Central Coast Community Energy (3CE) Policy Board
September 14, 2023

Policy Board of Directors
September 14, 2023
9:00 a.m.

Paso Robles Inn
1103 Spring Street
Paso Robles, CA 93446
Public may participate through ZOOM. For ZOOM participation please join by computer audio at:
https://us02web.zoom.us/j/82977357049
Or join by phone:
+1 669 900 6833 or +1 669 219 2599
If you have anything that you wish to be distributed to the Board, please provide 15 copies to a member of 3CE staff or the Board Clerk, who will distribute the information to the Board members and staff.

The public may comment on the consent agenda and matters not listed on the agenda but within the Board's jurisdiction at the opening of the meeting. The Board may not take action at this meeting on any item not listed on the Agenda other than to refer the matter to staff or set it for a future meeting. The public may comment on a specific item listed on this agenda when the Board considers that item.

Speakers are generally limited to 3 minutes each. Total comment time and time limits per speaker may be limited at the discretion of the Chair.

In addition, members of the public may request and receive copies without undue delay of any documents that are distributed to the Board, unless there is a specific exemption under the Public Records Act that prevents the disclosure of the record. (Cal. Gov’t Code Section 54957.5) In compliance with Government Code Section 54957.5, non-exempt writings that are distributed to a majority or all of the Board in advance of a meeting and that relate to an agenda item will be made available at the Paso Robles Inn located at 1103 Spring Street Paso Robles, CA 93446 during normal business hours and are also available on the 3CE website located at: https://pub-3ce.escribemeetings.com/ AGENDA

Welcome & Roll Call
Pledge of Allegiance
Corrections or Additions
The Clerk will announce agenda corrections or proposed additions of emergency, urgency, or continued items, which will be acted on by the Board as provided in Section 54954.2 of the California Government Code.

Public Comment on Items on the Consent Calendar and Items Not listed on the Agenda The public may address the Board on the Consent Calendar and any matter within the jurisdiction of the Board but not on the agenda.

CONSENT CALENDAR

1. Approve minutes from the June 21, 2023 meeting of the Policy Board

2. Adopt Resolution No. PB-2023-06 approving Addendum No. 6 to the 3CE Community Choice Aggregation Implementation Plan and Statement of Intent and delegating authority to the CEO to file, if necessary, with the CPUC

3. Appoint Lew Bauman and Rosemary Soto to serve on the 3CE Community Advisory Council for a three (3) year term

4. Appoint Virginia Johnson and Kris Damhorst to serve on the 3CE Community Advisory Council for a three (3) year term

5. Appoint Matthew McClish to serve on the 3CE Community Advisory Council for a three (3) year term

6. Ratify reappointments of Community Advisory Councilmembers Heather Allen, Katie Davis, Wayne Norton, Richard Stedman, and Norman Tuitavuki to an
additional three (3) year term; and reappoint Community Advisory Councilmembers Jeff Byron, Brandon O’Rourke, and Dennis Osmer to an additional three (3) year term

7. Approve 3CE Community Advisory Council FY 2023-24 work plan unanimously supported by the CAC

8. Receive FY 2022-23 Energy Programs Update

9. Receive Regulatory Quarterly Update

10. Receive the Treasurer’s Report for the period October 1, 2022, through June 30, 2023

REGULAR AGENDA

11. Consider adopting the Fiscal Year 2023-24 Recommended Budget for Central Coast Community Energy (3CE) including updated Financial Policies; and adopt Resolution No. PB-2023-07 approving cost-based rate adjustments

12. Consider staff presentation and support proposal to reduce existing natural gas facility emissions while securing valuable Resource Adequacy product for 3CE through a hybrid natural gas power purchase agreement

13. Receive Nominating Committee recommendation and appoint Policy Board Chair and Vice Chair Board member comments and reports
Adjournment
Policy Board of Directors
June 21, 2023
1:30 pm
Central Coast Community Energy
70 Garden Court, Suite 300
Monterey, CA 93940
County of Santa Cruz
701 Ocean Street,
Third Floor Training Room
Santa Cruz, CA 95060
City of Pismo Beach
City Hall
Council Chambers
760 Mattie Road, Pismo Beach, CA 93449
City of San Luis Obispo
City Hall
990 Palm Street, Council
Chambers San Luis Obispo, CA
93401
City of Santa Maria
City Hall
110 East Cook Street, Council Chambers Santa
Maria, CA 93454
County of Santa Barbara
County Administration
Building 105 East
Anapamu Street,
Board of Supervisors Conference
Room Santa Barbra, CA 93101

MINUTES
The meeting was called to order at 1:30 PM with 13 members attending from 5 Noticed locations and a quorum established.

Directors Present: 3CE HQ: Adams, Baron, Brooks, Donaldson, Dutra, Freeman, Keeley, Kosmicki, McPherson, Vice Chair Williams
City of SLO: Marx, Orona
City of Santa Maria: Patino
Directors Absent: Martin, Nomura, Ortiz-Legg (arrived at 1:41pm at the City of SLO), Rios, Waage, Chair McShane (arrived at 1:48pm at 3CE HQ)
Clerk confirmed that there were no corrections or additions to the agenda.

The Chair opened the public comment period for the consent agenda and items not listed on the agenda.

The following individual(s) addressed the Board.
 Hunter Leighton
 John Hamon

Chair closed the public comment period in the consent agenda.

CONSENT CALENDAR
MOTION: Moved by Director McPherson, Seconded by Director Patino to approve the consent agenda.

ACTION: The Motion Carried with a voice vote: 13/0/6
AYES: Adams, Baron, Brooks, Donaldson, Dutra, Freeman, Keeley, Kosmicki, Hamon, Marx, McPherson, Patino, Vice Chair Williams
NOES: None ABSENT: Martin, Nomura, Ortiz-Legg, Rios, Waage, Chair McShane

1. Approved Minutes from the February 15, 2023 Regular Meeting of the Policy Board

2. Approved Minutes from the May 15, 2023 Special Meeting of the Policy Board of Directors

3. Received the Fiscal Year 2021-22 Audited Financial Statements

4. Received the Fiscal Year 2022-23 Mid-Year Budget Re-forecast and Approved to Increase Appropriation

5. Appointed Dewayne Woods as Treasurer for Central Coast Community Energy

6. Appointed Charles McKee as General Counsel for Central Coast Community Energy

7. Received Update on FY 2022-23 Energy Programs

8. Regulatory Quarterly Update

9. Treasurer's Report

PRESENTAION

10. Geothermal Project

REGULAR AGENDA

11. Community Advisory Council Report
Chair opened public comment period.

There were no public comments.

Chair closed the public comment period.

ACTION: Discussion item; no action required.

12. Operations Board Report
Chair opened public comment period.

There were no public comments.

Chair closed the public comment period.

ACTION: Discussion item; no action required.

13. CEO Report
a. Staffing Updates
b. Market and Regulatory Impacts on Cost of Energy
c. CAISO Interconnection Enhancements Initiative

d. Geothermal Project Comes Online
Chair opened public comment period.

There were no public comments.

Chair closed the public comment period.

ACTION: Discussion item; no action required.

14. Consider and Approve 3CE's Project Selection Criteria Chair opened public comment period.

The following individual(s) addressed the Board.
 John Hughes
 Kevin Dayton
 Seth Capron
 Paul Gutierez
 Horacio Suarez
 Micheal Chiacos
 Emily Gartenberg
 Benjamin Eichert
 Ana Rosa Rizo-Centino
 Veronica Wilson
 Alex Lantsberg
 Tim Frank
 Eric Veium
Chair closed the public comment period.

MOTION: Moved by Vice Chair Williams Seconded by Director McPherson to approve.

ACTION: The Motion Carried with a voice vote: 14/1/4
AYES: Adams, Baron, Brooks, Donaldson, Dutra, Freeman, Keeley, Kosmicki, Marx, McPherson, Orona, Ortiz-Legg, Vice Chair Williams, Chair McShane
NOES: Patino
ABSENT: Martin, Nomura, Rios, Waage

15. Adopt Resolution PB-2023-05 Authorizing CEO to Execute a Clean Energy Purchase Contract with California Community Choice Financing Authority and Ancillary Documents and Agreements to Effectuate the Prepay Financing Transaction
Chair opened public comment period.

There were no public comments.

Chair closed the public comment period.

MOTION: Moved by Director Keeley, Seconded by Director Kosmicki to approve.

ACTION: The Motion Carried with a voice vote: 11/2/6

AYES: Adams, Donaldson, Dutra, Keeley, Kosmicki, Marx, McPherson, Orona, Ortiz-Legg, Vice Chair Willaims, Chair McShane
NOES: Baron, Patino
ABSENT: Brooks (left at 3:47PM), Freeman (left at 3:47PM), Martin, Nomura, Rios, Waage Adjourned at 4:01PM

Staff Report Item 2
TO: 3CE Policy Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Jeremy Clark, Manager of Energy Trading
SUBJECT: Adopt Resolution PB-2023-06 approving Addendum No. 6 to the 3CE Community Choice Aggregation Implementation Plan and Statement of Intent and delegating authority to the CEO to file, if necessary, with the CPUC
DATE: September 14, 2023
RECOMMENDATION:

This recommends that the Policy Board of Directors adopt Resolution PB-2023-06 approving Addendum No. 6 to the 3CE Community Choice Aggregation Implementation Plan and Statement of Intent ("Implementation Plan”) to make certain adjustments reflecting the expansion of 3CE service to the City of Atascadero and San Luis Obispo County. It further recommends that the Policy Board delegate authority to the CEO to file Addendum No. 6, if necessary to initiate service within the City of Atascadero and County of San Luis Obispo.

BACKGROUND:

California Public Utilities Code section 366.2 requires that the governing body of each CCA adopt, at a duly noticed public meeting, an Addendum to its Implementation Plan, and submit the Implementation Plan to the Commission for certification.
3CE’s initial Implementation Plan was certified by the Commission on November 15, 2017. 3CE (then Monterey Bay Community Power) community choice aggregator(“CCA”) program launched on March 1, 2018.

The Commission certified Addendums No. 1 – 3, each of which expanded 3CE’s service area to specific jurisdictions, culminating in the 33 member agencies in which we currently serve customers.

The 3CE JPA was amended at various times to incorporate new jurisdictions as members, culminating

in the current 35 member agencies (which includes the City of Atascadero and The County of San Luis Obispo.

On March 8, 2023, the Commission certified Addendum No. 4, extending service to the City of Atascadero, though it has yet to finalize a date for the commencement of service. On August 11, 2023, the Commission certified Addendum No. 5, extending service to San Luis Obispo County, though it has yet to finalize a date for the commencement of service.

DISCUSSION/ANALYSIS:

Despite determining that 3CE met each of its statutory obligations under PUC section 366.2, the Commission has failed to provide an implementation date for commencement of services related to either addendum.

Staff is currently awaiting the Commission’s further guidance to secure firm implementation dates and, additionally, whether resubmission of Addendum No. 6 (which combines the anticipated impacts of 3CE’s expansion to Atascadero and the County of San Luis Obispo) is necessary to secure a firm implementation date.

Addendum No. 6 combines the anticipated impacts of 3CE’s expansion of electric services to the City of Atascadero and the County of San Luis Obispo and certain other forecast modifications reflecting 3CE’s recent operating history. Such impacts include customer energy requirements, peak demand, renewable energy purchases, financial plan, and various other items. Based on historic PG&E data, electricity demand within the City of Atascadero and San Luis Obispo County is roughly 800 GWh or 16% of 3CE’s total demand upon initiation of service, estimated at 6,156 GWh.

Approval of Addendum 6 provides staff the ability to move quickly to potentially withdraw Addendum Nos. 4 and 5 and to submit Addendum No. 6 prior to the December 31, 2023, deadline, should such resubmission become necessary. Until such time that Addendum No. 6 would be submitted to the Commission, the approval of Addendum No. 6 does not invalidate or otherwise impact the status of Addendum Nos. 4 and 5.

Following expansion of service, anticipated in January 2025 for all eligible customers within the City and County’s jurisdiction, 3CE’s total number of customer accounts will increase to approximately 516,000.

FISCAL IMPACT:

The FY 24-25 Operating Budget will reflect any fiscal impacts related to the expansion of service.

CONCLUSION:

The Policy Board’s adoption of Resolution PB-2023-06 approves Addendum No. 6 to the Implementation Plan and enables staff to take necessary steps to submit Addendum No. 6 to the Commission for certification which may be required prior to the expansion of electric service to the City of Atascadero and County of San Luis Obispo.

ATTACHMENT(S):

1. Draft Resolution PB-2023-06

2. Addendum No. 6 to 3CE’s Community Choice Aggregation Implementation Plan (without attachments)

RESOLUTION NO. PB-2023-06

A RESOLUTION OF THE CENTRAL COAST COMMUNITY ENERGY POLICY BOARD OF DIRECTORS APPROVING ADDENDUM NO. 6 TO THE COMMUNITY CHOICE

AGGREGATION IMPLEMENTATION PLAN AND STATEMENT OF INTENT AS REQUIRED BY PUBLIC UTILITIES CODE SECTION 366.2(c)(3)
WHEREAS, the Central Coast Community Energy ("3CE") is a Joint Powers Authority established and operated pursuant to California Government Code section 6500 et seq. to study, promote, develop, conduct, operate, and manage energy programs in the California Central Coast region; and
WHEREAS, the founding members of 3CE include the counties of Monterey, Santa Cruz and San Benito and the cities of Santa Cruz, Watsonville, Salinas, Monterey, Pacific Grove, Carmel, Seaside, Marina, Sand City, Soledad, Greenfield, Gonzales, Hollister, San Juan Bautista, Scotts Valley, and Capitola; and
WHEREAS, 3CE’s initial Implementation Plan for the initiation ofservice was certified by the California Public Utilities Commission on March 1, 2018; and WHEREAS, on December 5, 2018, the Policy Board approved Resolution No. PB-2018-07 approving Amendment No. 1 to the Agreement to include the Cities of Morro Bay and San Luis Obispo; and
WHEREAS, 3CE’s Addendum No. 1 to its Implementation Plan for the expansion of service to the Cities of Morro Bay and San Luis Obispo was certified by the California Public Utilities Commission on March 7, 2019; and
WHEREAS, on December 4, 2019, the Policy Board approved Resolution No. PB-2019-04 approving Amendment No. 2 to the Agreement to include the County of Santa Barbara and the Cities of Arroyo Grande, Carpinteria, Del Rey Oaks, Goleta, Grover Beach, Guadalupe, Paso Robles, Pismo Beach, Santa Maria, and Solvang; and
WHEREAS, 3CE’s Addendum No. 2 to its Implementation Plan for the expansion of service to the jurisdictions added by Amendment No. 2 was certified by the California Public Utilities Commission on March 6, 2020; and
WHEREAS, on September 2, 2020, the Policy Board approved Resolution No. PB-2020-05 approving Amendment No. 4 to the Agreement to include the City of Buellton; and WHEREAS, 3CE’s Addendum No. 3 to its Implementation Plan for the expansion to the City of Buellton was certified by the California Public Utilities Commission on March 8, 2021; and WHEREAS, on September 22, 2022, the Policy Board approved Resolution No. PB-2022-02 approving Amendment No. 5 to the Agreement to include the City of Atascadero; and WHEREAS, 3CE’s Addendum No. 4 to its Implementation Plan for the expansion to the City of Atascadero was certified by the California Public Utilities Commission on March 8, 2023; and

WHEREAS, on May 15, 2023, the Policy Board approved Resolution No. PB-2023-02 approving Amendment No. 6 to the Agreement to include the County of San Luis Obispo; and WHEREAS, the County of San Luis Obispo is now a member of 3CE and desires to offer community aggregation service within its jurisdiction commencing January 1, 2025; and WHEREAS, Public Utilities Code Section 366.2 requiresthat a community choice aggregator develop an Implementation Plan and Statement of Intent (“Implementation Plan”) detailing the process and consequences of aggregation and that such plan, including any subsequent changes to it, be considered, and adopted at a duly noticed public hearing; and WHEREAS 3CE’s Addendum No. 5 to its Implementation Plan for the expansion to County was certified by the California Public Utilities Commission on August 11, 2023; and WHEREAS, Addendum No. 6 to the 3CE Implementation Plan has been prepared to address the process and consequences of 3CE expansion to the City of Atascadero and the County of San Luis Obispo and was presented to the Policy Board at a duly noticed public hearing for its consideration and adoption, and is attached hereto as Attachment A.; and NOW, THEREFORE, after conducting a duly noticed public hearing as required by the Public Utilities Code Section 366.2 (c)(3), the Policy Board hereby adopts Addendum No. 5 to 3CE’s Community Choice Aggregation Implementation Plan and Statement of Intent to address 3CE expansion to the County of San Luis Obispo.

PASSED AND ADOPTED this 14th day of September 2023, by the following vote:

AYES:

NOES:

ABSENT:

Chair, Steve McShane
Attest:

Board Clerk, Heather Vowell

1 ADDENDUM NO. 6 TO THE

COMMUNITY CHOICE AGGREGATION

IMPLEMENTATION PLAN

AND STATEMENT OF INTENT

ADDRESSING
CENTRAL COAST COMMUNITY ENERGY’S

EXPANSION TO INCLUDE THE CITY OF

ATASCADERO AND THE

COUNTY OF SAN LUIS OBISPO
DATE OF SUBMISSION:

2 Table of Contents
CHAPTER 1 – Introduction & Statement of Intent................................................................................3 CHAPTER 2 – Changes to Address 3CE Service Extension to the Expansion Communities.........5 Enrollment Process...............................................................................Error! Bookmark not defined.

Program Phase-In......................................................................................................................................7 Sales Forecast.............................................................................................................................................8 Financial Plan...........................................................................................................................................12 Expansion Addendum Appendices .....................................................................................................13

3 CHAPTER 1 – Introduction & Statement of Intent
Addendum No. 6 to Monterey Bay Community Power Authority’s (“MBCP” and now, Central Coast Community Energy or “3CE”) Implementation Plan and Statement of Intent (“Implementation Plan”)1 addresses 3CE’s expansion to include the City of Atascadero in San Luis Obispo County (“Atascadero”) and the County of San Luis Obispo. 3CE is a Joint Powers Authority established and operating under Government Code § 6500 et. seq. 3CE runs the Community Choice Aggregation (“CCA”) program (as provided for in Public Utilities Code § 366.2 et. seq., for the counties of Monterey, Santa Cruz, San Benito, and Santa Barbara Counties as well as certain cities within San Luis Obispo County.

Initial Implementation Plan and Statement of Intent
3CE—at the time, named MBCP—submitted its initial Implementation Plan to the California Public Utilities Commission (the “Commission”) on August 16, 2017. That initial Implementation Plan was certified by the Commission on November 15, 2017. 3CE successfully launched the Program on March 1, 2018, to its initial member agencies.2 Addendum No. 1 to the Implementation Plan and Statement of Intent At its December 5, 2018, Meeting, 3CE’s—at the time, named MBCP—Policy Board3adopted Resolution No. PB-2018-07 to include the cities of Morro Bay and San Luis Obispo, both of which are in San Luis Obispo County. Addendum No. 1 to the Implementation Plan (“Addendum No. 1”), approved by Resolution No. PB-2018-08, was submitted to the Commission for certification on December 7, 2018, and was certified on March 7, 2019. 3CE began service in the cities of Morro Bay and San Luis Obispo in January 2020.

1 On June 3, 2020, Monterey Bay Community Power Authority’s Policy Board of Directors adopted Resolution PB-2020-02 to amend its Joint Powers Agreement changing its name to Central Coast Community Energy effective September 4, 2020. Any reference to Monterey Bay Community Power Authority or MBCP in the initial Implementation Plan and Statement of Intent, or in either Addendum No. 1 or Addendum No. 2 should be interpreted to mean Central Coast Community Energy or 3CE. 2 Initial member agencies included: the counties of Monterey, Santa Cruz and San Benito as well as the cities of Capitola, Santa Cruz, Scotts Valley, Watsonville, Salinas, Monterey, Pacific Grove, Carmel, Seaside, Marina, Sand City, Soledad, Greenfield, Gonzales, Hollister, and San Juan Bautista. 3 3CE is governed by two distinct governing bodies. First, the Policy Board retains responsibility for policy-related direction and decisions pertaining to 3CE’s organization and makes approvals of membership requests. Second, the Operations Board oversees operational matters.

4 Addendum No. 2 to the Implementation Plan and Statement of Intent On December 4, 2019, via Resolution No. PB-2019-005, MBCP adopted and authorized submittal of Addendum No. 2 to the Implementation Plan (“Addendum No. 2”) to address expansion into eleven additional jurisdictions including the County of Santa Barbara as well as the cities of Arroyo Grande, Carpinteria, Del Rey Oaks, Goleta, Grover Beach, Guadalupe, Paso Robles, Pismo Beach, Santa Maria, and Solvang.

Addendum No. 2 was submitted December 17, 2019, and certified by the Commission on March 9, 2020. 3CE began service in the Pacific Gas & Electric service area jurisdictions (Northern Santa Barbara County, Arroyo Grande, Del Rey Oakes, Grover Beach, Guadalupe, Paso Robles, Pismo Beach, Santa Maria, and Solvang, collectively, the “2021 PG&E Jurisdictions”) in January 2021.

Due to delays in Southern California Edison’s Customer Service Re- Platform, 3CE began service in Southern California Edison territory (including Southern Santa Barbara County and the cities of Carpinteria and Guadalupe, collectively, the “2021 SCE Jurisdictions”) in October 2021.

Addendum No. 3 to the Implementation Plan and Statement of Intent On November 4, 2021, the 3CE Policy Board adopted Resolution No. PB-2020-06, approving Addendum No. 3 to the Implementation Plan and Statement of Intent (“Addendum No. 3”) to address expansion into the City of Buellton.

Addendum No. 3 was submitted December 3, 2020, and certified by the Commission on March 8, 2021. 3CE began service in Buellton in January 2022.

Addendum No. 4 to the Implementation Plan and Statement of Intent On September 22, 2022, the 3CE Policy Board adopted Resolution No. PB-2022-03, approving Addendum No. 4 to the Implementation Plan and Statement of Intent (“Addendum No. 4”) to address expansion into the City of Atascadero.

Addendum No. 4 was submitted December 7, 2022, and certified by the Commission on March 8, 2023.

Addendum No. 4 was voluntarily withdrawn on [Date].

Addendum No. 5 to the Implementation Plan and Statement of Intent On May 15, 2023, the 3CE Policy Board adopted Resolution No. PB-2023-04, approving Addendum No. 5 to the Implementation Plan and Statement of Intent (“Addendum No. 5”) to address expansion into San Luis Obispo County.

Addendum No. 5 was submitted May 17, 2023, and certified by the Commission on August 11, 2023.

5 Addendum No. 5 was voluntarily withdrawn on [Date].

Addendum No. 6 to the Implementation Plan and Statement of Intent 3CE’s Addendum No. 6 primarily addresses 3CE’s planned expansion to serve customers in the City of Atascadero and the County of San Luis Obispo beginning in January 2025.

Additionally, Addendum No. 6 contains certain updated projections that are consistent with 3CE’s Integrated Resources Plan, current resource planning, Operating Budget, and other operating considerations.

Finally, Addendum No. 6, including references to 3CE’s August 16, 2017 Implementation Plan, December 7, 2018 Addendum No. 1, December 17, 2019 Addendum No. 2, November 4, 2020 Addendum No. 3, September 22, 2022 Addendum No. 4, May 15, 2023 Addendum No. 5, each of which are incorporated by reference and attached hereto as Appendices E, F, G, H, and I respectively, address all requirements identified in Public Utilities Code Section 366.2(c)(4), including universal access, reliability, equitable treatment of all customer classes and any requirements established by state law or by the CPUC concerning aggregated service.

CHAPTER 2 – Changes to Address 3CE Service Extension to the City of Atascadero and the County of San Luis Obispo
As set for above, 3CE’s Addendum No. 6 primarily addresses 3CE’s planned expansion to serve customers in the County of San Luis Obispo beginning in January 2025. Addendum No. 5 also provides updated projections based on 3CE’s operating history.

The addition of San Luis Obispo County in January 2025 will have minor impacts on 3CE’s operations including customer energy requirements, peak demand, renewable energy purchases, revenues, expenses, and various other items. 3CE’s commitment to 60% of its retail load met by clean and renewable resources by 2025 and 100% by 2030, are reflected in the following sections.

To the extent that other details related to membership expansion are not specifically discussed within this Addendum No. 5, 3CE represents that such information has not substantively changed relative to the initial Implementation Plan or Addendums Nos. 1, 2, 3, or 4 as previously certified by the Commission.

6 The following communities are now signatories to the 3CE Joint Powers Agreement and represent 3CE’s current Members or Membership4:

Member Agencies
1 City of Arroyo Grande
2 City of Atascadero
3 City of Capitola
4 City of Carmel-by-the-sea
5 City of Carpinteria
6 City of Buellton
7 City of Del Rey Oaks
8 City of Goleta
9 City of Gonzales
10 City of Greenfield
11 City of Grover Beach
12 City of Guadalupe
13 City of Hollister
14 City of Marina
15 City of Monterey
16 City of Morro Bay
17 City of Pacific Grove
18 City of Paso Robles
19 City of Pismo Beach
20 City of Sand City
21 City of Salinas
22 City of San Juan Bautista
23 City of San Luis Obispo
24 City of Santa Cruz
25 City of Santa Maria
26 City of Scotts Valley
27 City of Seaside
28 City of Soledad
29 City of Solvang
30 City of Watsonville
31 County of Monterey
32 County of San Benito
33 County of San Luis Obispo

4 The term Member(s) or Membership as used throughout the initial Implementation Plan or Addendums Nos. 1, 2, 3, 4, 5 and 6 shall refer to the complete list of 3CE’s 35 member agencies.

7 34 County of Santa Barbara
35 County of Santa Cruz
Enrollment Process
All customers currently enrolled in the 3CE program were appropriately noticed. Before additional phases of customers are enrolled in the Program, 3CE will comply with all required notice procedures, including mailing written notices to customers. Notice shall be sent at least two calendar months, or sixty days, prior to the commencement of automatic enrollment and two calendar months or sixty days, following the enrollment of customers.

All notices will provide information needed to understand the Program’s terms and conditions of service as well as explain how prospective customers can opt out of the Program, if desired.

All customers that do not follow the opt-out process specified in the customer notices will be automatically enrolled, and service will begin at their next regularly scheduled meter read date at least one calendar month, or thirty days, following the date of automatic enrollment, subject to the service phase-in plan later described in Chapter 5.

Customers enrolled in the Program will continue to have their electric meters read by and receive billing statements for electric service from their respective distribution utility (PG&E or SCE, as appropriate, depending upon the geographic area in which such customer takes electric service).

The electric bills for Program customers will show separate charges for generation procured on behalf of participating customers by the Program and all other charges related to the delivery of such electricity, as well as other utility charges, assessed by the distribution utility.

After service cutover, and as previously noted, customers will be given at least two additional notifications to opt out of the Program and return to their respective distribution utility (PG&E or SCE, as appropriate) following receipt of their first and second bills. Customers that opt out between the initial cutover date and the close of the post enrollment opt-out period will be responsible for program generation charges for the time they were served by 3CE but will not otherwise be subject to any penalty for leaving the program. Customers that have not opted out within thirty days of the fourth opt-out notice will be deemed to have elected to become a participant in the Program and to have agreed to the Program’s terms and conditions, including those pertaining to requests for termination of service.

Program Phase-In
3CE will continue to phase-in the customers of its Program as communicated in this Implementation Plan. To date, six phases have been successfully implemented. The City of Atascadero and the County of San Luis Obispo enrollment will be the seventh phase and is scheduled for January 2025.

8 Phase 1. Complete, March 2018: All commercial, industrial and agricultural customers, which comprised approximately 34.14 percent of total customer load.

Phase 2. Complete, July 2018: Approximately 235,000 additional customers, comprised of residential accounts, which approximated 17.5 percent of total customer load.

Phase 3. Complete, January 2020: Approximately 30,000 residential, commercial, industrial, agricultural, and street lighting accounts within the cities of San Luis Obispo and Morro Bay, which comprised approximately 5 percent of total customer load.

Phase 4. Complete, January 2021: Residential, commercial, industrial, agricultural, and street lighting accounts within the 2021 PG&E Jurisdictions, which comprised approximately 27 percent of total customer load.

Phase 5. Complete, October 2021: Residential, commercial, industrial, agricultural, and street lighting accounts within the 2021 SCE Jurisdictions, which comprised approximately 15 percent of total customer load.

Phase 6. Complete, January 2022: Residential, commercial, industrial, agricultural, and street lighting accounts within the City of Buellton, which comprised approximately .64 percent of total customer load.

Phase 7. Planned, January 2025: Residential, commercial, industrial, agricultural, and street lighting accounts within the City of Atascadero and the County of San Luis Obispo, with exact timing subject to economic and operational constraints.

The multi-phase implementation approach has provided 3CE with the ability to start slow, addressing any problems and unforeseen challenges of a small manageable program before gradually building to full program implementation (with an expected customer base of approximately 517,000 accounts), following completion of all seven enrollment phases.

Sales Forecast
Regarding 3CE’s sales forecast, which is addressed in Chapter 6, Load Forecast and Resource Plan, 3CE assumes that total annual retail sales will increase to 5,800 GWh following theexpansion to the City of Atascadero and County of San Luis Obispo. The following tables have been updated to reflect the impacts of planned expansion to 3CE’s new membership.

9 CHAPTER 6, Resource Plan Overview
Central Coast Community Energy
Proposed Resource Plan (GWh)
2025 2026 2027 2028 2029 2030 2031 2032 2033 2034
CCCE Demand
Retail Demand (GWh)

(5,011)

(5,031)

(5,058)

(5,080)

(5,109)

(5,136)

(5,172)

(5,198)

(5,235)

(5,272)
Expansion Related Retail Demand (GWh)

(805)

(808)

(813)

(816)

(821)

(825)

(831)

(835)

(841)

(847)
Losses and UFE (GWh)

(340)

(342)

(343)

(345)

(347)

(349)

(351)

(353)

(355)

(358)
Total Wholesale Demand (GWh)

(6,156)

(6,181)

(6,215)

(6,241)

(6,276)

(6,310)

(6,354)

(6,386)

(6,432)

(6,476)
CCCE Supply
Renewable Resources (GWh) 2,444 3,061 2,881 2,854 2,846 2,818 2,810 2,770 2,720

2,709
Unspecified Power (GWh) 3,712 3,119 3,334 3,388 3,430 3,493 3,544 3,616 3,711

3,768
Total Supply (GWh) 6,156 6,181 6,215 6,241 6,276 6,310 6,354 6,386 6,432

6,476
Energy Open Position (GWh) - - - - - - - - - -
CHAPTER 6, Customer Forecast
Central Coast Community Energy
Enrolled Retail Service Accounts
Phase-In Period (End of Month)
Mar-18 Jul-18 Jan-20 Jan-21 Oct-21 Jan-22 Jan-25
Residential <15 232,859 261,201 340,117 377,585 379,279 393,033 Commercial 31,685 31,685 35,371 48,665 53,828 54,372 61,757 Industrial 37 37 26 66 82 82 92
Ag & Pumping 4,819 4,819 4,566 6,743 7,368 7,375 57,721 Street Lighting & Traffic 2,211 2,211 2,393 3,261 3,428 3,451 4,029 Total 38,752 271,611 303,557 398,852 442,291 444,559 516,632

10 Central Coast Community Energy
Retail Service Accounts (End of Year)
2023 to 2033
2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
Residential 379,279 393,033 391,655 390,653 389,819 389,076 388,384 387,699 387,018 386,340 Commercial 54,372 61,757 61,505 61,367 61,268 61,177 61,090 61,005 60,920 60,835 Industrial 82 92 92 91 91 91 91 91 91 91
Ag & Pumping 7,375 57,721 55,864 55,543 55,266 55,091 54,952 54,834 54,725 54,623 Street Lighting &
Traffic 3,451 4,029 4,021 4,017 4,014 4,011 4,009 4,006 4,003 4,001 Total 444,559 516,632 513,137 511,671 510,458 509,446 508,526 507,635 506,757 505,890 CHAPTER 6, Sales Forecast
Central Coast Community Energy
Energy Requirements (GWh)
2025 2026 2027 2028 2029 2030 2031 2032 2033 2034
CCCE Demand
Retail Demand (GWh) 5,011 5,031 5,058 5,080 5,109 5,136 5,172 5,198 5,235 5,272 Expansion Related Retail Demand (GWh) 805 808 813 816 821 825 831 835 841 847 Losses and UFE (GWh) 340 342 343 345 347 349 351 353 355 358 Total Wholesale Demand (GWh) 6,156 6,181 6,215 6,241 6,276 6,310 6,354 6,386 6,432 6,476

11 CHAPTER 6, Renewables Portfolio Standards Energy Requirements Central Coast Community Energy
Renewable Portfolio (GWh)
2025 2026 2027 2028 2029 2030 2031 2032 2033 2034
Retail Sales 5,816 5,839 5,871 5,896 5,929 5,961 6,003 6,033 6,076 6,118 Annual RPS Target (% of Retail Sales) 47% 49% 52% 55% 57% 60% 66% 72% 78% 84% Annual RPS Target (Minimum GWh) 2,714 2,881 3,053 3,223 3,399 3,577 3,962 4,344 4,739 5,139 Annual L/T RPS Target (Minimum GWh) 1,764 1,872 1,984 2,095 2,210 2,325 2,575 2,823 3,081 3,341 Program Renewable Target (GWh) 3,489 3,971 4,462 4,953 5,455 5,961 6,003 6,033 6,076 6,118 Program Target (% of Retail Sales) 60% 68% 76% 84% 92% 100% 100% 100% 100% 100% Vol. Margin of Over-procurement (GWh) 775 1,090 1,409 1,730 2,055 2,385 2,041 1,689 1,337 979 3CE’s procurement strategy to accelerate long-term contracting of renewable energy to achieve 60% RPS by 2025 and 100% by 2030 is likely to result in 3CE’s routine exceedance of RPS compliance mandates.

CHAPTER 6, Capacity Requirements
Central Coast Community Energy
Capacity Portfolio (MW)
2025 2026 2027 2028 2029 2030 2031 2032 2033 2034
Retail Peak Demand (MW) 743 744 745 747 748 749 750 752 753 755 Expansion Related Retail Peak Demand (MW) 180 181 183 183 184 185 186 186 188 188 Losses and UFE (GW) 54 54 54 54 55 55 55 55 55 55
Total Wholesale Peak Demand (MW) 977 979 982 984 986 989 991 994 996 998 Planning Reserve Requirement 17% 17% 17% 17% 17% 17% 17% 17% 17% 17% Capacity Reserve Requirement 166 166 167 167 168 168 168 169 169 170 Total Capacity Requirement (MW) 1,143 1,146 1,149 1,151 1,154 1,157 1,160 1,162 1,165 1,168

12 Financial Plan
Regarding 3CE’s financial plan, which is addressed in Chapter 7, Financial Plan, 3CE has updated its expected operating results, which now include projected impacts related to service expansion to the City of Atascadero and County of San Luis Obispo. The following table reflects updated operating projections in consideration of the planned expansion.

CHAPTER 7, CCA Program Operating Results
Notional values for reference only.
2025 2026 2027 2028 2029 2030 2031 2032 2033 2034
Revenues $643 $625 $616 $526 $539 $525 $528 $530 $534 $538 Costs
Cost of Energy $595 $579 $581 $505 $506 $490 $493 $496 $499 $503 Energy Programs $16 $18 $19 $21 $23 $24 $25 $26 $26 $26 Administrative Budget $10 $10 $10 $10 $11 $11 $11 $12 $12 $12 Total Costs $621 $606 $611 $536 $540 $525 $530 $533 $537 $541 Net Position $22 $19 $5 -$10 $0 -$1 -$2 -$3 -$3 -$3
End of Year Reserve Fund $256 $275 $281 $270 $270 $269 $268 $265 $261 $258 End of Year Reservce Fund as % of Revenues 40% 44% 46% 51% 50% 51% 51% 50% 49% 48% Central Coast Community Energy
Notional Indicative 10-year Financial Forecast ($ MM)

13 Expansion Addendum Appendices
Appendix A: Central Coast Community Energy Resolution PB-2023-02 Appendix B: Sixth Amendment to Central Coast Community Energy Joint Powers Agreement
Appendix C: County of San Luis Obispo Ordinance No. 3468 Appendix D: City of Atascadero Resolution No. 2022-004
Appendix E: Central Coast Community Energy Implementation Plan and Statement of Intent
Appendix F: Addendum No. 1 to 3CE Implementation Plan and Statement of Intent w/out attachments.

Appendix G: Addendum No. 2 to 3CE Implementation Plan and Statement of Intent w/out attachments
Appendix H: Addendum No. 3 to 3CE Implementation Plan and Statement of Intent w/out attachments
Appendix I: Addendum No. 4 to 3CE Implementation Plan and Statement of Intent w/out attachments
Appendix J: Addendum No. 5 to 3CE Implementation Plan and Statement of Intent w/out attachments
Appendix K: Central Coast Community Energy Resolution PB-2023-XX

Staff Report Item 3
TO: 3CE Policy Board of Directors
FROM: Community Advisory Council Selection Committee for Monterey County Steve McShane, Policy Board Chair (Salinas)
Mary Adams, Policy Board Director (Monterey County)
Jeff Baron, Policy Board Director (Carmel-by-the-Sea)
SUBJECT: Appoint Lew Bauman and Rosemary Soto to serve on the 3CE Community Advisory Council for a three (3) year term
DATE: September 14, 2023
RECOMMENDATION:

This recommends that the Policy Board of Directors (the “Board”) accept the Community Advisory Council Selection Committee’s (the “Selection Committee”) nominations and appoint the following nominees to the Community Advisory Council (“CAC”) for the indicated terms to fill two vacated seats:
 Lew Bauman (Monterey County) to an initial term ending September 30, 2026.  Rosemary Soto (Monterey County) to an initial term ending September 30, 2026.

BACKGROUND:

The CAC is a standing committee comprised of 15 members, representing customers and stakeholders from Central Coast Community Energy’s service area, and providing feedback on proposals, recommendations, and policies.

As provided for in Article VII, Section 2 of the Central Coast Community Energy Operating Rules and Procedures (the “Operating Rules”), the Selection Committee shall submit nominations from a list of applicants of citizens that reside or work within the agency’s service area to the full Policy Board for its consideration and appointment.

Two Monterey County CAC seats were recently vacated. Chair McShane appointed a selection committee comprising of Monterey Policy Board members in accordance with previous practice.

DISCUSSION/ANALYSIS:

Staff targeted outreach throughout Monterey County communities, including a diverse network of stakeholders, including member agencies, key chambers, business organizations, and community groups representing disadvantaged and underserved communities.

The Selection Committee reviewed submitted materials and nominates the following candidates:
 Lew Bauman: Dr. Bauman's distinguished career and extensive contributions to public administration, engineering, and environmental services reflect his exceptional leadership and expertise in a variety of fields. His ability to manage complex projects, drive organizational improvements, and navigate financial challenges has made a significant impact on the communities he has served. During his time as the CAO for Monterey County he collaborated in the formation of Monterey Bay Community Power, now Central Coast Community Energy.  Rosemay Soto: Ms. Soto's career is a testament to her unwavering dedication to advancing racial and social equity. Her extensive experience in grassroots organizing, coupled with her honors and awards, reflects her tireless commitment to creating a more just and inclusive society in Monterey County and beyond.

Both candidates have committed to serving at least one year of the term.

FISCAL IMPACT:

There is no fiscal impact associated with this recommendation.

CONCLUSION:

The Policy Board’s appointment of Dr. Bauman and Ms. Soto will bring the CAC to its full capacity and ensure complete representation for the Council.

ATTACHMENT(S):

Resumé from Nominated Applicants

1. Lew Bauman

2. Rosemary Soto

1 LEW C. BAUMAN Ph.D., P.E. 139 Mar Vista Drive
Monterey, CA 93940
(831) 595-2735
[email protected]

PROFESSIONAL EXPERIENCE
2005 - 2019
County of Monterey, CA
County Administrative Officer (CAO)
As Chief Executive Officer of Monterey County, population 450,000, managed public safety, health and welfare, social services, parks and recreation, land use and environment, and county administration. The County also operates Natividad Medical Center, a 172 acute-care teaching hospital and Level II Trauma Center, Mazda-Laguna Seca Raceway, and the Monterey County Water Resources Agency operating regional reservoirs providing the majority of the County’s water supply. As CAO, responsible to the Board of Supervisors for administration of day-to-day affairs of the County; advising the Board on the creation, organization, conduct, operation, alteration, consolidation or abolition of the various departments, offices, and agencies of the County government; as well as preparation of the recommended County Budget, strategic planning, and administration of labor relations.

KEY ACCOMPLISHMENTS
 Budget: Administration and preparation of County’s annual $1.5 billion Recommended Budget for General Fund and Enterprise Operations including 4,507 FTE’s. Effectively managed 11% decrease in General Fund revenue over five years through a strategic approach using a rolling three year forecast to close a $65.4 million projected structural gap while funding a strategic reserve equal to 10% of County revenues; negotiated labor agreements for employee share in pension contributions; initiated reserves for unfunded liabilities; initiated the prefunding of retiree health benefits plan; and achieved Board’s strategy to achieve structural balance of expenditures and revenues - without major service level impacts and maintaining positive labor relations. Near end of term as CAO, through refunding $80 million in Certificates of Obligation obtained credit ratings by Fitch stating “The upgrade to 'AA+' for the Issuer Default Rating (IDR) reflects the county's strong operating performance and financial flexibility.

The county's financial resilience is exceptionally strong”; and by S&P of Long Term ‘AA’, stating “the ratings also reflect our view of the county’s very strong management, with strong financial policies and practices under our Financial Management Assessment FMA) methodology; and strong budgetary performance”
 Hospital: Negotiated Intergovernmental Transfer and Grant (ITG) agreement between County, district hospital, and a community non-profit hospital to create interim Board of Trustees and provide $10 million grant to facilitate hospital turn-around. The ITG and subsequent turn-around effort dramatically improved quality of care and reversed hospital’s annual losses of approximately $25 million to an annual positive margin of $34 million in 2019, and cash reserves of $70 million over five-year period. Hospital subsequently received designation for first Level II Trauma Center in County.  Reorganization and Governance: Reorganized and consolidated departments including General Services, Public Works, Planning, Building, Capital Projects, and former Redevelopment Agency in consolidated Resource Management Agency to improve coordination and efficiencies of land use, capital projects, and public works contract administration. Initiated on-going process to centralize Human Resources, through creation of new department structured to improve coordination and efficiency. Improved Board governance and oversight of county operations through creation and staffing of Board Committees including Capital Improvement, Human Resources, Energy and Environment, and Economic Development.
 Capital Improvement: Formalized county’s capital improvement program through adoption of a consolidated 5-year CIP document. The 2016 Capital Improvement Program included 44 fully funded projects with a value of $212 million. Projects included an $88.9 million Jail Housing Addition with 576 new beds and administrative space; a $52.8 million new 120 bed Juvenile Hall; a $35 million repurposing and remodel of the County’s historic East/West Wing Courthouse to serve as the District Attorney’s and

2 related administrative offices; and acquisition and remodeling of an additional Government Center, Schilling Place, occupying 24.47 acres with 202,358 sq. ft. of offices, 1,200 parking spaces, with 87,207 sq. ft. of warehouse and 4,500 sq. ft. day‐care facility.  Monterey Bay Community Power: Collaborated with counties of Santa Cruz and San Benito, and their respective cities in drafting the Joint Powers Agreement (JPA) forming Monterey Bay Community Power (MBCP) in February 2017: members of MBCP including the counties of Monterey, Santa Cruz and San Benito, as well as sixteen (16) of their municipalities. MBCP provides all members electric generation as the CPUC registered Community Choice Aggregation (CCA) provide electric generation service to customers to choose clean-source power at a cost equivalent to the existing private utility, PG&E, while retaining PG&E’s role in maintaining power lines and providing customer service. The CCA model ensures local economic vitality as rates paid by local customers stays local and surplus revenues that normally flowing to the utility (PG&E) instead fund renewable energy projects, create jobs and stimulate the economy. MBCP delivered 100% of its electrical energy from greenhouse gas-free sources in the very first year. In total, the program is projected to reduce the region's carbon dioxide emissions by nearly 17.5 billion pounds over 10 years. In 2019, MBCP served 270,000 customers, with operating revenues of $117 million. After one year of operation on September 30, 2018, MBCP audited net position was $40,842,401.
 SVBGSA: Collaborated with City of Salinas to spearhead chartering of the Salinas Valley Basin Groundwater Sustainability Agency (SVBGSA) in response to California’s “Sustainable Groundwater Management Act” (“SGMA”) per California Water Code for sustainable management of local groundwater basins granting authority, and technical and financial assistance necessary to sustainably manage groundwater. In 2015, as CAO convened the City of Salinas, the Water Resources Agency, the Monterey County Farm Bureau, the Growers-Shippers Association, and Salinas Valley Water Coalition to facilitate consensus amongst key stakeholders concerning the formation, governance, and financing of the SVBGSA. SVBGSA was then established in 2017 and approved by the forming agencies and tasked with developing a comprehensive groundwater sustainability plan by 2020 and implementing the plan to achieve the Salinas Valley Basin sustainability by 2040. 1999 - 2005
County of Monterey, CA
Director of Public Works
Department Head and District Engineer for 46 Special County Districts. Managed three divisions: Engineering, Operations (including Environmental Services) and Administration. Responsibilities included oversight of five-year Capital Improvement Plan and administration of county budget units including County Surveyor, Litter Control, County Disposal Sites, County Service Areas, Sanitation Districts, and Assessment Districts.

KEY ACCOMPLISHMENTS
 Audit, Budget, and Reorganization: Initiated departmental review and Peer Review Audit by American Society of Civil Engineers toward restructuring Department to enhance internal operations, fiscal accountability, and service delivery. Reorganized Administrative Division into Finance and Administrative Operations Divisions to improve focus and accountability. Restructured staffing within budget constraints of Environmental Services Division through privatization of selected water and wastewater special districts.
 Privatization: Through RFP process privatized five (5) sanitation districts and two (2) water districts. In coordination with CAO’s Office, and through negotiation with union (SEIU), transitioned employees without layoffs. Privatization resulted in customer rate stabilization and a cumulative estimated $4.29 million customer savings over a five-year period
 Capital Projects Delivery: Delivered over $60 million in Capital Improvement Projects. Key projects included: seismic retrofit of 21 County bridges; road and traffic signal installation; Redevelopment Agency work; and a key State Highway 1 project receiving special recognition by the state Consulting Engineers Association and the Monterey County Transportation Agency award for innovative collaboration between State, County, and the development community implementing congestion relief on State Highway 1.

3  Operations: Rectified decades of deferred maintenance by funding and implementing County-wide Pavement Assessment and Asset Management Plan rehabilitating over half County’s paved roads.

Updated Department’s equipment fleet with the latest equipment and technology and initiated new Operational and Training programs.
 Equal Opportunity: Served as one of two Department Head Council representatives on Equal Opportunity Commission. At department level, implemented new training and recruitment activities to enhance equal opportunity for applicants and ensure compliance at the department level resulting in a departmental 49.2% minority representation (14.7 % increase in five years). 1997 - 1999
City of Foster City, CA
City Engineer/District Engineer
Managed Public Works Administration and Engineering Division. Served as City and District Engineer for the Estero Municipal Improvement District’s (EMID) water and wastewater utilities. Key responsibilities include implementation of major program areas including aggressive five year $50 million CIP, development engineering, traffic engineering, and related City Engineering functions.

KEY ACCOMPLISHMENTS
 Development Engineering: Responsible for negotiation and administration of Subdivision and Improvement agreements, property acquisitions, and public improvement engineering for over 1.7 million ft2 of fast-track high-technology high-rise development projects including: VISA International Headquarters, Electronics for Imaging (EFI) World Headquarters, Legacy Partners/Lincoln Property – West Coast Headquarters, and Beals-Martin and Foster Woodstock Mixed Use Developments.  District Engineering: District Engineer responsible for EMID water utilities serving 34,000 residents in Foster City and Mariner’s Island, San Mateo and wastewater collection and pumping facilities serving Foster City. Under a Joint Powers Agreement, served as Foster City’s engineering representative in coordinating the City’s interests in operational and management aspects of the San Mateo 14.7 mgd wastewater treatment facility.
 Capital Improvement Engineering: Managed the City/District’s $50 million five year CIP program including design, construction management, contract management, capital budgeting, and management of consulting architectural and engineering contracts. Key projects included initial planning for new $20 million Civic Center Campus and construction of $1.5 million Senior Center, as well as multiple water and wastewater capital improvement and rehabilitation projects. 1994 – 1997
Environmental Services Department, City of San Jose, CA Senior Engineer
Managed and coordinated program engineering activities of Phase I of South Bay Water Recycling Program (SBWRP), a $140 million program designed to deliver 21.1 million gallons per day of highly treated recycled water to the cities of San Jose, Santa Clara, and Milpitas. As member of a select task force, collaborated in development of scope, schedule, and budget for the multi-agency effort. Responsibilities included program development, oversight and coordination of engineering activities including design, construction management, and contract management including sixteen consulting engineering contracts with a combined value of $22.5 million as well as coordination with environmental, permitting, financial, and public outreach programs. Budget and financial control. SBWRP contractually included active participation of the cities of San Jose, Santa Clara, and Milpitas, the Santa Clara Valley Water District, and the United States Bureau of Reclamation.

4 1990-1994
Environmental Services Department, City of San Jose, CA Associate Engineer
Managed Engineering Section of Department’s Technical Support Division. As lead capital projects engineer for City’s regional 167 mgd advanced wastewater treatment facility, administered $60 million five year Capital Improvement Program including design, construction management, contract management, capital budgeting, and management of consulting architectural and engineering contracts. Successfully completed over 80 public works contracts for the City’s 167 mgd advanced wastewater facility. Highlights of projects managed included:
a new $9.2 million Technical Services Facility, a 14,000 ft2 state-of-the-art analytical laboratory and 20,000 ft2 office facility; Toxic Gas Ordinance Compliance Modifications, a $2.9 million retrofit of gas-based disinfection facilities to meet the City’s Toxic Gas Ordinance; Plant Modernization, a $10.2 million multi-phase project including a 2.8 MW engine-generator, major pump and piping systems modifications, structural rehabilitation of primary treatment facilities, a 6,400 ft2 paint facility; the Residual Sludge and Plant Pipe Modernization, a $4.0 million project involving reconstruction of sludge beds and piping systems, roadways, a 2,500 ft2 Operations facility; and hydraulic modeling of the Plant’s 16.5 MGD process water system for increased flow demands and replacement of process piping and ammonia storage and chemical feed systems. 1989-1990
Kennedy/Jenks/Chilton Engineers, San Francisco, CA
Environmental Engineer
Project Engineer responsible under direction for design and implementation of remedial activities and regulatory assessment of hazardous waste sites involving VOCs, metal contaminated soils and PCB containing sludges.

Representative projects included: Industrial Waste Pretreatment Plant, Emission Reduction Project, United Airlines, San Francisco International Airport in compliance with Bay Area Air Quality Management District Regulation 8, Rule 8 to reduce volatile hydrocarbon emissions and Guadalupe Valley Municipal Improvement District Project specifying remedial alternatives for removal of PCB and heavy metal containing sludges at the abandoned Guadalupe Valley Municipal Improvement District, CA treatment facilities 1986-1989
U.C. Los Angeles, CA
Post Graduate Research Engineer III
Designed, developed, and implemented technical evaluations of unit operation removal of chlorinated organics and precursors from City of San Diego’s pilot water reclamation facility. Investigations included engineering analyses of operating field installations and bench scale pilot studies. Water reclamation unit operations evaluated included coagulation-sedimentation, UV, reverse osmosis, carbon adsorption, aeration, ozonation, ion-exchange, and chemical reduction. Research conducted under contract with California Department of Water Resources.
1983-1985
United Energy Corporation, Foster City, CA
Staff Scientist
As team scientist, collaborated with engineering staff in development and construction of pilot low temperature/pressure ethanol distillation system, including design of pneumatic process control for pilot and scale-up. Coordinated field construction management of two 5,000 gpd scale-up facilities located in Borrego Springs, CA and Barstow, CA.
1979-1981
Kinnetic Laboratories, Santa Cruz, CA
Oceanographer II
Coordinated and organized expeditions and sampling programs for numerous oceanographic and biological studies including storm flow monitoring, NPDES discharge waivers, underwater surveys for oil platform construction, and collection for dredge spoil bioassays. Projects included water quality, oceanographic, and biological investigations in support of secondary discharge waivers for the cities of Carmel, Santa Cruz, Anchorage, Alaska and for the East Bay Dischargers Association.

5 EDUCATION
Ph.D., Civil Engineering, UCLA, 1989
M.S., Civil Engineering, UCLA, 1987
Eng. and Management Program, UCLA
M.S., Marine Science, UCSC, 1983
B.A., Biology, UCSC, 1980

REGISTRATION
Civil Engineer, CA No. C51340
Grade IV - California Water Treatment Plant Operator No. 21294

PROFESSIONAL AFFILIATIONS
California State Association of Counties
American Society of Civil Engineers
American Public Works Association
Governmental Finance Officers Association
Monterey Rotary Club

BOARDS AND COMMISSIONS
Trustee, Natividad Medical Center Board of Trustees (2005-2019) Operations Board Member, Monterey Bay Community Power (2017-2019) Manager, Community Health Innovations (CHI), Board of Managers (2011-2014) Director, United Way of Monterey County (2007-2015)
Director, Central South Coast Section – CEAC (2000-2002) Commissioner, Monterey County EEO Commission (2002-2003) Commissioner, Monterey County Disabilities Commission (2013) Chairman, American Society of Civil Engineers, Peer-Review Committee (2008-2010) Board of Directors, Rotary Club of Monterey (2019-2021)

PROFESSIONAL PUBLICATIONS
Bauman, L.C. and M.K. Stenstrom. (1990) Removal of Organohalogens and Organohalogen Precursors in Reclaimed Wastewater-I. Water Research, Vol. 24, No. 8, pp. 949-955.

Bauman, L.C. and M.K. Stenstrom. (1990) Removal of Organohalogens and Organohalogen Precursors in Reclaimed Wastewater-II. Water Research, Vol. 24, No. 8, pp. 957-964.

Bauman, L.C. and M.K. Stenstrom. (1989) Observations of the Reaction between Organohalides and Sulfite.

Environmental Science and Technology, Vol. 23, No. 2, pp. 232-236.

Bauman, L.C., M.K. Stenstrom, and J.B. Neethling. (1989) “Alternative Processes for Removal of Organohalogens and Organohalogen Precursors from Osmosis Treated Secondary Effluents”. Report for California Dept. of Water Res., U.C.L.A. ENG-88-39. DWR Contract #B56726
Bauman, L.C. (1984) Aspects of the Larval Ecology of Carcinonemertes epialti. Wassman Journal of Biology, Vol. 42 (1-2), pp. 27-39.

Contact
www.linkedin.com/in/rysoto
(LinkedIn)
Top Skills
Racial Justice
Social Justice
Grassroots Organizing
Honors-Awards
Perry G. Flicker Award
Barbara Davies Award
Mayor Joe Gunter Award
Rosemary Soto
Advancing Racial Equity Culture & Practice
Salinas, California, United States
Experience
The California Endowment
Program Manager
November 2022 - Present (11 months)
Advancing Racial Equity Culture & Practice
Monterey County
Management Analyst III
October 2007 - October 2022 (15 years 1 month)
County Administrative Office,
Office of Community Engagement & Strategic Advocacy (OCESA) Spearheaded strategic priority initiatives of the Board of Supervisors:

Governing for Racial Equity
Violence Prevention & Intervention
2020 Census
VIDA Project (COVID-19 Response)
2021 Redistricting
Behavioral Health Bureau tenure included leading the MHSA Prevention & Early Intervention Component, Ethnic Services Manager, Student Mental Health Initiative, Violence Prevention

Staff Report Item 4
TO: 3CE Policy Board of Directors
FROM: Community Advisory Council Selection Committee for Santa Cruz County Steve McShane, Policy Board Chair (Salinas)
Bruce McPherson, Policy Board Director (Santa Cruz County) Yvette Brooks, Policy Board Director (Capitola)
Jimmy Dutra, Policy Board Director (Watsonville)
SUBJECT: Appoint Virginia Johnson and Kris Damhorst to serve on the 3CE Community Advisory Council for a three (3) year term
DATE: September 14, 2023
RECOMMENDATION:

This recommends that the Policy Board of Directors (the “Board”) accept the Community Advisory Council Selection Committee’s (the “Selection Committee”) nominations and appoint the following nominees to the Community Advisory Council (“CAC”) for the indicated terms to fill two vacated seats:
 Virginia Johnson (Santa Cruz County) to an initial term ending June 30, 2026.  Kris Damhorst (Santa Cruz County) to an initial term ending June 30, 2026.

BACKGROUND:

The CAC is a standing committee comprised of 15 members, representing customers and stakeholders from Central Coast Community Energy’s service area, and providing feedback on proposals, recommendations, and policies.

As provided for in Article VII, Section 2 of the Central Coast Community Energy Operating Rules and Procedures (the “Operating Rules”), the Selection Committee shall submit nominations from a list of applicants of citizens that reside or work within the agency’s service area to the full Policy Board for its consideration and appointment.

Two Santa Cruz County CAC seats were recently vacated. Chair McShane appointed a selection committee comprising of Santa Cruz Policy Board members in accordance with previous practice.

DISCUSSION/ANALYSIS:

Staff targeted outreach throughout Santa Cruz County communities, including a diverse network of stakeholders, including member agencies, key chambers, business organizations, and community groups representing disadvantaged and underserved communities.

The Selection Committee reviewed submitted materials and nominates the following candidates:
 Virginia Johnson: For over three decades, Ms. Johnson has been a dedicated advocate and leader in the Monterey Bay Area, working tirelessly on a diverse range of critical issues. Since 1989, her commitment has led her to serve on numerous 501c(3) governing boards, community task forces, and government commissions, addressing pressing concerns such as food insecurity, homelessness, AIDS, healthcare, environmental degradation, transportation, housing, and energy.
 Kris Damhorst: Mr. Damhorst is a dedicated and experienced professional with a strong background in community engagement, environmental advocacy, and renewable energy initiatives. Currently serving as a commissioner on the Santa Cruz County Commission on the Environment, I provide vital support and environmental updates to the Santa Cruz County Board of Supervisors, contributing to the sustainable development of our region.

Both candidates have committed to serving at least the initial year of their term.

FISCAL IMPACT:

There is no fiscal impact associated with this recommendation.

CONCLUSION:

The Policy Board’s appointment of Ms. Johnson and Mr. Damhorst will bring the CAC to its full capacity and ensure complete representation for the Council.

ATTACHMENT(S):

Resumé from Nominated Applicants

1. Virginia Johnson

2. Kris Damhorst

Contact
www.linkedin.com/in/virginia-johnson-3b5233b (LinkedIn) Top Skills
Sustainability
Nonprofits
Program Management
Honors-Awards
Cool California Organization of the
Year
Woman of the Year
Governor's Environmental and
Economic Leadership Award
(GEELA)
Climate Change Leader
Virginia Johnson
Santa Cruz County Board of Supervisors- Office of Supervisor Bruce McPherson
Santa Cruz, California, United States
Summary
Since January 2013, it has been my privilege to work with Supervisor Bruce McPherson, 5th District representative on the Santa Cruz County Board of Supervisors. I am advising the Supervisor on a myriad of environmental and economic policy matters with an overall focus on the region's transportation and energy initiatives.

Supervisor McPherson previously served the greater Monterey Bay region as a State Assembly member and Senator, and was Secretary of State under Governor Arnold Schwarzenegger.

From 2013 to 2016, Supervisor McPherson allowed me to lead the project team investigating Community Choice Energy on behalf of Santa Cruz, Monterey and San Benito Counties as well as all 18 Cities within the Monterey Bay tri-county area. After three years of work, Monterey Bay Community Power will be formed in early 2017. For more information, please visit the project's website, mbcommunitypower.org.

I remain in service to the community as the 5th District appointee to the Santa Cruz County Commission on the Environment and as a Board member and Vice-President of Community Affairs for the Santa Cruz County Chamber of Commerce.

Experience
Santa Cruz County Board of Supervisors-- Office of Supervisor Bruce McPherson
Policy Analyst
January 2013 - Present (10 years 9 months)
701 Ocean Street, Santa Cruz, CA 95060
Ecology Action
CEO/ Executive Director
February 1995 - April 2012 (17 years 3 months)

After joining Ecology Action in 1995, I served 17 years as Executive Director/ CEO. In that capacity, I used three decades of experience in strategic business development and marketing to build an outstanding team. Together we exponentially increased Ecology Action's mission-driven service offerings and revenues from an annual budget of $125k to a state-wide innovative environmental consultancy with $50 million under contract and an annual budget of $28 million. Ecology Action grew to be well-respected within the public and private sectors by continually implementing dozens of successful local and regional programs as well as partnering with numerous public, private and non-profit entities throughout California.

In 2010/11, together with partners, Ecology Action purchased and renovated a downtown Santa Cruz landmark, the Sentinel Building, now a certified LEED Gold building. The project was a key factor to reinvigorating the central section of historical downtown Santa Cruz.

In April 2012, I retired from service at Ecology Action to seek other ways to contribute to the community.

Education
University of California, Berkeley

Kris
Damhorst
Business Owner
Kris Damhorst
168 Twin Pines Dr
Scotts Valley, CA 95066
314.458.3960
[email protected]
ㅡ
Skills Public speaking, customer service, personnel management, organizational operations, highly technical computer, manufacturing and web development skills, digital and social media marketing. ㅡ
Experience Damhorst Toys & Puzzles Inc. / Owner
January 2004 - PRESENT, Hermann, MO
I currently own and operate Damhorst Toys & Puzzles Inc. My company manufactures and sells personalized wooden children’s toys online. I currently employ 20 people in our manufacturing facility located in Hermann, MO
3Com Corporation / Director of Technical Training
January 1999 – June, 2003, Santa Clara, CA
Responsible for technical training and certification of 3Com products including VOIP hardware, Encrypted Network Interface Cards, and emerging wireless hardware. Oversaw a team of five employees and coordinated with product launch teams for training and support of new products.

Ford Motor Company / Regional Zone Manager
September, 1992 - November. 1998, Michigan, Ohio, California Served in both Ford Motor Company’s Customer Service and Lincoln/Mercury Sales Divisions. Responsible for interfacing with retail Ford and Lincoln/Mercury Dealerships and their retail customers on both the sales and customer service side. Met and exceeded wholesale quotas and deadlines. Prepared and delivered dealership vehicle and customer service training . Conducted dealer financial audits on warranty claims.

ㅡ
Education Purdue University / Bachelor of Science in Economics - Minor in Communication
Sept 1986 - May 1992, West Lafayette, IN
Chosen as student representation for the Purdue Foundation Student Board to host alumni and represent the student body at various fundraising events.

Specifically chosen to host University luncheons with the University President before football games and events at the President’s personal residence.

President of the Purdue University Pre-Law Club

Staff Report Item 5
TO: 3CE Policy Board of Directors
FROM: Community Advisory Council Selection Committee for San Luis Obispo County Steve McShane, Policy Board Chair (Salinas)
Dawn Ortiz-Legg, Policy Board Director (San Luis Obispo County) Jan Marx, Policy Board Director (San Luis Obispo)
John Hamon, Policy Board Director (Paso Robles)
Ed Waage, Policy Bord Director (Pismo Beach)
SUBJECT: Appoint Matthew McClish to serve on the 3CE Community Advisory Council for a three (3) year term
DATE: September 14, 2023
RECOMMENDATION:

This recommends that the Policy Board of Directors (the “Board”) accept the Community Advisory Council Selection Committee’s (the “Selection Committee”) nominations and appoint the following nominees to the Community Advisory Council (“CAC”) for the indicated terms to fill one vacated seat:
 Matthew McClish (San Luis Obispo County) to an initial term ending June 30, 2026.

BACKGROUND:

The CAC is a standing committee comprised of 15 members, representing customers and stakeholders from Central Coast Community Energy’s service area, and providing feedback on proposals, recommendations, and policies.

As provided for in Article VII, Section 2 of the Central Coast Community Energy Operating Rules and Procedures (the “Operating Rules”), the Selection Committee shall submit nominations from a list of applicants of citizens that reside or work within the agency’s service area to the full Policy Board for its consideration and appointment.

A San Luis Obispo County CAC seat was recently vacated. Chair McShane appointed a selection committee comprising of San Luis Obispo Policy Board members in accordance with previous practice.

DISCUSSION/ANALYSIS:

Staff targeted outreach throughout San Luis Obispo County communities, including a diverse network of stakeholders, including member agencies, key chambers, business organizations, and community groups representing disadvantaged and underserved communities.

The Selection Committee reviewed submitted materials and nominates the following candidates:
 Matthew McClish: Mr. McClish is a seasoned Management and Photovoltaic (PV) professional with an exceptional track record of success, built on several years of diverse experience in numerous project manager roles across both the public and private sectors. His career reflects a dedication to achieving excellence, driven by a profound understanding of project management and a deep passion for the PV industry.

Mr. McClish has committed to serving at least the initial year of the term.

FISCAL IMPACT:

There is no fiscal impact associated with this recommendation.

CONCLUSION:

The Policy Board’s appointment of Mr. McClish will bring the CAC to its full capacity and ensure complete representation for the Council.

ATTACHMENT(S):

Resumé from Nominated Applicant

1. Matthew McClish

Contact
www.linkedin.com/in/matt-mcclish-5b098915 (LinkedIn)
Top Skills
Solar PV
Communication
Strength Training
Certifications
HIS
Matt McClish
Sunrun Consultant
Greater San Luis Obispo Area
Summary
Management and PV professional with several years of experience, including multiple project manager roles in the public and private sector. Excellent interpersonal skills along with a strong ability to manage relationships effectively and resolve complex issues across different lines of business while driving positive change to promote company initiatives, profitability, and growth
Experience
Sunrun
Consultant at Sunrun
December 2022 - Present (10 months)
A.M. Sun Solar, Inc.

Solar Consultant
March 2020 - December 2022 (2 years 10 months)
San Luis Obispo County, California, United States
Kennedy Club Fitness
General Manager
September 2005 - March 2020 (14 years 7 months)
Paso Robles Joint Unified School District
Board Trustee
November 2017 - December 2018 (1 year 2 months)
Paso Robles, California
Costco Wholesale
Senior Manager
October 1991 - November 2004 (13 years 2 months)
San Juan Capistrano, Burbank
Education

California Polytechnic State University-San Luis Obispo Interdisciplinary Studies
California State University-Long Beach
Masters of Public Administration

Staff Report Item 6
TO: 3CE Policy Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Heather Vowell, Board Clerk
SUBJECT: Ratify reappointments of Community Advisory Councilmembers Heather Allen, Katie Davis, Wayne Norton, Richard Stedman, and Norman Tuitavuki to an additional three (3) year term; and reappoint Community Advisory Councilmembers Jeff Byron, Brandon O’Rourke, and Dennis Osmer to an additional three (3) year term DATE: September 14, 2023
RECOMMENDATION:

This recommends that the Policy Board ratify reappointments of Community Advisory Councilmembers Heather Allen, Katie Davis, Wayne Norton, Richard Stedman, and Norman Tuitavuki to an additional three (3) year term; and reappoint Community Advisory Councilmembers Jeff Byron, Brandon O’Rourke, and Dennis Osmer to an additional three (3) year term.

BACKGROUND/DISCUSSION
Article VII of the 3CE Operating Rules and Procedures provide that the CAC members’ standard terms shall be three years (following an initial round of staggered terms) and that members may serve at least two terms.

The terms for Community Advisory Councilmembers Heather Allen, Katie Davis, Wayne Norton, Richard Stedman, and Norman Tuitavuki each ended in 2022. Although no formal reappointment action was taken, each member has continued to serve and is interested in continuing to serve. The Board’s ratification of their reappointment to a three-year term effective in 2022 shall extend their appointment through September 2025.

The terms for Community Advisory Councilmembers Jeff Byron, Brandon O’Rourke, and Dennis Osmer ended in 2023. Both members are interested in continuing to serve on the CAC. The Board’s

reappointment for another three-year term shall be effective immediately and extend through September 2026.

FISCAL IMPACT:

No fiscal impact is anticipated.

CONCLUSION:

Ratifying the reappointment and formally reappointing the CAC members to an additional three-year term provides an opportunity for these members to continue facilitating greater community involvement with 3CE.

Staff Report Item 7
TO: 3CE Policy Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Jon Griesser, Director of Energy Programs
SUBJECT: Approve 3CE Community Advisory Council FY 2023-24 work plan unanimously supported by the CAC
DATE: September 14, 2023
RECOMMENDATION:

This memorandum recommends that the Policy Board of Directors approve the 3CE Community Advisory Council (“CAC”) FY 2023-24 Work Plan which was unanimously supported by the CAC at its August 2023 meeting.

BACKGROUND:

FY 2023-24 is the second year in which 3CE, in coordination with the CAC Chair, submit an annual work agenda for the Policy Board’s consideration and approval to direct the work of the CAC.

At its August 2, 2023, meeting, the CAC discussed and unanimously supported seeking Policy Board approval of the 3CE CAC FY 2023-24 Work Plan (the “Work Plan”).

DISCUSSION/ANALYSIS:

The Work Plan sets forth an annual work agenda and provides direction for the CAC’s work by specifying areas requiring feedback and input form the CAC while defining a timeframe for CAC input into energy program offerings.
3CE’s professional staff, in coordination with the CAC Chair, developed the proposed Work Plan to align with the Policy Board direction and to focus the CAC in support of outreach and education regarding 3CE’s energy programs. The FY 2023-24 Work Plan focuses the CAC in support of our professional staff’s

development of a strategic demand response program(s). Staff will facilitate a series of informational study sessions that will include focused topic areas and guest speakers relevant to demand response.

The proposed schedule outlined in the Work Plan for FY 2023-24 is as follows:

1. October 2023: Introduction to Demand Response programs and understanding demand patterns and grid stress

2. December 2023: Overview of Demand Response strategies

3. February 2024: Focused presentation on 3CE’s proposed Demand Response program strategy

4. April 2024: Customer perspective on Demand Response programs

5. June 2024: Overview of 3CE FY 2023-24 Demand Response program

6. August 2024: 3CE Demand Response program update
FISCAL IMPACT:

None.

CONCLUSION:

The Policy Board’s approval of the FY 2023-24 CAC Work Plan provides direction and focuses the CAC’s work to support the 3CE Boards and professional staff in achieving 3CE goals.

ATTACHMENT(S):

1. FY 2023-24 CAC Work Plan

FY 2023-24 Work Plan
Community Advisory
Council
Mission:

Central Coast Community Energy provides reliable,
affordable, clean electricity, and electrification
programs to reduce greenhouse gas emissions and
strengthen our local community.

Central Coast Community Energy is governed
by separate Policy and Operations Boards. 3CE’s
professional staff carries out the policy direction of the governing boards.

The Central Coast Community Energy Community
Advisory Council is comprised of 15 members who serve
in an advisory capacity to the boards.

THE CAC SEEKS TO
Role of the Central Coast Community Energy Community Advisory Council (CAC)
The CAC Workplan specifies CAC Work items as requested by 3CE Boards or professional staff.

The CAC Workplan aligns with 3CE Board priorities as set out in the 3CE operating budget, as well as defining CAC community outreach to promote 3CE’s energy programs.

1. ANTICIPATED BOARD AND STAFF REQUESTED WORK ITEMS MAY INCLUDE:
• Energy Program Portfolio
• Energy Program Evaluation
• Communication and Outreach Strategies in support of Energy Programs & Customer Engagement and Education
◦ Commercial / Industrial customers
◦ Ag customers
◦ Residential Customers
◦ Underserved Communities
• Other matters identified by the Boards and/or professional staff.

Provide feedback,
as requested by
3CE professional
staff or Policy and
Operations Boards
(the “Boards”) on
3CE’s professional
staff proposals and
recommendations.

Actively engage with
3CE’s communities
to assist 3CE
operational and
policy goals,
engagement,
and community
education regarding
3CE’s programs and
initiatives.

Support 3CE Boards
and professional
staff with legislative
advocacy in
furtherance of 3CE’s
operational and policy
goals.

2. ANTICIPATED ADDITIONAL WORK ITEMS FURTHERING COMMUNITY OUTREACH AND EDUCATION IN SUPPORT OF 3CE AND ITS ENERGY PROGRAMS MAY INCLUDE:

October 2023 – Introduction to Demand Response programs and understanding demand patterns and grid stress.

Purpose: A) Introduce the concept of Demand Response programs and the benefits they provide to utilities and customers; B) Understand the patterns of energy demand in our community and the state during times of grid stress.

Speaker(s): DR Implementor, grid operators, and/or utility data analysis. • What are Demand Response programs and how do they work? • What benefits do they offer to utilities, customers, and the community? • What are the patterns of energy demand in our community? • How do we compare to other areas of the state?
• When does our grid typically experience stress?
• How could a Demand Response program be tailored to our specific demand patterns and times of grid stress?
Informational/Work Study Sessions facilitating the CAC’s support of 3CE staff’s development of a strategic Demand Response program supporting 3CE goals.

December 2023 – Overview of Demand Response Strategies
Purpose: A) Understand a variety of relevant Demand Response strategies implemented for different customer types; B) Provide feedback on 3CE staff on recommendations for future Demand Response program strategy.

Speaker(s): Utility representatives (IOUs, CCAs) and 3CE staff • How is time-based pricing used in Demand Response strategies? • What are the pros and cons of manual vs. automated Demand Response program models? • What are the different ways incentives can be leveraged for Demand Response programs? • What Demand Response strategies have had the greatest success in places like the Central Coast?
February 2024 – Focused Presentation on 3CE’s Proposed Demand Response Program Strategy
Purpose: A) Consolidate input and learnings from previous meetings; B) Provide feedback on 3CE’s recommended Demand Response approach.

Speaker(s): 3CE staff
• What would a successful Demand Response program look like for our community? • How do we address potential challenges or barriers identified in previous meetings? • What is the timeline for program implementation?

April 2024 – Customer Perspective on Demand Response Programs Purpose: Understand potential customer participation in Demand Response programs, focusing on customer preferences, motivations, and possible barriers.

Speaker(s): Customer research specialist, sociologist with a focus on energy and behavior change
• What are customer attitudes towards participating in Demand Response programs? • What incentives or rewards would motivate customers to participate? • What barriers might deter customer participation and how could these be addressed? June 2024 – Overview of 3CE FY 2023-24 Demand Response Program Purpose: Understand the 3CE FY 2023-24 Demand Response Program Speaker(s): 3CE staff and Demand Response implementor
• How does 3CE’s Demand Response Program work and who will participate? • How does 3CE benefit from the Demand Response Program? • How will we measure the success of our Demand Response program and continuously improve it?
August 2024 – 3CE Demand Response Program Update
Purpose: Receive an update on the ongoing 3CE Demand Response Program Speaker(s): 3CE staff, third-party implementor
• How is the Program performing?
• What challenges are we observing and how are we addressing them? • What are some real-life examples of load reduction resulting from the Program?

Staff Report Item 8
TO: 3CE Policy Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Dan Bertoldi, Manager of Energy Programs
SUBJECT: Receive update on FY 2022-23 Energy Programs
DATE: September 14, 2023
RECOMMENDATION:

This memorandum recommends that the Policy Board of Directors receive an update on FY 2022- 23 Energy Programs.

DISCUSSION/ANALYSIS:

The 3CE Policy Board of Directors adopted the FY 2022-23 Operating Budget that includes approximately $16M for the FY 2022-23 Energy Programs Portfolio.

FISCAL IMPACT:

There is no fiscal impact associated with this report and update.

CONCLUSION:
3CE’s Energy Programs support local economic stimulation by providing the community and Member Agencies with funding and services to accelerate regional electrification as well as enhanced incentives for underserved customers to reduce GHG emissions throughout the 3CE service area.

ATTACHMENT(S):

1. Update on 3CE Community Energy Programs

2. Update on 3CE Member Agency Services

FY 22-23 3CE Community Energy Programs
Provided in this report is an update on FY 22-23 Community Energy Programs implementation activities.

Electric Bus Program
On March 1, 2023, 3CE launched the Electric Bus Program. The Electric Bus Program provides 3CE customers with incentives for the purchase or lease of all-electric school buses and agricultural worker transport buses. The Electric Bus Program is intended to reduce GHG emissions from buses, as well as eliminate harmful pollutants emitted by traditional diesel buses near people. To date, 3CE has received one application for a school bus. This program has an incentive budget of $1.4 million.

As of the writing of this report, 3CE has approved two applications for a total of $400,000 for an electric school bus that will go towards Title 1 schools in Monterey and Santa Barbara counties.

Electrify Your Home Program
On October 3, 2022, 3CE staff launched the Electrify Your Home Program (EYH) with implementation support from third-party implementor, Energy Solutions. This residential electrification program provides incentives “midstream” to enrolled contractors who recommend and switch out gas powered appliances in existing single and multi-family buildings with all-electric heat pump water heating and HVAC technologies. These incentives directly reduce the upfront cost for 3CE customers who make the switch to all-electric heat pump technology. In FY 22/23, 3CE budgeted $1.6 million for EYH.

Contractors enrolled in the statewide TECH Clean California (TECH) program also have access to no-cost workforce education and training focused on electrification design and specification, heat pump installation, building science, and soft skills in sales and marketing. There are 75 licensed contractors enrolled in the TECH program that serve part of 3CE’s service area.

The following table summarizes program performance to date:

Approved & Paid Submitted Reserved Total Allocated
Single-family $481,400.00 $122,100.00 $100,400.00 $703,900.00 Multifamily $0 $0 $45,000.00 $45,000.00
Total $481,400.00 $122,100.00 $145,400.00 $748,900.00

New Construction Electrification Program
On October 3, 2022, 3CE staff launched the New Construction Electrification Program (NCEP). This year’s iteration of NCEP provides affordable and farmworker housing developers, and homeowners building Accessory Dwelling Units (ADU), with incentives to build all-electric housing. Housing projects must be built to all-electric standards for all energy utility needs including but not limited to water heating, space heating, and cooking appliances. Incentives will be provided on a per-unit basis and will be provided “downstream” to developers and homeowners upon successful completion of the project. In FY 22/23, 3CE has budgeted $1.5 million for NCEP.

As of the writing of this report, staff have received and approved six (6) multi-unit projects totaling $500,000 in funding reservations for a total of 200 affordable housing units. 3CE has also received and approved 17 applications for ADU projects for a total of $90,000. See Figure 1 below for total program funds reserved by county in FY 22/23. For a full list of all NCEP funds reserved since FY 19/20, please see Appendix A, attached to this document.

Figure 1 (above): Shows NCEP funds distributed by County in FY 22/23.

Electrify Your Ride Program
On November 1, 2022, 3CE staff launched the third iteration of the Electrify Your Ride (EYR) Program.

Building off last year’s program, the Electrify Your Ride Program provides rebates to 3CE customers who purchase or lease an electric vehicle (EV). This program also incorporates rebates for Level 2 EV Chargers, as well as related home electrical upgrades - such as panel upgrades and wiring – to support “EV Readiness”.

Residential, commercial/agricultural, and public agency customers are welcome to apply. Higher incentive amounts are available through this program for income-qualified customers to promote greater adoption of transportation electrification in disadvantaged and low-income communities.

The following figures summarize program performance based on over 700 approved applications received to date:

Figure 2 (above): Shows Electrify Your Ride funds distributed by County in FY 22/23.

Figure 3 (above): Shows Electrify Your Ride Program funds distributed by Measure type in FY 22/23.

Figure 4 (above): Shows a breakdown of funds distributed to income qualified applicants. Tier 1 = 201 - 400% of the Federal Poverty Level (“FPL”); Tier 2 = less than 200% of FPL; N/A = Non-Income Qualified applicants Ag Electrification Program
On December 8, 2022, staff launched the fourth iteration of the Agricultural Electrification Program (“Ag Program”). The Ag Program provides incentives to 3CE customers for replacement of fossil fuel powered agricultural equipment with new electric equipment including irrigation pumps, farm tools, tractors, utility vehicles, and other equipment. Incentives are provided “downstream” directly to the customer after proof of purchase and/or installation of equipment.

Like last year, applications for projects with the greatest estimated GHG emissions reduction as well as those submitted by small to medium sized businesses will be supported by the highest incentive levels.

The following figures summarize program performance based on approved applications received to date:

Figure 5 (above): Shows total funds reserved or distributed by County for the FY 22/23 AG Electrification Program.

Figure 6 (above): Shows Ag Electrification Program funds distributed by equipment type in FY 22/23.

Appendix A – NCEP Approved Housing Developments, by City Installation City Development Name
Estimated Project
Completion Date
Total Reserved
Funds
Total # of
Housing
Units
(Final) Status
Atascadero Paseo Paloma 11/1/2026 $180,000.00 72 Funds Reserved Buellton Village Senior Apartments 8/31/2024 $122,500.00 49 Funds Reserved Goleta Heritage Ridge 2/28/2025 $102,500.00 41 Funds Reserved Goleta Hollister Lofts 12/31/2023 $90,000.00 36 Funds Reserved Guadalupe Escalante Meadows 6/1/2023 $200,000.00 80 Funds Reserved Hollister Riverview Estates II 4/12/2023 $60,000.00 24 Project Complete Hollister Santana Ranch Apartments 3/1/2023 $139,250.00 56 Funds Reserved Hollister Phase 1 of Santana Ranch Apartments 3/1/2023 $37,500.00 16 Funds Reserved Hollister The Apartments at Santana Ranch, Phase 2 12/31/2023 $137,500.00 55 Funds Reserved Lompac (Unincorporated SB
County) Brisa Encina 7/31/2024 $122,500.00 49 Funds Reserved Lompoc Plaza de la Bandera 10/15/2025 $110,000.00 44 Funds Reserved New Cuyama Perkins Place 4/30/2025 $82,500.00 33 Funds Reserved Pismo Beach Shell Beach Senior Apartments 5/1/2024 $62,500.00 25 Funds Reserved Pismo Beach Pismo Terrace 7/31/2023 $125,000.00 50 Funds Reserved Salinas 467, 479 E. Market Street 1/31/2025 $156,750.00 84 Funds Reserved San Luis Obispo
Presidio WH SLR 80 Towns, LLC (Williams Homes)
Fig at the Orchard- Tract 3150 2/16/2022 $141,500.00 80 Funds Reserved San Luis Obispo
Presidio WH SLR 120 Lofts Efficiency Units at the
Orchard -Tract 3150 6/15/2022 $214,500.00 120 Funds Reserved San Luis Obispo Iron & Oak 12/31/2022 $29,750.00 17 Project Complete San Luis Obispo Vinifera 10/10/2022 $76,000.00 40 Project Complete San Luis Obispo Broad Street 10/24/2022 $100,000.00 40 Funds Reserved San Luis Obispo Tiburon Place 10/1/2024 $170,000.00 68 Funds Reserved San Luis Obispo Harvest Lofts 3/31/2023 $213,500.00 122 Funds Reserved San Luis Obispo Harvest Vistas 12/31/2024 $26,250.00 15 Funds Reserved San Luis Obispo Avila Ranch - $35,000.00 14 Funds Reserved Santa Babrara Patterson Point 5/15/2025 $60,000.00 24 Funds Reserved Santa Cruz 180 Permanent Supportive Housing Project 7/12/2023 $240,000.00 121 Funds Reserved Santa Cruz Pacific Station North 4/30/2025 $237,500.00 95 Funds Reserved

Santa Cruz Jessie Street Apartments - $123,500.00 50 Funds Reserved Santa Cruz 1500 Capitola Road Family Housing 6/30/2023 $142,500.00 57 Funds Reserved Santa Cruz Downtown Library Apartments 3/31/2025 $240,000.00 105 Funds Reserved Santa Cruz Calypso 9/30/2024 $87,500.00 35 Funds Reserved Santa Cruz, CA Natural Bridges Apartments 1/5/2025 $50,000.00 20 Funds Reserved Santa Ynez Harry's House 5/26/2023 $150,000.00 60 Funds Reserved Seaside Lower Stilwell Privatized Military Housing 8/31/2022 $240,000.00 96 Project Complete Soledad San Vicente Rentals 6/30/2021 $20,000.00 8 Project Complete Unincorporated Monterey
County East Garrison Apartments 8/30/2023 $165,000.00 66 Funds Reserved Watsonville Miles Lane Family Housing 12/7/2023 $180,000.00 72 Funds Reserved Watsonville Pippin Phase II Apartments 7/9/2024 $200,000.00 80 Funds Reserved Watsonville 1482 Freedom Blvd 11/30/2023 $131,750.00 53 Funds Reserved

FY 22-23 Member Agency Services
Provided in this report is an update on FY 22-23 Member Agency Services implementation activities.

Reach Code Program
On October 3, 2022, 3CE staff launched the Reach Code Program with program implementation support from a consultant, TRC Engineers. This redesigned program offers stakeholder outreach support and provides no-cost technical assistance to help Member Agencies adopt and implement reach codes.

Support includes presenting to key stakeholders, answering technical questions, attending meetings, developing customized ordinances, reviewing staff presentations and reports, and developing implementation tools to help Member Agencies enforce their reach codes. The Reach Code Program includes recommended model codes for new construction electrification, electric vehicle charging infrastructure, and existing building electrification.

Since launch, four Member Agencies have engaged in the program: City of Watsonville, City of San Luis Obispo, the County of Monterey, and the City of San Juan Bautista. 3CE is also supporting a regional reach code working group effort including the County of Santa Barbara and the Cities of Carpinteria and Goleta and being led by 3C-REN with support from Southern California Edison.

The following table summarizes program performance based on engagement and type of reach code being pursued:

Member Agency Type of Reach Code (NC, EB, EV)
County of Monterey New Construction and Electric Vehicle City of Watsonville New Construction and Electric Vehicle City of San Luis Obispo Existing Buildings
City of San Juan Bautista New Construction and Electric Vehicle On April 17, 2023, the US Court of Appeals for the Ninth Circuit overturned a District Court ruling allowing the City of Berkeley’s adoption of municipal codes that prohibit natural gas infrastructure in newly constructed buildings. Working closely with its partners, 3CE is investigating the implications of the Ninth Circuit Court’s ruling to determine what actions, if any, should be taken.

Electrify Your Fleet Program
On December 15, 2022, 3CE staff launched the Electrify Your Fleet (EYF) program. EYF provides incentives to Member Agencies to offset the cost of the purchase/lease of light duty, medium duty, and heavy-duty battery electric vehicles. These incentives are available as a post-purchase rebate or as a pre-purchase reservation.

The following figures summarize program performance based on applications received as of the writing of this report.

Figure 1 (above): Shows Electrify Your Fleet funds distributed by Organization in FY 22/23 Figure 2 (above): Shows Electrify Your Fleet Program funds distributed by Vehicle Class in FY 22/23.

Charge Your Fleet Program
On December 15, 2022, 3CE staff launched the Charge Your Fleet (CYF) program. CYF is the complement to EYF and provides incentives to Member Agencies to offset the cost of the purchase and construction/installation of electric vehicle charging infrastructure. Charging stations may be either public facing or “behind the fence” and include Level 2 and/or Level 3 chargers. These incentives are available as a post-purchase rebate or as a pre-purchase reservation.

The following figures summarize program performance based on applications received as of the writing of this report.

Figure 3 (above): Shows Charge Your Fleet funds distributed by Organization in FY 22/23 Figure 4 (above): Shows Charge Your Fleet Program funds distributed by equipment type in FY 22/23.

Member Agency Building and Transportation Electrification Working Groups 3CE has established and is facilitating working groups focused on building and transportation electrification to drive participation in existing programs and inform future program design; identify common needs, barriers, and scalable solutions for regional electrification; and identify and share resources between Member Agencies and 3CE.

The Building Electrification Working Group (TEWG) met on July 27, 2023, which featured a presentation from TRC Engineers, 3CE’s third-party implementor for the Reach Code Program, where they discussed “Electric Preferred 2.0” Reach Codes.

Below is the proposed schedule for future BEWG and TEWG meetings.

BEWG TEWG
October 26 November 16
Plan Your Fleet Program
On June 1, 2023, 3CE launched the Plan Your Fleet Program to provide no-cost planning, design, and engineering consultation to 3CE Member Agencies to accelerate fleet electrification and development of electric vehicle charging infrastructure across the 3CE service area. Since launching the Program, 3CE’s third-party implementor, Optony, has engaged with and is providing technical assistance to four (4) Member Agencies.

Broadband Access Initiative
Through the Broadband Access Initiative, 3CE is collaborating with Member Agencies, Regional Broadband Consortia, economic development agencies, and community-based organizations to support two regional broadband projects. 3CE will establish an agreement with Member Agencies to support work that (1) addresses economic development, employment opportunities, and digital equity and (2) enhances 3CE customer engagement and enables customer participation in programs. Member Agencies will, in turn, coordinate with economic development agencies and community-based organizations to conduct projects working with underserved customers across 3CE’s service area, particularly in rural regions, disadvantaged communities, and areas impacted by flooding. 3CE staff are in the process of finalizing two agreements that will be executed by the end of FY 22/23.

Staff Report Item 9
TO: 3CE Policy Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Dennis Dyc-O’Neal, Chief Operating Officer SUBJECT: Receive Regulatory Quarterly Update
DATE: September 14, 2023
RECOMMENDATION:

This recommends the Policy Board receive the attached Regulatory Update.

Quarterly Regulatory Update
September 14, 2023

Table of Contents
REGULATORY UPDATE......................................................................................................................................................... 3 Resource Adequacy (RA)................................................................................................................................................. 3 Provider of Last Resort (POLR) and Emergency Transition Planning ......................................................... 3 Load Management Standards (LMS) and Real-Time Pricing............................................................................ 4 Demand Flexibility............................................................................................................................................................. 4 Preventing Disconnections............................................................................................................................................. 5 Bioenergy Market Adjustment Tariff (BioMAT).................................................................................................... 5 Net Billing Tariff.................................................................................................................................................................. 5 Integrated Resource Planning (IRP)........................................................................................................................... 6

REGULATORY UPDATE
Resource Adequacy (RA)
Issue
The Resource Adequacy (RA) program is the California Public Utilities Commission’s (CPUC) main grid reliability planning program. All load serving entities (LSEs) under the CPUC’s jurisdiction, including CCAs, must demonstrate purchase of a specified amount of eligible RA generation capacity each month and year to comply with RA program requirements. Increasing demand for and a decreasing supply of eligible RA capacity over the past five years have resulted in sharply increased prices and unprecedented difficulty procuring sufficient RA to achieve compliance. Over the past year the CPUC has also sought to tie RA compliance to other, unrelated functions such as CCA expansion into new communities.

Status
On June 29th the CPUC passed a Decision setting new rules for the RA program. CCAs seeking to expand service into new communities must now be RA compliant for at least two calendar years first. The CPUC also closed the RA proceeding and there will be no new RA policymaking until at least early 2024.

Next Steps
On July 26th the California Community Choice Association (CalCCA) filed an Application for Rehearing of the Decision challenging the new restrictions on CCA expansion on behalf of all California CCAs. In addition to any CPUC response to this Application, the CPUC will open a new RA proceeding in late 2023.

This proceeding will likely focus on the new slice-of-day RA framework the CPUC approved in 2022, addressing issues with this framework that emerge during the first year of implementation.

Provider of Last Resort (POLR) and Emergency Transition Planning Issue
The Provider of Last Resort (POLR) is the backstop entity that provides electric service to customers of a load serving entity if that LSE fails suddenly. This role has historically been held by the investor-owned utilities (IOUs, namely Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric), but this proceeding is establishing a process to allow CCAs and other non-IOU LSEs to become POLR in their service areas.

This proceeding is also considering rules designed to prevent LSE failures that have various implications for 3CE finances and operations. This includes changes to how much money CCAs must post as insurance against their own failure (called the Financial Security Requirement or FSR). 3CE’s FSR has been set at $147,000 since 2018, but that amount is likely to increase with the reforms being considered in this proceeding.

Status
In July parties including CalCCA filed opening and reply briefs, the last opportunity for stakeholder input before the CPUC issues a Proposed Decision on FSR changes in October.

Next Steps
Staff will analyze the Proposed Decision when it arrives, provide feedback through comments and meetings with CPUC staff as appropriate, and incorporate any changes to 3CE’s FSR into internal financial planning.

Load Management Standards (LMS) and Real-Time Pricing
Issue
The California Energy Commission’s (CEC) updated the Load Management Standard (LMS) regulations now require IOUs, municipal utilities, and CCAs with load greater than 700 GWh/year to upload time-dependent rates to the CEC’s Market Informed Demand Automation Server (MIDAS) platform, develop an LMS Compliance Plan by March 2024, and present to their governing bodies, for approval by the CEC, at least one hourly marginal cost based rate option (often referred to as a real-time rate) for their customers by 2025.

Status
As of July 28, 2023, 3CE’s MIDAS platform updates have been completed.

Next Steps
3CE staff is evaluating the CEC regulatory authority to set CCA rate structures, as well as the potential benefits and drawbacks for time-dependent rates.

Demand Flexibility
Issue
The CPUC opened this proceeding in 2022 to promote demand flexibility in California in order to improve grid reliability and reduce the cost of grid stress events. While this proceeding does not directly govern CCA ratemaking, 3CE is participating to ensure CCA ratemaking authority is preserved, monitor changes to IOU transmission and distribution rates, address data access issues between IOUs and CCAs that hinder time-dependent rate design, and help prevent cost shifts between bundled and unbundled customers.

This proceeding is also implementing the requirement set by AB 205 in 2022 that the CPUC design an income-graduated fixed charge (IGFC) for all residential electric utility customers by July 1, 2024. The goal is to reduce energy costs for low-income Californians by creating a monthly fixed charge that increases with income, allowing the per-kWh volumetric charge to be lower. While the fixed charge will be on the delivery side of the bill and not affect 3CE operations directly, 3CE staff are following the process to understand how customers’ experience will evolve around 3CE service.

Status
On August 15th the CPUC issued a staff proposal to expand AgFit, a dynamic pricing pilot for agricultural load that is currently a partnership between PG&E and CCA Valley Clean Energy. AgFit offers agricultural customers assistance with water pumping automation, time-varying rates that incentivize pumping during off-peak hours, and on-bill savings plus performance incentives. The CPUC is seeking feedback on what would be needed to expand AgFit to other CCAs and 3CE is preparing a response.

Next Steps
Staff will file 3CE’s response to the AgFit proposal on September 18th. Further out, the CPUC is scheduled to release a Proposed Decision in Q2 2024 establishing an IGFC rate structure and pathway for implementation in advance of the July 1, 2024 legislative deadline. Following the Decision each investor-owned utility will need to file an Advice Letter applying the approved rate structure to their own ratemaking process. The earliest that any California electricity users could expect to see an IGFC on their bill is September 2026.

Preventing Disconnections
Issue
In June 2020 the CPUC created the Arrearage Management Program (AMP) to help vulnerable Californians, including CCA customers, manage overdue electricity bills and avoid disconnection. For eligible customers the program forgives 1/12 of the customer’s debt for every on-time payment of a current bill, up to $8,000 per customer after twelve on-time payments. Customer debt that is forgiven through the program is paid to 3CE and other load-serving entities out of funds collected from all electricity customers through the Public Purpose Programs charge. The AMP program was originally set to sunset after four years in June 2024.

Impacts
On July 19th the CPUC issued a Proposed Decision extending both AMP and Long-Term Payment Plans for eligible residential customers until October 1, 2026; requiring an AMP evaluation by October 1, 2025; and authorizing a study of medical baseline programs for each IOU service territory. 3CE staff helped develop supportive CalCCA comments and the CPUC approved the Proposed Decision on August 31st.

Next Steps
The AMP program will now be available to 3CE customers through 2026 without interruption. By the end of 2023 the CPUC is expected to release a Proposed Decision on whether to extend another customer assistance pilot 3CE is participating in, the Percentage of Income Payment Plan (PIPP) pilot.

Bioenergy Market Adjustment Tariff (BioMAT)
Issue
BioMAT is a procurement program opened in 2015 to encourage the development of small bioenergy projects in California. The program is unique in that it allows load serving entities (LSEs) contracting with these projects to recover the costs from all California electricity users through the Public Purpose Programs (PPP) charge. In 2021 3CE and other CCAs successfully lobbied legislators to reverse the exclusion of CCAs from BioMAT with the passage of AB 843. AB 843 was the first time CCAs gained access to PPP funding, setting a valuable policy precedent. The CPUC began implementation of AB 843 in October 2022 by opening of a new proceeding to work through the details of CCA participation.

Status
Major issues in the CPUC proceeding have been the approval process for CCA BioMAT contracts, the BioMAT cost recovery process, and management of the BioMAT contract queue to track procurement progress for participating CCAs.

Next Steps
The CPUC is scheduled to release a Proposed by the end of September 2023.

Net Billing Tariff
Issue
In December 2022 the CPUC revised the former Net Energy Metering (NEM) program into the Net Billing Tariff (NBT), also called Solar Billing Plan.

Status
On August 2nd, a Proposed Decision addressing the remaining items of tariff left in the proceeding was published without mentioning collaboration with CCAs. The six issues addressed were: 1) Virtual-NEM Tariff design, 2) NEM-aggregation sub-tariff design, 3) consumer protections, 4) evaluation of NBT, 5) fuel cell participation in NEM, and 6) implementation of AB 2143.

Next Steps
3CE staff continues to follow the proceeding to understand how changes will impact customer protections, NBT evaluation, push for CCA involvement regarding bill presentation and customer engagement. A final decision and conclusion of the proceeding is expected in September 2023.

Integrated Resource Planning (IRP)
Issue
Integrated Resource Planning (IRP) is the CPUC’s greenhouse gas (GHG) reduction planning program.

LSEs must submit IRPs every two years demonstrating that planned future procurement will produce GHG emissions below an assigned benchmark while contributing to a resource fleet that meets sector-wide GHG targets while maintaining grid reliability. LSEs submitted their most recent IRPs in November 2022, and previous IRP cycles have produced the three procurement mandates 3CE must comply with.

Status
This proceeding has three major developments scheduled for Q3-Q4 2023. First, the CPUC will release its analysis of the aggregated 2022 IRPs, which will end the current IRP cycle and may result in another procurement mandate. Second, it will rule on two stakeholder petitions to modify aspects of the current procurement mandates. Third, CPUC staff will release for comment a proposed long-term procurement framework that would replace the ad hoc mandate structure used so far.

Next Steps
Staff will be actively engaged in this proceeding, conducting advocacy around the structure of the long-term framework and incorporating any new mandates or changes to previous ones into internal procurement planning.

Staff Report Item 10
TO: 3CE Policy Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Dewayne Woods, Chief Financial Officer
SUBJECT: Receive the Treasurer’s Report for the period October 1, 2022, through June 30, 2023 DATE: September 14, 2023
RECOMMENDATION:

Receive the Treasurer’s Report for the period October 1, 2022, through June 30, 2023.

SUMMARY:

For the nine months ending June 30, 2023, operating revenues totaled $328.8 million while operating expenses totaled $ $287.4 million for a net operating income of $41.4 million. Non-operating revenue added an additional $7.0 million, totaling a positive change in net position of $48.4 million. These positive results for the first nine months are expected to be instrumental for the remainder of the fiscal year as higher energy costs and resource adequacy compliance purchases begin to materialize.

FINANCE:

There is no financial impact by receiving this report.

ATTACHMENT(S):

1. June 30, 2023 Treasurer's Report

Compiled Financial Statements 1
Compiled Budgetary Comparison Schedule 6
Budget Variance Commentary 9
Financial Dashboard 10
Investment Summary 11
Table of Contents

TREASURER REPORT
Fiscal Year to Date
As of June 30, 2023

1 ACCOUNTANTS’ COMPILATION REPORT
Board of Directors
Central Coast Community Energy
Management is responsible for the accompanying financial statements of Central Coast Community Energy (a California Joint Powers Authority) which comprise the statement of net position as of June 30, 2023, and the related statement of revenues, expenses, and changes in net position, and the statement of cash flows for the period then ended in accordance with accounting principles generally accepted in the United States of America. We have performed a compilation engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. We did not audit or review the accompanying statements nor were we required to perform any procedures to verify the accuracy or completeness of the information provided by management. Accordingly, we do not express an opinion, conclusion, nor provide any assurance on these financial statements.

Management has elected to omit substantially all of the note disclosures required by accounting principles generally accepted in the United States of America in these interim financial statements.

Central Coast Community Energy’s annual audited financial statements include the note disclosures omitted from these interim statements. If the omitted disclosures were included in these financial statements, they might influence the user’s conclusions about the Authority’s financial position, results of operations, and cash flows. Accordingly, these financial statements are not designed for those who are not informed about such matters.

We are not independent with respect to the Authority because we performed certain accounting services that impaired our independence.

Maher Accountancy
San Rafael, CA
July 27, 2023
1101 Fifth Avenue, Suite 200 San Rafael, CA 94901 415 459 1249 mahercpa.com

Current assets
Cash and cash equivalents
Held for working capital reserves 35,900,000 $
Held for reserves - other 128,198,124
Held for program commitments 4,700,000
Cash and cash equivalents 168,798,124
Accounts receivable, net of allowance 32,670,370
Accrued revenue 22,165,385
Energy settlements receivable 180,314
Other receivables 440,642
Loan receivable 187,201
Prepaid expenses 6,984,078
Deposits 4,964,188
Restricted cash 294,000
Investments - held for reserves 70,918,120
Total current assets 307,602,422
Noncurrent assets
Deposits 23,182
Loan receivable 1,520,797
Lease asset, net of amortization 1,510,377
Capital assets, net of depreciation and amortization 606,843 Total noncurrent assets 3,661,199
Total assets 311,263,621
Current liabilities
Accrued cost of electricity 34,079,018
Accounts payable 1,815,725
Other accrued liabilities 816,740
User taxes and energy surcharges due to other governments 1,729,442 Lease liability 294,445
Security deposits - energy suppliers 6,501,030
Total current liabilities 45,236,400
Noncurrent liabilities
Security deposits - energy suppliers 9,131,250
Lease liability 1,243,995
Total noncurrent liabilities 10,375,245
Total liabilities 55,611,645
Investment in capital assets 578,780
Restricted for security collateral 294,000
Unrestricted 254,779,196
Total net position $ 255,651,976

NET POSITION
As of June 30, 2023

STATEMENT OF NET POSITION

CENTRAL COAST COMMUNITY ENERGY
ASSETS

LIABILITIES

OPERATING REVENUES
Electricity sales, net 328,727,632 $
Other income 84,826
Total operating revenues 328,812,458

OPERATING EXPENSES
Cost of electricity 268,662,965
Contract services 7,366,711
Staff compensation 4,631,599
Other operating expenses 6,463,210
Depreciation and amortization 277,045
Total operating expenses 287,401,530
Operating income (loss) 41,410,928

NONOPERATING REVENUES (EXPENSES)
Interest and investment income 5,615,977
Grant revenue 1,450,969
Financing costs (36,456)
Nonoperating revenues (expenses) 7,030,490
CHANGE IN NET POSITION 48,441,418
Net position at beginning of period 207,210,558
Net position at end of period 255,651,976 $
Nine Months Ended June 30, 2023

AND CHANGES IN NET POSITION

STATEMENT OF REVENUES, EXPENSES

CENTRAL COAST COMMUNITY ENERGY

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 345,150,340 $
Receipts from liquidated damages 147,000
Receipts from suppliers 5,045,531
Other operating receipts 84,826
Payments to suppliers for electricity (275,281,578)
Payments for other goods and services (13,338,243)
Payments for staff compensation (4,837,866)
Payments of taxes and energy surcharges to other governments (6,357,895) Net cash provided by operating activities 50,612,115

CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES
Principal payments received of loan receivable 292,002
Receipts from grantor 1,450,969
Net cash provided by non-capital
financing activities 1,742,971

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Payments of lease liability (176,212)
Payments to acquire capital assets (496,749)
(672,961)

CASH FLOWS FROM INVESTING ACTIVITIES
Investment income received 4,893,534
Proceeds from investment sales 76,427,981
Purchase of investments (114,302,385)
Net cash provided (used) by investing activities (32,980,870) Net change in cash and cash equivalents 18,701,255
Cash and cash equivalents at beginning of year 150,390,869 Cash and cash equivalents at end of period $ 169,092,124 Reconciliation to the Statement of Net Position
Cash and cash equivalents (unrestricted) $ 168,798,124
Restricted cash 294,000
Cash and cash equivalents $ 169,092,124
Nine Months Ended June 30, 2023

STATEMENT OF CASH FLOWS

CENTRAL COAST COMMUNITY ENERGY

Operating income (loss) 41,410,928 $
Adjustments to reconcile operating income (loss) to net cash provided by operating activities
Depreciation expense 277,045
Provision for uncollectible accounts 3,555,036
(Increase) decrease in:

Accounts receivable, net 10,882,194
Accrued revenue (4,003,440)
Energy settlements receivable (180,314)
Other receivables 1,716,409
Prepaid expenses (6,675,659)
Deposits 3,329,742
Increase (decrease) in:

Accrued cost of electricity (5,995,564)
Accounts payable 226,514
Other accrued liabilities (219,284)
User taxes and energy surcharges due to other governments (212,522) Security deposits - energy suppliers 6,501,030
Net cash provided by operating activities 50,612,115 $

CENTRAL COAST COMMUNITY ENERGY
STATEMENT OF CASH FLOWS (continued)
Nine Months Ended June 30, 2023

RECONCILIATION OF OPERATING INCOME (LOSS) TO NET

CASH PROVIDED BY OPERATING ACTIVITIES

6 ACCOUNTANTS’ COMPILATION REPORT
Board of Directors
Central Coast Community Energy
Management is responsible for the accompanying special purpose statements of Central Coast Community Energy (a California Joint Powers Authority) which comprise the budgetary comparison schedule and a supplemental budgetary comparison schedule for the period ended June 30, 2023, and for determining that the budgetary basis of accounting is an acceptable financial reporting framework. We have performed a compilation engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. We did not audit or review the accompanying statement nor were we required to perform any procedures to verify the accuracy or completeness of the information provided by management. Accordingly, we do not express an opinion, a conclusion, nor provide any assurance on this special purpose budgetary comparison statement.

The special purpose statement is prepared in accordance with the budgetary basis of accounting, which is a basis of accounting other than accounting principles generally accepted in the United States of America. This report is intended for the information of the Board of Directors of the Authority.

Management has elected to omit substantially all of the note disclosures required by accounting principles generally accepted in the United States of America in these interim financial statements.

Central Coast Community Energy’s annual audited financial statements include the note disclosures omitted from these interim statements. If the omitted disclosures were included in these financial statements, they might influence the user’s conclusions about the Authority’s financial position, results of operations, and cash flows. Accordingly, these financial statements are not designed for those who are not informed about such matters.

We are not independent with respect to the Authority because we performed certain accounting services that impaired our independence.

Maher Accountancy
San Rafael, CA
July 27, 2023
1101 Fifth Avenue, Suite 200 San Rafael, CA 94901 415 459 1249 mahercpa.com

2022/23 YTD
Budget (Amended)
2022/23 YTD
Actual
2022/23 YTD
Budget Variance
(Under) Over
2022/23 YTD
Actual / Budget %
2022/23 Annual
Budget (Amended)
2022/23 Budget
Less Actual
2022/23 Budget
Remaining /
Budget %

REVENUES AND OTHER SOURCES
Electricity sales $ 339,600,000 $ 335,184,662 $ (4,415,338) 99% 463,110,000 $ $ 127,925,338 28% Less uncollectible accounts (5,625,000) (5,006,061) 618,939 89% (7,500,000) (2,493,939) 33% Net revenue - electricity 333,975,000 330,178,601 (3,796,399) 99% 455,610,000 125,431,399 28% Investment and miscellaneous income 4,640,000 5,700,803 1,060,803 n/a 6,187,000 486,197 n/a Total revenues and other sources 338,615,000 335,879,404 (2,735,596) 99% 461,797,000 125,917,596 27% EXPENDITURES AND OTHER USESCurrent Expenditures
Cost of energy 269,825,282 282,453,000 (12,627,718) 96% 403,427,000 133,601,718 33% Energy programs (incentives and grants) 11,940,000 5,420,314 (6,519,686) 45% 15,920,000 10,499,686 66% Data manager 1,976,662 1,985,000 (8,338) 100% 2,975,000 998,338 34% Utility service fees 1,356,000 1,333,673 (22,327) 98% 1,808,000 474,327 26% Staffing 6,893,000 4,631,599 (2,261,401) 67% 9,191,000 4,559,401 50% Professional services 2,487,000 1,597,941 (889,059) 64% 3,317,000 1,719,059 52% Legal services 1,395,000 940,207 (454,793) 67% 1,860,000 919,793 49% Marketing and customer enrollment 713,000 349,767 (363,233) 49% 951,000 601,233 63% Other general & administration 2,699,000 1,625,381 (1,073,619) 60% 3,599,000 1,973,619 55% Total current expenditures 311,921,000 287,700,826 (24,220,174) 92% 443,048,000 155,347,174 35% Other Uses
Capital outlay 161,000 96,621 (64,379) n/a 203,000 106,379 n/a Total other uses 161,000 96,621 (64,379) n/a 203,000 106,379 Total Expenditures and Other Uses 312,082,000 287,797,447 (24,284,553) 92% 443,251,000 155,453,553 35% Surplus (Deficit) $ 26,533,000 $ 48,081,957 $ 21,548,957 $ 18,546,000 $ (29,535,957) -159% Reserves at end of reporting period: Held for Working Capital 35,900,000 $ Held for Reserves - Cash and Cash Equivalents 128,198,124 Held for Reserves - Investments 70,918,120 Total 235,016,244 $

CENTRAL COAST COMMUNITY ENERGY

SUPPLEMENTAL BUDGETARY COMPARISON SCHEDULE
Nine Months Ended June 30, 2023

CCA Program Surplus/(Deficit)
per budgetary comparison schedule: 48,081,957 $
Adjustments needed to reconcile to the
changes in net position in the
Statement of Revenues, Expenses
and Changes in Net Position:

Add back GASB 87 lease amortization not in operating budget 139,757 Subtract depreciation expense (277,045)
Add back capital asset acquisitions 496,749
Change in Net Position 48,441,418 $

REVENUES, EXPENSES AND CHANGES IN NET POSITION

CENTRAL COAST COMMUNITY ENERGY

BUDGET RECONCILIATION TO STATEMENT OF
Nine Months Ended June 30, 2023

Budget Item YTD Variance Comment
Electric Sales Revenue (1.3%) Sales revenue includes revenues actually billed to customers as well as estimated customer usage during the reporting period that is not yet billed.

Cost of Energy (4.5%) Variances in this category are typically due to (1) timing difference between projected and actual REC deliveries, (2) variance from actual to anticipated market prices, and (3) variance from actual to expected volume used by customers. Cost of energy includes scheduling coordinator fees for budget purposes only.

Staffing (32.8%) Staffing expenses are under budget due to the timing of new hires.

Professional Services (35.7%) This category includes accounting, IT, technical and other consultants.

Legal Costs (32.6%) This category includes outside legal costs for regulatory and energy procurement needs.

Marketing and customer enrollment (50.9%) Variance is mostly due to the lower than anticipated costs of recent customer enrollments.

Data Management Services (0.4%) These fees non-discretionary and are charged on a per customer basis.

Utility Service Fees (1.6%) These are PG&E and SCE fees charged on a per customer basis.

Other General & Administrative (39.8%) This category includes occupancy costs, industry membership dues, and other general and administrative costs.

Energy and Related Programs (54.6%) Programs expenses have generally been delayed until future periods Budget Commentary for significant items

CENTRAL COAST COMMUNITY ENERGY
October 1, 2022 through June 30, 2023
9

$9.1
$7.6
Act
Bud
$60.2
$57.1
$59.7
$0.0
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
$70.0
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
Actual
Budget
$330.0
$339.6
$463.1
$0.0
$100.0
$200.0
$300.0
$400.0
$500.0
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
Actual
Budget
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
Actual (T48/T8) 415 407 429 406 370 383 363 388 389
Budget 453 425 424 431 393 432 396 419 426 442 456 435
0 50
100
150
200
250
300
350
400
450
500

CUSTOMERS

SALES VOLUME
389 GWh

STD MARGIN
$9.1M (25%)
Δ in NET ASSETS
$8.2M

REVENUE
$38.4M
Cumulative YTD Electricity Sales
Cumulative YTD Direct Margin
(Electricity Sales less Cost of Energy)
Data Definitions:

CUSTOMERS: Count of active customers from Calpine.

REPORTED / SALES VOLUME: Best available estimate of actual meter volume. Currently based on T+8 SQMD Report and T+48 when available.

REVENUE: Total Operating Revenue, net of uncollectible, (excludes Miscellaneous and Interest income).

NON-OP REV: Other uses, primarily Interest Income
ELECTRICITY SALES: Sales from electricity (net of uncollectible).

STD MARGIN: Electricity Sales less cost of energy (Forecasting & scheduling included in Cost of Energy to match budget) ACTUAL: Same as sales volume above
BUDGET: Volumes from FY22/23 budget (not yet updated for amended budget) Monthly Sales Volume (GWh)
Financial Dashboard: June 2023
Margin %

CUSTOMERS
445,000
ACTIVE
June revenue of $38.4M accounts for 389
GWh in net retail consumption.

Year-to-date electricity revenue is $330M
compared to an amended budget of $340M.

YTD Direct Margin (defined as Electricity
Sales less Cost of Energy) of $60.2M is
ahead of amended budget by $3.1M.

The chart to the right shows volume
comparison to budgeted volume.

The charts below display cumulative
revenue and margin $ vs budget.
29%
46%
21%
39%
46%
14%
Res
Com
Ag
YTD Month
6%
40%
47%
39%
44%
16%
Res
Com
Ag
YTD Month
Revenue $38.4
C.O.E. $27.9
OpEx $2.3
Net Income $8.2 24.6%

19.2%
Act
Bud
Margin $
10 Page 81 of 95
Return of Investments YTD Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep CASH AND CASH EQUIVALENTSRiver City Bank - Money Market and other Interest Earning AccountsFunds Invested - Average Balance $ 68,793,882 $ 70,230,463 $ 70,636,473 $ 68,570,477 $ 76,819,998 $ 92,274,506 $ 105,080,118 104,647,869 $ $ 111,614,272 $ - $ - $ -Gains/Losses/Interest $ 1,536,596 $ 85,008 $ 94,651 $ 119,286 $ 123,533 $ 137,627 $ 205,218 $ 240,392 $ 257,694 $ 273,188 Average APY 1.48% 1.62% 2.03% 2.16% 2.15% 2.67% 2.76% 2.94% 2.94%INVESTMENTSRiver City Bank - Treasury-indexed productsFunds Invested - Average Balance $ 40,162,814 $ 45,259,882 $ 55,127,902 $ 47,699,367 $ 47,828,254 $ 42,893,075 $ 42,856,284 $ 42,594,899 $ 42,768,287 $ - $ - $ - Gains/Losses/Interest $ 1,500,328 67,213.37 146,549.22 207,805 214,163 186,551 167,504 148,003 185,195 177,344 - Average APY 2.01% 3.89% 4.52% 5.39% 4.68% 4.69% 4.14% 5.22% 4.98%RBC GAM / Principal Financal Funds Invested - Average Balance $ 75,380,564 $ 75,641,706 $ 75,948,593 $ 76,212,285 $ 76,458,827 $ 76,851,697 $ 77,101,019 $ 77,341,109 $ 77,675,387 $ - $ - $ - Gains/Losses/Interest $ 2,444,353 143,733.97 261,142.30 306,886.17 266,301.86 246,542.46 392,869.54 252,509.11 240,089.34 334,278.08 - Average APY 2.29% 4.14% 4.85% 4.19% 3.87% 6.13% 3.93% 3.73% 5.16%

CENTRAL COAST COMMUNITY ENERGY
Investment Summary
October 1, 2022 through June 30, 2023
11

Staff Report Item 11
TO: 3CE Operations Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Dewayne Woods, Chief Financial Officer
SUBJECT: Consider adopting the Fiscal Year 2023-24 Recommended Budget for Central Coast Community Energy (3CE) including updated Financial Policies; and adopt Resolution No.

PB-2023-07 approving cost-based rate adjustments
DATE: September 14, 2023
RECOMMENDATION:

This recommends the Policy Board consider and adopt:

1. The Fiscal Year 2023-24 Recommended Budget for 3CE, including the Financial Policies; and

2. Resolution No. PB-2023-07 approving cost-based rate adjustments effective October 1, 2023, and January 1, 2024.

BACKGROUND:
3CE adopts an annual budget for the fiscal year that runs from October 1st through September 30th.

Attached is the Executive Summary providing detailed information on the Fiscal Year (FY) 2023-24 Recommended Budget including the major cost drivers and corresponding cost-based rate adjustments required to maintain a balanced budget.

DISCUSSION/ANALYSIS:

The Recommended Budget for FY 2023-24 totals $562.8 million and funds 52 Full- Time Equivalent (FTE) positions. Significant changes since the adoption of the FY 2022-23 budget include: increases in Cost of Energy (COE) by $116.9 million or 29%, increases in Salary and Benefits by $346,541 (3.8%), and increases in Services and Supplies of $2.6 million (8.5%), for an overall increase in appropriations of $119.6 million (27%).

The COE accounts for 92.4% of all expenditures and drives 3CE’s rates, outpacing all other expenditures, which total a mere 7.6% of overall costs combined. The 7.6% is comprised of 1.7% related to staffing,

and the remaining 5.9% is allocated for services and supplies, including all energy incentive programs.

Salary and benefit increases reflect annual salary increases and the expected filling of vacancies. Energy Programs funding is recommended to be consistent with previous years’ funding at $15.6 million for incentive and administration, and an additional $1.2 million in staffing dedicated to programs.

The two major cost increases in Services and Supplies are a contracted increase in Data Manager fees of $1.7 million and an increase in the agency’s operational contingency by $900,000. The increase in Data Manager fees was expected due to the FY 2022-23 transition to a single data and customer billing operations provider. The increase in contingency reflects a policy recommendation to budget 5% of operational appropriations for contingencies, excluding COE.

The increase in COE and other expenditures is financed by a recommended adjustment to electricity generation rates as follows: increases by an average of $0.025 per kilowatt-hour (kWh) in the PG&E service area and maintaining the 2%-minus per kWh rate in the Southern California Edison (SCE) service area, resulting in a $101 million increase in revenue collection. The COS rate increases will be effective October 1, 2023, and January 1, 2024, to provide a phased in approach to minimize overall increases to customers.

To keep rates as low as possible for our customers, this year’s Recommended Budget does not anticipate adding to the agency’s Net Position given that reserves are within an acceptable range as defined by the Recommended Financial Policies.

This year 3CE’s Recommended Financial Policies are completely updated with new reserve policies to reflect the complexity of our overall business. Reserves are structured with a Strategic Reserve equal to 25 percent of budgeted appropriations, an Energy Rate Stabilization Reserve equal to 20 percent of budgeted COE, a Renewable Energy Innovation and Initiatives Reserve equal to five percent of COE, a Capital Infrastructure Reserve to be based on a Capital Improvement and Replacement Plan, and an increase of the Operational Contingency to five percent of appropriations excluding COE.

FISCAL IMPACT:

Adoption of the Recommended Budget funds $562.8 million in expenditures and allows 3CE to continue operations with a balanced budget while minimizing costs to customers.

CONCLUSION:

It is recommended to support the Policy Board approve and adopt the Fiscal Year 2023-24 Recommended Budget for 3CE including updated Financial Policies and cost-based rate adjustments.

ATTACHMENT(S):

1. Executive Summary of the Budget Book

2. Draft Resolution No. PB-2023-07

Executive Summary
14 Fiscal Year (FY) 2023-24 is 3CE’S sixth year of operation, and over this short period, much has been accomplished. The Recommended Budget for FY 2023-24 totals $562.8 million and funds 52 Full-Time Equivalent (FTE) positions. Significant changes since the adoption of the FY 2022-23 budget include: increases in Cost of Energy (COE) by $116.9 million or 29%, increases in Salary and Benefits by $346,541 (3.8%), and increases in Services and Supplies of $2.6 million (8.5%), for an overall increase in appropriations of $119.6 million (27%). The COE accounts for 92.4% of all expenditures and drives 3CE’s rates, outpacing all other expenditures, which total a mere 7.6% of overall costs combined.

The above chart reflects the importance of COE to the agency’s forecasted expenditures. After accounting for the COE, the remaining 7.6% is comprised of 1.7% related to staffing, and the remaining

5.9% is allocated for services and supplies, including all energy incentive programs. Salary and benefit increases reflect annual salary increases and the expected filling of vacancies.

The two major cost increases in Services and Supplies are a contracted increase in Data Manager fees of $1.7 million and an increase in the agency’s operational contingency of $900,000. The increase in Data Manager fees was expected due to the FY 2022-23 transition to a single data and customer billing operations provider. In FY 2023-24, this transition will be complete. The increase in contingency reflects a policy recommendation to budget 5% of operational appropriations for contingencies.

Customers’ electric generation rates in Pacific Gas & Electric’s (PG&E’s) service area are based solely on 3CE’s actual costs. With only 7.6% of budgeted costs related to non-energy procurement, cost-based rates in combination with prudent financial management provide substantial benefits to our customers.

The increase in COE and other expenditures is funded by a recommended adjustment to electricity generation rates as follows: increases by an average of $0.025 per kilowatt-hour (kWh) in the PG&E service area and maintenance of a 2%-minus per kWh rate in the Southern California Edison (SCE) service area, resulting in a $101 million increase in revenue collection.

To keep rates as low as possible for our customers, this year’s Recommended Budget does not anticipate adding to the agency’s Net Position given that reserves are within an acceptable range as defined by 3CE’s Financial Policies.
15 The chart below provides a summary of the FY 2023-24 Recommended Budget:

Maintaining competitive rates is a core goal and key component of 3CE’s stated aims of achieving 100% renewable energy, local control of our energy decisions, local economic stimulation, and decarbonization through electrification. This Recommended Budget provides rates that range on average between 3% to 22% below PG&E’s estimated rates (see chart below).

Energy
Staffing, Salaries and Benefits
Services and Supplies
FY 2023-24 Forecasted Expenses

AS A PERCENT OF TOTAL
Customer Classes Average Difference
3Cchoice to PG&E
Rates
Residential -16%
Small Commercial -17%
Medium Commercial -22%
Large Commercial -21%
Agricultural -18%
Streetlights -3%
3Cchoice Rate Comparison
to PG&E
PG&E Average $/kWh $0.138
3Cchoice
(PG&E Territory) $/kWh $0.116
FY 2023-24 Budget Summary
FY 22-23 Final
Adopted
FY 23-24 Baseline FY 23-24
Recommended
Augmentation
FY 23-24
Recommended Budget
FY 23-24 Variance
Prior Year Budget

REVENUE
Total $461,797,031 $455,128,399 $107,705,049 $562,833,447 $101,036,416

COST OF ENERGY SOLD
Subtotal $403,427,380 $520,297,514 $520,297,514 $116,870,134

SALARIES & BENEFITS
Subtotal $9,190,535 $9,537,076 $9,537,076 $346,541

SERVICES & SUPPLIES
Subtotal $30,416,173 $29,968,253 $3,030,605 $32,998,858 $2,582,685

CAPITAL
Subtotal $202,779 ($202,779)
Total Appropriations $443,236,867 $559,802,843 $3,030,605 $562,833,448 $119,596,581 Total Financing Sources $461,797,031 $455,128,399 $107,705,049 $562,833,448 $101,036,416 Total Budgeted Change to
Net Position $18,560,164 ($104,674,444) $104,674,444 ($0) ($18,560,164)

92.4%

5.9%

1.7%

Executive Summary (continued)
16 The 3CE service area overlapping with SCE’s service territory is planned to transition to cost-based rates as part of our next three-year rate-setting cycle covering years 2025-2027. Rates for our customers in this area are currently set to follow SCE’s generation rates minus 2%, maintaining 3CE’s competitiveness in the market.

In September 2020, 3CE’s Policy Board voted to serve 60% of retail sales with clean and renewable energy by the end of 2025, with the larger goal of being 100% clean and renewable by 2030. Today we are on our way toward meeting those goals while maintaining competitive electricity rates and providing innovative services for our community.

In recent years 3CE has increased our number of long-term PPAs, which serve to stabilize rates in addition to growing our renewable energy portfolio. 3CE currently has six renewable projects online that are producing energy that meets more than a quarter of retail sales. Six more projects are in development with anticipated commercial operation dates prior to 2026. Assuming the on-time delivery of these projects, 3CE will meet its goal of 60% clean and renewable energy in 2025.

While 3CE has demonstrated success bringing new clean and renewable resources online, the electricity generation sector, including 3CE, faces several challenges that could impact 3CE’s aggressive renewable goals.

Project Delays
Developers continue to claim impacts to contractual online dates from supply chain disruptions, inflation, the Russian War in Ukraine, and mounting interconnection issues. Delays to 3CE’s new generation projects jeopardize our ability to meet compliance obligations, and to stabilize the cost of energy with fixed low-cost contracts. 3CE is working with developers to help address these impacts, ensure value for customers, and bring resources online as fast and cost-effectively as possible.

Wholesale Market Volatility
Natural gas storage and distribution constraints, a colder-than-usual winter, prolonged summer heat events throughout California and the western United States, and many of the same macroeconomic conditions impacting developers, continue to fuel unprecedented wholesale market volatility. A strategic and layered procurement approach in accordance with 3CE’s Energy Risk Management Policy, maintenance of a strong credit rating, and disciplined fiscal management by our Boards has enabled 3CE to minimize the cost impacts to date.

Resource Adequacy
Resource Adequacy (RA) is not energy and does not create additional capacity for the grid. Rather, RA is a compliance product that commits generators to be available to dispatch when needed.

Regulatory changes have increased the amount of RA that Load Serving Entities (LSEs) are required to purchase, while the retirement of fossil-burning generators and limitations on qualifying imports have decreased the supply of available RA resources. The imbalance of supply and demand has spiked RA prices by over 200% year over year to levels that exceed price caps set by many regulatory commissions across the country. While California has no resource adequacy price cap, states that do generally set the cap below what officials deem excessive. 17 The impact on 3CE has been dramatic. RA constituted 11% of the budgeted FY 2022-23 COE.

That number is anticipated to be 17.5% of COE at the current fiscal year close. In the FY 2023-24 Recommended Budget, RA accounts for 29% of the total COE and 93% of the total increase in COE.

The current environment presents many challenges to bringing new renewable electricity projects to 3CE’s energy portfolio. Developing PPAs will need to be expanded to bring pricing stability and ensure the attainment of our renewable goals in the years ahead.

Regardless of the increased COE and an ever-changing regulatory environment, 3CE’s rates remain extremely competitive on average when benched to those of Investor-Owned Utilities (IOUs) like PG&E and SCE. This Recommended Budget strives to balance increased costs with our mission to provide renewable energy at affordable rates. We present this budget as a step in the right direction to serve our communities while meeting the challenges associated with a highly competitive energy procurement market and heavily regulated industry.

RESOLUTION NO. PB-2023-07

A RESOLUTION OF THE CENTRAL COAST COMMUNITY ENERGY POLICY

BOARD OF DIRECTORS ADOPTING ADJUSTED ELECTRIC GENERATION RATES TO BE IMPLEMENTED OCTOBER 01, 2023 and JANUARY 1, 2024 WHEREAS, Central Coast Community Energy (“CCCE”) is a Joint Powers Authority (“JPA”) established and operated pursuant to California Government Code sections 6500 et seq. to study, promote, develop, conduct, operate, and manage energy programs in the California Central Coast region of Santa Cruz, Monterey, San Benito, Santa Barbara Counties, and certain cities within San Luis Obispo County; and
WHEREAS, CCCE is a community choice aggregator (“CCA”), as such term is defined in section 331.1 of the Public Utilities Code of the State of California (“Public Utilities Code”), that is a public agency, as such term is defined in the JPA law, which has implemented a CCA program pursuant to section 366.2 of the Public Utilities Code, and possesses the power to purchase and sell electric energy and enter related contracts for such purposes; and WHEREAS, pursuant to sections 3.3.1 and 3.3.3(f) of the Joint Powers Agreement, the Policy Board is responsible for setting electric generation rates; and WHEREAS, on June 16, 2021, at a duly noticed regular meeting, the Policy Board adopted Resolution PB-2021-05, establishing a cost-of-service rate design and approving proposed three-year PG&E service-area electric generation rates for formal adoption in the Fiscal Year 2021-2022 budget process to be implemented in January 2021 for the three-year period starting January 1, 2022, and ending December 31, 2024; and WHEREAS, on August 30, 2021, at a duly noticed special meeting, the Policy Board approved:
(1) a rate adjustment to the proposed PG&E service area cost-of-service rates to cover a revenue shortfall caused by escalating energy costs above those used to model costs of service and a projected reduction in revenue collection used for cost recovery, as well as (2) a one-time $30 bill credit for customers enrolled in the CARE, FERA, and/or medical baseline programs; and WHEREAS, on September 16, 2021, at a duly noticed regular meeting, the Policy Board adopted Resolution PB-2021-07, approving the proposed PG&E service area cost-of-service rates as adjusted by the Policy Board at its August 30, 2021; special meeting; and WHEREAS, on December 16, 2021, at a duly noticed special meeting, the Policy Board approved a second adjustment to the adjusted proposed PG&E service area cost-of-service rates and bill credits to address increased operational expenses including increased cost of energy and additional funding for programs and initiatives in connection with member agencies, specifically: (1) an increase of 2.0 cents per kWh over the previously approved rates for CY 2022 only, (2) an increase of 1.0 cents per kWh over the previously approved rates for CYs 2023 and 2024, and (3) an increased one-time $100 bill credit for customers enrolled in the CARE, FERA, and/or medical baseline programs; and

WHEREAS, on September 21, 2022, at a duly noticed meeting, approved Resolution PB-2022- 04implementing a reduction of 1.0 cent per kWh from the rates previously approved in Resolution PB-2021-09 for CYs 2023 and 2024 for customers in the PG&E service area while also maintaining generation rates at 2% below SCE rates for CYs 2023 and 24 in the SCE service area; and WHEREAS, the projected FY 2023-24 cost of energy (COE) increased 29%; and WHEREAS, the Board makes the following findings:

1. It is reasonable to adjust electricity generation rates by an average across customer classes of $0.025 per kWh (kWh) in the PG&E service area for the remainder of CY 2023 and 2024, phased as follows:
a. , Effective October 1, 2023, an average rate adjustment of 1.0 cent per kWh increase (across customer classes), and
b. Effective January 1, 2024, a further rate adjustment of an additional 1.5 cent per kWh (average across customer classes).

2. It is reasonable to maintain rates of 2% below SCE for the SCE service area for 2023-2024.

3. These rates are for the provision of electrical service and therefore shall not be deemed charges for fees imposed as an incident of property ownership. Further, that California Constitution Art. XIII D does not apply to this resolution and the adoption of cost-of-service rates.

4. CCCE customers can opt out of CCCE service and receive service from an investor-owned utility or others competing in the market. These rates are not an imposition within the meaning of California Constitution Art. XIII C and therefore are not a tax.

5. This resolution and these rates are exempt from the requirements of the California Environmental Quality ACT (“CEQA”) pursuant to CEQA Guidelines, as they are not a “project” because they involve only the organizational and administrative activities of government that will not result in direct or indirect physical changes in the environment (14 Cal. Code Regs. § 15378 (b) (5)). Further, the resolution is exempt from CEQA, as there is no possibility that the resolution or its implementation would have a significant impact on the environment (14 Cal. Code Regs. § 15067 (b)(3)). CCCE will cause a Notice of Exemption to be filed as authorized by CEQA and CEQA Guidelines.

NOW, THEREFORE, THE CENTRAL COAST COMMUNITY ENERGY POLICY BOARD OF DIRECTORS DOES HEREBY RESOLVE, DETERMINE, AND ORDER AS FOLLOWS:

1. The Policy Board hereby adopts:
a. A rate increase of 1.0 cent per kWh from the rates previously approved in Resolution PB-2022-04, which such increase effective October 01, 2023 for customers in the PG&E service area; and

b. A further rate increase of 1.5 cent per kWh from the effective rate as of October 01, 2023 (as set forth in the immediately preceding subparagraph 1.a). Such further increase will be effective January 1, 2024 for customers in the PG&E service area; and c. Continued rates of 2% less than SCE for CYs 2023 and 2024 for customers in the SCE service area.

2. The Policy Board directs staff to monitor and determine when market or industry conditions beyond the control of CCCE require that the approved rate schedule be modified between meetings of the Policy Board and/or before the end of the current rate period.

3. In the event of a fiscal emergency or significant shift in market conditions where the fiscal stability of CCCE, its credit rating, or financial outlook are in danger of being downgraded, the Policy Board delegates to the Chief Executive Officer the authority to adjust the approved rates between meetings of the Policy Board when needed to achieve goals set by the Boards.

4. Whenever emergent or market conditions require the CEO to adjust rates between meetings of the Policy Board, the CEO shall place a report on the agenda of the next regular Policy Board meeting explaining the adjustment and the reasons for the adjustment and requesting that the Policy Board ratify the actions of the CEO. All actions heretofore taken by the officers, employees, and agents of CCCE with respect to the matters set forth above are hereby approved, confirmed, and ratified.

PASSED AND ADOPTED this 14th day of September 2023, by the following vote:

AYES:

NOES:

ABSENT:

Chair, Steve McShane
Attest:

Board Clerk, Heather Vowell

Staff Report Item 12
TO: 3CE Policy Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Dennis Dyc-O’Neal, Chief Operating Officer SUBJECT: Consider staff presentation and support proposal to reduce existing natural gas facility emissions while securing valuable Resource Adequacy product for 3CE through a hybrid natural gas power purchase agreement
DATE: September 14, 2023
RECOMMENDATION:

This recommends the Policy Board support a proposal to reduce existing natural gas facility emissions while securing valuable Resource Adequacy product for 3CE through a hybrid natural gas power purchase agreement.

BACKGROUND:

Resource Adequacy (RA) is a non-energy compliance product, sometimes referred to as “capacity,” that commits generators to be available for dispatch and therefore helps ensure the reliable operation of the grid by assuring sufficient resources are available to the California Independent System Operator when and where they are needed. Failure to procure the required volumes results in non-compliance penalties being assessed.
2024 will be a test year for the new 24-Hour Slice of Day Resource Adequacy paradigm, which will place a greater emphasis on baseload and dispatchable capacity resources.

In 2019, the Policy Board identified, as part of its adopted Advocacy Policy and Procedures, that “ensuring a reliable grid requires utilization and investment in both existing and emerging technologies that will accommodate both the increased load from the electrification of processes and greater generation from solar, wind, and other renewables.” The Policy went on to clarify that staff should support policies that promote low or zero emission conventional generation resources that can “serve as a bridge to California’s zero-carbon grid.”
In 2020, the Policy Board adopted its goal to meet its retail demand with 60% clean and renewable energy by 2025 and then 100% clean and renewable energy by 2030.

On August 21, 2023, the Executive Committee unanimously supported seeking the full Policy Board approval of staff’s proposal.

DISCUSSION/ANALYSIS:

Over the last several years, it has been increasingly difficult to procure sufficient RA volumes.

Policymakers are beginning to realize that the available RA supply is, under the best-case scenario, barely sufficient to meet the quantities demanded by California’s regulations. Further, when viewed in the larger context of Western market constraints there is an obvious RA supply deficiency.

California’s success in bringing new renewable resources online creates an increasingly intermittent grid, requiring regulators to further limit qualifying RA resources to prioritize dispatchable and firm energy deliveries.

Regulatory actions, taken to ensure RA “shows up” have further exacerbated RA supply constraints because they have: (1) limited the RA value assigned to renewables to serve as reliable resources; (2) required imported RA to have a firm delivery component; and (3) removed supply assets from the market to create a strategic reserve of dispatchable resources. Regulatory policymaking has at the same time increased supply obligations by raising the planning reserve margin to 16% with an even higher “effective” margin for IOUs.

While such actions were determined necessary to ensure the reliability of the grid, the decreased supply and increasing demand for capacity have resulted in dramatic RA price increases. Despite best market efforts, even at exorbitant prices, 3CE – and ten other CCAs – were deficient in their 2023 Year-Ahead obligations. 3CE’s assessed penalty was $6.8 million. 3CE’s expects further penalties for failing to meet month-ahead obligations during the same period and will additionally be assessed a portion of any backstop procurement ordered by the CAISO.
3CE has been uniquely impacted by the tightening RA market through additional compliance measures applied by the CPUC resulting in an indefinite delay to 3CE’s implementation start date for customers in the City of Atascadero. Furthermore, a new rule, adopted by the CPUC in June, requires two years of RA compliance to be eligible to serve additional jurisdictions who join 3CE, and may impact the start date for San Luis Obispo County.

These factors have contributed to RA Market Prices skyrocketing year-over-year from a low of $8 to $12/kW-month to $20 to $30/kW-month for annual strips, which equates $90 to $130 million in additional costs to 3CE’s customers.

In response to these pressures, 3CE developed a new strategic approach toward RA compliance that includes:

1. Leveraging our accelerated buildout of 100% clean and renewable Power Purchase Agreement projects (or owned projects) to maximize RA value, including pursuit of baseload renewables;

2. Accelerating our battery storage buildout with varied technologies and dispatch capabilities;

3. Layering short and long-term RA contracts to hedge against price volatility;

4. Control over existing traditional dispatchable resources that can perform in each hour of the 24-hour slice of day paradigm; and

5. Developing short and long-term load shifting strategies that include demand response.

Staff has begun to implement this strategy through additional purchases of capacity, pursuing additional renewable projects, hedging RA, entering a contract with OhmConnect for a demand response solution and simultaneously reviewing RFI results to build a separate load shifting / demand management program.

Now, as part of this strategy, staff has identified an opportunity to enter an innovative PPA contract structure to site a grid charged battery with an existing natural gas peaker plant. The result would provide high quality, CAISO-preferred RA for 3CE while reducing emissions from the existing peaker facility.

Natural gas peaker facilities have a relatively low capital cost and high operational cost, meaning they are generally last to dispatch into the market – e.g., the market clearing price needs to be high enough to justify the high operating costs. While they do not run often, peakers remain a CAISO preferred resources for grid strain events because they have a rapid start time and can be dispatched relatively quickly 24 hours a day.
3CE is exploring contract structures with 15 plus year terms that would enable the installation of a 1- hour dischargeable battery of roughly the same size of the peaker output, installed on the existing peaker site. For example, a 52MW natural gas power peaker plant would be paired with a 52MW or larger 1-hour duration battery. 3CE would have the ability to grid-charge the battery during low priced periods (midday hours when solar is plentiful) and discharge during the evening ramp. The battery will compete for transmission capacity at the site and the natural gas unit will operate less, thus reducing emissions at the project location. The recommended term is within the useful life of the existing facility and allows 3CE to provide longer term stable and predictable RA costs.

Such a structure, based on the above example would meet five (5) percent of 3CE’s annual RA obligation, helping ensure compliance and stabilizing 3CE’s RA costs. It is anticipated that the proposed contract structure would provide RA value for up to the interconnection capacity. Furthermore, adding the new battery will allow 3CE to count a portion of the battery towards meeting its Mid Term Reliability procurement mandate, depending on the total interconnection capacity.

The contract structure would be consistent with the Board direction to serve retail demand with 100% renewable energy by 2030 and would not impact 3CE’s Power Content Label (because of the contract structure the natural gas dispatch would not serve demand). Further, the proposed project would reduce emissions from the already existing, and operating Peaker unit by an estimated 50% to 90%, depending on market prices.

Finally, while the project proposal was originally submitted to 3CE as part of an earlier solicitation prior to the adoption of the Project Selection Criteria, staff has verified that the project developer has indicated they are committed to utilizing a labor agreement for the construction of the new battery.

FISCAL IMPACT:

There is no financial impact associated with this report at this time.

The notional cost impact of a PPA would be determined more precisely during negotiations and presented to the Operations Board pursuant to 3CE’s normal approval process and in accordance with its Energy Risk Management Policy.

RA cost savings will be dependent on final negotiations. Because the RA would be a premium product under the 24-hour slice-of-day model, we anticipate RA cost savings over the initial seven years of the project could be considerable given the current market prices.

CONCLUSION:

Support of this new strategy will allow 3CE to reduce RA non-compliance risks, obtain cost certainty in a volatile market, encourage good-paying jobs in support of the battery construction, and reduce emissions from an existing natural gas peaker facility.

Staff Report Item 13
TO: 3CE Policy Board of Directors
FROM: Nominating Committee – Directors Bruce McPherson, Mary Adams, Claudia Orona SUBJECT: Receive Nominating Committee recommendation and appoint Policy Board Chair and Vice Chair
DATE: September 14, 2023
RECOMMENDATION:

The Nominating Committee (the “Committee”) recommends that the Policy Board appoint:

1. Chair: Das Williams (County of Santa Barbara), and;

2. Vice Chair: Yvette Brooks (Capitola)
BACKGROUND / DISCUSSION:

Pursuant to Section 3.9 of the 3CE Joint Powers Authority Agreement and Article VI, Section 4, of the 3CE Operating Rules and Procedures the Chair and Vice Chair serve on year terms with no limit to the number of terms they may serve. Further, the term does not expire until the annual meeting of the Board.

The Nominating Committee, chaired by Supervisor Bruce McPherson, solicited interest from Directors and subsequently confirmed that the nominated individuals were willing to serve in the capacity for which they are nominated.

FISCAL IMPACT:

None