HomeMy WebLinkAboutAgenda Report - November 18, 2020 C-15AGENDA 6TEM Clo
15
CITY OF LODI
COUNCIL COMMUNICATION
TM
AGENDA TITLE: Adopt Resolution Regarding Evaluation of Energy Storage for Lodi Electric Utility
MEETING DATE: November 18, 2020
PREPARED BY: Electric Utility Director
RECOMMENDED ACTION: Adopt a resolution regarding the evaluation of energy storage for
Lodi Electric Utility.
BACKGROUND INFORMATION: Assembly Bill 2514 (2010), amended by Assembly Bill 2227 (2012),
was designed to encourage California to incorporate energy storage
into the electricity grid, as codified in Public Utilities Code (PUC)
Sections 2835-2839 and 9506.
The PUC requires that, by 2012, each local publicly owned electric utility (POU) initiate a process to
determine appropriate targets, if any, for the utility to procure viable and cost-effective energy storage
systems and adopt said targets, if determined appropriate, by 2014. On March 21, 2012, the City Council
adopted Resolution 2012-24 acknowledging Lodi Electric Utility's (LEU) obligation regarding energy
storage systems. On October 16, 2013, the City Council adopted Resolution 2013-183 regarding the
feasibility of energy storage and supporting staff's assessment that no cost-effective energy storage
systems were viable for Lodi at the time.
Each POU is then required to reevaluate its energy storage target determinations not less than every
three years and report to the California Energy Commission (CEC), any applicable adopted targets and
modifications to those targets as a result of the periodic evaluations. Each POU is also required to
submit reports to the CEC demonstrating that it has complied with any previously adopted energy storage
targets. On October 18, 2017, the City Council adopted Resolution 2017-196 once again determining,
based on an analysis completed in partnership with the Northern California Power Agency (NCPA),
Southern California Public Power Authority (SCPPA), and a contracted energy consultant, that no cost-
effective energy storage systems were viable at that time.
Earlier this summer, NCPA, on behalf of several utilities including LEU, contracted with the Smart Electric
Power Alliance (SEPA) to re-evaluate the costs and benefits of energy storage systems. This report
included information from technology assessments, market analyses, as well as costs and benefits for
implementing energy storage systems. SEPA's analysis concluded that no foreseeable battery cost
reductions or retail rate increases would make energy storage systems economical for LEU under current
market conditions. As such, LEU continues to maintain that energy storage is not a viable or cost-
effective technology to invest in at this time.
The Risk Oversight Committee received a report on the evaluation of energy storage systems for Lodi at
its October 15, 2020 meeting and recommended City Council approval of LEU's assessment regarding
the viability of energy storage at this time.
APPROVED:I
Steve Schwabau , 'y Manager
Adopt Resolution Regarding Evaluation of Energy Storage for Lodi Electric Utility
November 18, 2020
Page 2 of 2
FISCAL IMPACT: Not applicable.
FUNDING: Not applicable.
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Jeff ddrkheimer (Nov 2, 202013:05 PST)
Jeff Berkheimer
Electric Utility Director
PREPARED BY: Jiayo Chiang, Electric Utility Resources Analyst
RESOLUTION NO. 2020-272
A RESOLUTION OF THE LODI CITY COUNCIL REGARDING EVALUATION OF
ENERGY STORAGE FOR LODI ELECTRIC UTILITY
WHEREAS, pursuant to Assembly Bill 2514, as amended by Assembly Bill 2227, each
local publicly -owned electric utility (POU) must initiate a process to determine appropriate targets,
if any, for the utility to procure viable and cost-effective energy storage systems and adopt said
targets, if determined appropriate, by 2014; and
WHEREAS, each POU is then required to reevaluate its energy storage target
determinations not less than every three years and report to the California Energy Commission
(CEC), any applicable adopted targets and modifications to those targets as a result of the
periodic evaluations; and
WHEREAS, each POU is also required to submit reports to the CEC demonstrating that it
has complied with any previously -adopted energy storage targets; and
WHEREAS, on March 21, 2012, the City Council adopted Resolution No. 2012-24
acknowledging Lodi Electric Utility's (LEU) obligation regarding energy storage systems; and
WHEREAS, on October 16, 2013, the City Council adopted Resolution No. 2013-183
regarding the feasibility of energy storage and supporting staff's assessment that no cost-effective
energy storage systems were viable for Lodi at the time; and
WHEREAS, on October 18, 2017, the City Council adopted Resolution No. 2017-196 once
again determining, based on an analysis completed in partnership with the Northern California
Power Agency (NCPA), Southern California Public Power Authority (SCPPA), and a contracted
energy consultant, that no cost-effective energy storage systems were viable at that time; and
WHEREAS, NCPA, on behalf of several utilities including LEU, recently contracted with
the Smart Electric Power Alliance (SEPA) to re-evaluate the costs and benefits of energy storage
systems; and
WHEREAS, SEPA's analysis concluded that no foreseeable battery cost reductions or
retail rate increases would make energy storage systems economical for LEU under current
market conditions; and
WHEREAS, LEU continues to maintain that energy storage is not a viable or cost-effective
technology to invest in at this time; and
WHEREAS, the Risk Oversight Committee received a report on the evaluation of energy
storage systems for Lodi at its October 15, 2020 meeting and recommended City Council approval
of LEU's assessment regarding the viability of energy storage at this time.
NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council does hereby conclude
that, by adoption of this resolution, no cost-effective energy storage technology is viable to invest
in at this time for Lodi.
Dated: November 18, 2020
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I hereby certify that Resolution No. 2020-272 was passed and adopted by the City Council
of the City of Lodi in a regular meeting held on November 18, 2020 by the following vote:
AYES: COUNCIL MEMBERS — Chandler, Nakanishi, and Mayor Kuehne
NOES: COUNCIL MEMBERS — None
ABSENT: COUNCIL MEMBERS — Mounce
ABSTAIN: COUNCIL MEMBERS — None
/I 77zele— ,
JENNIFER CUSMIR
City Clerk
2020-272