Power Procurement

Power Procurement

RCEA’s Community Choice Energy program (CCE) has been serving some 60,000 customers since May 2017, with approximately 700,000 MWh of annual load and over $2 million in yearly bill savings relative to the investor-owned utility generation rates customers would otherwise pay. Power procured by RCEA through short-and long-term contracts is resold to Humboldt County ratepayers.

Our CCE service appears as “electric generation charges” on local customer bills. Although we don’t yet own or operate any power plants, we work with The Energy Authority (TEA) to purchase power on the wholesale market on behalf of our customers. We also contract directly for some resources, such as local biomass power.

Electricity revenue from our CCE program is redirected into community-driven energy choices, including development of an offshore wind energy industry in California with Humboldt Bay as a leading hub, and RCEA’s first solar-with-storage generation asset, planned for the California Redwood Coast – Humboldt County Airport.

Our goal is to continue to capitalize on the energy expertise that exists on the north coast to develop sustainable local energy sources and jobs. Some of the tools we’re using to attain this goal include:

  • Renewable Energy Requests for Proposals – In February of 2019 we launched an RFP with the goal of entering into long-term Power Purchase Agreement(s) with one or more renewable energy facilities. The RFP favors resources in Humboldt and surrounding northern California counties.
  • Feed-In Tariff Program– In March 2019 we introduced a FIT, offering a fixed, long-term price for community scale renewable energy projects under one MW in Humboldt County.
  • The Integrated Resource Plan – Our biennially updated Integrated Resource Plan describes our electricity resource needs and guides our procurement process.

Contracts for energy procurement are discussed at the Board of Directors’ meetings.  The meetings are held on the 4th Thursday of each month at 3:30 p.m. and are open to the public. Meetings are located at the Humboldt Bay Municipal Water District Office, 828 7th St., Eureka, CA  95501

Questions and Answers on RCEA’s 2019 Long-Term Renewable Energy Procurement

July 2019

Redwood Coast Energy Authority established its community choice energy program in 2017. The program was launched with a goal adopted by our Board of providing 100% locally generated renewable electricity to our Humboldt County customers by 2030. In March 2019, our Board adopted a resolution calling for a 100% clean and renewable electricity mix by 2025. The makeup of this mix remains to be determined, but it is expected to include a combination of resources that meet California’s Renewable Portfolio Standard (RPS) and other resources that do not emit greenhouse gases, including large hydro power. RCEA’s risk management policy prohibits inclusion of nuclear power, coal power, and hydro power from existing dams on the mainstem Klamath River in our energy portfolio.

In addition to our Board’s goals, RCEA’s renewable energy procurement is driven by compliance with two key pieces of California legislation. SB 100 calls for electricity providers to increase the percentage of renewable energy in their mix over time, eventually reaching 100% renewable and carbon-free energy by 2045, with intermediate targets along the way. SB 350 requires electricity providers to ensure that, beginning in 2021, at least 65% of SB 100’s renewable energy mandate is under long-term contracts of ten years’ minimum duration.

Customers participating in our default REpower service received 44% renewable energy in 2018, while “opted up” REpower+ customers receive 100% renewable energy. Currently RCEA is procuring this energy through short-term procurement agreements of five years or less in duration. In February 2019, RCEA issued a request for proposals (RFP) seeking SB 350-compliant renewable power purchase agreements (PPAs) for terms of ten years or longer. RCEA specified a preference for local projects in order to advance the Board’s goal of 100% local generation. We received proposals from thirteen companies and, after a careful review process by a team of RCEA staff and outside energy experts, we identified three companies that were presented to the Board for consideration at its June 2019 meeting.

The PPAs that were initially considered were:

  • A fifteen-year contract for 80 MW of capacity from Terra-Gen LLC’s planned Humboldt Wind energy project on Monument and Bear River Ridges near Scotia.
  • A twelve-year contract for 50 MW of capacity from Candela Renewables LLC’s planned 200 MW solar project located in western Fresno County.
  • A fifteen-year contract for the full 5.5 MW capacity of Snow Mountain Hydro LLC’s existing Cove hydropower project in Shasta County.

Altogether, those projects would have provided about two-thirds of RCEA’s annual electricity supply. In addition to helping RCEA meet the SB 350 requirement, they also would have provided energy at lower cost than we are currently paying under short-term procurement and helped RCEA keep its commitment to providing customer savings on energy bills. At its June 2019 meeting, our Board authorized staff to negotiate the three above PPAs. Since then, Terra-Gen’s Humboldt Wind’s application for a conditional use permit was rejected by the County Planning Commission and the Board of Supervisors. The project will not move forward, but RCEA will continue to seek opportunities for local onshore wind development that meets the community’s standards. Due to unforeseen delays in development of the Candela solar project, our Board has authorized staff to negotiate a PPA for a similarly sized solar project with EDP Renewables, another participant in the RFP. A PPA with Snow Mountain Hydro has been executed, with deliveries of power to begin in February 2020.

California is retiring fossil fuel power plants at an unprecedented rate in its efforts to reduce statewide greenhouse gas emissions responsible for climate change. In addition, the Diablo Canyon nuclear plant that provides about one-fourth of PG&E’s electricity[1] is scheduled to close by 2025. To replace these resources, California needs to accelerate its development of renewable resources, which can include onshore and offshore wind, solar, geothermal, bioenergy, and hydropower. The RCEA Board of Directors, with community input, has set ambitious targets to support the state’s renewable energy transition. RCEA is committed to helping our local government member agencies fulfill their climate and energy goals.

RCEA supports rooftop solar and other distributed renewable energy technologies. We offer net energy metering, a feed-in-tariff for mid-sized renewable energy projects, and a Public Agency Solar Program to promote this approach. However, there are two concerns about relying only on distributed solar. One is cost – deploying the amount of renewable energy we need to meet countywide electricity loads only with small distributed systems would cost far more than the energy we can procure through the PPAs currently under negotiation. Another concern is over-reliance on solar energy. The energy from solar projects is delivered at midday, when the California grid is already experiencing a glut of over-generation from the state’s booming solar industry. This can be addressed through energy storage that makes solar energy available at other times of day, as RCEA is doing with its solar plus storage microgrid project at the California Redwood Coast-Humboldt County Airport. However, adding storage significantly increases project cost and complexity.  RCEA aims to develop a diverse power mix, including resources that produce electricity at complementary seasons and times of day to solar, such as wind and hydropower.

[1] https://www.pge.com/pge_global/local/assets/data/en-us/your-account/your-bill/understand-your-bill/bill-inserts/2017/november/power-content.pdf

RCEA is a joint powers agency formed by and representing our local Humboldt County and City governments. As such, we have a stake in protecting the environment in Humboldt County. RCEA’s existing power purchase agreements for biomass power stipulate that the contract can be canceled by RCEA in the event that the seller does not comply with environmental and other regulations. The PPAs under negotiation will include this same provision, which we fully intend to enforce.

Ultimately the potential for RCEA to buy power from a project is contingent on their ability to be approved by the environmental agencies with regulatory and permitting authority.

Policy Basis

The Redwood Coast Energy Authority’s Board of Directors launched Community Choice Energy (CCE) in May of 2017 based on years of strategic planning and robust public engagement. The core goal is to maximize the use of local renewable energy while providing competitive rates to customers.

  • In 2012, RCEA’s Board adopted a Comprehensive Action Plan for Energy (CAPE) that established a vision for 2030 that includes Humboldt County no longer being a net energy importer and the majority of the community’s energy needs being met by renewable energy sources.
  • In 2013, RCEA finalized the RePower Humboldt Strategic Plan which further evaluated and reaffirmed the goal of Humboldt County meeting the majority of its electricity needs as well as a significant portion of its heating and transportation energy needs from local renewable resources by 2030.
  • In 2016, RCEA’s Board adopted CCE Launch Period guidelines calling for the program to “Maximize the use of local local renewable energy while providing competitive rates to customers.”
  • On March 28, 2019, RCEA’s Board adopted the target of a 100% clean and renewable electricity power generation mix for RCEA’s community choice energy program by 2025. Updates to CAPE are expected to be made by the end of 2019 to incorporate this new timeline.
  • December 19, 2019 RCEA’s Board of Directors approved the final version of RCEA’s updated RePower Humboldt strategic plan, including plans for power procurement through 2030.
  • September 1, 2020 RCEA delivered its 2020 Integrated Resource Plan to the California Public Utilities Commission, detailing RCEA’s power procurement plans and their alignment with statewide power planning goals.

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