"Even in the face of the numerous and unexpected challenges that 2020 presented, the staff persevered and achieved many notable accomplishments."
Though it seemed to start like any other year, 2020 quickly proved to be anything but normal. Starting in March, the global COVID-19 pandemic impacts began to affect our personal and professional lives. Employers scrambled to establish telework policies; small businesses were forced to shutter indefinitely; parents became homeschooling teachers; and so much more of our day-to-day lives quickly shifted within days.
The Agency had an established Pandemic Policy and quickly adapted to the changing circumstances. Our Administrative Services team worked quickly to ensure that we had the technological and practical tools and protocols in place to transition some eligible employees to work-from-home; we procured personal protective equipment and implemented new precautionary measures to ensure the ongoing health and safety of our employees; we had to rethink our operations to ensure that we would stay connected and secure while continuing to provide exemplary service for our members.
While we managed the ongoing challenges, we realized the crisis provides a great opportunity to rethink the current business strategy and launched a significant review and update of the agency’s five-year strategic plan. The revised plan, to be brought before the NCPA Commission in January, represents a collective agency-wide effort to be prepared for future needs and resources. The initiatives and defining goals create a plan that assures NCPA remains a well-recognized leader within the industry and our sector.
I am incredibly grateful for our hard-working employees and their collective resolve to creatively increase the Agency's value for our members. Even in the face of the numerous and unexpected challenges that 2020 presented, the staff persevered and achieved many notable accomplishments.
NCPA's Generation Services team undertook several projects and activities to improve NCPA's generation facilities' value and ensure continued safe and reliable operations. Following an unplanned outage due to issues with the turbine at the Lodi Energy Center (LEC), the Administrative Services and Generation Services teams worked together to successfully submit a $44 million insurance claim to replace the damaged equipment. Looking forward, the Commission authorized the purchase of a turbine capable of combusting a 45% hydrogen-gas blend at the facility, which will lower the emissions and extend the plant's useful life. The Agency's Legislative and Regulatory Affairs team further supported the effort by securing a grant to partially fund a study assessing the feasibility of securing a hydrogen supply to support the fuel source for the LEC.
The Generation Services team initiated a discussion with participants of the Capital Facilities project ("STIG") regarding future repowering options, presenting an assessment to project participants on available options. The Administrative Services team completed refunding of the outstanding bonds for the STIG, saving project participants $2.4 million through final bond maturity, which was advanced by one year to 2024.
At the hydroelectric facilities, we completed a rewind of the Collierville Unit 1 generator on budget and ahead of schedule, helping project participants reduce costs for replacement procurement by making the unit available sooner than anticipated. The Agency adopted wildfire mitigation plans for all generation facilities. In implementing the plans, we invested to mitigate fuel risk and implemented improvements to harden the infrastructure, including replacing the 230 kV insulators on the hydro generation-tie lines.
In the wake of the Kincade Fire's damage to the area surrounding the geothermal facilities, we worked alongside PG&E to install a temporary intertie that allowed our units to stay online during PG&E's maintenance outage in January, providing needed zero-carbon resources for project participants. We also implemented an idle well program at the geothermal facility to improve steam production in several of the wells, increasing the facility's capacity by 1 MW.
In addition to its tremendous work in facilitating the Agency's response to the COVID-19 public health emergency, the Administrative Services team spearheaded several improvements at our headquarters facility. Contractors re-painted the external walls of the building. Grant funding was secured that paves the way for the anticipated installation of electric vehicle charging stations in our parking lot this coming Spring 2021.
NCPA continued its emphasis on the professional development of the Agency's and members' workforces. We continued to offer low-cost training classes for NCPA members and staff, achieving cost savings through a centralized structure.
The Power Management team worked closely with members to navigate the operational challenges experienced in 2020, including extreme heat events, Public Safety Power Shutoff (PSPS) events, and the impacts of the ongoing pandemic. Through each of these challenges, NCPA supported the members in their continued efforts to supply reliable, clean, and cost-effective service to their customers.
Operating as a Load-Following Metered Subsystem, we successfully balanced the members' portfolio during 98% of all hours during FY 2020, resulting in significant savings achieved by avoiding costs and direct savings. We also integrated new member resources into the NCPA scheduling portfolio to support serving reliable electricity and achieving regulatory and environmental goals.
We continued to provide high-quality services to non-member customers, expanding to forge new service agreements with Sonoma Clean Power Authority and Nevada Irrigation District. In total, services for non-member customers resulted in approximately $2 million in additional revenues, credited to the members to offset their costs associated with NCPA services and increase the overall value of service offerings.
Further, NCPA developed improved reporting capabilities for members' benefit, including dynamic load and resource accounting tools, enhancements to NCPA's risk management and deal tracking systems, and other bid-to-bill software upgrades. These efforts will increase efficiency, reduce cost, and create additional opportunities for NCPA to provide value-added support to its members.
2020 was a productive year for NCPA's engagement on issues affecting the federal power resource. NCPA secured critical provisions in the 2025 Central Valley Project (CVP) base resource contracts, shaping the 30-year agreements to protect member interests in this carbon-free resource. After nearly ten years of NCPA advocacy, we also finalized and secured recalculations in the CVP Cost Allocation Study, realizing a member savings of over $100 million in reduced CVP power customers' capital repayments and repayment interest credits.
The Legislative and Regulatory Affairs team launched a successful virtual NCPA Speakers Series, featuring over 25 high-profile speakers in the energy industry, including members of Congress and the State Legislature, regulatory agency heads, and industry thought leaders. Through these conversations, NCPA members continued to actively engage in grassroots advocacy with key policymakers in our industry.
In the legislative realm, we advocated for member interests in federal legislative deliberations on COVID-19 and protected NCPA and member infrastructure investments. We successfully defeated numerous state legislative proposals that would have infringed on our members' local decision-making processes and increased the cost of compliance for regulatory programs. NCPA and its members also continued to actively engage in state and federal wildfire policy deliberations—securing important gains with regard to improved forest management and highlighting the insurance-related challenges impacting our sector of the industry. NCPA secured favorable treatment in pending federal climate legislation that avoids duplicative and conflicting regulatory requirements and advanced restoration of tax-exempt advance refunding bonds. We actively engaged in regulatory processes at the California Energy Commission, California Independent System Operator, and California Air Resources Board, shaping policy development to reflect the long-term planning needs of our members and preserving flexibility for members to safeguard local use of climate-related funds. Importantly, we also expanded support services contracting opportunities for members related to many programs, including the implementation of electrification programs, and implemented a joint study of customer-sited energy storage systems, realizing cost savings for members in a time when many experienced constrained staffing and budget resources.
The events of 2020 made us rethink NCPA’s business strategy and has made our Agency even more nimble and resourceful. COVID-19 will have a lasting impact on the economy and on the communities, making the value of collaboration through joint action ever more critical. As we look ahead to 2021, we will continue to find innovative solutions to the ongoing challenges while advancing a strong vision for the future of NCPA.
Randy S. Howard