Neighborhood Notification
Independent Assessment of LADWP Owned Solar Projects
LADWP's Comprehensive Solar Plan - Solar LA is a multi-year program designed to expand solar power in Los Angeles. The ultimate goal of Solar LA is to generate 1,280 megawatts of solar power. Solar LA consists of three primary components, 1) 380 MW of customer solar programs, 2) 500 MW of large scale solar projects and 3) 400 MW of utility-owned solar projects which is also known as Measure B.
If approved by voters March 3, 2009, Measure B provides that LADWP will install and own 400 Megawatts (MW) of solar energy. One of the main concerns raised regarding Measure B is the potential cost. To provide an independent assessment of the expected costs and rate impact, LADWP retained the Huron Consulting Group (Huron), an independent third party familiar with LADWP.
Huron is a leading consultant to the utility industry, assisting their clients in defining and implementing business strategies, improving market share and lowering costs. Their clients include but are not limited to Southern California Edison, Detroit Edison, Pepco and Exelon. Additionally, Huron has served as the independent rate analyst for the City Council in evaluating LADWP's rate proposals.
Specifically, Huron:
- evaluated the solar industry environment to determine the historical cost trends and future state of the industry,
- analyzed expected program costs under various scenarios and
- identified key drivers of uncertainty likely to impact generation production cost and the overall customer rate.
Huron's analysis of this dynamic issue was timely given various factors that were crucial in determining the costs associated with such an undertaking were in flux (i.e. federal tax credits) until the latter part of 2008.
After fifty interviews and 450 hours of extensive research and analysis as well as conducting a comprehensive review of 40 external industry and academic reports, Huron concluded that the ninety percent confidence interval yields a total program cost of $817 million and $1.2 billion, considering tax benefits. This cost translates to approximately an additional one percent increase to LADWP rates.
The typical LADWP residential customer may see a one dollar per month increase in their bill due to the implementation of Measure B. As you know, there are a number of issues facing LADWP as it relates to how the energy we serve is generated. Once installed the 400 MW contemplated in Measure B will help LADWP:
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displace some of its polluting energy sources,
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comply with AB 32,
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reach the goal of twenty percent renewables by 2010 and thirty five percent by 2020, and
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spur further innovation and greater economies of scale in the solar manufacturing industry.
Please click here to view Huron's analysis including assumptions and methodology used to determine the aforementioned costs.
Click here to contact your Neighborhood Council Representative.
LADWP Neighborhood Council Liaison
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