Agenda — Municipal Services Committee, December 5, 2023 (part 2 of 2)

Renewable Portfolio
Standard
Procurement Plan
Still Under Development and Review
Appendix 28
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Table of Contents

1. Executive Summary 265

2. Disclaimer 266

3. Portfolio Content Category Requirements 266

4. Renewable Portfolio Standard Procurement Plan 268

4.1. Supply vs. Load .............................................................................................................................................................. 268

5. Compliance Strategy 269

6. Balanced Portfolio 270

7. PWP’s Renewable Portfolio Standard and Carbon-Free Strategy 270

8. PWP’s Renewable Portfolio Standard Procurement Process 271

8.1. Quantitative Analysis .................................................................................................................................................. 272

8.2. Qualitative Analysis..................................................................................................................................................... 272

9. Summary of Renewable Portfolio Standard Procurement Plan 273

10. Renewable Portfolio Standard Procurement Plan Limitations and Relief 277

11. Version History 277

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Table of Figures
Figure 1: Renewable Resource Categories and State Renewable Portfolio Standard Requirements ................................ 267 Figure 2: 2023 Integrated Resource Plan Updated Load Projection ................................................................................... 269 Figure 3: PWP SB 100 Procurement Plan from 2023 IRP .................................................................................................. 2741 Figure 4: PWP SB 100 Procurement Plan from 2023 IRP ……………………………………………………………………………………………….274

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1. Executive Summary
In late 2018, Pasadena City Council (City Council) approved Pasadena Water and Power’s (PWP) Renewable Portfolio Standard (RPS) Procurement Plan to comply with Senate Bill 100 (SB 100). SB 100 mandates a 60% RPS by 2030 and sets a planning target of 100% zero carbon resources by 2045. 159 The City Council also approved the Pasadena Climate Action Plan in 2018, which strives for a 52% reduction (compared to 1990) in citywide greenhouse gas (GHG) emissions associated with energy, transportation, water, and solid waste by 2035. In 2022, SB 1020 expanded the 100% zero‐carbon by 2045 goal of SB 100 by adding interim targ ets to accelerate the adoption timeline. On January 30, 2023, the City Council adopted Resolution 9977, which declares a climate emergency in Pasadena and sets a policy goal to source 100% of Pasadena’s electricity from carbon‐free sources by 2030. This target is more ambitious than California and directs the City Manager to utilize the 2023 Integrated
Resource Plan (IRP) process to plan multiple approaches to transition to the goal in a way that optimizes affordability, rate equity, stability, and reliability of electricity while achieving the goal.

This procurement plan a guide to ensure compliance with SB 100, SB 1020, and other state requireme nts. PWP will endeavor to investigate and pursue achievement of Resolution 9977’s goals in accordance with best utility practices as described below in Section 7, PWP’s Renewable Portfolio Standard and Carbon‐Free Strategy. The following are the primary changes in this revised RPS Procurement Plan:
 Annual renewable ener
gy targets will reflect reasonable progress in the intervening years between RPS milestones and will be set at the greater of (i) the City of Pasadena’s RPS goal or (ii) the State of California RPS goal of SB 100.  Pursuant to SB 350 and the City of Pasadena’s RPS Enforcement Program, PWP will incorporate the most recent RPS Procurement Plan in
to future iterations of the IRP.
 The following changes in Pasadena’s contracted RPS resources are reflected in this RPS Procurement Plan:
 Update to potential contracts, as presented in the 2023 IRP.  Given the number of variables and uncertainties related to ac tual resource performance and net retail load, it is difficult to precisely match the amount of renewable energy procured for each year to the RPS requirements. PWP’s RPS portfolio optimization strategy to achieve the target RPS at the lowest cost to Pasadena customers includes the following:
 To the extent available and consistent with Pasadena City Council goals, maximizing the use of lower cost categories (e.g., Portfolio Content Category (PCC) 2 and PCC 3), within resource balancing
requirements, to meet the target RPS goals.
 Limiting the amount of renewable energy and renewable energy credits (REC) that are actually retired in each PCC each year to the tar
geted amount. Any surplus is carried over to the following year(s) as long as the RECs can be retired within 36 months of generation.

159 60% of retail sales as explained below.
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2. Disclaimer
This RPS Procurement Plan describes the intended strategy of PWP to comply with the RPS requirements of California SB X1‐2, SB 350, SB 100, and the RPS Enforcement Program adopted by the Pasadena City Council on December 5, 2023. The RPS Enforcement Program and this RPS Procurement Plan incorporate the regulations established by the California Energy Commission (CEC) regarding Public Utilities Code
Section 399.30 (l), as such interpretations of the law are codified in the California Code of Regulations, Title 20, Division 2, Chapter 13, Sections 3200 through 3208, and in Title 20, Division 2, Chapter 2, Article 4, Section 1240. This RPS Procurement Plan addresses not only California’s state‐wide RPS requirements but
also the City of Pasadena’s RPS goal, as affirmed in the 2015 IRP Update.

3. Portfolio Content Category Requirements
The CEC developed Enforcement Procedures for the RPS for local publicly‐owned utilities (POU), which specify rules and procedures for compliance with the provisions of the California Public Utilities Code as modified by SB X1‐2, SB 350, SB 100, and SB 1020. This Procurement Plan is consistent with the latest version of the CEC Enforcement Procedures and the City of Pasadena’s RPS Enforcement Program. 160
The following categories of renewable resources may be used to meet statutory RPS procurement targets (these categories are defined in the City of Pasadena RPS Enforcement Program and CEC Enforcement Procedures):
 Portfolio Content Category (PCC) 0
 Resources procured prior to June 1, 2010
 PCC 1
 Eligible renewable energy resource el ectricity that meets the requirement of in‐state or out‐of‐state resources scheduling power directly to a California balancing authority in accordance with Public Utilities Code section 399.16(b)(1)
 PCC 2
 Resources located outside a California balancing authority that may be delivered at times or locations other than when the energy
is actually produced, in accordance with Public Utilities Code Section 399.16(b)(2)  PCC 3
 Eligible renewable energy resource electricity products or any fraction of the electricity generated, including unbundled RECs that do not qualify under the criteria of PCC 1 or PCC 2, in accordance with Public Utilities Code Section 399.16(b)(3)

160 CEC: “Enforcement Procedures For The Renewables Portfolio Standard For Local Publicly Owned Electric Utilities,” Amended Regulations, Title 20, Division 2, Chapter 13, Sections 3200 – 3208, Title 20, Division 2, Chapter 2, Article 4, Section 1240; Effective April 2016 ‐ CEC‐300‐2016‐002‐CMF; and Pre‐Rulemaking Amendments to the Enforcement Procedures for the Renewables Portfolio Standard for Loc
al Publicly Owned Electric Utility (Sections 3200 through 3208) 277
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The Net Procurement Requirement is the total RPS requirement minus the grandfathered PCC 0 resources, which count in full. PWP assigns eligible renewable energy resource electricity products to the appropriate PCC consistent with Section A.3 of the City of Pasadena RPS Enforcement Program and the CEC Enforcement Procedures, Section 3203.

Under the CEC’s Enforcement Procedures, all local POUs must show an increasing annual renewable energy procurement to demonstrate reasonable progress toward reaching the mandated 60% by calendar year 2030. PWP must procure a minimum quantity of electricity products from eligible renewable energy resources, including RECs, as a specified percentage of retail sales. Retail sales are defined in the RPS Enforcemen t Program as sales of electricity by a POU to end‐ use customers and their tenants, measured in MWh minus energy consumption by a POU, electricity used by a POU for water pumping, or electricity produced for onsite consumption (self‐generation). Annually, PWP uses approximately 16 GWh (or about 1.6% of total
load) of electricity for water pumping. 161 SB 350 further clarifies that retail sales may exclude sales to customers taking service under the optional Green Power Option or any shared renewable generation program to achieve the following RPS targets.

Figure 1 summarizes the renewable energy procurement requirements under the CEC Enforcement Procedures, Pasadena’s RPS Enforcement Program, and the potential requirements under SB 100 (the SB 100 r equirements are estimates, as the CEC Enforcement Procedures have not been updated for SB 100 compliance).

Figure 1: Renewable Resource Categories and State Renewable Portfolio Standard Requirements PWP CEC‐Compliant RPS Procurement Plan Requirements by Calendar Year Requirement Compliance
Period 3
Compliance
Period 4
Compliance
Period 5
Compliance
Period 6
Compliance
Period 7
California RPS
Mandatory
Procurement
Requirement (% of
Net Retail Sales)162, 163
Year %
44% by
December 31,
2024
52% by
December 31,
2027
60% by
December 31,
2030
2031+
(3 year blocks)
60%
2017 27%
2018 29%
2019 31%
2020 33%
PCC 1 Minimum ≥75% of Net Procurement Requirement
PCC 2 Maximum164 ≤15% of Net Procurement Requirement
PCC 3 Maximum ≤10% of Net Procurement Requirement
Long‐Term Contracts
(at least 10 years
duration)
N/A At least 65% of contracts must be long‐term contracts (at least 10 years in duration)

161 1 GWh = one Gigawatt hour = one million kilowatt hours. 162 As specified in the CEC Guidebook and CEC Enforcement Procedures. 163 Net Retail Sales is defined as Total Retail Sales minus Department usage including Water Department pumping load. 164 The PCC 2 constraint is not specified by law but is derived logically as the maximum residual given the PCC 1 and PCC 3 constraints.
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For a customer participating in the Green Power Option or any shared renewable generation project, the RECs associated with electricity credited to such customer under the program will not be used by PWP for compliance with state mandated RPS procurement requirements. The RECs will be retired on behalf of the participating customer and may not be fur ther sold, transferred, or otherwise monetized for any purpose. Under these programs, PWP will seek to procure generation from eligible renewable energy resources that are located in reasonable proximity to participants to the extent possible.165 Details of the above requirements can be found in the CEC’s Enforcement Procedures for Local Publicly Owned Utilities and Pre‐Rulemaking Amendments to the Enforcement Procedures.

4. Renewable Portfolio Standard Procurement Plan

4.1. Supply vs. Load
This Procurement Plan is consistent with the renewable energy procurement guidelines recommended by the 2023 IRP.

The PWP 2023 IRP was designed to strike a balance between environmental regulatory compliance and system reliability while maintaining stable and affordable retail electric rates. It also complies with the requirements of SB 350, SB 100, and SB 1020. The 2023 IRP projects that PWP’s retai
l sales will increase due to increased electrification efforts. The gap between the gross and net forecast is due to demand response, energy efficiency and distributed generation. This trend is shown in Figure 2.

165 PUC Section 399.30(c)(4)
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Figure 2: 2023 Integrated Resource Plan Updated Load Projection Though the SB 100 mandates require POUs to procure 60% of the ir retail needs through renewable power by 2030, PWP
must strike a balance of meeting this need while being mindful of its cost, reliability, and sustainability obligations and priorities. Over or under procuring renewable energy in comparison to requirements come with risks and opportunities.

Private use restrictions on generation projects financed with municipal bonds, and on the sale of power from the federally‐ owned and operated Hoover power project, generally require that these projects be dedicated to serving PWP’s load and not resold. IPP is expected to be repowered with a smaller natural gas‐fired project in 2025. Much of the shortfall in capacity and energy after that date is planned to be f
ulfilled with renewable or zero‐carbon energy resources. To mitigate a variety of risks, PWP will seek to ensure an appropriate mix of various RPS and other products as part of a diversified power supply portfolio.

5. Compliance Strategy
PWP starts with a projected load forecast based on actual historical loads, assuming load growth for planned projects and electrification, offset by expected distributed generation, demand side‐management and projected energy efficiency savings. PWP’s RPS procurement requirement is calculated by multiplying the load forecast for each year (in GWh) by the required annual RPS percentage for that year to come up with the a mount of renewable energy (in GWh) required by year
(the annual RPS Total Procurement Requirement). 166
166 1 GWh = one Gigawatt hour = one million kilowatt hour (kWh) ‐
500,000
1,000,000
1,500,000
2,000,000
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
2026
2028
2030
2032
2034
2036
2038
2040
2042
2044
2046
2048
2050
Retail Sales (MWh)
Retail Sales
Retail Sales (Historical)
Retail Sales (Future)
Retail Sales (Future) With Energy Efficiency & Distributed Solar Removed Energy efficiency and
distributed solar reduce load
Electrification increases load
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Next, PWP subtracts the amount of energy that is expected to be delivered from the existing resources. First, the existing, grandfathered contracts in PCC 0 are subtracted from load. The resulting number is the RPS Net Procurement Requirement. Next, PWP subtracts the amount of energy that is expected to be delivered from the existi ng resources procured by PWP by PCC and Compliance Period.

In meeting the RPS procurement requirements identified in this RPS Procurement Plan, PWP is required to meet the long‐ term contract requirements per Public Resources Code § 399.13(b). Beginning January 1, 2021, a minimum of 65% of PWP’s RPS resource procurement shall be from its contracts that have terms of 10 years or more or in its ownership or ownership agreements for eligible renewable energy resources.

6. Balanced Portfolio
After determining the amount of energy already procured in each year, each PCC, and each Compliance Period, PWP must determine the amount of RPS procurement still required. This requires a calculation of the RPS procurement constraints and a comparison of annual energy procurement against these constraints to determine if future compliance targets (or obligations) will require additional purchases of PCCs. The final calculation is th e net short evaluation. If the sum of existing
contracts is less than the total required RPS Net Procurement Requirement energy for the year, the difference is the amount that must be procured, and allocated to the PCCs according to the constraints. Any surplus renewable energy and/or
credits in a year may be carried over into the following year, and the RPS Net Procurement Requirement adjusted accordingly.

In addition to balancing between PCCs and compliance periods, PWP must consider the right mix of resources to fit PWP’s portfolio and load as it evaluates RPS proposals. PWP evaluates its existing RPS portfolio and remaining fu ture needs to develop a diverse portfolio of different technology types (e.g., wind, solar, geothermal). Further, PWP evaluates the right mix of contract durations to meet the long‐term contract requirements and balancing ongoing needs with short term opportunities. Additionally, PWP expects
to contract with a diversified set of counterparties, which in the procurement process are evaluated for deliverability and performance risk to mitigate risk of delays and project failure. PWP also factors in aspects of geographic diversity to further mitigate deliverability risk.

7. PWP’s Renewable Portfolio Standard and Carbon‐Free Strategy Above and beyond the mandatory RPS procurement requirements under SB 350 and SB 100, PWP’s target of 100% carbon‐ free resources by 2030, a policy goal set by City Council, requires the additional procurement of carbon‐free resources.

Additional procurement will occur as PWP is able to secure resources beyond meeting regulatory requirements and replacing Inte
rmountain Power Plant with carbon‐free resources by 2027, while balancing cost and other considerations.

In all scenarios, a significant amount of wind, solar, storage, and fuel cells are added by 2031. Scenarios 1‐3, which all meet 100% carbon‐free by the end of 2030, require 700 – 1,300 MW of new installed capacity over the next eight years (see Figure 3). Compared to PWP’s current resources of around 400 MW, this is a transformational amount of resources. In case a particular resource type is unobtainable according to the timeline, and in the quantity specified below, PWP could exercise alternative resources to make up the shortfall. Throughout this initial period through 2031, PWP will caref ully
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Successfully procuring this level of new capacity will require a coordinated effort in order to source projects, conduct due diligence, perform evaluations, negotiate contracts, secure approval, sign contracts, and ultimately see projects through to their commercial operations date. There will be continual Requests for Proposals for the carbon‐free resources that will help shape the optimal mix of resources in
PWP’s Power Supply at best fit and least cost portfolio.

Figure 3: Cumulative New Resource Installed Capacity Through 2031 (MW) Solar Wind
Battery
Storage Fuel Cell Geothermal
Scenario
Total
Scenario 1 300 285 115 700
Scenario 2 615 30 665 35 10 1,355
Scenario 3 480 60 598 35 20 1,193
Scenario 4 5 250 130 385
Scenario 5 5 610 60 675

8. PWP’s Renewable Portfolio Standard Procurement Process Because PWP is a relatively small municipal utility, it solicits most of its long‐term renewable resources through open requests for proposals (RFP) conducted by its joint powers authority SCPPA (Southern California Public Power Authority).167 This allows PWP and other SCPPA members to purchase the output of portions of multiple diverse projects and gain economies of scale, rather than limit the projects that they would be capable of participating in due to the comparatively small demand of most of the individual utilities. PWP anticipates dividing its outstanding RPS procurement between diff
erent resource technologies and seeking some long‐term and mid‐term contract terms. In this case, PWP defines long‐term as ten years or longer, and mid‐term as five to ten years. PWP may procure some RECs and/or PCC 2 products with shorter tenures. PWP will also seek products with energ y pricing tied to electricity market indices as well as fixed priced.

The SCPPA RFPs are considered an open and “rolling” solicitation, generally issued in January, with responses accepted through December each year. The SCPPA RFP solicits proposals for power purchase agreements with and without ownership options and also invites energy storage and innovative proposals. PWP initially sc reens prospective renewable resource proposals received through SCPPA and through direct contact with renewable project developers based on the levelized offer price ($/MWh or $/kW‐month) for resources with a project size and proposed delivery period that matches PWP’s procurement targets. For larger project s, joint participation with other SCPPA members may be desirable to obtain the best project economics and contract terms.

167 SCPPA = Southern California Public Power Authority, which includes the cities of Anaheim, Azusa, Banning, Burbank, Cerritos, Colton, Glendale, Los Angeles Dept. of Water & Power, Pasadena, Riverside, Vernon, and the Imperial Irrigation District. 282
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8.1. Quantitative Analysis
From the short‐list of projects that pass the initial screening, PWP evaluates and compares proposals to identify the “least cost/best fit” opportunities. Best fit analysis considers PWP’s projected needs in light of its existing portfolio of generating resources and contracts. For example, considerations include: RPS targets and other regulatory requirements, grid and local area reliability needs, projected load and gen
eration profiles, the estimated commercial operation or contract start date, and proposed contract term (duration). Variables can include the following:
 Generation cost
 Risk analysis of time‐of‐delivery value under various market price scenarios  Capacity value
 Congestion hedge value at the point of delivery
 Ancillary service value 168
 Value of environmental attributes by PCC
 Costs of integrating variable generation technologies  Incremental transmission costs excluding current CAISO load‐ based transmission access and grid management charges
 Costs and deliverability status associated with CAISO load‐ based transmission access and grid management charges

8.2. Qualitative Analysis
In addition to the quantitative evaluation, PWP performs a qualitative evaluation using a process similar to that employed by California investor‐owned utilities to rate project viability. Project viability can refer to the following:
 Project owner/development team experience developing, owning, operating and/or maintaining similar projects and technical feasibility
 The proposed resource must be a commercializ ed technology in use at other operating facilities of similar or larger capacity
 Must meet the California Emission Performance Standard  Must be pre‐certified by the CEC as an eligible renewable resource  The proposal must include high quality resource production profile estimates  There should not be any known or anticipated manufacturin g supply chain constraints  Identified available water source and minimal water consumption

168 Ancillary Services are required to support the transmission of energy from generation resources to loads while maintaining reliable operation of the electric grid in accordance with regional reliability standards and good utility practice. Ancillary Services include Regulation, Spinning Reserve, Non‐Spinning Reserve, Voltage Support and Black Start, each as defined in the CAISO Tariff. 283
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 Development milestones
 Site control
 Permitting
 Status of and ability to obtain financing
 Interconnection progress
 Transmission system and deliverability upgrade requirements/schedule  Reasonableness of proposed commercial operation or contract start date

In addition to project viability, PWP’s qualitative evaluation also considers the following factors:
 Risk exposure diversificatio n
 Counterparty creditworthiness and willingness to post collateral  Resource flexibility and optionality
 California’s Energy Action Plan preferred loading order  Preference for previously disturbed and brownfield sites, or locations in designated Renewable Energy Zones  Local and certified small or micro business preference

9. Summary of Renewable Portfolio Standard Procurement Plan PWP’s 2023 RPS Procurement Plan for meeting the RPS goals is outlined in, with the appropriate PCC and RPS targets required under the CEC Enforcement Procedures. To optimize the portfolio and minimize costs, this Procurement Plan assumes PWP retires only the amount of RECs required in each PCC in any particular year and carries over the remainder into future periods. The pending con
tracts listed in Figure 4 refer to planned future contracts to meet compliance requirements. The 2023 RPS Procurement Plan is an estimate only to show PWP’s intent to comply with SB 100.

When reviewing the 2023 RPS Procurement Plan, it is important to note the following:
 CP refers to Compliance Period
 CP 4, CP
5, and CP 6 are based on PWP estimates
 TBD is to be determined based on contract negotiations and the 2018 IRP Update  Planned refers to projects that are under negotiation, or plan to be under negotiation in that CP

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Figure 4: PWP SB 100 Procurement Plan from 2023 IRP
2023 – 2024 (Partial Compliance Period
4)169 Compliance Period 5 Compliance Period 6
Calendar Year (CY) 2021 ‐ 2024 2025 ‐ 2027 2028 ‐ 2030 Estimated PWP Adjusted
Projected Retail Sales
(MWh)
2,064,129 3,417,985 3,579,142
Estimated Requirement
Procurement for CP (MWh) 879,914 1,687,019 2,053,186 Grandfathered Projects
Resource Resource
Type Location Online
Year PCC Partial Compliance
Period 4 (GWh)
Compliance Period 5
(GWh)
Compliance Period
6 (GWh)
Biofuels: Chiquita Landfill Biofuels CA 2010 PCC0 75,002 106,606 97,569 Wind: PPM (Avangrid) Wind Wind CA 2003 PCC0 5,648 ‐ ‐ Wind: Milford Wind Wind UT 2009 PCC0 19,055 28,754 17,996 Total Grandfathered Owned or Contracted Projects 99,705 135,360 115,566 Non‐Grandfathered Owned or Contracted Projects
Resource Resource
Type Location Online
Year PCC Partial Compliance
Period 4 (GWh)
Compliance Period 5
(GWh)
Compliance Period
6 (GWh)
Biofuels: Puente Hills
Landfill Biofuels CA 2014 PCC1 59,790 89,527 89,142 Solar PV: Antelope Solar Solar PV CA 2012 PCC1 30,823 46,116 44,725 Solar PV: Kingbird Solar Solar PV CA 2013 PCC1 114,972 172,485 167,340 Solar PV: Columbia Two
Solar Solar PV CA 2013 PCC1 14,672 21,991 21,320 Solar PV: Summer Solar Solar PV CA 2012 PCC1 30,825 46,119 44,727

169 Compliance shown for 2023 – 2024.
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Solar PV: Windsor Reservoir
Solar Solar PV CA 2010 PCC1 2,639 3,962 3,828
Geothermal: Coso
Geothermal Geothermal CA 2027 PCC1 ‐ 72,375 214,730 Geothermal: Calpine
Geysers Geothermal CA 2027 PCC1 ‐ 194,910 578,280 Solar PV: EDF Sapphire Solar Solar PV CA 2027 PCC1 0 110743 321581 Total Non‐Grandfathered Owned or Contracted Projects 253,722 758,228 1,485,675 Non‐Grandfathered Generic Projects (Scenario 4)
Resource Resource
Type Location Online
Year PCC Compliance Period 4
(GWh)
Compliance Period 5
(GWh)
Compliance Period
6 (GWh)
Wind: New Land‐Based
External Wind Wind WECC
Region
TBD (250
MW in
2025)
PCC1 ‐ 2,302,196 2,255,532
Wind: New Land‐Based
External Wind (Storage
Paired)
Wind WECC
Region
PCC1 ‐ ‐ ‐
Solar PV: New External Solar Solar PV WECC
Region
PCC1 ‐ ‐ ‐
Solar PV: New External Solar
(Storage Paired) Solar PV WECC
Region
PCC1 ‐ ‐ ‐
Solar PV: New Internal Solar Solar PV WECC
Region
PCC1 ‐ ‐ ‐
Solar PV: New Community
Solar Solar PV WECC
Region
TBD (5
MW in
2025)
PCC1 ‐ 42,692 41,298
Solar PV: New Internal Solar
(Storage Paired) Solar PV WECC
Region
PCC1 ‐ ‐ ‐
Solar PV: New Commercial
Solar Solar PV WECC
Region
PCC1 ‐ ‐ ‐
Solar PV: New Residential
Solar Solar PV WECC
Region
PCC1 ‐ ‐ ‐
Geothermal: New External
Geothermal Geothermal WECC
Region
PCC1 ‐ ‐ ‐
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Biofuels: New External Fuel
Cells Biofuels WECC
Region
PCC1 ‐ ‐ ‐
Biofuels: New Internal Fuel
Cells Biofuels WECC
Region
PCC1 ‐ ‐ ‐
Wind: New Offshore Wind Wind WECC
Region
PCC1 ‐ ‐ ‐
Total Non‐Grandfathered Owned or Contracted Projects ‐ 2,344,889 2,296,829 287
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10. Renewable Portfolio Standard Procurement Plan Limitations and Relief Section E of the City’s RPS Enforcement Program notes that PWP will use its best efforts to procure adequate supplies of renewable energy as set forth in this RPS Procurement Plan; however, PWP will at all times maintain system reliability and average procurement costs for retail electric sales in accordance with the approved budget and retail elec tric rates approved by the City Council. California law recognizes that adverse situations beyond PWP’s control may arise and prevent PWP from fulfilling the RPS Procurement Targets in a timely manner and consistent with such limitations.

In the event PWP discovers that such conditions, as specified in the City of Pasadena’s RPS Enforcement Program, may potentially prevent PWP from meeting the RPS Procurement Targets set forth in the RPS Enforcement Program, PWP will notify the City Council of the adverse conditions and apply to the CEC for relief. If appropriate, PWP may submit a revised RPS Procurement Plan for discussion, approval, and implementati on.

The CEC may reduce a procurement requirement to the extent PWP demonstrates that it cannot comply because of conditions beyond its control.170 However, the CEC may not, under any circumstance, reduce the procurement obligation of PCC 1 below 65%for any compliance period obligation after December 31, 2016. PWP expects to fully comply with the City of Pasadena’s and the State of California’s mandatory RPS requirements. PWP does not recommend taking advantage of this provision or other optional compliance measures detailed in the City of Pasadena’s RPS Enforcement Program at this time.

11. Version History
 Version 1: Initially adopted July 22, 2013
 New mandate to comply with SBX1 2
 Version 2: Amended June 1, 2015
 Include updates on contracts and other processes
 Version 3: Amended January 29, 2018
 Show compliance with SB 350
 Include updates on contracts and other processes
 Version 4: Amended December 10,
2018
 Show compliance with SB 100
 Include updates on contracts and other processes, as recommended by the 2018 IRP  Version 5: Amended December 5, 2023
 Show compliance with SB 100

170 PUC Section 399.15(5)
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 Include updates on contracts and other processes, as recommended by the 2023 IRP

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100 Garfield Avenue, Room N 106
Pasadena, California 91101
626.744.4005

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Renewable Portfolio
Standard
Enforcement Plan
Still Under Development and Review
Appendix 29
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Table of Contents

1. Purpose 283

2. RPS PROCUREMENT PLAN GUIDELINES 283

2.1. Compliance Periods ..................................................................................................................................................... 283

2.2. State RPS Procurement Targets .............................................................................................................................. 283

2.3. PCC Definition and Balance Requirements ......................................................................................................... 285

2.4. Long‐Term Contracts .................................................................................................................................................. 288

2.5. Additional Requirements .......................................................................................................................................... 288

2.6. City Council Discretion ............................................................................................................................................... 288

2.7. Review of the RPS Procurement Plan ................................................................................................................... 289

3. Public Notice for RPS Procurement Plan 289

4. Excess Procurement 289

5. Renewable Energy Procurement in Excess of Statutory Procurement Targets 290

6. PRS Procurement Plan Limitations and Relief 291

7. Reporting 294

8. Enforcement 294

9. Version History 295

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Table of Figures
Figure 1: Compliance Targets .............................................................................................................................................. 284 Figure 2: Portfolio Content Categories ............................................................................................................................... 285

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28. Purpose
The purpose of this revised Renewable Portfolio Standard (RPS) Enforcement Program171 for the Pasadena Water and Power Department (PWP) is to comply with the California RPS pursuant to California Public Utilities Code (PUC) Section 399.30. Each calendar year, PWP will target California state mandated targets (e.g., 60% by 2030), with reasonable progress towards these goals in the intervening years. Pasadena also has its own carbon‐free policy goal, which is not subject to State compliance
requirements.

29. Renewable Portfolio Standard Procurement Plan Guidelines PWP has developed a RPS Procurement Plan for the City Council to consider for adoption. Going forward, no later than January 1, 2024, PWP will incorporate the RPS Procurement Plan into its broader Integrated Resource Plan (IRP) developed and adopted pursuant to PUC Section 9621(b). The RPS Procurement Plan will at minimum include the elements descri bed in the following sections.

29.1. Compliance Periods
Procurement targets in Section 2.2 reflect the minimum quantity of eligible renewable energy resources to be procured by PWP in each of the following RPS Compliance Periods (CP):
 CP 4: January 1, 2021, to December 31, 2024, inclusive  CP 5: January 1, 2025, to December 31, 2027, inclusive  CP 6: January 1, 2028, to Decembe r 31, 2030, inclusive  CPs three years in length beginning January 1 and ending December 31, beginning and after January 1, 2031

29.2. State RPS Procurement Targets172
PWP will procure a minimum quantity of electricity products from eligible renewable energy resources, including renewable energy certificates/credits (REC), as a specified percentage of total retail sales to achieve the targets outlined in Figure 1. In each of the intervening years, PWP must show reasonable progress towards the next goal.

The requirements shown in

171 Pursuant to California Public Utilities Code Section 399.30 as enacted by California Senate Bill (SB) X1‐2 in 2011 (“The California Renewable Energy Resources Act”) and subsequently revised by Assembly Bill (AB) 2227 in 2012, and in 2015 by SB 350 (“The Clean Energy and Pollution Reduction Act of 2015”), and as implemented through the Pre‐Rulemaking Amendments to the Enforcement Procedures for the Renewables Portfolio Standard for Local Publicly Owned Electric Utilities, California Energy Commission Amended Regulations Effective April 12, 2016, CEC‐ 300‐2016‐002‐CMF; the Pre‐Rulemaking Amendments to the Enforcement Procedures for the Renewables Portfolio Standard for Local Publicly Owned Electric Utility (Sections 3200 through 3208), and the California Energy Commission Draft Guidebook, Renewables Portfolio Standard Eligibility, Ninth Edition, July 2016, CEC‐300‐2016‐ 006‐ED9‐SD. 172 PUC Section 399.30(c)(2)
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Figure 1 reference the California PUC Section 399.30 and SB 100 requirements, not PWP’s goal of 100% carbon‐free by 2030.

Figure 1: Compliance Targets
CP Dates Minimum % of RPS
1 [complete] By December 31, 2013 Average of 20% retail sales by 2013 2 [complete] By December 31, 2016 25% of 2016 retail sales 3 [complete] By December 31, 2020 The sum of: 27% of 2017 retail sales, 29% of 2018 retail sales, 31% of 2019 retail sales, and 33% of 2020 retail sales 4 By December 31, 2024 44% of 2024 retail sales
5 By December 31, 2027 52% of 2027 retail sales
6 By December 31, 2030 60% of 2030 retail sales
7+ Post 2030
Not less than a 60% of retail sales, post 2030; the California Energy Commission (CEC) will establish appropriate multi‐year
compliance periods at a later time

For the purpose of this RPS Enforcement Program, retail sales shall be defined as the total volume of energy sold, in Megawatt hours, to all retail end‐use customers taking service under Pasadena Municipal Code (PMC) Sections 13.04.040 to 13.04.090173, and 13.04.177 (Net Energy Metering), inclusive. Retail sales may exclude sales to customers taking service under the optional Green Power Option (PMC 13.04.179) or any shared renewable generation program. Sales to retail customers taking Direct Access Service under PMC 13.04.095, energy consumption by PWP, electricity used by PWP for water pumping, and electricity prod uced for onsite consumption under PMC 13.04.178 (self‐generation) that was not sold to the customer by PWP shall not be included in this definition of retail sales.

For a customer participating in the Green Power Option or any shared renewable generation project, if the renewable energy is excluded from the calculation of retail sales, the Portfolio Content Category (PCC) 1 RECs associated with the electricity credited to such customer under the program will not be used by PWP for compliance with state mandated RPS procurement requirements. The RECs will be retired on behalf of the participating customer, and may not be further sold, transferred, or otherwise monetized for
any purpose. To the extent possible, the electricity products excluded from retail sales will be procured by PWP from eligible renewable energy resources that are located in the PWP service territory and in reasonable proximity to program participants174.

173 PMC Sections 13.04.040 – Residential single‐family service, 13.04.045 – Residential multi‐family service, 13.04.050 – Small commercial and industrial service, 13.04.060 – Medium commercial and industrial service – Secondary,13.04.064 – Medium Commercial and Industrial Service – Primary, 13.04.067 – Large commercial and industrial service – Secondary, 13.04.070 – Large commercial and industrial service – Primary,

13.04.071 – Special load management and conservation service, 13.04.075 – Long‐term contracts, 13.04.080 – Standby Service, 13.04.85 – Unmetered rates – Non‐demand, 13.04.087 – Unmetered rates – Demand, 13.04.090 Street lighting and traffic signal service. 174 PUC Section 399.30(c)(4)
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29.3. Portfolio Content Category Definition and Balance Requirements The categories of renewable resources outlined in
Figure 2 will be used to meet the statutory RPS procurement targets.175 Figure 2: Portfolio Content Categories
PCC PCC Description PCC % Balance Requirements
PCC 0: (“Grandfathered” or
“Count‐in‐Full” resources and
contracts):176
 PCC 0 refers to electricity products
procured pursuant to a contract or
ownership agreement executed
before June 1, 2010, and associated
with generation from an eligible
renewable energy resource that met
the CEC eligibility requirements in
effect when the original procurement
contract or ownership agreement
was executed will be classified as PCC

0.  PCC 0 products will count in full
toward state mandated RPS
procurement requirements177.
“Count‐in‐full” means that such
renewable electricity products
procured prior to June 1, 2010, will
be applied toward (deducted from)
the state RPS procurement target for
each compliance period prior to
determining the portfolio balance
requirement, subject to the
following:
 The associated REC must be
retired within 36 months of the
date the electricity product is
generated.
 The PCC 0 products will not
count toward the portfolio
balancing requirements
 No minimum or maximum
requirements; the PCC 0
amount is subtracted from the
RPS needs and any shortage
must comply with the PCC1,
PCC 2, or PCC 3 balance
requirements
 PCC 0 does not have portfolio
balancing requirements
175 PUC Sections 399.30(c)(3) and 399.16, and California Energy Commission Enforcement Procedures Section 3203 176 CPUC 399.16(d) and (e)
177 California Energy Commission Enforcement Procedures Section 3202 296
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PCC PCC Description PCC % Balance Requirements
 The PCC 0 electricity projects
associated with contracts of less
than 10 years will not be
subtracted when calculating
excess procurement (See
Section 4)
PCC 1

 PCC 1 are products procured as a
bundle with associated energy from
the eligible renewable resource.
 To be classified as PCC 1, eligible
renewable energy resource electricity
products must meet the requirement
of either of the following:
 Having a first point of
interconnection with a California
balancing authority (BA), having
a first point of interconnection
with distribution facilities used
to serve end users within a
California BA area, or scheduled
from the eligible renewable
energy resource into a California
BA without substituting
electricity from another source
other than to provide real‐time
ancillary services required to
maintain an hourly or sub‐hourly
import schedule into a California
BA. Only the fraction of the
schedule actually generated by
the eligible renewable energy
resource shall count toward this
PCC.178
 Having an agreement between
the BA in which the eligible
renewable energy resource is
 CP2: Minimum of 65%
 CP 3 and thereafter: Minimum
of 75%

178 A balancing authority is the entity responsible for integrating resource plans ahead of time, maintaining balance between loads, energy imports/exports, and generation within its balancing authority area, and supporting interconnection frequency in real‐time. California balancing authorities include: the California Independent System Operator (CAISO), the Los Angeles Department of Water & Power (LADWP), the Imperial Irrigation Distri
ct (IID), the Balancing Authority of Northern California (BANC), PacifiCorp West, Sierra Pacific Power (SPP), Turlock Irrigation District (TID) and the Western Area Lower Colorado Region (WALC). PWP is in the CAISO balancing authority area. 297
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PCC PCC Description PCC % Balance Requirements
located and a California BA to
dynamically transfer electricity
from the renewable energy
resource to the California BA.179
PCC 2
 PCC 2 refers to electricity products
that must be generated by an eligible
renewable energy resource and be
procured as a bundle (matched) with
incremental energy scheduled into a
California BA from a substitute
resource.180
 The first point of interconnection to
the transmission grid for the eligible
renewable energy resource and the
resource providing the incremental
electricity must be located within the
WECC181 service territory but outside
the metered boundaries of a
California BA area.
 The contract for the incremental
electricity must be executed at the
same time or after the contract for
the renewable electricity product.
 CP 3 and thereafter: Maximum
of 15%
PCC 3
 PCC 3 products may be procured
separately from the energy produced
by the renewable resource
(unbundled).
 Eligible renewable energy resource
electricity products or any fraction of
the electricity generated, including
unbundled RECs that do not qualify
under the criteria of PCC 1 or PCC 2,
fall within PCC 3.182
 CP 3 and thereafter: Maximum
of 10%
179 PUC section 399.16(b)(1)
180 PUC Section 399.16(b)(2)
181 Western Electricity Coordinating Council, the non‐profit regional electric reliability entity in the western interconnection, which includes 14 Western US states, 2 Canadian provinces, and Northern Baja Mexico. 182 PUC Section 399.16(b)(3)
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29.4. Long‐Term Contracts
PWP may enter into a combination of long‐term and short‐term contracts for electricity and associated RECs. Beginning January 1, 2021, at least 65% of the procurement PWP counts toward the California RPS requirement in each compliance period will be from contracts of 10 years or longer in duration, or PWP ownership or ownership agreements, for eligible renewable energy resources. An electricity product classified as PCC 2 will count toward the long‐term procurement requirement of this subdivision if the electricity product is procured under a contract of at least 10 years in duration or an ownership agreement, even if the matching incremen tal electricity is not associated with a contract of at least 10 years in duration or an ownership agreement.183

29.5. Additional Requirements
 RPS procurement requirement deficits incurred by PWP in any compliance period will not be added to the RPS procurement requirements of a future compliance period.  PWP must retire RECs to meet its RPS procurement requirements within 36 months from the initial month of the generation of the associated energy.
 In general, publicly‐owned utiliti
es (POU) may not use RECs for purposes of the California RPS for any given compliance period if that compliance period begins after the date of REC retirement; however, CEC Resolution No. 16‐0309‐04a (adopted by the CEC March 9, 2016) establishes a process to allow PWP to request that surplus RECs retired and reported to the CEC for a specified RPS CP (surplus retired RECs) be withdrawn and used for the
following RPS CP.
 PWP may not procure or retire a REC to meet its RPS procurement requirements for a compliance period that precedes the date of genera
tion of electricity associated with that REC, or the date the REC was procured by PWP.  For example, PWP may not procure or retire a REC generated in April 2021 to meet its state RPS procurement requirements for the 2017 to 2020 CP, nor retire a REC generated in November 2020 to meet its procurement re
quirements for the 2017 to 2020 CP if PWP did not procure the REC until February 2021.

29.6. City Council Discretion
The City Council will have the discretion to approve, reject, or modify PWP’s recommendations with respect to the following:
 The mix of eligible renewable energy resources procured by PWP pursuant to the RPS Procurement Plan for meeting the greater of the City’s carbon‐free policy goal  Those additional generation resources procured by PWP for purposes of ensuring resource adequacy and reliability

183 PUC Section 399.13(b)
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 The reasonable costs to be incurred by PWP for any eligible renewable energy resources that may be procured or owned by the utility

29.7. Review of the Renewable Portfolio Standard Procurement Plan PWP shall provide progress and assessments and/or updates of the approved RPS Procurement Plan for the City Council’s consideration when regulatory mandates modify the RPS requirements and/or significant changes occur to the RPS Procurement Plan as a result of RPS procurement. Going forward, updates to the RPS Procurement Plan will be brought to the City Council on an as needed basis. The RPS Procurement Plan up date is included as part of PWP’s 2023 IRP.

30. Public Notice for the Renewable Portfolio Standard Procurement Plan PWP will adhere to the following guidelines related to public notice associated with the RPS Procurement Plan184:
 Post public notice pursuant to the Ralph M. Brown Act185 when the City Council will deliberate in public on the RPS Procurement Plan
 Contemporaneously notify the CEC of the date, time, and location of the meeting and provide an electronic copy of the RPS Procurement Plan and other documents for posting on CEC’s website  This requirement will be satisfied if PWP provides the Uniform Resource Locator (URL) that links to this information
 Upon distribution
of information related to its renewable energy resources procurement status and future plans to the City Council for consideration at a noticed public meeting, PWP will make that information available to the public and provide the CEC with an elec tronic copy of the documents for posting on the CEC's web site  This requirement will be satisfied if PWP provides the URL that links to the documents or information regarding other manners of access to the documents

31. Excess Procurement186
PWP may apply excess procurement in one CP to any future CP, including compliance years following 2020.187 However, there will be no carryover of deficits between compliance periods. Other provisions include:
 PCC 3 products may not be counted as excess procurement

184 PUC Sections 399.30(f)
185 Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5 of the Government Code 186 Pre‐Rulemaking Amendments to the Enforcement Procedures for the Renewables Portfolio Standard for Local Publicly Owned Electric Utilities, California Energy Commission Amended Regulations Effective April 12, 2016; CEC‐ 300‐2016‐002‐CMF; Section 3206 – Optional Compliance Measures, Subsection (a)(1) – Excess Procurement 187 Pre‐Rulemaking Amendments to the Enforcement Procedures for the Renewables Portfolio Standard for Local Publicly Owned Electric Utilities, California Energy Commission Amended Regulations Effective April 12, 2016; CEC‐ 300‐2016‐002‐CMF; Section 3206 – Optional Compliance Measures, Subsection (a)(1) – Excess Procurement 300
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 PCC 0 products that would otherwise be classified as PCC 3 and that ex ceed the 10% maximum limit for PCC 3
must be subtracted from the calculation of excess procurement  Prior to January 1, 2021, electricity products procured under contracts of less than 10 years in duration will be subtracted from the calcul
ation of excess procurement, unless grandfathered (PCC 0)  If procurement is under a contract that has been amended to extend the term, the duration of the amended contract will be calculated from the original contract execution date to the amended contract end date  If procurement is under a contract that has been amended to a total term of at least 10 years in duration, the electricity products generated as of the month and year in which the contract amendment occurs will be eligible to qualify as excess procurement
 The numerical express of the excess procurement permitted for the CP endi ng December 31, 2021, and each annual CP thereafter is as follows:
 Excess Procurement = (EPX) – (RPSX+S2X+ S3X)
 EPX = Electricity products retired and applied toward the RPS procurement target for the compliance period X
 RPSX = The RPS procurement target calculated for compliance period X  S2X = Retired PCC 2 RECs that meet the criteria of Section 3202 (a)(1) or 3202 (a)(3) and that were not applied to the procurement target
 S3X = Retired PCC 3 RECs that meet the criteria of section 3202 (a)(1) in excess of the 10% maximum for compliance period X
 For PCC 1 products, contracts of any duration may count as excess procurement  PCC 2 or PCC 3 products shall not be counted as excess procurement  Contracts of any duration for PCC
2 or PCC 3 products that are credited toward a CP shall not be deducted from a retail seller's procurement for purposes of calculating excess procurement

32. Renewable Energy Procurement in Excess of Statutory Procurement Targets If the City Council establishes RPS goals for PWP higher than the California Procurement Targets, or procures energy to serve PWP Green Power Option customers taking service under PMC 13.04.179 or a shared renewables program, the eligible renewable resources procured in excess of the statutory minimum shall be deemed voluntary and not subject to188 the following:
 Any mandatory enforcement provisions under California rules or regulations  Any restriction from carry over or banking provisions to subsequent CPs, such as sale, purchase, exchange, or any other use
188 As defined in PUC Section 399.30(c)
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 Any requirements for or restrictions on portfolio content categorization189  Any reporting or public notice required by the CEC

33. Renewable Portfolio Standard Enforcement Plan Limitations and Relief PWP will use its best efforts to procure adequate supplies of renewable energy as set forth in this RPS Enforcement Plan and the RPS Procurement Plan; however, PWP will always maintain system reliability and maintain average procurement costs for retail electric sales in accordance with the approved budget and retail electric rates approved by the City Council.

California law recognizes that adverse situations beyond PWP’s control may arise and prevent PWP from fulfilling the RPS
Procurement Targets in a timely manner and consistent with such limitations.

In the event PWP discovers that such conditions may potentially prevent it from meeting the RPS Procurement Targets set forth in this RPS Enforcement Plan, PWP will noti
fy the City Council of the adverse conditions and apply to the CEC for relief. If appropriate, PWP may submit a revised RPS Procurement Plan for discussion, approval, and implementation.

The CEC may reduce a procurement requirement to the extent PWP demonstrates that it cann ot comply because of conditions beyond its control.190 However, the CEC may not, under any circumstance, reduce the procurement obligation of PCC 1 below 65% for any compliance period obligation after December 31, 2016.

The below applies:
 Delay of timely compliance
 The City Council may make a finding that conditions exist that are beyond PWP’s control to delay the timely compliance with RPS procurement requireme
nts as defined in Section 3204 of the CEC’s Enforcement Procedures, including achieving procurement targets and balancing requirements for each CP. Such a finding shall be limited to one or more of the following causes for delay and shall demonstrate that PWP would have met its RPS procuremen t requirements but for the cause of the delay:
 There is inadequate transmission capacity to allow sufficient electricity to be delivered from eligible renewable energy resources, or proposed eligible renewable energy resource projects, to the extent applicable, using CAISO’s current operational protocols. The City Council may find that:
 PWP has undertaken
all reasonable measures under its control and consistent with its obligation under local, state, and federal laws and regulations to develop and construct new transmission lines or upgrades to existing lines intended to transmit electricity generated by eligible renewable energy resources, considering its expectation for cost recovery.  PWP has take
n all reasonable operational measures to maximize cost‐effective purchases of electricity from eligible renewable energy resources in advance of transmission availability.

189 PUC Section 399.30(c)(3)
190 PUC Section 399.15(5)
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 Permitting, intercon
nection, or other circumstances have delayed procured eligible renewable energy resource projects, or there is an insufficient supply of eligible renewable energy resources available to PWP:
 The City Council must also find that PWP prudently managed portfolio risks, including, but not limited to, holding solicitations for RPS‐eligible resources with outreach to market participants and relying
on a sufficient number of viable projects to achieve RPS procurement requirements.
 PWP sought to develop either its own eligible renewable energy resources, transmission to interconnect to eligible renewable energy resources, or energy storage used to integrate eligible renewable energy resources.
 PWP procured an appropriate minimum margin of pr
ocurement above the level necessary to comply
with the RPS to compensate for foreseeable delays or insufficient supply.  PWP had taken reasonable measures to procure cost‐effective distributed generation and allowable unbundled RECs.
 Unanticipated curtailment of eligible renewable energy resources was necessary to address the needs of CAISO or other BA, if the delay of timely compliance would not result in an increase in
greenhouse gases (GHG) emissions.
 Unanticipated increase in retail sales due to electrification. For purposes of this paragraph, electrification refers to electrifying sectors that were either supplied by natural gas or other means.

This includes, but is not limited to, whole house ele
ctrification (moving away from natural gas), heat
pump electrification, transportation electrification (which includes, but is not limited to, the direct or indirect use of electricity to power vehicles, trains, ships and other vessels), etc. PWP will demonstrate consideration of the factors specified in the CEC Enforcement Procedures in
determining that this condition prevents timely compliance.  Cost limitations
 The City Council may adopt rules for cost limitations on the procurement expenditures used to comply with its RPS procurement requirements. Such cost limitation rules shall ensure that:
 The limitation is set at a level
that prevents disproportionate rate impacts.
 The costs of all procurement credited toward achieving the RPS are counted toward the limitation, but the limitation will not include PWP’s costs to procure eligible renewable energy resources for PWP’s voluntary green pricing or shared renewable generation programs.  In adopting cost limitat
ion rules, the City Council will rely on all of the following:
 The most recent renewables energy resources RPS Procurement Plan  Procurement expenditures that approximate the expected cost of building, owning, and operating eligible renewable resources
 The potential that some planned resource additions may be delaye d or canceled  When applying procurement expenditures under an adopted cost limitation rule, PWP will apply only those types of procurement expenditures that are permitted under the adopted cost limitation rule.  Adopted cost limitation rules will include planned actions to be taken in the event the projected cost of meeting the RPS procurem
ent requirements exceeds the cost limitation.
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 Portfolio balance requirement re
duction
 The City Council will allow for the reduction by PWP of the portfolio balance requirement for PCC 1 for a specific compliance period.191
 The need to reduce the portfolio balance requirements for PCC 1 must have resulted because of conditions
beyond PWP’s control.192
 A reduction of the portfolio balance requirement for PCC 1 below 65% for any compliance period after
December 31, 2016, will not be considered.193
 If PWP reduces its portfolio balance requirements for PCC 1, th ese changes must be adopted at a publicly
noticed meeting, providing at least 10 calendar days advance notice to the CEC, and must include the appropriate information in an updated renewable energy resources RPS Procurement Plan submitted to the CEC. The notice to consider the portfolio balance requirement reduction and the RPS Pro curement Plan must include the following information:
 The compliance period for which the reduction may be adopted  The level to which PWP has reduced the requirement
 The reason or reasons PWP has proposed for adopting the reduction  An explanation of how the needed reduction resulted from conditions beyon d PWP’s control194
 For the period from January 1, 2021, to December 31, 2024, inclusive, PWP may adjust its renewable energy procurement targets to ensure the procurement of additional electricity from eligible renewable energy resources, in combination with the procurement of electricity from unavoidable long‐term contracts and ownership agreements, does not exceed the total retail sales of PWP during that CP. PWP may limit its procurement of eligible renewable energy resources for that CP to the greater of (i) the quantity that would allow PWP’s total procurement of electricity products from eligible renewable energy resources during the compliance period, when combined with its unavoidable long‐term procurement of coal‐ fired generation during the CP, to not exceed PWP’s total retail sales during the compliance period, or (ii) 33% of its retail sales for the CP.  For purposes of this provision, unavoidable long‐term contracts and ownership agreements means commitments for electricity from a coal‐fired power plant, located outside the state, originally entered in to by PWP before June 1, 2010 (e.g., the Intermountain Power Project), that are not subsequently modified to result in an extension of the duration of the agreement or result in an increase in total quantities of energy delivered during any CP.
 PWP shall demonstrate
that any cancellation or divestment of the commitment would result in significant economic harm to its retail customers that cannot be substantially mitigated through resale, transfer to another entity, early closure of the facility, or other feasible measures.  Adjustments may be required if an approved RPS Procurement Plan is subsequently projecte d to adversely affect system reliability or resource adequacy.
191 Consistent with PUC section 399.16(e)
192 Specified in California Energy Commission Enforcement Procedures Section 3206(a)(2) 193 PUC section 399.16(e)
194 As provided in Section 3206(a)(2) of the California Energy Commission Enforcement Procedures 304
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34. Reporting
PWP will submit reports to the CEC as required.195
 PWP’s reporting of costs to procure electricity products to meet its RPS procurement requirements will not include the costs to procure eligible renewable energy resources for PWP’s Green Power Option or shared renewable generation program.
 PWP’s costs for its Green Power Option or shared renewable generation program will be reported separately from its costs to procure el
ectricity products to meet PWP’s RPS procurement requirements.  In addition to the applicable reporting requirements in the CEC Enforcement Procedures, if PWP excludes the eligible renewable energy resources procured for PWP’s Green Power Option or shared renewable generation program from its annual retail sales, PWP will report the following information:
 The total number of MWh of electrici
ty products from eligible renewable energy resources procured for the year that were credited to participating customers pursuant to PWP’s Green Power Option or shared renewable generation program
 Documentation demonstrating that the RECs associated with the electricity products were retired in WREGIS on behalf of the participating customer196
 The total number of MWh of electricity products procured that PWP excludes from its annual retail sales  Documentation showing that the RECs excluded from PWP’s annual retail sales meet the criteria for PCC 1  A description of PWP’s efforts to ensure the electricity products were procured from eligible renewable energy resources located
in PWP’s service territory or in reasonable proximity to program participants

35. Enforcement
The City Council directs the City Manager to inform the City Council at a public meeting if PWP will not meet the renewable energy procurement requirements as set forth in this RPS Enforcement Program and the RPS Procurement Plan. The PWP General Manager will notify the CEC of such non‐compliance in the manner and schedule established by the CEC pursua nt to regulations developed by the CEC.197

195 Section 3207 of the California Energy Commission Enforcement Procedures 196 WREGIS is the Western Renewable Energy Generation Information System, an independent, renewable energy tracking system for the region covered by the Western Electricity Coordinating Council (WECC). WREGIS tracks renewable energy generation from units that register in the system by using verifiable data and creating renewable energy certificates (REC) for this generation. 197 PUC Section 399.30
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The CEC has adopted regulations specifying procedur
es for enforcement of this article. The regulations include a public process under which the CEC may issue a notice of violation and correction against PWP or any other local POU for failure to comply, and for referral of violations to the California State Air Resources Board for penalties.

Any
complaint against PWP pertaining to the enforcement of an RPS requirement, or any regulation, order, or decision adopted by the CEC pertaining to the RPS, shall be filed in accordance with Title 20, Section 1240 of the California Code of Regulations.

A complaint may be issued for PWP’s failure to comply with any of the requirements in th e applicable regulations, including, but not limited to, the following:
 Failure to meet an RPS procurement target for reasons other than PWP’s adopted cost limitations and/or delay of timely compliance rules, which the CEC determines comport with the RPS requirements specified198  Failure to meet a PCC 1 portfolio balance requiremen
t199 for reasons other than PWP’s adopted cost limitations and/or delay of timely compliance rules, which the CEC determines comport with the RPS requirements as specified200
 Failure to adopt an RPS Procurement Plan, RPS Enforcement Program or Plan, or provide notice, disclosure, or other information
to the CEC and public as specified201
 Failure to submit a complete annual, compliance, or other report, or other doc umentation or information as
specified202
 Beginning January
1, 2021, failure to meet the long‐term contracting requirement as specified203

36. Version History
 Version 1: Initially adopted December 12, 2011
 New mandate to comply with SBX1 2
 Version 2: Amended July 22, 2013
 Include updates on contracts and other processes
 Version 3: Amended January 29, 2018
 Show compliance with SB 350
 Include updates on contracts and other processes
198 Subdivisions (a)(2) and (3) of section 3206 of the California Energy Commission Enforcement Procedures 199 Subdivision (c) of Section 3204 of the California Energy Commission Enforcement Procedures 200 Subdivisions (a)(2) and (3) of Section 3206 of the California Energy Commission Enforcement Procedures 201 Section 3205 of the California Energy Commission Enforcement Procedures 202 Section 3207 of the California Energy Commission Enforcement Procedures 203 Section 3208 of the California Energy Commission Enforcement Procedures 306
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 Version 4: Amended December 10,
2018
 Show compliance with SB 100
 Include updates on contracts and other processes, as recommended by the PWP 2018 Power IRP  Version 5: Amended December 5, 2023
 Include updates on contracts and other processes, as recommended by the PWP 2023 Power IRP 307

100 Garfield Avenue, Room N 106
Pasadena, California 91101
626.744.4005

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1 Addendum – Supplemental Information
Introduc�on .............................................................................................................................................. 2

1. Addi�on of 2026 Waypoint – Goodrich Transfer Sta�on Updates .................................................... 2

2. 2024 Cost of Service and Rate Design Study ..................................................................................... 5

3. Distributed Energy Resources (DERs) and Demand Response (DR) – Project Plan Considera�ons .. 7

4. Dashb
oard ......................................................................................................................................... 8 Summary ................................................................................................................................................... 9 309
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2 Introduction
This Addendum sa�sﬁes the follow-up documenta�on and commentary requirements directed by the Municipal Services Commitee (MSC) during its November 14, 2023 mee�ng delibera�ons. Staﬀ were directed to return with the following supplemental informa�on for further discussion and considera�on:

1. Create an incremental 2026 Waypoint, allowing for future evalua�on and technical analysis of the planned Goodrich Receiving Sta�on upgrades and the required key system modiﬁca�ons as described in the Power Delivery Master Plan (PDMP).

2. Provide incremental �meline and detail associated with the planned 2024 PWP’s Electric Cost of Service and Rate Design study.

3. Provide incremental DER and DR informa�on and concepts. The Implementa�on Plan paterned a�er Carbon Free Scenario 2 modeling results, iden�ﬁes DER and DR resource types.

4. MSC directed staﬀ to provide commentary of dashboard concepts that could be used to assist in the future monitoring and communica�on.

1. Addi�on of 2026 Waypoint – Goodrich Transfer Sta�on Updates Consi
stent with MSC’s direc�ve, a 2026 Waypoint has been added that will provide a speciﬁc and pointed opportunity to review the Goodrich Transfer Sta�on required upgrades. Per protocol, the PDMP , which is updated every ﬁve years, is a comprehensive 100+ page document that addresses the capital infrastructure, capital investment, and capital replacement planning for the Distribu�on and Sub- transmission system. The PDMP also includes signiﬁcant detail speciﬁc to the Goodrich Receiving Sta�on.

From a technical perspec�ve, the size, capability, design considera�on and megavolt-amperes (MVA) metrics of the power transformers at Goodrich may be of heightened interest, but the overall capabili�es of the Distribu�on and Sub-transmission system capabili�es must be jointly and comprehensively considered.
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3 The goals of the PDMP are comprehensive and require infrastructure investment not only to the Goodrich power transformers, but also to the balance of the distribu�on and sub-transmission networks, which must electrically accommodate the incremental power ﬂows. Engineering review is needed to assure both con�nued system reliability and ensure electrical protec�on and preserva�on of cri�cal system infrastructure.

The ﬁve primary goals which are inherent to the Goodrich Transfer Upgrade and the PDWP are as follows:

1. Reliability and Safety

2. Resiliency

3. Power Quality

4. Grid Moderniza�on

5. Grid Edge (Technology that is customer facing, installed at the “edge” of the grid) The 2026
Waypoint will be uniquely u�lized to provide updated technical reviews and evalua�ons of the Goodrich Transfer Upgrade, with key considera�ons that are topical in the present day, and account for developments since the 2022 P D M P.

PWP is a
Transmission-Constrained Electric System
Goodrich plays a key role in suppor�ng reliability in this constrained system. It operates constantly and is the sole interconnec�on point to the larger CAISO markets. In the review of Goodrich’s transfer capabili�es, the following key considera�ons are paramount:
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4 • Improving import capacity up to the 336 MW contractual transmission limit. PWP’s ability to use this addi�onal capacity depends on installing larger transformers at the loca�on as well as incremental changes to the 34.5-kv distribu�on system including upgrading other substa�ons. • Readying, reviewing, and engineering poten�al power delivery system modiﬁca�ons to accommodate future installa�ons of batery storage capabili�es. Engineering studies and associated system impact reviews are required for any signiﬁcant resource implementa�on, and the addi�on of batery storage capaci�es is no excep�on.

The PDMP is updated every ﬁve years and is dri ven by the latest IRP . The current plan, which was adopted by the City Council in 2022 and includes the requirements of the 2018 IRP , took 2.5 years to develop and is the culmina�on of 22 studies on various topics. Accordingly, the next update is planned for 2026 and will require signiﬁcant modeling and es�ma�ng to iden�fy the projects, sequencing, capital investment, and resources needed to support the 2023 IRP and its 2030 goals.

Cost Considera�ons – PDMP
Since the adop�on of the 2022 PDMP, the price and availability of infrastructure has been dynamically driven, both by pandemic-related events and the scarcity in key metals that are essen�al to the u�lity industry.

The ini�al es�mate for the overall PDMP was $821 million, to be distributed over a number of years to lessen rate impacts. This refreshed cost review will consider impacts from expedited scheduling, new resource costs, and the inﬂa�onary environment. These characteris�cs will be addressed within the 2026 Waypoint evalua�on.

Supply Chain – Custom Manufacturing
The power transformers at Goodrich will require custom manufacturing. Considering the current transformer backlog that the industry is experiencing, this requirement will be reviewed to assure appropriate ac�ons are taken to include expedi�ng, where might be required, in order to meet carbon- free policy goal requirements. This key logis�cal element will also be speciﬁcally evaluated at the 2026 Waypoint.

Construc�on Schedule: Opportuni�es to Expedite or Defer Projects The actual infrastructure upgrades of the Distribu�on and Sub-transmission system must be carefully coordinated as por�ons of the exis�ng system will likely be out of service for signiﬁcant periods of �me while new infrastructure is being constructed.

The 2026 Waypoint will be an opportunity to refresh construc�on schedule assump�ons, project planning considera�ons, and con�ngency analysis. Moreover, there are coordina�on and approvals required from the CAISO and/or other regulatory en��es, as removing key transmission infrastructure such as Goodrich Receiving Sta�on components may have impact on the surrounding bulk electric system.

Summary
The coordina�on associated with Goodrich Receiving Sta�on will be refreshed in 2026, as part of prudent prepara�ons suppor�ng the 2030 carbon-free policy goal. The dynamic considera�ons noted in 312
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5 this document as well as others, will be part of the 2026 Waypoint analysis speciﬁc to the Goodrich Receiving Sta�on Upgrades.

2. 2024 Cost of Service and Rate Design Study
U�lity Cost of Service and Rate Design (COS) studies are long-established founda�onal tools for evalua�ng, reviewing, and establishing u�lity rates. PWP is planning a COS in 2024 which will include a comprehensive review of PWP’s power system costs, alloca�ons, and budgetary categories. The COS will also examine customer usage behaviors, by customer type, to provide a beter understanding of how each would be impacted by various rate structures, while also beter documen�ng how each customer class u�lizes and relies upon the PWP system.

The ﬁndings of the analysis and proposed rate designs will provide the basis for electric rates for a 10- year period and produce a rate model that can be adjusted for changes in energy policy requirements. The model will also help iden�fy rates to support new technologies such as Time of Use (TOU) rates, Net Energy Metering (NEM), Customer Self-Genera�on, Metered EV rates, and low-income assistance programs.

In order to recover and allocate system costs eﬀec�vely, several key factors will be considered in the COS modeling including AMI program implementa�on, DER and DR expansion, U�lity-Side Energy Storage, elimina�on of carbon-based energy supply, stranded investments, expansion of assistance programs, development and implementa�on of the IRP and PDMP , and regulatory compliance requirements.

A Request for Proposals (RFP) for the COS study is planned for early December 2023. As PWP engages further with respondents leading to eventual selec�on, a formal project �meline will be produced.

However, many COS �melines may involve an 18-month execu�on window leading to eventual rate approvals.
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6 The customer impacts driven by aggressive decarboniza�on of the PWP resource por�olio will be analyzed as part of the COS ini�a�ve. PWP’s goal is to develop and review a series of electric rate designs that are based on cost-of-service principles.

The intent of the COS evalua�on is:

1. To perform a comprehensive review of PWP’s power system costs, alloca�ons, and budgetary categories;

2. To assess customer characteris�cs and customer classiﬁca�ons;

3. To design various rate structures, and to evaluate their impacts on customers; and

4. To develop a ﬂexible, non-proprietary working rate model that will be conveyed to the City of Pasadena.

The working model will be able to accommodate adjustments to factors such as integra�on of renewable energy sources; rising opera�ng, maintenance, and capital needs; stranded investments; normal to extreme weather paterns; overall sales; and customer demands.

Each rate structure op�on will adequately balance PWP’s short- and long-term ﬁnancial sustainability.

The proposed rate structure must meet the electric u�lity’s ongoing opera�ng expenditures, bond covenants, capital improvement needs, and fund reserve requirements. It must also follow accepted industry standards, best prac�ces, and California law. The recommended rate design will align policy goals with pricing strategies to encourage customer behavior that beneﬁts Pasadena’s u�lity system and public policy considera�ons.

The ﬁndings of the analysis and the proposed rate designs will provide the basis for electric rates for a ten-year period and will be conﬁgurable to accommodate evolving energy policy requirements. In developing and upda�ng electric rates, PWP and its consultant will consider the following:
• Time of Use (TOU) rates
• Net Energy Metering (NEM) — with and without Advanced Metering Infrastructure or Time of Use metering
• Customer Self-Genera�on (Non-NEM)
• Metered Rate for Electric Vehicles (EVs) — Residen�al and Public • Recovery Adjustments for new Renewable Energy and Power Purchase Agreements (PPAs) • A Standby Charge for the recovery of ﬁxed costs necessary to make electricity service available to a distributed genera�on facility
• Low-Income Assistance Programs
The following are some of the key factors that PWP and the consultant will incorporate into their rate recommenda�ons:
• Advanced Metering Infrastructure (AMI) program implementa�on and data • Distributed Solar Energy and Storage Resources, and Demand Response • U�lity-Side Energy Storage
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7 • Value of Good Load Factor (Load Shi�ing Programs)
• Commercial and ins�tu�onal customers achieving energy independence • Stranded investments
• Nonrenewal of carbon-based energy supply contracts
• Expansion of assistance programs, including the Electric U�lity Assistance Program (EUAP) • Power Integrated Resource Plan (IRP)
• Power Delivery Master Plan (PDMP)
• Compliance with applicable California regula�ons such as Proposi�on 26 • Other issues, as appropriate
PWP staﬀ and the consultant will present the ﬁndings of the analysis and proposed rate design to City Council Commitee(s) and the Pasadena City Council for review and approval.

PWP is planning to publish an RFP for this analysis in early December 2023, with proposal evalua�ons slated for the end of January 2024. The dura�on of the project will be approximately 18 months, with quarterly informa�onal items to Council Commitee(s) as well as a Public Par�cipa�on Plan to be developed.

PWP will con�nue to work with government en��es, nonproﬁt organiza�ons, other industry group, and stakeholders to iden�fy areas of support for its goals.

3. Distributed Energy Resources (DERs) and Demand Response (DR) – Project Plan Considera�ons

The increased penetra�on of variable resources to the electric grid has introduced a greater need for dynamic responsiveness, which in-part can be resolved with the addi�on of DER and DR resources. The modeling results call for a signiﬁcant number of distributed resources to be installed in the PWP service territory.

Resource types of DR and DER’s can vary, to include adjustable smart thermostats for air condi�oning (A/C) and hea�ng, u�lity triggered water hea�ng deferrals, u�lity/commercial/residen�al partnership in limited dura�on load curtailment and managed electric vehicle (EV) charging/discharging as poten�al DR considera�ons, in addi�on to the poten�al levels of commercial/industrial and residen�al DER levels of solar, wind and storage.

PWP will engage in proac�ve approaches such as conduc�ng a detailed distributed resources Market Poten�al Study. This will include both energy eﬃciency and distributed resources. This type of study will help PWP evaluate the incremental capabili�es of demand-side resources on the system, as well as use the results to design cost-eﬀec�ve programs.

PWP will also perform a Hos�ng Analysis, which will help PWP iden�fy the best ﬁt loca�ons of distributed resources with the least impact on the system, as well as iden�fy poten�al distribu�on system improvements that could enhance the amount of distributed resources in its service territory.

In addi�on to the exis�ng Load Curtailment Program, PWP will consider addi�onal approaches for enhancing demand response. For example, when PWP implements advanced metering infrastructure, 315
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8 there will be opportuni�es to explore automated demand response for residen�al and commercial customers. In addi�on, the CEC con�nues to expand its demand response program oﬀerings including the Demand Side Grid Support (DSGS) Program as well as the Distributed Electricity Backup Assets (DEBA) Program. DEBA incen�vizes the construc�on of cleaner and more eﬃcient distributed energy assets that would serve as on-call emergency supply and/or load reduc�on for the State’s electrical grid during extreme events.

In addi�on to these ac�on items, PWP will con�nue to evaluate demand-side resources as part of a broader strategy, and further ac�ons will include:

1. Con�nued review and coordina�on of State of California, CAISO, and/or CEC oﬀerings of DER programs that meet the beneﬁt criteria.

2. Con�nued review of exis�ng PWP programs that currently support thermostat control, or other similar devices such as PWP’s Water and Energy Direct Install Program (WeDIP) and its demonstrated Energy Eﬃciency and Demand Response contribu�ons.

3. Review and considera�on of ﬁscal incen�ves that align with principles of equity and cost causa�on as deﬁned in federal, state, and local jurisdic�onal guidance.

4. Review of Public Beneﬁts program.

PWP will leverage its experience in these broad areas to further DR and DER programs, while consulting with industry experts, CEC, and other regulatory bodies and engaging in broad utility industry collaborations.

4. Dashboard
PWP p
lans to create future web-based dashboards that will serve to provide status updates similar to other past and present initiatives within the City of Pasadena.

While th
e exact formats of the dashboard(s) are not yet determined, the general components can be generally summarized from the vast amounts of information already presented as part of the 2023 IRP.

Examp
les of potential Dashboard topics could include:
• Status u
pdates of executed, but not yet commercial projects
• Commercial Operation Date (COD) projections as well as status of key milestones such as environmental reviews of renewable projects in which PWP may have a commercial interest • CAISO updates on policies that are anticipated to change over time, and which may have material impact upon resource planning activities.
• CAISO transmission projects which may have material impacts upon projects that PWP may have commercial interest
• Rate and/or cost impacts, as they occur dynamically
• PWP reliability statistics
• RPS compliance
• Greenhouse gas emissions reduction performance
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9 Initial considerations could include some of the above topics. The dashboard will be updated and dynamically augmented over time.

Annua
lly, and with each approval process for a new energy contract or program, PWP will report progress rela�ve to the IRP progress and status. These updates will be made to the MSC and/or as designated by U�lity governance authori�es.

Summary
All IRPs and associated planning documents rely upon informa�on known at the �me or available during the planning horizon, such as energy market condi�ons, an�cipated forward pricing of energy resources, and regulatory and policy requirements of state, local and federal governance.

The electric u�lity industry must also an�cipate, in IRPs, that innova�on in a variety of technologies is also likely -- innova�ons such as storage technology or other carbon-free resources that could present addi�onal opportuni�es for further and faster decarboniza�on across the industry and the bulk electric grid.

During the MSC meeting of October 10, 2023, staff presented the challenges of the condensed timeline, and the requirement to procure a significant amount of resources of all types needed to achieve the policy goal of 100% carbon-free by 2030. This time compression, applied to the resource procurement requirements, was further discussed during the MSC meeting of November 14, 2023, which included focus on procurement of DER and DR resources as modeled in the carbon-free Scenario 2 results.

In ad
dition, during the October 10, 2023 discussion, staff affirmed that energy resources are procured well in advance of when they are needed online. Actual practice affirms that most resource types are procured or contracted years ahead of project COD. PWP has been aggressively proactive in the procurement of resources years in advance of actual COD or energy delivery dates and has already executed contracts for the following:
• Sapphire
Solar and Battery Storage
• Coso Geothermal
• Calpine Geothermal
• RFP for Battery Storage
In the aggregate, over recent years, PWP has proactively added greater than $500 million of renewable procurement, all of which strategically folds and fits into 2023 IRP considerations.

PWP sh
all con�nue its external market solicita�ons by engaging with developers for renewable projects that are strategically deliverable to PWP’s region of the CAISO. Compe��on for renewable resources is an�cipated to be more challenging, as increased statewide compliance requirements are enacted by regulatory governance, with progressively increasing renewable and zero carbon compliance requirements:
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10 • 44% renewable by 2024
• 60% renewable by 2030
• 100% renewable and zero carbon by 2045
PWP will mon
itor poten�al impacts of CAISO policy con�nually, as these are cri�cal enablers to the CEC’s Scoping Plan and to achieving statewide carbon-free goals. These considera�ons include:
• Poten�al changes to Resource Adequacy constructs designed to enhance grid stability and resiliency • The transmission interconnec�on queue, and transmission projects suppor�ng statewide grid buildout, as detailed in the CEC Scoping Plan
• Con�nual monitoring of project deliverability as determined by CAISO transmission analysis Consid
ering today’s extremely compe��ve resource procurement environment, PWP must manage the price vola�lity of resource contracts that are impacted by supply chain and inﬂa�onary challenges, and other raw material impacts. Selec�ng renewable and zero carbon resources that are priced prudently and aligned with best ﬁt, and least cost values while managing risk to retail customers, remains a top priority.

The 2023 IRP process provides con�nuity and informs the future 2028 IRP processes. With the addi�on of both the 2026 and 2028 Waypoints, cri�cal elements such as new and emerging technologies are veted, reviewed and considered, while also providing infrastructure considera�ons for Goodrich Transfer Sta�on and the next PDMP . The synergies that have been strategically embedded in this plan preserve the 2030 Carbon Free policy goal without any opportunity cost from a planning perspec�ve.

As with all IRP’s, the 2023 plan represents a “snapshot in �me” that considers currently available commercial technologies. New innova�on in storage technology or other carbon-free resources could provide addi�onal opportuni�es for further, faster, and more eﬃcient decarboniza�on. PWP will closely monitor and evaluate new technology oﬀerings as a focused eﬀort, and also iden�fy poten�al grants and other funding mechanisms for accelerated deployment.
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November 6, 2023
TO: Honorable Mayor and City Council
THROUGH:

Municipal Services Committee (October 10, 2023)
FROM: Water and Power Department
SUBJECT: ADOPT
ION AND APPROVAL OF THE 2023 POWER INTEGRAT ED

RESOURCE PLAN FOR THE WATER AND POWER DEPARTMENT
RECOMMENDATION:

It is recommended that the City Council:

1. Find that the proposed actions are statutorily exempt from the California Environmental Quality Act (“CEQA”) pursuant to CEQA
Guidelines Sections 15262,
Feasibility and Planning Studies; and 15271, Early Activities Related to Thermal Power Plants;

2. Adopt and approve the 2023 Power Integrat ed Resource Plan (“IRP”) for filing with the California Energy Commission (“CEC”) for the Water and Power Department (“PWP”); and

3. Support PWP’s continuing efforts to meet State regulatory requirements and to study the feasibility and scope of future programs, projects, and procurements to advance progress toward a carbon-free energy resource portfolio.

ENVIRONMENTA
L ADVISORY COMMISSION RECOMMENDATION:

On September 12, 2023, the Environmental Advisory Commission (“EAC”) was presented with an informational update regarding the recommendations in this report.

Subsequently, the EAC held a Special Meeting on September 26, 2023, and provided correspondence to the City Council included in Attachment A.

EXECUTIVE SUMMARY:

In compliance with Senate Bill (“SB”) 350 (2015), PWP has prepared a filing of its 2023
Power IRP, which is a long-term electricity system planning document that outlines and describes energy and capacity resource needs, policy goals, physical and operational 11 Attachment B
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constraints, and other priorities. In addition to meeting all State-mandated targets for renewable and zero-carbon electricity supply, as defined by the Public Utilities Code (”PUC”) and as implemented and administered by the CEC, the IRP, as directed by the City Manager through Resolution 9977 (Attachment B), also outlines multiple approaches to achieving the policy goal to source 100% of Pasadena’s electricity from carbon-free sources by the end of 2030, while optimizing for affordability, rate equity, stability, and reliability.

For the development of the IRP, PWP contracted with the Alliance for Cooperative Energy Services Power Marketing LLC (“ACES”) for modeling and consulting services, a collaboration that included a computer simulation study of various energy resource portfolio designs that might be considered for Pasadena. This effort examined five distinct designs or conditions (hereinafter referred to as “Scenarios”) and several related impact studies to produce useful findings that can inform future policies and programs affecting and related to PWP’s portfolio. To ensure transparency in the modeling results, PWP contracted with Energy and Environmental Economics, Inc. (“E3”), a leading energy consulting firm focused on clean energy policy implementation, to conduct an independent review.

Based on specific parameters, each Scenario produced a portfolio of energy generation and storage resources, including an estimated cost over the course of the IRP Study Period; specifically, 2023 through 2050 (“Study Period”). While all Scenario-specific resource portfolios perform better than the current statewide greenhouse gas (“GHG”) target, those representing carbon-free electricity by 2030 on an hourly basis will be the most challenging to achieve.

PWP modeled five scenarios: three investigated the potential for carbon-free resources to meet load by the end of 2030, one met California requirements, and another met California State requirements and added a carbon tax based on the Social Cost of Carbon (“SCC”).

PWP stressed the five resulting scenarios to four sensitivities: a month-long heat wave in summer 2030, a loss of TM Goodrich receiving station in 2030, high cost of new resources, and low cost of new resources. PWP also studied the potential of two different types of emerging technologies: an energy efficiency proxy resource and a demand response proxy resource.

BACKGROUND:

SB 100 (2018) requires that 60 percent of PWP’s retail electricity sales be derived from renewable resources by 2030, increasing to 100 percent renewable and zero-carbon resources by 2045. SB 1020 (2022) accelerates progress by adding milestone targets to advance the State’s trajectory to the 2045 goal. To date, PWP has consistently exceeded its Renewable Portfolio Standard (“RPS”) and carbon reduction targets, focusing on renewable energy resources that are economically beneficial and best aligned with Pasadena’s retail load profile.
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In compliance with SB 350 (2015), Publicly Owned Utilities (“POU”) such as PWP must file an IRP every five years. PWP previously produced IRPs in 2009, 2012, 2015, and 2018, plus an update in 2021. The IRP must be filed according to CEC requirements based on timing of adoption by the City Council.

In the preparation, development, and filing of the IRP, PWP has followed the prescriptive requirements of the CEC, as documented in Publicly Owned Utility Integrated Resource Plan Submission and Review Guidelines – Revised Second Edition, dated October 4, 2018, as well as a successor draft update distributed by the CEC in 2022 (collectively referred to herein as the “Power IRP Guidelines”). The Power IRP Guidelines can be found here: https://efiling.energy.ca.gov/getdocument.aspx?tn=224889 . A submitted IRP
must be consistent with the requirements of PUC Section 9621, which encourages POUs to explore multiple scenarios and sensitivity analyses in order to identify best options that minimize impacts to ratepayers, ensure system reliability, strengthen the bulk transmission system and local communities, enhance distribution systems and demand-side energy management, and minimize air pollutants and GHG emissions – with early priority given to disadvantaged communities.

On January 30, 2023, the Pasadena City Council adopted Resolution 9977, which declares a Climate Emergency, and sets a policy goal to achieve 100% carbon-free electricity by the end of 2030. The Resolution further directs the City Manager to utilize the 2023 IRP process to identify multiple approaches to transition to this goal, while optimizing for affordability, rate equity, stability, and reliability. Accordingly, three of the five Scenarios for the 2023 IRP incorporate the goals of Resolution 9977.

IRP Scenarios

After input from stakeholders, PWP and ACES modeled the following Scenarios for the 2023 IRP filing. For reference purposes in the descriptions below, “internal” refers to PWP’s service territory, while “external” refers to the “grid” outside PWP’s service territory.

Scenario 1 – 100% Carbon-Free by 2030 on an hourly basis (no limit on internal resources)
Scenario 1 allows for unlimited utility-side resources to be located inside PWP’s service territory. As it is a carbon-free representation, Scenario 1 excludes all carbon-emitting resources, including existing natural gas facilities and market purchases containing carbonized-based energy.

Scenario 2 – 100% Carbon-Free by 2030 on an hourly basis (maximum limit on internal resources)
Pasadena has limited space available to site new utility-side generation and/or storage facilities and sets maximum limits for internal resources based on the best available information. Scenario 2, also a carbon-free representation, excludes carbon-emitting resources, facilities, and market purchases.

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Scenario 3 - 100% Carbon-Free by 2030 on an hourly basis (maximum limit on internal resources and doubled distributed resources)
Scenario 3 applies the same carbon-free goals as Scenarios 1 and 2, plus the internal resource limitations of Scenario 2. However, it also doubles the amount of distributed (customer-side) solar and storage that is expected to occur naturally by including an additional amount into the modeling parameters. Like Scenarios 1 and 2, Scenario 3 excludes all carbon-emitting resources, facilities, and market purchases.

It should be noted that while Scenarios 2 and 3 include similar energy producing resources, they appear in different quantities and at different times, which impacts their respective costs.

Scenario 4 - Reference Case
Scenario 4 (“Reference Case”) demonstrates PWP’s ability to comply with California’s increasingly aggressive clean energy targets while incorporating ambitious actions already in place through prior IRPs. Scenario 4 far exceeds regulatory requirements, achieving a renewable and zero-carbon portfolio in 2028, almost 20 years earlier than the 100% by 2045 target, 95% by 2040 and 90% by 2035 mandated by SB 100 and SB 1020. It also reduces PWP’s GHG emissions by 88% below 1990 levels by 2030.

Scenario 5 - Reference Plus Social Cost of Carbon
Scenario 5 begins with the assumptions of the Reference Case but adds the estimated financial impact of carbon emissions on the environment and people, translated to $/metric ton of carbon dioxide.

Emerging Technologies Study/Scenario
This is an additional study that evaluates Scenario 2 with the effects of new “emerging technologies,” a general term that describes and/or predicts technologies that will be developed to enhance energy efficiency or support peak shaving, and which may become available during the IRP Study Period.

Sensitivity Tests

To determine the degree of resiliency under pre-identified operational contingencies, specific Sensitivity Tests were applied to each study. These tests were not intended to produce pass or fail results, but rather provide information about the performance of the Scenarios under extreme conditions.

Heat Wave – Extreme Weather Event
This test evaluates the performance of a Scenario against the effects of a persistent, record-setting heat wave affecting the region in general, and Pasadena in particular, with daily temperatures that cycle between 90 degrees F (minimum) and 120 degrees F (maximum) for four weeks consistently during the summer.

Goodrich Transfer Contingency – Partial Loss of Physical Connection to Outside Grid
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This test evaluates the performance of a Scenario against a substantial interruption of power flow to PWP’s service territory through T. M. Goodrich Receiving Station (“Goodrich”), which is the primary location where electricity can be imported or exported to and from the region. The model represents this condition as the loss of one 220-kV transmission line into Goodrich for one week during the summer.

Price Fluctuations – Impacts of New Resource Price Changes This test evaluates the impacts of price fluctuations on a Scenario using the low and high price curves estimated by the National Renewable Energy Laboratory (“NREL”) and accounts for cost uncertainty.

Key Takeaways

 All Scenarios show that additional resources will be needed beginning in 2025 as participation in the Intermountain Power Project (“IPP”) begins to scale down:
o June 2025 – IPP converts to a natural gas facility. 108 MW of installed capacity is reduced to approximately 50 MW.
o June 2027 – IPP expires, and PWP exits project.

 Scenarios 1 through 3 (Carbon-Free by 2030) exclude all carbon-emitting resources, including energy purchases from the California Independent System Operator (“CAISO”) due to the embedded carbon content. They also result in stranded assets and early termination of existing contracts. o Glenarm Power Plant, which was repowered in 2017, becomes a stranded investment.
 The associated stranded investment costs were not included in the modeled power supply cost projections.
o Magnolia Power Project will require early termination before the 2036 contract end.

 All Heat Wave Scenarios require increment al resource additions within Pasadena’s service territory to maintain reliability.

 All Carbon-Free by 2030 Scenarios require in stallation of a significant number of new resources in Pasadena to mitigate reliability concerns associated with a loss of 140 MW of transmission through Goodrich.

 All Scenarios require considerable in cremental generation resources between now and 2030. The Carbon-Free by 2030 Scenarios, in particular, have relatively small timeframes available during which to procure, build, and begin electrical production of the required new resources. The fiscal cost to retail ratepayers is also time- compressed, resulting in exceptional year-over-year rate increase projections.

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The impacts of both added and retired resources under each Scenario are depicted in Attachment C.

Figure 1 details the estimated power supply cost of implementing the resource portfolio calculations for each Scenario.

Figure 1

Includes power supply costs only, not overall utility costs.

Emissions Compliance Requirements

In November 2022, the California Air Resources Board (“CARB”) issued the latest Scoping Plan for Carbon Neutrality (“Scoping Plan”), which accelerates statewide emissions reduction progress and impacts many industries, including utilities. While California’s statewide GHG reduction target is currently set at 40% below 1990 levels by 2030 as mandated by SB 32 (2016), the newly enacted AB 1279 (2022), which is incorporated in the 2022 Scoping Plan, increases this target to 85% by 2045. As part of the Scoping Plan rulemaking and implementation, CARB is also evaluating the future of the Cap-and-Trade program, which may further accelerate and/or impact emissions targets and program requirements.

California’s drive to reduce GHG emissions is ongoing, with new legislation introduced regularly that sets higher targets to achieve faster results. Utilities such as PWP must comply with the changing mandates of programs such as RPS and Cap-and-Trade, which all work together to help achieve increasingly aggressive State goals such as reduced carbon emissions.
0 0.5
1 1.5
2 2.5
3 3.5
4 Scenario 1 -
"Unlimited
Internal
CF2030"
Scenario 2 -
"Limited
Internal
CF2030"
Scenario 3 -
"Limited
Internal and
2x DERs
CF2030"
Scenario 4 -
"Reference"
Scenario 5 -
"Reference +
SCC"
Dollars (Billions)
Present Value Revenue Requirement for all Scenarios
Study Period (2023 ‐2050)
(2023$)
Low Costs Moderate/Reference Costs High Costs
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In accordance with the 2018 IRP, an ambitious plan that was one of the earliest SB 100- compliant IRPs in California, City Council set its own GHG reduction target to be at least 75% lower than 1990 levels by 2030, which is far more aggressive than the 40% requirement of SB 32. The 2023 IRP continues this progression with all Scenarios showing better performance than both the statewide target and PWP’s minimum internal operating goals, as shown in Table I.

Table I
Scenario Forecasted GHG Emissions in
2031 (End of 2030)
Percent Reduced compared to
1990 level of GHG emissions
Level of GHG Emissions in
1990
918,622
N/A
Scenario 1 "Unlimited internal
Carbon‐Free by the end of
2030"
0 100%
Scenario 2 "Limited internal
Carbon‐Free by the end of
2030"
0 100%
Scenario 3 "Limited internal
and Doubled Distributed
Energy Resources Carbon‐
Free by the end of 2030"
0 100%
Scenario 4 "Reference Case” 100,924 89%
Scenario 5 "Reference plus
Social Cost of Carbon"
17,041 98%

Table II illustrates when each Scenario will achieve California’s 100% clean energy target, as defined by SB 100 and SB 1020.

Table II
SB 100 and SB 1020 Compliance

Percent Renewable and Zero Carbon
2025-2031
2025 2026 2027 2028 2029 2030 2031
Scenario 1 98% 102% 131% 125% 125% 114% 108%
Scenario 2 83% 82% 112% 107% 107% 136% 128%
Scenario 3 78% 78% 108% 103% 103% 129% 123%
Scenario 4 97% 95% 125% 120% 120% 115% 103%
Scenario 5 191% 189% 217% 208% 209% 201% 187%
Results based on resource eligibility as defined in the in the SB 100 Joint Agency Report. See Citation 1.
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Concerns with Accelerating California’s Targets

California’s clean energy targets continue to become more stringent. In 2022, the State adopted new industry-wide legislation as part of the California Climate Commitment (also known as Governor Newsom’s “Climate Package”), which included several measures designed to reduce statewide carbon emissions, increase adoption of renewable energy, and address other industry-specific concerns. Relevant to utilities such as PWP, the package includes SB 1020, which adds new interim RPS targets that drive faster progress toward achieving SB 100's “clean energy by 2045” goal. To be compliant, PWP will be required to serve its retail load with eligible renewable and zero-carbon resources on a quickly accelerating, milestone-driven scale. Also, as CARB continues with rulemaking for the Scoping Plan, it is likely that other programs and requirements will be implemented that will affect the utility industry.

At the end of Calendar Year (“CY”) 2022, PWP achieved RPS of 40% and is well positioned to achieve the 2045 target through groundwork that has already been set by the clean energy strategy of the 2018 IRP, which set goals that exceeded regulations in place at the time. The 2023 IRP was developed using the same forward-thinking approach and includes three Scenarios that achieve zero-carbon by 2030. Moreover, Scenario 4 achieves the “100% renewable and zero-carbon” target in advance of California’s 2045 mandate (specifically, in 2028).

As California and the nation push to decarbonize the power grid as quickly as possible, overall resource scarcity, transmission constraints, and volatile energy market conditions have resulted in statewide progress that is slower than expected. In the March 2021 SB 100 Joint Agencies Report
1, published by CARB, CEC, and the California Public Utilities Commission (“CPUC”), it is reported that to meet the 2045 target, California would be required to triple its electrical power capacity. Moreover, this study assumes that some natural gas would be retained through 2045 to ensure reliability of California’s power grid.

As PWP reported to the Municipal Services Committee (“MSC”) on January 24, 2023, accelerating California’s targets, which are already among the most ambitious in the nation and world, includes significant risks which the IRP modeling has shown.

Reliability of Electricity Service

Due to resource scarcity, transmission limitations, and various macroeconomic conditions, it is doubtful that ample new renewable and zero-carbon resources or projects would be logistically implementable to meet a 2030 commercial operation date. These realities, combined with the condensed timeline, make it highly improbable that the magnitude of procurement that would be required under Scenarios 1 through 3 could realistically occur.

Additionally, Pasadena is a transmission-constrained city, and having available local generation capacity is a critical requirement of everyday planning to ensure uninterrupted

1 https://www.energy.ca.gov/publ ications/2021/2021-sb-100-joint-agency-report-achieving- 100-percent-clean-electricity
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reliable service. Considering these enormous challenges, pursuit of any of the carbon-free by 2030 options without additional reliability or compensatory safeguards such as local dispatchable generation would severely jeopardize reliability requiring the continued availability of Glenarm. This is further affirmed in the IRP reliability standards as defined in PUC 9621(b)(3).

Land Use – Space and Location Constraints

Pasadena is a residential city with historic character and limited space for future development. Moreover, of the available space, only a small fraction is under the City’s control. This presents a challenge when considering options for new energy resources to be constructed within City limits, especially photovoltaic solar, which has the lowest energy output per square foot of all resources evaluated and would require significant additional space. Even if site restrictions were not a factor (such as in customer-sited rooftop installations), a practical limit exists on buildable rooftop space within the City.

Battery Storage options also pose concerns since identifying suitable locations that meet zoning requirements will likely be challenging. Furthermore, community concerns about overall battery safety, especially near populated areas such as residences and schools, may present significant legal challenges that would not only delay projects but could also carry financial implications.

Traditionally, utilities, including electric utilities, have had the benefit of eminent domain to locate facilities and infrastructure that are deemed in the public interest or aligned with the public good. In general, renewable projects have not met this level of public interest, which adds to the existing land use and location challenges.

Ultimately, Scenarios 1 through 3, the studies that call for the most resource development within Pasadena, pose significant challenges from a land use perspective.

Resource Market Conditions

External and/or macroeconomic constraints, such as supply chain, limit the quantity of renewable generation resources available to PWP. This applies to both granular renewable components and rare earth metals needed to assemble renewable generation facilities. Furthermore, large scale renewable developers are challenged in the timely construction of new facilities due to a variety of issues ranging from CAISO high voltage transmission interconnection requirements as well as other considerations such as zoning requirements. Additionally, there is high demand for renewable resources, requiring utilities such as PWP to bid against larger entities with similar renewable resource requirements.

Negotiating an energy resource contract to final form can take several months, depending on the complexity, and usually results in a few well-executed contracts per year. To add new resources on the order of 1,000 MW by 2030, as required by Scenarios 1 through 3, equates to approximately 40 renewable contracts. Additionally, considering that statewide 19 327
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oversubscription of transmission facilities is occurring, the location and attributes of a project must also be considered to ensure that the renewable energy can be electrically delivered to Pasadena in compliance with CAISO energy market protocols. These import challenges are in addition to local transmission constraints.

Finally, a potential contract must also fulfill the appropriate RPS and Resource Adequacy (“RA”) needs to ensure that it meets regulatory compliance requirements and represents a responsible investment. In today’s market, contracts must be executed approximately four to five years prior to Commercial Operation Date (“COD”), which means that opportunities negotiated now would typically be online by approximately 2028. According to LevelTen Energy, which publishes a Power Purchase Agreement (“PPA”) Index, “between the second quarter of 2022 and 2023, PPA prices increased nearly 30% in both North America and Europe.”
2 Prices in California are generally known to be higher. Considering these factors, in addition to the small volume of development projects in California, the logistical challenges of bringing sufficient resources online to achieve a carbon-free energy portfolio by 2030 are extreme. Figure 2 is a forecast of Commercial Solar costs through 2050.

Figure 2

Comparison of moderate case of new resource cost forecasts based on National Renewable Energy Laboratory’s (NREL) 2022 and 2023 Annual Technology Baseline (ATB)

Financial Impacts

The 2023 IRP Scenarios project cost increases of $1.5 billion to $3.5 billion (net present value) in energy supply, which will have an impact on PWP and its customers. The data in this report are estimates only and intended to provide a sense of the financial implications

2 https://www.leveltenenergy.com/post/to-fight-climate-change-ppas-need-to-leap-forward $0.00
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
$70.00
$80.00
$90.00
$100.00
Commercial Solar (Real $/MWh)
NREL 2022 ATB - Levelized Cost of Energy ($/MWh) NREL 2023 ATB - Levelized Cost of Energy ($/MWh) 20 328
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to the utility and customers based on each Scenario. The overall financial impact of the IRP will be fully evaluated after adoption and incorporated into a cost-of-service study expected to begin in 2024.

For the power supply portion, projections include the costs for existing debt and contractual obligations for facilities that will be stranded as the result of each Scenario. In 2016, Pasadena issued bonds for the Glenarm Power Plant which have an outstanding balance of over $85 million as of the end of Fiscal Year (“FY”) 2023. Contractual obligations also exist for the Magnolia and IPP projects, which must be repaid regardless of participation. While IPP will terminate in 2027 without any further financial impact, Scenarios 1 through 3 strand the Glenarm and Magnolia assets beginning in 2030.

As a not-for-profit POU, PWP relies on collected rate revenue for all components of services provided. The amounts shown in Tables III and IV are provided for illustrative purposes only and represent “just in time” rates that would be needed for the different “moderate” and “high” costs in order to recover costs. Varying rate structures, capital financing plans, and rate offsets (such as grant funding) will all be actively pursued but cannot confidently be projected and as such are not included in this analysis.

Energy Charge projections are based on single-family residential customers on an annual basis. The projections assume usage of 500 kWh per month (6,000 kWh annually), with the average energy charge portion being $836.12 per year. Rates will accelerate during the first seven years of the plan due to cost recovery associated with the compressed timeline and will remain elevated after 2030 to support the portfolio costs.

Table III: Annual Bill Impacts for Single-Family Residential Customers (Moderate Cost Estimates)

Scenario
Power
Supply
NPV
Moderate
Cost

($ in
Billions)
Current
Energy
Charge
Portion of
Customer
Bill in 2023
($/single
family
residential
customer,
Annualized)
Energy
Charge
Portion of
Customer
Bill in 2030
($/single-
family
residential
customer,
Annualized)
%
Change
in Energy
Charge
Portion of
Customer
Bill from
2024 to
2030
Energy
Charge
Portion of
Customer
Bill in 2045
($/single
family
residential
customer,
Annualized)
%
Change
in Energy
Charge
Portion of
Customer
Bill from
2024 to
2045
1 2.456 $836.12 $1,254.18 50% $1,367.06 64%
2 3.003 $836.12 $1,596.99 91% $1,549.08 85%
3 2.926* $836.12 $1,530. 10 83% $1,484.20 78%
4 1.937 $836.12 $1,153.85 38% $1,061.54 27%
5 2.426 $836.12 $1,588. 63 90% $1,429.77 71%

*The total power supply Net Present Value (“NPV”) moderate cost in the table above for Scenario 3 includes the cost of doubling the growth of distributed solar and storage from the load forecast in 21 329
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the amount of $632.33 million. All Scenarios studied in the 2023 IRP have included an embedded Distributed Energy Resource (“DER”) growth rate built into the load forecast. Scenario 3 takes this natural growth rate and doubles to study the value of DERs. The IRP modeling captures the estimated costs as they are an additional cost, regardless of the funding source.

Table IV: Annual Bill Impacts for Single-Family Residential Customers (High-Cost Estimates)

Scenario
Power
Supply NPV
High
Cost

($ in Billions)
Energy
Charge
Portion of
Customer
Bill in 2023
($/single
family
residential
customer,
annualized
)
Energy
Charge
Portion of
Customer
Bill in2030
($/single-
family
residential
customer,
annualized
)
%
Change
in Energy
Charge
Portion of
Customer
Bill from
2024 to
2030
Energy
Charge
Portion of
Customer
Bill in 2045
($/single
family
residential
customer,
annualized
)
%
Change
in Energy
Charge
Portion of
Customer
Bill from
2024 to
2045
1 2.728 $836.12 $1,354.52 62% $1,584.78 90%
2 3.453 $836.12 $1,806.02 116% $1,824.08 118%
3 3.378 $836.12 $1,722.41 106% $1,774.08 112%
4 2.127 $836.12 $1,220.74 46% $1,196.32 43%
5 3.057 $836.12 $1,722.41 106% $1,205.69 44%

Retail Rates

Given that the costs in the IRP are higher than what is currently in the Light & Power Fund Financial Plan, customer retail rates will need to increase to meet the additional revenue requirements. Tables III and IV represent the Energy Charge, just one component of the rates that customers pay for electricity. Other components recover costs for transmission of power to the PWP service area, distribution inside of the service area, customer service, administration, and other factors. All facets of the enterprise require revenue increases to address cost factors such as inflation, high demand, limited supply, supply chain issues, and a competitive job market.

Historically, PWP rates have been commensurate with neighboring and similarly sized utilities. Figure 3 below shows that as of May 2023, Pasadena was around the midpoint for other benchmarking utilities. Power services providers such as PWP have held residential rates around the historical rate of inflation, which is likely to change in the future.

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Figure 3: Pasadena Historical (2023) Power Cost Benchmarking

Pasadena’s rates in comparison to neighboring cities and investor-owned utilities based on California Municipal Utilities Association DRAFT 2023 California Rate Forecast and Bill Comparison dated July 17, 2023

On June 12, 2022, the City Council approved PWP’s Power Delivery Master Plan (“PDMP”) which outlines over $821 million in investments needed through 20423.

Additionally, the IRP calls for extra capital investments required for electrical distribution system support of battery storage infrastructure. The PDMP was developed using 2021 cost assumptions, prior to the recent high inflationary period and supply chain constraints.

The infrastructure needs were also developed with a longer implementation period; accelerating the master plan schedule would be challenging as it may not be technically feasible, and there would be exposure to higher costs than estimated in 2021.

The other components to the total impact on operating cost to be considered are the finance, administration, information technology and customer service components of expenses.

Aside from delivery, CAISO has projected that over the next decade or so, it will need to invest approximately $7.3 billion in new and upgraded transmission infrastructure to be recovered by participants such as PWP

4. These transmission investments are required to
support statewide decarbonization.

3 https://pwp.cityofpasadena.net/wp-content/uploads/2023/07/FY-2022-PWP-Annual- Report-Optimized.pdf
4 https://www.caiso.com/Documents/caiso-2022-2023-transmission-plan-approved.pdf 23 331
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When factoring in the increasing costs of the various rate components, it can be confidently implied that bills will increase. While a full cost-of-service analysis will give more certainty on the exact rate impact, it is possible that bill amounts may double. The current rate is in the 20¢ per kWh range and doubling would result in 40¢ plus in the planning time horizon. By looking at just the Energy Charge in this report, customer will likely see bill increases in the double digits. Looking to other utilities who have done full cost analyses and have less ambitious plans and longer lead times, doubling retail rates may also be on the lower end of the spectrum.

Cost of Future Debt Financing and Credit Risk

The added costs associated with the IRP represent a significant change to revenue requirements and will be incorporated into PWP’s financial plan. This will prompt discussions with credit rating agencies about future cost recovery efforts to ensure continued excellent credit worthiness. Credit risk, including changes in the bond market, are omitted from rate figures due to the high variability and uncertainty of the credit market.

Comparative Benchmark Analysis

While studying options for Pasadena’s energy future, PWP reviewed the plans of two other California POUs – Sacramento Municipal Utilities District (“SMUD”) and Los Angeles Department of Water and Power (“LADWP”), among many others:

SMUD has set a “Zero Carbon by 2030” goal and proposed to keep rate increases below the rate of inflation. In the March 2022 Progress Report 5, SMUD reports that 2024 and
2025 rate cases suggest that supplemental rate increases must be considered due to inflation affecting supply and operating costs. In addition, SMUD is unsure when it will be able to fully eliminate natural gas generation unless additional fuels or new technology emerges to close the gap. Current indications suggest that reaching the 90% zero carbon mark will be relatively easy. However, the remaining 10% will be difficult and costly. In the two years since releasing its Zero Carbon Plan, SMUD has already fallen behind due to volatile market conditions and increasing prices. However, the flexibility of the plan, at its inception, accounts for these situations.

LADWP’s “100% Clean Energy by 2035” goal differs from PWP’s in that it sets a later target date and uses annual carbon emissions - which allows carbon output during some hours of the year as the benchmarking tool. LADWP has recommended an “80% renewable by 2030” interim goal, which is not necessarily carbon-free, and has affirmed the intent to do so “in a way that is equitable and has minimal adverse impact on ratepayers.” Among the many challenges that LADWP lists in its planning document are resource build rates, on both the utility side and the customer side; supply chain and staffing limitations; weather volatility and load resiliency requirements; and potential

5https://www.smud.org/-/media/Documents/Corporate/Environmental- Leadership/ZeroCarbon/2030-ZCP-Progress-Report---March-2022_FINAL.ashx 24 332
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internal financial repercussions. LADWP estimated that rates may increase by up to three times by 2035 as shown in Figure 4 below:

Figure 4: LADWP Nominal Forecasted Electric Retail Customer Rates

Source: LADWP’s 2022 Strategic Long Term Resource Plan - https://www.ladwp.com/ladwp/faces/ladwp/aboutus/a- power/a-p-
integratedresourceplanning;jsessionid=8LZtlR8bNnfbwk2zLdKMYDhlm1vNQqm1CJb120SbzyW5KnVNx9Js!536452485 ?_afrLoop=916568595449569&_afrWindowMode=0&_afrWindowId=null#%40%3F_afrWindowId%3Dnull%26_afrLoop% 3D916568595449569%26_afrWindowMode%3D0%26_adf.ctrl-state%3D1ioizrh34_4

Both the SMUD and LADWP plans depend on the ability to repower natural gas combustion turbines to run on hydrogen fuel. As PWP has observed, the technology to do this on a utility scale has not yet been proven; therefore, this part of the strategy remains fluid. PWP has not included hydrogen combustion turbines in the 2023 IRP but continues to monitor development of this emerging technology for possible application in future years.

Next Steps

The 2023 IRP was developed with a forward-thinking and flexible approach, along with a determination to meet and exceed California’s increasingly aggressive clean energy 25 333
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targets as quickly as possible. As recommended by PUC 9621 and to instill confidence that due diligence was performed, PWP’s Scenarios represent diverse conditions, responses, and goals. Scenarios 1 through 3 include a very conservative treatment of carbon to achieve the results of Resolution 9977, while 4 and 5 are based on California’s continually advancing clean energy targets. Scenario 5 adds a SCC to the State requirements. As technology advances, California will likely continue to implement new laws and regulations which will have compliance requirements for utilities like PWP. Table V below shows the relative degree of concerns associated with each Scenario to address critical conditions and requirements (in order of least to most concerning).

Table V: Scenarios – Comparison of Concerns
Scenario Adverse Rate
Impacts
Resource Procurement
Challen
ges
Reduced
Reliabilit
y
CAISO Market
Challen
ges
1 Most Most Most Most
2 Most Most Most Most
3 Most Most Most Most
4 Least Least Least Least
5 Most Moderate Moderate Least

In any future resource portfolio, PWP will be required to fill the gap between its current resources and the forecasted quantitative performance requirement associated with each resource attribute (specifically, energy supply, RA, and renewable carbon-free energy content). PWP’s challenge will be to augment its portfolio with additional procured and owned resources of various technologies that will fill all three gaps simultaneously, yet cost-effectively.

Near-term resource procurement and/or construction planning initiatives:
 100 MW of utility-scale solar capacity
o In addition to Sapphire solar + batte ry contract recently executed.

 60 MW of 4-hour utility-scale storage
o Will require additional, as-yet undetermined locations to site within Pasadena.
o In addition to 25-MW Battery Energy Storage System (“BESS”) currently in solicitation stages.

Besides the actual acquisition and development of individual energy and storage resources, the following are additional actions that PWP is considering that would support the overall carbon reduction goals of the IRP:

 Explore expansion of DERs.
 Support mass transit and electric vehicl e fleet development and vehicle-to-grid distributed storage opportunities.
 Continue to study the reliability of PWP’s evolving resource portfolio.  Perform a cost-of-service study to ident ify projected resource portfolio capital expenditures over the next 20 years.
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 Evaluate possible changes to customer incentives or subsidies, including low- income assistance, and any follow-on Net Energy Metering programs.  Expand Demand-Side Management, implement Advanced Metering Infrastructure, and explore connection incentives.
 Monitor the actual influence of the City’s Building Electrificat ion Ordinance, which becomes effective in 2025.
 Continue to monitor developments in emerging technologies.

Each of these activities will be evaluated, and any resulting programs or actions will be presented to the City Council for approval and/or other guidance or policy directives.

Community Outreach

As with past IRPs, the 2023 IRP process included a robust community outreach effort.

Most notable was the organization of a Stakeholder Technical Advisory Group (“STAG”), a diverse representation of the Pasadena community that participated in ten planning meetings and provided valuable input. PWP also conducted/provided three widely advertised Town Hall Meetings, which encouraged participation and feedback from all members of the community; regular progress updates to MSC, EAC, and the City Council, all of which were accessible to the public; and written responses to approximately 100 comments, questions, and suggestions. Other communications included an informational video and ongoing advertising through local newspapers, website updates, social media, flyers, and bill inserts. All community feedback was carefully considered and used, where appropriate, to shape the IRP.

A summary of STAG and public meetings, and associated discussion topics are shown in Table VI below:

Table VI
Meeting Date Topic
STAG #1 December 14, 2022 Introductions
STAG #2 January 18, 2023 Introduction of ACES and IRP Process STAG #3 February 15, 2023 Decarbonization Pathways
Community Meeting #1 February 22, 2023 Start of IRP Process and where is PWP now? STAG #4 March 1, 2023 Proposed Sc enarios and Sensitivity Tests Municipal Services Committee March 14, 2023 Informational Update Environmental Advisory Commission March 14, 2023 Informational Update STAG #5 March 15, 2023 Assumption Data Discussion
STAG #6 April 12, 2023 Cost of New Resources
STAG #7 April 19, 2023 Final Scenarios and Sensitivity Tests Community Meeting #2 April 27, 2023 What will be studied in the 2023 IRP (Scenarios, Sensitivity Tests, and Study)
Municipal Services Committee May 9, 2023 Informational Update Environmental Advisory Commission May 9, 2023 Informational Update STAG #8 May 17,2023 Load Forecast
STAG #9 August 16, 2023 Results of 2023 IRP Scenarios
Environmental Advisory Commission September 12, 2023 Informational Update STAG #10 September 20, 2023 Wrap-up
Virtual Community Meeting #3 September 21, 2023 Results of 2023 IRP and Steps going forward

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Independent Review

To ensure transparency in the IRP study results, PWP also contracted with E3 to review the IRP analysis. A recognized leader in clean energy policy implementation, E3 provides technical, policy, and market analysis, and has worked with clients that include CEC, CPUC, CARB, and a variety of public and private utilities throughout the nation and the world. E3 has also explored higher RPS standards for SMUD, experience that was especially valuable for PWP’s project considering the goals of Resolution 9977.

E3 reported that the modeling approach conducted by ACES was logically sound, and that the IRP meets CEC reporting standards. E3 also made recommendations for future consideration, including that further assessment would be required to demonstrate conclusively that the carbon-free portfolios developed would be sufficient to meet PWP’s RA obligations and local reliability needs.

Summary and Recommendation

In order to meet State of California compliance requirements and fulfill PWP’s obligation to the community, it is respectfully recommended that the City Council adopt and approve the 2023 IRP. In addition to meeting CEC filing requirements, the IRP incorporates Resolution 9977, which directs the City Manager to use the IRP process to plan multiple approaches to transition to the policy goal of sourcing 100% of Pasadena’s electricity from carbon-free sources by the end of 2030, while optimizing for affordability, rate equity, stability, and reliability.

It is also recommended that the City Council support PWP’s continuing power supply decarbonation efforts, including future programs, projects, and procurements, that help advance Pasadena on the path toward a carbon-free future.

The IRP provides the technical objectives, data, information, and pathways needed to achieve 100% carbon-free by 2030. However, many of the required implementation plans are extremely challenging due to a variety of concerns that have been largely documented and are generally included in the 2021 SB 100 Joint Agencies Report

1. Those challenges
include maintaining required reliability standards, the time compression leading to 2030, supply chain, inflation, and statewide land use issues. Furthermore, the immense renewable procurement that would be required with many facilities not yet built, sited, or still requiring further environmental analysis; in addition to known CAISO transmission constraints, CAISO interconnection queue requirements, and the prerequisite for incremental statewide transmission infrastructure needed to support renewable generation are among many of the technical and logistical concerns.

Through strategic operations, active planning, and effective procurements, PWP has realized significant reductions in electric system GHG emissions, with a 68% reduction as compared to 1990 thresholds. Moreover, the electric power industry, despite growing electrical demand, has outpaced other industrial sectors such as transportation, in the reduction of GHG emissions. Previous PWP plans and forecasted projections affirm 28 336
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significant future GHG reductions, and the 2023 IRP builds upon that existing trajectory.

While the timely implementation of the 2030 carbon-free goal is logistically challenged, the continuation of GHG reductions and trajectory are not compromised. Although achieving the removal of the final percentages of GHG emissions are known to be the most challenging and expensive, there is future expectation that new or emerging technologies, such as long-term battery storage, will be a valuable enabler.

There are federal and state regulatory requirements that ensure electric system reliability.

The 2023 IRP optimizes across various factors, to include reliability requirements. By definition, these non-dispatchable resources do not rise to the level of providing electric system reliability by themselves, due to their vulnerability to insufficient wind or illumination. There is industry optimism that future technologies will be developed at scale that could mitigate this vulnerability such as long duration batteries as well as other technologies. The Glenarm facility would remain available as part of the Carbon-Free Scenarios. In a partially offsetting fashion, the Glenarm facility would operate sparingly responding to either energy scarcity or localized reliability events.

The 2023 IRP has been informative and valuable by identifying optimized renewable portfolio configurations and power supply costs. It also reinforces the understanding that power supply decarbonization will require flexibility in negotiation of renewable contracts as well as the employment of all approaches and carbon-free resource types identified in the Scenarios.

In summary, the 2023 IRP will continue the PWP trajectory of GHG reductions in an uninterrupted manner. As in past years, PWP will rely upon proactive planning which is critical to ensuring electric reliability and affordability while being responsive to new and changing laws, regulatory requirements, and market conditions.

PWP will continue to be responsive and aligned with local City governance and policy direction as assigned and instructed.

CITY COUNCIL POLICY CONSIDERATION:

The 2023 IRP supports the City’s Urban Environmental Accords goals with respect to increasing renewable energy and reducing GHG emissions, the General Plan Energy Element, the 2018 Power IRP (as updated in 2021), and the City Council’s Strategic Planning Goals. The 2023 IRP specifically supports the following Urban Environmental Accords goals: Action 1 - Renewable Energy; Action 2 - Energy Efficiency; and Action 3 - Climate Change. The 2023 IRP also satisfies the directives of Resolution 9977.

ENVIRONMENTAL ANALYSIS:

On March 11, 2009, March 5, 2012, and June 22, 2018, the City Council found that the adoption of the 2009, 2012, and 2015 IRPs were exempt from review pursuant to State CEQA Guidelines Sections 15262 and 15271. CEQA exempts from its application those projects that involve "only feasibility or planning studies for possible future actions, which 29 337
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the agency, board or commission has not approved, adopted, or funded ... " and which do not have a legally binding effect on later activities. (State CEQA Guidelines §15262.) To fall under this exemption, however, the lead agency is required to consider environmental factors.

PWP presents the 2023 IRP with strong consideration of environmental factors. A primary goal of the plan is to analyze ways to reduce the environmental impact of Pasadena’s overall energy portfolio, particularly, the reduction of GHG. Furthermore, any specific construction projects undertaken pursuant to the PWP 2023 IRP will be subject to full CEQA compliance, both as and when appropriate.

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MEMORANDUM
To: Pasadena City Council
From: Pasadena Environmental Advisory Commission
Date: September 26, 2023
Re: Integrated Resource Plan Letter to Council
Dear Councilmembers,
On September
12, Pasadena Water and Power pr esented to the Environ mental Advisory Commission (“EAC”) on the state of Pasadena’ s 2023 Power Integrated Resource Plan (“IRP”). That presentation included the results of modeling that PWP and its consultant had done, but PWP di d not present the EAC with a written draft . It prompted a discussion with PWP regarding their efforts to comply with Council Resolution No. 9977 , which calls for the City to source 100 percent of its electricity from carbon-free sources by the end of 2030. We w rite with rec ommendations for how the Council can ensure that Pasadena is meeting the goal set by Resolution No. 9977, both in the IRP process and beyond.

Subject to the C
ouncil’s approval , PWP plans to submit i ts IRP to the California Energy Commission (“ CEC”) by De cember 31, 2023. PWP plans to submit an IRP t hat complies with CEC’s regulatory requirements. However, based on the discussion a t our September 12th EAC meeting, we understand that PWP is not expecting to submit any single specific plan (such as a “recommended planning strategy”) for achieving an energy portfolio that meets the requirements of Council Resolution No. 9977. It is our understanding that what PWP plans to do is accep table practice for an IRP. However, we note that PWP ’s 2018 IRP did include a “Recommended Planning Strategy,” which selected a specific modeled scenario to assist PWP in procurement decisions.1
As PWP has acknow
ledged, this year’s IRP process has been driven by the carbon- free goal pronou nced in Council Resolution No. 9977. Accordingly, we believe it is appropriate for th e Council to direct PWP to include language in the IRP , as well as to produce a separate and more specific formal planning document, which can guide PWP as it works to comply with Resol ution No. 9977. I n addition, we recommend that the Co uncil adopt a formal accountability process so that the Council can assess PWP’s progress toward meeting the goal set forth in Resolution No. 9977.

I. IRP Statemen
t and Formal Planning Document
1 See Pasadena Water and Power, 2018 Power Integrated Resource Plan (December 2018), 38–39, available at https://pwp.cityofpasadena.net/wp- content/uploads/2018/12/Pasadena-Water-and-Power-2018-IRP-Final.pdf.

Attachment A: Correspondence from EAC to City Council
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If PWP is to meet the goal of sourcing Pasadena ’s electricity from carb on-free sources by the end of 20 30, PWP needs to set clear interim goals for its power procurement and proffer a plan of reasonab le specificity as to how it will meet t hose goals. We recommend that the Council direct PWP to do the following:

1. Reaffirm, in the text of the IRP, that PWP recognizes the City’s commitment to sourcing 100 percent of electricity from carbon-free sources by the end of 2030, and that PWP intends to rely on a combination of the scenarios modeled in the IRP to achieve that goal.

2. Draft and submit to the Council , on a defined timeline, a formal planning document that outlines, with reasonable specificity , the steps that PWP will take to implement a combination of the modeled scenarios outlined in the IRP and to achieve compliance with the 2030 carbon-free electricity goal. We recommend that such a document include, as a minimum, plans in the following areas:

a. Plans to act expeditiously to negotiate a nd e xecute Power Purchase Agreements for carbon-free power sources.

b. Plans to shift toward expansion of distributed energy resources (“DER”).

We are concerned that PWP has not taken sufficient affirmative steps to encourage distributed energy resources, pa rticularly rooftop solar installations. We recommend that the Council direct PWP to set a plan to double the amount of installed rooftop solar as a starting point.

c. Plans to significantly expand battery storage infrastructure in Pasadena.

d. Plans to significantly improve and expand PWP ’s energy efficiency programs.

e. Plans to si gnificantly improve and expand PWP’s demand reduct ion programs. This should include implementing “time of use” programs for customers to reduce or curtail demand.

f. Plans to significantly improve and expand programs for financially disadvantaged customers.

g. Plans to move up the timeline for the Goodrich Intertie.

The EAC appreciates the Council’s strong statements and ambitious goal set forth in Resolution No. 9977. We believe that the Council is taking the right stance in the face of the reality of climate change. We also recognize that it will take strong , ongoing leadership to ensure that the City meets the 2030 carbon-free electricity goal. Continued action beyond the submission of the IRP document is required, and we believe that a formal planning document as described above is a necessary step in that direction.

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II. Accountability Process

We also recommend that the Council implement a robust accountability process to ensure that PWP remains on track to meet the City’s carbon-free electricity goal. The Council has set a n unambiguous target for Pasadena’s clean -energy future, and we appreciate the Council’s unwavering commitment to achieving that target. We also recognize that procuring and providing reliable, carbon- free electricity is a complicated technical , logistic al, and financial undertaking. To ensure that PWP is acting w ith necessary speed t oward that goal, we believe it is important for the Council to exercise close oversight t o hold PWP accountable to that goal and to the formal planning document described above. We believe that the Council should consider the following accountability mechanisms:

1. Demand regular, fulsome reports from P WP on its progress toward the carbon- free electricity goal, on top of the regular reporting to Counci l that PWP does.

This could involve, f or example, PWP submitting certain simple and basic metrics to the Council each time it presents , as well as publicizing this information on the PWP website in an accessible format, which could include:

a. The number of carbon-free energy contracts currently in force (and what power they are expected to provide on what timeline)

b. The number of c arbon-free energy contracts being ne gotiated (and what power they are expected to provide on what timeline)

c. The number of carbon- free energy contracts bein g contemplated or pursued by PWP (and what power they are expected to provide on what timeline)

d. Pasadena’s tota l daily MW power us age and the perce ntage that comes from carbon-free sources

2. Demand regular, fulsome reports to a c itizen body modeled on the Stakeholder Technical Advisory Group (“ STAG”), including pre sentation of the information described in paragraph one.

3. Vest a City commission with meaningful and well-delineated audit authority over PWP. This authority could be vested in the Environmental Advisory Commission or in, for example, a reestablished Utilities Commission.

Respectfully Submitted
Chairperson David Cutter

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RESOLUTION NO. 9977

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PASADENA,

CALIFORNIA DECLARING A CLIMATE EMERGENCY AND SETTING A GOAL TO SOURCE 100% OF PASADENA'S ELECTRICITY FROM CARBON FREE SOURCES BY 2030
WHEREAS, on March 5, 2018, the City of Pasadena ("City") adopted a Climate Action Plan ("CAP) based on the Global Warming Solutions Act of 2006 ("AB 32") and focuses on five specific GHG reduction strategies: Energy Efficiency and Conservation; Sustainable Mobility and Land Use; Solid Waste Reduction; Water Conservation; and Urban Greening; and
WHEREAS, the CAP reinforces Pasadena's commitment to providing sources of renewable power and reducing GHG emissions by meeting or exceeding state required emissions reduction targets; and
WHEREAS, the City has already implemented a number of important actions to achieve CAP GHG reduction goals including but not limited to a commitment to procuring only low carbon generating resources and phasing out all fossil fuel contracts, and offering a 100 percent renewable Green Program rate option for customers; and WHEREAS, the City has declared a water supply shortage and has enacted stringent water conservation policies and strategies to mitigate the effects of ongoing drought conditions; and
WHEREAS, the City actively promotes active transportation, public transit, and continues to demonstrate leadership in accelerating the adoption of Electric Vehicle ("EV") technology with Pasadena having one of the highest percentages of registered EVs in the nation; and
WHEREAS, the City has adopted ordinances to achieve long-term GHG reduction including a requirement to include electrification in new building designs, prohibiting the use of gas-powered leaf blowers, and prohibiting polystyrene food packaging in Pasadena; and
WHEREAS, the City continues to exceed CAP Urban Greening targets by restoring greenspace and planting new trees to improve carbon sequestration, reduce urban heat-island effect, and increase opportunities for active recreation; and TKODPWH20D1VKZ
$77$&+0(17%5(62/87,21

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WHEREAS, the City has developed partnerships with community-based organizations for inclusive energy efficiency and water conservation programs and actively engages the community in conservation strategies; and WHEREAS, the Pasadena Environmental Advisory Commission on January 17, 2023, the Pasadena Unified School District Board of Education on December 15, 2022, and the Pasadena City College Board of Trustees on January 18, 2023, each took action to support a goal of the City of Pasadena achieving 100% carbon free Energy by 2030 to address the climate emergency; which aligns with and supports previous actions of the Pasadena City Council when it adopted an Environmental Charter in 2005, endorsed the U.S. Mayors' Climate Protection Agreement and the United Nations Urban Environmental Accords, and launched a Green City Action Plan in 2006; and WHEREAS, the City recently implemented a comprehensive GHG Inventory process to measure actual and forecasted emissions of municipal operations and the community to gauge the ongoing progress of the CAP; and WHEREAS, California continues to pass successor legislation that expands on the goals of AB 32 and prioritizes climate change mitigation strategies; and WHEREAS, in the 2022 Scoping Plan for Carbon Neutrality ("Scoping Plan"), the California Air Resources Board ("CARB") has set a recommended GHG emissions reduction target of 85 percent below 1990 levels by 2030 and carbon neutrality by 2045, and updates the Scoping Plan every five years with increasingly ambitious targets; and WHEREAS, in Policy D-135.966, the American Medical Association has declared climate change as a "public health crisis that threatens the health and well-being of all individuals" and promises to advocate for policies that limit global warming, reduce GHG emissions, and support clean energy solutions; and
WHEREAS, according to the California Energy Commission, the percentage of California's energy that comes from renewable resources continues to increase as the state moves toward 100 percent clean energy; and
WHEREAS, proactive planning is required to ensure that GHG emissions reduction Cqn be achieved while maintaining a power supply portfolio that meets customer needs, satisfies local and state reliability requirements, and minimizes electric rate impacts and volatility; and
TKODPWH20D1VKZ
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WHEREAS, the City's role as a publicly owned utility is governed by local, state, and federal laws and regulations; multi-party agreements; and bond documents which direct and/or impact operating and investing decisions; and WHEREAS, Pasadena Water and Power ("PWP") undergoes its Power Integrated Resource ("IRP") planning process every five years, which guides how Pasadena's electricity will be sourced for the next 20 years; and WHEREAS, the City is committed to demonstrating aggressive action and ongoing leadership in combating climate change and has set GHG targets that will achieve carbon neutrality before 2045.

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PASADENA AS FOLLOWS:

Section 1. The City Council hereby declares that climate change is an emergency that threatens the health and welfare of our city, region, state, nation, and the environment.

Section 2. The City commits to environmental stewardship and continued leadership in sustainability.

Section 3. The City Council hereby sets a policy goal to source 100% of Pasadena's electricity from carbon free sources by the end of 2030.

Section 4. The City Council hereby directs the City Manager to utilize the 2023 IRP process to plan multiple approaches to transition to the goal described in Section 3 and to optimize affordability, rate equity, stability, and reliability of electricity while achieving this goal.

Section 5. The City Council hereby directs the City Clerk to send a certified copy of this resolution to the Pasadena Water and Power General Manager.

II I
II I
I II
II I
II I
II I
II I
TKODPWH20D1 VKZ
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Adopted at the regular meeting of the City Council on the 3 �iSPbday of January
2023, by the following vote:

AYES: Councilmembers Hampton, Jones, Lyon, Madison, Masuda, Rivas, Vice Mayor Williams, Mayor Gordo
NOES: None
ABSENT: None
ABSTAIN: None
Approved as to form:

Lisa Hosey
Assistant City Attorney
TKODPWH20D1VKZ
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Scenario 1:

Scenario 1
Timeline Impacts
2025 Retirements
 108 MW IPP Coal
 10 MW Demand Response

Additions
 54 MW Natural Gas (IPP Renewal)
 280 MW Solar
 75 MW Storage

2027 Retirements
 54 MW Natural Gas (IPP Renewal)

Additions
 39 MW Solar (EDF Sapphire)
 35 MW Geothermal (Coso Geothermal and Calpine Geysers_  20 MW Storage (EDF Sapphire)

2030 Retirements
 212 MW Natural Gas (Glenarm + Magnolia)
 5 MW Wind (Milford 1)

Additions
 210 MW Storage
 110 MW Fuel Cells

Overall Impact Scenario 1 focuses on Fuel Cells to meet most needs. Solar and Storage also make significant contributions.

(300)
(200)
(100)
0 100
200
300
400
500
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 New Installed Capacity (MW)
Scenario 1 "Unlimited Internal CF2030": Incremental Capacity Additions Storage Solar Wind
Geothermal Distributed Solar Distributed Storage
Other Existing Coal Existing Gas
Existing Large Hydro & Nuclear Existing Wind Existing Solar Existing Demand Response Load
Attachment C: Impacts of Resources Under Each Scenario
39 347
Scenario 2

Scenario 2
Timeline of Impacts Impacts
2025 Retirements
 108 MW IPP Coal
 10 MW Demand Response

Additions
 54 MW Natural Gas (IPP Renewal)
 185 MW Solar
 30 MW Wind
 85 MW Storage

2027 Retirements
 54 MW Natural Gas (IPP Renewal)

Additions
 39 MW Solar (EDF Sapphire)
 35 MW Geothermal (Coso Geothermal and Calpine Geysers)  20 MW Storage (EDF Sapphire)

2030 Retirements
 212 MW Natural Gas (Glenarm + Magnolia)
 5 MW of Wind (Milford 1)

Additions
 170 MW Storage
 35 MW Fuel Cells
 10 MW Geothermal
 400 MW of Distributed Solar
 400 MW of Distributed Storage

Overall Impact Scenario 2 focuses on Distributed Energy Resources; specifically, solar and storage to meet needs.
(400)
(200)
0 200
400
600
800
1,000
1,200
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 New Installed Capacity (MW)
Scenario 2: "Limited Internal CF2030": Incremental Capacity Additions Storage Solar Wind
Geothermal Distributed Solar Distributed Storage
Other Existing Coal Existing Gas
Existing Large Hydro & Nuclear Existing Wind Existing Solar Existing Demand Response Load
40 348
Scenario 3

Scenario 3
Timeline Impacts
2025 Retirements
 108 MW IPP Coal
 10 MW Demand Response

Additions
 54 MW Natural Gas (IPP Renewal)
 105 MW Solar
 85 MW Storage
 60 MW Wind
 2 MW Distributed Storage

2027 Retirements
 54 MW Natural Gas (IPP Renewal)

Additions
 39 MW Solar (EDF Sapphire)
 35 MW Geothermal (Coso Geothermal and Calpine Geysers)  20 MW Storage (EDF Sapphire)

2030 Retirements
 212 MW Natural Gas (Glenarm + Magnolia)
 5 MW Wind (Milford 1)

Additions
 150 MW Storage
 35 MW Fuel Cells
 320 MW Distributed Storage
 347 MW Distributed Solar,

Overall Impact Scenario 3 focuses on Distributed Ener gy Resources, with supplemental resources in Wind, Solar, and Storage.
(400)
(200)
0 200
400
600
800
1,000
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 New Installed Capacity (MW)
Scenario 3: "Limited Internal+ 2x DERs CF2030" : Incremental Capacity Additions Storage Solar Wind
Geothermal Distributed Solar Distributed Storage
Other Existing Coal Existing Gas
Existing Large Hydro & Nuclear Existing Wind Existing Solar Existing Demand Response Load
41 349
Scenario 4

Scenario 4
Timeline Impacts
2025 Retirements
 108 MW IPP Coal
 10 MW Demand Response

Additions
 54 MW Natural Gas (IPP Renewal)
 5 MW Solar
 250 MW Wind
 80 MW Storage

2027 Retirements
 54 MW Natural Gas (IPP Renewal)

Additions
 39 MW Solar (EDF Sapphire)
 35 MW Geothermal (Coso Geothermal and Calpine Geysers)  20 MW Storage (EDF Sapphire)

2030 Retirements
 5 MW Wind (Milford 1)

Additions – None

Overall Impact Scenario 4 is designed to meet regul atory requirements and past IRP objectives. Glenarm remains online, reducing the need for additional resources, with remaining needs met by Wind. It achieves 100% renewable and zero-carbon by 2028, almost 20 years ahead of the 2045 California mandate, and reduces GHG emissions by 88% below 1990 levels by 2030.

(200)
(100)
0 100
200
300
400
500
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 New Installed Capacity (MW)
Scenario 4:"Reference" : Incremental Capacity Additions Storage Solar Wind
Geothermal Distributed Solar Distributed Storage
Other Existing Coal Existing Gas
Existing Large Hydro & Nuclear Existing Wind Existing Solar Existing Demand Response Load
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Scenario 5

Scenario 5
Timeline Impacts
2025 Retirements
 108 MW IPP Coal
 10 MW Demand Response

Additions
 54 MW Natural Gas (IPP Renewal)
 5 MW Solar
 610 MW Wind
 30 MW Storage

2027 Retirements
 54 MW Natural Gas (IPP Renewal)

Additions
 39 MW Solar (EDF Sapphire)
 35 MW of Geotherm al (Coso Geothermal and Calpine Geysers)  20 MW Storage

2030 Retirements
 5 MW Wind (Milford 1)

Additions
 20 MW Storage

Overall Impact In Scenario 5, Glenarm remains operational but is disincentivized due to a large, presumptive tax on carbon emissions (SCC). Wind, which provides the best ancillary services compared to other renewables, meets overall needs.

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20 Attachment C
352
21 353
22 354
23 355
24 356
25 357
26 358
27 ----Attachments A-C of the Agenda Report presented to the MSC on November 14, 2023, are included herein the report---- 359
E3 Technical Review of Pasadena Water and Power’s Integrated Resource Plan 1 E3 T echnical Review of Pasadena Water and Power’s Integrated Resource Plan
Executive Summary
October 31, 2023
Energy Environment and Economics (E3) was contracted by Pasadena Water and Power (PWP) as a technical reviewer to provide validation, critiques, and insights to support the 2023 Integrated Resource Plan (IRP), which explores a set of scenarios to achieve a goal of a carbon-free electricity portfolio by 2030.

E3 has worked extensively with utilities throughout North America (and specifically California) to develop high-quality, robust IRPs, providing both direct analytical support and critical analytical review to utilities seeking to decarbonize their portfolios while maintaining reliability.

The scope of this review consisted of a 1) evaluation of the methodology for consistency with industry standards, 2) review of inputs and assumptions, and 3) validation of results and key findings.

Overall, E3 found that the IRP framework as well as inputs and assumptions to be consistent with industry standard practices used by many utilities in long -term planning. Additionally, the results align with common trends seen in other jurisdictions seeking to decarbonize the electricity sector . All scenarios considered, including the Re ference Case, reach ambitious carbon reduction go als by 2030 and 2040 , achieving 80-100% and 90-100% carbon emissions reductions, respectively.

Key Takeaways
E3 finds that the overall IRP process and methodology is consistent with regulatory requirements and current industry standard practice.
• IRP aligns with the California Energy Commission (CEC) submission guidelines. • Planning framework is transparent, engages stakeholders, and sets clear objectives. • Analysis utilizes industry standard capacity expansion and system operation models.

E3 finds that the IRP inputs and assumptions , which were accessible for this review, are reasonable long-term planning assumptions, sourced from credible public sources where possible. • Key sources include the CEC Integrated Energy Policy Report (IEPR) and the National Renewable Energy Laboratory Annual Technology Baseline (NREL ATB). • Results of the IRP should be interpreted within the context of a rapidly shifting and uncertain market for clean energy; recent increases in PPA pricing provide an indication of directional changes in the industry that will impact costs of future decisions and will warrant continued monitoring as PWP makes progress towards its goals.

E3 concludes that the technical results are generally consistent with studies of ambitious clean energy objectives studied by other utilities and research institutions. • All portfolios include a mix of renewables, energy storage, and “firm” resources (resources capable of operating at full capacity over sustained periods of time), following a common blueprint for electricity sector decarbonization observed across a range of studies.

Attachment D
358
360
E3 Technical Review of Pasadena Water and Power’s Integrated Resource Plan 2 • Scenarios that meet PWP’s 2030 carbon-free goal are more ambitious than most of its peers’ current goals, which requires significant additional resources and results in high costs: the implied cost of carbon abatement in these scenarios exceeds the social cost of carbon. • Reliance on hydrogen fuel cells is a unique aspect of PWP’s carbon-free portfolios; most other plans retain or repurpose natural gas until a commercial “clean-firm” alternative is viable.

While we find the overall IRP analysis and results to be generally reasonable, we also provide PWP with recommendations for future improvements to the IRP . Most importantly, we recommend that PWP continue to refine its f orward-looking analysis of its system reliability needs to ensure that any plan developed ensures reliability for its customers.

The complete technical review report of PWP’s 2023 IRP follows with additional results and recommendations.
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E3 Review
October 31, 2023
Pasadena Water and Power
Integrated Resource Plan (IRP)
Nick Schlag, Partner
Nathan Lee, Managing Consultant
Charlie Duff, Managing Consultant
Melissa Rodas, Associate
360
362
2 Who is E3?
Thought Leadership, Fact Based, Trusted.

Integrated Resource Plan (IRP) Review Purpose
Results & Key Findings
Inputs & Assumptions
Process & Methodology
• Modeling Methods
• Scenario Design
• CEC Alignment
• IRP framework
• Market Prices
• Policies
• Load Forecast
• Resources
• Benchmarking
• Carbon Abatement Costs
• Resource Mix
• System Costs
Pasadena set an ambitious goal of delivering hourly
carbon free electricity … PWP’s IRP explores strategies to accomplish that goal by 2030
Given the importance and impact for Pasadena, this
review provides confirmations, critiques, and
insights to support PWP in this challenge
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364
4  IRP framework and inputs and assumptions generally follow industry standards and best practices  IRP results align with common trends seen in other jurisdictions seeking to decarbonize Key Findings: Review of PWP’s 2023 IRP
Results & Key Findings
Technical results are generally
consistent with studies of low-carbon
and carbon-free portfolios conducted by
utilities and research institutions:

Significant additions of renewables and
energy storage across all scenarios
Scenarios that meet PWP’s carbon-free
goal are more ambitious than most of its
peers’ current goals, requiring additional
resources and resulting in higher costs
Reliance on fuel cells is a unique aspect of
PWP’s carbon-free portfolios; most other
plans retain or repurpose natural gas until
a commercial alternative is viable
Inputs & Assumptions
Key inputs (load forecast, market and
commodity prices, resource costs, etc.)
are from reliable sources or analytical
processes
Key sources: CEC Integrated Energy
Policy Report, NREL Annual Technologies
Baseline
–––
Today’s market environment is rapidly
shifting, and results should be
interpreted within this context
Recent upward pressure on resource PPA
pricing will warrant continue market
monitoring for future IRP updates
Process & Methodology
IRP complies with California Energy
Commission (CEC) submission
guidelines
–––
Framework is transparent, engages
stakeholders, and sets clear objectives
–––
Modeling relies on industry standard
standard capacity expansion and
system operation modeling methods
E3 recommends additional reliability
analysis in scenarios that include fossil
retirement and hourly carbon-free goals
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5  E3’s work with utilities and regulators to develop long-term electric system resource plans that achieve ambitious clean energy targets support four common findings:

1. Technologies available today can enable significant progress towards ambitious state and utility clean energy objectives

2. A technology-neutral approach to planning and procurement will enable utilities to meet reliability and clean energy goals most affordably

3. Decarbonization of the “last 10%” poses the greatest challenge, and may lead to significant increases in costs

4. Some form of firm capacity is needed for reliability even under a deeply decarbonized grid
 These findings are supported by a growing body of literature, including recent studies by the National Renewable Energy Laboratory (NREL), Princeton University, the Electric Power Research Institute (EPRI), and the Massachusetts Institute of Technology (MIT)
Deep Decarbonization Planning Studies: Common Trends
Firm Resources
Today: nuclear, natural gas,
geothermal, biogas
Future: hydrogen, long-duration
storage, nuclear SMR, CCS
Scalable Low-Cost Clean
Energy Resources
Today: wind, solar, efficiency
Future: nuclear small modular
reactors (SMR), carbon capture &
sequestration (CCS)
Balancing Resources
Today: batteries, pumped storage,
hydro, demand response
Future: advanced flexible loads, other
storage technologies
Blueprint for a Low Carbon Grid
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366
6  PWP’s resource portfolios are consistent with common the blueprint for a low carbon grid
• All resulting portfolios include a mix of firm capacity, scalable clean energy generation, and balancing resources
 Carbon-free portfolios (scen. 1-3) require higher quantities of clean energy and storage capacity, resulting in considerably higher costs • PWP’s carbon-free portfolios result in high “implied carbon abatement” costs (~$600-1,200 per ton in 2030) compared to the social cost of carbon assumed in Scenario 5 ($400 per ton)
 Among California utilities’ plans, PWP’s consideration of hydrogen fuel cells for firm capacity is unique
• No other California utilities have committed to plans that include retirement of all existing natural gas plants that play critical roles in maintaining reliability • Sacramento Municipal Utility District’s current plan anticipates relying on existing gas resources for firm capacity through 2030, planning a transition to renewable fuels or CCS to support further decarbonization
Key Takeaways: PWP IRP Results Benchmarking
*PWP IRP results were compared against three California planning activities to identify key differences and validate model results:

1.California Public Utilities Commission IRP Preferred System Plan (CPUC Resource Plan): A 73% Renewable Portfolio Standard, with 86% GHG free resources by 2032

2. Sacramento Municipal Utility District Case A (SMUD 2030 Carbon Neutrality): No allowance of combustion generation beyond currently contracted biogas; no unspecified market purchases in 2030

3. NREL LA 100% Renewable Scenario SB100 (LA 100% Renewable Plan): 100% renewable energy by 2045 Despite differences among
utilities and their modeling
methods and assumptions,
common findings observed
across a broad range of
decarbonization studies should
be broadly applicable and
consistent across them
IRP Benchmarking Framework
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7 Current Trends: A Large Share of California’s Long-term Needs Will Be Met With Solar, Storage, and Other “Non-firm” Resources Peak Day Net Load
(GW)
2021 2025 IRP Portfolios 2033 IRP Portfolios
Solar
Energy-Limited
Resources
(Storage, Demand
Response, Hydro)
Wind
Net Load
Gross Load
Remaining firm
resource needs
1 Hour of Day 241 Hour of Day 241 Hour of Day 24
0%
5%
10%
15%
20%
25%
0 500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
GWh Solar Curtailment (GWh)
Solar Production (GWh)
Solar Curtailment (% of GWh) 5,000
4,000
3,000
2,000
1,000
0 25%
20%
15%
10%
5%
0%
0%
5%
10%
15%
20%
25%
0 500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
GWh Solar Curtailment (GWh)
Solar Production (GWh)
Solar Curtailment (% of GWh)
CAISO. Production and Curtailment Data.

The duck curve is expected to grow As more solar is integrated, the duck curve will deepen
Additional storage will help shift
energy to hours of greater need
Already, annual curtailment is growing in
California and with additional solar set to be
deployed, the trend will only continue.

Curtailment happens the most during spring
months when solar production is high and
demand levels are lower
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8  To maintain reliability and meet clean energy
objectives, utilities in California and the Southwest
will add significant quantities of renewables and
storage resources in the next decade
 Coupled with supply chain constraints and
interconnection queue issues, there is uncertainty
in both cost and project execution timelines
Current Trends: Development Of New Resources Is
Expected to Occur at an Unprecedented Rate
Projected additions will
exceed 10 GW per year
based on utility plans
Aftermath of
California Energy
Crisis
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9 1. Introduction to E3

2. Current Trends and Risks in California Energy Markets

3. Review of IRP Methodology and Inputs and Assumptions

4. Review of IRP Results
Contents
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370
10 Who is E3?
Thought Leadership, Fact Based, Trusted.

San Francisco New York Boston
100+ full-time consultants
Engineering, Economics,
Mathematics, Public Policy…30 years of deep expertise
Calgary
Recent Examples of E3 ProjectsE3 Clients
Buy-side diligence support on several successful
investments in electric utilities (~$10B in total)
Acquisition support for investment in a residential
demand response company (~$100M)
Supporting investment in several stand-alone
storage platforms and individual assets across
North America (10+ GW | ~$1B)
Acquisition support for several portfolios and
individual gas-fired and renewable generation
assets (20+ GW | ~$2B)
United Nations Deep Decarbonization Pathways
Project
California: 100% clean energy planning and
carbon market design for California agencies
Net Zero New England study with Energy Futures
Initiative
New York: NYSERDA 100% clean energy planning
Pacific Northwest: 100% renewables and
resource adequacy studies for multiple utilities
300+
projects
per year
across our
diverse
client base
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11 E3’s experience in resource planning
 E3 has worked with a wide range of clients that are increasingly writing the script for the emerging clean energy transition to understand how to plan deeply decarbonized electricity systems • California PUC: Assisting the CPUC in administration of IRP program mandated by SB 350 by developing a ‘Reference System Plan’ that achieves 40% GHG emission reductions by 2030 • Pacific Northwest Low Carbon Scenarios Study: Investigated the costs and emission reductions associated with various policies in the Northwest, including a higher renewable portfolio standard, cap and trade, and a carbon tax
• Sacramento Municipal Utilities District: Assisting with 2018 IRP to evaluate long-term clean energy goals including GHG emission reductions of 90-100% by 2040 • Los Angeles Department of Water and Power (LADWP): Evaluated reliability contributions of clean energy alternatives to natural gas once-through-cooling plant repowerings • Hawaiian Electric Company (HECO): Developed an affordable, technical feasible Power Supply Improvement Plan (PSIP) consistent with Hawaii’s goal of 100 percent renewable energy by 2045 • Xcel Energy Upper Midwest IRP: Provided support to Xcel Minnesota by conducting independent technical analysis to examine how to meet long-term carbon reduction goals along with associated costs as part of their 2019 IRP process • Nova Scotia Power: Full support for Nova Scotia Power’s 2021 IRP considering coal retirements and deep decarbonization in a geographically constrained region  Through these projects, E3 has developed an unparalleled understanding of resource planning within highly decarbonized renewable electricity systems
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12  Technological, economic, societal, and political factors are rapidly transforming the electricity sector:
• Climate change and the policy imperative to decarbonize the economy require deployment of massive quantities of low-carbon electricity • Renewable resources including wind, solar and batteries have fallen dramatically in cost, offering attractive alternatives to conventional resources • Consumers increasingly wish to control their own destiny, decentralizing the locus of decision-making
• Innovation in data processing, telemetry and metering are enabling greater utility and customer engagement in energy use
 In response to these trends, integrated resource planning is evolving – modern IRPs have come a long way since their origins in the 1980s
• New tools and techniques to address increasing complexity of planning problems • A new “dual” purpose to (1) support near-term actions and (2) articulate long- term vision
• Expanded scope to consider implications beyond electric sector and linkages with other planning functions
• More open and proactive stakeholder engagement process Emerging trends in Integrated Resource Planning
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Current Trends and Risks in
California Energy Markets
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14 A Large Share of California’s Long-term Needs Will Be Met With Solar, Storage, and Other “Non-firm” Resources
Peak Day Net Load
(GW)
2021 2025 IRP Portfolios 2033 IRP Portfolios
Solar
Energy-Limited
Resources
(Storage, Demand
Response, Hydro)
Wind
Net Load
Gross Load
Remaining firm
resource needs
1 Hour of Day 241 Hour of Day 241 Hour of Day 24
0%
5%
10%
15%
20%
25%
0 500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
GWh Solar Curtailment (GWh)
Solar Production (GWh)
Solar Curtailment (% of GWh) 5,000
4,000
3,000
2,000
1,000
0 25%
20%
15%
10%
5%
0%
0%
5%
10%
15%
20%
25%
0 500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
GWh Solar Curtailment (GWh)
Solar Production (GWh)
Solar Curtailment (% of GWh)
CAISO. Production and Curtailment Data.

Curtailment happens the most during spring
months when solar production is high and
demand levels are lower
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15  To maintain reliability and meet clean energy
objectives, utilities in California and the Southwest
will add significant quantities of renewables and
storage resources in the next decade
 Coupled with supply chain constraints and
interconnection queue issues, there is uncertainty
in both cost and project execution timelines
Development Of New Resources Is Expected to Occur at
an Unprecedented Rate
Projected additions will
exceed 10 GW per year
based on utility plans
Aftermath of
California Energy
Crisis
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376
Review of IRP Methodology
and Inputs and Assumptions
375
377
17 Elements of a Robust Integrated Resource Planning Process 3 1
elect ost
Cost Effective
Portfolio
Establish
our ear
Action Plan
ile IRP Report
Compare
Costs
Assess Risks
Compare
Environmental
Impacts
Create
Portfolios
apacity expansion
imulate
perations
Pro ction si lation
Test Reliability
oss of loa probability
oad orecast
eneration
xisting Reso rces
e an i e Progra s
e Reso rce ptions
Transmission
Commodity
orecasts
Identify ey
ecisions
Identify
ources of
ncertainty
elect
cenarios,
utures
ensitivities
Cost
Reliability
Environmental
oals
Regulatory
Re uirements
arbon issions
t er issions
Water se
RP argets
tan ar s
Identify
b ectives
efine
cenarios
ather
ata
Conduct
Analysis
Evaluate
ptions
inali e
Plan
Engage takeholders and Integrate eedback
Figure adapted from Public Service Company of New Mexico 2020 Integrated Resource Plan 376
378
18  Primary objective of utility planning: identify
and procure a portfolio of resources that
minimizes costs to ratepayers while
maintaining reliability and achieving clean
energy objectives
 Elements of a successful plan:
• Robust technical analysis of resource options
• Evaluation of key risks and uncertainties
• Consideration of short- and long-term implications
of planning decisions
• Engagement of a wide range of industry
stakeholders
Utility Planning Processes Balance Multiple Objectives
Common
Utility
Planning
Goals
Reliability
SustainabilityAffordability
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19 E3 reviewed PWP’s overall IRP framework and key inputs and assumptions for alignment with industry standards and best practices. The results of this review are presented as follows:

1. CEC IRP Submission Guidelines

2. General IRP Framework

3. Modeling Methodology

4. Load Forecast

5. Existing Resource Characterization

6. New Resource Options Considered

7. Resource Operational Characteristics

8. Commodity Price Forecasts

9. Carbon and Clean Energy Accounting
Areas of Review: IRP Framework and Inputs and
Assumptions
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20 1. CEC Submission Guidelines
ID Criteria E3 Review
1a Is the IRP consistent with the planning horizon filing requirements adopting an IRP that ensures the utility achieves specific goals and targes by 2030?
Yes. The IRP is consistent with the current planning horizon requirement to 2030. Revised CEC submission guidelines, currently in the docket, would extend the planning horizon requirement to 2045, and under this revision PWP’s IRP would also remain in compliance. 1b Do the scenarios and sensitivity analyses adhere to the CEC IRP filing requirements?
Yes. The IRP considers five planning scenarios utilizing different resource option and emission constraints, with sensitivities on temperature impacts, generation technology costs, and transmission contingencies. 1c Are all Standardized Tables, required for filing, completed for the adopted strategy/plan?
Yes. The following standardized tables required for filling have been completed.

1. Capacity Resource Accounting Table (CRAT)

2. Energy Balance Table (EBT)

3. RPS Procurement Table (RPT)

4. Greenhouse Gas Emissions Accounting Table
(GEAT)
1d Does the IRP provide additional and supporting information? Yes. Supporting documents are available to indicate the methodology for selecting resources, load forecasts, and resource costs.
1e Does the IRP include the demand forecast required for filing? Yes. Demand forecasts based on IEPR forecasts are provided following CEC recommendations. 1f Does the IRP report the mix of resources used by the POU as required for the IRP filing?
Yes. IRP considers a resource mix considers a diverse set of emissions free resources; however, energy efficiency and transportation electrification sensitivities are not considered. 1g Does the IRP demonstrate how PWP will ensure it meets system and local reliability goals?
Yes. The IRP considers system reliability and models potential loss of load; however, concerns remain that with limited guidance from CEC and CAISO on how future resource adequacy requirements will evolve, the approach used in this IRP will not be sufficient to guarantee a reliable outcomes. 1h Does the IRP show how PWP will ensure how it will meet CARB established GHG emission targets?
Yes. PWP has a zero emissions goal by 2030, set by the City of Pasadena, which surpasses the requirement established by CARB.
1i Does the IRP show how PWP will serve customers at just and reasonable rates and minimize bill impacts?
Yes. Rates were calculated for each scenario studied. However, E3 suggests consideration of an additional write up of potential rate impacts and comparisons between studied scenarios and sensitivities. 1j Does the IRP ensure PWP strengthens the diversity,
sustainability and resilience of the transmission and distribution systems?
Yes. The IRP explores a Goodrich transfer contingency sensitivity, which is a vital interconnection for the PWP system. An additional writeup of the risks has been provided in the filing with the CEC. 1k Does the IRP ensure PWP achieves the goal of minimizing local air pollutants for disadvantaged communities?
Yes. IRP contains a discussion on air quality impacts in Pasadena’s disadvantaged communities. Fossil fuel generation occurs outside of the DAC, but positive impacts from plant decommissioning are discussed. 379
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21 2. General IRP Framework
Criteria E3 Review
2a Does the IRP articulate a clear set of
motivating questions & objectives?
Yes. PWP established a clear vision with a set of goals for the IRP, a set of objectives, and a purpose, “to serve as a blueprint for PWP to deliver reliable, environmentally responsible electricity service at competitive rates over a ~20-year planning period.”
2b Does the IRP explore a coherent set of
scenarios and sensitivities clearly linked to
the objectives?
Yes. With this IRP, PWP explores the requirements to achieve the City of Pasadena’s ambitious goal to provide 100% carbon free electricity by 2030 through a set of scenarios and sensitivities that test stresses tied to heat wave impacts, Goodrich intertie transfer contingencies, and technology cost impacts. However, by focusing only on bookend scenarios, i.e., a “Reference” case and cases that entirely eliminate carbon emissions, the analysis misses an opportunity to explore tradeoffs between cost, environmental objectives, and reliability impacts that could be useful to decisionmakers.
2c Are the modeling inputs and assumptions
gathered from reputable and (where
possible) public sources?
Yes. Inputs and assumptions are from reputable and public sources, such as industry standard technical assumptions and costs data sources were cited for generic expansion resources. However, for key assumptions that employ proprietary datasets, such as market and gas prices and renewable resource profiles, providing additional information on methodology and assumptions and/or aggregated data in the final IRP would allow for more transparency around impacts.
2d Does the analysis follow best practices and
apply industry-standard modeling tools and
approaches to quantify metrics connected
to the IRP objectives?
Yes. The overall IRP process aligned with best practices and employed industry-recognized modeling tools.

However, ensuring that capacity expansion modeling optimizes portfolios to meet reliability goals in a robust manner together with and clean energy goals while minimizing cost would help to ensure PWP meets reliability as well as environmental and cost goals.
2e Is a concrete action plan identified based
on analysis?
Pending. At the time of E3’s original review, the IRP analysis and synthesis did not result in a specific action plan. With feedback from the Municipal Services Committee, PWP agreed to define a specific set of waypoints in the near future that would provide for concrete action and indicate progress towards the goals of this IRP. At the time this review was finalized, the specifics of those waypoints were still being determined. 2f Has the IRP process been transparent and
accessible to stakeholders?
Yes. PWP hosted regular Stakeholder Advisory Group (STAG) meetings; shared updates on the IRP process through multiple channels, e.g., online, print, social media, etc.; and provided opportunities for public input to shape the process.
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22  The PWP IRP explored a range of scenarios and sensitivities that follow a similar trend other small utilities have analyzed  Extreme weather and a portfolio’s reliability and/or resilience are more often considered via a specific LOLP analysis
• Given this was out of scope in this IRP, its inclusion as a sensitivity acknowledges its importance
 A range of variables were not evaluated in the scenarios • Load growth from electrification and alternate resource and policy decisions (i.e., retention of Glenarm, no clean and firm, net zero policy, etc.)
Sensitivities
Scenarios
2b – Scenario Design
• Carbon Policy:
100% Carbon-Free by 2030 vs CA
State policy (treated as reference)
• Resource availability:

Local (internal) buildout constraints
in 100% carbon-free cases
• Social cost of carbon:

Impact on reference
• Extreme Weather:

Heat wave impact
• Market Ties:

Goodrich Transfer Contingency
• Technology Costs:

High / Low case
Scenarios
should focus on
drivers with
high impact &
high uncertainty
Low Medium High
Impact
Low Medium High
Uncertainty
Drivers with low
impact are not
useful for
analysis
Drivers with large
impacts but low
uncertainty can
be characterized
uniformly
!
E3 Recommendation
E3 found the scenarios and sensitivities explored as
“bookends” – in the realm of what’s possible – with
less focus on plausible or probable futures to help
guide PWP’s decision-making. E3 recommends
exploring options between the bookends during
future IRPs.

For example,
load growth via
electrification
For example,
commodity prices in
zero carbon case
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23 Horizon:
• PWP model years for the long-term capacity
expansion study extend through 2050
• This is a common study horizon for utilities and
aligns with best practice
Industry Best Practices
Utilities should develop and evaluate
a range of resource portfolio options.

Current best practice entails the use
of optimal, typically least-cost, Long-
Term Capacity Expansion (LTCE)
software to create portfolios modeling
that account for:
 Expected changes to loads and
existing/planned resource
portfolio over a long (20+ year)
planning horizon
 System reliability, greenhouse gas
(GHG), and clean energy
objectives
 Costs to develop and operate new
generation resources
 Hourly (or similar) operational
dynamics of the electricity system
3a - Portfolio Development
Model:
• Used by many across the industry (Public Service
Company of New Mexico, Xcel Energy, others)
• Long-term capacity expansion model for portfolio
analysis which aligns with best practice
2050Now
Simulation:
• EnCompass allows hourly resolution of system
operations with a reduced set of sample days
• This is common practice, capturing a range of
conditions across the year for resource planning
Constraints:
• System reliability is represented in the model via a
planning reserve margin and capacity accreditation
• Clean energy and GHG constraints are applied
• Ensuring these are modeled is best practice
1 24
MW
GHG
PRM
 PWP uses an industry standard tool to develop long-term resource expansion portfolios across multiple scenarios and sensitivities, applying constraints to represent applicable state and city policies 382
384
24 3. Modeling Methodology
ID Criteria Explanation
3a Are least-cost portfolios developed for each scenario using capacity expansion modeling?
Yes. PWP’s portfolios are created using EnCompass, which uses optimization to construct portfolios to meet utilities’ needs. This tool is used by many utilities throughout the industry in the creation of IRPs, including Public Service Company of New Mexico, Xcel Energy, and others. 3b Are system operations simulated on an hourly basis? Yes. PWP’s analysis accounts for hourly operational needs of the system in two places:
• The capacity expansion analysis conducted in EnCompass includes an hourly representation of system operations on a reduced set of sample days
• Portfolio outputs from the capacity expansion module are subsequently simulated across a full year (8,760 hours) in EnCompass
This two-stage approach (capacity expansion followed by production simulation) is industry standard.
3c Does the PWP IRP methodology consider system
reliability needs?
Yes. A planning target is modeled with resources accredited using ELCCs or NQCs following CPUC guidance and using its datasets. However, with limited guidance from the CEC and CAISO on how future resource adequacy requirements will evolve, the approach used in this IRP will not be sufficient to guarantee a reliable outcome. Currently, the IRP analysis accounts for PWP’s reliability needs in three ways:

1. Requiring PWP to meet an annual planning reserve margin constraint, assuming capacity credits for all resources remain at today’s levels as calculated by the CPUC

2. Ensuring that load is served across all 8,760 hours of the operational simulation

3. Evaluating several “stress tests” to examine portfolios performs under extreme conditions, including a heat wave and a transmission contingency This approach is not sufficient to demonstrate conclusively that the portfolios developed would be sufficient to meet PWP’s resource adequacy obligations and local reliability needs. 383
385
25 Industry Best Practices
Utilities should evaluate
resulting portfolios through full
hourly operational simulations
across the model horizon
 Simulate operations for 8,760
hours in all model years
 Ensure operational resource
constraints are captured
 Operational simulation for least-
cost system operations
 System costs flow into revenue
requirement calculation
PWP leverages the same model for full operational simulation modeling to evaluate annual dispatch of its portfolios and calculate system costs for its revenue requirement calculation.
3b - Operational Simulation
• EnCompass also used for full
operational simulation
• PWP system is represented as
single zone connected to “market”
price strip zone
• 8,760 hours for model years
• Heat rate, Pmin, Pmax, and other
operational parameters reflected
• Hourly load and renewable
generation is represented
• Costs resulting from production
simulation runs fed into revenue
requirement calculations
Operational Simulation using Encompass
!
E3 Recommendation
Whenever the full 8,760 simulation resulted in unserved energy, additional fuel cell and/or storage capacity was added (depending on the scenario) and the simulation was re-run to ensure reliability; however, with more robust reliability modeling, E3 anticipates this iteration and “true-up” would not be necessary and better align with best practices. 384
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26 Industry Best Practices
Utilities should ensure that their resource
portfolio plans are sufficient to meet their
reliability needs, depending on their unique
regulatory environment and physical
characteristics:

1. Establish a clear reliability standard that
may be one or more of the following:
• Based on a statistical standard for portfolio
reliability, such as Loss of Load Expectation
or an alternative measure,
• Set by a resource adequacy program
administrator, and/or
• Tied to an N-1 (or other) operating criterion.

2. Identify future system needs and ability
to meet those needs using:
• Loss of Load probability modeling to simulate
resource availability across a broad sampling
of conditions,
• Projections of future capacity credits
assigned to resources in the context of a
resource adequacy obligation, and/or
• Detailed modeling of system performance
under N-1 conditions.
 Reliably meeting PWP’s loads entails overlapping reliability re uirements:
• Long-term planning of its system to operate reliably under N-1 transmission contingency on its intertie with CAISO, and
• Annual obligation to CAISO to ensure the PWP portfolio has sufficient resources to meet local and system resource adequacy requirements
 Despite limited guidance from the CEC and CAISO on how future resource adequacy requirements will evolve, PWP does address future resource adequacy needs in its IRP • However, the capacity accreditation assumptions do not fully account for changing resource adequacy needs and are not sufficient to ensure PWP will meet its future resource adequacy obligations – particularly in scenarios with Glenarm retirement
3c – Portfolio Reliability
Aspect of Current Methodology Outstanding Risks & Vulnerabilities Portfolio is designed to meet resource adequacy needs as reflected by a Planning Reserve Margin (PRM) requirement using present- day, technology-specific capacity credit assumptions established by the CPUC and CAISO.

Resource adequacy modeling does not capture future capacity credit declines for renewables (only solar) and storage resources likely to occur as their penetrations in California increase; portfolio may be insufficient to meet CAISO RA obligations.

Additional adjustments to each portfolio are made to ensure resources can meet PWP demand across a single 8,760
operational simulation.

A single deterministic simulation will usually fail to capture the types of extreme conditions that ultimately lead to reliability events, which are not present in most years.

Additional stress tests – reflecting a heat wave and transmission contingency that reduces PWP’s import capacity – are evaluated.

These events evaluate system performance under summer stress conditions; however, many studies have shown that portfolios that are heavily reliant on renewables and energy storage tend to experience higher reliability risks in the winter.
!
E3 Recommendation
E3 suggests that during routine reliability due diligence, scenarios are tested for extreme winter events to ensure adequacy. Also, E3 suggests that future IRPs incorporate a forward-looking perspective on resource adequacy requirements and capacity accreditation. Finally, E3 recommends existing ongoing reliability studies directly assess implications of Glenarm retirement on local reliability.* *Glenarm retirement would require PWP due diligence & all standard required approvals 385
387
27 4. Load Forecast
ID Criteria E3 Review
4a Is the load forecast developed using
industry-standard approaches?
Yes. PWP’s load forecast is derived from the California Energy Commission’s (CEC’s) Integrated Energy Policy Report (IEPR) by applying a ratio of PWP to Southern California Edison (SCE) historical load to the IERP’s SCE forecast. The CEC develops load forecasts for each California Load Serving Entity that reflect projected economic & demographic trends and impacts of policy. This load forecast is used directly by most California municipal utilities in their IRPs and serves as the basis for the California Public Utilities Commission’s development of a “Preferred System Plan” for the utilities and Community Choice Aggregators under its jurisdiction. By adopting the IERP forecasts, PWP follows the industry standard approach for load serving entities.
4b Does the demand forecast account for
load modifiers resulting from future
energy efficiency and distributed
energy resources?
Yes. The IEPR load forecast captures expected impacts of key load modifiers, including additional achievable energy efficiency, behind-the-meter solar PV and energy storage, and transportation and building electrification. PWP modifies the SCE fraction- based results using its own energy efficiency, distributed resources, TOU rate impacts, electric vehicle adoption, and native load.

By adopting the IEPR forecasts and modifying via PWP-specific assumptions and analysis, this follows a best-in-class approach accounting for the impact of load modifiers.
4c Does the load forecast account for
expected impacts of climate change?
Yes. The CEC incorporates a climate change adjustment into its projections of annual energy and peak demand. By adopting the CEC forecasts, PWP is reflecting climate change impacts as captured within IEPR. 4d Are various components of load,
including future load modifiers,
represented by hourly profiles
developed from reasonable historical
or simulated data?
Yes. PWP uses individual hourly profiles for each load component. These are calculated as a fraction of the hourly SCE forecasts available in the CEC’s IEPR. However, final, disaggregated hourly load component data were not available to show how PWP’s hourly load shapes may differ from SCE’s hourly IEPR load data. While the future load modifiers were noted to capture PWP-specific load adjustments on an annual basis for various components, hourly load profile adjustments are not detailed in the methodology to be made PWP-specific. Altogether, the representation of hourly profiles is adequate and follows common practices across the industry.
4e Are uncertainties in load forecasts
explored through sensitivity analysis
or alternative scenarios?
No. Alternative load forecasts and load sensitivities were not explicitly studied in the IRP. Ultimately, the scenario and sensitivity design process conducted by PWP resulted in a focus around decarbonization policy, technology availability, and reliability via a “heat wave” and transmission availability sensitivity; but not load uncertainty. While not detrimental to the IRP, E3 recommends evaluation of load uncertainty during ongoing due diligence to understand the impacts on PWP resource portfolios and costs. 386
388
28  Assessing the impacts of alternative future load
forecasts is common in utility IRPs
• Particularly when uncertainties or policy drivers could cause variations from the “base” forecast
 Electrification level assumptions are embedded
in PWP’s IRP forecast are consistent with a
“Reference” scenario
 Studies show significant future load increases
linked to the levels of transportation and building
electrification needed to achieve California’s
decarbonization goals, i.e., the CARB Scoping Plan
 These load growth levels could directly impact
conclusions regarding:

1. Cost and viability of achieving a 100% carbon-free
portfolio

2. Implications of retiring existing resources related to reliability of portfolio
4e – Load Forecast Sensitivities
!
E3 Recommendation
E3 recommends, during ongoing utility diligence, evaluation of impacts of higher electrification levels consistent with state policy goals to inform any specific commitments regarding clean energy targets or plant retirements.

Business-as-Usual Reference Scenario
CARB 2022 Scoping Plan
PWP IRP Load Forecast
Scoping Plan Scenario
CARB 2022 Scoping Plan
+70% increase by 2045
due to electrification
The adopted CARB 2022 Scoping Plan
Scenario shows substantially higher loads than
the Business-as-Usual Reference, highlighting
the range of uncertainty in California’s load
forecasts due to electrification
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29 5. Existing System
ID Criteria E3 Review
5a Are the retirements and commercial operations
dates (CODs) of existing and planned resources,
reflected in the portfolio?
Yes. The IRP retires existing thermal resources by 2030 to meet the zero-carbon emissions goal and includes CODs for all planned resources. In reference scenarios, there are planned retirements for the existing coal plants and an assumed 20-year lifetime for renewable projects. Retirements for natural gas facilities are dependent on the scenario assumptions. Although not explicitly modeled in the IRP, additional costs associated with the retirement, or potential termination of contracts, of emitting resources should be part of the decision making related to achieving 100% carbon free electricity by 2030. This may be the case for resources such as Glenarm, Magnolia, and Intermountain Project units. 5b Are existing and planned resources’ technical
and cost inputs and assumptions sourced from
historic and/or recent RFP data, respectively?
Yes. The IRP assumes resource costs based on historic operations costs for existing resources or RFP data for planned resources. Existing coal resource costs are based on IPP budget projections while planned solar and geothermal project costs are sourced from RFP data. Natural gas resource costs are developed from natural gas costs, transportation, and facility O&M. 5c Are transmission constraints within the planning
area represented?
Yes. The IRP considers transmission constraints within the planning area by using a zonal representation where PWP’s local zone is connected to an external market zone in a single pipeline construct. PWP can utilize the Goodrich line and import up to 280 MW and export up to 100 MW. The limits reflect “real world” risk preferences and operational constraints. 388
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30 6. New Resource Options
ID Criteria E3 Review
6a Does the IRP consider a reasonably broad set of
options, including both commercially available and
emerging technologies?
Yes. The IRP considers a broad set of resources applicable for Pasadena’s ambitious clean energy goals, while considering technological feasibility. However, additional disaggregation of solar and wind resources by region through resource profiles would help to capture resource diversity contributions and can potentially impact resource selection. 6b Are cost and financing assumptions developed based
on reputable public data sources and/or market
intelligence?
Yes. The IRP develops cost assumptions based on current market conditions and long-term energy forecasts according to industry standards. Near-term costs are based on recent RFPs for geothermal, solar, wind, and battery resources while long-term costs are calculated using NREL (or EIA) cost projections. 6c Do future resource costs account for availability of tax credits established by Inflation Reduction Act?
Yes, resource costs are adjusted to account for tax credits made available by the IRA. However, E3 does provide several recommendations for future refinement of treatment of IRA tax credits:
• IRP assumes a 2035 credit expiration, when it is likely credits will remain in effect after this time due to national emissions not reaching the 75% reduction 2022 emissions . Potential credit extensions should be tracked in future IRPs. • Analysis does not consider the PTC as an option for new solar – this may limit the selection of future solar as the PTC provides larger incentives at the assumed capacity factor of 32% • Hydrogen fuel cost projections do not account for available IRA credits. This may cause an overestimation in future hydrogen fuel costs and limit resource selection.
• Analysis does not account for costs of lost PTC when PTC-eligible resources are curtailed and may affect the way resources are deployed and curtailed.
6d Are new resource options characterized by
reasonable limits on technoeconomic potential and
other factors that could limit timing or amount of
development?
Yes. The IRP limits new resource build options to a 1 GW build limit per technology per year. Space constraints are considered in different scenarios by favoring distributed resources. Local constraints versus resource constraints for resources built externally on CAISO are unclear.
6e Are transmission costs to deliver new resources to
loads accounted for in the analysis?
Yes. Transmission costs for new resources are accounted for through a transmission access charge (TAC) applied to external resources.
6f Are the impacts of future technology cost uncertainty explored?
Yes. The IRP considers technology cost uncertainties by performing sensitivity analyses around high and low technology costs.
6g Are financial assumptions from public, reputable
sources?
Yes. The IRP does rely on public reputable sources for financial sources. PWP should ensure that these are clearly cited in the final IRP filing for transparency.
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31 Excluded*Included
6a – Technologies Options Considered
• Community solar & paired solar
• 4-, 6-, 8-hr storage (local &
system)
• Fuel cells (local & system)
• Residential solar & batteries
• Commercial solar & storage
• Biogas
• Onshore wind & paired wind
• Offshore wind
• Utility solar & paired solar
• Geothermal
• Small modular nuclear
reactors*
• Hydrogen conversion at
existing gas plants*
• Carbon capture retrofits at
existing gas plants*
• Fossil Fuels
• Long duration storage*
• Tidal / wave power
• New gas with CCS*
✓
 The technologies included in the IRP were reasonable based on technology readiness and policy considerations ✓ Exclusion of new fossil fuels or small modular nuclear reactors follows Pasadena and California policy, respectively
✓ Exclusion of tidal / wave power is appropriate based on technology readiness and economics
× Long duration storage & gas with CCS could have been
considered as firm options, but do not compromise the approach* × Conversion of Glenarm to hydrogen could have been considered as a potentially lower-cost, clean firm option, but doesn’t compromise the approach*
✓ All mature renewable technologies and storage were included, including configuration variants (paired vs non-paired) ✓ Local and system resource options were considered, which is important for transmission-constrained utilities
✓ Firm, dispatchable, zero-carbon technologies were considered (fuel cells & biogas), which many utilities have found crucial to ensure reliability in low-carbon systems
– While fuel cells are a less mature technology, E3 has seen this option considered as a non-combustion-based firm resource !
E3 Recommendation
Consideration of more than one generic wind and solar resource option/location for onshore wind and solar and offshore wind may provide PWP with more diversified resource profiles contributing to a more resilient clean energy portfolio.
* Purposefully excluded due to Stakeholder Advisory Group (STAG) feedback 390
392
32  Methodology used to develop generic cost assumptions follows industry standard practices for IRPs:
• Near-term costs anchored to public market referents (typically executed power purchase agreements (PPAs))
• Long-term cost trajectories defined by public data sources (NREL Annual Technologies Baseline, supplemented with EIA Annual Energy Outlook)
• “High” and “Low” technology cost ranges developed to capture inherent future cost uncertainties
 Since assumptions were originally developed, inflationary pressures, global supply chain issues, and rising interest rates have continued to exert upward pressure on PPA
costs
• “IRP - Base” cost trajectories appear optimistic based on current PPA market data
• Cost impacts under the “IRP - High” sensitivity should be considered as a reasonably likely outcome that is consistent with today’s market
6b - Methodology to Develop Cost Assumptions

0.00 10.00

20.00 30.00

40.00 50.00

0.00 2025 202 202 202 202 2030 2031 2032 2033 2034 2035 203 203 203 203 2040 2041 2042 2043 2044 2045 204 204 204 204 2050 tility cale olar (Real 0 3 / Wh)
NREL High Low Range NREL Moderate IRP Base IRP Low IRP High

0.00 5.00

10.00 15.00

20.00 25.00
2025 202 202 202 202 2030 2031 2032 2033 2034 2035 203 203 203 203 2040 2041 2042 2043 2044 2045 204 204 204 204 2050 our attery torage (Real 0 3 /kW mo)
NREL High Low Range NREL Moderate IRP Base IRP Low IRP High

Example Cost Projections Used In PWP IRP
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33 6c - Treatment of Inflation Reduction Act
Notable Items for Future Consideration

ZERO CARBON FUELS
• PWP did not include any fuel cost adjustments for hydrogen or biofuels that may sway the economics of achieving zero emissions on an hourly basis. E3 suggests applying this during routine utility due diligence as these resources also qualify for IRA credits.

TAX CREDIT EXPIRATION YEAR
• PWP assumes tax credits expire by 2035 which would occur if the US achieves 75% GHG reductions below 2022 levels by 2032. E3 finds this level of GHG reductions optimistic and suggests considering an extension of the “Application Year” or, at a minimum, performing cost sensitivities that explore the impact of extensions in ongoing utility analyses.

PTC vs. ITC Assignment in PWP IRP
 The IRA allows clean energy developers to select either the ITC or PTC
 Selection depends on both the cost and the capacity factor of resources
• ITC is often more favorable for higher-cost, lower capacity factor resources
• PTC is often more favorable for lower-cost, higher capacity factor resources
!
E3 Recommendation
As the threshold for choosing PTC vs ITC is close and dependent on future system dynamics (i.e., curtailment), E3 recommends evaluating both options for resources such as wind and solar to determine the optimal choice as part of future IRP studies.

Resource Capacity Factor PTC ITC
Onshore Wind 35%
Geothermal 90%
Solar 19% - 32%
Offshore Wind 46%
Battery Energy
Storage 10% - 42%
Fuel Cells Model optimized
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34 7. Resource Operational Characteristics
ID Criteria E3 Review
7a Are operational constraints of dispatchable
resources, such as gas and nuclear captured
within the analysis?
Yes. The typical operational constraints such as pmin, pmax, must-run capacities, daily starts, min up and down times, outage rates, maintenance schedules ramp rates are reflected for the dispatchable resources. Heat rates for existing coal and natural gas resources are based on actual plant characteristics as provided by PWP and are consistent with industry standards for each technology. 7b Are operating costs for dispatchable resources
appropriately characterized within the analysis?
Yes. Variable O&M assumptions for existing coal and natural gas resources are based on actual plant characteristics as provided by PWP.
7c Do resource profiles for wind and solar resources
reflect expected diurnal and seasonal variability,
e.g., serially complete timeseries data 8,760?
Not Applicable. E3 did not review hourly profiles for renewables used in the modeling due to contractual restrictions between ACES and the third-party vendor that provided the profiles. However, based on the information available, E3 believes all renewable and load profiles are not “temporally aligned”, i.e., do not reflect a common set of meteorological conditions throughout the year, considered industry best practice and an opportunity for future improvement. Existing resources appear to be modeled with an average annual capacity factor, while new resources are represented by hourly profiles. Without temporal alignment between load profiles and renewable profiles, there is a risk of mischaracterizing renewable resource availability to meet load throughout the year; additional (or less) capacity may be required, depending on if the misalignment overstates or understates renewable resource availability.
7d Is renewable curtailment modeled in system
dispatch with appropriate penalties where
relevant?
Yes. The operational simulation in EnCompass allows for curtailment of renewable resources while ensuring that the full costs of all new resources are accounted for, i.e., under a PPA structure, resources that are curtailed are compensated at the full PPA price. However, no costs for the loss of the PTC when energy is curtailed are accounted for. These costs may be increasingly important if new solar resources opt for the PTC (rather than the ITC as modeled in this analysis). 393
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35 7c – Renewable Energy Resource Profiles
Common Industry Practice:
 Hourly profiles for wind and solar are simulated and match hourly load conditions, i.e., using the same weather year modeled to ensure realistic system conditions are captured. • Hourly dynamics should reflect “real” generation – profiles shouldn’t be averaged over years  Geographic granularity of renewable profiles represent generic but distinct areas where utility would potentially procure resources.
 For a representative renewable resource in each area, multiple locations are simulated and aggregated to ensure profile does not over- or under-estimate resource potential.

Note: E3 was not able to review the full hourly renewable resource profiles used in PWP’s IRP due to contractual restrictions between PWP’s contractor and the third-party provider of the renewable profiles. 8,760
hours
Load
Solar
Wind
!
E3 Recommendation
E3 recommends using temporally aligned wind and solar resource and load profiles and representing more utility-scale solar and wind resources across California, as profiles vary regionally in future IRPs.

Temporal alignment of wind and solar resource and load profiles determines these resources’ contribution to firm capacity, or capacity credit, and has important economic implications (or renewable energy’s economic value). 394
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36 8. Commodity Pricing - 1 of 2
ID Criteria E3 Review
8a Are cost assumptions for fuels
developed based on reputable
public data sources and/or market
intelligence?
Yes. Overall, commodity prices are from appropriate sources. The fuel prices at SoCal CG are provided by Horizons Energy and utilizes a variety of sources, i.e. Natural Gas Intelligence (NGI) to obtain forwards and historical LMCs, EIA Annual Energy Outlook (AEO), and other published sources, to produce the forecasts. A transport and delivery adder is applied to the Glenarm unit fuel prices. The green hydrogen and renewable natural gas prices are sourced from Utility Dive and Bloomberg, and the Gas Foundation, respectively. However, green hydrogen and RNG do not consider IRA tax credits, which could make these fuels more cost effective. This could impact resource dispatch or investment decisions and the subsequent system costs (revenue requirement) of the results. Given the lack of publicly available sources with clean fuel price forecasts that embed the IRA impacts, the IRP modeling team has responded with inclusion of a disclaimer and note that PWP will monitor the market, public, and private sources of information to investigate these fuels, as necessary.
8b Are wholesale market price
forecasts developed based on
reputable public data sources and/or
market intelligence?
Yes. Horizons Energy provided market price forecast data that uses a fundamentals-based approach, simulating full grid operations in the EnCompass model to determine the market prices. More background information on the associated methodology would improve understanding, such as documentation around the assumptions of policy achievement, installed capacity and generation across regions, hourly price dynamics, etc.; however, it is understood that some of this information is sensitive and confidential for the vendor and may not be shared. 8c Are future wholesale market prices
forecasts aligned with future
commodity price forecasts and
impacts of policy on markets?
Additionally, are market transactions
(sales/purchases) appropriately
accounted for and are the inputs
and assumptions clearly detailed?
Yes. The market is represented as a price strip representing SP-15 and PWP can transact on an hourly basis constrained by the limits described in 7a (price taker model), a sound approach for a small utility, relative to the market size. The data provided is only in an average “ x24” price for a given year, but the model uses an hourly representation of market price forecast data. As described by the market price vendor, gas prices and market prices are aligned.

However, due to contractual restrictions the full dataset and development methodology and assumptions were not available so E3 cannot fully evaluate the reasonableness of these assumptions without this review. For transparency, the inputs and assumptions behind the development of these market price forecasts shared by the vendor should be included in the IRP’s supporting information.
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37 8. Commodity Pricing - 2 of 2
ID Criteria E3 Review
8d Are cost assumptions for carbon emissions
(such as emissions, compliance or social cost of
carbon) based on reputable public data sources?
The California Cap and Trade Program is modeled as a limit on carbon and direct inputs from the CARB identify limits for PWP. Costs and/or revenues from the disposition of allowances under the program are considered in dispatch or revenue requirement metrics. A social cost of carbon is modeled from the EPA’s “Supplemental Material for the Regulatory Impact Analysis for the Supplemental Proposed Rulemaking, ‘Standards of Performance for New, Reconstructed, and Modified Sources and Emissions Guidelines for Existing Sources: oil and Natural Gas Sector Climate Review” 8e Are uncertainties in commodity price forecasts
explored through sensitivity analysis or
alternative scenarios?
No. Scenario and sensitivity analysis was not conducted on commodity price forecasts. Given deep uncertainty in future market prices, it is standard practice to explore sensitivities on these commodity prices or potential constraints on market purchases and sales; however, PWP’s approach to explore islanded and market access scenarios provides some understanding extreme ends of market exposure.

Ultimately, the scenario and sensitivity design process resulted in a focus around other input assumptions.
8f Is the cost of delivering energy contracted
outside of the PWP region to the local system
properly represented?
Yes. The PWP IRP represents this using a Transmission Access Charges (TAC), which are applied to the external resources on a /MWh basis for getting energy to PWP’s system. This is a standard approach and reasonable assumption to use in the IRP.
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38 8a. Natural Gas Price Forecast
 Horizons Energy provided the gas prices representing the Southern California City Gate Hub for use in the PWP IRP, and were also used in the underlying market prices • This alignment is important to ensure common economics between the market and dispatch of resources responding to those market signals
 PWP applied a 1.1x multiplier to gas prices for the Glenarm units to represent additional transportation costs and taxes for those units
 Only average annual gas prices were provided to E3 for its review, as hourly assumptions were unavailable due to contractual restrictions between ACES and the third-party vendor Note: Prices are from market quotes with a trade date of 12/30/2022 and data from Horizons Energy is blended at 10% per year. While more detail on how Horizons Energy produces the data that is blended in to produce prices would be useful, the overall gas price forecast is reasonable !
E3 Recommendation
Often, evaluating sensitivities around market prices/gas prices can help understand the range of costs utilities could experience in the future. E3 recommends consideration of these types of sensitivities during routine utility due diligence or future IRPs. 397
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39 8d. Treatment of Carbon Emissions and Costs
 California’s Cap and Trade Program was modeled as an explicit cap on carbon for the PWP system based on limits set by the California Air Resources Board; and costs/revenues associated with the disposition of allowances are integrated into cost metrics
• Given the program results in /ton prices on carbon emissions that falls within the range of a published “floor” and “ceiling” price, it is appropriate to model this price explicitly
 PWP modeled a Social Cost of Carbon based on the EPA assumptions* and according to industry standard • E3 has seen the modeling of a Social Cost of Carbon in many jurisdictions • Social Cost of Carbon has been modeled as an implicit price signal to inform investments, but does not impact the revenue requirement as it is not an explicit cost borne by PWP ratepayers * “Supplemental Material for the Regulatory Impact Analysis for the Supplemental Proposed Rulemaking, ‘Standards of Performance for New, Reconstructed, and Modified Sources and Emissions Guidelines for Existing Sources: oil and Natural Gas Sector Climate Review” 398
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40 9. Carbon and Clean Energy Accounting
ID Criteria Explanation
9a Are all applicable RPS (or clean energy targets)
targets and related policies clearly defined and
detailed for the planning horizon?
Yes. The PWP IRP adheres to applicable RPS and clean energy targets and related policies through clearly defined targets aligned with SB 100 and SB 1020 as well as City of Pasadena goals. These targets are tied to modeling constraints and resource attributes 9b Are all applicable GHG targets and/or goals and
related policies clearly defined and detailed for
the planning horizon?
Yes. The PWP IRP planning approach explores how the ambitious climate goals of the City of Pasadena may drive resource portfolio choices. The PWP IRP model constraints adhere to the CARB target range to 2030 with straight-line reductions to zero emissions by year-end 2045, except for scenarios that meet the Pasadena Resolution to source 100% of the city’s electricity from carbon free sources by 2030 (year-end), which have zero emissions from 2031 through 2045. All existing, planned and new resource candidates considered in the model have assigned carbon emission rate attributes (lb CO2/MWh) for use in emissions accounting through the planning horizon. 399
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Review of IRP Results
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42 E3 benchmarked PWP’s IRP with peers planning for similarly ambitious energy goals and through a study of tradeoffs between metrics of total cost and carbon emissions reductions. The following sections present these results:

1. Benchmarking of Results with California Energy Plans

2. Carbon Abatement Costs Review
PWP IRP Results Review
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43 PWP IRP Results Benchmarking: Approach
 PWP IRP results were benchmarked with three
California planning activities to identify key
differences and validate model results:

1. *California Public Utilities Commission IRP Preferred System Plan (CPUC Resource Plan): A 73% Renewable
Portfolio Standard, with 86% GHG free resources by 2032.

2. Sacramento Municipal Utility District Case A (SMUD
2030 Carbon Neutrality): No allowance of combustion
generation, only of currently contracted biogas, without unspecified market purchases in 2030.

3. NREL LA 100% Renewable Scenario SB100 (LA 100%
Renewable Plan): 100% renewable energy by 2045
Despite differences in terms of input
assumptions, tools used,
scenario design, etc.
…similar entities embarking on decarbonizing
their systems should come to
similar approaches in terms of
strategies.

Hypothesis: IRP Results Benchmarking
 Every power system is unique and requires tailored approaches to meet specific objectives; therefore, there are no “correct” solutions, and so E3 asks:

1. What trends are common across deep decarbonization energy planning strategies?

2. How does PWP’s IRP results align with these common trends among similar ambitious “peer” planning activities? *CPUC IRP creates a plan to meet GHG emissions goals while maintaining reliability at the lowest possible costs. Preferred plans are chosen with considerations from IOUs with independent modeling. See https://www.cpuc.ca.gov/irp
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44  E3’s work with utilities and regulators to develop long-term resource plans support three common trends in deep
decarbonization planning studies:

1. Technologies available today can enable significant progress towards ambitious state and utility clean energy objectives

2. A technology-neutral approach to planning and procurement will enable utilities to meet reliability and clean energy goals most affordably

3. Some form of firm capacity is needed for reliability even under a deeply decarbonized grid
 These findings are supported by a growing body of literature, including recent studies by the National Renewable Energy Laboratory (NREL), Princeton University, the Electric Power Research Institute (EPRI), and the Massachusetts Institute of Technology (MIT)
Deep Decarbonization Planning Studies: Common Trends
Firm Resources
Today: nuclear, natural gas,
geothermal
Future: hydrogen, long-duration
storage, nuclear SMR, CCS
Scalable Low-Cost Clean
Energy Resources
Today: wind, solar, efficiency
Future: nuclear SMR, CCS
Balancing Resources
Today: batteries, pumped
storage, hydro, demand response
Future: advanced flexible loads,
other storage technologies
Blueprint for a Low Carbon Grid
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45 Deep Decarbonization Planning Studies: Common Trends in California
Firm Resources
Today: nuclear, natural gas,
geothermal
Future: hydrogen, long-duration
storage, nuclear SMR, CCS
Scalable Low-Cost Clean
Energy Resources
Today: wind, solar, efficiency
Future: nuclear SMR, CCS
Balancing Resources
Today: batteries, pumped
storage, hydro, demand response
Future: advanced flexible loads,
other storage technologies
Nameplate Capacity Normalized by System Peak Demand: 2030 : geothermal, thermal resources, fuel cells,
and nuclear resources
: wind, solar and distributed resources
: demand response resources
: battery storage, long-duration storage, and pumped hydroelectric : large- and small-scale hydroelectric resources
Blueprint for a Low Carbon Grid
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46 California in 2050 at a glance:
 93 GW peak demand
 90% carbon-free generation
• 150 GW solar PV
• 21 GW wind
• 8 GW hydro
• 5 GW geothermal
• 75 GW energy storage
 35 GW reliability need for
firm capacity (40% of peak)
 90% GHG reduction
relative to 2005 levels
Statistics and visuals adapted from High
Electrification scenario in Long-Run Resource
Adequacy under Deep Decarbonization
Pathways for California
The Essential Role of Firm Generation In a Low Carbon Grid Weekly Generation Mix
(GWh) Most weeks of the year, the supply of carbon-free resources s x s s s s…
Hourly Generation for a December Week (2007 Weather Conditions) (MW) …bu u w s w renewable droughts when storage is exhausted, firm resources are needed to ensure reliability 25-35 GW
natural gas capacity
Legend:
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47 Multiple Analyses Conclude “Clean Firm” Resources Will Be Needed To Enable Complete Power Sector Decarbonization
Highlights from Clean Firm Power is the Key to C f ’s Carbon-Free Energy Future:

The Environmental Defense Fund and the Clean Air Task Force convened three groups of energy system experts to model C if rni ’s electricity system in order to figure out how the state might make that much affordable, clean, and reliable electricity. Groups from Princeton University, Stanford University, and Energy and Environmental Economics (E3), a San Francisco-based consulting firm, each ran separate models that sought to estimate not only how much electricity would cost under a variety of scenarios, but also the physical implications of building the decarbonized grid.
…
Despite distinct approaches to the calculations, all the models yielded very similar conclusions. The most important of these was that solar and wind c n’ do the job alone.
…
Our model results show that squeezing out the last increments of carbon from power generation while maintaining affordability and reliability will require clean firm power.
“Clean irm” Technology ptions
• Hydrogen Combustion
• Hydrogen Fuel Cells
• Natural Gas w/ Renewable Fuel
• Natural Gas w/ CCS
• Geothermal
• Nuclear
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48  ’s 030 Clean Energy Vision
establishes an ambitious plan to
decarbonize energy supply over the next
decade
 After studying a range of options for existing
natural gas resources, SMUD found the most
viable path to be one in which plants are retooled
and repurposed using carbon-free fuels
• Need for firm capacity driven by reliability
Spotlight: SMUD 2030 Clean Energy Vision
Image source: SMUD 2030 Clean Energy Vision
“Retiring o r t er al po er plants an relying co pletely on proven clean tec nologies is possible, b t it’s an expensive option t at ay not be reliable n er every eat er scenario.” 407
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49 PWP IRP Benchmarking 2030 Results: 1 of 3
Nameplate Capacity Percent of System Peak Demand 2030
PWP Reference CasesNormalized CA Results 100% Carbon Free by 2030 Firm Capacity and Hydro represent 70-90% of
system peak in CPUC, SMUD, and LA100, while firm
capacity and hydro only represent approximately
0% of capacity in PWP’s cenario 1.

With gas retirements, PWP firm capacity needs are met through existing nuclear, fuel cells, and geothermal energy, while comparison cases consider a combination of existing nuclear, gas resources, hydrogen combustion, and geothermal resources.

PWP Scenario 1 is the carbon free scenario with the
largest proportion of firm capacity.

System Peak Demand
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50 PWP IRP Benchmarking 2030 Results: 2 of 3
Nameplate Capacity Percent of System Peak Demand 2030
PWP Reference CasesNormalized CA Results 100% Carbon Free by 2030 PWP scenarios 2 and 3 have less than 1/2
the firm capacity and hydro resources as
the comparison cases, but 3x the variable
and storage resources.

In the absence of firm capacity options PWP must add significant additional variable renewables and storage, which will have declining firm contributions with future system saturation. This may not be captured in current reliability modeling approach. Additional analysis during routine utility due diligence would be useful to ensure confidence these portfolios are adequately reliable.

System Peak Demand
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51 PWP IRP Benchmarking 2030 Results: 3 of 3
Nameplate Capacity Percent of System Peak Demand 2030
PWP Reference CasesNormalized CA Results 100% Carbon Free by 2030 PWP Scenarios 4 and 5 have the
capacity to meet 80% of their peak load
with firm capacity and hydro resources,
comparable to CPUC, SMUD, and LA100
which range from 70-90% PWP Scenario 4 and 5 are reference cases meant to meet SB 1020 (Net Zero Emissions
by 2045), and thermal resources are not
retired in 2030
PWP Scenario 4 has comparable amounts of variable
and storage resource capacity to the CA plans,
suggesting that it is likely at or near reliability targets.

Scenario 5 has 2x the variable resource capacity of
the other plans resulting from the inclusion of the
social cost of carbon.

System Peak Demand
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52 PWP IRP Benchmarking 2040 Results
Nameplate Capacity Percent of System Peak Demand 2040
PWP Reference CasesNormalized CA Results 100% Carbon Free by 2030 PWP Scenario 1 has similar firm
capacity and hydro resource
proportions as SMUD, but 75% of
the resources of CPUC and
LA100.

Scenarios 2 & 3 have 2x the variable
renewable and storage resource capacity
of CPUC and LA100, but capacity levels
are comparable to SMUD.

Scenario 4 & 5 have a comparable
levels of firm capacity as the
comparison cases.
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53 PWP IRP Benchmarking:
2030 and Beyond Resource Mix
Resources PWP IRP1 CPUC IRP SMUD 2030
Carbon Neutrality
LA 100%
Renewable Plan
Fuel Cells
Hydrogen Combustion
Offshore Wind
Gas with CCS
Gas
Pumped Storage
Demand Response (DR)2
Nuclear
Biogas
Wind
Solar
Hydro
Battery
Geothermal
The only dispatchable firm capacity
resource option PWP considers is fuel
cells, while LA, CPUC and SMUD
include a mix of existing and new gas,
gas w/ CCS, and hydrogen combustion
for dispatchable firm capacity.

Balancing resources such as pumped
storage and DR, which are considered
by LA, CPUC and SMUD, are not
included in PWP’s IRP Mix in Scenarios
1-3.3
Only PWP’s IRP does not
consider new or existing gas
resources as a firm capacity
resources from 2030 on
In Mix
Not in Mix

1. Only carbon-free scenarios 1, 2, & 3 considered here.

2. PWP load forecast includes 1 MW of DR resources by 2030.

3. PWP included an emerging technologies scenario that
estimated additional DR potential; however, this DR capacity was not added to scenarios 1, 2 & 3.
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54 PWP IRP Benchmarking: Key Takeaways
 PWP’s IRP aligns with ambitious decarboni ation plans in terms of scalable clean energy and storage resources; however, differences are evident in the firm capacity options considered. • Of the benchmarked plans, PWP was the only system that considered fuel cell additions and does not consider gas resources after 2030.
 Constraints on firm capacity options (i.e., thermal resources) in carbon-free scenarios result in higher variable renewable resources and storage additions than the benchmarked scenarios. • These additional variable renewables will have declining firm contributions with future system saturation, which may not be captured with the current reliability modeling approach.  CPUC, SMUD, and LA100 rely on existing thermal resources to provide firm capacity through 2030, moving to renewable fuels or CCS in the mid-term, and hydrogen combustion in the long-term. • PWP’s IRP gas resources are retired by 2030 in Carbon-Free scenarios, requiring significant additions of fuel cells and battery storage to meet firm capacity needs.
 Benchmarking exercise helps validate PWP IRP methodology as 2040 reference scenario results align well with deep decarbonization trends.
• PWP’s reference scenarios are well aligned with the common trends of firm capacity, scalable low-cost clean energy resources, and balancing resources of deep decarbonization plans. 413
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55 PWP IRP Scenario Results: Carbon Abatement Costs
2030: Cost & Emissions Comparison to 2023 Reference Levels 2040: Cost & Emissions Comparison to 2023 Reference Levels  The additional cost to remove the remaining system carbon emissions after achieving 80% or 90% carbon reductions is significantly higher than the cost to get to those reduction levels  This is consistent across scenarios but exacerbated in 2 & 3 where firm capacity limits are applied 30% increase in cost
for 80% reduction in
emissions from 2023
to 2030 in the
Reference Scenario.
140% increase in cost for 100% reduction
in emissions from 2023 Reference levels.
60% increase in cost
for a 90% reduction in
emissions from 2023
Reference levels.
130% increase in cost for a 100%
reduction in emissions relative to 2023
Reference Scenario levels.
* *
*Refers to Scenario 4
**Costs include base energy rate and IRP scenario revenue requirement normalized by load for scenario. Cost does not include any stranded assets $0.13/kWh**
$0.23/kWh
$0.15/kWh
$0.22/kWh
$0.18/kWh $0.21/kWh$0.18/kWh $0.22/kWh
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56  Implied cost of carbon abatement is higher than the assumed social cost of carbon chosen in Scenario 5, reaching 2x the costs in scenarios 2 and 3 in 2030.

PWP IRP Scenario Results:

SCC and Implied Carbon Abatement Cost Comparison
2030: Implied Cost of Carbon Abatement
In 2030 Scenario 2 and 3 implied carbon abatement
costs greater than 2.5x the assumed Social Cost of
Carbon (SCC).
$590
$870
$1,200
$1,700
$1,000
$1,600
$ / Short Ton Emissions
2040: Implied Cost of Carbon Abatement
GHG
The Implied Cost of Carbon Abatement ($/ton) for a given scenario measures the cost to achieve additional emissions reductions, relative to a reference case, on a per ton basis Calculation:
$/ton =
∆ 𝑐𝑜𝑠𝑡
∆ 𝑒𝑚𝑖𝑠𝑠𝑖𝑜𝑛𝑠
2030 SCC: $400 per short ton
2040 SCC: $580 per short ton
In 2040 Scenarios
2 and 3 this
implied cost is
over 2.5x the
assumed SCC.
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Thank You
Contact Info: Nathan Lee, Managing Consultant
[email protected]

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Pasadena Water and Power
ADOPTION AND APPROVAL OF THE 2023 POWER INTEGRATED

RESOURCE PLAN FOR THE WATER AND POWER DEPARTMENT
December 5, 2023
Special MSC Meeting
419
Pasadena Water and Power
Prior MSC Meetings - summarized
October 10, 2023
> Staff presented the 2023 IRP plan for adoption and approval > MSC directed Staff to provide incremental Implementation Plan details > Staff introduced the Waypoint framework during the meeting > MSC directed Staff to return with enhanced information of the Waypoint concept November 14,
2023
> Staff provided responses on the October 10, 2023, meeting follow-up items > Staff outlined the 2028 Waypoint framework, informing of its alignment with Car
bon Free Scenario 2, to include a detailed Implementation Plan mirroring the scenario’s resource types, resource timing, derived from the computerized modeling optimizations
> Staff informed that 2028 Waypoint framework provisions for the potential int
egration/review of new and emerging technologies while dovetailing into the next regulatory required 2028 IRP filing
> MSC directed Staff to return with additional discussion items > Please reference the agenda items listed on the next slide 2 420
Pasadena Water and Power
Today’s Agenda - December 5, 2023

1. Create an incremental 2026 Waypoint, allowing for future evaluation and t
echnical analysis of Goodrich Receiving Station (“Goodrich”) upgrades and the required key system modifications as described in the Power Delivery Master Plan (PDMP)

2. Provide incremental timeline and detail associated with the planned 2024 E
lectric Cost of Service and Rate Design Study (COS)

3. Provide incremental Distributed Energy Resources (DER) and Demand Res
ponse (DR) information and concepts. The Implementation Plan patterned after Carbon Free Scenario 2 modeling results identifies DER and DR resource types

4. Provide commentary of dashboard concepts that could be used to assist in
future monitoring and communication
• Staff was directed to follow- up with additional Information on the below items during the November 14, 2023 MSC meeting 3 421
Pasadena Water and Power
Power Delivery Master Plan (PDMP)
• The five primary goals which are inherent to the Goodrich Transfer Upg
rade and the PDWP are as follows:

1. Reliability and Safety

2. Resiliency

3. Power Quality

4. Grid Modernization

5. Grid Edge (Technology that is customer facing, installed at the “edge” of the grid) • The 2026 Waypoint will be uniquely utilized to provide updated technical r
eviews and evaluations of the Goodrich Transfer Upgrade 4 422
Pasadena Water and Power
Goodrich Transmission Upgrades
• 2026 Goodrich Waypoint aligns with PWP’s next PDMP update > The PDMP is comprehensively refreshed every 5 years based on the latest IRP  The 2026 PDMP will incorporate the requirements and goals of the 2023 IRP > Ongoing distribution system activities include voltage upgrades, which improve s
ystem resiliency, transfer capability, system efficiency and the reliability benefits of infrastructure refresh.
• The 2026 PDMP will examine the Goodrich Upgrade Project > Included in the 2022 PDMP with planned completion in 2032. The upgrade will pr
ovide an additional 56 MW of transmission capability
> The 2022 PDMP includes $821 million in capital improvements to the distribution sy
stem
5 423
Pasadena Water and Power
Goodrich Facts
• 100% of all energy imported into Pasadena is received through Goodrich > Pasadena’s single point of connection to CAISO power grid • Owned by PWP but operated/maintained by Southern California Edison(SCE) • Current maximum import capacity at Goodrich is 280 MW > Upgrade will increase to 336 MW, the maximum allowed by PWP’s contract with SCE • Upgrade originally planned in 2022 PDMP, with a forecasted completion date in 2032 > Timeline includes parts procurement, permitting, authorizations, logistics to minimize downtime, and a
ctual construction time
> The PDMP also identifies critical path projects necessary for Goodrich including installation of larger t
ransformer enhancements, and retrofit of several substations > Goodrich and PDMP costs are estimated at $821 million over the plan’s timeframe. Cost estimates will be r
efreshed, as they were completed prior to the supply chain and inflationary impacts > Opportunities for expediating will be reviewed; dependent upon overall PDMP project planning • To achieve Carbon-F ree by 2030 with only imported energy, an incremental or second transmission facility would be required to increase import capabilities. 6 424
Pasadena Water and Power
2024 Cost of Service and Rate Design Study
• A Cost of Service and Rate Design Study (COS) is planned for 2024 which will evaluate:
> Power System costs
> Allocations and budgetary categories
> Customer behaviors by customer class (Commercial or Residential) > Possible rate structure designs
• The COS will produce a rate model to assist with understanding potential rate impacts o
f integrating new technologies, resources and dynamic energy market costs • PWP plans to publish a Request for Proposals for a COS in December 2023. Full project t
imeline is expected to be ~18 months
7 425
Pasadena Water and Power
2024 Electric Rates Roadmap
8 426
Pasadena Water and Power
DERs and Demand Response – Project Planning
• Distributed Energy Resources (DERs) and Demand Response (DR) > Engage in technical prerequisite of conducting a market potential study, to further evaluate, r
eview and quantify capabilities inside the Pasadena service territory. > Perform a hosting analysis to review existing electrical infrastructure to better understand the b
est fit location, and least system impact for DER implementations > Continue to support and expand Energy Efficiency improvements for residents and co
mmercial businesses within the existing Water and Energy Direct Install Program (WeDIP), a program delivering year-over-year demand reduction, and energy efficiency results > Implement Advanced Metering Infrastructure (AMI), which has potential to enable DER and D
R benefits
> Continue to engage in selected statewide programs in coordination with regulatory agencies
such as Demand Side Grid Support (DSGS) and Distributed Electricity Backup Assets (DEBA)
> PWP will continue to proactively procure identified resource needs well in advance of r
equired commercial operation date, as seen in the early Sapphire Solar and Battery Storage, Coso Geothermal and Calpine Geothermal resource additions. 9 427
Pasadena Water and Power
Metrics Dashboard
• Develop a web-ba sed dashboard to include:
> Quarterly progress updates on timeline, resource procurement, and other activities > Providing summaries of relevant studies that have been completed > CAISO metrics related to key transmission corridors and programs > Status of renewable projects under development where PWP may have a co
mmercial interest
> Rates, cost impacts and other considerations as they may occur dynamically > Regulatory compliance considerations or changes that may have material impact u
pon the project, Renewable Portfolio Standards, or CAISO Resource Adequacy program enhancements
> Updates on other sponsored initiatives such as energy efficiency and or vehicle c
harging
> Answers to Frequently Asked Questions
> Regular content updates
10 428
Pasadena Water and Power
100% Carbon-Free Trajectory to Waypoint in 2028
11 53%
73%
75%
82%
87% 88%
100%
-10%
10%
30%
50%
70%
90%
0 100000
200000
300000
400000
500000
600000
700000
800000
900000
2024 2025 2026 2027 2028 2029 2030
Forecasted Emissions (Scenario 2, 2023 IRP) Statewide Reduction Target Statewide
Reduction
Target
2023 IRP IMPLEMENTATION TIMELINE
Forecasted GHG Emissions (Scenario 2, 2023 IRP)
2024 2025 2026 2027 2028 2030
Resolution
9977 Goal of
100%
Carbon-Free
by 2030
2028

WAYPOINT
NEW 2028 IRP
Begin efforts for 2028 IRP
Seek pilot projects for DERs potential
on residential, commercial and
industrial scale
Complete additional local battery
storage projects
Evaluate possible changes to
customer incentives or subsidies
Complete efforts started in 2024-2026
Update the City Council on progress
so far
Review goals for EE and DERs
procurement
Implement Community Solar
Program
Begin integration of AMI to provide
for expansion of customer
participation
Review incremental opportunities for
DAC/LI to address affordability
PWP periodic update to Power
Delivery Master Plan
Evaluate the actual influence of the
City’s Building Electrification
Ordinance (effective in 2025)
Continue efforts from 2024-2025 not
completed
Update the City Council on progress
so far
Identify potential for EE and DERs,
Community Solar
Engagement to seek suitable
locations for local resources
Various reliability studies
Rate design study (rate equity)
Seek additional sites for local battery
storage
Continue efforts from 2024 not
completed
Update the City Council on progress
so far
Study expansion of DERs and EE
Local Battery Storage Projects
Evaluate Community Solar
Cost-of-Service Study
AMI Project
Low-income thresholds adjustment
Study new emerging technology
opportunities
Community engagement platform
Engagement with government
regulators and legislators
Seek funding opportunities through
various channels and in partnerships
Update the City Council on progress
so far
Level of
GHG
emissions
in 1990:
918,622
Metric
Tons
Forecast of 87%
GHG Reduction
from 1990 Levels
and
107%
Renewables and
Zero-Carbon
(Exceeds 2045
State Goal)
2026 WAYPOINT
New 2026
Power Delivery
Master Plan
As new carbon-free procurements and projects occur, comprehensive resource portfolio updates will be given to MSC and City Council 429
Pasadena Water and Power
Recommendation
• Adopt and Approve the 2023 Power Integrated Resource Plan (“IRP”) for f
iling with the California Energy Commission (“CEC”) for the Water and Power Department (“PWP”); and
• Support PWP’s continuing decarbonization trajectory while exceeding S
tate regulatory requirements, and simultaneously working towards achieving the policy goal of 100% Carbon-Free electricity by 2030, through the utilization of the 2028 Waypoint Framework supported by the 2023 IRP Scenario 2 modeling results
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Municipal Services CommitteeDecember 5, 2023

Municipal Services Committee
December 5, 2023