How
the first to exceed C
aims to re
Pushing the envelope Again
As I mentioned earlier, the road only gets
harder, but we’re on our way. In December
2008, SMUD’s Board established a goal of hav-
ing 33 percent renewables in SMUD’s portfo-
lio by 2020; in fact, we aim to reach 37 percent
by that date (with an additional 4 percent via
Greenergy).
As we work toward this goal, we have bought
more renewable energy through PPAs. We have
built another phase of wind power that will add
up to another 128 MW to our wind resources
next year, and we have signed contracts to build
three geothermal projects that will add 120 MW
in 2012 and 2013. We established a feed-in tariff
program, whereby we pay a premium to eligible
renewable energy generators for their production. This program will net another 100 MW
of solar PV when it’s fully operational in 2013.
Based on our contracts through 2016, we project
that we are on our way to reaching our 37 percent goal. All of these are reasons to be excited
that we are on the right track and progressing in
a timely fashion.
Our enthusiasm is tempered by the market
and transmission challenges we face. Supplies
of renewable energy will likely only get tighter
and more expensive as more and more utilities
become buyers. Moving renewable energy generated in high-density locations to the end-user
is hampered by transmission-capacity issues, of
course, which can also markedly increase costs.
It is hoped, though, for the utility industry, that
prices for renewable energy will come down so
it can compete with conventional sources like
natural gas and thus alleviate some of renewable
energy’s challenges like intermittency. Local and
regional renewable energy providers have sprung
up everywhere it seems, eager to realize green-tech/clean-tech entrepreneurial opportunities.
A glut of natural gas has appeared in the market
from new shale gas supplies. That is reducing
the price of conventional electricity in California, challenging renewable energy generators to
reduce their costs even further.
Despite the obstacles, our 37 percent renewables goal is a critical element of achieving a low-carbon future, and we intend to prevail. The risks
are real and the road uncharted, but experience
has taught us that investing for long-term sustainable supply can reap compound interest. ST
by-2010 mandate, which, as a municipal utility,
SMUD wasn’t even required to meet.
In the decade hence, we faced many challenges. Consider that in 2003, we were at only about
3 or 4 percent renewable power. We became
very methodical in our approach. Contracts were
signed only if the projects were certain to come
online. We built two phases of a 102-MW wind
facility. We built and bought more solar power
and entered into power purchase agreements
(PPAs), whereby third-party developers own,
operate and maintain PV systems and sell us the
electricity via fixed-rate contracts. One of those
PPAs included a 1.2-MW solar array from which
we sold subscriptions to customers who could
not own their own panels because of expense
or living circumstances (e.g., because they’re
renters). In another PPA, we contracted to buy
solar from a local defense contractor that built its
6-MW array to fulfill Environmental Protection
Agency Superfund requirements. Until the bottom fell out of the housing market, we contracted
with builders to include solar in the design and
construction of new homes. We contracted for
geothermal and bio-digester gas.
We did all of this all while balancing the need
to keep SMUD’s rates among the lowest in California. We accomplished it all without gimmicks
like buying into contracts without guarantees
just so the numbers could be met. Our 20 per-cent-plus is solid renewable energy and again,
our customers demand that we achieve this
goal while keeping rates low and reliability high,
which we have succeeded in doing. SMUD’s
average annualized monthly residential bill is
about $91, which is more than 20 percent lower
than what customers pay in neighboring utilities’
service territories.
Elisabeth S. Brinton, chief business and public affairs
officer at the Sacramento Municipal Utility District,
joined SMUD in 2008 as a member of its executive
team. She is responsible for maintaining the customer-owned utility’s outstanding reputation locally, regionally and nationally. She also leads economic development, public affairs, business development, marketing
and supplier diversity and advances strategic government, business and community partnerships.
As the nation’s sixth-largest publicly owned utility,
SMUD ( smud.org) has been providing low-cost, reliable electricity for more than 60 years to California’s
Sacramento County (and a small portion of Placer
County). SMUD is a recognized industry leader and
award winner for its innovative energy-efficiency
programs, renewable power technologies and for its
sustainable solutions for a healthier environment.
Fifty years ago, we built our
hydropower staircase of
11 reservoirs and eight
powerhouses, the Upper
American River Project. when
it came time to build a
significant renewable
energy mix, the low-carbon
hydro vision provided a
pretty good model.
