resources • Require Self-Generation to Maintain Good Power Factor for Customer Load • Benefits - Will Reduce Future Increases In: > Natural gas demand > GHG emissions (supports CAP goals) > Local air pollution > Rates for customers without self-generation 11

Change in Application Process Pasadena Water and Power • Regulation 23 to Include Application Expiration > Application will remain active for 12 months after it is accepted by PWP as “completed” > Application will expire if project has not received authorization to operate in 12 months > General Manager may authorize a twelve month extension if construction is substantially advanced 12

Pasadena Water and Power • Backup slides follow 13

Daily Generation – 2017 (MWh) Pasadena Water and Power 14

DG Runs When Not Needed Pasadena Water and Power 76, 375 MWh 173 MW PWP Generation (2017) 20 MW Customer-DG Produces ~167, 000 MWh Offsets ~40, 000 MWh PWP Generation 15 Produces ~127, 000 MWh Excess Generation

Rate Treatment Pasadena Water and Power • Net Energy Metering (NEM)> Renewable generating facilities such as PV and wind • Self-Generation Service (Schedule SG) > Non-renewable generating facilities 16