1. 1 Climate Change: California Experience To: APPA National conference John Roukema Director Silicon Valley Power June 16, 2009

2. 2 Agenda California legislation Municipal approach to energy efficiency –Partnerships –Targets, reporting and progress Renewable energy portfolios Silicon Valley Power

3. 3 California Legislation Legislation over last few years –State loading order for new resources –No new investment in Coal –Renewable Portfolio Standard Defined by local agency (Legislation pending to fix) 33% by 2020 REC eligibility, Out of state vs. in state, oversight –Set energy efficiency targets for ten years Report annually –Solar initiative sets goals for state SVP’s share 30MW AB32 Climate Change

4. 4 4 Public Power Interests are Diverse and Unique “One size does not fit all”

5. 5 5 Changing Viewpoints About Public Power’s Commitment to Energy Efficiency Public power energy efficiency targets “are now lagging well behind those of the state’s investor-owned utilities.” ( Natural Resources Defense Council Report, February 2005) It is “less than convincing” that public power is doing its job in the area of energy efficiency. ( Assembly Energy & Utilities Committee Chair Lloyd Levine, November 2005) 2005 Publicly-owned utilities are successfully demonstrating their commitment to energy efficiency as a part of a larger responsibility to carbon emissions reductions. (Pg 2 - CEC Report) The POU community has made remarkable progress in efficiency program evaluation over the last year. (Page 16) The POUs have been responsive to AB2021 during 2008 and in their planning for 2009 and beyond. (Page 26) 2009

6. 6 6 SB 1037 2009 Report - KEMA Efficiency Measure Quantification Studies 2006, 2008, 2009 - E3 Reporting Tool, v2006-08 - Custom Measure Guidelines - Measurement & Evaluation Reports AB 2021 Targets 2007 Report Submitted March 16, 2009 Submitted March 16, 2009 Submitted October1, 2007 Submitted October1, 2007 Reporting Confirms Public Power Commitment SB 1037 2007 Report SB 1037 2008 Report Submitted March 17, 2008 Submitted March 17, 2008 Submitted March 15, 2007 Submitted March 15, 2007 Supporting Documentation

7. 7 7 Strategic Partnerships

8. 8 $220 M spent on energy efficiency since 2006 More than $3 of benefits for every $1 spent (TRC analysis) Work to sustain effectiveness –Program saturation occurs quickly –Requires creativity, constant change –Uncertainty in behavior-based programs (not just lighting) 8 Public Power Views on Energy Efficiency

9. 9 9 E3 and KEMA retained to provide engineering expertise and develop models (ongoing effort) Energy efficiency potential studies done Conservative approach taken – No Surprises Policy M&V analysis done for first time Public power results consistent with pre- verified savings Target setting process refined Targets closely aligned with annual reporting responsibilities Trend analysis better tied to timely M&V results 20062007 2008 2009 Moving Toward AB2021Targets Realistic Approach Yields Realistic Results

10. 10 Focus on specific numbers guarantees analytical failure Trends much more important to gauge progress Key Implications for 2009 –Economy may skew next year’s analysis –Customer behavior unpredictable Can’t force customer to invest in energy efficiency Analytical Considerations The Importance of Trends

11. 11 Realistic Trends Provide Effective Policy Tool AB 2021 Targets Program Savings Public Power Savings vs Targets Source: CMUA SB1037 Report, March 2009

12. 12 2008 Annual RPS Status – NCPA 1. Renewable energy, expressed in percent of retail sales 2. California eligible is defined in Section 399.12 of the Public Utilities Code NCPA Members Eligible Renewables 4% - 55% All Renewables 17% - 77%

13. 13 Silicon Valley Power Municipal Utility –Owned and Operated by the City of Santa Clara 117,000 residents 51,000 Customers –Clean, reliable, competitively priced electricity –490 MW Peak Load –3,000 Gwh/year –73% load factor –90% of Sales are Commercial and Industrial

14. 14 Silicon Valley Power SVP Owns and Operates 7 Power Plants –Four small hydro plants –Natural gas combined cycle and peaking plants –Cogeneration plant –24 hour trading and scheduling SVP Partners in 9 Power Plants –Northern California Power Agency (NCPA) Geothermal, Large Hydro, Natural gas –MSR Public Power Agency (MSR) Coal and Wind –Transmission Agency of Northern California (TANC)

15. 15

16. 16 Wind Hydroelectric Geothermal 0 pounds of CO2 per kWh produced Solar

17. 17 But, wait, there’s more 950 pounds of CO2 per kWh Coal Natural Gas 2400 pounds of CO2 per kWh

18. 18 Where does this leave SVP? Carbon intensity: 650-750 pounds/kWh Depending hydro condition With load growth need to be 450 pounds/kWh Options Replace coal Continue renewable development Reduce load

19. 19 Energy Efficiency Programs For $5 to 6 M per year: –Commercial & Industrial Programs 25,860,913 kWh in first year savings –Residential Programs 914,530 kWh in first year savings –Total FY 07-08 Savings 26,775,443 kWh –Goal for FY 07-08 was 25,765,000 –Goal for FY 08-09 is 27,339,560

20. 20 Residential Programs Free In Home & Online Energy Audits CFL Give a ways Refrigerator Replacement & Recycling Rebates Attic Insulation Rebates Solar Electric Rebates LCD Monitor Rebates Whole House Fan Rebate SVP Plug Ins Catalog Solar Attic Fan Rebate AC Replacement & Recycling Rebates Pool Pump Rebate Ceiling Fan Rebates

21. 21 Commercial & Industrial Programs Free Energy Audits Free Design Assistance Lighting Rebates Motor & VFD Rebates HVAC & Chiller Rebates Commercial Washing Machine Rebates Food Service Equipment Rebates New Construction Incentives LEED Incentives Solar Electric Rebates Customer Directed Rebate Energy Innovator Grant

22. 22 Third Party C&I Energy Efficiency Programs Compressed Air Management Program (CAMP) Keep Your Cool Program Retrocommissioning Program Express Efficiency Program Data Center Optimization Program (DCOP) Preschool Energy Efficiency Program

23. 23 SVP Energy Innovator Awards Environmental Innovator –Santa Clara University (over 100 employees) –Echelon Corporation (100 employees or less) Energy Efficiency Partner –Sierra Meat Company (over 100 employees) –PDM Steel Services Center (100 employees or less) Green power Champion –Applied Materials (over 100 employees)

24. 24 Awarded the 2007 EPA “Program of the Year”

25. 25 Lessons Being Learned We are facing major challenges –Won’t go away Be proactive in energy efficiency and renewables –Protect the customers interests –Provides validity to concerns –Reduces costs in long run Get your message out early and often –Take an active role in developing regulations Public Power must focus on common concerns We have more common ground than differences

26. Thank you!