Board of Directors Meeting
October 31, 2024
Item 2: CEO Report
2 Completed Community Events
3 DATE DESCRIPTION
September 29, 2024 City of Vista Cyclovia
October 9, 2024 CPUC Small and Diverse Business Expo
October 9, 2024 Del Mar Climate Coalition
October 8, 2024 Carlsbad City Council Presentation
October 10, 2024 CPUC Supplier Diversity En Banc
October 18, 2024 NEXUS: San Diego Climate Summit
October 26, 2024 Kiwanis' Oceanside Pacific Spaghetti Dinner October 24, 2024 AWWEE Conference
October 30, 2024 CAISO Stakeholder Symposium
October 30, 2024 SD Regional Economic Development Corporation - Manufacturing Report Launch
Upcoming Community Events
4 DATE DESCRIPTION
November 13, 2024 Dr. Bronner’s Green Team Presentation November 20, 2024 Power Association of California (PANC) “Fireside Chat” – Evolving Landscape of Energy Storage in the San Diego Region
December 2024 Various Tree Lighting Ceremonies for Member Agencies Oceanside & Vista Enrollment
Stats
5 City # of Eligible
Customers
# of Opt-Downs to
50%
Renewable
# of Opt-Ups to
100%
Renewable
# of Opt-Outs
Participation
Rate
Oceanside 69,422 186 68 3,689 94.7%
Vista 37,230 78 266 1,509 96.0%
TOTAL 106,652 264 344 5,198 95.1%
CEA Enrollment Stats
6 Member City Clean Impact – 50%
Renewable
Clean Impact Plus -
75% Carbon Free
Green Impact – 100%
Renewable
Carlsbad 161 49,288 215
Del Mar 4 2,766 67
Escondido 139 53,013 63
Oceanside 175 63,116 64
San Marcos 118 34,560 63
Solana Beach 15 6,897 157
Vista 73 34,016 262
TOTAL ACCOUNTS 685 243,656 891
Solar Plus Update
7 • 19 Enrolled Contracts (as of 10/16/24)
• Solana Beach - 1
• Carlsbad – 2
• Escondido – 4
• San Marcos – 5
• Oceanside – 5
• Vista – 4
• 2 Systems installed and live!
• Vista, Carlsbad
• 3 more systems soon to go live
• Channel Partner agreements in progress
• Expanding Marketing
8 Solar Plus Update
Item 3: Amending Clean Energy Alliance
Rate Schedule to Add Wholesale Market
Access Tariff (WMAT) Rate
9 Item 3: WMAT Rate Setting Public
Hearing
10 Recommendation:
1. Conduct the Public Hearing by opening the hearing,
receiving public testimony and closing the Public Hearing
2. Approve Resolution No. 2024-018 Amending the Clean
Energy Alliance Rate Schedule to add the Wholesale
Market Access Tariff (WMAT) Rate Effective January 1,
2025
Background
11 • WMAT Program, Terms and Conditions approved by the Board on October 26, 2023
• WMAT Terms and Conditions set WMAT rate calculation and specified that the rate be adopted at a future public hearing
• Staff has been procuring energy and power supply products to serve the Carlsbad Desalination Plant (Channelside) beginning on January 1, 2025, which is enrolled in the WMAT Program
• The proposed WMAT Rate was developed per the WMAT Terms and Conditions which provides revenues to cover costs for 2025 including power supply, CAISO energy, Long- and Short-Term Renewable Energy and Resource Adequacy
• The proposed WMAT Rate also includes CEA administrative costs equivalent to other CEA rates
Proposed WMAT Rate
12 • The proposed WMAT Rate to be effective January 1, 2025 is:
$0.10150 per kWh
• Per CEA’s policy and applicable requirements, a notice of public hearing was published in the San Diego Union
Tribune on October 18 and October 25, 2024
• As proposed, the WMAT Rate provides sufficient revenue to cover costs as currently estimated and to fund a
proportionate share of CEA administrative costs and
reserves
Item 4: Regulatory Update
13 Clean Energy Alliance: Regulatory Update
Tim Lindl – Keyes & Fox LLP
October 31, 2024
Overview
● SDG&E 2025 Energy Resource Recovery Account (ERRA)
Forecast Case (A.24-05-010)
● SDG&E Phase I General Rate Case
15 16
Setting PCIA Rates
YEAR-END
PABA BALANCE
FORECASTED
INDIFFERENCE
AMOUNT
PCIA REVENUE
REQUIREMENT
17 Setting PCIA Rates
TOTAL COST
OF UTILITY
PORTFOLIO
MARKET
VALUE OF
UTILIY
PORTFOLIO
INDIFFERENCE
AMOUNT
(PCIA)
RPS ADDER
($/GWH) *
GWh
MARKET
VALUE OF
UTILITY
PORTFOLIO
ENERGY
INDEX
($/GWH) *
GWh
RA ADDER
($/MW) *
MW
Developments in the ERRA
● Judge’s October 8 Ruling Renewed Questions re the RA Adder ● CEA Comments in Response to ALJ Ruling urged staying the course
● SDG&E filed its October Update on October 21
18 2025 Rates in the October Update*
19 * These will change twice more between now and January 1.
Vintage Current
(2024)
October Update
(2025)
Increase/
(Decrease) Cost/Credit (-)
Bundled Customer
Generation + PCIA $0.15017/kWh $0.15027/kWh $0.00010/kWh 15.03 cents/kWh Solana Beach PCIA
(Vintage 2017) $0.00689/kWh $0.00061/kWh ($0.00628)/kWh 0.06 cents/kWh Carlsbad & Del Mar PCIA
(Vintage 2020) ($0.00073)/kWh ($0.02161)/kWh ($0.02088)/kWh -2.16 cents/kWh Escondido & San Marcos
PCIA (Vintage 2022) $002815/kWh ($0.01909)/kWh ($0.04363)/kWh -1.91 cents/kWh Oceanside & Vista PCIA
(Vintage 2023) $0.00684/kWh ($0.03679)/kWh ($0.04363)/kWh -3.68 cents/kWh SDG&E Phase I General Rate Case
● CCA Position: No “Forever” PCIA assets
○ Miramar: The cost of investments to increase capacity by 20 MW should not go to the 2004/2008 PCIA vintages
○ Vintaging Framework: Analytical tool to ensure new investment in older plants, extensions of life, or changes in nature of an asset all mean re-vintaging those investments (or the entire resource) ● Proposed Decision denies Miramar investments and (largely) supports CCA position.
20 QUESTIONS?
Tim Lindl
[email protected]
(510) 314-8385
21 Item 5: Board & CAC Policy
Amendments
22 Item 5: Policy Amendments
23 • Recommendation: That the CEA Board adopt Resolution No. 2024-019 approving amendments to the CAC Policy and the Vice Chair Term Limit Policy.
Background
• At the September 26, 2024 Board meeting, staff provided a list of recommended changes to the current CAC Policy.
• The Board supported most of the amendments but directed staff to return to the Board to provide options for the Board to consider on appointing a CAC Chair.
• Currently, CEA Policy No. 20, Chair-Vice Chair Term Limit Policy, states that the CEA Board will appoint a Board
Alternate to serve as the CAC Chair, while the CAC Policy states the CAC appoints their Chair.
24 Proposed Amendments – CAC Policy
25 • Staff is recommending that following language be
added to the CAC Policy:
The CAC Chair shall be appointed by the CEA Board and
shall be an Alternate Board Member of the CEA Board.
Should an Alternate Board Member be unavailable to
serve as Chair, the CEA Board shall appoint a Board
Member to serve as CEA Chair. Should a Board Member
not be available to serve, the CEA Board shall direct the CAC to appoint a Chair from a member of the CAC.
Other Amendments – CAC Policy
26 • Terms of CAC Members will change from three-year
terms to two-year terms to closer align with Board
Member terms
• CAC meetings will take place bi-monthly
• Removing the term limit for CAC Members
• CAC Members who wish to continue serving at the end of their term may apply for reappointment
Proposed Amendments – Chair & Vice Chair Term Policy
27 • To implement this CAC Chair selection process, Section
2.2 of CEA Policy 20 must similarly be amended as
follows:
At the beginning of each calendar year, the Board appoints a Chair for CAC which shall be an Alternate Board Member.
Should an Alternate Board Member be unavailable to serve as Chair, the CEA Board shall appoint a Board Member to serve as CEA Chair. Should a Board Member not be
available to serve, the CEA Board shall direct the CAC to appoint a Chair from a member of the CAC.
Questions/Discussion
28 Item 6: Approve Amendment to
Cape Station PPA
29 Item 6: Approve Amendment to
Cape Station PPA
30 • Recommendation:
• That the CEA Board approve Amendment No. 1 to 15-Year Power Purchase Agreement with Cape Generating Station I LLC for geothermal renewable energy and capacity.
• Authorize the Chief Executive Officer to execute the Amendment, subject to Transactions Attorney approval.
Background
• CPUC Decisions 21-06-035 (Mid-Term Reliability Requirement) & 23-02-040 (Supplemental Mid-Term Reliability Procurement) • Procurement of additional resources to ensure sufficient resources are available for reliability as older non-renewable resources are retired; • Incremental requirements for each LSE for new capacity online on or before each year from 2023 through 2028
• Goal to increase resource diversity with clean firm resources such as geothermal and long-duration storage, in addition to battery storage • Fervo Energy proposed a geothermal project into an earlier CEA solicitation for Cape Generating Station, and a PPA was executed in September 2022.
31 Proposed PPA Amendments
32 • Fervo has indicated challenges with project financing and their procurement of key project equipment
components, and has proposed the following PPA
amendments:
• Commercial Operation Date (COD) pushed back to
January 2031
• Price increase, resulting in increased costs to CEA of approximately $900,000 per year
• Various other tweaks to align across Fervo’s various PPAs for the Cape Station site
Questions/Discussion
33 Item 7: Receive Annual Audited
Financial Report for the Fiscal Year
Ended June 30, 2024
34 FY2023/2024 Audited Financials
and
September 30, 2024 Financial Update
(Preliminary)
October 31, 2024
Item 7: Audited Financials Summary
• Pisenti & Brinker, LLP
• Brett Bradford, partner
• 2
nd year as independent auditors
• Audit completed as of October 24, 2024
• Audit Results
• Clean opinion
• Material Weakness: Deficiency in Internal Control
• Voluntary Allocation and Market Offer (VAMO) costs were not accrued at June 30, 2023 • New CPUC program beginning 01/01/2023 to enable SDG&E to allocate RECs to CEA • Issues in the implementation resulted in late receipt of first invoice in Fall of 2023 • Invoice received after audit was complete in the prior year • Isolated, one-time event
• Management proactively proposed the restatement to the auditor and elected to restate prior year financial statements
• CEA implemented complete procedures for appropriate accruals in FY2024 and going forward 36 • At the time of the Board’s FY2024/25 Budget Review and Approval
• Actual financials were only through April 2024
• Estimated financials for the remainder of the year
• Estimated VAMO impact was not yet included in the year-end forecast as complete procedures for estimating had not yet been developed • VAMO Impact in FY2024
• $4.4 million accrued after Board reviewed the estimated FY2024 Year-end Projections
37 Audited Financials Compared to
Budget Estimate
38 • Revenue was higher
than expected –
difficult to estimate
the impact of April
2024 expansion
• Cost of Energy was
higher than
expected – mostly
due to VAMO
expense of $4.4
million
Projected Year-end FY2023-24 at
Budget Approval
Audited Year-end
FY2023-24
Difference:
Favorable /
(Unfavorable)
OPERATING REVENUES
Total Operating Revenues $196,122,886 $198,067,134 $1,944,248
OPERATING EXPENSES
Total Cost of Goods Sold (Energy Expense) 191,407,169 197,129,829 (5,722,660) Other Operating Expenses (excluding COGS) 5,919,624 6,103,355 (183,731) Total Operating Expenses $197,326,793 $203,233,184 ($5,906,391) OPERATING INCOME/(LOSS) ($1,203,907) ($5,166,050) ($3,962,143) NON-OPERATING REVENUES (EXP.) -
Total Nonoperating Income/(Expense) (1,265,040) (1,261,688) 3,352 -
CHANGE IN NET POSITION ($2,468,947) ($6,427,738) ($3,958,791) Full Year FY2023-2024
Audited Financials Compared to
Budget Estimate
39 • Preliminary results for September 2024
• YTD Change in Net Income - $44.2 million through September • Compared to Budget of $32.7 million
• Full-year forecast - $43.7 million
• Slightly below the current September level – losses in most months expected for the for the rest of the fiscal year due to normal seasonality • Losses expected in months that winter rates apply, but should be significantly lower than last year due to recent increase in Winter Rates
• For comparison, the prior YTD through September was $25.8 million although the full year ended up being negative
• Forecasted full-year forecast is sufficient to make-up for the prior year-end Net Position with significant positive Net Position remaining • Forecasted FY2025 year-end Net Position of approximately $26.7 million • Will enable building of reserves consistent with CEA Policy and CCA best practices Preliminary September 2024 Results –
Q1 FY2025
40 Preliminary Budget
Variance:
Favorable /
(Unfavorable)
YTD Actual as %
of YTD Budget
Prior Year-to-Date ActualFull Year Forecast
FY2024-2025
Full Year Budget
FY2024-2025
Full Year Forecast
as % of Full Year
Budget
OPERATING REVENUES
Total Operating Revenues $128,449,242 $119,747,675 $8,701,567 107% $77,735,103 $366,454,205 $360,839,549 102%
OPERATING EXPENSES
Total Cost of Goods Sold (Energy Expense) 81,363,085 84,392,313 3,029,228 96% 50,286,457 315,981,269 317,090,165 100% Other Operating Expenses (excluding COGS) 2,146,134 2,132,578 (13,556) 101% 1,156,070 9,557,652 9,378,650 102% Total Operating Expenses $83,509,219 $86,524,891 $3,015,673 97% $51,442,527 $325,538,921 $326,468,815 100% OPERATING INCOME/(LOSS) $44,940,023 $33,222,783 $11,717,240 135% $26,292,577 $40,915,284 $34,370,733 119% NON-OPERATING REVENUES (EXP.) -
Total Nonoperating Income/(Expense) (696,472) (562,578) (133,894) 124% (521,403) (1,249,019) (1,063,383) 117% -
CHANGE IN NET POSITION $44,243,551 $32,660,205 $11,583,346 135% $25,771,174 $39,666,265 $33,307,350 119% $84,205,691
Ending Net Position $23,158,872 $23,738,971 ($580,099) $15,234,077 $22,701,431 $24,386,116 Year-to-date Full Year FY2024-2025
Preliminary September 2024 Results –
Q1 FY2025