A C T I VAT I N G A N E N E R G Y PA R T N E R S H I P F O R T U C S O N ?

John Farrell February 18, 2015

H U G E P O T E N T I A L

POTENTIAL PERCENT OF POWER FROM LOCAL

RENEWABLES

100% or more 50 to 100% 25 to 50% 10 to 25% 10% or less

L O C A L R E N E W A B L E P O T E N T I A L

32 states - 100%+

What percent of Arizona electricity could come from

rooftop solar alone?

I N T E R A C T I V E

20%

23%

49%

42%

31%

18%

23%

24%

19%

19%28%

23%

24%

24%

26%

21%

12%

11%52%51%

22%

23%

21%23%

19%

14%

38%41%

26%

35%

28%

19%

25%

21%

25%

24%

20%

22%

19%

23%

17%

23%

18% 20%

15%

24%

21%18%

Residential and Commercial roofs

L O C A L S O L A R P O T E N T I A L

POTENTIAL PERCENT OF POWER FROM LOCAL

ROOFTOP SOLAR

50% or more 25 to 50% 10 to 25% 0 to 10%

21%

49%

0¢

5¢

10¢

15¢

20¢

Residential Commercial Residential with ITC

Commercial with ITC

Prairie Fire Solar

Green Valley0¢

5¢

10¢

15¢

20¢

0¢

5¢

10¢

15¢

20¢

T U C S O N S O L A R AT PA R I T Y ?

cents per kilowatt-hour

U T I L I T Y ( T E P ) R AT E S M O D E L E D A C T U A L ( P I M A C O U N T Y )

30% tax credit

30% tax credit

NREL System Adivsor Model

$0

$3,000

$6,000

$9,000

$12,000

1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012

Wind

SolarSource: Lawrence Berkeley Labs

A N D O N LY G E T T I N G B E T T E R

U.S. Installed Cost of Wind and Solar Power ($/kilowatt)

0¢

3¢

6¢

9¢

12¢

2004 2005 2006 2007 2008 2009 2010 2011 2012

R I S I N G AV E R A G E R E TA I L E L E C T R I C I T Y P R I C E S I N T U C S O N

¢ per kilowatt-hourSource: EIA

+2.8% per year since 2008

But rates = bills

W H AT W I L L B E A D D E D ?

C U M U L AT I V E C A PA C I T Y A D D I T I O N S T U C S O N E L E C T R I C P O W E R ( T E P ) 2 0 1 4 R E F E R E N C E P L A N

0

500

1000

1500

2000

2500

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

TEP 2014 IRP, p26

C I T Y- U T I L I T Y D I S S O N A N C E

Are you Canadian?

I N T E R A C T I V E

Owned by Canadian

company, Fortis Governed by AZ Corporation Commission

M I L L I O N T O N S O F G H G E M I S S I O N S

4

5

6

7

8

1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

T U C S O N C L I M AT E P R O B L E M

Other 40% Tucson Electric

Power 60%

Sources: Pima County GHG Inventory, TEP 2014 IRP

U T I L I T Y R E S O U R C E M I X 2 0 1 3

Efficiency/Other 4%

Renewable 4.0%

Coal 80%

Gas 12%

Source: TEP 2014 IRP

U T I L I T Y R E S O U R C E M I X 2 0 2 8

Efficiency/Other 11%

Renewable 9.6%

Coal 43%

Gas 36%

G H G - 2 7 % E L E C . - 1 6 % T O TA L

Source: TEP 2014 IRP

M I L L I O N T O N S O F G H G E M I S S I O N S

4

5

6

7

8

1990 1994 1998 2002 2006 2010 2014 2018 2022 2026

Actual emissions

Projected based on TEP IRP

Kyoto reduction goal

R E S U LT S O F U T I L I T Y R E S O U R C E P L A N …

Source: TEP 2014 IRP

M I L L I O N T O N S O F G H G E M I S S I O N S

0

2

4

6

8

1990 1994 1998 2002 2006 2010 2014 2018 2022 2026 2030 2034 2038

… N O T N E T Z E R O

N E T Z E R O 2 0 4 0 – –C I T Y ’ S L I K E LY G O A L

F O R E C A S T A G A I N S T T H E G R A I N

0

3,000

6,000

9,000

12,000

15,000

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010

Source: World Bank, 2014 TEP IRP

Per capita electricity use, United States

T E P F O R E C A S T

A R I Z O N A C O S T O F C O A L D E L I V E R Y

0

10

20

30

40

2010 2011 2012 2013

C O S T LY C O A L R E L I A N C E

$ per short ton

Source: EIA

C O S T LY C O A L R E L I A N C E

Coal 43%

$161 million in compliance with pollution law by 2018

Source: TEP 2014 IRP

• 1200 MW of new capacity planned

• 50+ year commitment

• 350 gallons of water per MWh

• Cost of $88-119 per MWh

T H I S I S A G A S

Source: TEP 2014 IRP

T H I S I S A G A S

Twice as much natural gas capacity planned as

solar power

0¢

5¢

10¢

15¢

20¢

8.8¢

16.6¢

U T I L I T Y ’ S C O S T F O R E C A S T

cents per kilowatt-hour

U T I L I T Y ( T E P ) C L A I M

11.9¢

Source: TEP 2014 IRP

0¢

5¢

10¢

15¢

20¢

8.8¢

11.1¢

T U C S O N ’ S A C T U A L C O S T O F S O L A R

cents per kilowatt-hour

U T I L I T Y ( T E P ) C L A I M

11.9¢

16.6¢

“integration”

Source: TEP 2014 IRP

“integration”

“We have to back up every kilowatt of solar every minute of every day”

D I S - I N T E G R AT I O N

Utility and neighbors have a 33% reserve margin (WECC)

Source: TEP 2014 IRP

D I S - I N T E G R AT I O N

solar resource is predictable

D I S - I N T E G R AT I O N

Source: http://ilsr.org/solving-solars-variability-more-solar/

I N T E G R AT I O N C O S T S FA L L W I T H D I S P E R S I O N ( $ P E R M W H )

0

10

20

30

40

1 solar plant 5 solar plants 25 solar plants

$2.70

$10.80

$39.00

D I S - I N T E G R AT I O N

Efficiency/Other 4%

Renewable 4.0%

Coal 80%

Gas 12%

Integration costs are minimal when solar is a tiny fraction of grid resources

0¢

5¢

10¢

15¢

20¢

8.8¢

11.1¢

T U C S O N ’ S A C T U A L C O S T O F S O L A R

cents per kilowatt-hour

U T I L I T Y ( T E P ) C L A I M

11.9¢

adjusted

0¢

5¢

10¢

15¢

20¢

8.8¢

11.1¢

0¢

5¢

10¢

15¢

20¢

4.37¢

11.1¢

T U C S O N ’ S A C T U A L C O S T O F S O L A R

U T I L I T Y ( T E P ) C L A I M M O D E L E D

adjusted

30% tax credit

30% tax credit

11.9¢

Source: System Advisor Model

0¢

5¢

10¢

15¢

20¢

8.8¢

11.1¢

0¢

5¢

10¢

15¢

20¢

4.37¢

11.1¢

0¢

5¢

10¢

15¢

20¢

Utility scale solar

Residential Commercial Prairie Fire Solar

Green Valley

5.7¢

9.6¢

T U C S O N ’ S A C T U A L C O S T O F S O L A R

U T I L I T Y ( T E P ) C L A I M M O D E L E D A C T U A L ( P I M A C O U N T Y )

adjusted

C R E D I B I L I T Y G A P

30% tax credit

30% tax credit

11.9¢

0¢

5¢

10¢

15¢

20¢

8.8¢

11.1¢

0¢

5¢

10¢

15¢

20¢

4.37¢

11.1¢

0¢

5¢

10¢

15¢

20¢

Utility scale solar

Residential Commercial Prairie Fire Solar

Green Valley

5.7¢

9.6¢

T U C S O N ’ S A C T U A L C O S T O F S O L A R

U T I L I T Y ( T E P ) C L A I M M O D E L E D A C T U A L ( P I M A C O U N T Y )

adjusted

30% tax credit

30% tax credit

11.9¢

SOLAR SAVINGS OVER GAS

W AT E R

W AT E R I S L I M I T E D

• Central Arizona Project has lowest water rights from Colorado river

• Water storage will cover shortage but less water sales mean higher rates

L O T S O F W AT E R F O R P O W E R

T U C S O N W AT E R U S E

TEP 15%

85%

M I N N E A P O L I S : A M O D E L C I T Y- U T I L I T Y PA R T N E R S H I P ?

A S I M I L A R C H A L L E N G E

Minneapolis Energy Options

Taking charge of our energy future

G R A S S R O O T S A C T I O N

Clean Local Equitable Affordable Reliable

Minneapolis Energy Options

Taking charge of our energy future

E N E R G Y O P T I O N S 2 0 1 2

Franchise • 20 years • $23 million for city

general fund • expiring 2014

Municipal utility

O R G A N I Z I N G L E D T O O P T I O N S

Franchise reform Community Choice Aggregation

Partnership

E N E R G Y O P T I O N S 2 0 1 4

Franchise • 20 years • $23 million for city

general fund • expiring 2014

Municipal utility

C I T Y- U T I L I T Y PA R T N E R S H I P

2 - Y E A R W O R K P L A N Minneapolis Energy Options

Taking charge of our energy futureB +

Building benchmarking

Community-driven energy efficiency

Community solar

LED streetlights

Pay back on the bill

C O N S TA N T V I G I L A N C E

W H Y F O C U S O N L O C A L P O W E R ?

$48 billion at stake

S O L A R I S VA L U A B L E

0¢

2¢

4¢

6¢

8¢

10¢

12¢

14¢

Energy

Gen. capacity

Environment

T&D Deferral

Loss Savings

12.8¢

(per kWh)

Source: The Value of Distributed Photovoltaics to Austin Energy and the City of Austin

Austin Energy Value of Solar Tariff

$0.00

$0.03

$0.06

$0.08

$0.11

$0.14

Brown energy replacement

Avoided transmission losses

Environmental (RPS compliance)

Avoided transmission access

Local capacity value

(per kWh)

Palo Alto CLEAN Program

13.5¢

$0.00

$0.03

$0.06

$0.08

$0.11

$0.14

Brown energy replacement

Avoided transmission losses

Environmental (RPS compliance)

Avoided transmission access

Local capacity value

(per kWh)

Minnesota Value of Solar

12¢

C O S T S H I F T ?

0

3

6

9

12

Value of solar (MN)

Net metering payment

(MN)

Solar producers provide subsidy for

non-solar ratepayers

L O C A L P O W E R VA L U E

Over 25 years, locally owned = $5 million of electricity spending in local pockets.

Source: NREL JEDI economic model

1 Megawatt

$2.5 million dollars and 20 construction jobs

L O C A L P O W E R VA L U E

Not local

0 25 50 75 100

very negative negative neutral positive very positive

Comparing two towns with nearby wind projects. When one is locally owned, it means…

L O C A L P O W E R VA L U E

Supporting increased use of local wind energy

Not local

0 25 50 75 100

very negative negative neutral positive very positive

-44%

+33%

+77% net approvalLocal

Ownership

Other 54%

Individuals & Farmers 46%

Germany’s Energy Revolution Still People Powered

29,000 MW

20% renewable

T H E F U T U R E F O R L O C A L E N E R G Y

EQUITABLELOCALLOW-

CARBONEFFICIENTFLEXIBLE LOW-CARBONEFFICIENTFLEXIBLE LOCAL EQUITABLE

FIVE PILLARS OF ENERGY DEMOCRACY

“Utility 2.0” pillars

$48 billion opportunity

“Utility 3.0”

E N E R G Y D E M O C R A C Y I N A C T I O N

INDEPENDENTLOCAL GRID

MANAGER

= super efficient buildings

L O C A L P O W E R O P P O R T U N I T Y

S A N TA F EB O U L D E R

2x Coal

same

LEVERAGEUtilitiesCities

need

www.ilsr.org

R E A D M O R E

@johnffarrell

F O L L O W A L O N G