0 RPS Program and Progress Senate Energy Committee December 15, 2011

AGENDA - Presentation Topics RPS Overview Local Solar Programs Feed In Tariff Solar Incentive Program Utility Program Coal Divestment 1

2 City requests LADWP 20% by 2017 State Goal 20% by LADWP Policy: 13% by % by 2017 SB2 (1X) legislatively enacts 33% RPS target 2011 LADWP accelerates RPS goal to 20% by 2010 State Exec Order: RPS 33% by 2020 LADWP IRP RPS Goal of 33% by 2020 LADWP RPS policy changed to 35% by 2020 SB106 accelerates state goal to 20% by 2010 RPS Policy Amendment and Enforcement Program Adopted RPS Policy History In 2002, the California Legislature passed Senate Bill 1078 that established the California Renewables Portfolio Standard, Progressively, the RPS goals have increased: Timeline 2

SB2 (1X) RPS Compliance Targets 2011 – 2013 (on avg.) December December % 25% 33% YEAR RETAIL SALES On Dec. 9, 2011, the California Renewable Energy Resources Act, SB 2 (1X) became effective 3

4 RPS Principles Geographic & resource diversity of projects is important Maximize use of existing LADWP transmission & land Maintain options/flexibility Regionally “cluster” renewable projects to achieve operational efficiency Ownership of projects using proven technology is part of the current RPS Policy

5 Renewable Projects Regional Map Columbia River Corridor: PowerEx Small Hydro Pebble Springs Wind Willow Creek Wind Linden Wind Farm Windy Point Wind Columbia River Corridor: PowerEx Small Hydro Pebble Springs Wind Willow Creek Wind Linden Wind Farm Windy Point Wind Milford Wind I / II Pleasant Valley SW Wy Wind STS Transmission Gas Pipeline – Landfill / Biogas Small Hydro – Aqueduct Pine Tree Wind, Solar (future), Geothermal (Future) Barren Ridge-Inyo Transmission (Future) Pacific DC Transmission Local In-Basin Solar Mead Transmission Solar (Future) Mead Transmission Solar (Future) Imperial Valley Geothermal (Future), Solar (Future)

Renewable Resource Portfolio Type of ResourceEnergy Mix Renewable Portfolio Standard (RPS) 6

Renewable Resource Portfolio Renewable Portfolio Standard (RPS) 7

LADWP RPS Progress 8

Windy Point LADWP Wind Projects – Site Photos Pine Tree Milford Phase 1 9

LADWP Wind Projects – Site Photos (continued) Willow Creek - Oregon Pleasant Valley - Wyoming Linden Ranch - Washington Pebble Springs - Oregon 10

PROJECTS IN SERVICE PROJECTS UNDER CONSTRUCTION PROJECTS PLANNED DEFICIT GOAL 33% RPS Deficit 11

12 Lessons Learned System Integration for renewables is an important consideration. BPA in the Northwest, LADWP system in CA and UT Transmission / Energy Delivery is a challenge. Firming/Shaping products are useful to maximize transmission usage Weather forecasting is crucial Benchmarking project performance and O&M costs Renewable technology types have different value considerations PPA contract negotiations are difficult and time-consuming RPS must be an integral part of the IRP process

RPS by technology LADWP Energy Mix Note that Coal is being reduced from 39% to 27% as shown Projected 2020 Resource Mix 13

Future LADWP Energy Projects Solar: In-Basin Solar Pine Tree Solar Adelanto Solar Owens Valley Wind: Pine Canyon Geothermal: Imperial County (Phase I) Owens Valley Power Purchase Agreements: Over 200 responses to Jan 2011 RFP Solar, Geothermal, Wind, and Biogas Transmission Upgrades: Barren Ridge Renewable Energy Project 14

Resource Availability Transmission Access CEQA Environmental Constraints Permitting/Zoning Regulatory Uncertainty Endangered Animals Development Challenges Siting/Land Issues Mojave Ground SquirrelDesert Tortoise Mojave Fringe-Toed Lizard 15

Balancing RPS goals with system resource needs Once through Cooling – OTC (316b) Aging Distribution System Infrastructure Coal Transition (SB1368 Compliance) Continued economic downturn with little load growth Energy Efficiency investments Maintain grid reliability with intermittent energy Transmission Investments Meeting SB2 (1X) provisions: buckets Local Distributed Energy Need to balance multiple regulatory compliance mandates within reliability and resource constraints Getting to 33% Renewable Energy Levels 16

17 LADWP – An Early Leader in Local Solar Generation Started net-meter incentive program in 1999 (one of first programs in the state) $150 Million Commitment $55 Million Spent (10 MW) Prior to SB1 Initiative (Oct 2007)

18 LADWP’s SB1 Program: Higher rebates than required by State In 2011, LADWP doubled annual investment $313 million capped program through 2016 (SB1 compliant) Pays customers $288 million for incentives Average budget - $30 million in solar rebates annually through 2016 Seeks to achieve as many MWs as possible Uses 10-step declining scale based on performance of solar installation LADWP set incentives $0.70 to $1.70 per watt higher than State minimum to attract customers because of our lower rates Local Solar Programs SB 1 Implementation

19 Local Solar Programs Cumulative Budget and Requested Dollars

20 *Estimated Incentive FundsMegaWatts Installed Through Dec. 1, 2011 $110 million SB1*, $165 million total 42 Requested and in Process$91 million*40 Remaining Unrequested SB1$87 million48 Total$288 million130 4,520 Operating Solar Systems, with approx. 1,550 in process Solar Incentive Program Status as of Dec. 1, 2011

21 Comply with state mandate – Senate Bill 32 Create an additional solar power funding mechanism to augment the Solar Incentive Program Provide a reliable, cost effective, dependable, sustainable, and streamlined program Price Discovery Encourage electrical generation from renewable resources close to load centers Balance renewable portfolio for reliability via geographic and technology diversity Provide local economic development Local Solar Programs FiT Program Objectives

22 Over 1 MW AC currently installed on City Roofs 2 MW more will be constructed in MW AC Adelanto Solar Project is in Construction – Completion due in June MW AC Pine Tree Solar Project scheduled for construction from March to Sept Both Adelanto and Pine Tree Solar Projects used ARRA subsidized financing Local Solar Programs Utility Built Solar

Coal Divestment 2011 Power Resource Mix 23

Coal Divestment 2030 Power Resource Mix 24

Coal Divestment Replacement Portfolio for Navajo Coal 25

MW Output 90% Capacity Factor LADWP gets 44% to 66% Until participants Other Key Assets: Southern and Northern Transmission Systems Coal Divestment IPP Coal

Questions or Comments? 27