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The Power of Joint Action to Manage a Changing Industry

"The traditional electric utility service model has been shattered by the confluence of targeted public policies, the emergence of disruptive technology innovations, and the growth of non-traditional actors. However, as NCPA celebrates its 50th anniversary in 2018, at least one thing has not changed: the power of joint action."

It goes without saying that the challenges and opportunities in today’s electricity industry are vastly different than when the Northern California Power Agency (NCPA) was founded in 1968. The traditional electric utility service model has been shattered by the confluence of targeted public policies, the emergence of disruptive technology innovations, and the growth of non-traditional actors. However, as NCPA celebrates its 50th anniversary in 2018, at least one thing has not changed: the power of joint action. Through NCPA, our member utilities receive significant value working together to meet the evolving needs of their communities. As we reflect on 2017, not only did we see our agency grow by welcoming the City of Shasta Lake, we also saw the continued benefits of joint action, particularly in the areas of power plant operations, new services, and public policy advocacy.

From left to right, NCPA Vice Chair Roger Frith, who has been on the City of Biggs' city council from 2004 to the present, including as mayor (2008-16); NCPA General Manager Randy Howard; and NCPA Chair Bob Lingl, who is mayor of the City of Lompoc, where he has served on the city council since 2008.

2017 has been an excellent year for NCPA’s fleet of clean energy power plants. Our hydroelectric project has performed at record levels due to the heavy rain and snowfall we experienced over the last 12 months. The Geysers geothermal units continue to operate as among the most reliable geothermal power plants in the nation. Additionally, NCPA negotiated a significant gas transmission rate decrease—which took effect on September 1st—that will reduce the Lodi Energy Center’s costs to project participants by approximately $10 million for the rest of the fiscal year. Additional benefits from the federal hydropower resources were realized with the ongoing NCPA efforts to control spending and properly allocate the costs. These plants play a major role in providing our member communities with affordable and reliable electricity while meeting their clean energy goals.

NCPA was particularly active this year in providing new services to our members, and creating additional cost savings by expanding services to others utilities in the public power community. We integrated five new solar projects for the City of Palo Alto, and are the scheduling coordinator for each project. We executed a low-cost, long-term 17-megawatt solar contract for the Port of Oakland and the cities of Healdsburg, Lodi, Biggs, and Gridley. We made system upgrades that are allowing us to expand wholesale energy market services to new participants, including the Merced Irrigation District, Placer County Water Agency, Pioneer Community Energy, and East Bay Community Energy. We are also currently in the process of jointly acquiring the assets of the utility service organization Hometown Connections, Inc., which will offer more robust and cost-effective products and services to our member utilities.

NCPA’s legislative and regulatory advocacy efforts this year played a key role in advancing our agency’s public policy priorities. Our accomplishments include, among other things, stalling an 11th-hour attempt to substantially change the governance structure of the California Independent System Operator. We were also closely engaged in the cap-and-trade negotiations at the state legislative and regulatory levels. Specifically, we worked strategically with a coalition of electric utilities to secure the direct allocation of nearly 17 million greenhouse gas allowances to NCPA members—worth at least $400 million—from 2021 to 2030. Our success in the public policy arena is owed in great part to the involvement and advocacy of NCPA members, who do an outstanding job educating legislators and regulators on how certain policy changes will affect their communities.

As we enter NCPA’s 50th year of public service, I cannot help but think of the challenges and opportunities NCPA will face in the next 50 years. Technological innovation, public policy changes, and shifts in markets will undoubtedly transform the energy industry as we know it today. By working together to share our expertise, make joint investments, and promote the values of our communities, NCPA and our member utilities are well positioned to succeed in this changing environment. This is the power of joint action, which has been our strength in the past, and will continue to be our strength as we move forward.


Randy S. Howard
General Manager

Financials

NCPA_Financials.pdf
Reports on Audit of Combined Financial Statements — For the Years Ended June 30, 2017 and 2016

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