HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 05/11/2010 - OVERVIEW OF PLATTE RIVER POWER AUTHORITY OPERATION DATE: May 11, 2010
STAFF: Brian Janonis WORK SESSION ITEM
Steve Catanach FORT COLLINS CITY COUNCIL
Pre-taped staff presentation: available
at fcgov.com/clerk/agendas.php
SUBJECT FOR DISCUSSION
Overview of Platte River Power Authority Operations and Planning.
EXECUTIVE SUMMARY
This is the second of a two-part discussion on Platte River Power Authority(Platte River). The first
discussion on December 8, 2009, focused on the organization of Platte River by the four
municipalities of Estes Park, Fort Collins, Longmont, and Loveland. Topics included governance
structure as defined by the Organic Contract, the role of the Board of Directors, municipal
representation,significant Platte River governing policies and communications between Platte River
and the City Council.
This presentation will focus on Platte River's generation resources, including renewable energy
sources, demand side management and energy efficiency programs, emissions, and its Climate
Action Plan. Platte River will discuss how its operations have changed in response to the changing
environment.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
• Is there any additional information Council would like to see?
BACKGROUND / DISCUSSION
BRIEF HISTORY
Platte River Power Authority ("Platte River") was formed as a power authority in 1975 through a
contract among the municipalities of Estes Park, Fort Collins, Longmont, and Loveland. Platte
River provides essentially all of the electricity requirements of the Municipalities from generation
and transmission resources developed since 1975. The Municipal utility systems, in turn,provide
electricity to retail customers through their local distribution systems.' Platte River also sells
electricity that is surplus to the Municipalities' needs to other electric utilities in the region. In
addition to supplying electricity, Platte River provides other products and services to the
Municipalities, including demand side management and energy efficiency services, renewable
energy source certification, greenhouse gas emissions reporting and climate registry services,
telecommunications infrastructure, customer information system and billing support, equipment
maintenance support, energy services and market research.
May 11, 2010 Page 2
RESOURCES
Platte River meets the projected power and energy requirements of the Municipalities through the
following resources:
• Long-term hydropower supply (power and energy), received from Western Area Power
Administration pursuant to two long-term contracts (currently to 2024) for electric supply
and transmission service. Summer and winter capacity amounts to about 90 MW and 117
MW respectively.
• Platte River's 18%undivided ownership interest(154 MW net capability share) in the coal-
fired Craig Units 1 and 2, located near Craig, Colorado. These were placed in commercial
operation in 1980 and 1979, respectively, and are owned jointly with four other regional
utilities.
• Rawhide Unit 1, a 280 MW net capability coal-fired electric generating facility, located at
Rawhide Energy Station in northeastern Larimer County, Colorado, which commenced
commercial operation in March 1984. Rawhide Unit 1 is wholly-owned and operated by
Platte River.
• Wind turbines located at the Medicine Bow Wind Project, owned and operated by Platte
River,and the Silver Sage Wind site,through long-term purchase contracts(to 2029). Total
rating of these two wind turbine plants is approximately 20 MW. Renewable energy
certificates(RECs)are also purchased from wind sites in the region. Since wind generation
does not contribute capacity at time of system peak, it is considered an energy resource.
• Natural gas combustion turbines (Units A, B, C, D and F) located at the Rawhide Energy
Station. These turbines are owned and operated by Platte River,with a total capacity of 388
MW (summer rating).
A detailed breakdown of energy supplied to Fort Collins from each of these resources is provided
in Attachment 1. Renewable energy (hydropower and wind combined) provides over 20% of the
total supply to the City.
RENEWABLE ENERGY PLANNING
Planning for renewable energy supply is guided by a Renewable Energy Supply Policy (Policy),
approved most recently by the Platte River Board of Directors in July 2007. This Policy is intended
to guide Platte River as it plans for and acquires new renewable sources to meet the needs of the
Municipalities. Guidance is provided regarding the level of renewable sources to be obtained, the
type of sources considered acceptable to meet the Municipalities' renewable requirements, the
anticipated impacts of renewable sources on future resource planning, the timing of resource
acquisition and the approach to be used for pricing renewable sources for sale to the Municipalities.
All of the Municipalities offer renewable energy as an option to their customers and the rate for
renewable supply is the same for all Municipalities. This rate is based on the total net cost to
acquire and deliver renewable supply (not including hydropower). This rate is charged as a
premium to the standard wholesale electric rate, since the renewable sources acquired to date are
more costly than traditional sources. Common pricing allows each municipality to retain the
benefits of renewable supply based on its individual purchases. Fort Collins uses nearly half of the
total energy supplied to the four communities, but purchases about 70% of the total renewable
supply. This means that 70% of the benefits of renewable energy sources accrue to Fort Collins.
May 11, 2010 Page 3
These benefits include greenhouse gas emission reductions associated with use of renewable energy
and may include other benefits in the future.
The most recent addition to renewable energy supply was made in October 2009, with start-up of
the Silver Sage Project. The current renewable energy forecast(four Municipalities combined)calls
for the next addition to be acquired in approximately 2014. Each of the Municipalities could
individually request more renewable supply if it saw fit to do so. For 2010, energy sources will
comprise about 42%of total renewable supply,with RECs supplying 58%. By 2014,energy sources
are planned to meet about 60% of total supply and by 2020, this portion increases to over 80%.
Platte River tracks local and regional renewable project developments and provides information to
the Municipalities regarding potential new options for renewable supply. A copy of the Renewable
Supply Policy is included as Attachment 2. .
DEMAND SIDE MANAGEMENT/ENERGY EFFICIENCY
Platte River currently invests significant resources in Demand Side Management(DSM),which can
include energy efficiency,peak clipping,distributed generation and other technologies that exist on
the customer side or"demand side"of the retail electric meter. Most of Platte River's current DSM
activities are focused on energy efficiency. The 2010 budget for DSM funded by Platte River is
approximately$1.9 million-roughly triple the investment made five years ago. DSM investments
by Platte River have been primarily based on Platte River's Integrated Resource Plans (IRPs).
Two broad categories of DSM programs are in place: (1) "Common Programs"—those operated
by Platte River in each of the Municipalities and funded jointly by Platte River and the
Municipalities, and (2) Specific Municipal Programs—unique to each Municipality. Attachment
3 provides a detailed list of DSM programs. Common Program performance has exceeded
expectations set by the two most recent IRPs (2002 and 2007), as indicated from the following
metrics:
• Energy savings exceed expectations by 70%
• Demand savings 30% greater than predicted
• DSM program investment 12% greater than projected
• Cost per unit of energy saved 35% less than predicted
A description of the Common Programs currently operated by Platte River is given below. A total
of seven programs are provided—four in the commercial sector and three primarily for residential
customers.
• Electric Efficiency Program(EEP)—Rebates and technical assistance for energy-efficient
upgrades in commercial and industrial facilities.
• LightenUP — Rebates and technical assistance to customers and referrals to experienced
contractors for lighting retrofits (commercial and industrial).
• Lighting with a Twist — Reduced prices on compact fluorescent light bulbs sold at
participating retailers (residential customers).
May 11, 2010 Page 4
• Building Tune-Up — Assistance to commercial customers for retro-commissioning of
building systems.
• Energy Audits — Audits and technical information for commercial customers to identify
efficiency projects.
• Select Heating Ventilation and Air Conditioning (HVAC) —Regional effort to provide
training and other support for HVAC contractors (residential and small commercial).
• ENERGY STAR Homes—Marketing and technical support for ENERGY STAR qualifying
new homes.
The Common Programs have provided the following benefits: _
• Lower Emissions—Regional carbon dioxide (CO2)reduction of about 40,000 metric tons
annually, with additional reductions of other criteria emissions (oxides of nitrogen(NOx),
sulfur dioxide (SO2), etc.).
• Reduced Fuel—Natural gas and coal consumption has been decreased by about 500,000
million BTU annually (combined Platte River and region).
• Reduced Community and Customer Energy Use—Electricity use in the four communities
(combined) decreased by about 55,000 MWh/yr (about 1.8% of 2009 total) and customers
participating in programs reduced their electricity costs by about $3 million annually.
• Reduced Net Community Energy Cost — It is estimated that wholesale rates would
increase about 1.3%within 5 years(2014)due to current DSM programs,but total purchases
by the municipalities would be about 2.2%less. Therefore,the communities' payments for
electric supply would actually decrease.
• Local Economic Benefit—Approximately$20 million in local economic activity has been
initiated due to investment in DSM projects.
• Customers Served — An estimated 30,000 to 50,000 residential customers and over 600
local business customers in the member municipalities have participated in the current
programs.
• Delayed Generation Investment—Programs have delayed the need for new generation by
about one year. By 2014,the delay is estimated to be about two years(current DSM levels).
Each year, DSM data is provided to the Western Area Power Administration, as part of the IRP
reporting process required by the Energy Policy Act. For the most recent reporting year (2008),
combined DSM programs for Platte River and the owner Municipalities provided energy savings
of about 58,000 MWh/yr, with summer peak demand reduction of about 29 MW. These represent
about 1.8%of total energy sales to the Municipalities and about 4.6%of the Municipalities' annual
peak (2008).
May 11, 2010 - Page 5
Funding of Common DSM programs is summarized in Attachment 4. Approximately $7 million
has been invested by Platte River in DSM support to the Municipalities for 2002 through 2009. Fort
Collins customers have received more funding relative to sales and the other three municipalities'
customers have received relatively less. This is due primarily to more aggressive marketing of
programs in Fort Collins (by Fort Collins Utilities). Each Municipality makes its own choices
regarding costs and benefits of energy efficiency and decides the level of program funding it wishes
to implement above and beyond the common programs operated by Platte River. Fort Collins has
made extensive investment in energy efficiency to help its citizens and businesses. The main benefit
of DSM programs in Fort Collins goes directly to Fort Collins Utilities' customers. When FCU and
its customers invest in energy efficiency programs, FCU customers receive the physical
improvements to their homes and businesses (better insulation, new windows, improved lighting,
new appliances, etc.) and only FCU customers get the improved comfort and lower electric bills
associated with the program measures.
ENVIRONMENTAL PERFORMANCE/STEWARDSHIP
Highlights of Platte River's historical record and current activities in the area of environmental
performance are summarized below. These are in addition to the renewable energy and energy
efficiency program details provided earlier.
• Platte River is guided by a Board-approved Environmental Policy and set of Environmental
Principles that integrate environmental considerations into planning, design, construction
and operations (see Attachment 5).
• Platte River is the only electric power supplier in the state of Colorado to maintain 100%
environmental compliance in all operations since inception.
• The Rawhide and Craig coal facilities operate with S02 and NOx emission rates that are
among the lowest in the U.S. (see Attachment 6).
• In 1998, Platte River was the first utility in the region to provide wind power (from the
Medicine Bow Wind Project) — to supply Fort Collins initially, then for supply to all the
Municipalities in 1999.
• Since 1997,Platte River has voluntarily reported greenhouse gas emissions and became the
first utility outside of California to join the Climate Action Registry—Platte River has also
since joined the national climate registry as a founding member.
• Platte River was the first municipal generator in the state to develop a Climate Action Plan
that outlines specific options for reducing CO2 emission to 20%below the level for 2005
by 2020 — the plan shows that a large portion of the reduction goal could be met with
increased energy efficiency and new renewable energy.
• To reduce waste from used compact fluorescent lamps (CFLs), Platte River worked with
regional entities to establish a CFL recycling program. This was a joint program with Fort
Collins, Xcel, Colorado Department of Public Health & Environment, EnCana Oil & Gas,
ACE Hardware, and other local retailers.
May 11, 2010 Page 6
• With goals of avoiding disposal costs and saving natural resources, Platte River is working
to develop new uses for fly ash, the powdery material that is the main by-product of coal
combustion. A portion of fly ash is now sold for beneficial use, including displacement of
a portion of the cement in construction materials, which saves money and reduces CO2
emissions. During 2009, about 17% of the fly ash was sold for beneficial use.
• An employee-run program for enhancing sustainability in Platte River's offices has
identified many options for reducing greenhouse gases and saving resources, including
reduced paper usage,building efficiency improvements,and reduced computer energy use.
Prior to formation of the team, Platte River recycled yard waste, scrap metal and mixed
office waste for over a decade.
• Alternative vehicles and transportation have been supported by Platte River for decades,
including testing of alternative fuel vehicles, bicycle commuting and promotion of ride
sharing. Through the Larimer County Smart Trips VanGo program,employees drove 84,000
fewer miles, saved about 3,600 gallons of fuel and reduced CO2 by 36 tons during 2008.
Platte River also continues its initiative to replace gasoline-powered service trucks used at
its Headquarters and Rawhide sites with electric carts. The addition of eleven new carts in
2009 will further reduce gasoline consumption, regulated emissions and CO2 emissions.
• Platte River supports the Climate Savers Computing Initiative—focused on energy reduction
in distributed and server systems. The ultimate goal is to reduce computer power
consumption by 50%.
• Since 2001, Platte River has provided over$44,000 to the Municipalities for planting trees
in parks, along streets and at schools. Platte River was recognized for its efforts in a 2009
Fort Collins Arbor Day Proclamation.
• Platte River has participated in the Climate Wise program since its inception and is currently
a Gold Level member.
• Platte River initiated a voluntary emissions reduction agreement (VERA)with the State of
Colorado for the Rawhide Energy Station, which led to reductions in SO2 and NOx
emissions. As part of the VERA, new burners were installed in 2005 which reduced NOx
emissions by over 40%. About $6 million was invested in this voluntary effort.
• Platte River also voluntarily agreed to reduce mercury emissions —two years earlier than
required. Platte River installed a state-of-the-art continuous emissions monitoring system
and began detailed measuring of mercury more than a year before it was required. The
improved measurement technology shows mercury emissions are only about half of what
was estimated using older measurement technology. Platte River's total investment in
mercury measurement and control is expected to exceed $22 million by 2020 (capital and
operating costs combined).
• Platte River recently was selected for the Environmental Leadership Program Silver Award
from the Colorado Department of Health and Environment. No other generation utility has
received this level for all operations.
May 11, 2010 Page 7
• Platte River's investments in energy efficiency,recycling,renewable energy and power plant
performance enhancements exceed $60 million over the last 10 years.
Platte River will continue to be proactive in evaluating and implementing improvements in its
operations that balance environmental, social and economic perspectives.
CLIMATE ACTION PLAN
In 2007, the Governor of the State of Colorado issued the Colorado Climate Action Plan, which
included a goal of reducing statewide greenhouse gas emissions to 20 percent below 2005 levels by
2020 and 80 percent below 2005 levels by 2050. To meet the 2020 goal, Platte River would need
to reduce carbon dioxide emissions by approximately 700,000 metric tons. The Governor's Energy
Office asked the state's electric utilities to voluntarily develop plans to meet these targets using
approaches specific to each utility's unique circumstances. In June 2009, Platte River completed
its first Climate Action Plan (CAP). A consultant was hired to assist in the CAP development
(KEMA, Inc.). Nine public events were conducted to share the draft plan with citizen advisory
groups, large customers (key accounts) and the general public. Once completed, the final CAP
document was distributed to the Governor and other interested parties and is currently available in
electronic format on Platte River's web site or in hard copy upon request. The Executive Summary
from Platte River's CAP is provided as Attachment 7. The full report can be accessed at:
www.prpa.org/enviromnent/i/capjune2009.pdf
Based on the 2009 CAP study effort, a 20% reduction by 2020 appears possible for Platte River.
The three lowest cost options for meeting this reduction include: (1)reduced reserve surplus sales,
(2)increased energy efficiency programs for retail customers,and(3)additional central station wind
generation. Each of these options could reduce coal generation levels, directly reduce emissions
from Platte River resources,decrease surplus sales and increase wholesale rates. Reductions in coal
generation were assumed to take place at Craig. These three measures were estimated to reduce
total emissions by about 23%, with an estimated wholesale rate increase of about 16% by 2020.
This increase would be in addition to rate increases required for the base case planning scenario.
Since the 2009 CAP was completed,Platte River continues to track legislative and regulatory efforts
associated with carbon policy and has developed estimates of potential costs for various federal
legislative proposals. Based on work by the American Public Power Association (APPA), Large
Public Power Council (LPPC), Colorado Association of Municipal Utilities (CAMU) and other
groups, it appears that federal cap and trade legislation could increase wholesale costs by as much
as 70% by 2020, depending on the amount of CO2 emission allowances allocated to electric
generators and associated allowance prices. In addition,Platte River has contributed to an effort by
the Governor's Energy Office to develop a summary report on policy issues for electric generators
throughout Colorado. Energy efficiency efforts also continue,with program savings well ahead of
estimates made in Platte River's 2007 Integrated Resource Plan(a five-year plan for 2007 to 2011).
Additional wind generation was added in late 2009, at the Silver Sage Wind Project west of
Cheyenne,Wyoming. Finally,a preliminary evaluation of reserve sale changes has been completed,
which indicates that a portion of reserve energy sales reductions may need to come from Rawhide
(vs. all reductions occurring at Craig). This has only a minor effect on the overall results.
Recently, Platte River staff evaluated three options for reducing or replacing coal generation at the
Craig and Rawhide units with natural gas-fired generation sources. Increased costs for these
May 11, 2010 Page 8
measures ranged from$89 million/year to about$280 million/year,with CO2 reductions from 32%
to 57%. Wholesale rate increases required to implement these options ranged from 44%to 140%.
For a typical residential customer,this would mean the monthly rate would more than double,with
costs to an average home increasing by about$60-70 per month. Costs for commercial,institutional
and industrial customers would also increase by more than double relative to today's costs.
A copy of the draft study is provided as Attachment 8.
Platte River's CAP was developed as a planning tool. Beyond energy efficiency program expansion
and recent renewable energy additions,no additional CO2 reduction measures have been budgeted
for 2010 and beyond. Platte River's Board of Directors will continue to review developing climate
change issues and make policy and budget decisions associated with future implementation of
options.
FUTURE CHANGES
Looking forward,Platte River is working with the Municipalities to track several developing areas,
including Smart Grid technology, demand side management and energy efficiency,Climate Policy,
environmental regulations,evolution of electric vehicle technology,renewable energy development
and evolution of distributed generation sources. To stay abreast of developing issues, Platte River
maintains positive relationships with the Governor's Energy office,state agencies,regional utilities
and other groups.
Coalitions are a cost effective way to increase knowledge of developments as they occur and to
increase responsiveness. Platte River works with a variety of local, state, regional and national
coalitions, including the local Chambers of Commerce, the Colorado Utilities Coalition, the
Colorado Association of Municipal Utilities, the Colorado Municipal League, the Colorado
Association of Commerce and Industry,the Western Energy Supply and Transmission Association,
the Large Public Power Council, the Western Governors Association, the Colorado River Energy
Distributors Association,the Colorado Energy Forum,the American Public Power Association and
the Climate Policy Group. Platte River staff maintains knowledge of developing issues through
these groups and through training via the Rocky Mountain Electric League and other resources.
Platte River will continue to work closely with the Municipalities to plan for the future and meet its
ongoing strategic business objectives (summarized below):
• Delivering value to the Municipalities and their citizens — by understanding their needs,
improving satisfaction through quality services,and developing new products and services.
• Providing a competitively priced wholesale electric energy supply and delivery system —
through optimizing the resource mix,efficiently managing costs while maintaining reliability
and continuing the commitment to environmental stewardship.
• Ensuring financial integrity — by maintaining access to low-cost capital, responsible
management of financial and physical assets, risk management, timely business analysis,
prudent investment and capital management.
Platte River management will be available to answer questions on the topics presented above or
other areas of interest during the May 11 City Council Work Session.
May 11, 2010 Page 9
ATTACHMENTS
1. Sources of Power and Energy supplying Fort Collins
2. Platte River Renewable Energy Supply Policy
3. Demand Side Management/Energy Efficiency Program Summary
4. DSM Program Funding
5. Platte River Environmental Policy& Principles
6. Emissions Comparisons for Rawhide and Craig
7. Platte River Climate Action Plan Executive Summary
8. Preliminary Study of Gas vs. Coal Generation
9. Powerpoint presentation
Attachment 1 — Fort Collins Wholesale Supply Mix — 2009
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Attachment 2—Platte River Renewable Energy Supply Policy(last approved July 2007)
Platte River Power Authority
Renewable Energy Supply Policy
July 12, 2007
INTRODUCTION
Since 1998, Platte River has provided renewable energy to the Municipalities from the Medicine Bow
Wind Project. The energy generated at the Medicine Bow site supplements hydropower purchased from
Western Area Power Administration (WAPA), which is also a renewable resource. As the needs of the
Municipalities have increased, new options for meeting renewable requirements have been identified. For
2005, the level of non-hydro renewable supply provided was less than 40,000 MWh,or about 1.6% of
total energy sales to the Municipalities. In 2007, about 127,000 MWh is expected to be delivered
(roughly 4% of total Municipal energy sales). Current forecasts anticipate requirements for new
renewable energy from sources other than WAPA hydropower of about 211,000 MWh/yr by 2016(10
years out) and about 463,000 MWh/yr by 2026(20 years into the future).
This Policy is intended to guide Platte River as it plans for and acquires new renewable sources to meet
the needs of its Municipalities. These plans will be reviewed periodically and updated as conditions
change over time. The Policy provides guidance regarding the level of renewable sources to be obtained,
the type of sources considered acceptable to meet the Municipalities' renewable requirements, the
anticipated impacts of renewable sources on future resource planning,the timing of resource acquisition
and the approach to be used for pricing renewable sources for sale to the Municipalities.
RENEWABLE REQUIREMENTS
Renewable energy requirements of the Municipalities are driven by several factors:
• Fort Collins'Electric Energy Supply Policy—Approved by Fort Collins City Council in March of
2003,this policy seeks to increase the percentage of renewable energy sold within Fort Collins to
15% by the year 2017.
• Longmont Renewable Energy Purchases—In December 2006, the Longmont City Council approved
purchase of renewable energy at a level equal to 3% of total sales for inclusion in the rate base.
Voluntary customer purchases are made above this level, leading to a total renewable requirement of
about 3.6% in Longmont (2007).
• Colorado Renewable Energy Standard—Amendment 37 was approved by voters in November 2004
and subsequently modified by Senate Bill 05-143 in 2005. In 2007, House Bill 07-1281 was
implemented,establishing the current Colorado renewable energy standard. Many providers of retail
electric service in Colorado must deliver clearly defined levels of renewable resources to their
customers by specified dates. Plans in both Fort Collins and Longmont currently require renewable
energy at levels significantly above the Colorado standard. Loveland and Estes Park are not currently
affected by this standard.
• Voluntary customer participation—Though there is currently no requirement that renewable
standards be implemented in Loveland and Estes Park,customers of these Municipalities continue to
purchase renewables on a voluntary basis. Additional renewable sources may be required for any or
all of the Municipalities, particularly if large commercial or industrial customers decide to purchase
renewable energy based on corporate or local goals.
1
Table 1 provides a summary of projected total renewable requirements for the four Municipalities, based
on current estimates for the factors above, with the exception of potential large commercial and industrial
purchases on a voluntary basis. Existing sources and estimates of net remaining needs are also shown.
Renewable energy comprises about 6% of total energy distributed by Fort Collins in 2007, and the City
intends to distribute 10%by 2014 and 15% in 2017. Longmont anticipates maintaining a level of at least
3.6%through 2016, 6% by 2017 and 10% by 2022. Loveland and Estes Park do not anticipate significant
requirements of new renewables at this time. Table 1 provides a current year and 10-year estimate of
future requirements for general planning purposes. Actual renewable resource acquisitions over time will
be determined based on the current Colorado renewable energy standard and formal requests from the
Municipalities (see Guidelines for Acquiring Future Renewable Sources below).
Table 1. Summary of Estimated Renewable Energy Requirements
Equiv.
New New
Estes Total Existing Sources Wind
Fort Collins Longmont Park Loveland Required Sources RequiredCapacit
Year (MWh) (MWh) (MWh) (MWh) (MWh) (MWh) (MWh) (MW)
2007 93,000 30,000 961 4,700 128,661 128,779 0
2008 93.000 30.000 961 1.000 124,961 125,779 0
2009 95,000 31.000 961 1,000 127,961 128,779 - 0
2010 96,000 31,000 961 1,000 128,961 75.779 53,182 17
2011 96,341 32,000 961 1,000 130,302 75,779 102,694 18
2012 98,318 32,000 961 1,000 132,279 51,779 129,660 26
2013 100,296 32,000 961 1,000 134,257 51,779 132,625 27
2014 170,455 32,000 961 1,000 204,416 51,779 186,728 50
2015 173.864 32,000 961 1,000 207,825 51,779 190,819 51
2016 177,341 32,000 961 1,000 211,302 16,779 229,991 63
2017 271,332 58,992 961 1,000 332.285 16,779 315,506 103
Note that the last column indicates the size of wind plant capacity required to provide the renewable
energy requirements-assuming energy requirements are met 100% with wind plant at a 35%capacity
factor. This is estimated information, for planning purposes only. Renewable requirements outlined
above could be met with one or more of multiple sources (wind or other energy sources, RECs, etc.), as
described in the next section.
The Colorado renewable energy standard currently applies to Fort Collins and would likely apply to
Longmont in 2010. It would likely not apply to Loveland until about 2020 and Estes Park would not be
impacted for over 20 years (under current rules). All four member Municipalities are currently
purchasing renewable energy at levels above the Colorado renewable energy standard. Figure 1 shows
the difference between the Municipalities purchase plans and the Colorado renewable energy standard
requirements, which ranges from about 80% in 2008 to roughly 50% in 10 years (2017). By 2026(20
years from now), the difference is less than 25%.
2
Figure 1—City Policies vs. Colorado Renewable Energy Standard
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300,000
250,000
200,000
—City Policy
150,000 CO Standard
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50,000
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DEFINITION OF QUALIFIED RENEWABLE ENERGY SOURCES
Though federal hydropower provides a significant portion of the Municipalities' energy, for purposes of
this Policy, federal hydropower is not considered a qualified renewable source. Distributed generation,
fuel cells supplied with fossil fuels, demand side management,ethanol and biodiesel fired generation are
also not considered qualified.
Qualified Renewable Energy Sources include those listed below and energy generated for delivery to
Platte River's electrical system from any of these sources may be counted toward the renewable
requirements. These qualifications are consistent with the current Colorado renewable energy standard.
• Solar systems (photovoltaic or thermal electric)
• Wind turbines
• Geothermal systems
• Biomass generation systems
• Hydroelectric units with a nameplate rating of ten megawatts or less
Fuel for biomass generation systems is limited to nontoxic plant matter consisting of agricultural crops or
their byproducts, urban wood waste, mill residue, slash or brush,animal wastes and products of animal
wastes and methane produced at landfills or as a by-product of the treatment of wastewater residuals.
Renewable Energy Certificates (RECs) associated with generation from any of the qualified sources listed
above may also be used to meet renewable requirements. RECs represent the rights,title and interest in
environmental attributes associated with energy produced from a renewable energy generation facility.
"Environmental attributes" means any credits, benefits,emission reductions, offsets or allowances
resulting from avoidance of emission of any gas, chemical or other substance attributable to renewable
generation. These include any benefits or credits arising from legislation or regulation concerned with
oxides of nitrogen or sulfur, particulate matter or mercury. Benefits or credits associated with reduced
3
production of carbon dioxide(greenhouse gas benefits) are also included, though it is unclear whether
future regulations will allow RECs to be counted toward greenhouse gas reduction requirements. RECs
also include the rights to report exclusive ownership of environmental attributes to any agency, authority
or other party. One REC represents the environmental attributes attributable to the generation of one
MWh of energy from specific renewable sources. These attributes are available primarily due to the fact
that the renewable resource displaces fossil fueled generation(coal and natural gas) and reduce associated
environmental impacts.
For purposes of this policy, RECs must meet the following additional requirements to be considered
qualified:
• Generation facilities must be located within the western electrical grid (WECC), or within non-
WECC states contiguous to Colorado(Nebraska, Kansas and Oklahoma).
• Generation facilities must begin commercial operation on or after January 1, 1997, with the exception
of existing small hydropower units.
• Generation of renewable energy must occur within the calendar year that the equivalent amount of
energy (with associated environmental attributes)is delivered to the Municipalities, within the last
two quarters of the prior year,or within the first quarter of the following year,consistent with Green-e
standards.
• Renewable generation output solely required to comply with a renewable portfolio standard or other
renewable energy requirement of a federal authority or state authority other than the State of Colorado
will not be considered qualified.
• Renewable generation capacity that comes on line solely to comply with a mandate by a public
utilities commission ruling,or as a quid pro quo component of a legal settlement, will not be
considered qualified.
Platte River will be responsible for acquiring all RECs and other resources associated with renewable
energy deliveries to the Municipalities. Platte River will also be responsible for assuring that RECs meet
the qualifications contained in this policy.
Renewable sources used to meet the Municipalities' requirements currently include the following (for
deliveries planned in 2007 through 2009):
1. Energy generated from Vestas wind turbines, located at the Medicine Bow Wind Project site,
owned and operated by Platte River(along with environmental attributes). Energy is transmitted
to Platte River's electrical system, for delivery to the Municipalities. Approximately 13% of the
total supply for 2007 is from this source.
2. Energy purchased from wind turbines that are not owned and operated by Platte River(along with
environmental attributes),with energy transmitted to Platte River's electrical system, for delivery
to the Municipalities. Purchases from the Clipper turbine are an example of this source. About
4%of supply is from this source(2007).
3. RECs purchased from renewable resources that are not owned and operated by Platte River, with
no associated energy transmission. RECs are combined with energy produced by Platte River's
generation sources and delivery is made to the Municipalities. RECs are used once and retired
upon sale to the Municipalities. Approximately 83% of 2007 supply is from this type of source.
GUIDELINES FOR ACQUIRING FUTURE RENEWABLE SOURCES
Each type of renewable source comes with unique benefits and risks. Ownership provides stable long-
term energy supply and can provide direct emission reductions: risks include post-warranty component
4
failure (gearboxes,generators, etc.) and reduced payments from the Renewable Energy Production
Incentive program (federal subsidies for wind). Energy purchases (via long-term contracts with
developers)can also provide emission reductions and stable long-term supply, with fixed contract rates.
These type purchases can mitigate the risk of losing federal subsidies (developers receive credits through
the tax law) and can also reduce the risk of component failure costs (the risk is on the developer rather
than Platte River).
REC-based sources are currently the lowest cost option in the short term and RECs cause no adverse
impact on electric system operations. However, RECs provide no energy that may be useful to mitigate
future fuel cost risk and RECs may not help address future legislation and/or regulations for carbon
emissions (greenhouse gas rules) since they provide no energy to displace fossil fuel generation.
Renewable markets today generally accept RECs as providing carbon reduction benefits. However,
future regulations may not directly tie carbon reduction benefits to REC ownership. Another risk with
RECs is significant price escalation if supplies become limited. This has happened in limited cases to
date(mostly in the eastern U.S.), but may become more widespread as demand for renewable sources
increases over time. Finally, long-term REC purchases are limited at this time, and therefore RECs may
not provide the same price stability available from ownership of plant or from energy-based purchase
contracts.
Platte River's resource planning philosophy for firm resources is grounded in a long-term perspective, to
ensure that the electricity needs of the Member Municipalities are met over the long-term. It is also
prudent to apply a long-term perspective to acquisition of renewable resources,at least for a portion of the
supply. The goal of this policy is to provide low cost, reliable supply, with price stability over time. The
overall mix of renewable supply should include both long and short-term resources, and should include
RECs and energy sources to provide supply diversity to help optimize benefits of the overall resource
portfolio.
In all renewable resource decisions Platte River will seek to minimize rate impacts (premium levels for
renewable purchases). However, price stability, reliability of supply,counterparty risk and other financial
risks, environmental and other benefits, potential carbon legislation and impact on Platte River's existing
generation and transmission system will also be considered.
Key guidelines for acquiring resources to meet Platte River's total renewable energy supply are as
follows:
• Resource acquisition criteria—New long-term renewable enerev resources should be added
when the total amount of renewable energy required by the current Colorado renewable energy
standard exceeds output capability of existing long-term renewable energy resources. Energy
resources will be acquired to meet the Colorado renewable energy standard and any remaining
amount necessary to meet higher self-imposed standards of the Member Municipalities will be
acquired from REC-based sources.
• Long-term renewable energy resources—These will include ownership of renewable generation
plant from qualified sources or long-term renewable energy purchase agreements with developers
or other suppliers (with a term of 15 years or more).
• Apply in-state resource credits—Consistent with the Colorado renewable energy standard,
potential resources will be evaluated assuming that each kilowatt-hour(kWh) of renewable
energy generated within the state is counted as 1.25 kWh toward the renewable requirement (for
all sources other than solar energy). Every 1.0 kWh of renewable energy generated from solar
electric resources located within Colorado may be counted as 3.0 kWh toward the requirement.
The application of these credits will serve the purpose of making Colorado resources more
competitive.
5
• Amount of resource to add—When a new long-term renewable energy resource is needed, the
size of resource(s) should be sufficient to meet the Colorado renewable energy standard levels for
approximately three years into the future. This will help in smoothing resource planning and
acquisition, given the lead time for resource development. For example, a new resource needed
in 2010 would be sized sufficient to meet the Colorado standard at least through 2012.
If the current Colorado renewable energy standard is replaced or modified by a new state standard or if a
federal standard is implemented that supersedes the current state standard,this Renewable Energy Supply
Policy may be modified.
Each municipality affected by the Colorado renewable energy standard (Fort Collins in 2008 and
Longmont in 2010)can choose whether to use the in-state resource credit in their retail accounting. Key
assumptions related to implementation of credits follow.
• Accounting for the credit is at the retail level
• The credit does not increase the amount of supply—it reduces the requirement
• If the credit is applied, the amount of energy resource acquired at the wholesale level is reduced
• The credit only applies to those cities affected by the state standard
• An individual city can only take the credit in proportion to its renewable purchase commitment
• The credit would be applied to both energy and REC resources located in Colorado
• Voluntary program purchases would not include any credit(they would be 1.0 for 1.0)
If a Municipality chooses to include these credits in their supply requirements, Platte River will assist in
resource accounting to help ensure proper amounts of renewable energy are delivered to the
Municipalities.
RESOURCE PLANNING IMPACTS—FIRM CAPACITY FROM RENEWABLE SOURCES
Most existing renewable sources do not provide reliable capacity at the time of Platte River's system
peak. Wind turbines at the Medicine Bow site have generated less than 10% of their rated output at the
time of peak during six of the nine years of operation. For three of these operating years, the output was
1% or less. Therefore, no capacity from wind turbines is considered available to offset the need for new
firm resources. Since RECs have no impact on system operations, they also do not reduce the need for
new, firm resources.
Geothermal energy is limited in this region and the availability of solar energy is typically low at the time
of system peak. Studies from local photovoltaic(PV) solar sites indicate a capacity value of about 10% to
15% of rated output at time of system peak, and PV systems only produce about 20% of rated power on
average. PV solar is also very expensive relative to other options. Some companies are developing solar
systems based on heat collection and thermal storage, but these systems are limited in commercial
availability at this time and generation costs are uncertain. Biomass and small hydro facilities may
provide capacity during peak times,though small hydro generation options appear limited in the region
and no biomass facilities are currently available. We will continue to monitor developments of these
potential firm renewable sources over time.
RENEWABLE PRICING
This policy requires that pricing for renewable energy be provided through a single rate for all renewable
energy purchased from Platte River by the Member Municipalities. The rate will be based on all net cost
increases incurred by Platte River to acquire and deliver renewable energy (not including WAPA
hydropower). SCHEDULE—TARIFF 7: RENEWABLE ENERGY SERVICE(TARIFF 7) will set
6
pricing for all renewable energy deliveries, incorporating the single rate concept. The rate for TARIFF 7
will be reviewed each year by the Platte River Board of Directors.
Modifications to TARIFF 7 will reflect changes in premium costs for the combined mix of renewable
sources over time. If renewable resources can provide firm capacity value to Platte River system
operations, if carbon regulations are imposed and new renewable energy sources can be used to mitigate
carbon costs,or if renewable sources provide other monetary benefits to Platte River(REPI,etc.), proper
credit will be applied toward TARIFF 7 premiums.
In order to receive service under TARIFF 7, each municipality,shall submit a`Request Letter" stating its
commitment to purchase fixed amounts of renewable energy for specific term. As additional
commitments are made,the Request Letter agreement(s) may be superseded over time. The Request
Letter commitments need to be long-term, to reflect the long-term nature of renewable requirements.
This policy proposes that Request Letters cover commitments for a term of approximately 20 years.
Request Letters must also include, at a minimum, the amount of renewable energy required by the
Colorado renewable energy standard (for those Municipalities affected by the state standard). Where
possible, Request Letters should also include any amount of renewable energy required to meet self
imposed policies or standards of the Municipalities (above amounts required by the Colorado renewable
energy standard). Finally, Request Letters must indicate whether or not a Member Municipality chooses
to include in-state resource credits in their retail renewable standard accounting, as allowed by the
Colorado renewable energy standard, so that Platte River can adjust its deliveries to accommodate this
election.
Once member Municipalities request a quantity of renewable energy (via`Request Letter" agreements as
described herein), Platte River management and staff will be responsible for determining the specific
renewable sources and for acquiring the needed quantity, based on guidance outlined in this policy.
Finally, payment will be made by Platte River to Fort Collins on the net book value of the first two wind
turbines installed at Medicine Bow during 1998. Annual payments will be made through 2017. Fort
Collins originally made capital payment to Platte River for these two turbines. Beginning with generation
on October 1,2006, all future payments from the Renewable Energy Production Incentive program for
these(and all other wind turbines owned and operated by Platte River at Medicine Bow) will be retained
by Platte River.
7
Attachment 3 —DSM Program Summary
RESIDENTIAL PROGRAMS
Platte River Estes Fort
(Common to all) Park Collins Longmont Loveland
Lighting with a Twist Lighting with a Twist Lighting with a Twist Lighting with a Twist Lighting with a Twist
ENERGY STAR Homes ENERGY STAR Homes ENERGY STAR Homes ENERGY STAR Homes ENERGY STAR Homes
Select HVAC Thermal energy storage AC Load Management Energy Audits AC Load Management
Solar PV &wind rebates Solar PV rebates Solar PV rebates
ENERGY STAR Appliances ENERGY STAR Appliances
A/C Tuneup
LED Holiday Lighting
Energy savings rebates
Free weatherization
Refrig/freezer recycling
Zero-Interest Loans
COMMERCIAL/INDUSTRIAL PROGRAMS
Platte River Estes Fort
(Common to all) Park Collins Longmont Loveland
LIGHTENUP LIGHTENUP LIGHTENUP LIGHTENUP LIGHTENUP
Electric Eff. Program Electric Eff.Program Electric Eff. Program Electric Eff. Program Electric Eff. Program
Building Tune-up Retrocommissioning Retrocommissioning Retrocommissioning Retrocommissioning
Energy audits Energy audits Energy audits Energy audits Energy audits
Questline Keep Current PowerSource Questline
Thermal energy storage ElectriConnect ALPS
A/C Tuneup
Integrated Design
1
Attachment 4 — DSM Program Funding
70 %
60 %
50 %
40 % ■ % of DSM
30 % funding
20 % ■ % of Muni sales
10 % d d
0 %
EPLP FCU LPC LWP
Actual Funding ($)
$ 4 , 500 , 000
$ 4 , 000 , 000
$ 375007000
$ 370007000
$ 2 , 500 , 000
$ 270007000 ■ DSM funding
$ 175007000 ■ Muni sales
$ 1 , 000 , 000
$ 500 , 000
$ _ r
EPLP FCU LPC LWP
EPLP — Estes Park Light & Power
FCU Fort Collins Utilites
LPC — Longmont Power & Community
LWP Loveland Water & Power
Attachment 5— Platte River Environmental Policy and Principles
PLATTE RIVER POWER AUTHORITY
ENVIRONMENTAL POLICY AND PRINCIPLES
POLICY STATEMENT
Platte River provides reliable, low-cost electricity in an environmentally responsible manner to
its owner communities of Estes Park, Fort Collins, Longmont and Loveland. Depending on
water storage conditions, over one-quarter of the municipalities' electrical energy requirements
are served from renewable resources including hydropower and wind. Platte River's other
energy resources include coal and natural gas.
Platte River uses state-of-the-art air quality control systems at its power generation stations and
meets or exceeds all applicable environmental laws and regulations. As new legislation and
regulations are proposed, Platte River participates in public processes and supports additional
control requirements where costs are commensurate with measurable environmental benefits.
In addition, as technology improves and opportunities arise,Platte River will be proactive in
evaluating and implementing improvements in its power operations that balance
environmental and other socio-economic concerns.
PRINCIPLES
1) Platte River will consider environmental factors as an integral part of planning, design,
construction,and operating decisions.
2) Platte River will reinforce environmental compliance through program reviews,
training, and by communicating environmental values throughout the organization.
3) Platte River will encourage public participation in planning for the location of major
facilities as a means of avoiding and resolving conflicts and to achieve a balance between
the need for economic electric supply and environmental quality.
4) Platte River will conserve natural resources such as water,soils, grasslands, and wetland
areas through efficient use and careful planning. Where needed,Platte River will restore
land disturbed by its operations or construction.
5) Platte River will encourage employees to bring environmental issues forward to assure
Platte River's compliance with applicable laws,rules, regulations, and permits.
6) Platte River will strive to reduce environmental health and safety risks to its employees
and the communities in which it operates by (i) maintaining safe and healthful working
conditions, (ii) the design and operation of its facilities, and (iii) being prepared for
emergencies.
7) Platte River will manage the disposal of waste material in an environmentally
responsible manner, will recycle the materials it uses whenever possible, and will use
1
recycled materials where appropriate.
8) Platte River will work with its customers to support cost-effective programs to conserve
energy.
9) Platte River will coordinate its generation and transmission planning with neighboring
utilities to minimize over building or under utilization.
10) Platte River will consider environmentally progressive technologies such as wind, solar
power, or other renewable technologies to meet its future generation needs.
2
Attachment 6 — Emission Performance for Rawhide and Craig Units
S02 Emission Performance — Near lowest in the U. S.
5 . 00
m 4 . 00
0
- Jgp
3 . 00
a� Rawhide
0. 078
N 2 . 00
O
U) Average 1 . 084
1 . 00
0 . 00
NOx Emission Performance — Near lowest in the U. S.
1.2
i.i
1.0
m 0.9
c
O
0.8
E Rawhide
07 0. 161
0.6
X 0.s
O
z 0.4 Average 0 . 340
0.3
01
01
0.0
Attachment 7 — Platte River Climate Action Plan (Executive Summary)
EXECUTIVE SUMMARY
Platte River Power Authority (Platte River) generates and delivers reliable, affordable, and
environmentally responsible electricity to the communities of Estes Park, Fort Collins, Longmont,
and Loveland, Colorado, where this electricity is distributed by each local municipal utility to
community residents and businesses.
In 2007, the Governor of the State of Colorado issued the Colorado Climate Action Plan, which
included a goal of reducing statewide greenhouse gas emissions to 20 percent below 2005 levels
by 2020 and 80 percent below 2005 levels by 2050. To meet the 2020 goal, Platte River would
need to reduce carbon dioxide emissions by approximately 700,000 metric tons. The Governor' s
Energy Office asked the state ' s electric utilities to voluntarily develop plans to meet these non-
binding targets using approaches specific to each utility' s unique circumstances. This plan is not
prescriptive, but rather lays out a set of options that Platte River can adopt to meet the 2020 target
and prepare for emerging federal or regional regulations . Platte River' s Board of Directors will
make policy and budget decisions associated with any future implementation of options.
Climate change is one of the profound challenges of our time. Scientific evidence suggests that
rising greenhouse gas concentrations in the atmosphere could have severe consequences for our
state, our nation, and our world. Platte River as a provider of electric energy, a vital public good,
must balance competing interests of affordability, reliability, and environmental stewardship in a
fair, open, and judicious manner. Platte River welcomes the opportunity to take part in this
important discussion to establish a rational roadmap forward to a sustainable energy future.
About Platte Rimer
Platte River has been providing power to its owner municipalities for over 35 years. Platte
River' s generating resources include a mix of coal, natural gas, wind, and hydropower. This
diversity of generation resources provides operational flexibility and enhanced reliability.
Platte River takes pride in its approach to operation and management of its electricity generation
plants, and has been recognized by electric industry experts for those efforts. In October 2008,
POWER Magazine recognized the Platte River Rawhide Energy Station for the advanced
technologies and operations improvements implemented over the last decade. Rawhide Unit 1
has an outstanding record of operating well below environmental permit requirements, and has
one of the lowest sulfur dioxide emission rates of coal plants in the United States. Platte River
also operates five gas-fired combustion turbines units at the Rawhide site and has an 18 percent
ownership in two coal units located near the town of Craig, Colorado.
1
Platte River' s renewable energy policy established a portfolio goal of over 300,000 megawatt
hours per year from renewable sources by 2020. This level is above the current Colorado
Renewable Energy Standard, driven by policies in the owner municipalities. In 1998 , Platte
River was the first utility in the region to provide wind power to its customers. Current wind
supplies include the Medicine Bow Wind Project, purchases from Clipper Windpower, Inc . , and
purchases of renewable energy certificates. Later this year, a new wind project will be added at
the Silver Sage Wind Project site near Cheyenne, Wyoming. To address continuing growth in the
demand for energy and to provide enhanced services to customers of the owner municipalities,
Platte River has provided energy efficiency services and demand side management (DSM)
programs since the early 1990 ' s. Investment in DSM since 2002 has exceeded $5 million and
over $2 million is budgeted for DSM in 2009 . This amount supplements the DSM expenditures
of the owner municipalities .
Meeting the Governor 's Goals
Using a portfolio of strategies Platte River can achieve the goal of reducing 20 percent below
2005 carbon dioxide emissions by 2020. Platte River engaged KEMA, Inc . , an independent
global energy consultant, to assist with the development of this plan. Platte River and KEMA
brainstormed potential measures to achieve necessary emissions targets. The Table below
provides some of the potential options Platte River considered to meet the governor' s goals.
Potential Measures to meet the 2020 Additional Measures to meet the 2050
Target (Quantitative Study) Target (Qualitative Study)
• Reduce Reserve Sales of Electricity • Plant optimization measures such as
coal drying
• Aggressive Demand Side Management • Smart grid, demand response, and
(DSM) Programs other advanced DSM programs
• Distributed Photovoltaics (PV) • Utility Scale PV Arrays
• Combined-Cycle Natural Gas Base • Developing and New Technologies for
Load Generation Coal Generation
• Concentrated Solar Power • Biomass Co-firing
• Increased Wind Generation • Greenhouse Gas Offsets
To meet the 2020 target, an analysis was performed to determine the amount of carbon dioxide
emissions that could be saved by each of the measures identified. The following chart shows the
emissions reduction potential for each analyzed measure :
2
4,000,000
31494,522 315,020
3,500,000
358 .449
(n 31000,000
C ❑ 134 , 927 2,796,530
736 , 382
O •
L 2,500,000
4 . U)
E M 123 , 913
`-' 21000,000 L 12,961 0)
fA • U 0
C: • (0
O
13500,000 i • ~
E
• � (6 OO
L U) CDW 1 , 000 , 000 W U Q • N
O • • 698,904
U NO500,000
0 0
� U
0
The chart demonstrates that Platte River can achieve the 2020 emissions target with a
combination of the evaluated measures. Achieving the 2050 target will involve additional
measures.
Carbon dioxide mitigation potential and costs for each measure were estimated compared to a
business-as-usual scenario to determine the relative cost-effectiveness for each measure. Costs
reflect Platte River' s costs (for example, new technology capital costs, operations and
maintenance costs, program costs, lost revenues) and benefits (reduced fuel costs). There may be
costs or benefits that fall outside our analysis. For example, participants in energy efficiency and
distributed photovoltaic programs will have both costs and savings related to the measures
installed.
The most cost-effective measures include reduction of surplus reserve energy sales, aggressive
demand side management (accounting for up to a one percent reduction of energy demand per
year), and increasing wind generation.
The emissions reduction supply curve in the following figure graphically demonstrates which
measures are least costly to meet the 2020 target. The vertical dotted line represents the desired
emissions reduction by 2020. Implementing these measures will result in estimated additional
expenditures of approximately $31 million per year between now and 2020. Platte River
3
financial staff estimates this will result in a wholesale rate increase of approximately 16 percent
above base case rate projections.
300
2020 Financial Impact :
250 $ 31 million/yr
1 Distributed PV
O A
L) 200
Average Cost of 700,000
m 150 Abatement = Goal
$40/metric ton
Q E 100
1
a' 50 - - - - -
Reserve Sales
Reduction
0
300,000 6007000 I 900,000 112009000 19500,000
-50
Metric Tons GHG Abated
❑ Reserve Sale Reduction ■ Demand Side Management ■ Wind
❑ Combined Cycle ■ Concentrated Solar ■ Distributed PV
Additional carbon dioxide reduction strategies could be pursued, but at much higher costs. Such
strategies could include transition to more natural gas generation and expanded renewable
generation, including concentrated central station solar generation or distributed solar
photovoltaic generation.
It is unclear at this time how Platte River could meet the 2050 target of an 80 percent reduction
below 2005 levels. New technologies would likely be needed, along with expansion of the more
expensive existing technologies evaluated in this study.
The evaluation conducted for this Climate Action Plan shows that Platte River can achieve the
2020 target, but it will be costly. This plan is a living document that will be updated periodically
as technology and regulations evolve. In the meantime, Platte River will continue to provide
leadership in serving its customers with reliable, affordable, and environmentally responsible
energy.
4
Attachment 8- Preliminary Study of Gas vs. Coal Generation
Draft White Paper
Resource Options
Platte River Power Authority
April 2010
Introduction
At the February Board of Directors' meeting, a suggestion was made that Platte River
staff develop a white paper addressing additional CO2'mitigation options for existing
generation resources, based on commercially available technologies. There was interest
in considering possible accelerated CO2 reductiortimeline:scenarios and estimating the
associated increased costs for such options. The intent of`this,white paper is to provide
information regarding options for reducingyCO2 emissionsibeyond the goal considered
in Platte River's Climate Action Plan
Review of Climate Action Plan
The June 2009 CAP was in response tb-Governor,.Ritter's goal of reducing statewide
greenhouse gas (GHG) emissions to,20 pereent,below'2005,levels by 2020 and 80 percent
below 2005 levels by 2050. A consultant was hired to assist in the CAP development
(KEMA, Inc.). Nine,,public.`events were'conducted.to shar'eithe draft plan with citizen
advisory groups, large customers (key. accounts) and._,the general public. Once
completed, the finaf'CAP document was sent to the Governor's Energy Office,
distributed to interested parties.and is currently available in electronic format on Platte
S
River's web site or-in hard copy upon request ,'-\
Based-odthe 2009 CAP study effort, a 20%-reduction by 2020 appears possible. The
three lowest,:cost option,for,meeting,this reduction include: (1) reduced reserve surplus
sales, (2) increased energy:;efficiency,;programs for retail customers, and (3) additional
central station wind generation. Each of these options could reduce coal generation
levels, directly reduce emissions' from Platte River resources, decrease surplus sales and
increase wholesale •rates. Reductions in coal generation were assumed to take place at
Craig. These three measuresJwere estimated to reduce total emissions by about 23%,
with an estimated wholesale rate increase of about 16%by 2020. This increase would be
in addition to rate increases required for the base case planning scenario.
Since the 2009 CAP was completed, Platte River continues to track legislative and
regulatory efforts associated with carbon policy and has developed estimates of
potential costs for various federal legislative proposals. _Based on work by APPA,
LPPC, CAMU and other groups, it appears that federal cap and trade legislation could
increase wholesale costs by as much as 70% by 2020, depending on the amount of CO2
emission allowances allocated to electric generators and associated allowance prices. In
1
addition, Platte River has contributed to an effort by the Governor's Energy Office to
develop a summary report on policy issues for electric generators throughout Colorado.
Energy efficiency efforts also continue, with program savings well ahead of estimates
made in Platte River's 2007 Integrated Resource Plan (a five-year plan for 2007 through
2011). Additional wind generation was added in late 2009, at the Silver Sage Wind
Project west of Cheyenne, Wyoming. Finally, a preliminary evaluation of reserve sale
changes has been completed, which indicates that a portion of reserve energy sales
reductions may need to come from Rawhide (vs. all reductions occurring at Craig).
This has only a minor effect on the overall results.
,tea
Additional GHG Mitigation Options- Gas to replace'Coal
For this white paper, Platte River staff evaluated4hree options for reducing or replacing
coal generation with natural gas-fired generafion sources` The options considered are
\.
described briefly below.
• Take no supply from the Craig Units - Platte River could shut down-its portion of Craig
Units 1 and 2. Capacity could be replaced by:converririg,gas units at Rawhide to run in
�y. p.
combined cycle mode (gas turbine with added steam-tirbine). Under;#his scenario, all
generation lost from Craig units;could-be replaced with•riatural gas generation at Rawhide..
• Co firing of natural gas in Rawhide coal>tmit - Dilririg' 2008, Platte River conducted a
preliminary study of burning natural, gas,with-_coal ("co,firing") at Rawhide. Co-firing
could occur at variousaevels or a complete replacement of co614ith natural gas at Rawhide
could be implemented For simplicity,we considered 100%q firing with natural gas.
• Replace all coal generation with natural gas,='This scenario would involve firing Rawhide
with natural gas (no,coal), shutti;ng down Platte River's portion of Craig and replacing lost
capacity by,converting gas,umts at•Rawhidee to,run in combined cycle mode (new steam
turbines fed'by�heat.recoveryboilers wouldaproviae replacement capacity).
Evaluations of these options were, conducted at a preliminary level of detail. A
summary•of estimated costs;,_CO2 savings and rate impacts is provided below. Values
shown for annual cost increases, CO2-reductions, unit CO2 cost, wholesale rate impact
and reduction'ws. 2005 are afl:for individual measures. The last column shows total
-,,. � -t
-CO2 reductions ificluding,the base case measures included in the CAP.
�-`Annual Annual Total
Cost CO2 CO2 Wholesale CO2 CO2
Increase Reduced Cost Rate Reduced Reduced
Description ($/yr) (Mtons) ($/Mton) Impact (vs.2005) (vs.2005)
Base Case measures 31,000,000 821,358 38 16% 23% 23%
No Supply from Craig 89,000,000 288,000 309 44% 8% 31%
Rawhide 100%gas-fired 221,000,000 886,000 249 108% 25% 48%
Replace all coal with gas 287,000,000 1,182,000 243 140% 34% 57%
As indicated in the table, all of the options for replacing coal with natural gas have a
high cost, both in total and per unit of CO2 reduced. Wholesale rate increases required
2
to implement these options are also substantial, up to as much as 140% for a complete
replacement of coal generation with gas.
Reductions in total CO2 emissions could reach approximately 57% if all coal were
replaced with natural gas.
A rough estimate of retail cost increases for various customer groups is summarized in
the table below, assuming a complete conversion from coal to natural gas. Retail rate
impacts are assumed to be about 120%, slightly less than the wholesale estimate of
140%.
After'," ..``•Qpprox. Approx.
Current Increase"1Increase Increase
($/month) ($%month) ($)>,_ M
Residential 55 120 65,''., 120%
Small Commercial 170 '`,: "V 370 200' l4:::120%
Large Commercial 3,000 6,700 3,700 ',120%
Industrial 94,000 210,000'/,1-16,000 120%.
y
a
.^kri h.,t
Key Considerations for Natural Gas,Options
A summary of the key factors associated with usi ig,coal aria,natural gas as generation
fuel is provided m the table�below (prelnminary,2020,estimates).
Characteristic ., "` , _>' ,Coal Natural Gas
Cost per unit of energy r`oduced , $19-24/MWh $62-125/MWh
Price volatili_ , Low High
Long term availability of'fuel su pl a > _ ,100+ ears Uncertain
Plant' eiieration efficieric` :'',, ! 34% 25%to—50%
GHG emissions associated with geneiation., —2,000 lb/MWh 40%to 70%of coal
Carbon se tiiestration potential Uncertain Uncertain
Criteria otlt t"fs,(S02,NOx,PM;'mercu� Higher Lower or none
Provides surplus`6n6rgy sales potential Yes No
Reliability of o erahon;, ;`; Highest High
-Flexibility to balance interinittene'resources Low Moderate
The primary factors iri considering replacing coal generation with gas are the
significantly higher cost of gas generation (and associated rate increases), high volatility
of gas prices, the relative uncertainty of natural gas fuel supply and the significantly
lower CO2 emission"rates of natural gas vs. coal generation. Reliability of operation for
gas vs. coal is also a key factor to consider.
As indicated earlier, the estimates provided in this paper are preliminary. Some key
assumptions and other factors associated with the information provided herein are
summarized below.
3
• Cost estimates for equipment modification are +/-30%
• Estimates for all options are based on implementation by 2020
• Modifications to the existing natural gas pipeline would be needed for some options (at
additional cost not included in the estimates provided)
• Lost surplus sales associated with reducing coal are not included (much smaller by 2020)
• No revenue for potential sale of Craig generation or transmission assets is included
• Minimum operating requirements at Craig were neglected in the estimates
• Operations and maintenance changes are not included
• No reduction in reliability is included for gas vs. coal units - a thorough evaluation of
outage risk and associated reserve capacity would be required for these options
• No CO2 costs from potential legislation/regulation are included in the analysis
Other Measures
-77
In addition to the options for replacement,of coal generation,,with gas as presented
above, other potential measure have been reviewed on a`;Very preliminary basis,
including those described below. X.
• Biomass -Biomass involves taking waste, wood or other plant materials and burning it for
electricity generation. This can be,done as a co,fining;-option in existing coal generation
facilities, or in new stand-alone generation units. iVlap" issues would need to be addressed
to consider biomass—including cost ofJ.iel,_,reliabill y of•,fuel supply over the long term,
emission impacts, permitting (for co=firin _Yand'.capital cost:•Biomass technology continues
to evolve, and there,may be opportunities for usin biomass•by`•2020.
• Concentrating Solar;Power'-`.this option could be considered in the future as a replacement
to the wind generation option.(in. cluded`in"the CAP) if costs continue to drop. Currently,
CSP is more expensive.than wind, even considering the fact that it can provide firm supply
for some'
periods during'the year =:
f "\ /
• Distributed Photovoltaic Solar - Currently this* technology is also more expensive than
wind-,':and does not'provide`finm,capacity.Costs may come down enough to make this an
option for the future.
• Distributed'Combined Heat and Pow r - This technology involves generating both usable
heat and electricity from the same fuel (typically natural gas) at commercial, industrial and
institutional facilities. Biogas from wastewater treatment plants or other sources may also
be considered. Some•poteritW'sites exist within the Municipalities' service territories.
• Purchase of Allowances;or•Carbon Offsets-Depending on price,it may be less expensive to
purchase CO2 allowances (assuming a Cap and Trade emission control program). Offsets
may also be purchased to support local or regional projects such as landfill gas collection,
dairy and feedlot methane reductions, wastewater facility modifications and changes to
agricultural practices (tillage methods,etc.).
Platte River continues monitoring these technologies as they evolve over time. The
options considered in the CAP (reserve energy sale reduction, energy efficiency
programs for retail customers and increased wind) all appear more cost effective at this
time relative to coal/gas conversion or the other measures listed above. Any further
4
studies of GHG emission reductions or implementation of measures would be based on
direction from the Platte River Board of Directors.
l '
/ Il� �Y •�.0`v`l.
Y
3
1 =�
F
5
PLATTE RIVER
POWER AUTHORITY
Fort Collins City Council
Work Session - Videotaping
May11 , 2010
outline
► Introduction
► System & Supply Resources Overview
► Renewable Energy
► Demand Side Management & Energy Efficiency
► Environmental Performance
► Climate Action Plan
Future
2
Introduction Background
3
Management Structure
Board of Directors
Estes Park Fort Collins Longmont Loveland
Mayor Bill Pinkham Mayor Doug Hutchinson Mayor Bryan Baum Mayor Cecil Gutierrez
Mr. Rueben Bergsten Mr. Brian Janonis Mr. Tom Roiniotis Mr. Ralph Mullinix
General Counsel
General Manager
Corporate Financial Electric Customer & Power
Services Services Operations Environmental Production
Services
Local Utility Partnership
j � � Residential �
I y Small
Business �
Generation I Transmission Distribution EEEEEBEEEBII '
I � uu E3EEE9 B3I .
- - - - - - - - - - - - - � � Key i
Platte River Power Authority Estes Park �� Accounts,
• Sole Supplier Fort Collins � � . �
• Joint Ownership / Equity Longmont Customers
• Local Governance Loveland
5
Platte River Mission
Reliability Environmental
Quality
Competitive
Price
6
Wholesale Rates
$ / M4Yh
S50
S45 1 1 rates 22% higher than 1983
1average
S35
Platte River Tri-State ARPA Xcel
-
S25 - - - - - - - -
y-
en
ep � a0 cp cp aQ ap ar of of of rn rn rn rn a1 a1 Q O O O � O O O O O
ae m m m m rn rn rn a a a m m m m m m o 0 0 0 0 0 0 0 0 0 0
Wholesale Rate Comparison
8.4Q
6.5t
4.2t
Platte River System
& Resources
RAWHIDE
CRISP ENERGY
STATION
HYDROPOWER MEDICINE
BOW
WINO PROJECT
PLATTE RIVER
POWER AUTHORITY CRAM
ENERGY DELIVERY SYSTEM STATION + Silver Sage
• Dual delivery - reliability
LA PORTE
• WECC / NERC compliance RICHARD
• Joint facility ownership LAKE
• Regional utility
LIND TIMBERLINE AULT
D IXON
LAP CREEK DRAKE
HYDROPOWER HARMONY
CROSSROADS
t
R ESHOE t AIRPORT
ESTES PARK LOVE ND EST
ESTES VA LEY AST
FLATIRON
BOYD
® DERBY
MARYS HILL
LAKE
LONGS
PEAK
LONGMON,
MEADOW FORT
HARVARD ST. VRAIN
LEGEND
IN / PLATTE RIVER SUBSTATIONS ROGERS
rl� 8 CITY SUBSTATIONS ROAD= =
lTl/ Q OTHER SUBSTATIONS TERRY COUNTY
LINE
(NOT TO SCALE) --- UNDERGROUND TRANSMISSION FORDHAM
5
Platte River Resources
^¢` SO Emissions - U . S. Coal Plants
a- � -� NOx Emissions - U .S. Coal Plants
.l
Rawhide Energy Station — Coal
— Combined rating of 434 MW
�• 'T Very low regulated emissions
Rawhide & Craig
Rawhide Craig
supply
Craig Station - Coal Significant COZ emissions
Platte River Resources
` • 0
Rawhide Combustion Turbines — Natural
■ Five separate units �S MW total (summer)
■ Low operating time - reserve generation
■ High cost fuel - volatile pricing
■ Lower CO2 emissions
, 2
Platte
bles
r
ProjectMedicine
Wind f
Silver Sage
Wind Project
I _
Hydropower
( Multiple Sites) q
13
• • WIN . , m m m
About 26%
Renewable Wind
Sources (, ti °,
Hvdro Rawhide
19.440 36.7%
l.(ts
Craig
36.5%
1'u rchases
0.4 o
7
Platte River Revenues - 2009
6% �` - Munlclpal
23 %
Sales
Su rplus Sales
71 % to Qthers
Other Income
15
Resource Use Characteristics
11
Municipal loads (with reserves : .
11
11
MW
400 Surplus Sales
1�
11
11
11
1
m Coal & Hydro m Gas Peaking
16
Generation - Past & Future
300
250 Renewables
new coa/ in current resource p
& low use gas units (with DS
................................................. ...............................................................................................................
zaa
o Hydro
MW 15a
Coal
100 Gas
5a - .... .. .- Wind
a
1`' ��` �1 0,'' oig o`' ti1 11
1� 1� 1� 1� 1� O ti4 ti�
`�..
1 ..
a .-.
Renewable Sources
( Non - Hydro)
18
History — Platte River wind Program
1998 2001-03 2003-04 2003-07
1996-97 Med Bow Site • Component Failures • Less REPI Funds Renewable
1993-94 RFP for • Ownership • Warran Extensions Energy
New � • Ancillary Service policy
Joint pro'ects • Transmission • Transmission Limits Charges Added Expansion
Customer t • Land Lease • Reduced federal $ • Transmission Cost
Surveys • Site Maint. Increases
I • Operations I I
Voiunfa� Policy / CO Standa��•
1994-95 1998 1999 2000 2002-03 2004 2005-06 2007-08
5 MW at Phase I Phase II Phase III Wind FC Clipper RFP for
Foote Creek Med Bow Med Bow Med Bow Power Decision Turbine New
Wyoming 2 Turbines 5 Turbines 2 Turbines Purchase To Add 2.5 MW Wind
(All 4 Cities) 1 .2 MW 3.3 MW 1 .3 MW Agreements RECs ppA Plant
(Fort Collins) (All Cities) (All Cities) Short Term '10 MW +More RECs
+Tri-State 5-10 MW All Cities
4 yR
r
Ji , Wind Plant Sites �'
Medicine : .
Wind Projec
r �
o30
o . . : to 2005
s�
m .
$MBIOAd � •p 1 `
f- w
f /
4 r BO
M.
iijr�, � r- • ;Laranve
& Oct 2009 �'Y T
♦"�
AS 0
Y�
ly J
L1 85
No, Jd p 1287
TOO
� 30
•, 1
- -
�I � '� + � .,.'(.' • 44 � .mot. : ' '�
10
•
Lr • {
_- � ••fit _ r
cr
5 .
•
j
F t.
►1,... 4161
Renewable Supply Portfolio
40 -
Premium
30
20
10
0
RECs Net Plant
I
2010
• cents per kWh)
22
11
Renewable Supply Portfolio
REC
Portion
Planned 0
In 0 '
Renewable
i
Supply
Portfolio
i
23
12
1
Renewable Supply Policy
Forecast of municipal requirements :
✓ State RPS + Voluntary purchases
Definition of qualified sources :
✓ Type - wind , solar, biomass , geothermal , new hydro
✓ Location - Colorado , contiguous states or WECC
✓ Age - Commissioned in 1997 or later
✓ Certification / Registry = Green -e / WREGIS
Acquisition guidelines :
✓ Build new plant to Colorado RPS (ownership or PPA)
✓ Three year planning horizon
Pricing :
✓ Single premium rate (Tariff 7)
✓ Municipalities commit to specific amounts ( long -term)
✓ Annual review of Tariff 7 by Board of Directors
�� 24
Renewable Portfolio Standard
Colorado specific
Based on voter initiative "Amendment 37 "
• Updated multiple times
• Applies to Retail Utilities ( Municipalities )
• Current requirements :
✓ Investor Owned Utilities - 30% by 2020
✓ Rural Electric Utilities - 10% by 2020 (all REA utilities)
✓ Municipal Utilities - 10% by 2020 (40 , 000 customers or more)
Municipalities all purchase more than required
• Platte River role :
✓ Provide supply to meet individual Municipality needs
✓ Execute acquisitions via Board approved Policy
25
Wind Output at Time of Peak
100%
90% Wind does not provide reliable output at system
80% peak, so does not delay the need for new capacity
70% Solar also intermittent -
60% Potential for firming via
50% 45 .6% storage
4 T . 8%
40%
30% 2 T .6% 15 .2%
20% T 2 .2%
10% 7. 3% 5 .2% 7. 1 %
T . 3% 0 .2% 0.0% 0 .0%
0%
1 26
.\ it
Illli nd Project Price Trends
. ,
Bids
. ,
12% annual increase . . . . .
0
'10
1 ■
20
1 ■ ■ ■ ■ ■
1 ■ ■ ■ ■ ■
NREL 0 ' ■ ■ ■ ■ ■
z�
14
Energy Efficiency &
Demand Side Management
� 4w
za
DSM Program Drivers
Environmental benefits :
• Reduced fuel use (& reduced fuel price risk)
• Reduced regulated emissions
Potential to delay new generation and transmission
Low cost Greenhouse Gas mitigation option
Customer interest / expectations :
Survey results
Xcel program expansion
Tri - State / Rural Electric Coops starting programs
State / federal program support increases
zs
DSM Program Drivers
► Customer / community service :
• Participating customers save money - as rates are increasing
• Better comfort / equipment reliability
• Improved productivity / sales
► Supports local investment / economy :
o Sales of energy- efficient products and services
Leverage ratio of roughly 2 . 5 to 1 . 0
� $ 7 million DSM incentives 4 � $ 18 million in local business
W4
30
DSM vs . Other Options
$ 250
S2QQ
Cost S 15Q
per
MWh $ 1 QQ
$ 50
$ Q
31
DSM Planning Fundamentals
IRPs provide long - term guidance
Platte River provides " Common Programs "
Utilize IRP Selection Criteria for program planning
Selected programs offered in all Owner Cities
Joint implementation & coordination
City - by- city decisions on additional programs
► Annual funding via budget process
► Board direction / adjustments over time
32
1
11 • DSM Programs
Residential
Platte River Estes Pazk Fort Collins Lon ont Loveland
Lighting with a Twist Lighting with a Tcvist Lighting with a heist Lighting with a Trvist Lighting with a heist
E\ERGY STAR Homes ENERGY STAR Homes E\ORGY SCAR Homes E\ORGY STAR Homes E\ERGY STAR Homes
Thermal energy storage AC Load Management Energy Audits AC Load Management
Solar PV & wind rebates Solar PV rebates Solar PV rebates
ENERGY STAR Appliances ENERGY STAR Appliances
A/C Tuneup
LED Holiday Lighting
Energy savings rebates
Free weatherization
Refrig/keener recycling
Zero-Interest Loans
Platte River Estes Park Fort Collins Longmont Loveland
LIGHTENUP LIGHTS\UP LIGHTE\UP LIGHTS\UP LIGHTS\UP
Electric Eff. Program Electric Eff. Program Electric Eff. Program Electric Eff. Program Electric Eff. Program
Retrocommissioning Retrocommissioning Retrocommissionmg Retrocommissioning Retrocommissioning
Energy audits Energy audits Energy audits Energy audits Energy audits
Questline Keep Current PowerSource Quesdine
Thermal energy storage ElectriConnect ALPS
A/C Tuneup
Integrated Design
Program - 2002 • 2009
1 000
Medicine Bow + 1 111 Actual
Silver Sage:
61 ,000
1
Common
Programs
(All Cities) $ 2 ,000 ,000
Program C •
Cumulative 00 000
Peak Savings:
111 Ii1
00 000 Cumulative —
1
34
17
Common Program Funding
70%
Fort Collins
60% — • Received -60% of funds
E uit at -48%
50%
40% Average
2002 -2009
30%
Equity
20%
10% —
0%
EPLP FCU LPC LWP
RV�
1 36
Total Funding - 2010 by Entity
4,000,000
395009000 Total Investment
390009000 $6,600,000/yr
2 , 500,000
2 ,000,000
125002000
190009000
5009000
Estes Park Fort Collins Longmont Loveland Platte River
R 36
DS M relative to system loads
3rW 1.8%
3, =
2.5W
z= -
15 With DSM
Without DSM
1,OOD —
4.6%
5W 1
All Programs
Results to Date:
Peak Energy Peak reduction = 4.6%
(MW) (G'Wh) Energy reduction = 1.8%
(All Programs)
® ( 37
Efficiency Goals & Forecast
2.0%
1.8%
1.6% —
Annual 1A% —
savings 1.2% —
& 1.0% _ Average
Growth annual values
0.8% — to 2020
0.6% —
OA% —
0.2% —
0.0%
Current KEMA Fort Collins System
Common Estimate Goal Lead
Programs (CAP) Forecast
38
Benefits of Fort Collins DSM
Main benefits go to Fort Collins customers :
Physical improvements to homes & businesses
Improved comfort
Lower electric bills
More activity => more Common Program funds :
60% of Platte River ' s funds went to Fort Collins
48% equity based share
Net benefit to Fort Collins (to date)
► At system level - costs roughly match benefits :
Little financial benefit to other Municipalities from activities
at a particular Municipality
39
Joint DSM Planning Team
Municipal & Platte River DSM staff
Ongoing DSM program review & planning :
Current programs & potential new ones
Evaluate options for improved joint efforts
Regional coordination - Xcel , PVREA, GEO , others
Seek best practices for our unique situation
Update Board of Directors , management and staff
Budget coordination for 2011 +
40
1
Environmental Performance
41
Platte River Environmental Activities
2004
1998 2000
1998 Solar 2002 Clipper 2004 2005
Medicine emissOiz2 System I)SM wind Craig Rawhide 2007-08 2008
Bow Wind reporting
upgrade program turbine efficiency new control Small wto
Plant started & EV's funding contract improvements system hydro ams
started started studies pro gr
expanded
I I I
Over $60 Mi//ion /nvI
sted I
In Environmental Projects �•
Since 7998
I I I I I I
1998 1999 2000 2003 2005 2005 20N 2008
Rawhide Wind Wind Climate Climate Rawhide Rawhide Rawhide
efficiency Plant Plant Policy Action low NOX efficiency additional
improvements expansion Planning registry burners improvements efficiency
expansion team started improvements
42
Platte River Performance
P/atte River PowerAuthority is the on/y e%ctric
powORr supp/ier in the state of Colorado to
maintain 100°° environmental comp/lance in
a// operations since inception
➢ Early Response
➢ Environmental Management System (EMS)
➢ Detailed Operating Plans
➢ Employee Empowerment
➢ Internal Assessments (Audits)
➢ Continuous Training
➢ Monitoring / Database Management / GI S
➢ Environmental Policy
Environmental Policy
... Use state-of--the-art air quality control systems at power
generation stations;
Meet or exceed all applicable environmental laws and
regulations;
... Participate in public process;
... Support additional emission controls were costs are
commensurate with measurable benefits;
... Be proactive in evaluating and implementing improvements
Eli at balance environmental and socio-economic concerns.
44
22
Environmental Controls
S02 Removal
"Scrubber" removes gases
��F�� produced as coal is burned
!, . . . ,
Platte River voluntarily removes
more SOz than required
Low Sulfur requirement included
in coal contract
Rawhide is one of the lowest
emission coal plants in the
United States
Slurry Line Feed
Fixed Mane irrto Atomizer
Dispersion Rin
RotaTy
Atomizer
Slurry I
Spray
To Fabric
Fifter
So ids
as
Environrental ControHIM: 9d1w
ls
f
Ed Aiiiiiiiiiii�
12 OT Reduction
— — New burners & controls
OndIMAIr
AI Oc
FM
Minimize overheating of
—1 air during combustion
NOx reduced � 50%
(;� Among lowest emitters
rAirsombbw
in United States
�=
(mainly NICI
ll .
23
46
Environmental Controls
t Particulate Removal
" Baghouse" removes
� f 99 . 95% of articulates
Dampers
Gas
Outi
InducedDraft
III Very low "opacity" and
1 , Fanparticulate matter
I� t 4 .,s • .I /I � emission levels
:orn
" It ' s hard to tell the
Tube Sheet Compartment 2
plant is running "
Ga.- Indet
a�
Mercury Measurement � Control
Activated
Carbon ClltanlW A*
Injection
Measurement
Scrubber
: . . .
Alt Houle, Dfaw OfVcr
From
as
24
Mercury Removal Summary
1 990 ' s - Began early testing & training
Platte River joined astate -wide coalition in 2006
All members endorsed a state rule in 2007
Installed measurement equipment in 2007 - nearly two years
ahead of required date
► Emission levels about half of earlier estimates
► Installation of removal equipment began in 2009 , over two
years earlier than required
Testing of removal equipment will begin in 2010 , well ahead
of 2012 requirement
► Significant reductions by 2012 + more by 2018
49
� t � m � ss � o � s Qerfor �nnan � e
olorado Coal Plant Emissions
, , MIN
• IIIIIIIIII
0 .
0 0 ,
Efficiency Improvements
Turbine Upgrades:
High / IntermediatePressure
upgrade in 2008
HigherLow Pressure upgrade in 2005
power better
efficiency - or lower
emissions
j_
Other
• •
• • Efficiency
Motor -
�r
• - EfficientChiller
Heat Rate Program
51
RAWHIDE ENERGY STATI
ON 4
Rawhide Water
Recycling Reuse
t --
-INCH WATER PIPELINE
�� - - r --� -
r {l
,
DRAKE WATER RECLAMATION FACILITY
26
Fly Ash Management & Re - use
Fly ash — on -site reclamation .
Compacted , contoured to
match the surrounding
topography, covered with top
soil and seeded with native
_ p
lants
Fly ash re-use also promoted
Sales of ash for block
manufacturing , landscaping
structures & soil stabilization
, 1 • About 17% of ash sold in 2009
53
CLIMATE ACTION PLAN
KEMA 103 -
. ,
ONO
7�
/;
http://www. prpa .org/environment/i/capoune200-9 . pdf
ss
/ • 4
ti�-+ 4�! +j•�-rX�a'lr'.'��.t'!�'-_ . . �a jai
��. �w:t�=�•- � "t it - I►�
1
P
COLORADO CLI A ON FLAN
A STRATEGY TO ADDRESS GLOBAL WARMING
GoVERNORBILLRiiTFR ,
November 00 56
Carbon Policy
Intergovernmental Panel
on Climate Change
( IPCC)
ACV
"The /PCC has unequivocally
Tree Cutting Other
affirmed the warming of our
climate system, and /inked it
direct/y to human activity"
IPCC Synthesis Report (November 2007)
800 authors / 2 , 500 reviewers / 130 countries
Key driver of policy development
s�
Global GHG Sources
Fossil -
: Burning 400 Combustion
Nitrous
Oxide
Carbon
Dioxide
5700
Methane
1400
Agriculture
: Waste
Man Made Sources iPcc zoos
29
m one
• '
i+,000
s,0(X)
4,000 —Urdtrvi Stares
Tied to
Economies
- —C S Araerxa
—Ahxa
((() —XhII a East
� —Fom+er t.SSR
—lapaa
10000
will
0
• • IIIIh
COlOradO Industrial
Fossil Fuel process Transport Industrial
Industry 2%u Waste 26'/ Process
(CH4) 2% 5%
9%
Agriculture Res/Com Waste
Transport 9% Fuel Use 4%,
23%, 9% Agric.
7%
Industrial
ReI m / Electricity Fuel Use - "
Fuel Use ( 370/c 14%
100 Industras = Fossil Fuel - _-
Fuel Use Ind (CKI 6ectriclry
9% 3% 33%
30
Greenhouse Gas Inventory
■ CA Climate Action Registry — 1 st utility outside CA
■ The Climate Registry (TCR ) — Founding Reporter
■ Why join — early?
✓ Common means for reporting , tracking , verifying GHG
✓ Document early actions to voluntarily reduce emissions
✓ Gain access to software and technical assistance
✓ Participate in planning discussions
State of Colorado
■ Goals :
✓ 20 % GHG reduction from 2005 by 2020
✓ 80 % GHG reduction by 2050
■ Key Sectors :
✓ Agriculture
✓ Transportation
✓ Solid waste
✓ Utilities
■ Electric Energy Supply Sector Guidance :
✓ Reliable and sustainable supply
✓ Options :
o Energy efficiency & Renewable energy
o Clean coal
o Offsets
✓ Voluntary — unique to each utility
;\ 62
11�\
Project Timeline
"� Dec '08 � Mar — A ril
Board • Identify Options � May 74t^ to May 27 �t
Resolution • Modeling ' public Information June 7
To • Cost / Benefit ' Citizen Boards • plan to Governor (GEO)
500,000
1, 000,000
500,000
Governor's • Rate Impacts ' Key Account • Executive Summary
Customers
Energy Office • Operations impacts . Open Houses
Jan — Feb '09 � May 8t^ `� May 28tn
Current Work
• Communications
• Consulting RFP • Board Retreat • Board Meeting • Monitoring legislation
• Selected KEMA • Draft Plan presentation • Final Draft Plan • GEO summary
• Scope / Budget • Board Direction • Review / Approval . Ongoing studies
• Project Teams
C � z Emissions Trends
—�oo,000
metric tons
Governor's
Metric GOaI
Tons Key Variables:
cot2.000,000 2005 Level
Plant outages
Surplus sales market
Hydropower availability
1,000,000
Efficiency improvements
�100.00: I I—
Generation fuel mix
CO2 measurement
32
sa
CO2 Mitigation Options - Demand side
■ Increase energy efficiency :
➢ Roughly 1 % savings per year (year after year)
➢ Total energy use reduction of about 9% by 2020
➢ Aggressive — high level of coordination needed ( KEMA)
■ Distributed PV solar :
➢ Location on homes and businesses
➢ Costs based on providing customer rebates
➢ Program details as estimated by KEMA
■ Reduce a portion of surplus sales
65
CO2 Mitigation Options - Supply Side
■ Central station wind :
➢ 30 MW of new wind plant by 2020 (50 MW total )
➢ About 5% of total generation
➢ Balancing / regulation challenges above this level
➢ Costs based on KEMA studies
■ Central station solar:
➢ 50 MW of concentrating thermal solar
➢ Costs based on KEMA studies
■ Convert simple cycle gas to combined cycle :
➢ Reduce Craig coal generation
➢ Could be used to balance wind Purchase Offsets:
➢ Costs based on KEMA studies ➢ Uncertain rules
➢ Limited markets
➢ Worth considering
R 66
s I\
Res U Its — Cost vs . Tons Reduced
' Distributed
PV
0
OptionsLowest Cost
N To Meet Goal
U
U
0
0
N
U
Reserve Combined Cycle
Sales Natural Gas
Reduction
•L
KEAAA� • • - • - •
67
Rate Impacts - Wholesale
40 - 70% hi her than base Federal
8.0 Potential
1 .0
16% hi her than baseA State Goal
i
Rate Base Case
(¢/kWh) 5.0 Wo CO2 costs)
00 OWN
Note:
2.
Wholesale rates are
i 1. 50 — 75 % of retail
(de ends on cih/)
i
ii
68
CAP Public Process
FBoard
D . ��.anand rail-Gazette ads 8-Ma
Reporter-Herald and Times-Call ads 11-May
Estes Park News ad deadline 12-May
Trail-Gazette, III lIII' oan, Times-Call, Reporter-Herald ads 13-May
EP Utilities Committee Meeting EP Town Hall 14-May 0i
EP News ad runs 15-May
• . i0 00
LPC Public Open House Radisson Conf. Center, North Fairview Room 1S-May 6:30 p.m.-8:30 p.m.
Open House FC Marriott, Windsor Rooms 1&2 19-May 2:30 p.m.-4:30 p.m.
FCU Public Open House FC Marriott, Windsor Rooms 1&2 19-May 5:00 1 . 11 .-8:00 p.m.
LWP Utilities Commission Meeting LW&P Service Center 20-May 00
LIP Public Open House McKee Conference Center, Friends Room 20-May 6:30 p.UNM:19 11 p.m.
FCU Electric Board Meeting Platte River Hearing Room 21-May 5:30 p.m.
EP Public Open House LIIIIIIIIIIIIIII III akeshore Lodge, Sundance Room 21-May 6:30 p.m:5:30 p.m.
Regular : Or 0r
Municipality Public Accounts Media Total
General ke�
69
CAP Key Points - So Far
■ 20% reduction by 2020 appears possible
■ Three options meet goal — reserve sale change , efficiency & wind
■ Longer term (2050) plans need to be developed over time
■ Rules are unclear — state & federal legislation / regulation
■ Rate increases are uncertain
■ Estimates are preliminary — will very likely change over time
■ Other notes :
✓ Voluntary effort
✓ Specific to Platte River's unique situation
✓ Platte River Board makes policy / budget decisions
✓ Ongoing — annual reporting / updates
Ik: �o
35
Additional Study
■ Consider additional CO2 reduction options :
➢ Beyond goal of 20% by 2020 presented in CAP
➢ Focus on reducing coal-fired generation
➢ Modifications to existing generation resources
➢ Commercially available technologies
.4500
Coal
Gas
1 , 500
➢ Focus on natural gas options to replace coal
➢ Rough estimates developed for:
0 2020 Time frame
o Capital costs — modification / replacement
o Fuel supply costs + O&M costs
o CO2 savings
o Rate impacts
Generation Comparisons
Coal $ 2 . 00 / MMBtu
Gas � $ 9 . 00 / MMBtu
x
o
.� 11000
w
O500 . .
Annual Annual COZ
Cost CO2 unit Muni CO2
Increase reduced cost Rate Reduction
Case Description ( $ /yr) (Mtons) ($ ; Mton) Impact (vs. 2005 )
CAP base case options 31 , 000 , 000 821 , 358 38 16% 23%
Shut down Craig units 89 , U00 ,000 288 , 000 309 44% + 8%
Rawhide 100% gas fired 221 , 000 , UUU 886 , 000 249 108% + 25%
Summary of Results
Replace all coal with gas 287,000,000 1 , 180,000 24 ' 140% y 34°�
Total Reduction
73
Looking VERY PRELIMINARY
rd
74
�\
37
Future Strategic Issues
Energy Efficiency Planning
Renewable Energy
Distributed Generation
Smart Grid Development
Resource planning balance :
Environment
Cost
Reliability