MEETING of the Energy Planning & Resources Committee
of the Clean Power Alliance of Southern California
Wednesday, February 23, 2022
12:30 p.m.
SPECIAL NOTICE: Pursuant to the Proclamation of the State of Emergency by Governor Newsom on March 4, 2020, AB 361, and enacting Resolutions, and as a response to mitigating the spread of COVID19, the Energy Planning & Resources Committee will conduct this meeting remotely.
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PUBLIC COMMENT: Members of the public may submit their comments by one of the following options:
• Email Public Comment: Members of the public are encouraged to submit written comments on any agenda item to [email protected] up to four hours before the meeting. Written public comments will be announced at the meeting and become part of the meeting record. Public comments received in writing will not be read aloud at the meeting. • Provide Public Comment During the Meeting: Please notify staff via email at [email protected] at the beginning of the meeting but no later than immediately before the agenda item is called.
o You will be asked for your name and phone number (or other identifying information) and agenda item similar to filling out a speaker card so that you can be called on when it is your turn to speak.
o You will be called upon during the comment section for the agenda item on which you wish to speak on. When it is your turn to speak, a staff member will unmute your phone or computer audio.
o You will be able to speak to the Board for the allotted amount of time. Please be advised that all public comments must otherwise comply with our Public Comment Policy. o Once you have spoken, or the allotted time has run out, you will be muted during the meeting.
If preferred, you may also submit written comments during the meeting via email to:
[email protected]. The written comments will be shared with the Board of Directors. *While downloading the Zoom application may provide a better meeting experience, Zoom does not need to be installed on your computer to participate. After clicking the webinar link above, click “start from your browser.” Agenda Page 1
Clean Power Alliance Energy Planning & Resources Committee February 23, 2022
Meetings are accessible to persons with disabilities. Individuals who need special assistance or a disability-related modification or accommodation to participate in this meeting, or who have a disability and wish to request an alternative format for the meeting materials, should contact the Clerk of the Board at least two (2) working days before the meeting at [email protected] or (323) 640-7664. Notification in advance of the meeting will enable us to make reasonable arrangements to ensure accessibility to this meeting and the materials related to it.
PUBLIC COMMENT POLICY: The General Public Comment item is reserved for persons wishing to address the Board on any Clean Power Alliance-related matters not on today’s agenda. Public comments on matters on today’s Consent Agenda and Regular Agenda shall be heard at the time the matter is called.
Comments on items on the Consent Agenda are consolidated into one public comment period. Members of the public who wish to address the Board are requested to contact the Board Clerk, as specified above, at the beginning of the meeting but no later than immediately prior to the time an agenda item is called.
Each speaker is limited to two (2) minutes (in whole minute increments) per agenda item with a cumulative total of five 5 minutes to be allocated between the General Public Comment, the entire Consent Agenda, or individual items in the Regular Agenda. Please refer to Policy No. 8 – Public Comment for additional information.
CALL TO ORDER & ROLL CALL
GENERAL PUBLIC COMMENT
CONSENT AGENDA
1. Approve Minutes from January 26, 2022 Energy Committee Meeting
2. Receive and File January 2022 Risk Management Team Report
REGULAR AGENDA
3. Oral Update on Mid-Term Reliability RFO
4. Resource Adequacy Reform Update
COMMITTEE MEMBER COMMENTS
ADJOURN – NEXT MEETING MARCH 23, 2022
Public Records: Public records that relate to any item on the open session agenda for a Committee Meeting are available for public inspection. Those records that are distributed less than 72 hours prior to the meeting are available for public inspection at the same time they are distributed to all, or a majority of, the members of the Committee. Those documents are available for inspection online at www.cleanpoweralliance.org/agendas.
Agenda Page 2
MINUTES
REGULAR MEETING of the Energy Planning & Resources Committee of the Clean Power Alliance of Southern California
Wednesday, January 26, 2022, 12:15 p.m.
Pursuant to the Proclamation of the State of Emergency by Governor Newsom on March 4, 2020, AB 361, and enacting Resolutions, and as a response to mitigating the spread of COVID19, the Energy Planning & Resources Committee conducted this meeting remotely.
CALL TO ORDER & ROLL CALL
Chair Parkhurst called the meeting to order at 12:15 p.m. and Interim Clerk of the Board, Raynette Tom, conducted roll call.
ROLL CALL
Alhambra Jeffrey Maloney Committee Member Remote
Carson Reata Kulcsar Committee Member Remote
Culver City Daniel Lee Committee Member Remote
Oxnard Kathleen Mallory Committee Member Remote
Sierra Madre Robert Parkhurst Chair Remote
Thousand Oaks Helen Cox Committee Member Remote
Ventura County Carmen Ramirez Committee Member Remote
All votes are unanimous, unless otherwise stated.
GENERAL PUBLIC COMMENT
There was no public comment.
CONSENT AGENDA
1. Approve Minutes from December 16, 2021 Special Energy Committee Meeting
2. Receive and File November and December 2021 Risk Management Team Report Ted Bardacke, CEO, provided a brief review of Item 2, noting that due to the default changes, CPA must revise its load forecast reflecting new positions driving deviations in the RMT report.
Motion: Committee Member Maloney, Alhambra
Second: Committee Member Cox, Thousand Oaks
Vote: The consent agenda was approved by a roll call vote with an abstention by Committee Member Ramirez.
REGULAR AGENDA
3. Approve Shortlist Projects as Recommended by the Review Team for the 2021 Mid-Term Reliability RFO
Agenda Page 3
Clean Power Alliance Energy Planning & Resources Committee Page 2 of 2 January 26, 2022
Natasha Keefer, Vice President, Power Supply, presented the recommended shortlist and waitlist for the 2021 Midterm Reliability Request for Offers (RFO). In 2021, the California Public Utilities Commission (CPUC) issued a decision requiring all Load Serving Entities (LSEs) to undertake new procurement to address mid-term reliability; this decision ordered CPA to procure a total of 679 MW of new reliable capacity between 2023-2026, of which a portion must be Long-Lead Time (LLT) resources. On September 29th, 2021, CPA launched its 2021 Midterm Reliability RFOs to comply with the order, and in January, the RFO Review Team developed a recommended shortlist and waitlist. Ms. Keefer provided an overview of the process by which CPA runs the long term RFOs, from launch to Board approval. Ms. Keefer discussed “incremental” capacity and described CPA’s remaining procurement need for compliance in three different product types: (1) “conventional” renewables plus storage/standalone storage; (2) baseload renewables; and, (3) a long-duration storage with 8+ hours of duration.
Ms. Keefer provided a summary of the RFO project eligibility by type and the six criteria used for evaluating projects. Ms. Keefer provided an overview of the conforming offers. Offers were valued and rated based on their Net Present Value (NPV) using a comparison of benefits and costs of the project. The RFO Review Team recommends a shortlisting approach that ranges from shortlisting a portion of CPA’s compliance requirement to up to 2-3x its procurement need in different product types. The Review Team also recommends using a targeted waitlist to ensure enough projects are approved, accounting for shortlisting and negotiation fallout. Ms. Keefer discussed key considerations by product type and reviewed the recommended shortlist/waitlist. Five projects are recommended for the shortlist and five projects for waitlist. The shortlist includes one local project, one out of state project, and two projects located in DACs. All projects rank high on workforce development and there are no low environmental stewardship projects. Ms. Keefer concluded with an overview of the RFO schedule and next steps.
Chair Parkhurst asked about plans to promote the development of baseload and long-term storage resources. Ms. Keefer noted that there are no immediate plans, however, developers are aware of the procurement mandate and may need additional time to overcome development hurdles before they begin bidding to LSEs. In response to questions from the Committee, staff clarified that the mandate makes no mention of a recalculation of procurement requirements should CPA expand; explained that waitlisted projects will be moved to the shortlist if other projects decide not to move forward with CPA; shortlisted projects are given a two-week window to enter into exclusivity with CPA. Waitlisted projects are kept open until the conclusion of PPA negotiations and approval from the Board, with the understanding that those waitlisted projects are under no obligation to CPA.
Chair Parkhurst thanked staff and Committee Member Ramirez and Committee Member Kulcsar for their participation in the RFO Review Team.
Motion: Committee Member Ramirez, Ventura County
Second: Committee Member Kulcsar, Carson
Vote: The consent agenda was approved by a roll call vote.
COMMITTEE MEMBER COMMENTS
Committee Member Ramirez commented on the efforts made to move towards renewable energy.
ADJOURN
Chair Parkhurst adjourned the meeting at 1:22 p.m.
Agenda Page 4
Staff Report – Agenda Item 2
To: Clean Power Alliance (CPA) Finance Committee
From: Geoff Ihle, Director of Market Risk
Approved by: Ted Bardacke, Chief Executive Officer
Subject: Risk Management Team Report
Date: February 23, 2022
January 2022 RMT REPORT
Key Actions
• Discussed January 2022 market performance.
• Reviewed energy positions and approved 2022-2025 hedges. • Reviewed positions for RPS, carbon free, and Resource Adequacy. • Reviewed the PCIA Voluntary Allocation & Market Offer (VAMO) process and SCE’s initial allocation volumes.1
• Reviewed Community Default-Change impacts on Load Forecast.
Policy Compliance
There were no policy deviations reported for January.
ATTACHMENT
None.
1 This item will be brought before the Energy Committee in March.
Agenda Page 5
Staff Report – Agenda Item 3
To: Energy Planning & Resources Committee
From: Natasha Keefer, Vice President, Power Supply
Approved by: Ted Bardacke, Chief Executive Officer
Subject: Oral Update on Mid-Term Reliability RFO
Date: February 23, 2022
Staff will provide an oral update on the item.
Agenda Page 6
Staff Report – Agenda Item 4
To: Clean Power Alliance (CPA) Energy Committee
From: CC Song, Director, Regulatory Affairs
Approved By: Ted Bardacke, Chief Executive Officer
Subject: Resource Adequacy Reform Update
Date: February 23, 2022
RECOMMENDATION
Receive and file.
ATTACHMENT
1) Resource Adequacy Reform Update Presentation
Agenda Page 7
Resource Adequacy Reform
Update
February 23, 2022
Agenda Page 8
Presentation Overview
• Resource Adequacy (RA) Reform
Background
• CPA Principles for RA Reform
• Summary of Proposals
• Next Steps
• Q&A
Agenda Page 9
RA Reform Background
3 • RA was originally designed to ensure sufficient capacity to meet the system-wide gross peak
• If this requirement was met, it was assumed there would be sufficient energy available in all other hours to maintain reliability to the pre-determined planning standard (115% of gross peak load)
• Since the RA program’s inception, the resources on the grid have become increasingly variable and energy-limited
• Net peak has become the most challenging time for reliability • Energy sufficiency can no longer be assumed as it once was • Quick fixes have been implemented but a more robust and durable solution is needed
Agenda Page 10
Net Peak vs. Gross Peak
Source: CAISO
4 The gross peak load represents
the total energy required by the
CAISO to serve demand at its
highest level of the day.
The net peak load represents the
total energy demand less the
wind and solar resource forecast
from the gross peak load.
While the gross load peak on a
typical day occurs in the late
afternoon, the early evening net
load peak is becoming
increasingly critical as solar
production ends and demand
remains high in the evening.
Agenda Page 11
Establishment of the RA Reform Process
5 • Jan 2020 - Commission requested proposals on RA reform • CalCCA-SCE Proposal – LSE required to show a portfolio with sufficient energy to meet both its load and storage charging needs • PG&E Proposal - RA requirements for multiple “slices-of-day” across seasons, counting methodology to reflect an individual resource’s ability to produce energy during each respective slice
• July 2021 - Commission directed working groups to develop implementation details around “slice-of-day” for RA year 2024 • Through the working groups, parties are generally converging around two slice-of-day proposals
• Members of CalCCA, including CPA, proposed two additional options Agenda Page 12
CPA Guiding Principles
• The below principles were presented to the Committee in June 2020:
• Develop a grid reliability framework that appropriately values the contributions of clean energy resources
• Establish a long-term resource planning standard allows LSEs chart a course to 100% clean energy while ensuring grid reliability • Ensure that any new framework is implemented thoughtfully and with sufficient time for LSEs to adapt
Agenda Page 13
High Level Summary of Proposals
24-Hourly Slice
Proposal (SCE)
2 Slice Proposal
(Gridwell)
For each month, each LSE must demonstrate it has enough capacity to meet its share of CAISO gross peak and net peak
For each month, each LSE must demonstrate it has enough capacity to meet its load profile in all 24 hours on the CAISO’s “worst day” Agenda Page 14
SCE 24-Slice Proposal
• Pros
• Slight tweak to current
framework– compliance
processes would remain largely
unchanged
• Cons
• The resource accounting
methodology may not value
renewable resources
appropriately
• Does not offer the granular view
of when a resource can
contribute, and may not be
durable in the long run
• Pros
• Direct visibility of how resource
supply meets demand, and how
excess energy from a renewable
can be used to charge storage
• Granular view of when a
resource can contribute,
especially useful for resources
like demand response
• Cons
• Resource trading cannot be
unbundled by the hour, creating
market inefficiency
• Existing systems at CPUC and
CAISO would need to be
updated
Gridwell 2-Slice Proposal
Pros and Cons of Proposals
Agenda Page 15
Appropriately value
contributions of renewable
resources
Long-term framework that
allows LSEs to chart a
course to 100% clean
energy
Thoughtful implementation
with sufficient time to adapt
9 CPA Principles and Proposed Frameworks
24-Slice
• More accurately values
renewable resources
based on granular hourly
contribution
2-Slice
• Renewable resource
valuation would be based
on existing Effective Load
Carrying Capacity (ELCC)
methodology, with large
discount on solar and wind
capacity contribution
24-Slice
• Granular view that
provides visibility into
individual LSE’s resource
mix’s ability to meet
demand
2-Slice
• Likely not as durable as
resource mix continues to
evolve and gas resources
retire
The July 2021 CPUC
decision directed working
groups to develop
implementation details
around a new framework
for 2023, which does not
provide sufficient time for
thoughtful implementation
Agenda Page 16
Parties Split Support on Proposals
10 2 Slice Proposal as
a Temporary Bridge
(4 CCAs)
24 Hourly Slice
Proposal With
Modifications (CPA)
Adopt 2 Slice proposal as a temporary bridge while something more durable can be developed for later implementation. Supported by 3CE, SDCP, SVCE, VCE.
Adopt 24-Hourly Slice Proposal but defer implementation until 2025 to resolve complex implementation issues including transactability and resource tracking.
CalCCA official position. Supported by EBCE, MCE, PCE, Pioneer, SJCE, SCP. 24-Hourly Slice
Proposal (SCE)
2 Slice Proposal
(Gridwell) Thermal generators
PG&E, renewable trade associations, storage trade association Agenda Page 17
Next Steps
CPUC Proceeding Schedule
• February 28: Workshop Report filed
• Early March (expected): Comments on Workshop Report
• Mid March (expected): Reply comments on Workshop Report • Summer 2022: Proposed Decision on RA Reform
CPA staff will continue to work with CalCCA staff to develop comments on the Workshop Report
CPA staff will continue to keep the committee apprised of the proceeding progress and identity potential opportunities for engagement
Agenda Page 18
11 Questions
Agenda Page 19