MEETING of the Energy Planning & Resources Committee
of the Clean Power Alliance of Southern California
Wednesday, May 25, 2022
12:15 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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o You will be able to speak to the Committee 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 Committee. *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 May 25, 2022
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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 April 27, 2022 Energy Committee Meeting
2. Receive and File April 2022 Risk Management Team Report
REGULAR AGENDA
3. 2022 Integrated Resource Plan (IRP) Introduction and Rate Product Content Discussion
COMMITTEE MEMBER COMMENTS
ADJOURN – NEXT MEETING JUNE 22, 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, April 27, 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 Clerk of the Board, Gabriela Monzon, conducted roll call.
ROLL CALL
Alhambra Jeffrey Maloney Committee Member Remote
Carson Reata Kulcsar Committee Member Remote
Culver City Daniel Lee Committee Member Absent
Oxnard Kathleen Mallory Committee Member Remote
Sierra Madre Robert Parkhurst Chair Remote
Thousand Oaks Helen Cox Committee Member Absent
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 March 23, 2022 Energy Committee Meeting
2. Receive and File March 2022 Risk Management Team Report Motion: Committee Member Ramirez, Ventura County
Second: Committee Member Maloney, Alhambra
Vote: The consent agenda was approved by a roll call vote with an abstention by Chair Parkhurst on item 1.
REGULAR AGENDA
3. Approve 2021 Mid-Term Reliability RFO Revised Shortlist Offer as Recommended by the Review Team
Natasha Keefer, Vice President, Power Supply, provided background on the Mid-Term Reliability (MTR) RFO and itemized the conditions impacting clean energy development such as trade actions, supply chain issues, COVID-19 impacts, rising commodity prices, and investment tax credit (ITC) uncertainties. Ms. Keefer reviewed the status of several projects selected in the MTR RFO shortlist and Agenda Page 3
Clean Power Alliance Energy Planning & Resources Committee Page 2 of 2 April 27, 2022
waitlist and outlined CPA’s progress toward the MTR compliance requirements.
Ms. Keefer detailed the Clearway proposal, discussed their proposed material price increase, and the rationale behind the RFO review team’s recommendation to proceed with negotiations at the revised price. Despite the price increase, the offer is high value and would have been selected for shortlisting using the RFO evaluation criteria; the revised price remains in the first quartile for net present value (NPV); it offers unique attributes and contributes to CPA’s MTR compliance.
Chair Parkhurst expressed a preference to accept the terms of the new offer from Clearway based on the rationale. Chair Parkhurst asked about challenges to meeting future requirements and other policy considerations. Ms. Keefer explained that the geothermal mandate would be the most challenging compliance due to physical resource constraints; long duration storage projects may be expensive, but CPA can secure those projects. Regarding policy considerations, there is a large focus on building new transmission lines and improving the CAISO interconnection process. Matt Langer, Chief Operating Officer, added that CPA is not unique in its portfolio compliance challenges; long-term improvements to the system are possible, but there are not very many near-term solutions to fix some of the issues. Committee Member Ramirez commented that times of market disruption can provide opportunities for new and innovative projects; inquired about confidentiality and fiduciary duty. Ted Bardacke, CEO, noted that the Energy Risk Management Policy (ERMP) sets certain duties for staff and Board members and how CPA may respond to market disruption and volatility. At the request of Committee Member Kulcsar, Ms. Keefer itemized the differences between this Clearway project and other projects, stating Clearway is still under negotiation and does not have a Power Purchase Agreement (PPA), and therefore, there is more flexibility and is being evaluated against other offers from the MTR RFO.
Motion: Committee Member Ramirez, Ventura County
Second: Committee Member Kulcsar, Carson
Vote: Item 3 was approved by a roll call vote.
COMMITTEE MEMBER COMMENTS
Committee Member Ramirez advised the Committee that she is seeking funding for electric vehicle charging stations in South Oxnard through the American Rescue Plan.
Chair Parkhurst thanked CPA staff for supporting the Earth Day celebration in Sierra Madre and added that a new 500 KW solar storage system was installed to cover 38% of electricity from a water pumping station. Committee Members Maloney and Ramirez expressed appreciation for upcoming events in their respective cities that will be supported by CPA staff.
ADJOURN
Chair Parkhurst adjourned the meeting at 1:05 p.m.
Agenda Page 4
Staff Report – Agenda Item 2
To: Clean Power Alliance (CPA) Energy Committee
From: Geoff Ihle, Director of Market Risk
Approved by: Ted Bardacke, Chief Executive Officer
Subject: April 2022 Risk Management Team Report
Date: May 25, 2022
April 2022 RMT REPORT
Key Actions
• Discussed March 2022 market performance.
• Reviewed energy positions and approved 2022-2025 hedges. • Reviewed positions for RPS, carbon free, and Resource Adequacy.
Policy Compliance
There were no policy deviations reported for March 2022.
ATTACHMENT
None.
Agenda Page 5
Staff Report – Agenda Item 3
To: Clean Power Alliance (CPA) Energy Committee
From: Natasha Keefer, Vice President, Power Supply
Approved by: Ted Bardacke, Chief Executive Officer
Subject: 2022 IRP Introduction and Rate Product Content Discussion Date: May 25, 2022
Staff will provide a presentation and invite feedback on the item.
ATTACHMENT
1. 2022 IRP & Rate Product Discussion
Agenda Page 6
2022 Integrated
Resource Plan (IRP)
Introduction
May 25, 2022
Agenda Page 7
CPA is required to file its 2022 IRP by November 1st and is currently planning its IRP analysis
o Staff will be presenting information on the IRP and other long-term planning materials between now and November to Energy Committee and the Board Staff will be seeking input and action on the IRP from the Board during its June Board meeting on two items. Prior input from the Energy Committee is requested today:
1. Substantive: Long-term planning assumptions for CPA’s three rate products
2. Administrative: Delegate IRP approval authority to the Energy Committee – This is consistent with the Board approval process implemented for the 2018 and 2020 IRPs given the short time frame the CPUC provides LSEs to complete the IRP submission Executive Summary
Agenda Page 8
Agenda
Background
Status of Procurement Mandates
2022 IRP Overview
Product Content Assumptions
Next Steps
Agenda Page 9
Background
Agenda Page 10
4 Background
CPUC requires all LSEs to submit their IRPs every two years, reflecting their individual procurement preferences and submission requirements as directed by the CPUC o The IRP proceeding is an important forum for statewide planning and may result in procurement orders for CPA
In September 2020, CPA submitted its Board-approved Conforming Portfolio Plans as part of the 2020 IRP proceeding
CPA’s Conforming Portfolio Plans were designed to meet the procurement objectives from the Board, as well as comply with the CPUC’s directives
o CPA was required to submit two statewide greenhouse gas reduction (GHG) scenarios – the 46 and 38 million metric ton (MMT) Conforming Portfolios; the 38 MMT scenario was CPA’s Preferred Portfolio
CPA’s Conforming Portfolio Plans were optimized to achieve the three goals of reliability, GHG reduction, and least-cost procurement
Agenda Page 11
CPUC Preferred System Plan
On February 15, 2022, the
CPUC adopted the 38 MMT
GHG target by 2030 as the
preferred system plan
The aggregated plans of the
LSEs, plus the additional
resources ordered in the
CPUC’s Mid-Term
Reliability Decision, came in
under the targeted GHG
emissions amounts and met
reliability targets Source: CPUC Decision Adopting 2021 Preferred System Plan Agenda Page 12
Status of
Procurement
Mandates
Agenda Page 13
7 Compliance
8 CPA has three procurement-related compliance obligations:
Procurement
Mandate
Description Status Notes
SB 350
65% of CPA’s RPS
compliance must be met
with long-term contracts
On Track
• CPA is fully contracted to meet SB 350
requirements
• CPA’s PCIA VAMO election will provide extra
buffer for new-build project risks
IRP Procurement
Track
Annual capacity
procurement requirement
for 2021-2023
On Track
• 2021-2022 targets are met
• 2023 target expected to be met once 100 MW
Luna storage project comes online (est. June
2022)
Mid-Term
Reliability (MTR)
Annual capacity
procurement requirement
for 2023-2026
Open
• CPA will be meeting this obligation with
projects under contract and projects in
negotation from the 2021 MTR RFO
• CPA must run a second MTR RFO* to meet
outstanding procurement requirements
(expected to launch in June/July 2022)
*To be presented further at the June Energy Committee
Agenda Page 14
2022 IRP
Agenda Page 15
9 2020 vs. 2022 IRP – What’s New
LSEs have the option to determine resources to be added to their portfolios following their individual procurement preferences
LSEs will be required to provide planning information out to 2035 Upcoming cycle planning efforts will be focused around 2035 GHG and reliability results
LSEs required to adopt conforming portfolios consistent with the 38 MMT buildout and potentially a 30 MMT sensitivity
Recommend planning for new resources that requires longer lead times for development, including out-of-state renewables and offshore wind Agenda Page 16
CPA’s 2022 IRP Considerations
CPA’s portfolio will be developed and optimized around CPA’s goals o Renewable and carbon free procurement for its current and future product offerings (customer demand), which far exceed the California RPS target of 60% by 2030 o GHG targets that meet both statewide requirements and JPA objectives CPA’s Conforming Portfolios will also achieve the CPUC GHG Benchmarks, which will be finalized by the CPUC in June
Longer planning horizon will consider long-term load scenarios and long lead time resources (e.g., out-of-state renewables, new geothermal, offshore wind)
Agenda Page 17
Product Content
Assumptions
Agenda Page 18
12 Current Default Levels in CPA Territory
Current and planned member agency defaults:
o Lean Power (5) – Arcadia, Paramount, Simi Valley, Temple City, Westlake Village o Clean Power (6) – Alhambra, Carson, Downey, Hawaiian Gardens, Moorpark, Whittier o 100% Green Power (21) – Agoura Hills, Beverly Hills, Calabasas, Camarillo, Claremont, Culver City, Hawthorne, Los Angeles County, Malibu, Manhattan Beach, Ojai, Oxnard, Redondo Beach, Rolling Hills Estates, Santa Monica, Sierra Madre, South Pasadena, Thousand Oaks, Ventura County, Ventura, West Hollywood For the IRP base case, the recommendation is to assume status quo rate product designations (i.e., no changes assumed to current member agency default elections) Any further default changes or CPA expansion would be included in the 2024 IRP 13 Percentage of Load by Year Lean Clean 100% Green
2023 14% 30% 56%
2024 14% 19% 67%
2025 14% 15% 71%
2026 14% 15% 71%
2027 14% 15% 71%
Agenda Page 19
Current Environmental Targets
14 Under SB 100, California utilities are required
to achieve 60% renewable energy by 2030
and 100% emissions free (either renewable
or zero-carbon) energy by 2045
o Beyond 2030, CPA assumes the Renewable
Portfolio Standard (RPS) will grow at a consistent
rate (i.e., 70% renewables achieved by 2035)
Proposed SB 1020 legislation attempts to
accelerate this decarbonization by requiring
that California also meet interim targets of
90% emissions free by 2035 and 95%
emissions free by 2040
o For the purposes of this presentation, CPA
assumes that any “compliance product” achieves
the SB 1020 proposed targets
Statewide Targets (Emissions Free %)
Source: CalCCA
Agenda Page 20
In December 2021, the Board discussed long-term rate product direction. Since then, conditions and understanding of customer needs have changed:
o 6 member agencies changed defaults to 100% Green
o CPA has engaged in several discussions with new prospective cities in LA and Ventura Counties o Several large corporate customers have made GHG-free commitments by certain dates (e.g., 2030 or 2035); SCE intends to launch a new rate product in 2023 to serve these customers Current Considerations
15 Lean Power provides a product geared
to affordability
Consistent with minimum compliance
standards
Meet needs for incumbent member cities
and cost-sensitive customers
Crucial in marketing to new cities
Continue to provide customers with gold-standard renewable energy product (status quo)
Can provide a pathway to 100% renewable with
eventual merging of Clean and 100% green
Pathways to 100% renewable can be
particularly beneficial for customers with specific
GHG targets
In all pathways Clean beats SCE’s estimated
emissions intensity but could progress slower
and eventually merge with Lean
Agenda Page 21
CPA has developed four options for future rate product targets, in order of most to least aggressive emissions reductions targets:
Scenarios
16 Lean Power Clean Power* 100% Green Power
Scenario 1
(CPA achieves 100% renewable for all customers by 2035) 100% renewable by 2035 100% renewable by 2030 100% renewable today Scenario 2
(CPA achieves 100% renewable for Clean by 2030) RPS/GHG Free Compliant 100% renewable by 2030 100% renewable today Scenario 3
(CPA achieves 100% renewable for Clean by 2035) RPS/GHG Free Compliant 100% renewable by 2035 100% renewable today Scenario 4
SB 1020 by 2035 – have Lean and Clean merge
RPS/GHG Free Compliant
and exceeds SCE’s estimated emissions intensity 100% renewable today * Clean Power will maintain an emissions intensity target that exceeds SCE’s estimated emissions intensity Agenda Page 22
Scenario 1
CPA Achieves 100% Renewable by 2035 for All Customers
17 Offer Clean customers 100% renewable by 2030
Offer Lean customers 100% renewable by 2035
Demonstrates strong environmental leadership
across all rate products
Risk is that Lean becomes less competitive with
SCE and CPA ceases to have a low-cost option
RPS% /Total Carbon Free %
Year Lean Clean
100%
Green Total Portfolio
2023 43/43 50/59 100/100 77/80
2024 45/45 50/61 100/100 83/85
2025 50/50 58/66 100/100 87/88
2026 55/55 67/68 100/100 89/89
2027 60/60 75/76 100/100 91/91
2028 65/65 83/84 100/100 93/93
2029 70/70 92/95 100/100 95/95
2030 75/75 100/100 100/100 97/97
2031 80/80 100/100 97/97
2032 85/85 100/100 98/98
2033 90/90 100/100 99/99
2034 95/95 100/100 99/99
2035 100/100 100/100 100/100
Agenda Page 23
Scenario 2
Clean Achieves 100% Renewable by 2030
18 Clean Rate is 100% renewable by 2030
Offer Lean customers 90% GHG Free by 2035
o Consistent with proposed SB 1020
o Renewable content is based on RPS compliance
Risk is that Clean rate could become less
competitive with SCE
Mitigation Option is that if current Clean Rate
customers/cities want to lower costs, they could
opt-down to Lean
RPS% /Total Carbon Free %
Year Lean Clean
100%
Green Total Portfolio
2023 43/43 50/59 100/100 76/79
2024 45/45 50/61 100/100 82/84
2025 50/50 58/66 100/100 86/87
2026 52/54 67/68 100/100 88/88
2027 54/58 75/76 100/100 89/90
2028 56/62 83/84 100/100 91/92
2029 58/66 92/95 100/100 92/94
2030 60/70 100/100 100/100 94/95
2031 62/74 100/100 94/96
2032 64/78 100/100 94/96
2033 66/82 100/100 95/97
2034 68/86 100/100 95/98
2035 70/90 100/100 95/98
Agenda Page 24
Scenario 3
Clean Achieves 100% Renewable by 2035
19 Offer Clean customers 100% renewable by 2035
Offer Lean customers 90% GHG Free by 2035
o Consistent with proposed SB 1020
o Renewable content is based on RPS
compliance
Risk is that Clean rate could become less
competitive with SCE
Mitigation Option is that if current Clean Rate
customers/cities want to lower costs, they could
opt-down to Lean
RPS% /Total Carbon Free %
Year Lean Clean 100% Green Total Portfolio
2023 43/43 50/59 100/100 76/79
2024 45/45 50/61 100/100 82/84
2025 50/50 54/66 100/100 86/87
2026 52/54 59/68 100/100 87/88
2027 54/58 63/70 100/100 88/88
2028 56/62 68/72 100/100 88/89
2029 58/66 72/74 100/100 89/90
2030 60/70 77/78 100/100 90/91
2031 62/74 81/82 100/100 91/92
2032 64/78 86/86 100/100 92/92
2033 66/82 90/90 100/100 93/93
2034 68/86 95/95 100/100 94/94
2035 70/90 100/100 100/100 95/95
Agenda Page 25
Scenario 4
Lean/Clean Merge to Compliant Product
20 Starting in 2025, Lean and Clean merge into a
single product given the trajectory for statewide
emissions reduction goals
o Consistent with proposed SB 1020
o Renewable content is based on RPS compliance
o Maintains Clean’s goal of achieving an emissions intensity target less than SCE
Simplifies CPA’s rate offerings with via a low-cost option and premium option Removes the gradual pathway to 100% Green
(customers could migrate to SCE option)
RPS% /Total Carbon Free %
Year Lean Clean 100% Green Total Portfolio
2023 43/43 50/59 100/100 76/79
2024 45/45 50/61 100/100 82/84
2025 50/50 50/66 100/100 85/87
2026 52/68 100/100 85/90
2027 54/70 100/100 86/91
2028 56/72 100/100 87/91
2029 58/74 100/100 87/92
2030 60/78 100/100 88/93
2031 62/82 100/100 88/94
2032 64/86 100/100 89/96
2033 66/92 100/100 90/97
2034 68/92 100/100 90/97
2035 70/92 100/100 91/97
Agenda Page 26
Scenario Comparison
21 Because of member agency default opt-ups to 100% Green Power since 2020, any of the proposed scenarios will result in higher renewable content and a lower emissions intensity for CPA’s portfolio compared to the 2020 IRP submission
60%
65%
70%
75%
80%
85%
90%
95%
100%
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 CPA Total Portfolio GHG Free by Scenario
GHG-Scenario 1 GHG-Scenario 2 GHG-Scenario 3
GHG-Scenario 4 GHG-2020 IRP
60%
65%
70%
75%
80%
85%
90%
95%
100%
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 CPA Total Portfolio RPS by Scenario
RPS - Scenario 1 RPS - Scenario 2
Agenda Page 27
Board Outlook
The primary objective of the June Board meeting discussion is to provide direction to staff on IRP modeling assumptions
o The results of the IRP analysis may provide insight into future Board decision-making related to long-term rate product content – expected later in 2022 or early 2023 The largest consideration around IRP assumptions is related to the long-term objective of the Clean communities – path to 100% Green vs. meeting California compliance mandates o One way to address both goals is to establish a new 100% by 2030 product (“Pathway 2030” rate) that would replace after it merges with Lean
In any given year, the Board will have flexibility in designing products for customers to address cost and competitive considerations; however, CPA should stay on track to meeting its long-term environmental targets
Agenda Page 28
22 Next Steps
Agenda Page 29
23 CPA’s 2022 IRP Schedule
Date Action
June
•Seek Board input on long-term product
content assumptions and delegation of
authority
•CPUC issues decision on LSE planning
targets/direction
•Develop forecasting and scenario inputs for
the 38 & 30 MMT cases
July •Develop draft resource portfolios
August
•Seek Energy Committee, CAC, and Board
input on draft resource portfolios and
present key findings/consideration
September
•Revise quantitative analysis as needed
•Prepare CPUC submission, including
narrative and Data Request
October
•Finalize IRP submission and present to
Energy Committee for approval
consideration
November •IRP submissions due
The CPUC is required to issue
instructions on the 2022 IRP no later
than June 15, 2022
IRP submissions require approval by
CPA’s “Governing Body”
Due to the highly compressed schedule
to complete the IRP submissions, CPA is
seeking to delegate final IRP approval to
the Energy Committee, consistent with
previous IRP submissions
Energy Committee, Community Advisory
Committee, and the Board will be
updated on IRP progress throughout the
summer as Staff completes its analysis
Subject to Change
Agenda Page 30
Discussion
Staff is seeking feedback from the Energy Committee on the scenarios prior to Board discussion
25 Lean Power Clean Power 100% Green Power
Scenario 1
(CPA achieves 100% renewable for all customers by 2035) 100% renewable by 2035 100% renewable by 2030 100% renewable today Scenario 2
(CPA achieves 100% renewable for Clean by 2030) RPS/GHG Free Compliant 100% renewable by 2030 100% renewable today Scenario 3
(CPA achieves 100% renewable for Clean by 2035) RPS/GHG Free Compliant 100% renewable by 2035 100% renewable today Scenario 4
SB 1020 by 2035 – have Lean and Clean merge
RPS/GHG Free Compliant
and exceeds SCE’s estimated emissions intensity 100% renewable today Agenda Page 31