2019 Integrated Resource Plan Adopted by Burbank City Council at its December 11, 2018 Meeting Table of Contents Chapter 1 6 1.1 Introduction 7 1.2 Assumptions and Implications 7 1.3 Major Changes Since 2015 IRP 9 1.4 Proposed Policy Guidelines 9 1.5 Action Items 10 Chapter 2 11 2.1 Introduction 12 2.1.1 About the IRP 12 2.1.2 Key Policy Drivers 13 2.1.3 Major Challenges 13 2.1.4 IRP Overview 14 2.2 Starting with Customers 15 2.2.1 Public Input 15 2.2.2 Demand and Energy Forecast 16 2.3 Customer-Side Resources 17 2.3.1 Energy Efficiency 17 2.3.2 Demand Response 18 2.3.3 Electric Vehicles 20 2.3.4 Customer-Owned Generation 21 2.3.5 Results of Customer-Side Impacts 21 2.4 Supply-Side Resources: The SB350 Future 22 2.4.1 Retirement of IPP coal in 2025 23 2.4.2 IPP Coal Replacement Options 23 2.4.3 Results: Replacing IPP Coal 25 2.5 Supply-Side Resources: The SB100 Future 27 2.5.1 Retirement of IPP Coal in 2025 27 2.5.2 Same IPP Coal Replacement Options as in SB350 27 2.5.3 Results: Replacing IPP Coal 28 2.6 Over-Generation at High RPS Levels 30 2.7 STS Transmission Utilization 31 2.8 Greenhouse Gas Emissions 32 Burbank Water and Power - 2019 Integrated Resource Plan Page | 2 2.9 Transmission 33 2.10 Distribution 33 2.11 Customer Rate Impacts 33 2.12 EIM Participation 34 2.13 Proposed Policy Guidelines 34 2.14 Action Items 35 2.12 Conclusion 35 Chapter 3 36 3.1 About BWP 37 3.2 Load 38 3.2.1 BWP is a Fully-Resourced Utility 40 3.2.2 Load Patterns 41 3.2.3 Annual Energy Requirements 41 3.2.4 The Duck Curve 43 3.2.5 Over-Generation 47 3.3 Generation 48 3.3.1 Baseload, Load-Following, Peaking and Intermittent Power Resources 49 3.3.2 Renewable Resources 52 3.3.3 Generation Diversity and Beneficial Impact on Rates 53 3.4 Transmission Resources 54 3.4.1 Bulk Transmission Reliability Issues 56 3.4.2 Transmission Planned Upgrades and Additions 56 3.5 Distribution 57 3.5.1 Distribution Reliability 59 3.5.2 Anticipating Customer DER Developments 61 3.5.3 Distribution Planned Upgrades and Additions 61 3.6 Grid Modernization 62 3.6.1 Grid Modernization Benefits 63 3.6.2 Grid Modernization Helps Promote Transportation Electrification 63 3.6.3 Grid Modernization Reduces Power Outages, Improves Power Quality 65 3.7 Energy Efficiency 65 3.7.1 Energy Efficiency Portfolio Results 67 3.7.2 Current Energy Efficiency Portfolio Strategy 68 3.7.3 Long-Term Impact of Efficiency Efforts 69 3.7.4 Ongoing Responsiveness to the Community 70 Burbank Water and Power - 2019 Integrated Resource Plan Page | 3 3.7.5 Other Energy Efficiency Program Descriptions 73 3.7.6 BWP’s Energy Efficiency Programs 73 3.7.7 Programs for Disadvantaged Communities 76 3.8 Customer Distributed Generation 77 3.8.1 Rooftop Solar 78 3.8.3 Customer Energy Storage 81 Chapter 4 82 4.1 Legislative and Regulatory Factors 83 4.1.1 Greenhouse Gas Emissions 83 4.1.2 Federal Legislation 84 4.1.3 Tax-Exempt Financing 84 4.1.4 California Legislation 84 4.1.4a Energy Efficiency Legislation 85 4.1.4b State Greenhouse Gas Reduction Legislation and Executive Orders 85 4.1.5 IRP Requirements Summaries and Checklist 93 4.1.6 Beyond 2020 93 4.2 Rate Design 94 4.2.1 The Ratemaking Process 94 4.2.2 Appropriate Price Signals 95 4.2.3 Current Electric Rates 96 4.2.4 Electric Rate Comparison 102 4.3 Balancing Authority Services 103 4.3.1 Western Electricity Coordinating Council 103 4.3.2 Balancing Authorities 105 4.3.3 BWP Within LADWP’s Balancing Authority 108 4.3.4 Balancing Authority Solution 108 4.4 Southern California Public Power Authority (SCPPA) 109 4.5 Compressed Air Energy Storage (CAES) 110 4.5.1 SCPPA Request for Proposals (RFP) for CAES Options 114 4.5.2 Wyoming Wind 115 Chapter 5 116 5.1 Public Education and Outreach 117 5.2 Major Issues Discussed 118 5.3 What BWP Heard from Customers 119 5.3.1 The Primary Issues 119 5.3.2 Open Question 130 Burbank Water and Power - 2019 Integrated Resource Plan Page | 4 5.3.3 Other Topics 131 Chapter 6 132 6.1 Customer Energy Use 133 6.1.1 Over-Generation 133 6.1.2 Strategies to Mitigate the Duck Curve 135 6.1.3 Transportation Electrification 136 6.1.4 Load-Shifting Opportunities 140 6.1.5 Load Management 140 6.2 Energy Storage 144 6.2.1 What is Energy Storage? 144 6.2.2 Storage Options for BWP 144 6.3 Generation Portfolio 146 6.3.1 Supply-Side Resources: The SB350 Future 146 6.3.2 Supply-Side Resources: The SB100 Future 152 6.4 Resource Adequacy 159 6.4.1 Installed Capacity 159 6.4.2 Flexible Capacity 159 6.5 STS Transmission Utilization 160 6.6 Over-Generation at High RPS Levels 162 6.7 Greenhouse Gas Emissions 163 6.8 Comparison of the IPP Replacement Options 164 6.9 Impact on BWP Customers’ Rates 165 Chapter 7 166 7.1 Policy Guidelines 167 7.2 Action Items 168 Chapter 8 - Appendices 169 Appendix 1. Generation 170 Appendix 2. BWP’s Transmission Rights 176 Appendix 3. Standardized Tables 181 Appendix 4. Checklist: Requirements for Publicly-Owned Utility IRP Reports 189 Chapter 9 - Exhibits 196 Exhibit A - BWP’s Fiscal Year 2016-17 Energy Efficiency Programs 197 Exhibit B - IRP Online and Town Hall Meetings Survey 198 Exhibit C - BWP Glossary of Terms 208 Exhibit D - BWP’s Historical Timeline 217 Burbank Water and Power - 2019 Integrated Resource Plan Page | 5 Chapter 1 Overview Burbank Water and Power - 2019 Integrated Resource Plan Page | 6 1.1 Introduction This is the 2019 Integrated Resource Plan (IRP) of Burbank Water and Power (BWP). The IRP is a long-term planning document designed to provide policy guidance for BWP’s electric supply to its customers over the next twenty years, from 2019 through 2038. The IRP, like all long-term planning, is directional rather than determinative. In other words, the IRP helps Burbank see the broad contours of its energy future and the general direction Burbank should head to reach that future; it is not a roadmap for decision-making beyond the near-term. The utility industry is undergoing dramatic change and this IRP reflects it. Concerns for climate change, the growth of cost-effective renewable energy and energy storage, and the pending retirement of one of BWP’s primary legacy energy sources, a coal-fired power plant called Intermountain Power Project (IPP), are all elements in the mix. At the same time, the IRP is informed by public input: what are the perspectives of Burbank residents, businesses, and other stakeholders with respect to Burbank’s energy future? BWP had a robust interaction with the public for this IRP, focused on major issues impacting BWP’s provision of reliable, affordable, and sustainable electric service to Burbank. This Chapter provides a brief overview of the highlights of the IRP, major changes in BWP’s business since its last IRP in 2015, proposed policy direction, and actions to fulfill that policy direction. The remainder of this IRP goes into greater detail on BWP’s business, both today and through the lens of long-term planning. Finally, detail on BWP’s public outreach can be found in Chapter 5. 1.2 Assumptions and Implications As a long-term planning document, the IRP is necessarily based on significant assumptions about the future: this carries inherent uncertainty, especially with the utility industry undergoing dramatic change. This IRP must make significant assumptions about a variety of key aspects of BWP’s business over the next 20 years, from federal and state policy direction to the availability of cost-effective renewable energy generation and electric transmission resources to the growth of electric demand in Burbank. With respect to generation and transmission resources, the IRP assumes that the economies of scale available in joint procurement with Los Angeles Department of Water and Power (LADWP) and others will remain. Also, for the purposes of this IRP, BWP forecasts little to no peak demand or energy growth over the next 20 years. This forecast is consistent with the California Energy Commission’s (CEC) forecast for the same period and reflects some (but not all) development under consideration in Burbank. Burbank Water and Power - 2019 Integrated Resource Plan Page | 7 The IRP is also based on Burbank’s and California’s energy policies. These include the “loading order”, whereby electricity demand is to be met first with energy efficiency and demand-side resources, then with renewable energy and then, to the extent that these are insufficient, with clean conventional electricity supply. These also include Senate Bill 350 (SB350) and Senate Bill 100 (SB100) which, among other things, mandate energy efficiency and renewable energy requirements for utilities like BWP. BWP, working with expert consultants, used those assumptions, public input, and legislative and policy framework to create illustrative views of Burbank’s energy future over the next 20 years. This complex analysis, referred to as “modeling”, yielded a number of major implications for Burbank’s energy future. These major implications are summarized here and discussed in greater detail in the body of the IRP.