COMMISSION AGENDA MEMORANDUM BRIEFING ITEM Item No. Date of Meeting DATE: March 7, 2025 TO: Stephen P. Metruck, Executive Director FROM: Sandra Kilroy, Senior Director, Environment & Sustainability Sarah Ogier, Director, Maritime Environment & Sustainability David Fujimoto, Sr. Environmental Program Manager 11b April 22, 2025 SUBJECT: Seattle Waterfront Clean Energy Strategy Briefing EXECUTIVE SUMMARY The Seattle Waterfront Clean Energy Strategy (SWCES) is a first-of-its-kind collaboration between the Port of Seattle (Port), Northwest Seaport Alliance (NWSA), and Seattle City Light (SCL) to assess the power infrastructure investments and strategies needed to support the electrification of buildings, vehicles, vessels, and equipment on Port-owned properties. Electrification is a primary strategy for achieving the Port's climate and clean air goals as outlined in the Maritime Climate and Clean Air Action Plan (MCAAP), Northwest Ports Clean Air Strategy (NWPCAS), and Century Agenda. The SWCES delivers technical, policy, and planning recommendations for how the Port and its partners should plan and implement the infrastructure needed to support a zero-emission maritime transition in Seattle by 2050. In 2021, the Port, NWSA and SCL entered a 10-year partnering agreement to support the joint planning and implementation of clean energy infrastructure, including development of the SWCES. This briefing provides an overview of the recently completed SWCES, recommendations, and next steps. BACKGROUND AND CONTEXT In the Pacific Northwest (PNW), access to affordable, low-carbon electricity is a key advantage to the electrification of buildings, vehicles, vessels and equipment. Electrification using the PNW's clean power can also significantly reduce air pollutant and greenhouse gas (GHG) emissions. Through the NWPCAS, the Ports of Seattle and Tacoma and NWSA adopted a shared vision to phase out seaport-related emissions by 2050. In 2021 and 2023 respectively, the Port of Seattle and NWSA accelerated goals for their own port-controlled operations, aiming to reach net zero greenhouse gas emissions by 2040. The City of Seattle similarly established targets essential to meeting global climate commitments, aiming to achieve carbon neutrality city-wide by 2050. Through the NWPCAS, infrastructure needed to support zero emissions equipment is identified as a central objective on the path to adoption of zero-emission operations across Northwest Template revised April 12, 2018. COMMISSION AGENDA - Briefing Item No. 11b Meeting Date: April 22, 2025 Page 2 of 7 ports. Across the Seattle harbor, several thousand vehicles (including heavy-duty trucks, motorcoaches, ground transportation, and fleet vehicles), hundreds of pieces of equipment (including cargo handling and construction equipment), hundreds of vessel calls (including oceangoing and harbor vessels) and dozens of buildings demand a mix of energy sources, predominantly petroleum-based liquid fuels and natural gas. Together, these fossil fuels comprise approximately 78% of total onsite energy use. However, Seattle and the region are preparing for a significant transition to lower emission fuel sources. As the ports and their tenants transition to electrified options, the Port's infrastructure will need to be prepared to handle the additional electrical loads. The SWCES is specifically designed to address this need by bringing together industry and utility interests, analyzing current and projected power requirements, and providing a roadmap for the development of energy infrastructure. PARTNERING AGREEMENT WITH SCL AND NWSA Authorized in October of 2021, the Port, NWSA and SCL entered into a 10-year agreement to support the participation in and achievement of common goals around the SWCES. These include: • Planning jointly for the provision of clean energy, including the inventory, forecast, analysis, and identification of coordinated actions. • Working together through a designated representative from each organization to manage the Strategy and establish a collaborative and communicative platform for identifying and assessing alternatives, developing solutions, reaching decisions, and resolving disputes. • Developing measures so that the Strategy development, capital planning, and delivery processes run smoothly and without surprises to any other Party. • Coordinating related studies, plans, and projects, and sharing information, inputs, and outputs to facilitate the integration of the SWCES within broader objectives of each of the Parties. • Employing a holistic, integrated planning approach that addresses multiple sites, near term as well as planned demands, co-optimized infrastructure and end use investments, traditional infrastructure and non-wires solutions, and multi-party benefits and considerations (such as the utility, port, tenant, community, and industry). • Evaluating and pursuing innovative solutions for clean energy deployment including infrastructure planning, delivery, operational procedures, policies, financing, and business models. • Establishing a framework for and supporting ongoing coordination and implementation across the Parties. • Coordinating communications and stakeholder engagement activities. • Developing shared funding strategies to support and leverage clean energy investments. Template revised September 22, 2016. COMMISSION AGENDA - Briefing Item No. 11b Meeting Date: April 22, 2025 Page 3 of 7 PLANNING PROCESS The SWCES was developed through an analytical process that considered Port-owned maritime properties along Seattle's Elliott Bay, the Duwamish River, the Lake Washington Ship Canal, and Shilshole Bay. This analysis included sites managed by the Maritime Division and NWSA and operated by the Port and private terminal operators. Large loads from adjacent properties were also considered. Interviews were conducted with the ports' lines of business and maritime industry tenants to provide insights into energy uses and operational requirements. A summary of the SWCES development process is outlined below: The SWCES analysis began with a site-by-site baseline analysis of 24 locations, at which, site operations, equipment, emissions, and fuel and energy uses were evaluated. This baseline provided a foundation for further investigation of a subset of 11 priority sites with high load growth potential, four locations expected to have significant, unique "spot loads," three potential truck charging locations, and four near-port sites selected by the utility. Forecasts of power demand were then developed to project peak power requirements through 2050. This forecast built upon the baseline inventories and considered operational projections, regulatory requirements, adopted port plans, and technology readiness, among other factors. The forecast was then used to assess constraints in Port's on-terminal power equipment and SCL's power distribution system. Traditional "poles and wires" utility investments as well as alternative, "non-wires" solutions (such as battery energy storage and onsite power generation) were evaluated as potential solutions to address infrastructure constraints. Finally, port and utility capital investment upgrades were identified, and strategic recommendations were developed to help manage risk, increase adoption of clean energy technologies, and provide a holistic approach to investment in port power infrastructure. KEY FINDINGS The SWCES provides insights into current and future energy use across Port-owned properties, as well as the on-terminal and utility-owned power infrastructure serving port facilities. Key findings from the analysis include:  Port power needs (peak electricity demand) are expected to increase four-fold by 2050. As fossil-fueled operations transition to electrification, power demand will increase Template revised September 22, 2016. COMMISSION AGENDA - Briefing Item No. 11b Meeting Date: April 22, 2025 Page 4 of 7 substantially. Estimates of peak power use at key maritime facilities are modeled to more than quadruple from 53 megawatts in 2019 to over 225 megawatts by 2050.  Shore power continues to be the key driver of near-term power demand. Of the expected electrified end uses, shore power use by oceangoing vessels (OGVs) is by far the most significant driver of near-term demand. Charging of vehicles, vessels and equipment are expected to be drivers from 2035 and beyond.  Port-adjacent sites are significant contributors to SCL's load growth. Redevelopment at "near-port" sites (facilities sharing power distribution feeders with port locations), notably the United States Coast Guard (USCG) facility at Pier 36 and Washington State Ferry (WSF) terminal at Pier 52, are expected to contribute significantly to SCL distribution system constraints in the southern portion of the harbor.  Both SCL and Port electrical infrastructure will face constraints in the future. Of the 16 SCL distribution system feeders serving key maritime facilities, 10 are expected to exceed electrical capacity planning limits by 2040. In addition, multiple on-terminal Port substations will face capacity constraints, with eight sites expected to exceed total site capacity.  Traditional infrastructure solutions are currently most cost-effective. Traditional solutions such as improvements to substations, feeders and distribution lines are currently the more cost-effective than distributed, "non-wires" technologies such as battery energy storage systems in addressing the most significant power distribution bottlenecks. Technologies should continue to be reviewed over time and considered for deployment with cargo handling equipment, truck charging, resiliency needs, and other similar projects to mitigate intermittent loads and demand charges.  Long-term planning and resiliency gaps exist. Long-term plans and resiliency requirements for port operations and tenants are not currently well defined, which may limit more holistic investment strategies for individual sites. RECOMMENDATIONS - STRATEGIES FOR EXECUTION The SWCES identifies a series of Capital Investments to address capacity constraints along with a set of eight supportive Strategic Implementation Actions and a Strategy Implementation Framework. (1) Capital Investments Utility distribution system and site-level upgrades are needed to support electrification of port facilities and equipment. Approximately $208 to $457 million (2024 dollars) in port and utility investments have been identified through 2050, including an estimated $69 to $168 million in utility distribution system infrastructure costs and an estimated $139 to $288 million in port onsite transformer, switchgear, and substation equipment costs (More detail can be found in the strategy document in Table 5, page 21). Template revised September 22, 2016. COMMISSION AGENDA - Briefing Item No. 11b Meeting Date: April 22, 2025 Page 5 of 7 Related support for planning and pre-design activities including infrastructure evaluation, site planning, tenant and contractor engagement, market assessment, securing tenant zeroemissions deployment commitments, and feasibility analyses will be important to prepare for initiation of future projects, particularly those involving higher levels of complexity and long leadtimes. Final investment decisions will need to be made after these deeper analyses are complete. Financing options and sequencing should be developed and evaluated with key partners and considered alongside other port funding priorities. (2) Strategic Implementation Actions Eight Strategic Actions (SA) to complement capital investments are recommended in the SWCES. These include:  SA1. Design for Future Electrification Capacity: Increase emphasis on prospective, "planned-capacity" improvements as a part of a shift from an incremental, project-byproject approach. Such a shift requires weighing potential risks of stranded assets and may not be practical in all cases. Monitoring and regular assessment of distribution system and on-terminal conditions, engagement with end-use stakeholders, modular designs, technology assessment, and complementary strategies to incent or require phased-in adoption of electrification technologies can help to mitigate risks.  SA2. Asset Condition Assessment: Assess port electrical asset conditions (e.g. age, equipment functionality, remaining useful life) and vulnerabilities (e.g. flooding and sea level rise, groundwater intrusion, seismic hazards) to further inform capital recommendations and prevent system failures. When combined with an evaluation of critical facilities for power resiliency (below), a more holistic view of electrical infrastructure needs and opportunities will be available to inform capital investments while enhancing project outcomes.  SA3. Identification of Critical Facilities for Resiliency: Assess port facility power resiliency requirements, including clear identification of critical facilities, utility hazard exposure and risk, minimum functional operational standards, and tenant requirements. A clear understanding of facility power resiliency requirements will help to refine site power distribution options, add value to distributed production and storage options, and assist with further prioritization of electrification infrastructure investments.  SA4. Integration with Site Master Planning: SWCES findings can help inform port master site development plans or specific site decarbonization plans that move study recommendations forward to pre-design and advanced project planning. Master site plans are needed to ensure compatibility between overlapping planning priorities at Port sites, including decarbonization, economic development, line of business needs, resiliency, and others. Such plans should use SWCES data to align strategic goals with site conditions to guide short and long-term development. Ideally, infrastructure, including Template revised September 22, 2016. COMMISSION AGENDA - Briefing Item No. 11b Meeting Date: April 22, 2025 Page 6 of 7 power infrastructure, should provide for the achievement of overall site objectives and follow an integrated planning effort.  SA5. Infrastructure Management and Development: Consider options for enhancing management and development of shared infrastructure on port properties to enhance delivery of infrastructure improvements, manage asset conditions, and help ensure integrated designs meet overall site-wide plans and business goals.  SA6. Increase Grant Project Readiness: The Port, NWSA, SCL, and industry partners should use the SWCES results to assess and develop a suite of funding-ready capacity improvements and decarbonization projects. This may include utility distribution system assets (e.g. feeders, substations, transformers, switchgear, smart meters, utility-side storage, etc.), port on-terminal assets (e.g. port substations, solar panels, communications, duct banks, etc.), and electrification deployment projects (e.g. shore power, vessel charging, fleets and equipment, building electrification, etc.). Establishing funding-readiness will allow project partners to more effectively consider external funding opportunities to help offset the significant costs of upgrades. Careful attention should be made to grant requirements to avoid additional costs, time delays and overall risk.  SA7. Clean Technology Development: Apply an innovation-focused maritime decarbonization lens that encourages assessment and trial of new concepts and technologies to improve services and help spur electrification technology deployment. The Port can leverage its concentration of heavy-duty transportation end-uses, diverse array of properties, high visibility, non-governmental organization (NGO) partnerships, ambitious emissions reduction targets, and economic development mission to support pilot projects, new business models, and industry partnerships.  SA8. Innovative Business Models and Financial Strategies: Evaluate as-a-service, elective pay, innovative rate models, and port Special Purpose District authorities to reduce financial barriers, recover costs, and support or accelerate adoption of clean energy technologies and end uses. (3) Strategy Implementation Framework The SWCES recommends a Joint Port-Utility Implementation Framework to help drive ongoing implementation. In accordance with the 2021 Partnering Agreement between the Port, SCL, and NWSA, the parties agreed to develop an implementation framework to guide ongoing implementation of the SWCES. This framework lays out capital and end-use deployment workstreams for ongoing planning and coordination. It will allow the parties to plan for and coordinate timely delivery of capital projects, assess the pace of technology deployment, support deployment of electrified equipment, and make necessary adjustments. Included should be longlead project planning items such as new utility substations or major transmission line extensions and significant changes in on-terminal energy needs. Template revised September 22, 2016. COMMISSION AGENDA - Briefing Item No. 11b Meeting Date: April 22, 2025 Page 7 of 7 NEXT STEPS With the completion of the Seattle Waterfront Clean Energy Strategy, staff from the Port, NWSA and Seattle City Light expect to proceed with implementation activities. Initially, these activities are expected to include: (1) (2) (3) (4) Public engagement on the SWCES and related projects. Briefing the NWSA Managing Members Environmental Working Group Review of near-term projects for inclusion in Port, NWSA, and SCL Capital Improvement Plans (CIPs). Site power master planning starting at selected sites. ATTACHMENTS TO THIS BRIEFING (1) (2) (3) Seattle Waterfront Clean Energy Strategy Partnering Agreement Presentation slides PREVIOUS COMMISSION ACTIONS OR BRIEFINGS Sustainability, Energy, and Climate Committee (SEAC) updates: February 2025, June 2024, May 2023, December 2022, May 2022 Template revised September 22, 2016.