1. City Carbon Neutral CEC Financial Analysis Feb. 10, 2009

4. 2006 City GHG Emissions

5. Electricity Natural Gas Gasoline and Diesel Rooftop Solar

6. Electricity Natural Gas Gasoline and Diesel Rooftop Solar

7. Natural Gas Nuclear Wind Geothermal Fuel cells Coal Large hydro

8. Wind Small hydro Conversion Fuel Cells Natural Gas Nuclear

9. Reference Case Carbon Neutral

10. Financial Assumptions Our cost analysis represents the “all-in” cost: –capital costs –available tax credits (which apply even for the City, under new legislation) –operations and maintenance –amortization costs –savings from electricity and natural gas Assumes 14 cents per kilowatt hour for SCE electricity, rising at 1.5% each year (constant 2008 dollars)

11. Reference Case generation cost assumptions

12. CN 2020 generation cost assumptions

13. Reference Case Carbon Neutral

14. Financing Options Power Purchase Agreements (PPAs) –The City’s recent solar project is a PPA project > no up-front cost to the City –PPAs are available for wind power also, and probably will be available soon for other renewable technologies Low interest loans –Energy Commission has low-interest loans up to $3 million CREBs bonds –Community Renewable Energy Bonds are available from the federal government

15. End Result? Up-front capital cost may be reduced dramatically –Could be zero for renewable energy projects if the City decided to pursue PPAs for all projects –Energy Service Companies (ESCOs) can retrofit City buildings for energy efficiency improvements, with no up-front cost About $25 million net savings should accrue under the Carbon Neutral by 2020 plan

16. Opportunity By pursuing carbon neutrality, the City: –Saves money through increased energy efficiency and conservation –May save money through Power Purchase Agreements for renewable energy –Positions itself to receive state and federal grants for carbon mitigation

17. Reference Case Carbon Neutral $25 million total cost savings by 2020