Southern California Public Power Authoritys SCPPA Long Term

Southern California Public Power Authority’s (SCPPA) Long Term Renewable Strategy Jim Caldwell LADWP

Who is SCPPA? Ÿ Member Utilities (12): Los Angeles Anaheim Azusa Banning Burbank Cerritos Colton Glendale Pasadena Riverside Vernon Imperial • Currently Serving: - 2 Million Residential and Commercial Customers - 4. 6 Million People - 9, 000 Megawatts of Electricity (15% of California) 2

Who is SCPPA? Ÿ Not-for-profit (public agency) Ÿ Governed by Board of Governors (one from each utility) Ÿ Provides diversity of power supplies Ÿ Optimizes energy resources through pooling Ÿ Provides aggressive demand management programs 3

SCPPA Renewable Portfolio Standard Ÿ 20% Renewable Portfolio Standards (RPS) Adopted by SCPPA Utilities in 2003 Ÿ Currently 5% to 15% by Utility Ÿ Implementation of RPS Projects – Utility Level (Contract or Ownership) – Joint Action (SCPPA) 4

Member’s Renewable Development via SCPPA Ÿ Benefits Ÿ Challenges Ø Share Financial Risk Ø Ø Diversify Resources Ø Interconnect to SCPPA Transmission Projects Ø Ø Do not Compete for the same Projects Ø Ø Cost Reduction with Shared Development Costs and Larger Projects Requires more Coordination and Collaboration Different Approval Timelines and Requirements Many Utilities are CAISO Participants, While Others Are Not. Ø Allows Smaller Utilities to Cost- Effectively Participate in these Large Projects 5

Los Angeles Department of Water and Power’s Long Term Renewable Strategy

LADWP System • Largest municipal utility in U. S. • 465 sq. mile service territory: LA & Owens Valley. • 3. 9 million residents. • 7400 MW maximum generation capacity: hydro, coal, natural gas, nuclear, and renewables. • System Peak of 6165 MW on July 24, 2006. • 25, 000 GWH annual production. • Extensive transmission & distribution assets. 7

Meeting LADWP’s Resource Requirements To meet native load requirements, LADWP: • Uses LADWP-owned generation or long-term firm energy contracts; • Enters into short-term economy purchases/sales; • Owns or has contractual transmission rights to secure deliverability of energy; • Provides a conservative reserve margin beyond peak demand * ; and • Does not rely on capacity purchases or capacity contracts. * reserve margin meets WECC requirements, and is expected to meet or exceed the CPUC resource adequacy requirements. 8

LADWP’s Long-Term Planning LADWP plans to continue to meet load growth (and new resource requirements such as renewable power) in a self-sufficient manner by: ŸDemand-Side Management – Aggressive Energy Efficiency and Water Conservation Programs, Green Building Program ŸAchieving a 20% renewable portfolio standard by 2010 – Currently 8% of Power Content. Adopted a goal of 35% renewables by 2020 -- the implementation plan for this goal is in place. ŸLADWP compliance = electricity delivered versus CPUC compliance of contracts in place. ŸBuilding New Renewable Generation – Pine Tree Wind Farm (under construction), Imperial Geothermal (preliminary engineering/permitting), Local Small Renew LA Projects (RFP under evaluation with Bureau of Sanitation) ŸRepowering old generation units with newer, cleaner, and more efficient units. Repowering of Haynes Generating Station has been authorized by Board and is in preliminary engineering. ŸBuilding Transmission – Owens Valley Renewable Corridor Upgrade, Green Path North ŸPurchase Agreements for Renewable Power with ownership options – Several Recent Renewable RFP’s ŸSignificantly expanding it’s customer driven solar program beyond the minimum requirements of SB 1. As a result, the Department will meet the Kyoto Protocol targets ahead of the international schedule and will reduce its carbon emissions significantly below 1990 levels prior to AB 32 2020 target date. 9

Resource Acquisition Status for 2010 ŸExisting RPS projects = 8% of sales (up from 3% in 2005) ŸPine Tree Wind Project, Northwest Small Hydro, and solar rooftops Ÿ 2004 LADWP RFP – potential acquisition of multiple projects Ÿ 2005 SCPPA RFP – potential acquisition of multiple projects Ÿ 2006 SCPPA RFP – potential acquisition of multiple projects ŸLADWP 2007 RFP – development on LADWP properties or near LADWP transmission system Total New+Existing MW* GWh %DWP 2010 Sales 3, 122 10, 647 44. 0% ** *nameplate ** exceeds 20% to account for contract failure, scheduling delays, and achievement of 2020 target of 35% renewables No transmission expansion is necessary to achieve 2010 targets, however expansion of Owens Valley corridor and Green Path North are critical for meeting 2020 goals. 10

LADWP Forecast Generation Resource Mix LADWP Energy Mix, 2007 LADWP Capacity Mix, 2007 5% 4% 8% 21% 47% 46% 24% 7% Source: 2007 Power Content Label 11

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Energy Efficiency Program Key Program Changes to Increase Program Participation Ÿ Increase incentive levels for the most efficient equipment and appliances. – For many items, LADWP will cover up to 100% of incremental cost of the most efficient equipment and work directly with equipment manufacturers and vendors to promote program to their customers. Ÿ Expand list of qualifying technologies and implement programs to reach new market segments. – Includes both proven and innovative technologies and specialized programs for small business and other hard to reach markets. Ÿ New Program Areas – CFL Distribution, Low-Income Refrigerator Exchange, City Facility Assessments Ÿ New Rebate Offers – New Construction / LEED Incentives, Custom Performance Program, Refrigeration, Small Business Direct Install Ÿ Future Programs – Point of Sale Program, District Cooling Facility 13

Customer-Driven Investments Distributed generation Ÿ The benefits for customer installed DG include waste heat recovery, backup power and power quality. Ÿ The benefits for utility installed DG include generation, transmission and distribution infrastructure deferral, and reduction of delivery losses. Ÿ Though a large amount of future DG installations are expected to be customer initiated, LADWP will also continue to self install a variety of distributed energy resources over the planning period totaling approximately 13 MW. In Basin Solar Ÿ Plan to meet or exceed SB 1 target of 280 MW by 2017 Ÿ “Minimum requirements” of law will not allow achievement of this goal. Recently announced “comprehensive plan” to: – – Expand current customer rebates under “CSI” program and remove barriers similar to proposed legislation Offer “Standard Offer Power Purchase Agreements” to leverage private capital Initiate self-build program for own facilities and other City buildings Redistribute program benefits to low income customer base Integrate solar with energy efficiency and Green Building practices for new construction 14

Planned Transmission Projects Ÿ Owens Valley Renewable Corridor (along Eastern Sierras) – 2009: 450+ MW for wind/solar under construction, (real time monitoring to optimize loading of existing line); – 2013: Construction of new 230 kv line plus substation upgrades to allow ~1200 MW new capacity Ÿ Green Path North Project (access to the Imperial Valley area) – 2013 -2015: 1200 to 1600 MW for wind/solar/geothermal 15

AB 32 Program: RPS as a Component All utilities should have a goal of 35% renewable by 2020 and to increase and hone investments in energy efficiency until ALL cost-effective energy efficiency and net zero energy new construction targets are reached. Ÿ Actively engaged with CEC, CPUC and CARB on developing AB 32 Implementation Measures Ÿ Need to realize the highest level of emission reductions in a way that preserves system reliability, and protects customers from rate shock. Ÿ Ensure that implementation strategy is consistent with the intent of AB 32: – – – Makes environment and direct emissions reductions the focus and priority Minimizes costs and maximizes benefits for CA’s economy. Improves and modernizes CA’s energy infrastructure. Maintains electric system reliability. Maximizes additional environmental and economic co-benefits for CA. Complements the State’s efforts to improve air quality. Ÿ Prefer direct investment in renewable energy, energy efficiency and other direct GHG reduction measures over the proposed complex market structure in the CPUC’s recent Proposed Decision. Ÿ Prevent a market based scheme that picks financial winners and losers rather than invests in emissions reductions. 16

LADWP’s Participation in SCPPA Ÿ Palo Verde Nuclear Power Plant – (1981, project share 5. 91%, LA’s share 67%) Ÿ Mead – Phoenix Transmission Project – (1992, project share 18. 31%, LA’s share 24. 8%) Ÿ Mead – Adelanto Transmission Project – (1992, project share 67. 92%, LA’s share 35. 7%) Ÿ Southern Transmission System – (1983, project share 100%, LA’s share 59. 5%) Ÿ Anschutz Pinedale Gas Field – (2005, project share 42. 5%, LA’s share 74%) 17

LADWP Participation in SCPPA Cont. Ÿ Pleasant Valley Wind Energy Center, Wyoming – (2006, project share 67. 5%, LA’s share 57. 45. %) Ÿ Milford Wind Farm Project, Utah – (2007, project share 100%, LA’s share 92. 5%) Ÿ Pebble Springs Wind Farm Project – (2007, project share 100%, LA’s share 69. 6%) Ÿ Geothermal Development Project – (2007, project share 100%, LA’s share 50. 0%) 18

LADWP Participation in SCPPA Cont. Ÿ Demand-Side Management – Refrigerator Replacement – Compact Fluorescent Bulbs – Small Business Lighting Program Ÿ Natural Gas Pre-pay 19

Joint LADWP-SCPPA Renewable Projects to Date Ÿ RFPs Issued in 2002, 2005, 2006, and 2007 Ÿ 98 MW of WY Wind – Jul’ 06 Ÿ 200 MW of Utah Wind – Dec’ 2007 Ÿ 98. 7 MW of Oregon Wind – Dec’ 2007 20

LADWP Renewable Achievements to Date Ÿ RFPs Issued in 2002, 2004, 2005, and 2006 Ÿ 2 MW Lopez Canyon Landfill - 2002 Ÿ 6 MW WM Bradley, Biomass Landfill Gas - 2006 Ÿ 6 MW SCS Penrose, Biomass Landfill Gas -2006 Ÿ 13 MW Solar Photovoltaic – 2000 ~ ongoing Ÿ 50 MW Powerex - Small Hydro - 2007 Ÿ 120 MW Pine Tree Wind Farm – June 2009 Ÿ 150 MW Pine Canyon Wind Farm – April 2013 21

The Renewable Portfolio Standard and AB 32

The Renewable Portfolio Standard and AB 32 Ÿ A strong RPS (33% or 35%) complements AB 32. Ÿ The City of Los Angeles is already implementing the Mayor’s Green LA Plan which establishes the following Goals: – LADWP to reach 20% Renewables by 2010; – LADWP to reach 35% Renewables by 2020. – City-wide GHG emissions must be 35% below 1990 levels by 2030. Ÿ Any form of AB 32 implementation needs to allow municipal utilities to retain the resources to continue to make these investments in direct emission reductions. 23