2023 Long-Term
Resource RFO:
Overview and
Update
JULY, 2023
• Solicitation Overview
• Participation
• Evaluation Process
• Challenges in Marketplace
• Next Steps
• Reminder: Portfolio Summary
2 Agenda
Goals & Objectives
• Secure a portfolio of contracts to
provide EBCE customers with
affordable renewable and clean
energy sources;
• Meet IRP Near- and Mid-Term
Resource Adequacy Reliability
Procurement mandates;
• Meet current and future CPUC
compliance obligations;
• Create new renewable energy
projects to deliver PCC1 RECs
• Contract low-cost energy hedges to
compliment existing portfolio
• Partner with SJCE for efficiency,
to minimize expenses, and lead
the market in contract terms.
Actions
• Issued a broad, open, competitive
solicitation to ensure wide array of
opportunities considered;
• Evaluated combinations of projects
to achieve desired volume targets;
• Typically prioritize project risk,
location, workforce development,
economics, and other
characteristics; limited ability to do
so in this RFO due to limited offers
in earlier years;
• Encouraged RFO participants to be
creative and provide proposal
variations on individual projects and
include battery storage.
3 Project Characteristics
Facilities:
• Location: Projects may be within or outside
of California. All energy must be deliverable
to CAISO & must provide RA
• Construction Status: Energy and related
products may come from new resources or
add incremental capacity to existing
resources.
Capacity:
• Minimum Contract Capacity: 5 MW
• Maximum Contract Capacity: none
Delivery Date:
• Energy and RPS attribute delivery must be
within calendar years 2024 through 2030
with a preference for projects that begin
delivery earlier within this window.
Contract Duration:
• 10-20 year durations
Technology:
• Renewables, Large Hydro
• Storage – short or long duration; any
technology
Solicitation Overview
4 Solicitation Overview – Eligible Products
Product
#
Product Name Description Example
Product 1 As-Available RPS
Product
New or incremental capacity to an existing
stand-alone PCC1-eligible generating
resource
solar, wind, geothermal,
small hydro or ocean
(thermal, wave, or current)
Product 2 As-Available RPS plus
Energy Storage
New or incremental capacity to an existing
stand-alone PCC1-eligible generating
resource with co-located energy storage
Same as above plus storage
with 2-hr, 4-hr, or 4-hr+
duration capability
Product 3 Firm or Shaped RPS
Product
New PCC1-eligible generating resources;
likely paired with energy storage
Energy delivered during
specific hours
Product 4 Stand-Alone Energy
Storage Toll or RA-Only offer
Energy storage may offer a full product
“tolling” structure contract. RA-only offers
not accepted in this RFO
Any storage technology
with 2-hr, 4-hr, or 4-hr+
duration capability
5 Participation
More robust project offering than 2022 RFO, comparable to 2020 RFO. 72 unique project sites; 195 project variations (as compared to 44 sites; 185 variations in 2022 RFO)
All 4 products that were solicited were offered
Offers included solar, wind, and battery storage
Projects based in 6 different states (CA, AZ, ID, NM, NV, WY); predominantly CA *Only 2 projects in EBCE service territory.
Evaluation Process
• Evaluation Rubric scored 3 areas:
• Counterparty Execution, Offer Competitiveness, and Project Development Status • Multiple items under each area
• Two reviewers were assigned to each project.
• Staff reviewed all submitted information and provided scores for all categories and NPV. • Each item has 100 point max. at its own weighting.
• Term Sheet Markups were scored by one assigned reviewer. • NPV scores were directly incorporated into overall project score with a weighting of 55%. • The Net Present Value was calculated based on simulations on 6 different forward curves • For each forward curve we took a weighted average of the P5 (50%), P50 (30%), and P95 (20%); and then took a simple average across the 6 curves
• We normalized this number on a $/MW basis and the projects were then assigned a 0-55 score based on the NPV distribution • Other factors considered in qualitative evaluation were Counterparty Execution Risk (20 points), Development Status Risk (20 points) and Local Business Enterprise (4 points) and Small Business Enterprise (1 point) • Scoring and rubric were similar to the selection process for previous RFOs • Previous RFOs used 3 forward curves, this RFO featured 6 curves each representing a unique scenario • Minor changes were made to weighting of local projects, including addition of points for small businesses 6 Challenges in the Marketplace
• Ongoing supply chain disruption & delays
• Uncertainty related to future tariffs for core components • Result: suppliers of core components pricing using Index structure; many Project Developers unwilling to take on price risk thus requiring pricing using index also or extreme mark-ups in price to cover risk • General: prices for generation and storage resources have increased 30- 40% since ~2020.
7 Next Steps
• Complete negotiations of projects under consideration. Anticipate presentations to Board beginning in September and continuing through winter
• Assess projects as they hit key milestones and mature further. • Update filing to CPUC on status of 2021-2023 and 2023-2026 Electric Reliability Requirements due August 1, 2023.
• CPUC’s 2024 IRP cycle provides formal opportunity for portfolio review and analysis of open position, cost and risk. Further engagement with board and community as part of IRP process.
8 Portfolio Summary
9 Project Name1 Project Name2 Devloper Type
Nameplate
Capacity COD
Term
(Years) Technology County State
Altamont SHWEC Greenbacker RPS 57.5 7/2/2021 20 Wind Alameda CA Rosamond Central Golden Fields Clearway RPS 112 12/22/2020 15 Solar Kern CA Pattern Tecolote Pattern RPS, no RA 100 12/20/2021 10 Wind Guadalupe & Torrance
NM
Luciana Tulare Idemitsu RPS 55.83 4/30/2022 15 Solar Tulare CA Edwards Solar II Edwards Terra Gen RPS 100 Q2 2024 15 Solar Kern CA Fervo Corsac Station Fervo RPS 40 2/1/2030 15 Geothermal Churchill NV Daggett South Daggett Clearway RPS+Storage 482 7/1/2023 15 Solar + Storage San Bernadino CA RE Scarlet Sonrisa EDPR RPS+Storage 100 12/15/2023 20 Solar+Storage Fresno CA Oberon Oberon Intersect RPS+Storage 125 1/1/2024 15 Solar Riverside CA Henrietta D Henrietta Convergent Storage 10 12/2/2021 15 Storage Kings CA Tumbleweed Tumbleweed REV Renewables Storage 50 6/1/2024 15 Storage Kern CA Kola Kola NextEra Storage 125 4/1/2025 20 Storage San Joaquin CA Sanborn Sanborn Terra Gen Storage 47 Q2 2024 12 Storage Kern CA