Exhibit to Agenda Item #1b - SMUD

Powering forward. Together.

Board Finance & Audit Committee Meeting and Special SMUD Board of

Directors Meeting – Budget 2019

Wednesday, November 7, 2018 scheduled to begin at 5:00 p.m.

Customer Service Center, Rubicon Room

Exhibit to Agenda Item #1b

Energy Operations

2019 Proposed Budget & Initiatives

Paul Lau

Chief Grid Strategy & Operations Officer

November 7, 2018 3 Board Finance & Audit Committee Meeting and Special

SMUD Board of Directors Meeting - Budget 2019

Chief Grid Strategy & Operations Officer

Note: SMUD resources support

Business Unit processes regardless

of organization/functional affiliation.

CHIEF

WORKFORCE

OFFICER

CHIEF

LEGAL

OFFICER

Dir, Reliability

Comp & Coord

Dir, Accounting &

Controller

Director, Planning,

Pricing & Ent Perf

Director, Treasury

Director, Facilities

& Security Ops

Dir, Substn,

Telecom, & Mtrg

Director, Power

Generation

Dir, Commercial

Development

Dir, Procurement

Whse & Fleet

Dir, HR, Diversity

& Inclusion

Dir, Org Capability

& Effectiveness

Dir, Environmental

Safety & Real Est

Deputy General

Counsel

BOARD OF DIRECTORSSpecial Asst to Board of Directors

Director, Audit

Services

CHIEF GRID

STRATEGY &

OPERATIONS

OFFICER

Director,

Grid Operations

Director,

Grid Planning

Director, Energy

Strategy, R&D

Dir, Distribution

System Ops

CHIEF

CUSTOMER

OFFICER

Director,

Revenue Ops

Dir, Marketing &

Corp Communic

Dir, Adv Energy

Solutions

Dir, Retail Prod

Del & Sales

CHIEF

INFORMATION

OFFICER

Dir, IT Infrastruc

& Operations

Director, Energy

Trading & Contract

Manager, Executive Department

Director, Resource

& New Bus

Strategy

CHIEF

FINANCIAL

OFFICER

Dir, IT

Applications

Dir, IT Strategic

Initiatives

Dir, IT Information

Security

Deputy General

Counsel

Dir, Customer

Care

Director, Strategic

Services

Director, Line

Assets

Dir, Community

Energy Svcs

CHIEF EXECUTIVE OFFICER

& GENERAL MANAGER

CHIEF ENERGY

DELIVERY

OFFICER



Energy OperationsBusiness Segments and Functions

Commodity

Procurement &

Sales

Energy Strategy,

Research &

Development

Resource & New

Business Strategy

Transmission Planning

& Distribution Planning

Power System

Operations & Dispatch

Generation

System Economic

Dispatch for Load

Distributed Energy

Resources StrategyResource Planning

Transmission and

Distribution

Maintenance Planning

Energy Management

SystemEnergy Trading Climate Change

New Business

Development

System Protection and

Control

Power Operations

EngineeringPower / Gas Contracts

Renewable and

Distributed GenerationStrategic Planning

Electrical Design

Standards

Distribution System

OperationsGas Reserves

Energy Storage & Grid

Modernization

PSO/DSO Training

Distribution

Management Systems

(GIS/ADMS)

Manage Commodity

Risk

Energy Efficiency &

Demand Response

Energy Imbalance

Market

Distribution Operations

Engineering

Optimize Energy

Operations AssetsElectric Transportation

Grid Planning & Operations

$62.7

$5.1

$3.1

$24.0

$-

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

2019 Proposed

$M

Keeping the Lights On Optimization/Operational Excellence

Risk Mitigation Embracing the Future



2019 Proposed Budget by Theme*

$94.9M

*Excludes Allocated costs



Keeping the Lights On

▪ Reliability and Compliance

▪ Regulatory compliance with all applicable standards (NERC,

WECC, CPUC General Orders)

▪ Transition reliability coordinator services to CAISO

▪ Load serving capability

▪ Transmission and Substation projects: 200MW

▪ Additional distribution capacity

▪ Distribution capacity: Adding 45MVA

▪ Proactively addressing existing SMUD facilities conflicts to

support development

▪ Increased DER integration through grid modernization

▪ Communications infrastructure upgrade

(SD-4)



Optimization and Operational

Excellence

▪ Wholesale market evolution

▪ Participate in CAISO’s Energy Imbalance Market (EIM)

▪ Energy Trading and Risk Management (ETRM)

▪ Delivers portfolio transparency for Energy Trading, Energy

Settlements and Commodity Risk in real time

(SD-2, 3)

▪ Renewable Portfolio Standard (RPS) Optimization

▪ Determine best mix of different categories of renewables and

existing surplus credits

(SD-9)



Embracing the Future

▪ Integrated Resource Plan

▪ CEC IRP filing in April 2019 as required by SB350

▪ Implementation of Board adopted IRP

(SD-9)

▪ Pursue new net revenue opportunities

▪ Leverage existing partnerships and new opportunities

▪ NEC/STI, OSI ADMS/DERMS

▪ Explore electrification and distributed energy resources

▪ DER as a Service

▪ EV Charging Infrastructure as a Service

▪ Fleet Electrification as a Service

▪ Asset optimization and managed services

(SD-19)

▪ Foundational technology

▪ Advanced Distribution Management System (ADMS)

▪ Distributed Energy Resource Management System (DERMS)

(SD-4, 10)




▪ Develop, evaluate and deploy technology and innovative business

models to maximize shared value for SMUD, our customers and

community

▪ Energy Storage▪ Launch four more AB 2514 storage pilots (total 6), including Res

New Construction, Thermal Energy Storage, and StorageShares

▪ Test “Second-Life” batteries with PV & Ultra-Fast EV Charging

▪ Building Electrification▪ Comprehensive retrofit programs

▪ Integrated Residential New Construction

▪ Work with local governments on “reach” codes

▪ Expand low-income program to include electrification measures

▪ Energy Efficiency▪ EE Portfolio shift to carbon metric and peak reduction to maximize

IRP alignment

(SD-2, 4, 5, 7,

9, 10)




▪ Develop, evaluate and deploy technology and innovative business

models to maximize shared value for SMUD, our customers and

community (cont’d)

▪ Electric Vehicles▪ Transition “Free Fuel for 2 Years” to Statewide POP Program

▪ Support Autonomous Testing for Open Standards (ATOS) Lab

▪ EV Charging “Powered by Greenergy” – LCFS Revenue Opportunity

▪ Explore New Business Models – Charge Anywhere, Try EV

Packages, Pay As You Save

▪ Leverage investments to expand access – Increase vehicles &

charging for low-income through VW and SMAQMD programs, pre-

owned EVs; Grant Application support for key community partners

▪ Distributed Generation▪ Launch redesigned Res & Commercial SolarShares, including

Developer SolarShares

▪ Launch/Expand North Franklin Community Energy Model

(SD-2, 4, 5, 7,

9, 10)



Energy Operations2019 Proposed Budget

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

2018 Plan 2018Forecast

2019 Prop 2018 Plan 2018Forecast

2019 Prop 2018 Plan 2018Forecast

2019 Prop

O&M Public Good Capital

$M

Keeping the Lights On Optimization/Operational Excellence Risk Mitigation

Embracing the Future Allocated Costs

$79.2 $79.4 $84.5

$13.0 $10.6 $11.4$14.7 $12.2 $15.6



Energy OperationsCommodity Budget – Key Assumptions

2018

Budget

2018

Forecast

2019

Proposed

Retail Sales to Customer (GWh) 10,472 10,370 10,348

Peak System Demand (MW) 2,889 2,944 2,855

Supply to Meet All Sales (GWh) 10,913 10,987 10,835

SMUD Renewable

11%

Large Hydro14%

Thermal 46%

ST Contracts and Other

3%

Other LT Contracts

7%

Renewable LT Contracts

19%

2019 Proposed

SMUD Renewable

9%

Large Hydro14%

Thermal 49%

ST Contracts and Other

8%

Other LT Contracts

7%

Renewable LT Contracts

13%

2018 Budget



Energy OperationsCommodity Budget – Key Assumptions

Cost

($Million)

2018

Budget

2018

Forecast

2019

Proposed

$ Change

Proposed to

Forecast

Power Cost $212.4 $228.0 $232.0 3.9

Transmission Cost $28.8 $32.7 $30.5 (2.2)

Gas Cost $193.9 $165.5 $185.6 20.1

Total Commodity Cost $435.1 $426.17 $448.1 $21.9

Commodity Price2018

Proposed

2018

Forecast

2019

Proposed

$ Change

Proposed to

Forecast

Power ($/MWh)* $78.2 $80.79 $83.07 $2.27

Gas ($/mmBtu)** $3.91 $3.59 $3.73 $0.14

*Total Power Costs ($/MWh) = (Power Costs + Transmission Cost) / (Expected Supply Requirements – SMUD Generation)

**Gas ($/mmBtu) = (Fixed Gas Cost + Variable Gas Cost) / Total Gas Purchases (Digester + NG)

To meet the supply needs, the costs are:



Energy Operations2019 Public Good Budget Summary

$0.5M 3%

$0.5M 4%

$0.7M 5%

$1.0M 6%

$2.1M 14%

$2.7M 17%

$3.0M 19%

$5.1M 32%

Electrification

Renewables & Climate Change

Demand Response

Grid Modernization

Distributed Generation

Energy Efficiency

Electric Transportation

Energy Storage

Energy Strategy Research and Development $15.6M (net)

Total SMUD Public Good budget is $93.9M. Board Authorized amount is $61.3M ($45.7M in Customer and $15.6M in Energy Operations).



Energy OperationsRenewable Energy Goals / Status



Energy OperationsEnergy Efficiency Portfolio Board Goals



Transmission Agency of Northern

California (TANC)

▪ Created in 1984 as joint powers agency.

▪ Project Manager and majority owner (87%) of California Oregon

Transmission Project (COTP – 500KV transmission line from Captain

Jack to Tracy).

▪ Membership consists of 15 Northern California Public Agencies.

▪ SMUD is 38.5% participant in TANC, its share increasing due to

the layoff with Santa Clara and Northern California Power Agency

(NCPA) member agencies that was effective July 1, 2014.

▪ 2019 TANC COTP/SOTP Budget = $47.0M / SMUD share = $17.4M

(2018 Budget = $48.1M / SMUD share = $17.8M ).

▪ WAPA O&M and TANC forecast litigation costs down slightly

▪ Included as part of the SMUD Power Budget.



Balancing Authority of Northern California

(BANC)

▪ Created in May 2009 as joint powers agency.

▪ Membership includes: SMUD, Modesto Irrigation District (MID), City of

Redding, City of Roseville, City of Shasta Lake and Trinity PUD.

▪ Provide Balancing Authority (BA) functions for members.

▪ BANC went operational in May 2011.

▪ 2019 “Base” BANC Budget = $2.3M / SMUD share = $1.6M (2018

Budget = $2.0M / SMUD share = $1.3M) (Does not include EIM costs)

▪ Increase in shared EMS/EMC/BCC Costs

▪ Included in the Grid Operations budget

Exhibit to Agenda Item #1b - SMUD

Documents

Transcript of Exhibit to Agenda Item #1b - SMUD