07-25-2016 BPU RPT 07 - Laserfiche WebLink

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W A I= R h N h R L Y I I F F -- RIVERSIDE PUBLIC UTILITIES Board Memorandum PUBLIC UTILITIES BOARD OF PUBLIC UTILITIES DATE: JULY 25, 2016 ITEM NO: 7 SUBJECT: UPDATE ON THE ICE ENERGY PEAK LOAD REDUCTION PILOT PROGRAM ISSUES: The item for Board of Public Utilities consideration is to receive an update on the Ice Energy Peak Load Reduction Pilot Program with Ice Energy Holdings, Inc. (Ice Energy) for implementation of the PLR pilot program using Ice Bear thermal energy storage (TES) for 2016. RECOMMENDATIONS: That the Board of Public Utilities receive and file this update on the Ice Energy Peak Load Reduction Pilot (Peak Load Reduction) Program. BACKGROUND: Assembly Bill (AB) 2514, signed into law on September 29, 2010, mandated that California publicly owned electric utilities consider establishing procurement targets for cost - effective energy storage technologies /devices by October 1, 2014. On September 5, 2014, and September 23, 2014, respectively, the RPU Board recommended and City Council approved, adoption of a zero megawatt energy storage procurement target, as none of the viable applications for energy storage solutions were cost- effective for the City at the time. Staff continued to investigate the various energy storage technologies available in the market. In 2015, Staff structured an agreement with Ice Energy to establish a Peak Load Reduction program using thermal energy storage, which was approved by the Board on January 23, 2015, and subsequently by City Council on March 3, 2015. The term of the Ice Energy agreement is five years. The Board requested that staff report back to the Board on the Peak Load Reduction program nine - months prior to the renewal of the agreement as to the effect of the agreement on peak -load reduction. The first opportunity to not renew the agreement occurs on September 30, 2016, which is 90 days prior to the start of calendar year 2017. Ice Energy is a privately -held company headquartered in Santa Barbara, California, and has recently moved its Operations, Research and Development Center to Riverside. Ice Energy provides TES -based energy storage solutions for utility applications. Its proprietary TES technology, Ice Bear, makes ice at night (off peak) and releases the stored thermal energy during peak hours for use in the cooling cycle of air conditioning (A/C) units. The Peak Load Reduction program was structured for five consecutive years starting in 2015. Each year, one Megawatt (MW) of peak load reduction is to be achieved. The City benefits from this program through: a) reduction of electricity peak demand and associated energy consumption; b) the consequential reduction in power procurement costs in the form of reduced electric capacity purchases during peak hours and reduced electric energy purchase costs due to lower priced electricity during off - peak compared to the on- peak hours; and c) relief to RPU's distribution peak system loading. In addition, RPU customers participating in the pilot program also benefit from improved energy efficiency