Financial, Administrative and Procurement Subcommittee
Meeting
Wednesday, July 10, 2024
1:00 pm
In Person:
Conference Room 5
Ava Community Energy
1999 Harrison Street, Suite 2300
Oakland, CA 94612
Or from the following locations:
• Clipper Club, 5 Captain Drive, Emeryville, CA 94608
• 1755 Harvest Landing Lane, Tracy, CA 95376
Via Zoom:
https://ebce-org.zoom.us/j/83599993289
Or join by phone:
Dial(for higher quality, dial a number based on your current location): US: +1 669 900 6833 or +1 346 248 7799 or +1 253 215 8782 or +1 929 205 6099 or +1 301 715 8592 or 888 475 4499 (Toll Free) or 877 853 5257 (Toll Free) Webinar ID: 835 9999 3289
Meetings are accessible to people with disabilities. Individuals who need special assistance or a disability-related modification or accommodation to participate in this meeting, or who have a disability and wish to request an alternative format for the meeting materials, should contact the Clerk of the Board at least 2 working days before the meeting at (510) 707-1764 or [email protected].
If you have anything that you wish to be distributed to the Finance, Administration and Procurement Subcommittee, please email it to the clerk by 5:00 pm the day prior to the meeting.
1. Welcome & Roll Call
2. Public Comment
This item is reserved for persons wishing to address the FAP Subcommittee on any Ava-related matters that are not otherwise on this meeting agenda. Public comments on matters listed on the agenda shall be heard at the time the matter is called. As with all Ava Community Energy
Board of Directors Page | 2
public comment, members of the public who wish to address the Board are customarily limited to three minutes per speaker. The FAP Chair may increase or decrease the time allotted to each speaker.
3. Approval of Minutes from May 8, 2024
4. Renewable 100 (R100) Cost Allocation Methodology and Fremont Renewable 100 Citywide Default (Informational Item)
Discuss impact of overview of cost allocation methodology options for pricing Renewable 100 and Bright Choice and the potential impact of Renewable 100 citywide default. Also, consider two implementation timelines approved by City Council (i.e., all 2025 vs. Phased Res/Com 2025/2026).
5. San Joaquin County JPA Membership (Informational Item) Discuss potential impact of including unincorporated San Joaquin County within Ava’s JPA and service territory (2026 enrollment).
6. Committee Member and Staff Announcements including requests to place items on future Board Agendas
7. Adjourn
The next Financial, Administrative and Procurement Subcommittee meeting will be held on Wednesday, September 11, 2024 at 1pm.
Conference Room 5
Ava Community Energy
1999 Harrison Street, Suite 2300
Oakland, CA 94612
Draft Minutes
Financial, Administrative and Procurement Subcommittee
Meeting
Wednesday, May 8, 2024
1:00 pm
In Person:
Conference Room 5
Ava Community Energy
1999 Harrison Street, Suite 2300
Oakland, CA 94612
Or from the following locations:
• Member Kaur – Clipper Club, 5 Captain Drive, Emeryville, CA 94608 • Member Andersen – Piedmont City Hall Conference Room, 120 Vista Ave, Piedmont, CA 94611
• Member Bedolla – 1755 Harvest Landing Lane, Tracy, CA 95376 Via Zoom:
https://ebce-org.zoom.us/j/83599993289
Or join by phone:
Dial(for higher quality, dial a number based on your current location): US: +1 669 900 6833 or +1 346 248 7799 or +1 253 215 8782 or +1 929 205 6099 or +1 301 715 8592 or 888 475 4499 (Toll Free) or 877 853 5257 (Toll Free) Webinar ID: 835 9999 3289
Meetings are accessible to people with disabilities. Individuals who need special assistance or a disability-related modification or accommodation to participate in this meeting, or who have a disability and wish to request an alternative format for the meeting materials, should contact the Clerk of the Board at least 2 working days before the meeting at (510) 707-1764 or [email protected].
If you have anything that you wish to be distributed to the Finance, Administration and Procurement Subcommittee, please email it to the clerk by 5:00 pm the day prior to the meeting.
1. Welcome & Roll Call
Present: Directors: Andersen (Piedmont), Gonzalez (San Leandro).and Kaur (Emeryville) Ava Community Energy
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Not Present: Director Bedolla (Tracy).and Chair Cox (Fremont) Member Kaur served as chair for this meeting.
2. Public Comment
This item is reserved for persons wishing to address the FAP Subcommittee on any Ava-related matters that are not otherwise on this meeting agenda. Public comments on matters listed on the agenda shall be heard at the time the matter is called. As with all public comment, members of the public who wish to address the Board are customarily limited to three minutes per speaker. The FAP Chair may increase or decrease the time allotted to each speaker.
(1:47) Public Comment - Jessica Tovar, representing the Local Clean Energy Alliance and East Bay Clean Power Alliance, reiterated the request for Ava to allocate $15 million to support community resilience hubs.
(4:03) Public Comment - Jordan Ackerman from the Construction Trades Workforce Initiative spoke about the potential of the resilience hub program to provide high quality employment opportunities, and he expressed hope that the developer would collaborate with the Building Trades to establish an agreement before returning to the board.
3. Approval of Minutes from March 13, 2024
(5:08) Member Andersen motioned to approve the minutes. Member Gonzalez seconded the motion, which passed 3/0/0/0/2.
Yes: Members Andersen, Gonzalez and Kaur.
No: none
Abstain: none
Recuse: none
Not Present: Chair Cox and Member Bedolla.
4. FY 2024-25 Draft Budget Review (Informational Item)
Review the draft budget for fiscal year 2024-2025
(6:33) Howard Chang presented the draft budget for fiscal year 2024-2025, noting that it is similar to previous years with a few updates. Howard highlighted key assumptions such as maintaining a $50 bill credit for CARE/FERA customers, proposing a 7% discount for Bright Choice, and increasing carbon-free procurement targets. The budget includes a strong financial forecast with a $153 million net position, a significant reserve contribution, and proposed staffing increases.
(37:13) Member Andersen asked for clarification on Ava Community Energy's reserve goal. Howard Chang responded that the reserve goal is set at 50% of annual operating expenditures, with a range of 25% to 75%. Member Andersen also asked about the possibility of decoupling Ava's rate structure from PG&E's rates. Howard Chang explained the benefits and potential downsides of coupling the rates – in particular, the need for consistency in customer communication and alignment with PG&E's Ava Community Energy
Board of Directors Page | 3
transmission and distribution charges.
(43:44) Member Gonzalez asked Howard Chang to confirm if the cost of service for Ava's coastal region is generally lower than PG&E’s average, to which Howard said yes.
Member Gonzalez then asked about the PCIA, noting that it is currently low due to high energy prices, and sought clarification on understanding electric bills and time-of-use rates. Member Gonzalez also asked about the relative proportion of energy costs driven by hedging and spoke about the merit-based compensation increase. (58:38) Public Comment – Jessica Tovar spoke about the Local Development Business Plan as a roadmap for community investments and advocated for its utilization. Jessica Tovar stated that community grants are not reaching community-based organizations as intended and spoke in support of the need for more funding to support these organizations.
5. Auditor Selection (Informational Item)
Review Ava’s selection for Auditor
(1:03:48) Jason Bartlett presented the auditor selection process for Ava's fiscal year 2024-2025. He stated that Pisenti & Brinker has been Ava's auditor for the past six years, but due to regulatory requirements, Ava must change the lead audit partner. After a thorough RFP process, staff recommended continuing with P&B and requested guidance on whether to engage Pisenti & Brinker for a three-year term with an option to extend or a full six-year term..
6. Committee Member and Staff Announcements including requests to place items on future Board Agendas
There were no Committee Member or Staff Announcements.
7. Adjourned at 2:23pm.
The next Financial, Administrative and Procurement Subcommittee meeting will be held on Wednesday, July 10, 2024 at 1pm.
Conference Room 5
Ava Community Energy
1999 Harrison Street, Suite 2300
Oakland, CA 94612
Minutes written by Adrian Bankhead.
Renewable 100 Cost
Allocation Methodology
July 10, 2024
1. Background
2. Renewable Cost Allocation
Methodology Options
3. Rate Implications
4. Feedback & Next Steps
Background
•
o
o
• Historically, Renewable 100 pricing is set at a premium to PG&E rates. This premium is set based on the differential cost to serve R100 customers relative to Bright Choice customers. o Certain components of the rates are rising
o Historically Ava has blended all renewable energy costs uniformly across Bright Choice and R100 with the cost differential based on the increased % of renewable energy in R100. o Our historical method of allocating costs associated with energy components may not be the best option for our customers and our agency moving forward due to rising renewable energy costs and large changes to R100 city-wide opt-ups.
Ava requires a Cost Allocation Method to formally allocate procurement costs from renewables to develop our
Renewable 100 and Bright Choice rates
Ava Service Plans: Renewable 100 and
Bright Choice
City of Fremont
Renewable 100
Transition
•
•
•
o
•
o
Why is there a Price
Impact for a
Fremont Opt-up,
but not
Historically?
Cost Allocation
Methodology Options
Options: How toBlend Renewable Energy
Components intoa Rate
Energy Prices
•
•
•
Rate Implications
Cost AllocationMethodology Scenarios
•
•
o
Considerations •
•
•
•
•
Next Steps •
•
•
•
Thank you!
Inclusion of New Communities:
San Joaquin County
(unincorporated)
Background
1. Ava Joint Powers Agreement (JPA) Sec. 3.1 ("Addition of Parties")
2. Previously invoked to include the following JPA members:
• Cities of Newark, Pleasanton, and Tracy (2019)
• City of Stockton (2022)
• City of Lathrop (2023)
3. CPUC Reso E-4907: Requires one-year wait between JPA membership/CPUC Implementation Plan submission and start of Ava service to new JPA member-jurisdiction • Board approval re JPA membership during CY 2024 = Start of service CY 2026
4. In 2023, CPUC's new Resource Adequacy (RA) requirements delayed Stockton's start of service until 2025
5. Lathrop & Stockton: Ava service scheduled to begin April 2025
6. San Joaquin County (unincorporated): If approved CY 2024, service could begin CY 2026 • Enrollment could be phased by sector/customer category:
➢ E.g., three phases: Q1/Jan: Muni/Com ---> Q2/April: Res ---> Q4/Oct: Agr (or Q1 '27) Ava Member Jurisdictions
3 Ava's current Joint Powers Authority (JPA) and
service area include: Alameda County, all AC cities
(except the City of Alameda), and the City of Tracy
in San Joaquin County (SJC).
In 2019, Tracy became the first SJC jurisdiction to
join Ava's JPA. The SJC cities of Stockton and
Lathrop joined the JPA in 2022 and 2023,
respectively. These latter two SJC cities are
scheduled to begin service with Ava in 2025.
San Joaquin County: Key Ava JPA Membership Milestones
1. July 28, 2022: Ava staff invited by SJC Sup. Rickman (former Mayor of Tracy) to meet with County Administrator & staff;
▪ PG&E load data forms requested by Ava
2. Sept. 26, 2023: Ava staff invited to present to SJC Board of Supervisors (BOS). Unanimous vote to proceed with Ava membership & approve PG&E load data request for Ava's analysis;
3. October 12, 2023: County's PG&E Load Data Request forms fully executed by SJC & PG&E
4. March 12, 2024: BOS unanimously passes first reading of CCA/Ava ordinance
5. March 21, 2024: PG&E provides SJC load data for Ava's analysis (w/errors & missing info)
6. April 9, 2024: BOS unanimously passes CCA ordinance and Resolution to join Ava
7. June 27, 2024: SJC's executed JPA signature page sent to Ava Timeline: San Joaquin County’s AvaMembership & Service
5 Ava enrolls
new customers
in uninc SJC
Community
Outreach
Ava updates
Imp. Plan for
CPUC
certification
Ava Board
considers
including SJC
Ava conducts
analysis
SJC BOS votes
to join Ava
Ava staff
invited to
present to SJC
BOS
*Pending Board approval, SJC's 2026 start of service would be scheduled following additional staff analyses to optimize cost, customer experience, and power resource procurement.
Customer enrollments could occur during a single month/year; or they could be phased by sector. ▪ E.g., three phases: Q1/Jan: Muni/Com ---> Q2/April: Res ---> Q4/Oct: Agr (or Q1 '27) San Joaquin County: Background
6 • Features: Highly agricultural economy; demographic
diversity; major transportation corridors (highways and rail lines); Port of Stockton; rich culture/history
• Pop: ~800,000 (cities + unincorporated areas) in 2023 o Unincorporated pop: ~200,000 (smaller
than Fremont; larger than Hayward)
o Growing population & development of
new homes (especially Lathrop)
•
•
o
o
o
o
1. Mission: Ava service to SJC accelerates progress toward JPA's express purpose ▪ Expand access to competitively-priced renewable energy ▪ Reduce greenhouse gas (GHG) emissions
▪ Provide lower rates than PG&E
▪ Catalyze local development & innovative programs
▪ Advance environmental justice
2. Strategy: Ava service to SJC creates strategic opportunities for the agency ▪ Economies of scale re long-term power procurement and retail rate savings ▪ Broader policy/political network re State/Federal legislative & regulatory issues ▪ Sector-specific programs & project development
➢ e.g. AgFIT; Valley Link fuel cell (green hydrogen) train ▪ Transportation corridors for EV charging network
➢I 5; I 205; I 580; Hwy 4; Hwy 12; Hwy 26; Hwy 88; Hwy 99; Hwy 120 ▪ Expanded stakeholder engagement in historically marginalized communities Qualitative Considerations: SJC re Ava's Mission & Strategy Unincorporated SJC : Membership Analysis Summary
• number
•
•
•
•
•
•
•
•
•
•
• 8
SummaryData
9 2023 Daily Load
10 SummerHourly LoadShape
11 Quantitative Analysis: Base-Case
• Financial Base-Case scenario is based upon expected forward looking estimates for revenues and power resource/energy costs ("PR" = Power Resource)
• The table provides Base-Case assumptions and results for 2026; and are based on estimates as of July 2024 • Data reflects service to SJC for full CY 2026. Exact enrollment timing may be adjusted to optimize cost impacts 12 1. Extend JPA membership to unincorporated San Joaquin County; and
2. Authorize staff to update Ava's Implementation Plan (IP) to reflect SJC's membership & resubmit IP to the CPUC by end of 2024. o Expected service in CY 2026, based on CPUC certification by EOY 2024 o Consider phasing SJC enrollment through 2026 by customer sector ▪ Additional analysis needed to optimize phasing
Timing: Bring to BOD for vote @ July 17, 2024, meeting
o To allow time for staff to submit updated Implementation Plan for CPUC certification by Sept 30, 2024.
▪ CPUC has 90 days to certify Ava's updated plan
o December CPUC certification needed to make the 2026 Resource Adequacy (RA) filing including new County load;
o Back up timeline: Sept 18, 2024, BOD meeting (requires preemptive draft of updated IP)
Staff
Recommendation
Thank you!
Additional slides
Process of Joining Ava
1. Initial meetings with City/County staff & elected officials • PG&E load data request forms
2. Presentations to City Council/BOS;
• Discussion item --> PG&E load data request forms
• Vote #1 - CCA Ordinance & Resolution to join Ava
• Vote #2 - Second CCA Ordinance vote (best completed by June to make Sept 30 RA deadline)
3. Ava staff conducts quantitative membership analysis
4. Ava Board/committees review analysis and Board considers including new community
5. Pending Board approval, Ava updates JPA and files updated Implementation Plan with the CPUC before 9/30 for preferable RA compliance
6. Next CY: Initial community outreach in new community (e.g., meetings w/CBOs, Chambers, et al)
7. CY+1: Ava enrolls customers in new community, typically April (could be phased) 2023 Hourly Load
18 Office of Mayor Mark Salinas T: 510.583.4340 TTD: 510.247.3340 777 B Street, Hayward, CA 94541 F: 510.583.3601 www.hayward-ca.gov July 10, 2024
Ava Community Energy - Financial, Administrative and Procurement Subcommittee 1999 Harrison Street, Suite 2300
Oakland, CA 94612
Submitted via email to the Clerk of the Board at [email protected] Re: Agenda Item 4 - Renewable 100 Cost Allocation Methodology and Fremont Renewable 100 Citywide Default
Dear Chair Cox,
On behalf of the City of Hayward, I write to express our concern with the proposed potential increase in the rate premium for Renewable 100 (R100). We are very much in favor of expanding the use of renewable energy and we support the City of Fremont’s intention to make R100 the default product for Fremont customers. However, Fremont’s decision to change their default now comes at a time that would require the purchase of more expensive renewable energy. We don’t believe this additional cost should be passed on to existing R100 customers.
I understand that this item is tentatively scheduled for a vote by the full Ava Board of Directors at their meeting on July 17, 2024. We respectfully request that the vote be postponed so that additional member jurisdictions, especially those that currently have R100 as their default, can weigh in. Thank you for your consideration.
Sincerely,
Mark Salinas
Mayor
Cc: Hayward City Council
Dustin Claussen, Interim City Manager
Adam Kostrzak, Interim Assistant City Manager
Alex Ameri, Public Works Director