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The Power of Joint Action to Manage a Changing Industry

"As we look forward to our next 50 years of public service, I am encouraged by the strength of our organization and our members’ commitment to the Agency’s success. Our industry is in a time of transition, with certain and substantial changes affecting our policies and operational realities. It is at such times that our collaborative approach helps us succeed..."

Since 1968, NCPA has demonstrated its strong commitment to helping its members deliver affordable, reliable, and clean electricity to their communities. 2018 was no exception. As we celebrated our 50th anniversary, we reflected on the significant milestones that our organization has accomplished to date and looked ahead to the many exciting opportunities that the future holds. Amongst our most significant accomplishments of the year were the strides made in the areas of new services, cost-containment, power plant operations, and advocacy.

In 2018, we integrated three new non-member customers into the NCPA scheduling portfolio. We are pleased to have started providing power management services to Pioneer Community Energy in February, East Bay Community Energy in June, and San Jose Clean Energy in September. While adding these new members, we also continued to manage the operational requirements of the Metered Subsystem Aggregation with a 98% accuracy.

Together with public power partners from across the country, we successfully closed the asset purchase of Hometown Connections, Incorporated. This will allow Members to affordably access a network of quality vendors that provide a broad range of services specifically tailored to public power utilities’ needs.

We supported agency and Member workforce development efforts by offering multiple training and development programs throughout the year. By offering these resources through NCPA, we were able to secure reduced pricing to help lower costs for members through economies of scale.

Our Power Management team facilitated various member compliance requirements and filings throughout the year, including the 2015-2017 Triennial Greenhouse Gas Compliance Surrender, Resource Adequacy Compliance, and Scheduling Coordinator Audit and Compliance Requirements. As renewable energy integration increased and wildfires impacted electric power delivery, we effectively managed Pool Member supply requirements to minimize exposure to market price volatility risk and help our members capture financial savings. NCPA enhanced its power management reporting and analysis offerings through NCPA Connect, providing members with access to the latest updates on NCPA’s market activities.

At our Hydro project, record storms and precipitation in the 2016/17 fiscal year left the project with more than overflowing reservoirs. Beaver Creek reservoir was inundated with sediment and out of commission. A major landslide at a Collierville power tunnel adit required extensive stabilization. The first half of the 2017/18 fiscal year was a busy time of recovery and heavy civil construction, as we dredged Beaver Creek Diversion and repaired the Adit 4 site. Extensive negotiations with NCPA’s insurance underwriters and the Federal Energy Management Agency resulted in recovery and reimbursement of most of these costs.

NCPA refunded the 2008 Series C Hydro bonds, saving the project participants $7.6 million over the life of the bonds. The Hydro project also received bond rating upgrades from Moody’s Investor Services and Fitch Ratings in 2018.

In September, we entered a major extended outage of our Collierville Unit 2 generator to replace its nearly 30-year old windings. The project returned to service at the end of 2018, with all maintenance successfully completed.

NCPA Solar Project 1 was launched to develop a fleet of community solar power plants within participating member territories. Construction on the projects will begin by the end of 2019. Participating members will benefit through the economies of scale in planning, development, procurement, and financing. Five NCPA members are currently participating, with the potential for more members to explore options in the future.

At the Geysers, we continued the longstanding record of providing members with reliable, clean energy. As a testament to its reliability, in the past year, more outage time was attributed to transmission line issues than to the plants themselves. We have projects planned or underway to improve plant efficiency to further extend the life of this valuable asset.

The flexibility of our Combustion Turbine projects was demonstrated this year, as they provided timely generation in coordination with intermittent renewable resources and market opportunity. In the past year, there were a record high number of starts among the units.

It was another eventful year at the regulatory agencies and the California State Capitol, and collectively, we shared in some very important achievements. NCPA was instrumental in protecting Low Carbon Fuel Standard credits for small and medium-size publicly owned utilities. Automakers and investor-owned utilities pressured the California Air Resources Board to redirect the majority of POUs’ program credits to fund a statewide rebate for new electric vehicles. However, with NCPA’s advocacy, the proposed regulation will allow small POUs to retain 100 percent of their credits and medium-size POUs to retain 80 percent of their credits through 2022. This outcome protects members’ ability to use proceeds earned through their participation in the program in a way that most effectively serves their communities.

NCPA was active on a number of key bills, and our advocacy helped to stymie proposals that would establish a new procurement mandate for geothermal and biomass resources, impose an energy storage procurement mandate on the California ISO, and alter the governance structure of the California ISO as a precursor to grid regionalization. We successfully advanced our own legislation to protect the investment our members made in natural gas plants in the wake of the electricity crisis, helping members contain costs during their transition to increase renewable energy procurement. With direct member engagement at the Capitol, we were able to ensure that statewide wildfire mitigation efforts incorporate local decision-making processes that take into account California’s diverse communities and allow utilities increased flexibility to implement practices that support public safety. Finally, we secured legislative amendments that limit financial liability risks associated with participation in joint powers agreements. Much of our success in the legislative and regulatory arena stems from the engagement of our members, who make integral contributions to our grassroots advocacy efforts by directly interfacing with policymakers and educating them on impacts to their communities.

As we look forward to our next 50 years of public service, I am encouraged by the strength of our organization and our members’ commitment to the Agency’s success. Our industry is in a time of transition, with certain and substantial changes affecting our policies and operational realities. It is at such times that our collaborative approach helps us succeed; together, we will evolve and navigate the changing waters in a way that best allows us to continue supporting our communities.


Randy S. Howard
General Manager

Financials

NCPA_Financials.pdf
Reports on Audit of Combined Financial Statements — For the Years Ended June 30, 2018 and 2017
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