Electric Update Workshop Michael Garvey Chairman September 14, 2000.
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Transcript of Electric Update Workshop Michael Garvey Chairman September 14, 2000.
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Electric
Update
Workshop
Michael GarveyChairman
September 14, 2000
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Agenda8:30 – 8:45 Check-in and refreshments Vina Maharaj
8:45 – 8:50 Welcome Michael Garvey, Chairman
8:50 – 9:00 Program Overview Eugene Leong, ABAG
9:00 – 10:15 What’s Happening in the ElectricMarkets ISO/PX, Price History Energy Markets Program Strategies
Michael Garvey, Moderator
Bob Grow, CECGary Hunt, HenwoodTom Green, NCPA
10:15 – 10:30 BREAK
10:30 – 11:30 Electric Program Review Renewable program Power purchases, prices, cash flow The Future, Calpine Contract
Dave Finigan, ABAG POWERJerry Lahr, ABAG POWERBill Ross, Calpine
11:30 – 12:00 Questions & Answers
12:00 Adjourn
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Executive Committeefor FY 1999 - 2000
• Ken Blackman, City of Santa Rosa• Kathy Brown, County of Contra Costa• Robert Fugle, Gold Gate Bridge
District• Michael Garvey, City of San Carlos• Wayne Green, City of Salinas• John Lisenko, City of Foster City• Mark Lewis, City of Union City• Alan Nadritch, City of Benicia
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Annual Board Meeting
October 19, 20009:00 a.m.
Metro Center
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Program Overview
Eugene LeongPresidentABAG POWER
September 14, 2000
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Program Overview
• ABAG POWER Objectives– Aggregate power purchases --> savings– Provide economical green power option– Take control of deregulated electric future
• What a Difference a Year Makes !!– April ‘98-April ‘00 --> Business as usual– June-August ‘00 --> The quarter from hell– Sept. ‘00-Dec. ‘01 --> Hedging the future
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The Big Picture “The overriding lesson of history is the need to
balance market power. History shows that balance cannot be created by regulatory rules alone--it must be in the market structure…a strong consumer presence is essential to help balance the influence of suppliers and make competition work….The coalitions formed…with public power systems, rural cooperatives, municipal associationsmunicipal associations, consumer advocacy and environmental groups, and labor organizations--provide a valuable example of combined interests that might help to balance market power in both state and regional structures”
-- Scott Ridley, “Profile of Power” (1996)
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Executive Summary “California is experiencing major problems with electricity
supply and pricing caused by policies and procedures adopted over the past ten years. This summer, California has seen both electricity price volatility – exemplified by huge increases in wholesale electric prices and increases in retail prices in San Diego – and supply and delivery system instability – culminating in unprecedented black-outs in the Bay Area. These serious, but thus far isolated, examples represent a precursor of what lies ahead for examples represent a precursor of what lies ahead for California’s economy over the next 30 monthsCalifornia’s economy over the next 30 months. California’s reliability deficits and retail price volatility may not improve in that time without a mid-course correction.”
--PUC Report to the Governor on Utility Deregulation (Aug. 2, 2000)
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C R I S I S
Danger Opportunity
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What’s Happening in the Electrical Markets
Bob Grow, CEC
Gary Hunt, Henwood
Tom Green, NCPA
September 14, 2000
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State Renewable Energy Program
DAVE FINIGAN
September 14, 2000
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TOTAL RENEWABLE ENERGY REBATE
COLLECTED FOR FY 1999 - 2000
$1,474,636
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FEBRUARY, 2000 REBATE
TO ELECTRIC PROGRAM MEMBERS
$749,087
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REMAINING REBATE TO BE
DISTRIBUTED TO MEMBERS
$725,549
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Program Savings
Total Rebate $1,474,636Program Administration -737,000 (Budget) Net Remaining for Program Savings $ 737,686
Total 1999 – 2000 Energy Cost $17,000,000 (Estimate)
% of Energy Cost 4.3%
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Electric
Program
Review
Jerry LahrProgram Manager
September 14, 2000
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ABAG POWER Avg. Monthly Electricity Cost
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
$/M
Wh
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ABAG POWER Monthly Energy Cost
$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
($ m
illi
on
s)
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
MW
h
Monthly Cost Monthly Usage
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Theoretical Cash Position(Energy Payments in Advance)
(14.00)
(12.00)
(10.00)
(8.00)
(6.00)
(4.00)
(2.00)
-
2.00
4.00
Jul-9
8
Sep-9
8
Nov-9
8
Jan-
99
Mar
-99
May
-99
Jul-9
9
Sep-9
9
Nov-9
9
Jan-
00
Mar
-00
May
-00
Jul-0
0
Sep-0
0
Nov-0
0
Jan-
01
Mar
-01
May
-01
$ m
illi
on
s
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Theoretical Cash Position(Energy Payments in Arrears)
(2.00)
(1.00)
-
1.00
2.00
3.00
4.00
5.00
6.00
$ m
illio
ns
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Electricity Cost Breakdown$/kWh
Transmission 0.010$ Distribution 0.030 Public Purpose Prog. 0.005 Nuclear Decom. 0.005 TTA 0.010 Generation 0.070 = PX Credit + CTC
Total 0.130$
• PX Credit: amount PG&E would have incurred to purchase electricity on your behalf
• PX Credit and Competitive Transition Charge (CTC) vary month-to-month, but must total to equal the generation charge
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Example 1: Price Freeze - PX Rate(Spring)
$/kWhTrans/Distr/PPP/ND/TTA 0.060 PX Credit CTCGeneration 0.070 = 0.030 + 0.040
Total 0.130$
Paid to PG&E orTrans/Distr/PPP/ND/TTA 0.060$ 0.130$ (total)CTC 0.040 (0.030) (PX credit)
Total 0.100$ 0.100$
Paid to NCPAEnergy (PX Credit) 0.030
Total - Billed to member 0.130$
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Example 2: Price Freeze - PX Rate(Early Summer)
$/kWhTrans/Distr/PPP/ND/TTA 0.060 PX Credit CTCGeneration 0.070 = 0.090 + (0.020)
Total 0.130$
Paid to PG&E orTrans/Distr/PPP/ND/TTA 0.060$ 0.130$ (total)CTC (0.020) (0.090) (PX credit)
Total 0.040$ 0.040$
Paid to NCPAEnergy (PX Credit) 0.090
Total - Billed to member 0.130$
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Example 3: Price Freeze - PX Rate(Summer)
$/kWhTrans/Distr/PPP/ND/TTA 0.060 PX Credit CTCGeneration 0.070 = 0.145 + (0.075)
Total 0.130$
Paid to PG&E orTrans/Distr/PPP/ND/TTA 0.060$ 0.130$ (total)CTC (0.075) (0.145) (PX credit)
Total (0.015)$ (0.015)$
Paid to NCPAEnergy (PX Credit) 0.145
Total - Billed to member 0.130$
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Price Freeze - PX Rate
-$0.1000
-$0.0500
$0.0000
$0.0500
$0.1000
$0.1500
$0.2000
$0.2500$/
kWh
Gen -CTC $0.0400 $0.0200 -$0.0740 -$0.0250
Gen - PX Credit $0.0300 $0.0500 $0.1440 $0.0950
TTA $0.0100 $0.0100 $0.0100 $0.0100
Nuc Dec $0.0050 $0.0050 $0.0050 $0.0050
PPP $0.0050 $0.0050 $0.0050 $0.0050
Distrib $0.0300 $0.0300 $0.0300 $0.0300
Trans $0.0100 $0.0100 $0.0100 $0.0100
Apr May Jun Jul
$0.13 $0.13
$0.13
$0.13
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Key Points
• Cash flow (working capital) increased due to :– skyrocketing energy prices– energy payments in advance
• ABAG POWER must now recover money owed by PG&E
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$/kWhTrans/Distr/PPP/ND/TTA 0.060 PX Credit CTCGeneration 0.070 = 0.050 + 0.020
Total 0.130$
Paid to PG&E orTrans/Distr/PPP/ND/TTA 0.060$ 0.130$ (total)CTC 0.020 (0.050) (PX credit)
Total 0.080$ 0.080$
Paid to Power SupplierEnergy (Calpine) 0.087
Total - Billed to member 0.167$
Example 4: Price Freeze - Fixed Price
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$/kWhTrans/Distr/PPP/ND/TTA 0.060 PX Credit CTCGeneration 0.070 = 0.087 + (0.017)
Total 0.130$
Paid to PG&E orTrans/Distr/PPP/ND/TTA 0.060$ 0.130$ (total)CTC (0.017) (0.087) (PX credit)
Total 0.043$ 0.043$
Paid to Power SupplierEnergy (Calpine) 0.087
Total - Billed to member 0.130$
Example 5: Price Freeze - Fixed Price
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$/kWhTrans/Distr/PPP/ND/TTA 0.060 PX Credit CTCGeneration 0.070 = 0.145 + (0.075)
Total 0.130$
Paid to PG&E orTrans/Distr/PPP/ND/TTA 0.060$ 0.130$ (total)CTC (0.075) (0.145) (PX credit)
Total (0.015)$ (0.015)$
Paid to Power SupplierEnergy (Calpine) 0.087
Total - Billed to member 0.072$
Example 6: Price Freeze - Fixed Price
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$/kWhTrans/Distr/PPP/ND/TTA 0.060 Generation 0.145
Total 0.205$
Paid to PG&ETrans/Distr/PPP/ND/TTA 0.060$
Paid to Power SupplierEnergy (PX Credit) 0.145
Total - Billed to member 0.205$
Example 7: Freeze Removed - PX Rate
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$/kWhTrans/Distr/PPP/ND/TTA 0.060 Generation 0.145
Total 0.205$
Paid to PG&ETrans/Distr/PPP/ND/TTA 0.060$
Paid to Power SupplierEnergy (Calpine) 0.087
Total - Billed to member 0.147$
Example 8: Freeze Removed - Fixed Rate
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Energy Prices
0
20
40
60
80
100
120
140
160
180
$/M
Wh
Futures Prices (Prebon Energy)
Fixed-Rate Contract (Calpine)
Estimated 10% savings onenergy costs (Sep '00 - Dec '01)
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Staff Recommendations
• Continue electric program w/ fixed price contract through 2001
• Explore different hedging and risk management strategies
• Expand Membership
• Strive for 100% renewable energy
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The Future,
Calpine Contract
Bill RossCalpine
September 14, 2000
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Reminder:
Annual Board Meeting
October 19, 2000
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Questions
&
Answers
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