What can we learn from Truckee’s power planning exercise?

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The Truckee Donner Public Utility District (TDPUD) is one of many utilities across California trying to figure out how best to satisfy state requirements for clean and reliable electricity while serving growing demand and keeping prices affordable. The utility recently went through a planning exercise to write up its first Integrated Resource Plan, which looks at power supply through 2040. What did they come up with, and what can we learn from their effort?

Truckee is a relatively small utility district — 13,000 residential customers and another 1600 or so commercial — and a somewhat unusual one. Its load peaks in winter, on weekends, and on holidays, the opposite of most other places. The area is forested, with a lot of snow in winter, so rooftop solar does not have a big impact.

What kind of power is Truckee using right now? It has a good amount of renewable energy and average emissions intensity. Its renewables are largely wind and landfill gas (with some solar in 2023), and it uses substantial amounts of gas and market purchases to fill in the gaps.

Here is what that looks like on a month-to-month basis from January 2021 through January 2024. Wind (purple), landfill gas (light green), and natural gas and market purchases (dark red and dark green) dominate, with more market purchases in winter.

By 2025, TDPUD doesn’t expect the portfolio to change much. Their landfill gas contract will expire and not be renewed, but the rest will look similar, still with a good amount of gas and market purchases.

There are a couple of problems with this portfolio. It won’t meet state guidelines for reliable, emission-free electricity in the coming years. And it can be pretty expensive to buy electricity and any needed credits on the market. Electric Utility Director Jared Carpenter says: “Resource Adequacy (reliability credits) … can be more costly than megawatt-hours, the energy everyone’s used to thinking about. It can hit you hard if you’re not investing in it. This is why everyone wants things like small hydro and wind farms.” They provide not only energy but also resource adequacy credit.

Carpenter adds that the focus on resource adequacy is spreading beyond California, across the west, which will further push up prices. Fortunately, he says, “Green power plants are the most cost-effective power plants that developers can build. They will make more money by building those plants, and that’s what they’re building.” With low-emission supply coming online, TDPUD will use power contracts to hedge against volatile market prices. (1)

TDPUD’s energy analysis recommends they evolve their portfolio with more wind (mostly from Idaho), solar plus storage (likely from Utah), and geothermal (likely from Nevada). Most California-based resources cost the utility extra in transmission fees because TDPUD is not a part of the California grid, so they avoid them when possible.

The supply mix will evolve over the next fifteen years. By 2030, with many more energy contracts, TDPUD is able to sell into the market (-7.3%) rather than buy from it (35.2% in 2025). Then by 2035, geothermal has grown to 33.4% of their power.

When will the utility sell power? Since demand is highest in winter, they will sell mostly in summer, when demand is strong from utilities in warmer areas. The graph below shows the hour-by-hour resource mix TDPUD anticipates on a summer day in 2040. They have steady power from geothermal (orange), hydro (blue), and wind (yellow), with midday solar (green), and batteries (pink) coming on in the evening. They have more than enough clean energy to sell power into the market.

Winter is a different story. On a December day in 2040, more powerful winter winds (yellow) play a critical role, particularly with the local hydroelectric having dried up for the season. Gas and market purchases (grey and black) are also needed to meet demand.

The utility calculates that following this strategy will save them about 10% of the cost of doing things the way they are now (saving almost $30 million), and crucially will help them meet state requirements.

What can we learn from this analysis? Geothermal is playing a large role for this utility, which needs a clean, non-variable (baseload) resource to replace the landfill gas that it is using and to help meet increasingly strict state requirements. But this resource is in high demand. Carpenter says that competition for clean and reliable resources has grown tremendously.  “While we are looking for resources, so is everyone else. And it’s not just utilities. It’s big companies and corporations that want to buy power on the wholesale markets to save money…. There is competition today that ten years ago I would never have envisioned.” He points to companies like Google and Amazon as examples of companies with increasing energy needs and aggressive clean energy ambitions. Carpenter notes that they are getting very good at energy planning, using artificial intelligence to help with their strategy and pricing.

This competition, and the scarcity of geothermal, have led Truckee to plan for substantially more solar plus storage, even though they believe geothermal would be a better solution for them. “We are looking at multiple geothermal projects right now. … If we look at every one that’s available, and we win every one that’s out there, we still wouldn’t be at the high end (of what we want). So we’ve got to be realistic… That’s why solar plus storage is a key priority.”

Transmission is also playing a role in decision-making, both cost and capacity. For example, even if they could purchase a lot of geothermal from Nevada, they worry that they might end up without enough transmission capacity to support it. Local resources alleviate such capacity constraints but are more expensive. And California-based resources, specifically TDPUD’s hydroelectric contract with the Central Valley Project, is essentially inaccessible to the utility because of extra transmission fees assigned to non-CAISO members. So resource location is an important consideration for their planning.

Another interesting thing from TDPUD’s portfolio-building exercise is the disappearance of a promising nuclear power source. TDPUD and its partner, the Utah Associated Municipal Power Systems, had invested substantial time and energy working with NuScale, a developer of small modular reactors. Those reactors could have provided emission-free baseload energy for the utility, but skyrocketing prices, too high even with substantial government incentives, led them to cancel the project.

What clean baseload resources are available, other than geothermal? Biomass is one possibility, and there is certainly plenty of biomass in the Tahoe Forest. The North Tahoe area is exploring several biomass plants, including one in Truckee, but development of the latter is uncertain. So the Truckee-Donner Public Utility District for now is placing its bets with geothermal and solar plus storage, though they hold out hope that some form of nuclear or other clean baseload like green hydrogen may eventually become economically effective.

Some of you may be wondering if the utility can save money by reducing demand. Can Truckee residents and businesses find inexpensive ways to use less energy so the utility doesn’t have to buy so much power?

Indeed, the energy analysts that Truckee hired, Aspen Environmental and Flynn RCI, believe it’s important that electrification be coupled with effective savings programs. The chart below shows how EV charging (orange and blue) and building electrification (purple) increase electricity demand.  Carpenter says EV charging is ramping up faster than expected, and will likely continue as more 4WD models and cheaper models come to market. These increases are only slightly offset by the small amounts rooftop solar in Truckee’s shady and snowy climate. The utility needs to establish new efficiency programs (shown in lighter blue) to offset the increase in demand.

A particular challenge that this utility has is that they have only 52 MW of transmission coming in. Their planning indicates that they are starting to push that limit as they near 2040. So the value of energy efficiency is high, given the costs of either adding new transmission or building local power. One good option for inexpensive efficiency would be time-of-use pricing that encourages customers to use more energy at cheaper times. Carpenter says “It can be four times as expensive to use energy in the evening than midday.” Aspen Environmental Director Catherine Elder suggested as one example that TDPUD, which is also a water utility, might want to change the hours when it pumps water up to its tanks. The utility should also encourage midday EV charging. It will be interesting to see what programs they come up with and how they drive adoption.

There are many uncertainties when it comes to power planning. We don’t know precisely how energy and transmission costs and supply will evolve. We don’t know how quickly we will electrify transportation and buildings. We don’t know how state policies for energy requirements and credits will change. And we don’t know how weather will affect energy use or hydroelectric power. TDPUD’s energy consultants ran sensitivity analyses to see how vulnerable different portfolios were to various changes. The “business as usual” scenario was quite vulnerable to changes in market prices and demand, while the recommended portfolio did better. But many changes are coming. As just one example, Truckee considered the possibility of a truck charging station along interstate 80 in Truckee. How would that affect demand? So any plan, however sophisticated, is just a plan, and must evolve over time.

I’d love to hear what questions you have about Truckee-Donner’s planning exercise, or about power planning in general.

Notes and References

1. Long-term purchase agreements are also needed to meet California’s renewable requirements.

Current Climate Data

Global impacts (March 2024), US impacts (March 2024), CO2 metric, Climate dashboard

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