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RIVERSIDE PUBLIC UTILITIES _ Board Memorandum PU 1� 11 I U XTIE5 BOARD OF PUBLIC UTILITIES DATE: May 18, 2012 ITEM NO: 10 SUBJECT: PUBLIC UTILITIES REVISED ELECTRIC RESOURCE ADEQUACY PROGRAM ISSUE: That the Board of Public Utilities consider adoption of a Revised Resource Adequacy Program governing the acquisition of adequate electricity to serve forecasted customer needs. RECOMMENDATION: That the Board of Public Utilities recommend that the City Council adapt by resolution the attached Revised Resource Adequacy Program. BOARD RECOMMENDATION: On April 27, 2012, the Finance Committee approved this item. BACKGROUND: Resource Adequacy refers to a utility's procurement of adequate power supply resources (i.e., capacity and energy) to serve its projected electric requirements, plus an additional amount to be held in reserve in case of unforeseen circumstances (e.g., unplanned transmission or generation outages). The City of Riverside first established its Resource Adequacy ("RA"} Program on May 23, 2006 through Resolution No. 21170 in response to California Independent System Operator Corporation ("CAISO") Tariff requirements regarding RA Programs, The City's current RA Program contains the fallowing elements: (1) an electric demand forecast; (2) Resource Adequacy standards, including appropriate reserve margins; (3) criteria for defining the type and quantity of resources that will qualify for meeting the RA requirements; (4) annual and monthly plans detailing how projected demand will be served by RA resources; (5) requirements for making RA resources available for use by the CAISO; and (6) RA compliance monitoring. In the past five years, the CAISO Tariff has undergone many amendments regarding the RA Program. Also, staff has gained additional practical experience regarding the RA Program and is hereby recommending some revisions to City's RA Program to reflect current conditions and eliminate provisions that are no longer applicable. The revisions are as follows: 1. Revise the annual RA Plan procurement obligation to (a) at least 100% of the City's forecasted non-summer monthly peak demands and (b) at least 115% of the City's forecasted summer monthly peak demands (July — September). As summer RA resources are traditionally in high demand, it is prudent for the City to procure such resources in the year prior to RPU's need to ensure availability; 2. Eliminate the preparation of a monthly energy plan. While initially (in 2006) it was prudent for the City to prepare monthly energy plans to ensure that the City has sufficient energy resources to cover 100% of the City's energy needs, this requirement is no longer necessary as a result of the