Pasadena City Council
May 8, 2023

Pasadena Water and PowerCalpine GeysersGeothermal ProjectCity Council PresentationMay 8, 2023Item 17 Pasadena Water and PowerOriginal Terms•On January 23, 2023, PWP received City Council approval to execute a ten-year PSA with SCPPA•Original Offer - $79.50/MWh, 10 Years>2025-2026 – 10 MW>2027-2034 – 35 MW>Start of Service – January 1, 2025>Increase in Share –January 1, 2027>End of Service – December 31, 2034•Furthered Pasadena’s Carbon-Free Goal2 Pasadena Water and PowerRevised Offer•After receiving City Council approval, Calpine Geysers Project notified SCPPA of revised terms >Due to a substantial increase in market prices and demand for renewable energy•Based upon the responses to SCPPA’s Request for Proposals, there are not many geothermal resource options in the market today>Provides baseload renewable energy>Provides resource adequacy needed for grid reliability required by CAISO3 Pasadena Water and PowerRenewable Portfolio Standard (RPS) Position Graph 0200,000400,000600,000800,0001,000,0001,200,0002014201520162017201820192020202120222023202420252026202720282029203020312032203320342035203620372038203920402041204220432044204520462047204820492050 Amount of RECs (MWh)RPS Position Showcasing Calpine Geysers Total RECs from Current Resources
Calpine Geysers (Showcased Resource)PWP Voluntary RPS GoalRequired RECs (State Mandate, SB 1020)4 Pasadena Water and PowerNew Offer Terms•SCPPA Fixed Price Renewable PPA Term>Term: 15 years (January 1, 2027 to December 31, 2041)$18.7 million annual estimated cost$278 million estimated cost over 15-year termTotal not-to-exceed contract value of $312,075,000 over the 15-year term>Contract Energy Quantity: 25 MW>All-In Energy Price: $95/MWh>Resource Adequacy: 22.25 MW >PCC1 RECs>Delivery Point: NP-155 Pasadena Water and PowerOpportunities from New Offer•Increase in the number of years in the contract to assist future needs>Previously was 10 years>New Offer is for 15 years•Leveling out of amount in MW offered>Previous offering was 10 MW for 2 years and then increased to 35 MW for 8 years>New offering starts at 25 MW and stays at that level for the entire 15-year term6 Pasadena Water and PowerGeysers Financial Analysis•Consultant’s analysis indicates Geysers Project is in line with current market values for Resource Adequacy, Renewable Energy Credits (RECs), and baseload energy•Geysers contract price is approximately $5/MWh less than the current market price of $100.28/MWh>The avoided rate impact would be 0.5 cents/kWh as compared to equivalent market prices •In FY 2024 PWP will initiate a full cost of service and rate study that includes examining the resource portfolio after 2027 (exit of IPP)>Design a rate structure to address cost recovery •Project Risk is mitigated since Geysers is an existing facility in operation (already built and running)7 Pasadena Water and PowerForward Price Trends for Power
8 • Data received from a reputable third party provider• Prices trend upwards for all generation technology types (renewable and non-renewable)• NP15 is Geysers delivery nodeForward Prices from 2027-2041 at CAISO NP15 node Pasadena Water and PowerHistorical Power Prices
• Data based on clearing prices for CAISO markets• SP15 is indicative for prices close to TM Goodrich (Pasadena’s Delivery Node)9 Historical Clearing Price at CAISO SP15 Node