Executive Committee Meeting
Wednesday, February 5, 2025
3:00 pm
In Person:
Conference Room 5
Ava Community Energy
1999 Harrison St., Suite 2300
Oakland, CA 94612
Or from the following locations:
Hayward City Hall, 777 B St, Hayward, CA 94541
Via Zoom:
https://avaenergy-org.zoom.us/j/88267670367
Or join by phone:
Dial(for higher quality, dial a number based on your current location):
US: +1 669 900 6833 or +1 253 215 8782 or +1 346 248 7799 or +1 301 715 8592 or +1 312 626 6799 or 877 853 5257 (Toll Free) or 888 475 4499 (Toll Free) Webinar ID: 882 676 70367
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) 906- 0491 or [email protected].
If you have anything that you wish to be distributed to the Executive Committee, please email it to the clerk by 5:00 pm the day prior to the meeting.
1. Welcome & Roll Call
2. Chair and Vice-Chair Appointments
3. Public Comment
This item is reserved for persons wishing to address the Executive Committee on any Ava Community Energy-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 Committee are customarily limited to three minutes per speaker and must complete an electronic speaker Ava Community Energy
Executive Committee Page | 2
slip. The Executive Committee Chair may increase or decrease the time allotted to each speaker.
4. Closed Session Public Comment
5. Closed Session
a. PUBLIC EMPLOYEE PERFORMANCE EVALUATION under California Government Code Section 54957: Performance Evaluation of Chief Executive Officer
6. General Counsel Report Out of Closed Session
7. Approval of Minutes from January 8, 2025
8. Mid-Year Budget Update (Informational Item)
Review the budget performance through December 2024.
9. Overview of fire at Moss Landing (Informational Item) Overview of fire at Moss Landing battery facility.
10.Committee Member and Staff Announcements including requests to place items on future Executive Committee Agendas
11.Adjourn
The next Executive Committee meeting will be held on Wednesday, March 5, 2025 at 3pm.
Draft Minutes
Executive Committee Meeting
Wednesday, January 8, 2025
9:00 am
In Person:
Conference Room 5
Ava Community Energy
1999 Harrison St., Suite 2300
Oakland, CA 94612
Or from the following locations:
City of Pleasanton, City Council Conference Room, 200 Old Bernal Ave, Pleasanton, 94566
Hayward City Hall, 777 B St, Hayward, CA 94541
Via Zoom:
https://avaenergy-org.zoom.us/j/88267670367
Or join by phone:
Dial(for higher quality, dial a number based on your current location):
US: +1 669 900 6833 or +1 253 215 8782 or +1 346 248 7799 or +1 301 715 8592 or +1 312 626 6799 or 877 853 5257 (Toll Free) or 888 475 4499 (Toll Free) Webinar ID: 882 676 70367
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) 906- 0491 or [email protected].
If you have anything that you wish to be distributed to the Executive Committee, please email it to the clerk by 5:00 pm the day prior to the meeting.
1. (1:00) Welcome & Roll Call
Present: Members: Marquez (Alameda County)*, Roche (Hayward), Andersen (Piedmont), Gonzalez (San Leandro) and Chair Balch (Pleasanton) *Member Marquez joined the meeting at 9:11am.
2. (2:02) Public Comment
Ava Community Energy
Executive Committee Page | 2
This item is reserved for persons wishing to address the Executive Committee on any Ava Community Energy-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 Committee are customarily limited to three minutes per speaker and must complete an electronic speaker slip. The Executive Committee Chair may increase or decrease the time allotted to each speaker.
There was no general public comment.
3. (2:32) Approval of Minutes from December 4, 2024
Member Andersen motioned to approve the minutes. Member Gonzalez seconded the motion, which was approved 4/0/0/0/1 (yes, no, abstain, recuse, not present):
Yes: Members: Roche, Andersen, Gonzalez and Chair Balch No: none
Abstain: none
Recuse: none
Not Present: Member Marquez
4. (4:28) BAAQMD Rule 9-6 (Informational Item)
Receive an update and provide Feedback to staff regarding the Bay Area Air Quality Management District’s amendments to Regulation 9, Rule 6.
JP Ross, the Vice-President of Local Development, presented on the Bay Area Air Quality Management District's (BAAQMD) newly adopted rules phasing out the sale of gas water heaters and furnaces to reduce nitrogen oxide emissions. In this presentation, JP Ross outlined the phased implementation timeline starting in 2027 for smaller residential water heaters, followed by furnaces and larger water heaters in subsequent years, and discussed the expected shift to heat pump water heaters as a compliance alternative.
Selected topics discussed by Executive Committee Members:
• Chair Balch confirmed that load planning is critical, and JP Ross explained how Ava incorporates heat pump adoption and additional loads into its Integrated Resource Planning (IRP).
• Member Gonzalez proposed a "readiness assessment" to help residents understand potential costs before emergencies occur.
• Chair Balch called for a strong public education campaign led by BAAQMD to ensure understanding of the rule.
• Member Roche spoke about the need to reduce exceptions so that the rules are equitable.
(56:47) Public Comment: Jim Lutz asked how Ava plans to address the expected increase in electric load and suggested exploring on-bill financing or virtual power plant programs to manage installations and load. He also spoke about a lawsuit against similar rules in Southern California.
Ava Community Energy
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5. (1:17:09) Building Efficiency Accelerator Funding (Informational Item) Staff will provide an update on the funding status for the Building Efficiency Accelerator program and seek feedback on a proposed budget reallocation.
Allison Lopez, the manager of the Commercial Energy Efficiency program, presented on Ava’s Building Efficiency Accelerator, a program funded by the CPUC's Public Purpose Program (PPP) charge, aimed at helping large commercial and industrial customers improve energy efficiency. In this presentation, Lopez explained the program’s progress, which includes enrolling 30 buildings and identifying 15 GWh of potential energy savings, as well as a recent CPUC budget recalculation error that reduced the program's funding from $13.4 million to $5.56 million. To address the funding gap, she proposed reallocating $1 million from Ava’s building electrification budget.
Selected Topics discussed by Executive Committee Members:
• Member Roche asked whether other CCAs faced similar funding disparities. • Member Roche also confirmed that the proposed $1 million budget reallocation is a one-time adjustment to support existing program participants. • Chair Balch expressed general agreement that staff is appropriately addressing the issue.
6. (1:28:56) Committee Member and Staff Announcements including requests to place items on future Executive Committee Agendas
There were no Committee Member or Staff Announcements.
7. (1:30:00) Adjourned at 10:30am
The next Executive Committee meeting will be held on Wednesday, February 5, 2025.
Fiscal Year 2024
-2025
Mid-Year Budget Update
Executive Committee
February 5, 2025
1 Fiscal Year 2024-2025 Mid-Year Budget Summary
• Ava's Fiscal Year (FY) runs from July 1, 2024 to June 30, 2025
• Mid-year budget update based on actuals through
Nov 2024, estimates for the month of Dec 2024,
and updated forecast for Jan-Jun 2025
• Forecasted FY Total Net Revenues increased from
$42MM to $95MM, primarily driven off an increase
in Electricity Sales, partially offset by an increase in cost of energy
• Note: Stockton & Lathrop starting service in April
• Increases to Cost of Energy is predominately from
increases in renewable energy costs
• Decreases to Overhead Operating Expenses is
mostly due to lower personnel costs due to hiring
timing and reduced legal costs
• Increase in Non-Operating Revenue is from higher
interest rates earned on interest bearing accounts
2 June Mid-Year Delta
OPERATING ACTIVITY BUDGET UPDATE
REVENUE & OTHER SOURCES
Electricity Sales 881,671,000 934,857,000 53,186,000
Uncollectables (8,817,000) (9,349,000) (532,000)
Other Operating Revenue 0 4,846,000 4,846,000
TOTAL OPERATING REVENUE 872,854,000 930,354,000 57,500,000
EXPENSES & OTHER USES
Cost of Energy 760,248,000 775,538,000 15,290,000
Cost of Energy Services 11,608,000 11,601,000 (7,000)
Total Energy Operating Expenses 771,856,000 787,139,000 15,283,000 Total Overhead Operating Expenses 45,267,000 39,334,000 (5,933,000) TOTAL OPERATING EXPENSES 817,123,000 826,473,000 9,350,000 NET OPERATING POSITION 55,731,000 103,881,000 48,150,000
NON-OPERATING ACTIVITY
TOTAL NON-OPERATING REVENUE 11,799,000 15,459,000 3,660,000 TOTAL NON-OPERATING EXPENSES 25,300,000 24,414,000 (886,000) NET NON-OPERATING POSITION (13,501,000) (8,955,000) 4,546,000 TOTAL NET REVENUES 42,230,000 94,926,000 52,696,000
Overview of Revenue Changes
3 • At time of budget approval, our rate
estimates for July-Dec 2024 were slightly
higher than what actualized
• Jan-Jun 2025 rates materialized higher than
forecasted at time of budget approval
• On average, revenues were about 3.6%
lower than expected in the first half of the
Fiscal Year
• On average, revenues are expected to be
about 19.2% higher than expected in the
second half of the Fiscal Year
• For the full fiscal year, revenues are
expected to be about 6.0% higher than
expected
-20,000,000
0 20,000,000
40,000,000
60,000,000
80,000,000
100,000,000
120,000,000
Jul-24 Aug-24 Sep-24 Oct-24 Nov-24 Dec-24 Jan-25 Feb-25 Mar-25 Apr-25 May-25 Jun-25 Fiscal Year Revenue Trends & Performance
Difference Cummulative Difference Budget Actual Updated Overview of Rate Changes • As of June 2024 budget approval, the Jul-Dec 2024 rate estimates were slightly higher than what actualized.
While the PCIA was relatively unchanged, overall
generation charges actualized approximately half a cent per kWh lower o Note that load estimates were in line with actuals • As of June 2024 budget approval, the Jan-Jun 2025 rate estimates were lower than what actualized; this was
largely offset by a lower PCIA, leading to relatively flat overall generation charges
• The increase in rates leads to an increase in operating headroom and an increase in the current forecasted
budget surplus
• Jan-Jun rates are structurally lower than Jul-Dec rates due to summer/winter rate differentials
• The increase in rates and decrease in PCIA is driven by lower brown power costs and higher RA and RPS
4 Overview of Energy Cost Changes
• Energy costs typically have variability between budget and actuals and year over year volatility
• Decrease in Capacity is due to sale of previous
procurement in anticipation of Stockton joining in
2024 and the CEC changing the load forecast
methodology for 2025
• Renewable energy costs increased by nearly $55MM,
or about 41%
• Decreases in carbon free energy is due to increases in the large hydro allocation that is provided due to PCIA • CAISO ancillary costs and basis price spreads have
been consistently to our benefit
5 Hedges Open/CAISO Capacity Renewables Carbon-Free Other Budget to Actual Attribute Energy Costs
Budget Actual
Power Charge Indifference Adjustment Rate (PCIA)
Uncertainty
• The California Public Utilities Commission (CPUC) set PCIA and PG&E bundled customer rates for 2025 in a December 2024 decision. • The CPUC's decision indicated that these rates are subject to after-the-fact revision for a change in PCIA methodology: "the Commission may in another proceeding consider revisions to the [Market Price Benchmark] MPB methodology that may impact the adopted 2025 Final MPBs."
• MPBs reflect prevailing market costs for different energy products – renewable energy certificates, brown power, and Resource Adequacy (RA). There is a formally set methodology approved by the CPUC to collect market data and calculate the MPBs. MPBs are used to calculate the PCIA and the PCIA is in turn part of the aggregate electricity rates.
• Translation – Ava's 2025 collections are subject to revisitation via rate changes in 2026, if/when the CPUC revises the 2025 Final MPBs. 6 • The CPUC may change a key
element of the PCIA.
• Retroactive revisions to Ava's
2025 revenue could be
effectuated via 2026 rates.
PCIA Rate Uncertainty – PCIA Mechanics
• PCIA and PG&E's bundled customer rates are a key
determinant of Ava revenue
• PCIA is a nonbypassable charge to recover the stranded costs of PG&E's legacy procurement portfolio.
• PCIA is not an exit fee. All customers pay PCIA.
o MPBs determine the value of PG&E's legacy procurement portfolio, and so drive PCIA rates
o High MPBs => low PCIA => greater operating headroom for Ava revenue o 2025 Forecast MPBs were relatively high (see sidebar). o A change to the 2025 methodology would impact
▪ the true-up of 2025 rates (with revisions to take effect in 2026) and ▪ the forecast of 2026 rates (which will also take effect in 2026, subject to true-up in 2027)
7 System RA MPBs ($/kw/year)
2023 (final) 2024 (final) 2025 (forecast)
14.37 28.26 40.31
What change, if any,
the CPUC will make
to MPBs, is
unknown.
Accordingly, the
financial impacts of
any changes are
also unknown.
Surplus Revenue Waterfall Allocation
8 • First $50MM to Reserve Funds
• CARE/FERA/MED customers each receive
$25 bill credit (currently about 200,400
accounts)
• Next $25MM split 60/40 to additional on-bill
credits and Net Billing Tariff resilience
program
• Remaining surplus allocated to reserve
funds
Resolution R-2024-42: Waterfall
Allocations of Surplus Revenue
Allocation Balance
Mid-Year Estimated Net Revenues 94,926,000
Contributions
Working Capital - 94,926,000
Reserve Funds 50,000,000 44,926,000
Divisional Surplus
CARE/FERA/MED Credit $25 5,010,000 39,916,000
On Bill Credits 60% 15,000,000 24,916,000
Net Billing Tariff Program 40% 10,000,000 14,916,000
Total Divisional 30,010,000
Reserve Fund Additional 14,916,000
Total to Reserves 64,916,000
Reserve Funds
9 Reserve fund policy P-10.1 as
set by resolution R-2021-2
• Target percentage is 50% of
operating expenses
• Range allows as low as
25% and as high as 75%
variation
• Because reserves are to cover forward operating expenses, the Operating Expenses column are the forward fiscal year’s values • The Forward FY expenses for 2023-2024 contributions are current updated operating expenses
▪ Current reserves provide approximately 40% coverage
• Contributions from current FY revenues increase balance to cover next FY’s operating expense
▪ Currently estimated near $1B Contribution Year Contribution Withdraws Balance Operating Expenses* PctCoverage 2018-2019 40,513,687 - 40,513,687 410,686,000 9.9%
2019-2020 49,704,640 - 90,218,327 383,045,000 23.6%
2020-2021 - - 90,218,327 471,897,000 19.1%
2021-2022 65,655,073 - 155,873,400 562,667,000 27.7%
2022-2023 75,000,000 - 230,873,400 732,885,000 31.5%
2023-2024 100,000,000 - 330,873,400 828,800,000 39.9%
2024-2025** 64,916,000 - 395,789,400 1,076,267,000 36.8% *Operating Expenses are fiscal year ahead for coverage purposes **Proposed contribution with projected operating expenses to cover for FY 25-26 as of 1/28/2025 Moss Landing Fire
Overview
Joanie Brooke | February 5, 2025
Moss Landing Battery Fire – what happened?
2 Image: Interior of Moss Landing BESS Phase I
https://www.energy-storage.news/fire-at-moss-landing-energy-storage-facility-what-we-know-so-far/ Moss Landing was a non-standard design:
• Phase I was built indoors, as one large 300MW
battery
• Minimal fire barriers between cells/modules
• Battery chemistry: Lithium Nickel Manganese
Cobalt Oxide (NMB), generally considered more
prone to thermal runaway
• Phase I was constructed before NFPA 855
established standards for battery storage design
and installation
• The non-standard design, and emergency
response standards, allowed the fire to propagate
through the entire building.
Current Standards
Current fire standard: NFPA 855
• Released 4/1/2020, Updated 8/25/2023
• Standard dictates testing, fire walls, minimum spacing between units, site-specific hazard mitigations, &
emergency response planning.
• Each container has dedicated HVAC unit, smoke, gas &
fire alarms, fire suppression systems, & automatic shut-off controls. • Factory testing ensures containers can suppress fires and prevent igniting adjacent units
Battery Chemistry
• Lithium Iron Phosphate (LFB) is the most common
chemistry today, generally considered to be stable.
3 Image Source: Daggett PV+Storage March 2024 Progress Report Overview of California Energy Storage
California has over 13,000MW of Energy Storage
online as of the end of 2024 and ~11,500MW is
Utility scale
>94% of all utility scale battery capacity came
online in 2021 or later after NFPA 855 standards
were released
* Information taken from CEC CA Energy Storage Survey 4 Overview of Ava’s Contracted Batteries
Ava’s contracted portfolio:
• 19 Storage Sites under contract (+1GW Nameplate)
▪ 7 in operation (352.5MW)
▪ 12 under development (737 MW)
• All are outdoor stationary containers (~2MW each)
• All permitted after NFPA 855 was released
• 16 Lithium-ion Phosphate (LFB)
• 3 Lithium Nickel Manganese Cobalt Oxide (NMB)
▪ Ava is discussing full safety reviews of NMB sites
with the developers.
5 Image Source: Scarlet I PV+Storage Feb 2024 Progress Report Project List
6 Project Technology Actual / Forecasted COD Storage Capacity (MW) Contract Duration (yr) County State
ONLINE PROJECTS
Henrietta D BESS 12/28/2021 10 15 Kings California
Ocotillo Solar + Storage 8/31/2023 50 10 San Diego California Daggett Solar + Storage 9/5/2023 12.5 15 San Bernadino California Oberon Solar + Storage 1/1/2024 125 15 Riverside California Scarlet I Solar + Storage 5/3/2024 30 20 Fresno California Tumbleweed_4hr BESS 7/16/2024 50 15 Kern California
Scarlet II_BESS BESS 12/11/2024 75 10 Fresno California
PROJECTS IN DEVELOPEMENT
Malaga – BESS BESS 2/15/2025 96 15 Fresno California
Hanford BESS 3/6/2025 16 15 Kings California
Kola BESS 7/7/2025 125 20 San Joaquin California
Alpaugh BESS 4/1/2026 5 12 Tulare California
Sun Pond Solar + Storage 4/1/2026 42.5 20 Maricopa Arizona Tumbleweed_8hr BESS 6/1/2026 50 12 Kern California
Scarlet III – BESS BESS 12/31/2026 70 10 Fresno California Aramis BESS 1/1/2027 25 10 Alameda California
Imperial Sun Solar + Storage 3/31/2027 100 15 Imperial California Gabriel BESS BESS 5/10/2027 100 20 Los Angeles California Zeta Solar Solar + Storage 7/26/2027 37.5 20 Merced California Rosemary Solar + Storage 6/1/2028 70 20 Fresno California