Good morning.
The March 1st, 2024 meeting of the Sustainability City Light Arts and Culture Committee will come to order.
It's 9.31 a.m.
I am Tanya Wu, chair of the Sustainability City Light Arts and Culture Committee.
Will the committee clerk please call the roll?
Councilmember Moore?
Present.
Councilmember Morales?
Here.
Councilmember Saka?
Here.
Councilmember Strauss?
Present.
Chair Wu?
Present.
Chair, there are five members present.
Thank you.
If there are no objections, the agenda will be adopted.
Hearing no objection, the agenda is adopted.
So welcome to our second meeting.
Today we will be hearing a presentation by one of our partners, the Bonneville Power Administration.
And we will now open the hybrid public comment period.
Public comments should relate to items on today's agenda within the purview of this committee.
Clerk, how many speakers are signed up today?
Currently we have one in-person speaker signed up and there are zero virtual public commenters.
Each speaker will have two minutes.
We will start with our one in-person speaker.
Clerk, can you please read the public comment instructions?
The public comment period will be moderated in the following manner.
The public comment period is up to 20 minutes.
Speakers will be called in the order in which they are registered.
Speakers will hear a chime when 10 seconds are left of their time.
Speakers' mics will be muted if they do not end their comments within the allotted time to allow us to call on the next speaker.
The public comment period is now open.
Will we go with the first speaker on the list?
The first public comment speaker is Jeff Haleah.
uh hello i just want to say that i hope that everybody on city council has researched this subject that's on the agenda prior to actually coming to the city council meeting so that you guys can be sure that you're not getting bs from whoever the presenter is and so i just would just encourage you guys for this meeting and for any meeting going forward to make sure that you have like at least googled the subject that say and and if you know of any of our fellow council members that aren't doing that that you will um make sure that they do do that because that way you'll know uh prior to hearing the information that's presented today whether or not it's accurate and um it will just be a refresher as opposed to like the first time before it is so that you could ask the presenter good questions and make it a really productive meeting.
And just one second.
I'm trying to remember what else I was going to say.
Did you have something to say about the Seattle City Light or Bonneville Power administration?
Oh, you'd like me to say something about the Productive Power Association?
Yeah, I do.
Just one second.
That's all, thank you.
Thank you.
Are there any additional speakers?
Chair, there are no additional registered speakers.
Great, we will now proceed to our items of business, but members of the public are encouraged to either submit their written public comments on the signup cards available on the podium or email the council at councilatseattle.gov.
So we will now move on to our first item of business.
Will the clerk please read item one into the record.
Agenda item number one, the role of Bonneville Power Administration with Seattle City Light.
Thank you.
Will our presenters please join us at the table and share a presentation?
And once ready, please introduce yourselves and begin your presentation.
Good morning, council members.
My name is Maura Brugger.
I'm the Director of Government and Legislative Affairs for Seattle City Light.
Good morning.
Kirstie Granger.
I am the Chief Financial Officer for Seattle City Light.
And good morning.
I'm Paul Dockery, the Senior Manager of Energy Resource Strategy and Planning for Seattle City Light.
So first I want to thank you for allowing us this time to provide a briefing.
We don't often get that opportunity because we usually have so many legislative items before the committee.
So we appreciate you being here.
Bonneville Power Administration is an important partner to Seattle City Light.
And so we appreciate this opportunity to provide some grounding on our relationship with Bonneville and its importance to our customers in the Seattle City Light service territory.
Yes, sir.
All right.
So Paul and I are going to split duties for presenting this presentation.
We have the PowerPoint.
It's up.
Is it going there or no?
Is it going to go up there?
Can you see it?
Sorry.
There we go.
Sorry.
I'll get it right next time for you.
Maura's new at Zoom.
Zoom at Council.
That's true.
Okay.
Thank you, Murphy.
Okay.
We're ready to go.
Great.
Okay.
So this is, like Maura said, talk about...
Bonneville Power Administration.
So why are we here today?
What are we talking about?
So one third of Seattle's electricity comes from the Bonneville Power Administration, or sometimes we just call it Bonneville or BPA.
As many of you know, probably the Seattle City Light We have hydroelectric facilities, Skagit, Boundary, and some smaller ones.
And so we generate a little more than half of the power that we serve our customers through from our own generation.
But a big portion of the power, 36% of the power we serve our customers actually comes from a purchase from Bonneville.
This is a good thing for our customers because the price we pay for the power that comes from Bonneville is very low.
So just under $40 is a good deal for a megawatt hour of power.
Bonneville is also the major transmission provider in the region.
And so the high voltage lines that Bonneville owns and operates are how we move power from Bonneville.
I mean, sorry, from Boundary Dam, which is our owned generation facility, as well as when we buy power on the wholesale market, that's how we move power here to Seattle to Bonneville.
serve everything.
The Bonneville contract is a big part of our budget, $191 million a year.
And why is this important right now?
So we had the long-term contract with Bonneville, so 17 years, and it's coming up for renewal soon.
And it expires in October of 2028, which might sound like a long time from now, but is quite soon.
And we are already starting conversations with Bonneville and others in the region on what the next contract will look like.
And I just add in a couple of things.
One is we are Bonneville Power Administration's second largest power customer behind one of our neighbors to the north utility serving Snohomish County.
And on that pie graph, it shows the 36 percent of power that we use to serve.
But the transmission to get all of that power other than about 25 percent of our power uses the Bonneville transmission system.
So what is BPA?
Bonneville is a federal power marketing agency, one of four in the country, and the headquarters are down the road in Portland, Oregon.
So as you know, Seattle City Light, but for anybody who might be listening, we are a public power utility.
We are not-for-profit, unlike Puget Sound Energy or a for-profit regulated electric utility that has investors.
So public power utilities like Seattle City Light get preference to purchase power from BPA at cost.
And so, as we mentioned, the price we pay for this power is low, and that's because Bonneville also isn't making profit from selling the power produced by all of the dams and other facilities they market power from.
And this concept of preference is really important.
It's a federal policy thing.
It's been in law for over 80 years.
But like any federal policy, these aren't set in stone.
They do come up from time to time.
And so this is a reason why Seattle, Seattle City Light, is active in the region, advocating for Seattle's interest with respect to Bonneville, and also traveling back to Washington, D.C.
from time to time to advocate with the federal government for Seattle's interests.
You want to add?
No, I was just going to say that, and if you can tell from this, it's not just Seattle.
Bonneville is kind of the elephant in the region with respect to power and transmission.
So they supply 28% of the power to the entire Northwest.
And so in any regional policymaking, they're a big deal.
Excellent.
Sure.
So this is a map, Seattle Times.
Thank you.
It's a good map.
It shows just the span of Bonneville.
You can see that Bonneville sells power from 31 federal dams.
And you can see from the map there, they're spread out across.
A lot of them are on the Columbia River, but they're also up on the Snake River, which stretches into Idaho and some smaller river systems in Oregon and Montana as well.
Bonneville also sells the output from the Pacific Northwest's only nuclear power plant, the Columbia Generating Station.
And so because we buy power from Bonneville and the power we get from Bonneville is a mixture of all of the generating facilities, part of Seattle's power is nuclear.
Next one.
Great.
Okay.
So the way that we buy power from BPA through a contract, BPA has three options for their contract, block, which is where a utility gets a predictable block of power every month, slice, which is where the utility gets a slice of whatever is generated, like a share, and that can vary depending on conditions, and you get a little bit of flexibility, and then also load following, which is where the electricity is shaped every hour, and this is an expensive product, as you can imagine, because it's tailored every hour.
So City Light buys block, which provides electricity tailored to meet our needs.
You can see from the chart there, how it works is the yellow is the BPA block.
And we get more in the winter, which is when our load is higher from heating needs.
And we take less in the spring, which is when our own hydro facilities are producing enough power to serve our load.
One thing that you'll be hearing from City Light about in the future, and we talked about this a little bit at the last committee meeting, is that City Light has a need for more electricity in the future.
And so our legacy hydro facilities aren't going to be enough to serve growing Seattle needs in the future.
And so we will need to be out getting contracts and procuring new power resources, you know, probably wind and solar and other renewables, but we will need city council approval to bring those new resources into our portfolio.
So you'll be hearing more about that down the road.
And you can see from this chart, you know, August when it's hot and more and more so we have air conditioning here in Seattle.
So that's an area.
And then in the winter, you can see in December, the blue line goes up above the yellow.
So those are two times of year where we're really going to be looking to bring on more resources to meet the growing demand here in Seattle.
And if you don't mind, I'll just foreshadow a little bit later in our presentation, we'll talk about the rest of the customers in the region that are served by Bonneville.
And all of us as customers have options, those three options for products, the block, the slice, and the load following.
And depending on the individual customer's circumstances, they can elect those.
And we'll talk some more about that in future slides.
But all customers, any public power utility in the prior graphic in the yellow region is eligible for one of those products.
All right, next slide.
So this is a little bit about transmission.
As we mentioned, BPA is power and also transmission.
So transmission is how we move power across the region.
You can see that these dark green lines on this map, this is all of BPA's transmission.
This is most of the transmission in the region.
City Light does own a little bit of high voltage transmission lines, but a lot of the power that we move around the region is on BPA's lines, like we rent space on them.
And so this is a really important thing.
You can see in the top corner there, that's where Boundary Dam is, way up in the northeast corner of the state.
And so we use the Bonneville transmission lines to move the electricity that we generate at Boundary all the way over to Seattle.
And one other thing on Bonneville before we kind of transition off of this is they are, as Kirstie mentioned, one of four federal power marketing agencies, which is its own sort of unique thing within the federal government.
But they're a part of the U.S.
Department of Energy, but they are fully funded by their sales of power and transmission to customers, which means that they are their own agency within the federal government and do not rely on funds from the, what's the right term?
Taxpayer funds.
They're not taxpayer funded.
They're rate funded.
Like Seattle City Light is.
We also aren't funded by Seattle taxes.
We are fully funded by revenue from electricity bills.
All right, so in the next section, we're gonna talk a little bit about policy issues that are coming up related to BPA and some decisions that you'll be hearing about where we're going to need council engagement in the coming years.
And this is our list of policies that are ongoing with the Bonneville Power Administration.
Today, we're going to focus on three of them.
First is this contract development for the next contract period, which we refer to as the post-2028 contract because, as Kirstie mentioned, our current agreement expires on October 31st, 2028. So we'll talk a little bit more about that.
The second is day ahead market choice, which continues this evolution of power markets in the West.
We're going to talk about how Bonneville is engaging in that and are working with Bonneville on that day ahead market evolution.
And third is transmission, transmission, transmission.
We're going to talk about transmission system expansion and generator interconnection.
And I did want to highlight, while this is a numbered list, please don't interpret it as a ranked list.
There is a lot of very good work going on on the other topics, but today we're just going to focus on those first three.
So first is this contract development.
And as we mentioned, we're in the midst of a 17-year contract with BPA that ends in 2028. 130 other preference customers also have contracts that expire in 2028 at the same time as us.
And Bonneville is currently hosting a public process for interested stakeholders to discuss the terms and conditions of this contract.
Because it is such a large, far-reaching agency with lots of customers, they have standard offerings of contracts where you can choose products.
But ultimately, all of us, 130 customers, are part of a multilateral negotiation to set the terms of this agreement.
So in our engagement with Bonneville on this very important topic, we've set three priorities for our advocacy.
One is the emissions policy.
And we're advancing policies that are consistent with Seattle's emissions reduction obligations and goals.
because we receive benefits of low emissions associated with hydropower we buy from Bonneville.
And it also helps us meet city goals around carbon emissions and state-level requirements.
And we want to make sure that the next contract continues to advance that interest that we have in emissions reductions.
The second is around product design.
So Kirstie mentioned Block, Slice, and Load Following.
Those are the products currently offered under the current contract, and we are customers of the Block product.
It is not a foregone conclusion that Bonneville will continue offering all of those products, and it is not a foregone conclusion that they couldn't offer other products.
And as the energy resource strategy and planning person in the room, I do believe that product design is critically important to understanding and interacting with the wholesale market and serving City Lights' load at the lowest possible cost.
And the last area of advocacy is energy efficiency.
Seattle has made significant investments in energy efficiency, which has provided us room to grow into additional loads.
And we can grow into this power supply from Bonneville at this low cost, low emissions rate.
And we're advocating to get credit for that investment and energy efficiency kit to carry forward into the next contract.
So that otherwise this access to low cost, low emission service that we've enabled through these energy efficiency purchases would expire at the end of the 17 year agreement.
And we want to make sure that our customers get credit for their investment and energy efficiency and continue to have access to this resource into the next contract.
So those are our three areas of focus in advancing our interest and the interests of Seattle in this contract development.
And just to underscore this, it's a big multilateral, right?
130 people that have interests in this process.
And Bonneville is engaging in a public process to help inform their decisions around what to offer.
And now we have the second issue.
So the first one, the contract is a big issue.
And the next one is just as big, right?
It's with regards to regional electric markets.
In order to provide cost-effective, reliable service to Seattle's load, we buy and sell power from other utilities and power producers in the region through wholesale electric markets.
And we do that in different ways and at different times.
For instance, there are long-term contracts like Bonneville's, the 17-year agreement with Bonneville.
It's a long-term procurement.
There are also forward contracts for power for future months or quarters that tend to happen either within the year or for the next year.
And then there are also purchases and sales in the days and hours leading up to electric service.
And that one of the areas of evolution in the West is around day ahead markets.
So when we're buying or selling power in the days in advance of providing electric service, which we have to do every minute of every day of every cycle to make sure the lights stay on.
So Bonneville and City Light and other utilities in the West are evaluating newly forming day ahead markets, two of which are under development in the West.
One of them is the California Independent System Operators Extended Day Ahead Market, and another is the Southwest Power Pools Markets Plus program.
And Bonneville is engaged currently in a public process, another public process, around their review of what market to continue to advance, either the Markets Plus or the EDAM.
And they're currently going through that process and expect to publish some leaning in April of 2024. And Bonneville's decision will have significant influence on us since we are a large purchaser of power from Bonneville and use Bonneville's transmission system.
So this is a big scope of work for us engaging and making sure our interests are reflected in Bonneville's process and their rationale for joining a market.
And it will have consequences for both our power contracts and the next contract in our own remarketing of our resources.
I can jump in, Paul, just to underscore.
So a lot of utilities in the region will be making this same decision.
Do we go to EDAM with the CalISO, or do we go to MarketsPlus?
And so this is kind of a big deal.
Like, nobody wants to end up at the beta max equivalent of markets.
And so this is a decision that we'll be talking about more in the coming months and years as we move towards making this decision.
Some of you might remember that City Light made a similar decision before about the EIM, which is the real-time market, the hourly market.
And so now we're moving to the day ahead phase.
And then as the finance person in the room, I just jump in and say that City Lights exposure to the wholesale market is something where we need to, it's unavoidable.
We have to transact in the wholesale market because we need to balance electricity loads every hour of every day.
And so we have to be in the wholesale market.
But there is a big financial risk to the utility and to the city from our interaction in the wholesale market.
And if you kind of recall, the Western energy crisis now was over two decades ago, but that was a very big deal for city council at the time, City Light.
I think we were in the hole about $500 million.
We were in debt for some time.
And so this is a financial risk.
The markets have evolved tremendously over the last two decades.
And so that we're talking about these automatic markets where we use technology to balance is fantastic advancements.
So things have changed.
But at the same time, this is a part of our business that is sophisticated and risky and unavoidable.
And so coming up pretty soon, too, we'll be coming back with a policy update with respect to how we do wholesale risk management around our market interactions, and so there'll be a resolution coming.
That's a little bit of housekeeping.
We haven't updated it since, I think, for over a decade, and so you'll be hearing about that soon as well.
That's on the March 15th agenda.
We hope to have the wholesale energy risk management policy coming before you so I have a chance to see how we manage these, the risk of being in the market in terms of buying and selling.
And I've telegraphed this one as transmission, transmission, transmission.
The region's need for more transmission is really three drivers of this.
One is that the demand for electricity in the region is growing, both due to tech industry growth as well as building and transportation electrification that's driving more load across the region.
There's also a reduction in the operation of thermal power plants along the I-5 corridor, which is driving the need for more transmission from the eastern side of the mountains to the western side of the mountains, because the new resources that we're bringing onto the grid are from wind and solar that are located generally east of the Cascades, where there are better wind and solar resources.
For Seattle City Light, this demand growth comes in the form of increased load that us as the utility have to serve.
Our expectation is over the next 10 years, our need for energy over the course of the year will increase by about 10%.
And the need to meet peaks, which is the, you know, top demand in any given hour for electricity, is expected to increase about 20% above what we just saw in January during that winter storm event by 2035, that we'll need to increase our service for events like that by about 20%, which is a significant increase in our need for transmission and resources to serve that load within the city of Seattle.
And that because, as we saw in the earlier maps, the Bonneville Power Administration has the transmission network that serves east and west of the Cascades.
We have to work with them and advocate and advance policies that are consistent with increasing transmission for load service in the region, including to us.
Anything you want to add?
I want to say, you know, for as far as Seattle's transition away from fossil fuels for our climate goals, this is all these numbers are all good news for the resource planning guy.
this means that we've worked to do to make sure that we can reliably serve Seattle's electricity needs in the future as they grow.
I just want to add, the Infrastructure Investment and Jobs Act that was passed in 2021 by Congress is an important resource for Bonneville Power Administration.
There's significant investment in transmission that was included in that legislation.
We're hoping to see real movement on the building of additional transmission that would be available for Bonneville customers.
And just to kind of follow up on this slide and tie it to things we've probably seen in the news, the need to interconnect additional resources is a constraint across the nation.
We see this in California and in Bonneville service territory, but also in the eastern interconnect as well, where the need to add resources is a constraint on the transmission system across the country.
Just like it would be difficult to kind of put a new road across the state, because you're cutting across different pieces of land with different owners, creating new transmission lines is very, very difficult because you have to move the electricity across on various farmland or different places, and there's a lot of work that has to be done to make that happen.
Yep.
All right, timelines.
Timeline, so this is the Bonneville Power Administration's policy decision timelines.
This is the work streams that Bonneville has ongoing within the region.
The provider of choice refers to what I called the post-2028, that's their term of art for this new contract.
And they are going through a record of decision process now.
They expect to issue some policy decisions early this year.
But that really just leads into a bunch of work around contract development.
And they are asking us to be ready to sign contracts by the end of 2025. On the kind of third stream here is the day ahead markets that we talked about and their timeline for trying to develop leanings within this spring and then have decisions later this year on what market to join.
For us, all of these are feeding into our own internal processes because Bonneville's decisions do weigh on our decisions on actions, specifically on what products to choose in the next contract and then how to engage in day ahead markets and regional market expansion.
So there's a lot of work associated with making sure that our positions are well advocated and well represented in all of these Bonneville Power Administration processes.
I'll just add, so when we, before we sign the contract, we will be coming back to the council for approval for that contract in 2025. And then the other one is the day ahead market, which we would, when we choose which day ahead market City Light will join, that will come to the city council as well.
We're anticipating possibly...
later in 2024 or early 2025. Again, as both my colleagues said, where Bonneville chooses to go will have impact on us, and so we'll need to have a really good signal about where Bonneville is going to be going in terms of which day ahead market they'll choose.
And I'll just associate it with this.
We had a list of the issues to start this section and a lot of them have processes that overlap with this.
One of them is residential exchange.
There are a bunch of other ongoing work streams with both Bonneville and at City Light to make sure the city's interests are advanced.
Can you explain residential exchange?
I can explain residential exchange in, like, the most basic of terms, but part of the federal statutes associated with the Bonneville Power Administration makes sure that all customers in the region, not just preference customers, get benefits from the federal government's investment in our infrastructure, and residential exchange is one of those mechanisms where benefits accrued from having federal investment in the region go to customers of investor-owned utilities as well.
Would that do it?
Okay, John.
I've just mentioned that because Puget Sound Energy, which is one of our investor-owned utility in our area, is one of those that benefits from the residential exchange.
So that's beginning to heat up, and then will be another issue that we'll be involved in.
But no decision coming to the city council on that.
Okay.
All right.
That's it.
We're happy to take questions and questions.
Any questions?
Council Member Saka?
Yeah, thank you, Chair Wu.
So yeah, I have a fair amount of questions.
I don't even know where to start.
But maybe I'll just ask a couple and then see if my colleagues have any other questions and then pile on, finish later as needed.
But thank you very much for this rather insightful presentation.
I guess going back to, so we'd like to better understand the sources of the power for BPA.
So it sounds like it's primarily dam power across 31 federal dams.
There's a slide there from the Seattle Times map.
And it sounds like some nuclear as well.
We'd love to understand the breakdown of that.
There may or may not have been a slide on the breakdown, but what are all the various categories and sources of power for BPA?
Do you want me to go?
Yeah, so it's 83% hydro, 15% nuclear, and 2% other resources, which tend to be some small contracts for wind, biomass, and stuff like that.
Part of the non-specified in this graphic is associated with balancing purchases and sales in the day-ahead market.
So just like Seattle City Light, when our resources don't exactly match our load, we either have to sell or buy from third parties in the region.
to make sure we can meet our load in a given hour.
And Bonneville does that as well.
And that ends up as part of our resource mix.
How does that current allocation of sourcing align or not with the city's climate goals?
Yeah, we can, I think Maura can help me speak to that.
But it is, you know, part of the mix that we show on here is the cleanness and low emissions of that.
And one of the reasons we're advancing our interests in the provider choice process around emissions is to make sure that that portion of service from unspecified meets our goals and expectations.
And we're trying to influence their policy to make sure that they, like us, are trying to avoid as many emissions in the region as possible.
That's part of the advocacy we do is really making sure that Bonneville stays a clean energy provider.
I'll just mention that the nuclear that we get ends up being about 4% of our load is met with the nuclear power through that Bonneville contract.
Again, carbon emission free as nuclear is.
You mentioned that one of the benefits of being able to purchase power from BPA is that we're able to, as a public utility provider, we are able to purchase that power at cost.
And so how are we passing that cost savings on to our own customers and end customers?
Sure.
So, you know, the low cost that we're able to get power from BPA for that 36% of the electricity in our resource stack gets passed through straight to our customers.
It's one of the reasons why Seattle can have rates as low as we do is because of the power we get from Bonneville's low cost and because the power that we generate at our own facilities relatively low cost compared to what other utilities across the country who might have coal or natural gas might have to pay to generate their electricity.
So it's definitely a factor in Seattle having pretty low rates compared to other urban areas across the country.
Thank you.
I'll stop and see if my colleagues have any comments or questions.
Are there any other questions or comments?
I guess two things.
Can you talk a little bit about, you mentioned multilateral negotiations that are happening with 100 other cities or so.
Can you talk a little bit about that process and when you anticipate, it sounds like if you're gonna be coming before us next year to sign a contract that that is well underway already.
So can you talk a little bit about where that process is headed?
And then you mentioned that I think you said at the next committee meeting you'll be coming back to talk about the wholesale market risk.
And so I'm interested to know how that issue plays into the contract negotiations as well.
if it does.
Yeah, on the timeline, so this graphic shows the provider of choices, that big multi-party process to determine what products Bonneville will offer.
It's been ongoing for at least three years to set up the negotiations, the process.
And I try to avoid the word negotiation because it's a stakeholder-driven process where the Bonneville Power Administration's administrator gets to issue a decision on what to offer.
And I mentioned it's 130 different people who ultimately buy from, but a lot of the work for some smaller utilities is done primarily through trade organizations.
So that process is largely through an aggregation of trade organizations representing a large volume of those customers and then utilities like Seattle City Light, Snohomish and other public preference customers, public power customers advocating for their own interests.
You can answer the second question.
Sure.
And then relating to the wholesale risk policy, it relates to Bonneville and that both have to do with our power supply and how we interact in the wholesale markets.
But it's really more generally about The resolution that is currently in place, it had a pretty high administrative lift for council and council staff because coming out of the Western energy crisis in 2002, council felt like they needed to have reporting and oversight and approval of policies.
City Light didn't have a risk function and our wholesale team was a lot smaller and so the resolution called for a lot of council oversight over City Lights operations in that space.
And over the last two decades, just as we have matured and things have evolved, you know, and City Council has many other high-risk issues and interesting policy issues, that you guys are taking on.
We're just kind of making an adjustment so that it better reflects the landscape that we're all operating in here in 2024. Thank you.
I'll just mention, so Paul mentioned the trade association.
So the Public Power Council is the trade association that we participate in along with the other public utility customers of Bonneville.
And they do have quarterly policymaker forums that they're virtual.
So you or your staff are welcome to join those.
I usually send that information out.
out to Eric McConaughey.
But I will make sure that all of you get that if you want to kind of tune in to some of these decisions.
And they're oriented towards policymakers who aren't going to be involved in the sort of day-to-day operations.
So I think it's at the right level that is able to help you stay along with these decisions as they're being made.
That's helpful.
Thank you.
Are there any other questions?
Do you want to continue?
Yeah, thank you, Madam Chair.
So one thing that was mentioned was that we're going to need to increasingly rely on wind and solar sources to meet our demands.
And so just be curious to better understand beyond the 2028 negotiations with BPA, like how are we planning for that now?
And, you know, when is that need, like, When is that gonna be anticipated?
Is there like a drop-dead date where like, oh, we need now?
How are you all planning for that right now?
Yeah, I can go into process and then I can go into some quantities and timelines if that is helpful.
So the process for understanding our resource needs is through this integrated resource planning process, which we go through every two years.
We at least update our resource plans to reflect our current load plans our load forecast our understanding the demand needs of the city and then trying to find the optimum the the best portfolio of resources to serve that changing load our last update to that integrated resource plan was in 2022 we're working on a progress report that will come to council this year but in that 2022 report we did identify the need for around 400 megawatts of a combination of wind and solar resources by 2030. We do expect, and we have seen our load forecast increase since when we did that study in 2022. So we are expecting that that need for resources will increase beyond that 400 megawatts in the next update.
Can I follow up on that?
So I know in 2021, I think, and 2022, load was down because...
Everybody was at home.
Commercial, and most of the power that you have is for commercial as well.
Do I understand that right?
Yeah, so it was down because of the pandemic.
Nobody was going shopping or doing anything else.
I'm assuming that things are starting to pick back up.
So can you maybe talk a little bit about that and how it, presumably we are back.
So I'll speak maybe anecdotally and then to our overarching trends.
We saw in this most recent winter event a peak load of 2,027 megawatts, which may not mean much to y'all, but that is the highest peak we've seen since 1990.
That was over Martin Luther King Day weekend when it was really cold.
Yep, so that I think is an indication of the electrification of some loads in the city and some increased heating electrical heating loads in the city.
Our load forecast team does a lot of work to understand end uses within the city and they're part of their ongoing forecasting is understanding as we have building electrification and transportation electrification.
how that peak and how that load will continue to grow in the future.
And I mentioned the stat that that load forecast expects it will have an increase in peak loads of about 20% by 2035. So I just mentioned the 2,000 megawatts.
We expect to have a peak of 2,500 megawatts.
or 2,400 to 500. We end up forecasting with a lot of precision, but it's in that range, which is a significant increase on the electric needs, the energy needs that City Light serves in the city.
And that drives to the need for transmission to make sure we can get those resources that we were identifying through those plans to serve the city.
So you mentioned that 10% of, well, we're going to grow by approximately 10%, need to grow our sourcing maybe by 10% to meet the demand.
But to meet the demand spike forecast, 20%.
So there's a delta there.
Can you better describe or help me better understand rather What's specifically driving the, like, what factors are specifically driving that demand spike and, you know, account for the variance there?
And then also, so, for example, like, I understand on one of those other slides it says, well, the tech industry is kind of, you know, one of the factors that's kind of driving the overall demand.
But, like, what's specifically accounting for that delta there?
Is it, for example, increasing reliance on electric heating sources or like what other factors are driving that?
Yeah, absolutely.
You want me to keep going?
Yeah.
So on the what's driving it, it's largely electrification of buildings and transportation.
And my analogy that I would draw is you ever been to like a wave pool?
If you add more water to the wave pool, your waves end up bigger, right?
is kind of what's happening to us.
So the 10% relates to how much water is in the wave pool, and then the 20% relates to how big the waves are because you have more water in the wave pool.
And that delta, right, as you're growing electrification loads is driving a higher peak and drives that delta between the 10 and 20%.
And that's largely driven by building electrification.
Heating is a big driver.
Our peak continues in the forecast to be electrical heating in the winter.
But we are seeing as part of our energy needs an increased peak in the summer because of air conditioning loads increasing.
I could keep going on this.
I just want to mention on the electrification, transportation electrification, you know, we think about individual passenger EVs, but really what the driver is.
You look at the Washington State Ferry System is going to be electrifying the big ferries going across the Sound.
We've had a partnership with King County Metro Transit for several years, and they already have electric...
transit buses on the route.
In fact, there's a groundbreaking for the electric infrastructure necessary, the charging infrastructure necessary to continue their commitment to fleet electrification.
Sound Transit's recently announced that they're going to be electrifying their fleet.
We've got drayage trucks at the port.
We've got a new shore power connection going in at Pier 66 so that all three Cruise ships will be on shore power when they're plugged in.
Those used to be when you plugged in a cruise ship, it's plugging in one or two hotels.
Now it's plugging in four or five hotels because those cruise ships are so big.
Those are big macro loads.
Paul talks about the waves.
When they plug in, it's a big surge on the system, and we have to plan for that.
level of demand, even though it's not a consistent 24-7 load.
So those are the things we're planning for.
It's exciting.
It's about reducing carbon emissions, which is what we are committed to at the city.
And so it's exciting, but it's also a challenge for us as the electric utility to meet those growing loads on our system.
That's terrific.
Thank you for sharing that.
And, yeah, those are all important sources of, you know, as we build and expand and grow our EV charging infrastructure, all those ferries, buses, port electrification efforts.
But, you know...
Single occupancy vehicles aren't going away anytime soon either.
And so, you know, as chair of the Transportation Committee, you know, we'll be looking for opportunities to make investments to allow for Teslas and Ford Mach-Es and, you know, personal vehicles, the like.
And so I hope that's part of your forecasting as well.
Yes, absolutely.
Awesome.
Thank you.
Great.
So I do have a question.
Rates for Sales to the Light just went up, and 1% surcharge went to cover costs from BPA.
Was that because of low demand or because of the market?
Yeah, that was from the BPA contract.
So BPA sets their rates, and then we have a rate pass-through because it's something that...
and nobody at the city of Seattle can control.
And so we don't have, we don't go through like a special process to change the rates.
We have a pass through where we take the, what we budgeted for, for BPA contract costs and what the contract cost comes back at and then pass that through in rates.
And so that rate pass through the 1% was from that.
Paula, tell me if I'm wrong, but I believe that it was, that one had to do with us having the opportunity to take more power from Bonneville than we had budgeted for.
And so it is a right pass through, but it's a good news story because it meant that we were able to take more of the low cost BPA power from that contract.
And so that was what caused that rate increase.
But then overall, it helps us keep our costs down, if that makes sense.
It will indirectly help the RSA surcharge go away faster.
Buying power from Bonneville is cheaper than buying power on the market if we can get their power.
Do we have any influence on Bonneville's choice in which market they choose?
It is an area where we continue to advocate for our interests and try to work with our partners in the region to make sure that choice is reasoned and aligned with our interests.
We don't have, we're one of 130. We are the second largest power customer at Bonneville, but we don't have a, we have influence and we are advocating and trying to elevate our influence in that process, but we aren't, we won't drive them to a specific decision.
That makes sense.
In terms of transmission system expansion, generator interconnection, how does that affect us here in Seattle or with Seattle City Light?
So as I mentioned, like 75% of our power comes through the transmission system on Bonneville.
That percentage is likely to increase as we increase resources to serve our load for load growth.
So that is a, we need Bonneville as a partner in the region for transmission.
to invest in the transmission infrastructure in the region to make sure we can get resources from wind and solar and serve load in Seattle with it.
So they're critical to making sure that the resources that are cost-effective for us can interconnect to the system, and then we can get transmission from those sources to our load.
Great.
Colleagues, are there any further questions?
Okay, if not, I look forward to seeing you at our next meeting in two weeks to learn more about market risk.
Thank you very much.
Thank you.
Thank you very much.
So we have reached the end of today's meeting agenda.
If there are any further business to come before the committee before we adjourn.
Hearing no further business to come before the committee, we are adjourned.
Thank you.