Operations Board of Directors
January 10, 2024
10:30 A.M.
Central Coast Community Energy
70 Garden Court, Suite 300
Monterey, CA 93940
REMOTE LOCATION VIA TELECONFERENCE
Any interested parties or community members may attend, and participate in, the meeting at the following addresses where Board members may also join the meeting from:
County of Santa Cruz
701 Ocean Street, Third Floor Training Room
Santa Cruz, CA 95060
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, Fourth Floor
Santa Barbara, CA 93101
Public may participate through ZOOM. For ZOOM participation please join by computer audio at:
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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 limited to 3 minutes each.
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 3CE’s offices located at 70 Garden Court, Suite 300, Monterey, CA 93940 during normal business hours and are also available on the 3CE website located at: https://3cenergy.org/meetings-agendas/ 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 November 8, 2023 meeting of the Operations Board of Directors
2. Adopt Resolution No. OB-2024-01 Supporting People’s Self-Help Housing Corporation’s Paseo Paloma Project
3. Receive Update on FY 2023-24 Energy Programs
4. Receive Regulatory Update
5. Receive the Treasure's Report for the period October 1, 2023 through October 31, 2023
REGULAR AGENDA
6. Community Advisory Council Report
7. CEO Report
a. Staffing Update
b. Start Date for the City of Atascadero and County of San Luis Obispo c. Front of the Meter Energy Storage Update
d. 3CE Review of Behind-the-Meter Energy Storage Focused Demand Response Proposals e. NET Billing Tariff (NBT) Update
8. Approve and authorize CEO to execute Hybrid - Battery Energy Storage System Power Purchase Agreement with MRP Pacifica Marketing II, LLC for the Panoche Hybrid Project, in a form substantially similar to the attached, as well as any
necessary ancillary documents, with a power delivery term of 15 years starting with an expected Commercial Operation Date of January 1, 2026, in an amount not to exceed $168,000,000
9. Approve and authorize CEO to execute Hybrid - Battery Energy Storage System Power Purchase Agreement with MRP Pacifica Marketing II, LLC for the Midway Hybrid Project, in a form substantially similar to the attached, as well as any
necessary ancillary documents, with a power delivery term of 15 years starting with an expected Commercial Operation Date of January 1, 2026, in an amount not to exceed $368,000,000 Board member comments & reports
Adjournment
Operations Board of Directors
November 8, 2023
10:30am
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 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, Suite 108
Santa Barbra, CA 93101
MINUTES
The meeting was called to order at 10:31 AM with 13 members attending in 5 locations and a quorum established.
Directors Present: 3CE Headquarters: Chiulos, Espinosa, Guertin, Pia, Reynolds, Uslar (arrived at 10:33 AM) County of Santa Cruz: Huffaker, Palacios, Vice Chair Goldstein City of San Luis Obispo: Campbell (arrived at 10:39 AM) City of Santa Maria: Miyasato, Murphy, Posada, Chair Johnson County of Santa Barbara: Imhof
Directors Absent: Garcia, Guertin, Lewis, Mendez, Wood
Corrections or Additions
Clerk announced that there were no corrections or additions to the agenda.
The Chair opened the public comment period for the consent calendar and items not listed on the agenda.
No public comments received.
The Chair closed public comment period.
CONSENT CALENDAR
MOTION: Moved by Director Miyasato, seconded by Vice Chair Goldstein to approve the Consent Agenda.
ACTION: The Motion Carried with a roll call vote: 15/0/4 AYES: Campbell, Chiulos, Espinosa, Guertin, Uslar, Huffaker, Imhof, Miyasato, Murphy, Palacios, Pia, Posada, Pia, Reynolds, Vice Chair Goldstein, Chair Johnson
NOES: None
ABSENT: Garcia, Lewis, Mendez, Wood
1. Approved Minutes from the October 11, 2023, Meeting of the Operations Board as submitted
2. Authorized the CEO to execute a 2nd amended and restated power purchase agreement with Victory Pass LLC, to effect non-substantive amendments with no changes to previously approved not to exceed amount or term
3. Received FY 23-24 Energy Programs Update
4. Received Regulatory Update
5. Received the Treasurer’s Report for the period October 1, 2022 – August 31, 2023
REGULAR AGENDA
Chair moved item 9.
9. Authorized the CEO to execute a Power Purchase Agreement ("PPA") with SunZia Wind PowerCo, LLC., in a form substantially similar to the attached, as well as any necessary ancillary documents, including potential replacement PPA(s) with the same terms and conditions as the attached except for any necessary administrative changes, with a power delivery term of 15 years starting with an expected Commercial Operation Date of September 30, 2026, in an amount not to exceed $715,000,000 The Chair opened the public comment period.
The following individual(s) addressed the Board
Des Chaux
Bisbo
Smigelski
The Chair closed public comment period.
MOTION: Moved by Director Palacios, seconded by Director Pia to approve.
ACTION: The Motion Carried with a roll call vote: 15/0/4 AYES: Campbell, Chiulos, Espinosa, Guertin, Uslar, Huffaker, Imhof, Miyasato, Murphy, Palacios, Pia, Posada, Pia, Reynolds, Vice Chair Goldstein, Chair Johnson
NOES: None
ABSENT: Garcia, Lewis, Mendez, Wood
6. CEO Report
a. Staffing Update
b. Power Supply Update
c. Property Ownership Principles
d. Prepay Update
The Chair opened the public comment period.
The following individual(s) addressed the Board.
Brett Garrett
The Chair closed public comment period.
ACTION: Discussion Item; no action required
7. Received an update on the Rate Design Request for Proposal (RFP) The Chair opened the public comment period.
The following individual(s) addressed the Board.
Brett Garrett
John Smigelski
The Chair closed public comment period.
ACTION: Discussion Item; no action required
8. Authorized the CEO to execute Amendment No. 3 to the Electrify Your Home implementation services agreement with Cohen Ventures, Inc., DBA Energy Solutions, to increase the not-to-exceed amount by $1,500,000 for a total of $3,260,000 with no change to the agreement term
MOTION: Moved by Director Imhof, seconded by Uslar to approve.
ACTION: The Motion Carried with a roll call vote: 15/0/4 AYES: Campbell, Chiulos, Espinosa, Guertin, Uslar, Huffaker, Imhof, Miyasato, Murphy, Palacios, Pia, Posada, Pia, Reynolds, Vice Chair Goldstein, Chair Johnson
NOES: None
ABSENT: Garcia, Lewis, Mendez, Wood
Board member reports and comments
Adjourned at 11:58 AM
Staff Report Item 2
TO: 3CE Operations Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Catherine Stedman, Chief Communications Officer SUBJECT: Adopt Resolution No. 0B-2024-01 Supporting People’s Self-Help Housing Corporation’s Paseo Paloma Project
DATE: January 10, 2024
RECOMMENDATION:
Adopt Resolution No. OB-2024-01 memorializing 3CE’s role in supporting, through its New Construction Electrification program, the Paseo Paloma affordable housing project being developed by People’s Self-Help Housing Corporation (PSHHC).
BACKGROUND:
In June 2023, through its New Construction Electrification Program, 3CE approved a $180,000 incentive reservation for PSHHC’s Paseo Paloma project, a 72-unit affordable housing multifamily development in Atascaderoi. The funding ensures the development will be all-electric in accordance with 3CE’s goal of reducing reliance on fossil fuels and decreasing harmful emissions.
PSHHC was recently awarded a $3.4 million grant from the California Department of Housing and Community Development (HCD) through the 2023 Excess Sites Local Government Matching Grants Program. To meet the conditions required by the HDC grant and secure the funding, PSHHC must obtain a board resolution from 3CE confirming our funding commitment to the project.
DISCUSSION/ANALYSIS:
California’s Health and Safety Code Section 50704.82 require PSHHC obtain a board resolution from a local public entity, such as 3CE, to receive a grant through HCD’s Excess Sites Local Government Matching Grants Program.
HCD has indicated they will allow for exceptions to many of the Matching Grants Program qualification criteria – such as 3CE’s approval of the Paseo Paloma project budget, in that 3CE’s energy program dollars are not matching funds as defined therein – but are unable to make an exception for the resolution requirement.
Resolution No. OB-2024-01 accurately describes 3CE’s relationship to PSHHC and its funding commitment under the New Construction Electrification Program.
The Paseo Paloma project is scheduled for completion in 2026, a full year after the anticipated start date for 3CE service to the City of Atascadero, making the project eligible for 3CE program funding.
Under its New Construction Electrification Program, before an incentive payment is made, 3CE requires the building(s) are or will be enrolled in 3CE electricity service and that the applicant submits a certificate of occupancy, notice of completion, or written notice from the applicable Building Inspector confirming that the development was completed as an all-electric building with no gas infrastructure throughout the building and construction site.
FISCAL IMPACT:
The $180,000 energy programs funding award to PSHHC is accounted for in the current Energy Programs budget. Adoption of the resolution will have no fiscal impact on the agency.
CONCLUSION:
Staff recommends the 3CE Operation Board adopt Resolution No. OB-2024-01 in support of New Construction Electrification funding for People’s Self-Help Housing Corporation’s Paseo Paloma project to facilitate the project’s receipt of state funding.
ATTACHMENT(S):
1. Draft Resolution OB-2024-01
i The Paseo Paloma project is comprised of 18 – 1BR; 35 – 2BR; and 19 – 3BR serving families earning 30%- 60% AMI. The project applied for HCD’s Multifamily Housing Program and will restrict approximately 25% of units (18 units) for individuals who are At Risk of Homelessness earning at or below 30% AMI. The project will include one (1) unrestricted manager unit. Onsite amenities include a community building, centralized laundry room, community kitchen, community gardens, and outdoor recreational areas for children, teens, and adults.
DRAFT RESOLUTION NO. OB-2024-01
RESOLUTION OF THE OPERATIONS BOARD OF CENTRAL COAST COMMUNITY ENERGY GRANTING $180,000 TO PEOPLE’S SELF-HELP HOUSING CORPORATION FOR THEIR PASEO PALOMA AFFORDABLE HOUSING PROJECT AND THEIR APPLICATION TO THE STATE’S
EXCESS SITES AND LOCAL GOVERNMENT MATCHING GRANTS PROGRAM WHEREAS:
A. Governor Gavin Newsom signed Executive Order No. N-06-19, which allows the production of affordable housing on state-owned Excess Sites (“Excess Sites”). The Executive Order authorizes the Department of General Services (“DGS”) and the Department of Housing and Community Development (“Department”) to identify and prioritize Excess Sites for sustainable, cost-effective, and innovative multi-family affordable housing projects.
B. Chapter 111, Statutes of 2021 (Assembly Bill (AB) 140) makes several statutory changes for the purpose of implementing the housing and homelessness provisions of the Budget Act of 2021, which establishes the Excess Sites Local Government Matching Grants (“LGMG”) Program (hereafter, “Program”) to be administered by the Department.
C. The Program was allocated up to $60 million to provide funds for Predevelopment and Development Costs to selected projects that receive a financial contribution from a Local Government, as defined pursuant to Health and Safety Code section 50704.80(b).
Funding for the Program is made available pursuant to Health and Safety Code section 50704.81(a)(2).
D. The Department has issued a Notice of Funding Availability (“NOFA”), dated July 17, 2023, for the Program pursuant to Health and Safety Code section 50704.83(f).
E. The Program requires a contribution from Central Coast Community Energy (3CE) to Paseo Paloma for People’s Self-Help Housing Corporation (“Applicant”) to apply for Program funds pursuant to Health and Safety Code section 50704.82. Towards that end, Applicant is submitting an Application for Program funds (“Application”) to the Department for review and consideration.
F. The Program requires a resolution from 3CE pursuant to Health and Safety Code section 50704.82(b(1)(A) approving a grant to be included in the Paseo Paloma budget, including all sources, and demonstrating the amount of Local Government Contribution to the Applicant which may be used for Predevelopment and Development Costs for Paseo Paloma, and the requested amount from the Program.
WHEREAS: On June 14, 2023, DGS and the Department selected People’s Self-Help Housing Corporation (PSHHC) to develop Paseo Paloma affordable housing project at El Camino Real and Musselman Drive, Atascadero, CA (“selected project”) pursuant to Executive Order No. N-06-19; and
WHEREAS: 3CE’s New Construction Electrification program selected Applicant’s Paseo Paloma affordable housing project to receive a $180,000 grant.
NOW,THEREFORE, the Operations Board of Directors of Central Coast Community Energy does hereby resolve, determine, and order as follows:
1) 3CE New Construction Electrification program grants $180,000 to People’s Self-Help Housing Corporation in support of their Application to the Department to receive Program funds for the Paseo Paloma project to develop affordable housing on the state-owned Excess Site.
2) The People’s Self-Help Housing Corporation is authorized to include this grant in their submittal for the Paseo Paloma Project Budget) and the Anticipated and Committed Project Sources to the Applicant to include in their application. 3) This Resolution shall take effect immediately upon adoption.
PASSED AND ADOPTED by the Operations Board of Central Coast Community Energy this 10th day of January 2024 by the following vote:
AYES:
NOES:
ABSENT:
DISQUALIFIED:
_____________________________
Chair, Derek Johnson
Attest:
_____________________________
Board Clerk, Heather Vowell
Staff Report Item 3
TO: 3CE Operations Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Oswaldo Martinez, Energy Programs Analyst
SUBJECT: Receive Update on FY 2023-24 Energy Programs
DATE: January 10, 2024
RECOMMENDATION:
This provides the Operations Board of Directors with an update on FY 2023- 24 Energy Programs.
DISCUSSION/ANALYSIS:
Attached to this report are status updates on 3CE’s Energy Programs, which includes both Community Programs (Attachment 1) and Member Agency Programs (Attachment 2).
FISCAL IMPACT:
There is no fiscal impact associated with this report and update.
ATTACHMENT(S):
1. Update on 3CE Community Energy Programs
2. Update on 3CE Member Agency Services
1 FY 2033-24 Community Energy Programs
DECEMBER 2023
This report provides an update on participation in Central Coast Community Energy’s (3CE’s) Community Energy Programs for the fiscal year to date.
Electrify Your Ride Program
On October 1, 2023, 3CE staff launched the fourth iteration of the Electrify Your Ride (EYR) Program.
Building off last year’s program, EYR provides rebates to 3CE customers who purchase or lease an electric vehicle (EV). This program incorporates rebates for Level 2 EV Chargers, as well as related home electrical upgrades - such as panel upgrades and wiring – to support “EV Readiness”. In addition, the program provides technical assistance for EV infrastructure buildout at multifamily and publicly accessible commercial customer sites. Technical assistance is being provided by Frontier Energy.
Residential, commercial/agricultural, and public agency customers are eligible to apply. Higher incentive amounts are available through this program for income-qualified customers, as well as for multifamily-unit buildings, to promote greater adoption of transportation electrification in disadvantaged and low-income communities. In FY 2023-24, 3CE budgeted a total of $4 million for EYR. To date, 3CE has received 369 applications and has approved over $600K in incentives. The following figures summarize program performance based on applications received in FY 2023-24:
Figure 1 (above): Electrify Your Ride funds distributed by County in FY 2023-24. 20%
2%
27% 28%
23%
FY 2023-24 EYR FUNDS DISTRIBUTED BY COUNTY
SUM OF REBATES = $648,000
Monterey County
San Benito County
San Luis Obispo County
Santa Barbara County
Santa Cruz County
2 Figure 2 (above): Electrify Your Ride Program Funds distributed by measure type in FY 2023-24.
Figure 3 (above): Breakdown of funds distributed to income-qualified applicants.
Tier 1 = 201 - 400% FPL; Tier 2 = <200% FPL; N/A = Non-Income Qualified applicants Electric Bus Program
On October 1, 2023, 3CE launched its FY 23-24 Electric Bus Program. The Electric Bus Program provides public schools/school districts, farmworker transit organizations, and public transit agencies enrolled in 3CE service with an opportunity to receive funding for the purchase of an all-electric bus.
Applications are accepted on a rolling basis until funds are fully reserved. Funds will be reserved for the awarded parties and paid to the applicant or the manufacturer prior to the delivery of the bus. Funds can be distributed directly from 3CE to the manufacturer of the awardee’s choosing on behalf of the awardee. Applicants are encouraged to stack/leverage other incentive funds and no matching fund source restrictions apply. In FY 2023-24, 3CE budgeted a total of $2 million for the Electric Bus Program. 33%
59%
8%
FY 2023-24 EYR FUNDS DISTRIBUTED BY MEASURE
SUM OF REBATES = $648,000
EV Readiness
Battery EV
EV Charger
17%
15%
68%
FY 2023-24 EYR FUNDS
% INCOME QUALIFIED INCENTIVES DISTRIBUTED
Income Qualified Tier 1
Income Qualified Tier 2
N/A
3 Since October 1, 3CE has received three applications for electric buses. Currently, all applications in Monterey, Santa Cruz, and Santa Barbara County have reserved funds for one electric school bus each.
One electric bus charger has been paid out in FY 2023-24 totaling $6,856.00 USD.
Electrify Your Home Program
On December 6, 2023, 3CE staff re-launched the Electrify Your Home Program (EYH) with implementation support from third-party contractor, Energy Solutions. A significant increase in the number of EYH applications in late FY 2022-23 prompted a temporary program shutdown to avoid full expenditure of the budget. Subsequently, 3CE’s Operations Board approved a budget amendment which allowed the program to relaunch in December.
3CE’s Electrify Your Home 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 2023-24, 3CE budgeted $1.5 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.
New Construction Electrification Program (NCEP)
This year’s iteration of the NCEP program provides affordable and farmworker housing developers and homeowners building Accessory Dwelling Units (ADUs) with incentives to build all-electric housing. 3CE also offers incentives to rebuild all-electric homes to people who lost their homes because of a declared natural disaster, such as the 2022-23 winter storms.
Qualifying 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 are provided “downstream” to developers and homeowners on a per-unit basis upon successful completion of the project. In FY 2023-24, 3CE budgeted a total of $1.1 million for NCEP.
Since October 1, 3CE has approved two new applications totaling $20,000 for an all-electric ADU and an all-electric disaster rebuild project. Also in FY 23-24, 3CE has paid $15,000 in incentives for three NCEP projects reserved in past fiscal years.
Agriculture Electrification Program
On October 1, 2023, 3CE launched the Agriculture (Ag) Electrification Program. This program provides rebates to ag customers for replacing fossil fuel powered equipment with electric equipment including farm tools, irrigation pumps, vehicles, and more. Enhanced incentives are available for small businesses and for businesses that experienced loss or damaged equipment because of a declared natural disaster (e.g., flooding). The program also provides technical assistance for EV infrastructure buildout at agricultural customer sites. In FY 2023-24, 3CE budgeted a total of $1.8 million for the Ag Electrification Program.
4 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. Rebate amounts were adjusted in FY 2023-24 to cover up to 50% of a Tier 1 or 2 project cost.
Since October 1, 3CE has received applications from San Benito, Santa Barbara, and Monterey Counties for two large pieces of Tier 2 equipment, and two applications for Tier 1 equipment items. Four projects have been paid out in FY 2023-24 totaling $45,000 USD.
FY 23-24 Community Energy Programs Launch Schedule:
Community Energy Programs Launch Date
Electrify Your Ride Program October 1, 2023
Electric Bus Program October 1, 2023
Ag Electrification Program October 1, 2023
Electrify Your Home Program December 6, 2023
New Construction Electrification Program October 1, 2023 Demand Response Program Q3 (Anticipated)
FY 2023-24 Member Agency Programs
DECEMBER 2023
This report provides an update on FY 2023-24 Member Agency program implementation activities.
Reach Code Program
3CE’s Reach Code program for Member Agencies provides no-cost technical assistance to help local cities and counties adopt and implement reach codes, including stakeholder outreach support. Services include 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 reach codes. In FY 2023-24, 3CE budgeted a total of $100,000 for the Reach Code program.
Since launching the Reach Code program on October 1, 3CE has engaged two Member Agencies:
Member Agency Type of Reach Code (NC, EB, EV)
City of San Luis Obispo New Construction and Existing Buildings City of Goleta Electric Vehicle Charging Infrastructure Electrify Your Fleet Program
3CE’s Electrify Your Ride (EYF) program provides rebates to Member Agencies after the purchase or lease of eligible vehicles. To reserve funds, applicants must provide proof of intent to acquire an eligible vehicle. Applications will be accepted until program funds are fully reserved or spent. A 3CE Member Agency applicant is eligible to be awarded up to $150,000 in EYF incentives in the program year. In FY 2023-24, 3CE budgeted a total of $2.1 million for EYF.
Since launching the program on October 1, 3CE has distributed $72,000 for six EVs.
Charge Your Fleet Program
3CE’s Charge Your Fleet (CYF) program provides rebates after the completed purchase and installation of Level 2 or Level 3 (DC Fast Chargers) electric vehicle charging infrastructure. The program also offers an option for Member Agencies to reserve funds in advance of purchasing and installing charging infrastructure. To reserve funds, applicants must provide proof of intent to purchase and/or install equipment. Applications will be accepted until program funds are fully reserved or spent. A 3CE Member
2 Agency applicant is eligible to reserve or be awarded up to $150,000 in CYF incentives during a single program year. In FY 2023-24, 3CE budgeted a total of $1.2 million for CYF.
Since launching the program on October 1, 3CE has received 1 application for 20 Level 2 Charging Ports from the County of Santa Barbara.
Plan Your Fleet Program
3CE’s Plan Your Fleet (PYF) program provides no-cost planning, design, and engineering consultation to 3CE Member Agencies to accelerate fleet electrification and the development of electric vehicle charging infrastructure across the 3CE service area. In FY 2023-24, 3CE budgeted a total of $250,000 for PYF.
Since launching the PYF program on October 1, 3CE has engaged with two Member Agencies:
Member Agency Technical Services Requested
City of Carpinteria Fleet Replacement Plan, Charging Infrastructure Plan City of Greenfield Charging Infrastructure Plan
Member Agency Building and Transportation Electrification Working Groups 3CE is facilitating working groups made up of Member Agency staff focused on building and transportation electrification to promote existing programs and inform future program design by identifying common needs, barriers, and scalable solutions for regional electrification. 3CE staff are currently planning and coordinating schedules for upcoming BEWG and TEWG working group meetings.
Staff Report Item 4
TO: 3CE Operations Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Jerri Strickland, Policy Advisor
SUBJECT: Receive Regulatory Update
DATE: January 10, 2024
RECOMMENDATION:
This recommends the Operations Board receive the attached Regulatory Update.
DISCUSSION/ANALYSIS:
Please find attached 3CE’s Regulatory Update, providing the latest information on the following:
Resource Adequacy (RA)
Demand Flexibility
Bioenergy Market Adjustment Tariff (BioMAT)
Integrated Resource Planning (IRP)
Energy Resources Recovery Account (ERRA) Compliance
ERRA Forecast
CONCLUSION:
This is an informational item only.
ATTACHMENT(S):
1. Regulatory Update
Regulatory Update
January 10, 2024
Table of Contents
REGULATORY UPDATE.................................................................................................................................................... 3 Resource Adequacy (RA)................................................................................................................................................. 3 Demand Flexibility............................................................................................................................................................. 4 Bioenergy Market Adjustment Tariff (BioMAT).................................................................................................... 5 Integrated Resource Planning (IRP)........................................................................................................................... 6 Energy Resources Recovery Account (ERRA) Compliance ............................................................................... 7 Energy Resources Recovery Account (ERRA) Forecast...................................................................................... 8
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 capacity each month and year to comply with RA program requirements. Increasing demand for a decreasing supply of eligible RA capacity over the past five years has resulted in sharply increased prices and unprecedented difficulty in 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 Community Choice Aggregation (CCA) expansion into new communities.
Status
On December 18th, the CPUC published a scoping memo for the RA proceeding outlined the focus for the 2025 and 2026 RA program years. The emphasis will be on implementing and tracking ongoing RA program reforms, along with further program refinement.
The proceeding is divided into three tracks:
Track 1 covers system and flexible capacity requirements for 2025, local capacity requirements for the next three years, and high-priority RA program refinements; Track 2 addresses structural modifications to the CPE framework, LOLE Study, PRM, and coordination with the IRP Proceeding; and
Track 3 encompasses system and flexible capacity requirements for the 2026 and 2027 program years, 2026-2028 local RA requirements, and refinements to the CEC’s incentive-based supply-side DR qualifying capacity proposal due in December 2024.
Next Steps
3CE will continue coordination with CalCCA and other stakeholders to strategize how to respond to each track of the proceeding. This proceeding will cover the three tracks over several phases, with the intent of addressing all items within 24 months.
Demand Flexibility
Issue
The CPUC opened this proceeding in 2022 to promote demand flexibility in California 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 will also address 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 of the IGFC is to reduce energy costs for low-income Californians by creating a monthly fixed charge that increases with income and allows the per-kWh volumetric T&D charges to be lower.
Finally, this proceeding explores options for real-time and dynamic rate pilots geared toward load management options for shifting electricity consumption away from the more costly net peak hours to the more plentiful solar generation hours.
Status
On December 15th, the CPUC issued a Proposed Decision (PD) to expand AgFit (a Valley Clean Energy and PG&E program focused on shifting agricultural irrigation load) and SCE’s Dynamic Rate Pilot to all CCAs.
According to the PD, CCAs have the option to join this year or future years by notifying the Commission of planned participation by filing a Tier 1 Advice Letter by March 1 before the summer of enrollment.
Newly participating CCAs can benefit from incentives, receiving $20 per kw-yr of enrolled shiftable load, capped at a total of $1.8M per IOU service area. For instance, if a CCA customer with 2.5MW of shiftable load enrolls, the CCA would receive $50,000 annually to cover program implementation costs. A final Commissioner’s vote is not expected until at least January 25, 2024.
On December 18th, a separate ALJ Ruling was issued requesting that each of the IOUs file additional information about the proposed budgets for implementing the first income-graduated fixed charges by January 2024. 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.
Next Steps
3CE is evaluating all program opportunities and tracking the finalization of the program design for the inclusion of additional CCAs. More information will be available within 60 days as PG&E and SCE are required to submit a Tier 2 Advice Letters outlining their initial implementation strategies for the expanded pilots.
Although the IGFC will be on the delivery side of the bill and not directly impact 3CE billing, 3CE staff are following the proceeding to understand if changes to T&D billing will alter the percentage of customers’ overall electricity bill paid to 3CE.
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 allows load serving entities (LSEs) under contract with these projects to recover their costs through the Public Purpose Programs (PPP) charge, which is collected from all California electricity users. With the passage of AB 843 in 2021, 3CE and other CCAs successfully lobbied legislators to include CCAs in the BioMAT program. In accordance with AB 843, the CPUC opened a new proceeding in October 2022 to work through the details of CCA participation in the BioMAT program.
Status
A Proposed Decision (PD) was published by the CPUC on October 10, 2023. The PD balances stakeholder positions on capacity allocation, queue management, BioMAT cost recovery, and process. The PD is a positive outcome for CCAs on the issue of PPP cost recovery and in its support for additional renewable resources that improve the reliability of California’s grid.
Next Steps
The Commission adopted the PD on November 30, 2023, incorporating three revisions:
IOUs must submit a Tier 2 Advice Letter within 30 days of the Decision's effective date to modify tariffs for implementation;
CalCCA (on behalf of the CCAs) must submit pro-forma program documents within 60 days of the Decision; and
Each participating CCA must directly contract with the program web developer and a third-party administrator if involved.
Over the next 90 days, a collaborative effort between the CPUC, IOUs, and CCAs will refine the pro-forma documents to integrate CCAs into the existing program. This collaboration began on December 14th when CalCCA, CCA staff (including 3CE staff), and IOUs met to create the pro-forma program documents.
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 their planned future procurement will fall within GHG emissions benchmarks, contribute to sector-wide GHG targets, and help maintain grid reliability.
Previous IRP cycles have produced the three procurement mandates, which applied to 3CE and other CCAs. All LSEs, including 3CE, submitted their most recent IRPs in November 2022.
Status
On October 5, 2023, the Administrative Law Judge (ALJ) overseeing the IRP proceeding issued a ruling seeking input on the 2023 Preferred System Plan (PSP) and Transmission Planning Process (TPP) portfolios. CalCCA submitted reply comments in response to stakeholders' initial input on the ALJ ruling on December 1st. The recommendations include refraining from adopting "minimum margins of over procurement" or Planning Reserve Margin "adders," supporting the CPUC's gas retirement sensitivity study as an appropriate initial step, making a determination on the use of central procurement, clarifying import assumption requirements, ensuring alignment of Publicly Owned Utilities Planning activities with state goals, and advocating for IRP modeling using the widely accepted PLEXOS model.
Next Steps
A PD is expected shortly and is anticipated to provide directions to LSEs regarding procurement requirements for the next round of IRP submissions due November 2024.
Energy Resources Recovery Account (ERRA) Compliance
Issue
Energy Resource Recovery Account (ERRA) compliance filings are made annually by the Investor Owned Utilities (IOUs) for the approval of costs associated with Utility Owned Generation (UOG) operations and fuel procurement, Portfolio Allocation Balancing Account (PABA) entries, economic dispatch of electric resources, and contract administration. IOUs are required to demonstrate compliance with CPUC decisions and the California Public Utilities Code. All CCAs participate jointly in these proceedings through CalCCA to ensure unbundled customers are treated equitably in IOU rate-setting decisions.
PG&E Status
On October 6, 2023, PG&E submitted a Motion to Strike CalCCA’s witness testimony, asserting that the testimony delved into out-of-scope issues. CalCCA's testimony criticized PG&E's management of excess RA in 2022, specifically its failure to offer excess RA resources to other Load Serving Entities as mandated.
PG&E, in its motion, contended that it adhered to CPUC orders relevant to the proceeding. CalCCA responded on October 23, 2023, arguing that its testimony falls within the proceeding’s scope and insisted that PG&E’s ERRA filing should assess IOU compliance with all procurement-related orders.
PG&E countered with a Reply on November 2, 2023, acknowledging compliance with D.21-12-015 but asserting that alignment with their Bundled Procurement Plan is consistent with this compliance. PG&E argued that CalCCA's position is a "moving target," making compliance targets uncertain. They also contended that CalCCA's points don't align with Scoping Issue 3 of the proceeding.
CalCCA is reviewing PG&E's filings and awaiting the Commission's decision on PG&E’s Motion to Strike to prepare for evidentiary hearings in January 2024.
On November 13, 2023, a Ruling set the due date for briefs in PG&E’s 2021 ERRA Compliance Case for December 7 with replies due December 21.
SCE Status
On November 9, 2023, the Commission released an Order extending the statutory deadline for SCE’s 2021 ERRA Compliance case from October 2023 to May 2024 to provide more time for a proposed decision and party comments.
Next Steps
3CE will continue to advocate for just treatment of unbundled customers and hold the IOUs accountable for following CPUC rules.
Energy Resources Recovery Account (ERRA) Forecast
Issue
ERRA forecast applications are filed annually by IOUs to look ahead at energy procurement-related revenue requirements, including the allocation of costs across PCIA vintages. CCAs participate through CalCCA to ensure: (1) accuracy of forecast account balances, rates, and cost calculations; (2) proper attribution of PCIA vintage; (3) proposer attribution between bundled and unbundled customers; (4) appropriateness of IOU proposals within the context of an ERRA forecast proceeding.
PG&E Status
On December 14, 2023, the Commission voted to approve the PG&E ERRA Forecast Revised PD. The Revised PD incorporated CalCCA’s proposal to utilize a first-in-first-out (FIFO) methodology for valuing banked RECs rather than PG&E’s proposed last-in-first-out (LIFO) methodology. The Revised PD directs PG&E to begin with RECs generated in 2018 and allows the forthcoming decision on SCE’s PfM in the PCIA proceeding to apply to future valuation of banked RECs for PG&E. Similar to SCE’s case, there will be a Phase 2 of the 2024 ERRA Forecast cases to discuss fixed generation costs.
SCE Status
SCE submitted its 2024 ERRA Forecast Reply Brief on November 2, 2023, responding to CalCCA’s concerns on REC valuation and energy storage forecasting. Disagreeing with CalCCA's proposed REC valuation, SCE argues against using the 2024 RPS Adder benchmark or the last-in, first-out methodology, citing potential risks for bundled customers. CalCCA's suggestion to include energy storage costs in the PCIA forecast is rejected by SCE, advocating for valuation at the Energy Index market price benchmark.
On November 7, the Commission issued a Proposed Decision (PD) for SCE’s 2024 ERRA Forecast case, proposing to await a decision on SCE’s PfM in the PCIA proceeding before addressing the banked REC issue. The Commission recommended SCE to use the same process as in last year's ERRA Forecast case, supported by CalCCA. CalCCA filed comments on November 17, endorsing the decision on banked REC valuation and requesting correction of language around SCE’s battery storage valuation. The Commission, at the November 30, 2023, Voting Meeting, approved the SCE 2024 ERRA Forecast Proposed Decision with modifications.
Next Steps
On January 9th, there will be a pre-hearing conference on consolidated IOU Fixed Generation Costs. The CCAs will continue to review the work presented by the IOUs to ensure the just treatment of both bundled and unbundled customers.
Staff Report Item 5
TO: 3CE Operations Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Juan Lopez, Director of Finance
SUBJECT: Receive the Treasurer’s Report for the period October 1, 2023 through October 31, 2023 DATE: January 10, 2024
RECOMMENDATION:
Receive the Treasurer’s Report for the period October 1, 2023, through October 31, 2023.
SUMMARY:
For the first month of FY 2023-24, operating revenues totaled $42.1 million, while operating expenses totaled $38.8 million for a net operating income of $3.3 million. Non-operating revenue added $1.0 million, tallying a positive change in net position of $4.3 million. The monthly actuals align with the budget. These positive results for the first month influence the remainder of the fiscal year as higher energy costs and resource adequacy purchases materialize.
The Finance Department expects the audited financial statements for Fiscal Year 2022-23 to be finalized by February 2024. Once the external auditor provides their audit report, the financial statements will be presented to the Audit & Finance Committee, followed by the Operations and Policy boards.
FISCAL IMPACT:
There is no financial impact by receiving this report.
ATTACHMENT(S):
1. October 31, 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 October 31, 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 October 31, 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
December 11, 2023
1101 Fifth Avenue, Suite 200 San Rafael, CA 94901 415 459 1249 mahercpa.com
Current assets
Cash and cash equivalents - unrestricted 172,645,479 $
Accounts receivable, net of allowance 31,310,628
Accrued revenue 26,461,537
Other receivables 3,686,000
Loan receivable 187,201
Prepaid expenses 1,013,288
Deposits 15,386,689
Cash - restricted 294,000
Investments 73,555,305
Total current assets 324,540,127
Noncurrent assets
Deposits 23,182
Loan receivable 1,520,797
Lease asset, net of amortization 1,398,497
Capital assets, net of depreciation and amortization 584,781 Total noncurrent assets 3,527,257
Total assets 328,067,384
Current liabilities
Accrued cost of electricity 46,164,059
Accounts payable 1,335,398
Other accrued liabilities 1,180,486
User taxes and energy surcharges due to other governments 1,539,337 Lease liability 302,431
Security deposits - energy suppliers 21,126,030
Total current liabilities 71,647,741
Noncurrent liabilities
Security deposits - energy suppliers 9,131,250
Lease liability 1,141,078
Total noncurrent liabilities 10,272,328
Total liabilities 81,920,069
Net investment in capital assets 517,906
Restricted for security collateral 294,000
Unrestricted 245,335,409
Total net position 246,147,315 $
NET POSITION
As of October 31, 2023
STATEMENT OF NET POSITION
CENTRAL COAST COMMUNITY ENERGY
ASSETS
LIABILITIES
OPERATING REVENUES
Electricity sales, net 42,082,115 $
Total operating revenues 42,082,115
OPERATING EXPENSES
Cost of electricity 37,063,724
Contract services 599,174
Staff compensation 612,593
Other operating expenses 157,030
Program incentives 274,043
Depreciation and amortization 46,803
Total operating expenses 38,753,367
Operating income (loss) 3,328,748
NONOPERATING REVENUES (EXPENSES)
Interest and investment returns 952,745
Financing costs (5,503)
Nonoperating revenues (expenses) 947,242
CHANGE IN NET POSITION 4,275,990
Net position at beginning of period 241,871,325
Net position at end of period 246,147,315 $
One Month Ended October 31, 2023
AND CHANGES IN NET POSITION
STATEMENT OF REVENUES, EXPENSES
CENTRAL COAST COMMUNITY ENERGY
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 42,617,852 $
Receipts of deposits and collateral 567,005
Payments to suppliers for electricity (39,624,488)
Payments of deposits and collateral (9,459,600)
Payments for other goods and services (1,366,014)
Payments for program incentives (960,851)
Payments of staff compensation (523,765)
Payments of taxes and energy surcharges to other governments (897,909) Net cash provided by operating activities (9,647,770)
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Payments of lease liability (29,369)
Payments to acquire capital assets (20,165)
Net cash provided (used) by capital and related financing activities (49,534)
CASH FLOWS FROM INVESTING ACTIVITIES
Investment income received 884,978
Proceeds from investment sales 6,831,273
Purchase of investments (21,113,337)
Net cash provided (used) by investing activities (13,397,086) Net change in cash and cash equivalents (23,094,390)
Cash and cash equivalents at beginning of year 196,033,869 Cash and cash equivalents at end of period 172,939,479 $ Reconciliation to the Statement of Net Position
Cash and cash equivalents - unrestricted 172,645,479 $
Cash - restricted 294,000
Cash and cash equivalents 172,939,479 $
SUPPLEMENTAL CASH FLOW INFORMATION
Capital asset acquisitions included in accounts payable and other liabilities 21,863 $ One Month Ended October 31, 2023
STATEMENT OF CASH FLOWS
CENTRAL COAST COMMUNITY ENERGY
Operating income (loss) 3,328,748 $
Adjustments to reconcile operating income (loss) to net cash provided by operating activities
Depreciation and amortization expense 46,803
(Increase) decrease in:
Accounts receivable, net of allowance 1,448,647
Accrued revenue (1,596,429)
Other receivables 627,656
Prepaid expenses (633,077)
Deposits (8,892,595)
Increase (decrease) in:
Accrued cost of electricity (2,758,417)
Accounts payable (1,443,402)
Other accrued liabilities 438,685
User taxes and energy surcharges due to other governments (214,390) Net cash provided by operating activities (9,647,771) $
CENTRAL COAST COMMUNITY ENERGY
STATEMENT OF CASH FLOWS (continued)
One Month Ended October 31, 2023
RECONCILIATION OF OPERATING INCOME (LOSS) TO NET
CASH PROVIDED BY OPERATING ACTIVITIES
1 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 October 31, 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
December 11, 2023
1101 Fifth Avenue, Suite 200 San Rafael, CA 94901 415 459 1249 mahercpa.com
2023/24 YTD
Budget
2023/24 YTD
Actual
2023/24 YTD
Budget Variance
(Under) Over
2023/24 YTD
Actual / Budget %
2023/24 Annual
Budget
2023/24 Budget
Less Actual
2023/24 Budget
Remaining /
Budget %
REVENUES AND OTHER SOURCES
Electricity sales, net 44,022,000 42,082,115 (1,939,885) 96% 556,433,447 514,351,332 92% Investment and miscellaneous income 533,000 952,745 419,745 179% 6,400,000 5,447,255 85% Total revenues and other sources 44,555,000 43,034,860 (1,520,140) 97% 562,833,447 519,798,587 92% EXPENDITURES AND OTHER USESCurrent Expenditures
Cost of energy 37,088,307 38,220,000 (1,131,693) 97% 520,297,514 483,209,207 93% Salaries and benefits 795,000 612,593 (182,407) 77% 9,537,076 8,924,483 94% Services and supplies 2,750,000 1,081,836 (1,668,164) 39% 32,998,857 31,917,021 97% Total current expenditures 41,765,000 38,782,736 (2,982,264) 93% 562,833,447 524,050,711 93% Surplus (Deficit) 2,790,000 $ 4,252,124 $ 1,462,124 $ - $ (4,252,124) $
CENTRAL COAST COMMUNITY ENERGY
SUPPLEMENTAL BUDGETARY COMPARISON SCHEDULE
One Month Ended October 31, 2023
CCA Program Surplus/(Deficit)
per budgetary comparison schedule: 4,252,124 $
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 23,866 Change in Net Position 4,275,990 $
REVENUES, EXPENSES AND CHANGES IN NET POSITION
CENTRAL COAST COMMUNITY ENERGY
BUDGET RECONCILIATION TO STATEMENT OF
One Month Ended October 31, 2023
Budget Item YTD Variance Comment
Electric Sales Revenue (4.5%) 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 (3.0%) 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.
Salaries and Benefits (22.9%) Staffing expenses are under budget due to the timing of new hires.
Services and Supplies (68.7%) This category includes all consulting, general administration, and program related expenses Budget Commentary for significant items
CENTRAL COAST COMMUNITY ENERGY
October 1, 2023 through October 31, 2023
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 $ 127,068,814Gains/Losses/Interest $ 382,898 382,898 $ Average APY 3.62%INVESTMENTSRiver City Bank - Treasury-indexed productsFunds Invested - Average Balance $ 40,000,000Gains/Losses/Interest $ 178,385.54 178,386Average APY 5.35%RBC GAM / Principal Financal/ Schwab/ ChaseFunds Invested - Average Balance $ 89,306,054Gains/Losses/Interest $ 375,490.63 375,491Average APY 5.05%
CENTRAL COAST COMMUNITY ENERGY
Investment Summary
October 1, 2023 through October 31, 2023
Current 0 - 30 Days 31 - 60 Days 61 - 90 Days > 91 Days A/R Balance 11,074,319 17,829,099 1,956,180 517,589 (66,559) 31,310,628
CENTRAL COAST COMMUNITY ENERGY
Summary of Accounts Receivable, Net of Bad Debt Allowance As of October 31, 2023
Staff Report Item 6
TO: 3CE Operations Board of Directors
FROM: Seth Capron, Community Advisory Council Chair
SUBJECT: Community Advisory Council Report
DATE: January 10, 2024
Report to Operations Board on the December 6, 2023 Community Advisory Council Meeting Workplan Demand Response Presentation and Panel Discussion Key Take-Aways
o Technology with smart devices is advancing rapidly, creating new opportunities. o Demand Response holds the potential to significantly shift loads into hours served by renewable energy, avoiding some of the high cost of battery storage. o Virtual Power Plants created by aggregating customer behind-the-meter batteries is currently the most impactful DR program. This program’s potential will be vastly increased as EV V2G comes online over the next few years. o Demand Response programs are being administered by Investor-Owned Utilities, for profit vendors, and CCA’s.
o 3CEnergy is working to determine our appropriate role: developing programs on our own, with third party aggregators, and/or with PG&E.
Speakers from PG&E Demand Response and Clean Power Alliance (LA/SoCal CCA) PG&E
o Long history of demand response programs
o Supply Side & Load Modifying
Some programs run directly by PG&E; others allow participation by third party demand response third party aggregators
Economic – Shift loads to times of lower wholesale power cost (& cleaner energy)
Lower customer costs
System reliability – both system wide and on local distribution circuits PG&E is credited with reductions to their Resource Adequacy requirements.
Many third-party aggregators are using technology to connect a large variety of devices, making more loads controllable & dispatchable
Emergency Load Reduction – Reduce loads during times of grid stress Voluntary load reductions
Through PG&E or third-party aggregators
Includes Virtual Power Plants with:
o Behind the Meter batteries
o Curtailing charging on aggregated groups of EV’s
EV’s include load time shifting as well as initial V2G programs under emergency grid stress
Will include considerable Vehicle to Grid in the future During grid stress events power is valued up to $2 per kWh! CAISO counts on these DR GW reductions in balancing supply & demand Clean Power Alliance (CPA)
o DR programs are difficult to manage in-house. CPA engaged Autogrid to administer their programs
o Three DR Programs
Smart Home
Automated load reductions/shifting using Smart Connected Devices Substantial incentives for each enrolled device – $85 - $400 Ongoing participation incentives per device - $25 to $300 Power Response - Homes
Manual adjustments of home loads (no smart devises)
Enrollment incentive for CARE/FERA of $20
Participation incentives (all customers) of $2/kWh in reductions Reductions calculated based on comparison to historical usage Power Response – Commercial (and public agencies)
Businesses with regular loads between 4pm & 9pm
Automated with smart devises or manual load reductions Incentives based on monthly average kW reduction
Up to $80 per kW each year for power reduction during events No penalties for opting out of events (some PG&E programs have penalties)
Multi-Family Communities
For affordable rental housing developments
Autogrid serves as third party program implementer
Enrolls customers, monitors market pricing, manages bids, and dispatches resources
Enrollees commit to a certain number of events per year 20 for residential programs
15 for commercial programs
Events up to four hours
Customers notified by text and/or email
Customers can opt out of automated curtailments
o CPA has budgeted for extensive brand & program awareness Included billboard & transit ads
Social media & digital ads
Radio ads
Direct outreach to commercial & multi-family
Program promotion includes emphasis on brand awareness by the public Update on the FY 23/24 Communications & Outreach Plan for Energy Programs Similar to presentation provided to Ops Board earlier by Dawn Mathis-Park, 3CE Director of Communications & Outreach
Update on FY 2023-24 Energy Programs
Information provided on the release of the FY2023-24 updates to our public and member agency programs
COO Report – Discussion Item
COO Shaw & CCO Catherine Stedman provided updates on:
Staffing Updates
o CCA concerns about departure of Program Department leadership o Jon Griesser and Dan Bertoldi did an outstanding job of significantly ramping up our energy programs, and they leave behind some big shoes to fill. Yellow Pine Solar 1 Ribbon Cutting
Operations Board Approves 15 Year SunZia Wind PPA
o 3CE’s most important energy supply contract to date
o Part of largest renewable energy project in the world - Will supply 12% of 3CE load o Time zone delta and evening wind production hours complement CA solar PG&E General Rate Case Approval Impacts Customer Bills o Concerns about overall increase in electricity costs and impacts on electrification o Our customers will tend to blame 3CE for PG&E’s increase distribution & transmission charges
Operations Board Approves $1.5 Amendment For Electrify Your Home o Great that state program is up and running again
o Starting to get some traction with this building electrification program o CAC would like to see additional expanded, innovative programs adopted in building electrification space
3CE Seeks Qualified Salesforce CRM Vendor to Support Energy Programs and Customers o A needed move to efficiently administer customer communications, programs & track progress on customer engagement
Staff Report Item 7
TO: 3CE Operations Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
SUBJECT: CEO Report
DATE: January 10, 2024
STAFFING UPDATE
On January 8, 2024, Geoff Ihle joins as the Energy Risk Manager. Geoff performed a similar role at Clean Power Alliance where he helped build a deal capture system as part of CPA’s risk management.
Prior to that, he held positions at the Public Utility Commission of Oregon and at several Berkshire Hathaway Energy subsidiaries.
START OF SERVICE FOR CITY OF ATASCADERO AND COUNTY OF SAN LUIS OBISPO CONFIRMED On December 18, 2023, 3CE received a letter from the California Public Utilities Commission confirming that 3CE had met its expansion requirements and setting January 1, 2025, as the “implementation date” to allow the residents and businesses within the City of Atascadero and the County of San Luis Obispo to begin receiving service as 3CE customers.
FRONT OF THE METER ENERGY STORAGE PROGRAM REDESIGN
Launched in late 2021, the Front of the Meter Energy Storage (FMES) initiative has a goal of installing up to 100 MW of small-scale energy storage devices, sized between 1 to 5 MW, throughout the 3CE service area to provide local grid resilience.
The effort has suffered several setbacks and encountered numerous challenges, including: an inefficient and cost-uncertain interconnection process, increased battery costs, higher cost of financing, and obtaining land control of suitable sites. 3CE initially identified 11 potential sites for installation of batteries. Due to zoning constraints, as well as capacity and interconnection issues, only two of those initial 11 locations were viable. Even then, we lacked the ability to secure the two subject locations for the necessary 20-year project duration. The lack of viable project locations compounded the increasing cost pressures as 3CE could not leverage its the bulk purchasing power over several projects.
3CE remains committed to the FMES effort. With both IOUs currently reviewing their interconnection requirements for standalone storage, staff anticipates suspending the FMES effort pending the outcome of the IOU review. Staff will revisit the FMES effort to determine program improvements for project location identification, site control, and interconnection to ensure a more successful future effort. successful.
3CE REVIEW OF BEHIND-THE-METER ENERGY STORAGE FOCUSED DEMAND RESPONSE PROPSOALS On December 6, 3CE issued a request for proposals seeking vendors to design, manage, and implement a behind-the-meter battery energy storage program, with the goal of promoting customer load-shifting to further reduce reliance on fossil fuels and contribute to grid resiliency. The RFP requests proposals to support battery installation for both residential and non-residential customers, preserving the option to hire multiple vendors to run programs specific to various customer segments, if desired and based on the responses received. Proposals are due on January 26 with contract awards anticipated in March 2024.
NET BILLING TARIFF (NBT) UPDATE
Net Billing Tariff (previously referred to as NEM 3.0), the latest Net Energy Metering (NEM) tariff, became effective on April 15, 2023. Since then, customers qualifying for NBT have been served on the legacy NEM
2.0 tariff. Beginning last month and extending into 2024, the Investor-Owned Utilities (IOUs) have begun transitioning qualifying customers away from the NEM 2.0 tariff and onto NBT. SCE has delayed its start date and asked the Energy Division (ED) for an extension to Dec 21, 2023, a week later than originally planned. On Dec 14, 2023, PG&E was granted an extension to implement residential NBT until Apr 15, 2024. PG&E plans to implement non-residential NBT in June 2024.
The proposed implementation date for all qualifying 3CE customers in SCE and PG&E territories will be June 2024. This positions 3CE and our customers to transition to NBT at a time when the IOUs have stabilized their own implementations, and our back-office provider has gained experience in implementing NBT billing in both IOU territories. Given the expected delays approved and proposed by the IOUs that we partner with, the implementation date may be subject to change.
ATTACHMENT(S):
1. Contracts less than $200k
CCCE Contracts < $200k
Vendor Total Engagement Amount From To Service Scope Remarks 1 The Centre for Organization Effectiveness $46,080 12/10/2023 12/10/2024 Facilitation and change management support to offer thought partnership and leadership development to key staff members. 2 Keyes & Fox LLP $200,000 1/1/2024 As needed Continuation request for Legal services in connection w/energy procurement 3 NewGen Strategies & Solutions LLC $392,500 11/13/2023 12/31/2026 Rate design and consulting support for a 3-year term, each term having a specified not-to-exceed amount. FY23-2024 - $169,500, FY24-2025 - $111,500, and FY25-2023 - $111,500
Staff Report Item 8
TO: 3CE Operations Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Dennis Dyc-O’Neal, Chief Operating Officer SUBJECT: Approve and authorize CEO to execute a Hybrid - Battery Energy Storage System Power Purchase Agreement with MRP Pacifica Marketing II, LLC for the Panoche Hybrid Project, in a form substantially similar to the attached, as well as any necessary ancillary documents, with a power delivery term of 15 years starting with an expected Commercial Operation Date of January 1, 2026, in an amount not to exceed $168,000,000.
DATE: January 10, 2024
RECOMMENDATION:
This recommends the Operations Board approve and authorize CEO to execute a Hybrid - Battery Energy Storage System Power (“BESS”) Power Purchase Agreement (“PPA”) with MRP Pacifica Marketing II, LLC for the Panoche Hybrid Project, in a form substantially similar to the attached, as well as any necessary ancillary documents, with a power delivery term of 15 years starting with an expected Commercial Operation Date of January 1, 2026, in an amount not to exceed $168,000,000.
BACKGROUND:
Following review and support from the 3CE Executive Committee and the Operations Board, 3CE staff sought and received Policy Board direction and support for an innovative approach to both: 1) reduce existing natural gas facility emissions; while also, 2) securing valuable Resource Adequacy product for 3CE through a hybrid natural gas power purchase agreement.
At its September 2023 meeting, the Policy Board directed staff to seek and negotiate a Hybrid Natural Gas plush Batter Energy System agreement whereby 3CE could install a new energy storage system at an existing natural gas facility and thereby reduce existing emissions while also reducing 3CE’s RA non-compliance risks and obtain cost certainty in a volatile market.
2023 Hybrid Natural Gas Power Purchase Request for Offers Central Coast Community Energy (“3CE”) launched a request for offers (“RFO”) in October 2023 targeting procurement of a Hybrid Natural Gas plant plus Energy Storage to reduce emissions. 3CE received offers for 5 different projects.
Project selection was considered on several factors that include an evaluation of the developer’s ability to perform, a quantitative and qualitative evaluation of the project, inclusive of 3CE’s Project Selection Methodology, adopted in June 2023.
The selected project for which we are seeking approval today is known as the Panoche Hybrid Project. This is one of two selected projects with the same developer, Middle River Power (‘MRP”). MRP owns and manages about 2,000 MW of generating capacity in California and 4,000 MW outside of California.
DISCUSSION/ANALYSIS:
The RFO solicitation, shortlisting, and negotiations included 3CE’s Project Selection Criteria, adopted in June 2023, which evaluates projects on 1) ability to cost effectively meet 3CE’s regulatory obligations and 100% clean and renewable energy goal; 2) commitment to workforce development; 3) potential for innovation; 4) location; 5) environmental impacts, and 6) benefits accruing to underserved communities.
Each category is ranked on a scale of High, Medium, or Low.
Contribution to 3CE’s Mission and Goals
With the volatile Resource Adequacy (“RA”) market dynamics, inclusive of a major reform called the 24- hour Slice-of-Day paradigm going live in 2025, this hybrid resource will provide valuable fixed-price RA benefits to ensure RA compliance for 3CE. It will meet approximately 5% of 3CE’s RA obligation.
It will provide a cost-effective energy hedge to 3CE and the CAISO. During constrained market condition events and the Peaker is dispatched, the financial structure has the energy being purchased directly by the CAISO from Seller. Thus, it will have no reportable emissions on 3CE’s Power Content Label. 3CE will work to maximize the charging and discharging of the new 1-hour BESS to provide the greatest value for 3CE customers and to reduce the utilization rate of the Peaker unit, and thus reduce emissions that would have otherwise occurred absent the BESS.
Given the new energy storage system will be 57 MW and the Peaker is 52 MW (oversized to utilize the available unused transmission capacity), 3CE will pursue additional benefit to contribute to its regulatory procurement mandate issued by the CPUC (“MTR Mandate”).
Low Med High
3CE’s ranking is High.
Workforce Development
The developer, MRP, represents that the construction phase of the energy storage system will meet the wage and apprenticeship requirements set forth in the Inflation Reduction Act (“IRA”). The developer, MRP, represents that BESS construction work will also be bound under a project labor agreement (“PLA”) to which 3CE shall not be a party. After the commercial online date, the developer represents that the project will hire one or two additional operators to manage and maintain the BESS resources. 3CE’s ranking is High.
Innovation
3CE supports projects that accelerate decarbonization while remaining cost competitive. This project is a creative repurposing of an existing site, utilizing its valuable and scarce transmission capacity to transition away from a conventional power facility towards an energy storage system.
The modeling indicates the new energy storage system will compete with the existing natural gas Peaker to use the interconnection capacity, and is predicted to reduce emissions on average between 54% to 78%. Actual results are contingent on the real time energy market prices affecting the economics around either running the Peaker or charging and discharging the battery.
High
High
3CE’s ranking is High.
Location
While not located within the 3CE jurisdictional footprint, the facility is in Firebaugh, Fresno County and grid-tied to the CAISO balancing authority.
3CE’s ranking is Medium.
Environmental Stewardship
The project is in an area zoned for industrial uses with other operating power plants nearby.
The subject project area is, however, surrounded by an agricultural area. The developer has initiated cultural and biological surveys as part of its technical reports to Fresno County. As both the existing and new BESS facility are on a developed parcel, no significant impacts are anticipated.
The project is anticipated to reduce thermal peaker plant output and thereby lower emissions in the local area.
3CE’s ranking is High.
Benefits Accrued to Underserved Communities
MRP’s submission notes it has a plan to engage with the local community regarding the construction of the new energy storage system. As the Project is integrating an energy storage system to reduce output from the existing natural gas Peaker unit, it will thereby lower emissions in the area. MRP is planning for approximately 75% of their workers to be hired from the local area for the construction of energy storage system.
3CE’s ranking is Medium.
High
Med
High
Med
Overview of the Project
Counterparty MRP Pacifica Marketing LLC
Parent Company Middle River Power (MRP)
Product Natural Gas Peaker Power Plant with BESS, providing Resource Adequacy (RA) benefits and dispatchable energy
Delivery Term 15 years
January 1, 2026, through December 31, 2040
Project Name Panoche Hybrid
Contract Capacity 52 MW Natural Gas Simple Cycle Turbine 57 MW 1-hour discharge duration Lithium-Ion Battery Energy Storage System (BESS)
Percentage of RA
Obligation met
5%
Location Firebaugh, Fresno County, California
Not to Exceed Amount $168,000,000
FISCAL IMPACT:
The fiscal impact of the Hybrid Panoche Peaker plus BESS project will not exceed $168 million over the 15-year term of the PPA. The project is anticipated to stabilize future energy rates by securing Resource Adequacy resources for 3CE customers.
CONCLUSION:
Approval of the MRP Pacifica Marketing II, LLC project provides 3CE a high value RA product, it will reduce our RA non-compliance risks, obtain cost certainty in a volatile market, encourage good-paying jobs in support of battery construction, and reduce emissions from an existing natural gas Peaker facility.
ATTACHMENT(S):
1. PPA between MRP Pacifica Marketing II LLC and 3CE (Redacted)
Staff Report Item 9
TO: 3CE Operations Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Dennis Dyc-O’Neal, Chief Operating Officer SUBJECT: Approve and authorize CEO to execute a Hybrid - Battery Energy Storage System Power Purchase Agreement with MRP Pacifica Marketing II, LLC for the Midway Hybrid Project, in a form substantially similar to the attached, as well as any necessary ancillary documents, with a power delivery term of 15 years starting with an expected Commercial Operation Date of January 1, 2026, in an amount not to exceed $368,000,000
DATE: January 10, 2024
RECOMMENDATION:
This recommends the Operations Board approve and authorize CEO to execute a Hybrid - Battery Energy Storage System Power (“BESS”) Power Purchase Agreement (“PPA”) with MRP Pacifica Marketing II, LLC for the Midway Hybrid Project, in a form substantially similar to the attached, as well as any necessary ancillary documents, with a power delivery term of 15 years starting with an expected Commercial Operation Date of January 1, 2026, in an amount not to exceed $368,000,000.
BACKGROUND:
Following review and support from the 3CE Executive Committee and the Operations Board, 3CE staff sought and received Policy Board direction and support for an innovative approach to both: 1) reduce existing natural gas facility emissions; while also, 2) securing valuable Resource Adequacy product for 3CE through a hybrid natural gas power purchase agreement.
At its September 2023 meeting, the Policy Board directed staff to seek and negotiate a Hybrid Natural Gas plush Batter Energy System agreement whereby 3CE could install a new energy storage system at an existing natural gas facility and thereby reduce existing emissions while also reducing 3CE’s RA non-compliance risks and obtain cost certainty in a volatile market.
2023 Hybrid Natural Gas Power Purchase Request for Offers Central Coast Community Energy (“3CE”) launched a request for offers (“RFO”) in October 2023 targeting the reduction of existing emissions and securing Resource Adequacy through the procurement of a Hybrid Natural Gas plant plus Energy Storage project. 3CE received offers for five different projects.
Project selection was considered on several factors that include an evaluation of the developer’s ability to perform, a quantitative and qualitative evaluation of the project, inclusive of 3CE’s Project Selection Methodology, adopted in June 2023.
The selected project for which we are seeking approval today is known as the Midway Hybrid Project. This is one of two selected projects with the same developer, Middle River Power (‘MRP”). MRP owns and manages about 2,000 MW of generating capacity in California and 4,000 MW outside of California.
DISCUSSION/ANALYSIS:
Approval of the Midway Hybrid Project accomplishes the earlier board direction to stabilize 3CE’s Resource Adequacy needs on a longer-term basis while reducing existing emissions by constructing a battery at an existing natural gas Peaker unit.
The RFO solicitation, shortlisting, and negotiations included 3CE’s Project Selection Methodology, adopted in June 2023, which evaluates projects on 1) ability to cost effectively meet 3CE’s regulatory obligations and 100% clean and renewable energy goal; 2) commitment to workforce development; 3) potential for innovation; 4) location; 5) environmental impacts, and 6) benefits accruing to underserved communities.
Each category is ranked on a scale of Low, Medium, or High.
Contribution to 3CE’s Mission and Goals
With the volatile Resource Adequacy (“RA”) market dynamics, inclusive of a major reform called the 24- hour Slice-of-Day paradigm going live in 2025, this hybrid resource will provide valuable fixed-price RA benefits to ensure RA compliance for 3CE. It will meet approximately 13% of 3CE’s RA obligation.
It will provide a cost-effective energy hedge to 3CE and the CAISO. During constrained market condition events and the Peaker is dispatched, the financial structure has the energy being purchased directly by the CAISO from Seller. Thus, it will have no reportable emissions on 3CE’s Power Content Label.
Low Med High
3CE will work to maximize the charging and discharging of the new 1-hour BESS to provide the greatest value for 3CE customers and to reduce the utilization rate of the Peaker unit, and thus reduce emissions that would have otherwise occurred absent the BESS.
3CE’s ranking is High.
Workforce Development
The developer, MRP, represents that the construction phase of the energy storage system will meet the wage and apprenticeship requirements set forth in the Inflation Reduction Act (“IRA”). The developer, MRP, represents that BESS construction work will also be bound under a project labor agreement (“PLA”) to which 3CE shall not be a party. After the commercial online date, the developer represents that the project will hire one or two additional operators to manage and maintain the BESS resources. 3CE’s ranking is High.
Innovation
3CE’s Project Selection Methodology supports projects that accelerate decarbonization while remaining cost competitive. This project is a creative repurposing of an existing site, utilizing its valuable and scarce transmission capacity to transition away from a conventional power facility towards an energy storage system.
The modeling indicates the new energy storage system will compete with the existing natural gas Peaker to use the interconnection capacity, and is predicted to reduce emissions on average between 54% to 78%. Actual results are contingent on the real time energy market prices affecting the economics around either running the Peaker or charging and discharging the battery.
High
High
3CE’s ranking is High
Location
While not located within the 3CE jurisdictional footprint, the facility is in Firebaugh, Fresno County and grid-tied to the CAISO balancing authority.
3CE’s ranking is Medium.
Environmental Stewardship
The project is in an area zoned for industrial uses with other operating power plants nearby.
The subject project area is, however, surrounded by an agricultural area. The developer has initiated cultural and biological surveys as part of its technical reports to Fresno County. As both the existing and new BESS facility are on a developed parcel, no significant impacts are anticipated.
The project is anticipated to reduce thermal peaker plant output and thereby lower emissions in the local area.
High
Med
3CE’s ranking is High.
Benefits Accrued to Underserved Communities
MRP’s submission notes it has a plan to engage with the local community regarding the construction of the new energy storage system. As the Project is integrating an energy storage system to reduce output from the existing natural gas Peaker unit, it will thereby lower emissions in the area. MRP is planning for approximately 75% of their workers to be hired from the local area for the construction of energy storage system.
3CE’s ranking is Medium.
Overview of the Project
Counterparty MRP Pacifica Marketing LLC
Parent Company Middle River Power (MRP)
Product Natural Gas Peaker Power Plant with BESS, providing Resource Adequacy (RA) benefits and dispatchable energy
Delivery Term 15 years
January 1, 2026, through December 31, 2040
Project Name Midway Hybrid
Contract Capacity 120 MW Natural Gas Simple Cycle Turbine 120 MW 1-hour discharge duration Lithium-Ion Battery Energy Storage System (BESS)
Percentage of RA
Obligation met
13%
Location Firebaugh, Fresno County, California
Not to Exceed Amount $368,000,000
High
Med
FISCAL IMPACT:
The fiscal impact of the Hybrid Midway Peaker plus BESS project will not exceed $368 million over the 15-year term of the PPA. The project is anticipated to stabilize future energy rates by securing Resource Adequacy resources for 3CE customers.
CONCLUSION:
Approval of the MRP Pacifica Marketing II, LLC project provides 3CE a high value RA product, it will reduce our RA non-compliance risks, obtain cost certainty in a volatile market, encourage good-paying jobs in support of battery construction, and reduce emissions from an existing natural gas Peaker facility.
ATTACHMENT(S):
1. PPA between MRP Pacifica Marketing II LLC and 3CE (Redacted)