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ic"I'ro'i'N5"~I/I'lW"'''11'j\..J..ç;',,):lL~,~c,UJ,'\.ç;, il,-" '00, ,¿'l' '",'r,,':ßJ,'J:~ \\T!r'S!il!"l~ '. c:-. ,HI."' '5'ù'"r~1 ", ,-'J)\I\dY1\.' ~li'''JI)r~l~ tJ'1,le'"',',-, (nrL~Y \.~, ((')Ír¿/ ~.. '~ ,Itii'~._~'-~"Ut9 10. ~iT(QJ~o1~ì~) ';"'-)-'iD~~- ANTONIO R. VILLARAIGOSA Commission RO\TALD F. DEATON, General Manager Mayor H. DAVID NAHAL f'resideni EDITH RAMIREZ, Vice Pres/dent MARY D. NICHOLS KICK PA:lSAOURAS FORESCEE HOGAN-ROWLES BARBARA E. MOSCHOS, Secerary November 9, 2007 The Honorable City Council c/o Office of the City Clerk Room 395, City Hall Mail Stop 160 Attention: Councilmember Jan Perry Chair, Energy and the Environment Committee Honorable Members: Subject: Council File NO.00-1531 - Draft 2007 Integrated Resource Plan Enclosed for your information is the Los Angeles Department of Water and Power's (LADWP) Draft 2007 Power System Integrated Resource Plan (IRP). A 2006 draft IRP has been posted on the LADWP website since March 2006, and the 2007 IRP will also be posted for final public review. We intend to seek approval from the Board of Water and Power Commissioners in December 2007. If you have any questions or require additional information, please contact me at (213) 367-4333, or Mr. Enrique Martinez, Chief Operating Officer -Power System at (213) 367-4435; or have a member of you r staff contact Mr. Brian Koch, Manager of Resource Development, at (213) 367-0054, or Ms. Winifred Yancy, Governmental Affairs Representative at (213) 367-0025. ~/-~/Sincerely, Robert K. Rozanski .NV 2 720i Acting General Manager ENERGY & ENVIRONMENT gb Enclosure c/enc: Mr. Enrique Martinez Mr. Brian Koch Ms. Winifred Yancy Water and Power Conservation... a way of life 111 ~orth Hope Street, Los Angeles, California 90012-2607 Mailing address: Box 51111, Los Angeles 90051-5700 Telephone: (213) 367-421 1 Cahle address: Recalanmadefrreedwa.DEWAPOLA 'CçY rf 2007 INTEGRATED RESOURCE PLAN City of Los Angeles Department of Water and Power Ronald F. Deaton General Manager (g (g b\ IF U November, 2007 Los Angeles Department of Water and Power 2007 Integrated Resource Plan -, TABLE OF CONTENTS 1.0 Executive Summary .................................... ....................................... ..... I ., 1.21.1 IntroductionOverview II I1.3 .4Summary Background of2007 IRP Recommendations 3 2 1.51.6 Renewable2000 IRP Accomplishments Portfolio Standard 54 2.0 IRP2.1 Objectives.................................... Rcliable ............ Service ........... ............................. 8 8 2.32.2 Environmental Competitive Leadership Price II 9 3.0 Integrated3.23.1 Resource Key Introduction Planning..................................................................... Assumptions 13 13 13 3.43.3 Load SystemForecast Reserve Margin 14 15 3.5 Summary of Loads and Resources 16 3.6 Environmental Achievements and Goals 22 4.0 Recommended4.1 Recommendations Strategies......... ............ ............ .... ...................................... 25 25 4.34.2 Details Summary ofthc and Recommendations Conclusion 4526 APPENDICES Appendix A: Generation Resources............................................ ................... A-I Appendix B: Load Forecasting.......... .......... ........................................ B-1 Appendix C: Environmental Issues.................................................................. C-I Appendix D: Renewable Portfolio Standard................ ....................................... D-I Appendix E: Energy Effciency and Demand Side Management............................. E-l Appendix F: Distributed Generation........ ........................................................ F-I Appendix G: Fuel Procurement Issues........ ..................................................... G-I Appendix H: Transmission System.............................. ................................... H-I Appendix I: Glossary....... ....... .........................................,......................... I-I November, 2007 Los Angeles Department ot Water and Power 2007 Integrated Resource Plan 1.0 EXECUTIVE SUMMARY -, 1.1 Overview The purpose of this 2007 Intcgratcd Rcsourcc Plan (IRP) is to providc a framework to assure that the future energy needs of the customers of the Los Angeles Department ofWatcr and Powcr (LADWP) are reliably met at the least cost, and are consistent with the City of Los Angeles' commitmcnt to cnvironmcntal cxccllcncc. Thus, thc major objectives of this IRP are to confirm that LADWP will continue to: I. Providc Rcliablc Scrvicc to our Customers 2. Remain Committed to Environmental Lcadcrship 3. Maintain a Competitive Price It is the overrding purpose of this IRP to intcgratc and harmonizc thcse three objectives. This 2007 IRP is based on the October 2006 Load Forecast (Load Forecast), but will also take into account a variety of othcr factors which influcncc LADWP's operations. The Southwest and the greater Los Angeles areas continue to grow and consume more electricity. Loads in Los Angeles have grown at a steady, moderate pace since the 1994 Northridge earthquake with an avcrage long-tcrm growth ratc of about 1.4 pcrcent per year. The Load Forecast predicts that electricity consumption within LADWP's service terrtory will increasc at an avcragc ratc of 0.9 percent per year, and the peak demand will increase at an average of 60 megawatts (MW) per ycar for thc forcsccable futurc. Other major factors influencing this 2007 IRP are the aggressive goals that LADWP has to significantly reducc grccnhousc gas (GHG) cmissions, incrcasc its portfolio of renewable energy, and establish customer programs to promote energy effciency. These goals ineludc rcducing GHG emissions to 35% below 1990 levels by 2030, increasing renewable energy to 20% of energy sales by 2010 and to 35% by 2020, and tripling its invcstmcnt in energy efficiency and conservation programs from previous years. 1.2 Introduction The LADWP last issued an IRP in 2000, during a period when significant changes were being madc to thc structurc and rcgulation ofthc electric utility industry in California. In 2000 and 2001, rolling blackouts affected system reliability, and wholesale priccs for elcctricity in California and the West skyrocketed. Fortunately, LADWP's customers were shielded from the majority of these events because ofLADWP's prudcnt planning and preparations. November, 2007 I Los Angeles Department at Water and Power 2007 Integrated Resource Plan In 2002, California shifted its electric utility industry emphasis from deregulation to decreasing its dependence on fossil fuels. Senate Bill (SB) i 078 implemented a Renewable Portfolio Standard (RPS), with a goal of providing 20% of the energy sold to customers to be generated using eligible renewable resources by 2017. SB 1037 was passed in 2005, which mandated a loading order that prioritizes the effcient use of energy and demand reduction programs. Also in 2005, the California Energy Commission's lntegrated Energy Policy Report stated a goal of accelerating the RPS to achieving the 20% goal by 2010. The California Governor, in the 2005- 06 Budget Summary, additionally included a goal of achieving 33-perccnt rcncwablcs by 2020 for the State as a whole. In 2006, LADWP issued a draft IRP for public review and comment. This 2007 IRP incorporates stakeholder feedback that was received and other important regulations and policies that governing authorities have recently approved. 1.3 Summary of the 2007 IRP Recommendations LADWP has made significant progress in achieving many of the goals set out in the 2000 lRP. As LADWP is now aggressively pursuing a RPS policy of achieving 20% renewables by 2010 and 35% by 2020, LADWP needs to consider how its financial and workforce resources will best be utilized and the 2007 IRP accordingly has significantly different approaches and recommendations than the 2000 IRP. The 2007 IRP will prioritize the loading order of energy effciency and demand-side management programs, increase the development and addition of renewable resources, reduce GHG emissions, and address the needs of tbe power system generation, transmission and distribution infrastructure to ensure its reliable operation. A summary of the recommendations of the 2007 IRP arc outlined bclow: 1) Increase the level of commitment and funding to Customer Energy Efficiency, Demand Side Management and Solar Rooftop Programs and identify opportnities to enhance and expand these programs. 2) Aggressively pursue the Renewable Portfolio Standard goals of having 20% of LADWP's customer's energy needs met by renewable sources of energy by 2010, with a longer term goal of 35% by 2020. The portfolio of renewable energy projects will be diversified by location and technology. LADWP will give preference to projects that are located within the Los Angeles region and are owned and operated by LADWP to further support LADWP's economic development and system reliability objectives. 3) Provide specific steps needed to achieve the reduction ofGHG emissions to 35% beíow i 990 levels by 2030. Additionally, LADWP will adhere to the climate change legislation California signed into law in 2006, including SB 1368: The Greenhouse Gas Emissions Performance Standard, and Assembly Bill (A B) 32: The California Global Warming Solutions Act. 4) Provide specific actions to be taken to successfully integrate renewable generation resources into the power system while maintaining power system reliability. November, 2007 2 Los Angeles Department of Water and Power 2007 Integrated Resource Plan 5) Establish programs to cnhance and expand electric transmission