1. PWP 2015 IRP Update
Item 18
June 22, 2015

2. Foundation – Earlier IRPs
This IRP Update builds on concepts & action plans from & 2012 IRPs.
Environmental Stewardship
System Reliability
Fiscal Responsibility
Sustainable
Cost Effective
Feasible
Viable
System Reliability: Maintain a capacity planning reserve margin of at least 15-18%; Maintain CAISO Resource Adequacy requirements in compliance with the CAISO Tariff (including System Resource Adequacy, Local Capacity Resources, and Flexible Resource Adequacy Capacity requirements); Preserve, optimize, and enhance local generation to reduce risk of overreliance on a single transmission tie at the TM Goodrich substation;Integrate remote and variable generation (wholly owned or joint project participation), demand side management and distributed generation.
Fiscal Responsibility: Maintain stable, competitive rates; Reduce market and price volatility in fuel and other cost factors; Minimize levelized Net Present Value of generation-related direct costs, including costs of greenhouse gas regulation compliance; Provide transparency in expected power-related rates for the average ratepayer, both in terms of percentage and dollar impact.
Environmental Stewardship: Minimize the environmental impact of meeting Pasadena’s electric energy needs; Comply with all federal, state and local laws and regulations; Meet or exceed required standards for renewables (RPS percentage) and CO2 emission reductions.

3. IRP Process Action Plan Sustainable 20-Year Strategic Resource Plan
Identify Needs
Load Forecast
Resources (Supply and Demand)
Regulatory Requirements
Reliability Requirements
Identify & Evaluate Resource Portfolios
Supply & Reliability Adequacy
Regulatory Compliance
Contractual Compliance
Least Cost
Environmental Impact
Societal Factors
Flexibility
Updates & Uncertainty Analysis
Scenarios & Sensitivities
Changes in Market
Changes in Law
Changes in Contracts
Changes in Load Profile
Public / Stakeholder Involvement
Advisory Group
Public Meetings
Website
Social Media
Survey
Action Plan
Short-Term Recommendations
Sustainable 20-Year Strategic Resource Plan
Updated Every 2-3 Years
Balances:
Reliability,
Fiscal Responsibility,
Environmental Stewardship

4. 2015 PWP IRP
Identify Needs

5. Billed Sales Forecast

6. Balancing Capacity/Energy

7. PWP Power Supplies
Our actual total came in closer to 28% renewables for 2014, but as you can see, today a lot of PWP’s power supply comes from the Intermountain Power Project, which is coal-fired, in Utah. But the next biggest chunk, and growing at a rapid rate, is renewables, including geothermal, small hydro, solar, wind, and what the state calls biomass and biowaste, but for us is primarily biomethane and landfill gas. Back on the conventional side, we also get 4% from a large hydro project outside of Las Vegas (Hoover Dam), 7% from a nuclear plant in Arizona (Palo Verde), and 8% each from natural gas (primarily at our local plants) and market purchases.

8. RPS Progress

9. Identify & Evaluate Resource Portfolios
2015 PWP IRP
Identify & Evaluate Resource Portfolios

10. (Preferred Portfolio) “Green” Market Influence
IRP Terminology
Portfolios
1 Stay the Course
(Preferred Portfolio)
2 IPP (Coal) Reduction
40% RPS (by 2020)
3 50% Renewable Portfolio Standard (by 2025)
4 70% Renewable Portfolio Standard (by 2030)
5 Carbon (GHG) Neutral (by 2030)
Scenarios
Base Case
B&V Energy Market Perspective
High Gas Prices
Low Gas Prices
“Green” Market Influence
Higher Carbon Pricing
Sensitivities
Higher Energy Efficiency
IPP (Coal) Economic Dispatch
(slightly higher generation than Business As Usual)
IPP Early Retirement in 2025
(original contract expires in 2027)
Groups of Power Supply Resources
Sets of Market Assumptions
Basic Model Variations

11. Reducing IPP Generation (under current contract)
2014 Average Generation = 70 MW

12. (Preferred Portfolio)
Base Case Portfolio Scorecards: Financial (Fiscal Responsibility) Measures
60% GHG Reduction
(Preferred Portfolio)
$1,377
$101.1
$91.90
IPP 2025 Retirement
$1,419
$103.9
$94.06
Reduced IPP Dispatch
$1,437
$104.9
$95.85
50% RPS by 2025
$1,477
$108.1
$98.57
70% RPS by 2030
$1,524
$112.2
$101.74
Carbon Neutral
$1,743
$129.2
$115.53
Total System Cost NPV ($Millions)
Avg. 20-Year Portfolio Cost ($Millions/Yr)
Levelized Direct Electric Cost
2015 ($/MWh)

13. Base Case Portfolio Scorecards: System Reliability Measures
60% GHG Reduction (Preferred Portfolio)
21% 9% 53
23% 5%
IPP 2025 Retirement
20%
Reduced IPP Dispatch
11% 6%
50% RPS by 2025
24% 78
12%
70% RPS by 2030
29%
17%
Carbon Neutral 7% 0%
Average Reserve Margin (%)
Minimum Reserve Margin (%)
Incremental FRAC from 2015 (MW)
20-Year Avg. Wholesale Sales (%)
20-Year Avg. Wholesale Purchases (%)

14. Base Case Portfolio Scorecards: Environmental Stewardship Measures
60% GHG Reduction
(Preferred Portfolio)
13,003
-64%
N/A
1,070
45,629
59,610
IPP 2025 Retirement
12,167
$110
1,014
40,581
62,763
Reduced IPP Dispatch
9,416
$37
876
23,807
73,532
50% RPS by 2025
9,088
-68%
$56
837
23,757
67,857
70% RPS by 2030
8,783
-74%
$77
792
23,755
63,352
Carbon Neutral
5,838
-100%
$113
572
28,270
48,642
CO2 Emissions (thousand metric tons)
2030 GHG Reduction from 2008 (%)
Realized GHG Emission Cost ($/metric ton)
20 year Avg GHG Intensity (lbs/MWh)
Coal Burned (thousand tons)
Natural Gas Burned
(Gbtu)

15. Portfolio Cost Comparison ($2015)

16. Portfolio Cost Comparison
Expected Increase from Starting (Today’s) Cost to 20-Year Levelized
Increase from Status Quo (2008) or Stay the Course (2015)
Total Portfolio Cost Increase
2008 IRP ($2008)
28% 6%
34%
1A – Stay the Course ($2015)
27.7%
N/A
2A – Reduce IPP ($2015)
4.3%
32.0%
3A – 50% RPS ($2015)
7.3%
35.0%
4A – 70% RPS ($2015)
10.7%
38.4%
5A – GHG Neutral ($2015)
26.8%
54.5%

17. What Portion of PWP Costs Are We Addressing in the IRP?
The IRP Modeling addresses only the Direct Cost component of the Energy Service Charge.
Analyses of the economic impact of various alternatives under the IRP on customer rates/bills assume that all other components of the power bill and rate structure remain unchanged from FY2017.
It is reasonable to assume that there will be increases in these other components as well over the next 20 years.* It is very difficult to accurately predict all components of rates over a 20 year horizon.
PBC = Rebate & Assistance Programs. 53% is for Utility Rebates, 15% is for Direct Installation Rebates, 10% is for Utility Assistance, 10% is Labor & Burden, 12% is Services, Supplies and Other Operating Expenses. The PBC increased by 2% in 2009, and 0.7% in 2015.
Transmission Services Charge = Operations, maintenance and portion of capital costs for transmission assets.
Distribution and Customer Charges = Call center, billing, customer service, Distribution system operations and maintenance, Debt service, PAYGO for capital investment. Approved Rate increases for 2015 = 2.7%, 2016 = 2.4%, and 2017 = 2.2%. 38% of the D&C charge is Labor & Burden, 21% is depreciation and amortization, 17% is services, supplies and other operating expenses, 15% is debt, and 9% is general fund transfer.
Energy Services Charge = Debt Service for GT5 project, Renewable energy premiums, Cap and trade program, Market gas and energy purchases
* For example, the CAISO is forecasting significant increases in its transmission access charge.

18. Estimated Impact of Direct Electricity Cost Only – Monthly Residential Bill (by Usage)
Assumes no changes to other cost components or rate structure from FY 2017 approved rates
Portfolio
Portfolio Name
500 kWh
1000 kWh
Current Annual Average Monthly Bill – As of March 2015
$84.95
$189.78
20-Year Levelized (2015$) 1
Stay the Course (Preferred Portfolio)
Economic IPP Dispatch + carbon premium
40% RPS by 2020
$96.31
$216.03 2
Reduced IPP Output
Reduce IPP to Min starting in 2015
$100.77
$224.93 3
Blended – 50% RPS
50% RPS by 2025 (Solar/Wind/Base Mix)
$102.01
$227.42 4
Blended – 70% RPS
50% RPS by 2025 & 70% by 2030 (Solar/Wind/Base Mix)
$103.47
$230.34 5
Carbon (GHG) Neutral Starting in 2015: Reduce IPP to Min, no power market purchases, natural gas plants burn 100% biomethane.
50% RPS by 2025 & 100% Carbon-Free by 2030 (e.g., 88% Renewable and 12% existing large hydro/nuclear)
$110.24
$243.88

19. Estimated Impact of Direct Electricity Cost Changes on Monthly General Service Bill (by Usage)
Assumes no changes to other cost components or rate structure from FY 2017 approved rates
Portfolio
Portfolio Name
2,000 kWh
10,000 kWh
50,000
kWh
100,000 kWh
Current Annual Average Monthly Bill – As of March 2015
$327
$1,664
$7,563
$14,875
20-Year Levelized (2015$) 1
Stay the Course (Preferred Portfolio)
Economic IPP Dispatch + carbon premium
40% RPS by 2020
$372
$1,898
$8,630
$16,965 2
Reduced IPP Output
Reduce IPP to Min starting in 2015
$390
$1,988
$9,081
$17,847 3
Blended – 50% RPS
50% RPS by 2025 (Solar/Wind/Base Mix)
$395
$2,014
$9,208
$18,093 4
Blended – 70% RPS
50% RPS by 2025 & 70% by 2030 (Solar/Wind/Base Mix)
$401
$2,043
$9,355
$18,382 5
Carbon (GHG) Neutral Starting in 2015: Reduce IPP to Min, no power market purchases, natural gas plants burn 100% biomethane.
50% RPS by 2025 & 100% Carbon-Free by 2030 (e.g., 88% Renewable and 12% existing large hydro/nuclear)
$427
$2,181
$10,042
$19,722

20. Public / Stakeholder Involvement
2015 PWP IRP
Public / Stakeholder Involvement

21. Stakeholder Technical Advisory Group
Member
Representing
Margaret McAustin
Pasadena City Council / MSC
George Falardeau
Art Center College of Design
Brian Killett
Citizens Climate Lobby
Paul Little
Chamber of Commerce
Dennis Murphy
Pasadena Resident
John Onderdonk
Cal Tech
Tom Romeyn
Huntington Hospital
Reuben Smith
Pasadena City College
Morey Wolfson
Environmental Advisory Commission
Michael Beck
Pasadena City Manager
Julie Gutierrez
Pasadena Asst. City Manager
Laura Dahl
Pasadena Planning Dept.
Phyllis Currie
PWP General Manager
Eric Klinkner
PWP Asst. General Manager (alt)
Sandra Ell
Environmental Adv. Commission (alt)
Pedro Pizarro
Cal Tech Board (first few meetings)

22. Customer and Stakeholder Involvement
Stakeholder Technical Advisory Group
15 members appointed by Mayor
8 meetings
MSC and EAC Briefings
3 Open Public Meetings
Electronic Updates
PWP Website
Social Media
Survey
Video

23. Some Key Customer Survey Observations
Top Priorities:
Reliability
Low Cost
Environmental Responsibility
Everything is a Priority!
Higher RPS Supported by Many
Cost/Rates = Major Concern
Coal = Major Concern
Many Interesting & Valuable Comments. See at

24. Updates & Uncertainty Analysis
2015 PWP IRP
Updates & Uncertainty Analysis

25. Key Issues/Changes CAISO Reliability Requirements
Local & Flexible Resource Adequacy Capacity (“FRAC”)
Energy Imbalance Market (“EIM”)
The “Duck Curve”
Changing Net Load Profile alters timing of “peak” and “off-peak” loads/prices
Over-generation
Need for fast-ramping, flexible resources
Retail Load
Increasing penetration of distributed generation (e.g., rooftop solar, microgrids) which reduce load, and EV charging would increase load
Change hourly and seasonal shape and load factor
Cap-and-Trade
Will it continue past 2020, or be replaced by federal carbon tax or some other program?

26. The Duck Curve

27. Key Issues/Changes (con’t)
GHG Emission Levels
1990 levels by 2020 (AB32 – The Global Warming Solutions Act)
80% GHG reduction below 1990 levels by 2050 (Schwarzenegger’s Executive Order S-3-05)
40% GHG reduction below 1990 levels by 2030 (Brown’s Executive Order B-30-15, issued )
California’s RPS
At least 33% by 2020 (AB32)
Brown’s “Golden State Standards (aka: the 50/50/50 plan): 50% RPS by 2030
Renewable Resources and Energy Storage
Costs expected to continue to decline
Technology still evolving
Tax incentives, legislative changes and reliability requirements uncertain
Intermountain Power Project Contract

28. Intermountain Power Project (“IPP”)
IPP is the largest contributor of GHG emissions in the PWP generation portfolio.*
* Percentages using current CARB GHG reporting methodology for electric utilities

29. PWP Carbon Emissions to Date
Emission Source
2008
2009
2010
2011
2012
2013
2014
Local Generation
82,724
73,355
74,590
80,551
139,828
59,603
64,217
Imports (incl. IPP Coal)
672,321
666,596
629,755
642,935
514,443
536,241
546,314
Magnolia*
38,553
36,285
40,727
19,169
5,723
4,540
12,073
Net Market Purchases*
111,720
106,925
65,898
74,751
97,901
63,304
85,656
Total Emissions/ (2008 Method)
Reduction from 2008
905,317
N/A
883,161
2.4%
810,970
10.4%
817,406
9.7%
757,895
16.3%
663,687
26.7%
708,261
21.8%
Total Emissions/ (Current Method)
755,045
739,951
2.0%
704,345
6.7%
723,486
4.2%
654,271
13.3%
595,844
21.1%
610,531
19.1%
*In 2008, Magnolia & Net Market Purchases were included in PWP Emissions. Current Method excludes them because they are counted by other entities (Burbank for Magnolia; Generation owners or first importers for CAISO market purchases). Switching from natural gas to biomethane at Magnolia produces RPS RECs but does not show up as PWP carbon emission reduction under current CARB methodology.

30. PWP Carbon Emissions vs. 1990
(MT)
2014 Actual Emissions
40% Reduction
60% Reduction
80% Reduction
918,622
708,261
551,173
367,488
183,724

31. 2015 PWP IRP
Action Plan

32. Recommendations
GHG reduction of at least 60% from 1990 levels by (to approx. 367,500 MT)
Eliminate coal fired generation no later than 6/16/2027.
Preserve IPP related transmission rights.
Have an option to reduce or opt out of any IPP natural gas repowering no later than 2019.
Until IPP is repowered, reduce IPP coal-fired generation when operationally & economically practicable.

33. Recommendations (con’t)
Continue to acquire all cost-effective and viable energy efficiency.
At least 1% of annual net energy load (12,750 MWh/year) and 0.7% of annual peak demand 2.3 MW/year) through 2023.
Update recommendations to City Council in 2017.
Continue to acquire cost effective renewable energy.
Renewable Portfolio Standard Policy & Annual Procurement Plan
Pasadena target = 40% RPS by 2020
State target = at least 33% RPS by 2020; may increase to 50% RPS by 2030
Support local renewable energy resources and community solar efforts.
Establish Feed-in Tariff by the end of 2016.
Launch a Community Solar pilot project by the end of 2016.

34. Recommendations (con’t)
Continue to ensure reliability and flexibility to respond to electric industry changes.
Explore and procure viable, cost-effective new technologies and efficient conventional technologies as needed to meet reliability and flexibility requirements.
Including distributed generation and energy storage.
Preserve existing local generation.
Evaluate repair and/or replacement options for Glenarm Unit 2.

35. Why “Stay the Course?”
Reaffirms Pasadena’s Aggressive 2012 IRP Commitments
Achieves a 60% GHG Reduction from 1990 Levels by 2030
Ahead of California statewide goal to reduce GHG 40% by under Governor Brown’s Executive Order B-30-15
Meets or Exceeds All of PWP’s Current Requirements
Legal, Regulatory, Reliability and Environmental
Provides Flexibility to Adapt to Changing Conditions
Least Cost Option Considered

36. Preferred Portfolio: Stay the Course = 60% GHG Reduction by 2030
Eliminate Coal
Energy Efficiency
Renewable Energy
Local & Community Renewable Programs
60 % GHG REDUCTION FROM 1990 LEVELS BY 20301
1 Statewide GHG targets are 40% reduction by 2030 & 80% by 2050 from from 1990 levels.

37. 2015 IRP Update
Supporting Materials

38. Average New Renewable Technology IRP Cost Assumptions
Net Metering
No PWP program in place yet – generic assumption is higher than most other utility programs.
Assumes reduction in federal Investment Tax Credit post Current solar PV offers are significantly less.

39. Average PWP Generation Cost by Resource

40. Expected PWP Gas-Fired Generation Cost

41. Assumptions – Natural Gas Prices

42. Assumptions – Electricity Prices

43. Assumptions – Carbon Prices

44. 2030 Total Power Supply Content Comparison by Portfolio
Baseload Renewables include Geothermal and Biogas/ Biomethane.

45. Power Supply Changes Over Time – Stay the Course
Baseload Renewables include Geothermal and Biogas/ Biomethane.

46. Base Case Portfolio GHG Comparison
Carbon (GHG) Intensity = GHG Emissions / Sales
Average over 20 years
One-year (2030) GHG emissions compared to 2008

47. How much does the 40% RPS portfolio (above and beyond the SBX1-2 33% mandate) cost rate payers?
During the last rate case, PWP explored the potential impact on rates of reducing the local RPS from 40% to the state mandated 33%. As the table below shows, the savings would be very small.
Reduce Renewable Portfolio Standard from 40% to 33%
Fiscal Year 2015
Fiscal Year 2016
Fiscal Year 2017
Fiscal Year 2018
System Average Rate per kWh
16.150¢
17.120¢
18.030¢
Change in ¢ per kWh
n/a
(0.035¢)
(0.027¢)
(0.053¢)
New System Average Rate per kWh
17.085¢
18.003¢
17.977¢
Annual Savings for 500 kWh per month Customer
$2.10
$1.58
$3.18
Annual Savings for 1000 kWh per month Customer
$4.20
$3.24
$6.36
Annual Savings for 10,000 kWh per month Customer
$42.00
$32.40
$63.60
Annual Savings for 100,000 kWh per month Customer
$420.00
$320.40
$636.00

48. Energy Charge (Adjusted by formula)
Power Supply FTE: 52

49. Progress Toward 2012 IRP Recommendations
Target
Status
Renewable Energy: RPS
40% by 2020; Meet/exceed state mandated level of 33% by 2020
On Track; 28% for 2014; Well on our way to 40% by 2020
Renewable Energy: Local Solar
15 MW by 2020; 19 MW by 2024
Approximately 6.2 MW installed
Coal Power Displacement
Reduce coal purchases by at least 35 MW by 2016 (via power sale to non-California public entity buyers)
No willing/qualified buyers; Sales blocked by CARB Resource Shuffling Rules. Able to achieve some reduced output w/economic dispatch + additional carbon premium.
New Local Gas-Fired Generation
Replace Broadway power plant with a comparably sized new combined cycle plant by 2014
GT-5 Under Construction; Commercial Operation expected June 2016
Energy Savings
Incorporate adopted 2010 Energy Efficiency Goals
Adopted 2013 Energy Efficiency Goals: 12,750 MWh, 2.3 MW = ~ 1% per year (energy), 0.7% (demand)
Additional Demand Response
Additional 5 MW by 2012 through incentives and programs
None identified to date. Under review pending development of smart grid strategy.
GHG Emissions Reductions
25% by 2015; 40% by 2020 (from 2008 levels)
19.1% as of 2014
Upgrades of Existing Generation
Continue to maintain and upgrade Glenarm Units 1 and 2 to extend their lives through 2030
Unit 1 complete. Unit 2 still being evaluated. Separate staff recommendation pending.

50. Customer Survey
470 responses to 24 questions between August 2014 & May 2015
Respondents self-selected & not restricted as to the number of times they could respond to the survey.
83.5% indicated that they live in Pasadena.
48.1% indicated that they work or own a business in Pasadena.
82.8% indicated that they were answering from a residential customer perspective.
Not necessarily statistically significant.
Summary data on the responses, charts, and lists of additional comments received, if any available on PWP IRP website.
470 responses to 24 questions between August 2014 & May 2015
Respondents self-selected & not restricted as to the number of times they could respond to the survey.
83.5% indicated that they live in Pasadena.
48.1% indicated that they work or own a business in Pasadena.
82.8% indicated that they were answering from a residential customer perspective.
Not necessarily statistically significant.
Summary data on the responses, charts, and lists of additional comments received, if any available on PWP IRP website.
It was intended to give a voice to some of PWP’s stakeholders who might not speak up during public meetings, who might not attend public meetings, or who were seeking guidance to structure specific comments with respect to the IRP. The survey also provided an opportunity to offer a couple of thought provoking insights on of a couple of IRP related topics. As an aside, the survey also provided interesting demographic data on responding stakeholders.