Sacramento Municipal Utility District has set a goal to increase the renewable energy in its system portfolio from 7 percent in 2002 to 10 percent by 2006 and 20 percent by 2011. This will require adding roughly 2,000 GWh/yr of new renewable energy generation by 2011. To meet this ambitious goal, the utility is developing and integrating renewable energy generation in various ways: financing its own generation assets such as wind facilities and large-scale photovoltaic arrays; purchasing generation through bilateral contracts; selling customer-sited and owned photovoltaic systems through a utility retail program; and possibly the purchase or sale of green tags in the future.
The utility currently has 115 MW of non-hydro renewables in its system portfolio, roughly 18 percent of which is utility-owned and operated. This includes 5 MW of wind power at the Solano wind site and more than 10 MW of photovoltaics in the Sacramento area, earning SMUD a national reputation as the "solar utility." After almost a decade of divesting generation assets in California, Sacarmento has maintained its ability to finance, build, and operate a large part of its energy portfolio and the utility has ownership experience with solar, wind, geothermal, and small hydro facilities. Asset ownership brings project control and operational flexibility that can be balanced against the reduced liability but increased volatility of power purchases. This is especially true for the occasional boom/bust building cycles of renewable energy resources, and helps build a balanced resource portfolio.
The costs for the majority of renewable generation in SMUD's resource mix are recovered in the rate-base. The utility also has a voluntary green-pricing program, Greenergy, with more than 17,000 customers who buy a total of 93 GWh/year of generation currently supplied from landfill gas, wind, and small hydro. Customers pay a $6 per month flat rate premium (on top of their regular energy costs) for 100 percent of their energy to come from renewables. To maintain customers' faith in its green-pricing program (and all of its products and services), SMUD believes it is important for Greenergy customers to know that their voluntary contributions fund specific renewable energy projects that the utility would not get power from without their explicit support. In other words, utility staff take pains to ensure that Greenergy participants' contributions are not used to fund renewable generation projects whose costs are otherwise dispersed among all ratepayers. To achieve this, the utility has separate purchase contracts for generation that supplies power to and is paid for by the Greenergy program.
Contact:
Bud Beebe
Regulatory Affairs Coordinator
Renewable Generation Assets Group
Sacramento Municipal Utility District
Sacramento, California
Telephone: 916-732-5254
Jim Burke
Greenergy Program Manager
Sacramento Municipal Utility District
Sacramento, California
Telephone: 916-732-5411