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HomeMy WebLinkAbout04-25-19 BCP Meeting MinutesBOZEMAN CLIMATE PARTNERS MEETING MINUTES APRIL 25, 2019 A. CALL MEETING TO ORDER The regular meeting of the Bozeman Climate Partners Working Group was called to order at 2:10 PM on April 25, 2019 in the Gallatin Room of City Hall. PRESENT Terry Cunningham, Jay Sinnott, Sherry Stav, Kathy Powell, Carson Taylor, Joan Montagne, Kristen Walser, Patty Howard, Natalie Meyer B. CHANGES TO THE AGENDA 1. The date of the next monthly Bozeman Climate Partners meeting was corrected to Thursday, May 23. 2. C. Taylor asked to include a discussion on the Green New Deal during the May 23 meeting. C. PUBLIC COMMENT None. D. MINUTES April 05, 2019 minutes amended by K. Walser to clarify that Senator Daines has not signaled support for climate legislation. K. Powell asked for clarifying language regarding D. Vitoff’s Special Presentation, the statement that “you can’t just throw money at waste and transportation” does not capture the intent of the statement and implies these may be wasteful investments. Minutes were amended and approved as submitted. E. OLD BUSINESS 1. STAFF PROJECT UPDATES a) N. Meyer shared that she participated in a two-part workshop in D.C. and Denver hosted by Bloomberg Philanthropies, Rocky Mountain Institute, the World Resources Institute, and the Urban Sustainability Directors Network. Approximately 26 other communities participated, including the City of Missoula. Cities primarily learned about the following local renewable energy options: Renewable Energy Credits, On-site Solar, Community Solar, Physical Power Purchase Agreements, Virtual Power Purchase Agreements, and Utility Green Tariffs. Green Tariffs represent exciting future opportunities in Montana. Missoula, Missoula County, MT DEQ, and Walmart are supportive of a green tariff. Details are included in the attached presentation. b) Climate Vulnerability Assessment & Resiliency Strategy a. Final revisions to the plan are in process and will be delivered to the City Commission on May 3rd and will present a summary during a City Commission Special Presentation on Monday, May 13th. The information will also be shared during the May Climate Partners meeting. Several members referenced the Chronicle article on the County’s F-grade rating for short-term air pollution as a result of summer wildfires. K.Walser referenced that Missoula schools had a shortage of HEPA air quality filters during fire season late summer. c) Climate Action & Resiliency Plan RFP Timeline a. The Climate Action & Resiliency Plan Request for Proposals was released on April 21 and proposals are due by May 14. We are aiming to be under contract by the end of June and have the project underway in July. 2. 2019 LEGISLATIVE ROUNDUP See attached slides. SB 331 is likely dead. This bill would allow NorthWestern to purchase another 150MW from Colstrip and take on a larger share of the cleanup costs without Public Service Commission oversight. Tomorrow is the last day proponents have to revive the bill. Mayor Andrus took steps to oppose the bill. SB 245-Property Assessed Clean Energy legislation failed after a tie in the House Committee where there was no testimony in opposition to the bill. There was an attempt to blast the legislation onto the House floor for a vote, but this failed. F. REMARKS FOR THE GOOD OF THE ORDER Patty Howard announced that GSWMD will be hosting a Fixit Clinic at Gallatin County Fairgrounds on September 28. City Sustainability will assist with the event and Bozeman Climate Partners are invited to volunteer for the event. G. NEXT MEETING – MAY 23, 2019 H. ADJOURNMENT – 3:30 PM by Natalie Meyer. The next regular meeting will be at 2:00 PM on May 23, 2019. Minutes submitted by: Natalie Meyer April 25, 2019 Sustainability Division Updates Bozeman Climate Partners February/March 2019 OFF-SITE RENEWABLE ENERGY BOOT CAMP 3 Renewable energy procurement opportunities Introduction to range of renewable solutions Part I: Intro Part II: Key considerations and availability Unbundled RECs On-site solar Community solar Large-scale, off-site physical & virtual PPAs Green tariffs 3 4 Renewable electricity ALL ELECTRONS ARE THE SAME DistributionTransmissionGeneration 4 5 DistributionTransmissionGeneration 5 RECs RECs RECs Renewable electricity –Enter the REC A RENEWABLE ENERGY CERTIFICATE (REC) REPRESENTS THE CLEAN ENERGY ATTRIBUTES OF 1 MWH OF RENEWABLE ELECTRICITY AND CONVEYS THE ENVIRONMENTAL AND SOCIAL ATTRIBUTES OF THE GENERATED ELECTRICITY TO CONSUMERS 6 DistributionTransmissionGeneration 6 RECs RECs REC retirement CLAIMS CAN ONLY BE MADE ONCE THE REC IS TAKEN OUT OF THE MARKET FUNDAMENTALS: REGULATORY ENVIRONMENT 8 Electricity markets Market Scope Wholesale Markets Sale of power between generators and electricity providers Retail Markets Sale of power between electricity providers and customers 8 9 Traditional electricity market structure THIS STRUCTURE IS STILL FOUND IN THE SOUTHWEST, SOUTHEAST, AND NORTHWEST DistributionTransmissionGeneration Vertically integrated utilities own & manage generation, transmission and distribution. Wholesale Retail 9 10 Organized wholesale markets in U.S. WHOLESALE MARKETS ARE MANAGED BY A REGIONAL TRANSMISSION OPERATOR (RTO) OR INDEPENDENT SYSTEM OPERATOR (ISO) WHICH USES COMPETITIVE MARKET MECHANISMS THAT ALLOW INDEPENDENT POWER PRODUCERS AND NON-UTILITY GENERATORS TO TRADE POWER 10 11 Areas with organized wholesale markets REGIONAL TRANSMISSION OPERATOR (RTO)/INDEPENDENT SYSTEM OPERATOR (ISO) MANAGE WHOLESALE MARKETS DistributionTransmissionGeneration Utilities traditional (vertically integrated) or there may be retail choice RTOs/ISOs manage: •Competitive markets for generation •Planning and access to transmission 11 12 Retail choice markets in U.S. MARKETS WHERE CUSTOMERS HAVE BEEN GRANTED, AT THE STATE LEVEL, THE RIGHT TO PROCURE ENERGY FROM A COMPETITIVE ELECTRICITY SUPPLIER OTHER THAN THEIR TRADITIONAL UTILITY PROVIDER Partial Retail Choice? In some states retail choice has been enacted but is not easily available (often called “partial retail choice”) due to: •Caps on participation •Restrictions on which customers can participate •High exit fees or other barriers to participation Source: “An Introduction to Retail Electricity Choice in the United States”, Clean Energy Ministerial, 2017 12 13 Areas with retail choice markets UTILITIES ARE NO LONGER VERTICALLY INTEGRATED AND THE TRADITIONAL UTILITY COMPETES WITH NEW SUPPLIERS-CREATING MORE OPTIONS FOR CUSTOMERS DistributionTransmissionGeneration RTO/ISO manage: •Competitive market for generation •Planning and access to transmission Competitive suppliers: •Offer alternative products such as renewable energy Traditional utilities manage: •Distribution –delivery, meter reading, outages •Often billing 13 14 Summary of competitive electricity markets Market Scope Region Utilities Implications Organized Wholesale Markets Sale of power between generators and electricity providers Across several states, align with utility territories Utilities may be vertically integrated (still traditional utilities) or not Customers can access renewable energy through wholesale markets Retail Choice Markets Sale of power between electricity providers and customers State level Utilities are no longer vertically integrated and new retail providers present Customers can access renewable energy from competitive suppliers 14 15 The range of renewable energy solutions Unbundled Renewable Energy Certificates RE Energy Produced On-Site (Primarily on-site solar) RE Produced & Purchased from the Market •Community Solar •Physical or Virtual PPA •Utility Solutions Energy Buyer Developer / Renewable Generator Traditional Utility OR OR 15 16 Unbundled renewable energy certificates Renewable Generator Energy Buyer $ RECs REC Provider Each MWh of renewable energy that is produced represents 1 REC. RECs can be retired or sold—there are various REC markets around the country 1. Customer signs contract with a supplier or REC broker for a specified # of RECs 2. Supplier finds and procures RECs from the specified market (state, RTO, national) and transfers to buyer or retires on their behalf $ RECs 16 17 Procurement Ease •Relatively easy to execute •Flexible and scalable; can adjust on a regular basis as needs change Contract Length •Contract lengths vary Impact •Can be sourced anywhere Bundled •Unbundled, RECs only Additional •Can be used to supplement other strategies •RECs always come at a price premium; the cost varies (10-20¢ -hundreds) depending on the market Caveats •Cities must be careful what they claim •May not have local economic, environmental or other benefits •May not enable new RE or be difficult to demonstrate the purchase drove new RE Unbundled renewable energy certificates Renewable energy certificates (REC) represent the clean energy attributes of 1 MWh of renewable electricity and convey the environmental and social attributes of the generated electricity to the purchaser •Produced by RE facilities but sold separately from the energy •Purchasing and “retiring” RECs allows owner to claim legal right to renewable attributes of the electricity •Can be used to reduce “scope 2” emissions for GHG accounting purposes 17 18 On-site solar $Traditional Utility Energy Buyer with On-Site Renewable Generation Renewable Energy Developer Excess $ Rebate/credit or RECs 1. Customer pays RE developer for each unit of energy produced per fixed price in PPA contract. RECs may be given to customer or held by developer (depending on deal) 2. Where net metering is permitted, if the on-site system produces more energy than the customer uses, excess energy is sent back to the grid and customer gets credit on bill 18 19 Procurement Ease •Third-party or host owned •Can be accessed across the country, however, site capability & regulatory limitations (e.g. net metering) may limit availability Contract Length •On average, 10-20 years Impact •Directly serve municipal facilities •Local benefits Bundled •Can be bundled or unbundled Additional •Net metering policy exists in most states, but may only apply to residential customers & small commercial customers •On-Site solar can provide jobs, environmental benefits, & resilience when paired with storage •Parking canopy can be used as an on-site energy option & shade Caveats •Total renewables potential is bound by roof space and available land, often resulting in on-site solar only delivering a portion of total city electricity load •Economics depend on availability of net metering & applicable rates On-site solar On-site solar projects are built on local buildings or land, at the same location that the energy is consumed •Usually connected “behind-the-meter” (BTM) •Most states have "net- metering" policy which credits kWhs produced directly to the customer's bill •Currently benefit from federal tax (which will start to decrease in 2020) 20 Community solar –utility product Developer / Renewable Generator $ Residential Customers Small C&I Customers Traditional Utility RECs (in some cases) 1. Customer pays utility through normal electricity contract and gets credit on bill for their allocation of the project. RECs may be retired on the customers behalf 20 21 Procurement Ease •Customers contract with third-party developer or through a utility program Contract Length •Most programs allow for transferability of program subscribers to new customers •There can be a range of lengths Impact •Local RE; programs are usually located in or near the communities they serve •CS can provide local jobs, environmental benefits, & resiliency when paired with storage•Available to low or moderate income households & customers without rooftop access Bundled •Many contract arrangements available for rates & ownership•RECs can be bundled or unbundled Additional •Municipal government can act as anchor off-taker•Can improve equity of customer choice & access to RE •Can avoid transmission line losses, requires less infrastructure upgrades than utility-scale solar, & easy interconnection Caveats •Some programs have project size limitations•Customer acquisition/subscription costs can be significant •Some programs require the utility retain the RECs, not the customer Community solar Community solar (CS) refers to projects sited within the customers’ utility service territory and connected to the distribution grid. •Output is credited and divided among multiple subscribers, either through direct ownership of parts of the installation, or… •Off-taker agreements for shares of production (customers then receive bill-credit based on energy produced) 21 22 Community solar and virtual net metering Source: SEPA community Solar Database, Data up to date as of September 31, 2017 22 23 Energy Buyer Traditional Utility $$ 2. The developer is responsible for delivering the electricity from the renewable plant to a predetermined “delivery point” close to the buyer’s operations, so that the customer takes physical delivery of the energy Developer / Renewable Generator 3. The renewable energy delivered offsets a portion of the electricity the customer would need to buy from their default utility provider, thus lowering their utility payments 1. The energy buyer signs a physical PPA with a project developer for a fixed price Physical power purchase agreements 23 24 Physical power purchase agreements Source:“An Introduction to Retail Electricity Choice in the United States”, Clean Energy Ministerial, 2017 24 25 Procureme nt Ease •Customer may contract directly with RE generator or retail supplier Contract Length •Typically long-term contracts; Physical PPAs with utility-scale plants often require large commitments (usually for 20 MW or more) which persist over a long time period (usually 10-20 years) Impact •Enables new RE to be built by providing financial guarantee Bundled •Can be bundled or unbundled Additional •Physical PPAs have relatively small upfront costs, as the installation costs are covered by the developer•May result in cost savings Caveats •Physical PPAs are more difficult to enter into if a city does not have a municipal utility or electric retail choice. Physical power purchase agreements In a Physical Power Purchase Agreement (PPA),also called a direct PPA, the seller delivers electricity to either 1) the customer at their facilities, or 2) a predetermined delivery point within their local electricity markets where the customer then takes legal title to the energy. Physical PPAs are most common in retail choice markets, where buyers can choose who to buy their electricity from. 25 26 Virtual power purchase agreements Fixed $/MWh Market $/MWh 3. The renewable energy is sold into the wholesale power market at a variable market price. The revenue from this sale, along with the associated RECs, are passed through to the energy buyer. If the wholesale market price is higher than the fixed PPA price, then the energy buyer gains, and vice versa. 2. The energy buyer signs a virtual PPA with a project developer for a fixed price 1. The energy buyer purchases electricity from their utility as usual. Energy Buyer Developer / Renewable Generator Grid / Electricity Market Traditional Utility 26 27 Virtual power purchase agreements Source:FERC 27 28 Virtual power purchase agreements Procurement Ease •Financial contract with RE generator Contract Length •Long term contract Impact •Enabling new RE to be built Bundled •Usually unbundled, but can be bundled or unbundled Additional •Customer provides price guarantee to generator •May result in cost savings •Doesn’t need to be in customer’s load zone (can pick location based on greatest carbon impact or greatest economic potential) Caveats •Complex legal contract •Exposes buyer to variable market price risk A virtual power purchase agreement (vPPA), also called a contract for differences, is a financial agreement in which a customer agrees to pay a project owner a predetermined price per unit of energy and, typically, the associated RECs from a renewable energy project. Instead of physically delivering the electricity to the customer, the project owner sells the energy into the local organized wholesale market; for each MWh, the buyer then pays or receives the difference between the wholesale market revenue and the predetermined PPA price. 28 29 Utility green tariffs Developer /Renewable Generator Energy BuyerTraditional Utility 2. Customer pays alternative contracted rate for power + RECs 1. Utility contracts with RE generator for power + RECs, potentially with customer input on project RECs $ 29 30 Utility green tariffs Procurement Ease •When a green tariff program exists, it’s open to a class of customers; individual approval not required •Utility or customer negotiates with RE developer Contract Length •Vary per utility product, but typically range between 5 –20 years Impact •Customer may have input on project •Projects may be local and/or new Bundled •Bundled, RE power + RECs Additional •Fixed / predictable long term price for energy •Protection from a fuel charge, e.g. fossil credit •May result in cost savings through RE credits, etc. Caveats •Utility engagement and commission approval may be necessary when a green tariff does not already exist •Early termination fees A utility green tariff or electricity rate, also known as a renewable energy tariff, which allows a class of customers to source a portion or all of their electricity from renewable energy projects, typically through long-term contracts with the customer purchasing both the electricity from a renewable energy project and the associated RECs. Traditionally, these programs are designed for large-scale customers. 30 31 Utility green tariffs Source:World Resources Institute 31 * ** Will be included in the next Emerging Green Tariff pub Considering a green tariff (proposal with the PUC) Green tariff(s) but no deal(s) through tariff to date Green tariff(s) and executed RE deal(s) through tariff Available for city use *Was available for city use – current program cap or term reached Available for city use –pending approval Utility Renewable Energy (RE) Deals 2020 Climate Action & Resiliency Plan •RFP Issued April 21 •Proposals due May 14 •Anticipated contract award June 07 •Contract commencement June 25 Regional News •Boise, ID: 100% renewable electricity goal o https://www.idahopower.com/energy/clean-today-cleaner-tomorrow/ o https://www.idahostatesman.com/news/business/article228300044.html •Missoula, MT: 100% clean electricity o https://www.missoulacurrent.com/outdoors/2019/04/missoula-clean-electricity-2/ 2019 Montana Legislative Roundup •SB 331 –Allows NorthWestern to purchase another 150MW from Colstrip and take on larger share of the cleanup costs w/out regulatory oversight o Amended, Failed. o May be reconstituted in HB 597 and got to conference committee. o No conference committee members appointed as of Tuesday. •SB 245 –Property Assessed Clean Energy o House Committee Tie, failed in attempted blast on to House floor. o No opponents. •HB 467 –Securitization that allows Investor Owned Utilities to refinance debt from facilities that are no longer in service. o Consumers scheduled to pay $407 million cost of Colstrip until 2042, regardless of closure date. o If a stranded asset, customers continue to pay and provide NWE a 8.25% rate of return. o Passed House and Senate. 2019 Montana Legislative Roundup •HB 456 –Allow utility power sales to EV charging stations o Expand EV charging infrastructure by authorizing utilities to sell electricity to 3rd party charging station operators o Heading to Governor Bullock •HB 267 –Establishes privacy regulations and opt-out provision for smart meters o Spurs adoption of this energy management tool by clearing way concerns over customer data and privacy. o Allows for customer opt-out and data access limitations o Heading to Governor Bullock Questions? Natalie Meyer, Sustainability Manager nmeyer@bozeman.net (406) 582-2317