Los Angeles toughens renewables plan

Los Angeles toughens renewables plan, even at cost of higher electricity rates

10.26.04

Gary Clouser, Freelance energy journalist

The Los Angeles City Council has ordered its municipal utility, Los Angeles Department of Water & Power (LADWP), to toughen its renewable fuels goal, even at the anticipation that it will result in higher electricity rates. The City Council has told LADWP it may not count power generated from the Hoover Dam toward its renewable goals. Hoover Dam-generated power accounts for about 2.5% of LADWP's power. Exclusion of power from that source toward the renewables objective is expected to cost the average residential ratepayer about $0.60 more per month, raising the anticipated cost for the renewable program to $3.20 per month from the earlier projection of $2.60 by 2017.

That LADWP estimate is based on funding renewable the plan, including interconnection costs, transmission costs, renewable energy costs exceeding projected cost from fossil fuels, such as coal and natural gas, and purchase agreements for renewable power.

The state of California has ordered investor-owned utilities to supply 20% of its supply through renewable fuels by 2017. That state mandate, however, does not officially apply to LADWP, because munis are exempt from that rule. The state does require munis to develop their own plans, called Renewable Portfolio Standard (RPS). LADWP’s goal is to increase renewable power to 20% by 2017, meeting the same percentage as is mandated for IOUs. LADWP has an interim goal of 13% renewables by 2010. Renewables currently provide about 3% of LADWP’s total electricity supply, according to LADWP spokesperson Carol Tucker. The City Council has ordered LADWP to submit its RSP plan by the end of the calendar year.

The issue addressed by the City Council this week was what hydroelectric power can be included in the RPS. Some council members wanted to allow Hoover Dam power to be included toward the renewable goal, even though the state law, as applied to IOUs, allows only “small” hydro, 30 MW or less. The City Council allowed LADWP to include all existing hydro-generated power, except for Hoover Dam. That allows LADWP to include several hydro facilities along the LA Aqueduct that are just over 30 MW, Tucker said.

The City Council’s plan, approved 12-2, was pushed by Councilman Tony Cardenas, chair of the Commerce, Energy and Natural Resources Committee. Hoover Dam can still be used for LADWP’s energy needs, but it will be forced to meet its renewable mandate through other means, Cardenas said. Council members said the use of more renewable energy sources is worth the higher costs. “We can discuss this both in terms of the health of our city, the health of our environment and the health of our ratepayers,” said Councilman Eric Garcetti, a supporter of the tougher plan. “What we are getting cheaper today will cost us more in the long run in the health of our city. If we use clean energy, we can help make Los Angeles the Silicon Valley of energy technology.”

Last month, LADWP received more than 40 proposals for renewable energy projects. The proposals covered a broad spectrum, including wind, geothermal, solar, small hydro, landfill gas, biomass, and municipal solid waste. LADWP is seeking to acquire up to 1,320,000 MW-hours per year of additional renewable energy by the end of 2010.

LADWP hopes to announce a “short list” in November, and begin awarding renewable energy projects in February 2005. LADWP plans to acquire renewable energy resources through development and ownership of projects, and through mid to long-term power purchase agreements.

Gov. Arnold Schwarzenegger favors pushing up the state's deadline for 20% use of renewable fuels for electricity generation to 2010, from the current date of 2017.

Los Angeles successfully lobbied to avoid being included in a state mandated RPS because it wanted to maintain local control of LADWP. Local control is a major concern of the city and LADWP because it was through maintaining local control that LADWP was able to avoid the state’s initial failed attempt at deregulation, which resulted in rolling blackouts and significant rate increases, LADWP says.

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