Resolution No. 2014-065RESOLUTION NO. 2014-65
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON APPROVING AND ADOPTING THE VERNON GAS &
ELECTRIC DEPARTMENT RESOURCE ADEQUACY PLAN FOR
2015, WHICH INCLUDES THE PEAK DEMAND FORECAST,
THE PLANNING RESERVE MARGIN, THE QUALIFYING
CAPACITY CRITERIA AND THE QUALIFYING CAPACITY
FROM SUCH RESOURCES, CITY'S RESOURCE ADEQUACY AND
SUPPLY DATA AND APPROVES THE RESOURCES USED TO
SATISFY THE CALIFORNIA INDEPENDENT SYSTEM
OPERATOR'S TARIFF REQUIREMENTS
WHEREAS, the City of Vernon (the "City") is a chartered
municipal corporation of the State of California that owns and operates
a system for the generation, purchase, transmission, distribution and
sale of electric capacity and energy; and
WHEREAS, the City has executed a Metered Subsystem Agreement
("MSS Agreement") with the California Independent System Operator
("CAISO"); and
WHEREAS, the City is considered a Load Serving Entity ("LSE")
under certain terms of the CAISO's Tariff ("Tariff"); and
WHEREAS, the Tariff requires each LSE to establish and submit
to CAISO an annual Resource Adequacy Plan, which includes a peak Demand
Forecast, a Reserve Margin, Qualifying Capacity Criteria, and a Supply
Plan; and
WHEREAS, the Tariff requires each LSE to submit monthly
Resource Adequacy Plans and Supply Plans; and
WHEREAS, the City has reviewed the historical and expected
demand for and supplies of electricity within its distribution system,
including the likely peak demand for electricity within the City's
distribution system throughout 2015, the available generation and other
capacity to serve that demand, and constraints which might impact the
availability of capacity to serve the City's projected peak demand; and
WHEREAS, based upon that review, the City finds that the peak
demand for electricity within the City's distribution system throughout
2015 is likely to experience load growth of approximately 0% as
compared to the same months of the prior year; and
WHEREAS, based upon that review, the City finds that the
default 15% Reserve Margin set forth in the Resource Adequacy
provisions of the MRTU Tariff is sufficient for planning purposes; and
WHEREAS, based upon that review, the City finds that the
Qualifying Capacity Criteria specified in the City of Vernon Demand
Forecast for 2015, Planning Reserve Margin, Qualifying Capacity
Criteria and Annual Resource Adequacy and Supply Plan are sufficient
and appropriate to be used in determining the amount of Qualifying
Capacity needed to meet the City's projected peak monthly demand and
15% Reserve Margin.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF VERNON AS FOLLOWS:
SECTION 1: The City Council of the City of Vernon hereby
finds and determines that the above recitals are true and correct.
SECTION 2: The City Council of the City of Vernon finds
that this action is exempt under the California Environmental Quality
Act (CEQA), in accordance with Section 15061(b)(3), the general rule
that CEQA only applies to projects that may have an effect on the
environment.
SECTION 3: The City Council of the City of Vernon hereby
approves and adopts the Gas & Electric Department Resource Adequacy Plan
for Calendar Year 2015 (the "Annual Resource Adequacy Plan"), which
includes the peak Demand Forecast, the Planning Reserve Margin, the
- 2 -
Qualifying Capacity Criteria and the Qualifying Capacity from such
resources, the annual Resource Adequacy and Supply data, and the Resource
Adequacy resources that will be used to satisfy the City's Local Capacity
Requirement for 2015, which is attached hereto as Exhibit A.
SECTION 4: The City Clerk, or Deputy City Clerk, of the
City of Vernon shall certify to the passage, approval and adoption of
this resolution, and the City Clerk, or Deputy City Clerk, of the City
of Vernon shall cause this resolution and the City Clerk's, or Deputy
City Clerk's, certification to be entered in the File of Resolutions
of the Council of this City.
APPROVED AND ADOPTED this 21st day of October, 2014.
ATTEST:
A rats
C+-ty-Ci-8Q:k-/ Deputy City Clerk
1 IWWIIAI�q
oil-
- 3 -
Name: W. Michael McCormick
Title: Mayor /
STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
I, Ana Barcis ,e ly k / Deputy City Clerk of the City
of Vernon, do hereby certify that the foregoing Resolution, being
Resolution No. 2014-65, was duly passed, approved and adopted by the
City Council of the City of Vernon at a regular meeting of the City
Council duly held on Tuesday, October 21, 2014, and thereafter was duly
signed by the Mayor or Mayor Pro-Tem of the City of Vernon.
Executed this -�,b day of October, 2014, at Vernon, California.
(SEAL)
- 4 -
Ast Bm1'q
Cat-p-2�cic�/ Deputy City Clerk
EXHIBIT A
City of Vernon
Gas & Electric Department
Resource Adequacy Plan
Calendar Year 2015
Background:
The Resource Adequacy provisions of the CAISO's Tariff require the Scheduling
Coordinator ("SC") of a Load Serving Entity ("LSE") such as the City of Vernon to establish
and submit the following information upon approval from its Local Regulatory Authority.
(1) a Coincident Peak Demand Forecast for its load, (2) a Reserve Margin used for planning
purposes, (3) the Qualifying Capacity Criteria that will be used for determining qualifying
resource types and the Qualifying Capacity from such resources, (4) an annual and monthly
Resource Adequacy and Supply data, and (5) a list of the resource that will be used to satisfy
the LSE's Local Capacity Requirement and Flexible Resource Adequacy Capacity
Requirement' showing,
Staff has prepared this "City of Vernon Gas & Electric Department's Resource Adequacy
Plan for Calendar Year 2015 consistent with the CAISO Tariff requirements. The following
is a discussion of each of the CAISO Tariff requirements and how the City will meet each
requirement.
Coincident Peak Demand Forecast:
Vernon's municipal load resides within the CAISO control area. The CAISO, as the
balancing authority, has the responsibility for meeting reliability criteria established by the
Western Electricity Coordinating Council ("WECC"). As such the CAISO has entered into
agreements with various market participants including, but not limited to, Generators,
Scheduling Coordinators, Participating Transmission Owners, Utility Distribution
Companies, and Metered Subsystems ("MSS"), which impose certain responsibilities on
parties to establish a reliable system. One of those responsibilities is to have operating
reserves that meet the WECC minimum requirements.
The CAISO's goal in considering reserve requirements is to balance available capacity with
demand across the entire CAISO control area and, therefore, CAISO's primary concern is
with the time and amount of peak demand on the CAISO-controlled transmission system (the
"system peak"). In order to reduce demand during the period of the system peak (and,
On August 1, 2014, CAISO filed tariff amendments (Section 40.10) with FERC to establish a flexible resource
adequacy capacity requirement. CAISO proposed an effective date of November 1, 2014
therefore, to lower the peak demand on the transmission system), utilities generally offer
retail rate structures designed to encourage load shifting away from the on -peak period. Such
efforts are intended to achieve on -peak demand reduction and lower the need to build new
generation to meet peak demand. Vernon has adopted such a rate structure and has
succeeded in shifting the peak demand period for Vernon's system to a time that is generally
earlier than the time of the CAISO system peak.
Vernon's share of needed capacity to meet CAISO control area capacity requirements may
be established by determining the amount of Vernon's load that contributes to the CAISO
system peak. Vernon's load that contributes to the CAISO system peak is the City of Vernon
Coincident peak Demand. The process to establish Vernon's monthly coincident peak
Demand Forecast consists of the following three steps:
1. Establish Monthly Vernon System Peak Demand Forecast for 2014
To establish Vernon's System peak demand forecast, Staff performs an analysis on the
year to year change in the City's energy demand peaks during a five year period. Based
on the results of the analysis, staff forecasts a load growth rate for the coming calendar
year (Exhibit 1). This year's analysis shows that for the period between 2010 and 2014,
the City of Vernon system peak demand has decreased half a percent. Closer review of
Exhibit I reveals that the decreases in system peak demand from 2013 to 2014 is 1.572%.
Based on current load changes information projections available to the Department,
including the fact that no significant new development in the city is likely to be finalized
in 2015 that will lead to a significant increase in load, and in consideration of the recent
history of years of stagnation, Staff concluded no load growth forecast is appropriate for
calendar year 2015. Exhibit 2 shows the determination of the projected system peak
demand for 2015 that incorporates a no load growth. The projected system peak demand
for the City of Vernon is also shown below in Table 1.
Table 1
Projected
Load
2015
MW
January
171.75
February
175.80
March
174.86
April
,183.60
May
184.63
June
181.67
July
187.43
August
187.04
September
190.96
October
180.27
November
184.68
December
175.04
2. Establish Coincidental Peak Factor
The coincidental peak factor is the percentage of the City of Vernon's energy demand at
the time of the CAISO system peak demand. As set forth in Section 40 of the CAISO
Tariff, the coincidental peak factor for each month has been calculated and provided to
the City annually by the California Energy Commission (CEC). The monthly coincidental
peak factor is shown in column E of Exhibit 3.
3. Calculate Monthly Coincident Peak Demand Forecast
The City of Vernon's Coincident Peak Demand forecast is calculated as the mathematical
product of the City of Vernon's forecasted System peak demand and the coincidental
peak factor. This reflects the City of Vernon's projected demand at the time of the
CAISO system peak demand for each month. The monthly coincident peak Demand
Forecast is calculated and shown in Exhibit 3 for the period of January through December
2015. It is also shown below in Table 2.
Table 2
Demand
Forecast
2015
MW
January
132.2
February
137.1
March
134.6
April
,152.4
May
153.2
June
149.0
July
153.7
August
162.7
September
158.5
October
147.8
November
147.7
December
138.3
Reserve Margin for Planning Purposes
The Reserve Margin is the amount of Resource Adequacy Capacity that an LSE must
maintain above its coincident peak Demand Forecast. Historically, the City of Vernon has
established its Reserve Margin at 15%. Staff has recommended that the City Council
maintain the Reserve Margin at 15% for planning purposes. The 15% Reserve Margin was
used to establish the monthly Resource Adequacy obligation for the City of Vernon. The
monthly Resource Adequacy obligation is listed in Exhibit 3
Oualifying Capacity:
A Load Serving Entity must provide the CAISO with a description of the criteria that will be
used to determine the type of resources that can be used to meet its capacity obligation and
the amount of capacity (Qualifying Capacity) from such resources. Historically Vernon has
used the following criterion to determine whether a resource qualifies: it qualifies if Vernon
has a contractual right to the power or has an interruptible service agreement with a
customer. The five following resources are among those that meet this criterion and provide
Qualifying Capacity. The calculation for the amount of Qualifying Capacity the five eligible
resource types follows:
1. Palo Verde. Vernon Purchase Power Contract with SCPPA for 4.9% of SCPPA's
share of Palo Verde Nuclear Generating Station (Palo Verde) shall be eligible as
Qualifying Capacity. The power is scheduled as an import generally at Westwing
Substation through the CAISO's entitlement of transmission from Westwing to SP-
15.
2. Boulder Canyon. Contract NO DE-MS65-86WP39587 between United States
Department of Energy Western Area Power Administration Boulder Canyon Project
and City of Vernon, California for Electric Service shall be eligible to count as
Qualifying Capacity. The power is scheduled as an import at Mead Substation
generally through the CAISO's entitlement of transmission from Mead Substation to
SP-15. The amount of Qualifying Capacity will be based on the most current
schedule for the available capacity from the Boulder Canyon Project at the time of
submittal of the Resource Adequacy Plan.
3. Vernon Units. Generating units and system units (but excluding Vernon diesel
generating units) within Vernon's MSS including the Malburg Generating Station and
the City owned H. Gonzalez units, as reflected in Schedule 14 of Vernon's MSS
Agreement with CAISO shall be eligible to count as Qualifying Capacity. The
amount of Qualifying Capacity of such units will be based on the projected
dependable gross output capacity on a day when the ambient air temperature is 90
degrees Fahrenheit.
4. Other Units. All other capacity from a Participating Generator, a System Unit, or a
System Resource, as defined in the CAISO Tariff, shall be eligible as Qualifying
Capacity. System Resources, however, must have a firm transmission path from
source to the CAISO control area. Such criteria for firm transmission facilities over
the CAISO control area can be satisfied with the possession of a firm transmission
right from the CAISO on the path associated with the System Resource. Firm
transmission rights provide physical priority right to schedule over congested paths.
5. Interruptible Service Agreements. Interruptible Service Agreements with the City's
Electrical customers. Currently Vernon has an Interruptible Service Agreement
where the customer agrees to interrupt 12.65 MW of load within a 30 minute
notification. A period of interruption can occur upon notification from the
Independent System Operator (ISO) requiring the City to shed load or upon the
unscheduled outage of the Malburg Generating Station ("MGS") or any other
generating unit internal to the City's system.
Vernon will use the following scheduled outage criteria for determining the level of
Qualifying Capacity ("QC") of any resource.
Scheduled Outages
Time Period
Description of How Qualifying Capacity of Resources Is Counted
Summer
Any month where days of scheduled outages exceed 25% of days in the
May
month, the resource cannot be counted as Qualifying Capacity. If
through
scheduled outages are less than or equal to 25% of the days in the
September
month, the resource is counted as Qualifying Capacity.
For scheduled outages of less than 1 week, the resource is counted as
Qualifying Capacity.
Non -Summer
Months
For scheduled outages of 1 week to 2 weeks, the Qualifying Capacity of
the resource is prorated using the formula:
October
[ 1 - (days of scheduled outage/days in month) - 0.25] * MW = QC
through
The formula will allow resources to be counted at between 50% and
April
25% of what would otherwise be their Qualifying Capacity.
For scheduled outages over 2 weeks, the resource cannot be counted as
Qualifying Capacity.
Annual and Monthly Resource Adequacy and Supply data:
The CAISO Tariff requires that the scheduling coordinator of a load serving entity provide an
annual and a monthly Resource Adequacy Plan (Section 40.2.2.4) using the required
templates and submitted on the set schedules. Furthermore, the scheduling coordinator of a
resource providing resource adequacy must submit both an annual and monthly Supply Plan
(Section 40.4.7.1) using the required templates and submitted on the set schedules.
Therefore, the City of Vernon as a load serving entity and a scheduling coordinator for
resource adequacy resources must submit a Resource Adequacy and Supply Plan on the set
schedules. Staff has prepared the Annual Resource Adequacy (Exhibit 4) and Supply data
(Exhibit 5) for calendar year 2015. Staff will submit the monthly Resource Adequacy and
Supply data to the CAISO as they become due. The data to be submitted on the monthly
plans will be consistent with the Annual Resource Adequacy and Supply Plan and may be
adjusted for seasonal variations as well as load and resource changes. The monthly plan is
due to the CAISO 45 days prior to the beginning of the month.
Local Capacity Area Resources:
In accordance with Section 40.3 of the CAISO Tariff, CAISO annually publishes a Local
Capacity Technical Study that determines the amount capacity resources needed in the Los
Angeles Basin area that must be available to the CAISO.. Based on the Local Capacity
Technical Study, the CAISO allocates responsibility for Local Capacity Area Resources to
the Scheduling Coordinators of the LSEs.. The CAISO validates that the Scheduling
Coordinator list enough local resources in its Resource Adequacy data templates to satisfy its
obligation. Staff has prepared the Resource Adequacy data templates (Exhibit 4) which lists
the Resource Adequacy Resources including the Malburg Generating Station and the City
owned H. Gonzalez units that will be counted on to satisfy the Local Area Capacity
requirement for the City of Vernon.
Flexible Resource Adequacy Capaci
On August 1, 2014, CAISO filed tariff amendments (Section 40.10) with FERC to establish a
flexible resource adequacy capacity requirement. CAISO proposed an effective date of
November 1, 2014 so that the amendments will apply to resource adequacy showings
beginning with the January 2015 resource adequacy month.
The proposed tariff amendment requires LSEs to have sufficient resources that could ramp
up and down quickly and have the potential to start and shut down multiple times per day i.e.
flexible capacity. The need for flexible capacity is a result of the CAISO managing a greener
grid. The increase of variable energy resources and distributed generation has presented
significant challenges to grid reliability. These types of resources are projected to continue
to increase in the future which will create an increase in supply and load variability and
unpredictability within the CAISO system. In order for the CAISO to efficiently operate the
grid, it needs measures to ensure that flexible resources are economically bid into the CAISO
markets and as a result optimally dispatch them. The CAISO has determined the system-
wide flexible capacity needs on a monthly basis and has notified each LSE their monthly
flexible capacity requirement allocations for Calendar Year 2015. Exhibit 6 lists the City's
total flexible resource adequacy requirement by month. The CAISO has also established
three categories of flexible capacity resources and the requirements each resource must meet
in order qualify under a given category. The three categories are: (1) base ramping
flexibility; (2) peak ramping flexibility; and (3) super -peak ramping flexibility. CAISO
establishes the Effective Flexible Capacity of each resource and the category of flexible
capacity each will qualify for each compliance year. For Calendar Year 2015, the CAISO
has established 78 MW of category 1 base ramping flexible resources adequacy capacity for
Malburg generating station, and 5.75 MW category 2 peak ramping flexible resources
adequacy capacity for each H. Gonzales Unit. LSEs are required to include both an annual
and monthly Flexible Resource Adequacy capacity showings in the Resource Adequacy data
template. No annual showing is required for 2015 but the monthly showing will be due to
the CAISO on a specified date beginning with the January 2015 monthly showing.
Staff has prepared the Resource Adequacy data templates (Exhibit 7) which lists the
Resource Adequacy Resources including the Malburg Generating Station and the City owned
H. Gonzalez units that will be counted on to satisfy the Flexible Resource Adequacy
Capacity requirement for the City of Vernon.
EXHIBIT 1
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EXHIBIT 2
Exhibit 2
January - December 2015 Projected Load
Month
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(Actual City
System Peak
Load)
2015
Projected
System Peak
Load
A
B
C
1
Janua '14
171.75
171.75
2
Februa '14
175.80
175.80
3
March'14
174.86
174.86
4
A ril'14
183.60
183.60
5
Ma '14
184.63
184.63
6
June'14
181.67
181.67
7
Jul '14
187.43
187.43
8
Au ust'14
187.04
187.04
9
Se tember'14
190.96
190.96
Rctober'13
180.27
180.27
ovember'13
184.68
184.68
12
December'13
175.041
175.04
A Month
B Source: (City Historical System Peak Load Data)
C Actual Load for 2013 and 2014
EXHIBIT 3
Exhibit 3
January - December 2015 Resource Adequacy Requirement
Month
Vernon
System Peak
Demand
Coincidental
Peak Factor
Coincident
Peak Demand
Forecast
RA Capacity
Requirement
A
B
C
D
E
1
January
171.8
77.0%
132.2
152.1
2
February
175.8
78.0%
137.1
157.7
3
March
174.9
77.0%
134.6
154.8
4
April
183.6
83.0%
152.4
175.2
5
May
184.6
83.0%
153.2
176.2
6
June
181.7
82.0%
149.0
171.3
71July
187.4
82.0%
153.7
176.7
8
August
187.0
87.0%
162.7
187.1
9
September
191.0
83.0%
158.5
182.3
10
October
180.3
82.0%
147.8
170.0
11
November
184.7
80.0%
147.7
169.9
12
December
1 175.01
79.0%1
138.31
159.0
A Month
B Source: (Exhibit 1 Column E)
C Source: CEC
D Product of B and C
E Product of D and 116% (115% reflects Planning Reserve Margin)
EXHIBIT 4
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EXHIBIT 5
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EXHIBIT 6
Exhibit 6
January - December 2015 Flexible RA Requirement
Min. Base
Flexibility
Re uirement
Peak
Flexibility
Super
Peak
Flexibilty
Total Flexible
RA
Requirement
A
B
C
D
E
1
Janua '15
22
6
1
29
2
Februa '15
21
6
1
28
3
March'15
281
8
2
37
4
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29
8
2
39
5
Ma '15
17
7
1
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6
June'15
13
5
1
18
7
Jul '15
11
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1
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8
August '15
9
4
1
13
9
Se tember'15
17
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1
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10
October N 5
11
3
1
15
11
November'15
4
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5
12
December'15
0
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0
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A Month and Year
B Requirement for Category 1- Base Ramping Resources
C Maximum allowed use of Category 2- Peak Flexibility
D Maximum allowed use of Category 3- Super Peak Flexibility
E Total Flexible RA Requirement for City of Vernon
EXHIBIT 7
Exhibit 7
January - December 2015 Effective
Flexible
Capacity
Effective
Flexible
Capacity
Flexible
Capacity
Category
A
B
C
1
Malburg Generating Station
54
1
2
H. Gonzalez 1
5.75
2
3
H. Gonzalez 2
5.75
2
A Designated flexible resource
B Designated Effective Flexible Capacity
C Designated Flexible Capacity Category
TRANSMITTAL COMMUNICATION
CITY CLERK'S OFFICE
INTEROFFICE MEMORANDUM
DATE: October 23, 2014
TO: Carlos Fandino, Director of Gas & Electric
FROM: Deborah Juarez, Records Management Assistant
RE: Resolution No. 2014-65 — A Resolution of the City Council of the City of Vernon
Approving and Adopting the Vernon Gas & Electric Department Resource Adequacy Plan
for 2015, which Includes the Peak Demand Forecast, the Planning Reserve Margin, the
Qualifying Capacity Criteria and the Qualifying Capacity from Such Resources, City's
Resource Adequacy and Supply Data and Approves the Resources Used to Satisfy the
California Independent System Operator's Tariff Requirements
Transmitted herewith is a copy of Resolution No. 2014-65 referenced above, which was approved by
City Council on October 21, 2014.
Thank you.
Attachment
c: Efrain Sandoval
Resolution No. 2014-65
STAFF REPORT
DATE: October 21, 2014
TO: Honorable Mayor and City Council p�
FROM: Carlos Fandino, Jr., Director of Vernon Gas & Electric�C
RE: Establishment of the City of Vernon Gas & Electric Department's Resource
Adequacy Plan for 2015
Recommendation
It is recommended that the City Council:
Find that the approval of the City of Vernon Gas & Electric Department Resource
Adequacy Plan for 2015 referenced in this staff report is exempt under the California
Environmental Quality Act (CEQA) in accordance with Section 15061(b)(3), the
general rule that CEQA only applies to projects that may have an effect on the
environment; and
2. Approve the Resolution establishing the City of Vernon Gas & Electric Department
Resource Adequacy Plan for 2015 that adopts:
a. The approval of the coincident peak Demand Forecast for 2015;
b. The approval to retain the same 15% Reserve Margin for planning purposes;
c. The approval of the Qualifying Capacity Criteria that will be used for
determining qualifying resource types and the Qualifying Capacity from such
resources;
d. The approval of the City's annual and monthly Resource Adequacy and
Supply data; and
e. The approval of the Resource Adequacy resources that will be counted on to
satisfy the City's Local Capacity Requirement and Flexible Resource
Adequacy Capacity Requirement for 2015.
3. Authorize staff to submit the City of Vernon Gas & Electric Department's Resource
Adequacy Plan for 2015 and the Monthly Resource Adequacy and Supply data to the
CAISO.
Background
The California Independent System Operator (CAISO) as the electric grid operator is responsible
for maintaining a reliable electric grid. One of the keys to maintaining a reliable grid is to ensure
that the electric system has adequate resources it needs to meet its electric demand. To do this
the CAISO has established provisions in its Tariff that are intended to ensure that Load Serving
Entities (LSE), such as the City of Vernon, will secure sufficient resources to meet their
customer's energy demands. Pursuant to Section 40 of the CAISO Tariff LSEs must provide to
the CAISO annually a Resource Adequacy demonstration or plan. The Resource Adequacy
demonstration must include (1) a coincident peak Demand Forecast, (2) Reserve Margin, (3)
Qualifying Capacity Criteria, (4) an annual and monthly Resource Adequacy and Supply data,
and (5) a list of Resource Adequacy Resources that will be counted on to satisfy its Local
Capacity Requirement and Flexible Resource Adequacy Capacity Requirement'.
(1) Coincident peak Demand Forecast: is defined as the amount of the City of Vernon's
load that contributes to the CAISO system peak. This is calculated by first establishing a
monthly peak demand for the upcoming year. A monthly peak demand is established by
taking the latest highest metered energy demand for the month and applying the projected
load growth rate. Based on staff analysis, the projected load growth for 2015 is set at 0%.
To establish the monthly energy demand for 2015, Staff has used the most recent 12
month highest monthly energy demand and applied a 0% load growth. Once the peak
demand forecast is established, each monthly peak demand is multiplied by a coincident
peak factor to establish the monthly coincident peak demand forecast. The coincident
peak factor is calculated and provided to the City of Vernon annually by the California
Energy Commission. It is the percentage of the City of Vernon's energy demand at the
time of the CAISO system's peak demand. Mathematically, the Coincident peak
Demand Forecast for 2015 is equal to the most recent 12 month monthly energy demand
increased by 0% load growth and multiplied by the coincident peak demand factor.
(2) Reserve Margin: is defined as the amount of Resource Adequacy Capacity that an LSE
must maintain above its coincident peak Demand Forecast. Pursuant to the CAISO
Tariff, a LSE must establish a Reserve Margin of no less than 15%. Historically the City
of Vernon has established its Reserve Margin at 15%.
(3) Qualifying Capacity Criteria: a Load Serving Entity must provide the CAISO with a
description of the criteria that will be used to determine the type of resources that can be
used to meet its capacity obligation and the amount of capacity (Qualifying Capacity)
from such resources. The City of Vernon has elected to use the following resources to
meet its capacity needs and the qualifying capacity from each of them.
a) Vernon Purchase Power Contract with SCPPA for SCPPA's share of the Palo Verde
Generating Station. The qualified capacity shall be 4.9% of SCPPA share of the Palo
Verde Generating Station.
b) the contract between the United States Department of Energy Western Area Power
Administration Boulder Canyon Project and the City of Vernon. The Qualifying
Capacity will be based on the most current schedule for the available capacity from the
On August 1, 2014, CAISO filed tariff amendments (Section 40.10) with FERC to establish a flexible resource
adequacy capacity requirement. CAISO proposed an effective date of November 1, 2014.
Boulder Canyon Project.
c) the generating units and system units within the City of Vernon's electric system. The
amount of qualifying capacity of such units will be based on the projected dependable
gross output capacity on a day when the ambient air temperature is 90 degrees
Fahrenheit.
d) Capacity from a Participating Generator, System Unit or a System Resource as
defined in the CAISO Tariff.
e) Interruptible Service agreements between the City of Vernon and its electrical
customers. The qualifying capacity will be based on the contracted amount the electrical
customer has agreed to interrupt either by a request from CAISO or upon an unscheduled
outage of the Malburg Generating Station or any other generating unit internal to the
City's electric system.
(4) Annual and monthly Resource Adequacy and Supply data: each annual and monthly
Resource Adequacy and Supply data must be submitted to the CAISO on the established
templates and on the set schedule dates. The Resource Adequacy data templates shall
identify all of the qualified resources committed to meet the City's resource adequacy
obligations and the adopted Reserve Margin. The Supply data templates list only those
resources that the City owns or is responsible for scheduling with the CAISO. Monthly
Resource Adequacy and Supply data templates will be consistent with the data submitted
in the Annual Resource Adequacy and Supply data templates and may be adjusted for
seasonal variations in the City's load or changes in its contracted/owned resource.
(5) Local Capacity Requirement: On an annual basis the CAISO publishes a technical
study that determines the amount of capacity resources needed in the Los Angeles Basin
area that must be available to the CAISO. Based on this study the CAISO allocate the
amount of local capacity the City of Vernon must make available each month. The City
of Vernon must then include in its Resource Adequacy Plan the list of local resources that
will meet its Local Capacity Requirement. These resources must be listed and submitted
to the CAISO in the approved Resource Adequacy data template. The data templates will
includes the generating units and system units within the City of Vernon's electric
system.
(6) Flexible Resource Adequacy Capacity Requirement: On August 1, 2014, CAISO filed
tariff amendments (Section 40.10) with FERC to establish a flexible resource adequacy
capacity requirement. CAISO proposed an effective date of November 1, 2014 so that
the amendments will apply to resource adequacy showings beginning with the January
2015 resource adequacy month. The need for flexible capacity is a result of the CAISO
managing a greener grid. The increase of variable energy resources and distributed
generation has presented significant challenges to grid reliability. The CAISO
determines and allocates the flexible resource adequacy requirement to each LSE. The
proposed tariff amendment requires LSEs to have sufficient resources that could ramp up
and down quickly and have the potential to start and shut down multiple times per day i.e.
flexible capacity. LSEs are required to include both an annual and monthly Flexible
Resource Adequacy capacity showings in the Resource Adequacy data template. The
City of Vernon must then include in its Resource Adequacy Plan the list of Flexible
Resource Adequacy resources that will meet its requirement. These resources must be
listed and submitted to the CAISO in the approved Resource Adequacy data template.
Consistent with the CAISO Tariff requirements, Staff has prepared the City of Vernon
Gas & Electric Department's Resource Adequacy Plan for 2015 for City Council
approval.
Fiscal Impact
There is no known fiscal impact.
Attachments