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2011 04 apr member update meetings final


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Presentation to KIUC members at quarterly update meetings in April 2011.

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2011 04 apr member update meetings final

  1. 1. Member Update Meeting April 2011 Alan Smith, KIUC Director David Bissell, KIUC Pr esident & CEO
  2. 2. Welcome <ul><li>Introduction of board members </li></ul><ul><li>Board Resolution 3-11 </li></ul><ul><ul><li>Commitment regarding hydroelectric generation project development requirements and guidelines </li></ul></ul>
  3. 3. Resolution 3-11 <ul><li>Recognize the legitimacy and priority of the cultural, diversified agricultural, hunting, fishing, tourism, and recreational needs of Kaua‘i, using only the remaining water flow after such considerations for hydro. </li></ul>
  4. 4. Resolution 3-11 <ul><li>Recognize that sufficient stream flow must be maintained for adequate habitat for affected aquatic and terrestrial species. </li></ul>
  5. 5. Resolution 3-11 <ul><li>Require that KIUC get direct input from any and all interested parties. </li></ul><ul><li>Include ongoing online access for community members’ hydro questions with answers posted on a publicly accessible website. </li></ul>
  6. 6. Resolution 3-11 <ul><li>Recognize that stakeholder involvement may require meetings, forums and other feedback resources that exceed any procedural requirements of governmental bodies. </li></ul>
  7. 7. KIUC <ul><li>KIUC is a non-profit owned by its members. </li></ul><ul><li>KIUC’s only interest is doing what’s best for the long-term benefit of our member/owners </li></ul>
  8. 8. KIUC’s Renewables Commitment <ul><li>KIUC’s renewables efforts are driven by member demand to: </li></ul><ul><ul><li>Manage the cost of energy to members; </li></ul></ul><ul><ul><li>Reduce dependence on imported oil; </li></ul></ul><ul><ul><li>Increase the amount of energy generated from Kaua‘i’s own resources. </li></ul></ul>
  9. 9. KIUC’s Renewables Commitment <ul><li>Nine-member elected board is strongly supportive of renewable energy. </li></ul><ul><li>Cooperative structure gives KIUC unique access to low-cost capital . </li></ul><ul><li>Low-cost capital makes renewables investment an option for rate stability. </li></ul>
  10. 10. Today’s agenda <ul><li>Energy economics – why work on renewables now to stabilize your electric bill. </li></ul><ul><li>Strategic Plan – how a portfolio of renewable projects will help get us there. </li></ul><ul><li>Hydro – why responsible hydroelectric development is essential to success. </li></ul><ul><li>Your role – input, questions, next steps. </li></ul>
  11. 11. Energy Economics <ul><li>$60 - $100 million – KIUC pays annually for petroleum fuel. </li></ul><ul><li>$37-$147 – recent years range of oil price per barrel. </li></ul><ul><li>Coal, natural gas – not burned on Kaua‘i. </li></ul><ul><li>Our best option – renewables. </li></ul>
  12. 12. Why we are moving towards renewables Fuel Forecast & Impact on Avg. Annual Bill $ 0 $ 240 $ 480 $ 720 $ 960 $ 1,200 $ 1,440 $ 1,680 $ 1,920 Fuel surcharge (Annual Avg. Bill) Annual $ $ / Gallon
  13. 13. 2011 Load Profile and Supply Diesel and Naphtha 30 million gallons
  14. 14. Wind – Not an Option <ul><li>Endangered species impacted by turbines. </li></ul>
  15. 15. Solar PV – Only Intermittent <ul><li>Cloud cover creates system instability as it ramps up and down. Solar’s unreliability limits its use. </li></ul>
  16. 16. Generation cost chart - 2010
  17. 17. Generation cost chart - 2025
  18. 18. Generation cost chart - 2040
  19. 19. 15-Year Strategic Plan <ul><li>Our vision </li></ul><ul><ul><li>To be an energy solutions leader </li></ul></ul><ul><li>Our mission   </li></ul><ul><li>Provide reliable power safely that is fairly and competitively priced ; </li></ul><ul><li>Practice conservation and efficient use of energy resources; </li></ul><ul><li>Increase sustainable power supply and environmental stewardship ; and </li></ul><ul><ul><li>Improve the quality of life for members and Kaua‘i. </li></ul></ul><ul><li> </li></ul>Together, we power Kaua‘i
  20. 20. <ul><li>Expand existing hydropower facilities and develop new . </li></ul><ul><li>Consider new sources of firm power generation . </li></ul><ul><li>Pursue Power Purchase Agreements ( PPAs ) for intermittent renewable energy . </li></ul><ul><li>Integrate grid-scale battery storage . </li></ul><ul><li>Improve energy efficiency & conservation programs. </li></ul><ul><li>Procure and implement Advanced Metering Infrastructure ( AMI ). </li></ul>Strategic Plan Action Items
  21. 21. Kaua‘i Energy Supply Transformation <ul><li>50% renewable – possible in 5-7 years! </li></ul><ul><li>World’s highest solar concentration – likely in two years. </li></ul><ul><li>New renewables projects – in development. </li></ul><ul><li>Battery energy storage system – in place. </li></ul><ul><li>Smart Grid/AMI – to be implemented. </li></ul>
  22. 22. Renewable Development <ul><li>Portfolio approach </li></ul><ul><li>Development projects include: </li></ul><ul><ul><li>Battery Energy Storage Systems (BESS) </li></ul></ul><ul><ul><li>Biomass </li></ul></ul><ul><ul><li>Hydroelectric </li></ul></ul><ul><ul><li>PV </li></ul></ul>
  23. 23. Biomass <ul><li>7 to 37 MWs firm capacity </li></ul>
  24. 24. Biomass Strategy <ul><li>Green Energy PPA before PUC </li></ul><ul><ul><li>6.7 MW,10% of energy supply </li></ul></ul><ul><ul><li>Scheduled for completion 2013 </li></ul></ul><ul><li>Biomass Invitation to Propose </li></ul><ul><ul><li>15-20 MW project, 20%-25% </li></ul></ul><ul><li>KIUC biomass plant </li></ul><ul><ul><li>Assessing potential 10 MW project, 13%-15% </li></ul></ul><ul><ul><li>Port Allen likely location </li></ul></ul>
  25. 25. PV <ul><li>10 to 15 MWs intermittent capacity </li></ul><ul><li>Price is good with </li></ul><ul><ul><li>tax incentives </li></ul></ul><ul><li>Fast completion time </li></ul><ul><li>Low capacity </li></ul><ul><li>Battery storage </li></ul><ul><ul><li>needed </li></ul></ul>
  26. 26. Kapaa Solar 1.2 MW
  27. 27. Battery Storage <ul><li>1.5 to 5 MWs storage capacity </li></ul>
  28. 28. Hydropower <ul><ul><li>20-40 MWs hydroelectric potential </li></ul></ul><ul><li>Abundant water supply </li></ul><ul><li>Capital intensive, but no fuel cost </li></ul><ul><li>Potentially lowest cost of power </li></ul><ul><li>Limited price escalation </li></ul><ul><li>Legacy project for Kaua‘i </li></ul>
  29. 29. Hydro Quiz <ul><li>How many hydroelectric generating stations are currently operating on Kaua‘i? </li></ul><ul><ul><li>None </li></ul></ul><ul><ul><li>Three </li></ul></ul><ul><ul><li>Eight </li></ul></ul>
  30. 30. Hydro Questions <ul><li>How many have actually seen one of Kaua‘i’s eight hydroelectric generating stations in person? </li></ul>
  31. 31. Existing Diversion
  32. 32. Modern Diversion
  33. 33. KIUC Hydro Strategy <ul><li>Consider all potential projects on Kaua‘i. </li></ul><ul><li>Use FERC (Federal Energy Regulatory Commission) licensing process: </li></ul><ul><ul><li>Process works </li></ul></ul><ul><ul><li>Structured timeline </li></ul></ul><ul><li>Work with hydro development experts: </li></ul><ul><ul><li>Free Flow Power </li></ul></ul><ul><li>KIUC owns all projects. </li></ul>
  34. 34. <ul><li>FFP approach to hydro design and development : </li></ul><ul><ul><li>Stakeholder involvement throughout process. </li></ul></ul><ul><ul><li>Integration of technical, environmental and regulatory aspects. </li></ul></ul><ul><ul><li>Development of balanced and cost effective projects. </li></ul></ul>Free Flow Power
  35. 35. The FERC process <ul><li>An issued FERC preliminary permit = permission to perform feasibility studies and gather stakeholder input. </li></ul><ul><ul><li>That is all. </li></ul></ul>
  36. 36. The FERC process <ul><li>With that permission = two- to five-year effort to get to a proposed design for a hydro project or projects that considers these and other interests: </li></ul><ul><ul><li>Cultural </li></ul></ul><ul><ul><li>Diversified agriculture </li></ul></ul><ul><ul><li>Fishing </li></ul></ul><ul><ul><li>Hunting </li></ul></ul><ul><ul><li>Recreational </li></ul></ul><ul><ul><li>Tourism </li></ul></ul>
  37. 37. Preliminary Permit Filings <ul><li>FERC Permitted Potential Projects </li></ul><ul><li>Hanalei River Hydroelectric Project 3.5 MW </li></ul><ul><li>Wailua Reservoir Water Power Project 2.0 MW </li></ul><ul><li>Wailua River Hydroelectric Project 6.6 MW </li></ul><ul><li>Makaweli River Hydroelectric Project 6.6 MW </li></ul><ul><li>Kitano Water Power Project 7.7 MW </li></ul><ul><li>Kekaha Waimea Water Power Project 1.5 MW </li></ul>
  38. 38.
  39. 39. Responsible Hydro Development <ul><li>Extensive input – KIUC will engage extensively with community, stakeholders before reaching proposed hydro design. </li></ul><ul><li>Diversions – KIUC will only consider low impact diversions, not dams. </li></ul><ul><li>Water allocation – KIUC will work through state agencies /processes, with stakeholders, to address hydro projects’ water allocation. </li></ul><ul><li>Water rights – FERC not involved. </li></ul>
  40. 40. Where we are Diesel and Naphtha 30 million gallons
  41. 41. Where we are
  42. 42. Where we can be with projects in development
  43. 43. Projects in Development Represent Over 75% of Kaua‘i’s Projected Energy Needs
  44. 44. Economic Impact of Renewable Projects <ul><li>$350 million-plus capital would be invested in projects under development. </li></ul><ul><li>Reduced dependency on foreign oil </li></ul><ul><ul><li>Could keep $60-$100 million yearly invested in Kauai </li></ul></ul><ul><li>Stabilize Kaua‘i energy prices. </li></ul><ul><li>Provide local jobs. </li></ul>
  45. 45. 50% Renewable by 2023 (or faster) <ul><li>Strategic Plan target </li></ul><ul><li>Faster results desired and possible </li></ul><ul><li>Reduce exposure to fossil fuel </li></ul><ul><li>Portfolio of projects </li></ul><ul><li>Leverage low-cost capital </li></ul><ul><li>Supportive board and community </li></ul>
  46. 46. Questions?
  47. 47. <ul><li>Mahalo! </li></ul><ul><li>David Bissell </li></ul><ul><li>[email_address] </li></ul><ul><li>808-246-8213 </li></ul>