A city in the sunny southwest, Tucson is wondering how it can maximize its use of cost-effective, economy-boosting solar power. Is a partnership with the electric utility, as seen in Minneapolis, the answer?

1. A C T I VAT I N G A N E N E R G Y
PA R T N E R S H I P F O R T U C S O N ?
John Farrell
February 18, 2015

2. H U G E P O T E N T I A L

3. POTENTIAL PERCENT OF
POWER FROM LOCAL
RENEWABLES
100% or more
50 to 100%
25 to 50%
10 to 25%
10% or less
L O C A L R E N E WA B L E P O T E N T I A L
32 states - 100%+

4. What percent of Arizona electricity
could come from
rooftop solar alone?
I N T E R A C T I V E

5. 20%
23%
49%
42%
31%
18%
23%
24%
19%
19%
28%
23%
24%
24%
26%
21%
12%
11%
52%
51%
22%
23%
21%
23%
19%
14%
38%
41%
26%
35%
28%
19%
25%
21%
25%
24%
20%
22%
19%
23%
17%
23%
18% 20%
15%
24%
21%
18%
Residential and Commercial roofs
L O C A L S O L A R P O T E N T I A L
POTENTIAL PERCENT OF
POWER FROM LOCAL
ROOFTOP SOLAR
50% or more
25 to 50%
10 to 25%
0 to 10%
21%
49%

6. 0¢
5¢
10¢
15¢
20¢
Residential Commercial Residential
with ITC
Commercial
with ITC
Prairie Fire
Solar
Green Valley
0¢
5¢
10¢
15¢
20¢
0¢
5¢
10¢
15¢
20¢
T U C S O N S O L A R AT PA R I T Y ?
cents per kilowatt-hour
U T I L I T Y ( T E P ) R AT E S M O D E L E D
A C T U A L
( P I M A C O U N T Y )
30%
tax credit
30%
tax credit
NREL System Adivsor Model

7. $0
$3,000
$6,000
$9,000
$12,000
1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012
Wind
Solar Source: Lawrence Berkeley Labs
A N D O N LY G E T T I N G B E T T E R
U.S. Installed Cost of Wind and Solar Power ($/kilowatt)

8. 0¢
3¢
6¢
9¢
12¢
2004 2005 2006 2007 2008 2009 2010 2011 2012
R I S I N G AV E R A G E R E TA I L E L E C T R I C I T Y
P R I C E S I N T U C S O N
¢ per kilowatt-hour
Source: EIA
+2.8% per year
since 2008

9. But rates = bills

10. W H AT W I L L B E A D D E D ?
C U M U L AT I V E C A PA C I T Y A D D I T I O N S
T U C S O N E L E C T R I C P O W E R ( T E P ) 2 0 1 4 R E F E R E N C E P L A N
0
500
1000
1500
2000
2500
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
TEP 2014 IRP, p26

11. C I T Y- U T I L I T Y
D I S S O N A N C E

12. Are you Canadian?
I N T E R A C T I V E

13. Owned by
Canadian
company, Fortis Governed by AZ
Corporation
Commission

14. M I L L I O N T O N S O F G H G E M I S S I O N S
4
5
6
7
8
1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
T U C S O N C L I M AT E P R O B L E M
Other
40%
Tucson Electric
Power
60%
Sources: Pima County GHG Inventory, TEP 2014 IRP

15. U T I L I T Y R E S O U R C E M I X 2 0 1 3
Efficiency/Other
4%
Renewable
4.0%
Coal
80%
Gas
12%
Source: TEP 2014 IRP

16. U T I L I T Y R E S O U R C E M I X 2 0 2 8
Efficiency/Other
11%
Renewable
9.6%
Coal
43%
Gas
36%
G H G
- 2 7 % E L E C .
- 1 6 % T O TA L
Source: TEP 2014 IRP

17. M I L L I O N T O N S O F G H G E M I S S I O N S
4
5
6
7
8
1990 1994 1998 2002 2006 2010 2014 2018 2022 2026
Actual emissions
Projected based on TEP IRP
Kyoto reduction goal
R E S U LT S O F U T I L I T Y R E S O U R C E P L A N …
Source: TEP 2014 IRP

18. M I L L I O N T O N S O F G H G E M I S S I O N S
0
2
4
6
8
1990 1994 1998 2002 2006 2010 2014 2018 2022 2026 2030 2034 2038
… N O T N E T Z E R O
N E T Z E R O
2 0 4 0 – –
C I T Y ’ S
L I K E LY
G O A L

19. F O R E C A S T A G A I N S T T H E G R A I N
0
3,000
6,000
9,000
12,000
15,000
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
Source: World Bank, 2014 TEP IRP
Per capita electricity use, United States
T E P F O R E C A S T

20. A R I Z O N A C O S T O F
C O A L D E L I V E RY
0
10
20
30
40
2010 2011 2012 2013
C O S T LY C O A L R E L I A N C E
$ per short ton
Source: EIA

21. C O S T LY C O A L R E L I A N C E
Coal
43%
$161 million in compliance
with pollution law by 2018
Source: TEP 2014 IRP

22. • 1200 MW of new capacity planned
• 50+ year commitment
• 350 gallons of water per MWh
• Cost of $88-119 per MWh
T H I S I S A G A S
Source: TEP 2014 IRP

23. T H I S I S A G A S
Twice as much natural
gas capacity planned as
solar power

24. 0¢
5¢
10¢
15¢
20¢
8.8¢
16.6¢
U T I L I T Y ’ S C O S T F O R E C A S T
cents per kilowatt-hour
U T I L I T Y ( T E P ) C L A I M
11.9¢
Source: TEP 2014 IRP

25. 0¢
5¢
10¢
15¢
20¢
8.8¢
11.1¢
T U C S O N ’ S A C T U A L C O S T O F S O L A R
cents per kilowatt-hour
U T I L I T Y ( T E P ) C L A I M
11.9¢
16.6¢
“integration”
Source: TEP 2014 IRP

26. “integration”
“We have to back up every kilowatt of solar
every minute of every day”

27. D I S - I N T E G R AT I O N
Utility and neighbors have a
33% reserve margin (WECC)
Source: TEP 2014 IRP

28. D I S - I N T E G R AT I O N
solar resource is predictable

29. D I S - I N T E G R AT I O N
Source: http://ilsr.org/solving-solars-variability-more-s
I N T E G R AT I O N C O S T S FA L L W I T H D I S P E R S I O N
( $ P E R M W H )
0
10
20
30
40
1 solar plant 5 solar plants 25 solar plants
$2.70
$10.80
$39.00

30. D I S - I N T E G R AT I O N
Efficiency/Other
4%
Renewable
4.0%
Coal
80%
Gas
12%
Integration costs are minimal when solar
is a tiny fraction of grid resources

31. 0¢
5¢
10¢
15¢
20¢
8.8¢
11.1¢
T U C S O N ’ S A C T U A L C O S T O F S O L A R
cents per kilowatt-hour
U T I L I T Y ( T E P ) C L A I M
11.9¢
adjusted

32. 0¢
5¢
10¢
15¢
20¢
8.8¢
11.1¢
0¢
5¢
10¢
15¢
20¢
4.37¢
11.1¢
T U C S O N ’ S A C T U A L C O S T O F S O L A R
U T I L I T Y ( T E P ) C L A I M M O D E L E D
adjusted
30%
tax credit
30%
tax credit
11.9¢
Source: System Advisor Model

33. 0¢
5¢
10¢
15¢
20¢
8.8¢
11.1¢
0¢
5¢
10¢
15¢
20¢
4.37¢
11.1¢
0¢
5¢
10¢
15¢
20¢
Utility scale
solar
Residential Commercial Prairie Fire
Solar
Green Valley
5.7¢
9.6¢
T U C S O N ’ S A C T U A L C O S T O F S O L A R
U T I L I T Y ( T E P ) C L A I M M O D E L E D
A C T U A L
( P I M A C O U N T Y )
adjusted
C R E D I B I L I T Y
G A P
30%
tax credit
30%
tax credit
11.9¢

34. 0¢
5¢
10¢
15¢
20¢
8.8¢
11.1¢
0¢
5¢
10¢
15¢
20¢
4.37¢
11.1¢
0¢
5¢
10¢
15¢
20¢
Utility scale
solar
Residential Commercial Prairie Fire
Solar
Green Valley
5.7¢
9.6¢
T U C S O N ’ S A C T U A L C O S T O F S O L A R
U T I L I T Y ( T E P ) C L A I M M O D E L E D
A C T U A L
( P I M A C O U N T Y )
adjusted
30%
tax credit
30%
tax credit
11.9¢
SOLAR SAVINGS
OVER GAS

35. WAT E R

36. WAT E R I S L I M I T E D
• Central Arizona Project has lowest water rights from
Colorado river
• Water storage will cover shortage but less water
sales mean higher rates

37. L O T S O F WAT E R F O R P O W E R
T U C S O N WAT E R U S E
TEP
15%
85%

38. M I N N E A P O L I S : A M O D E L
C I T Y- U T I L I T Y PA R T N E R S H I P ?

39. A S I M I L A R C H A L L E N G E

40. Minneapolis Energy Options
Taking charge of our energy future
G R A S S R O O T S A C T I O N

41. Clean
Local
Equitable
Affordable
Reliable
Minneapolis Energy Options
Taking charge of our energy future

42. E N E R G Y O P T I O N S 2 0 1 2
Franchise
• 20 years
• $23 million for city
general fund
• expiring 2014
Municipal utility

43. O R G A N I Z I N G L E D T O O P T I O N S

44. Franchise reform
Community Choice Aggregation
Partnership
E N E R G Y O P T I O N S 2 0 1 4
Franchise
• 20 years
• $23 million for city
general fund
• expiring 2014
Municipal utility

45. C I T Y- U T I L I T Y PA R T N E R S H I P

46. 2 - Y E A R W O R K P L A N Minneapolis Energy Options
Taking charge of our energy future
B +
Building benchmarking
Community-driven
energy efficiency
Community solar
LED streetlights
Pay back on the bill

47. C O N S TA N T V I G I L A N C E

48. W H Y F O C U S O N L O C A L
P O W E R ?

49. $48 billion at stake

50. S O L A R I S VA L U A B L E

51. 0¢
2¢
4¢
6¢
8¢
10¢
12¢
14¢
Energy
Gen. capacity
Environment
T&D Deferral
Loss Savings
12.8¢
(per kWh)
Source: The Value of Distributed Photovoltaics to Austin Energy and the City of Austin
Austin Energy
Value of Solar Tariff

52. $0.00
$0.03
$0.06
$0.08
$0.11
$0.14
Brown energy replacement
Avoided transmission losses
Environmental (RPS compliance)
Avoided transmission access
Local capacity value
(per kWh)
Palo Alto
CLEAN Program
13.5¢

53. $0.00
$0.03
$0.06
$0.08
$0.11
$0.14
Brown energy replacement
Avoided transmission losses
Environmental (RPS compliance)
Avoided transmission access
Local capacity value
(per kWh)
Minnesota
Value of Solar
12¢

54. C O S T S H I F T ?
0
3
6
9
12
Value of solar
(MN)
Net metering
payment
(MN)
Solar producers
provide subsidy for
non-solar ratepayers

55. L O C A L P O W E R VA L U E
Over 25 years, locally owned = $5 million of electricity
spending in local pockets.
Source: NREL JEDI economic model
1 Megawatt
$2.5 million dollars and 20 construction jobs

56. L O C A L P O W E R VA L U E
Not local
0 25 50 75 100
very negative negative neutral positive very positive
Comparing two towns with nearby wind projects.
When one is locally owned, it means…

57. L O C A L P O W E R VA L U E
Supporting increased use of local wind energy
Not local
0 25 50 75 100
very negative negative neutral positive very positive
-44%
+33%
+77% net approval
Local
Ownership

58. Other
54%
Individuals & Farmers
46%
Germany’s Energy Revolution Still People Powered
29,000 MW
20% renewable

59. T H E F U T U R E
F O R L O C A L E N E R G Y

60. EQUITABLELOCAL
LOW-
CARBONEFFICIENTFLEXIBLE LOW-CARBONEFFICIENTFLEXIBLE LOCAL EQUITABLE
FIVE PILLARS OF ENERGY DEMOCRACY
“Utility 2.0” pillars
$48 billion
opportunity
“Utility 3.0”

61. E N E R G Y D E M O C R A C Y I N A C T I O N
INDEPENDENT
LOCAL GRID
MANAGER
= super efficient buildings

62. L O C A L P O W E R O P P O R T U N I T Y
S A N TA F EB O U L D E R
2x
Coal
same

63. LEVERAGE
UtilitiesCities
need

64. www.ilsr.org
R E A D M O R E
@johnffarrell
F O L L O W A L O N G