MINUTES
Energy Planning & Resources Committee
of the Clean Power Alliance of Southern California
Regular Meeting
Wednesday, April 26, 2023, 12:15 p.m.
Meeting videos are available on CPA’s YouTube Channel.
www.youtube.com/@CPApublicmeetings
Committee Members participated in this meeting from the following locations:
Manhattan Beach City Hall
City Manager Conference Room
1400 Highland Avenue
Manhattan Beach, CA 90266
CPA Office
801 S. Grand Ave., Suite 400
Los Angeles, CA 90017
Alhambra City Hall
Conference Room A
111 S. First Street
Alhambra, CA 91802
Carson City Hall
Executive Conference Room
701 East Carson Street
Carson, CA 90745
Sierra Madre City Hall
Council Chambers
232 W. Sierra Madre Blvd.
Sierra Madre, CA 91024
Thousand Oaks City Hall
Public Works Conference Room
2100 Thousand Oaks Blvd.
Thousand Oaks, CA 91362
City of Oxnard Service Center 1
East Conference Room
214 South C Street
Oxnard, CA 93030
West Hollywood City Hall
3rd Floor Conference Room
8300 Santa Monica Blvd.
West Hollywood, CA 90069
CALL TO ORDER & ROLL CALL
Chair Parkhurst called the meeting to order at 12:15 p.m. and Gabriela Monzon, Board Clerk, conducted roll call.
ROLL CALL
Alhambra Jeff Maloney Committee Member Remote
Carson Reata Kulcsar Committee Member Remote
Manhattan Beach David Lesser Committee Member Remote
Oxnard Kathleen Mallory Committee Member Remote
Sierra Madre Robert Parkhurst Committee Chair Remote
South Pasadena Diana Mahmud Committee Member Remote
Thousand Oaks Helen Cox Committee Member Remote
West Hollywood Chelsea Byers 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 22, 2023, Energy Committee Meeting
2. Receive and File March 2023 Risk Management Team Report Motion: Committee Member Byers, West Hollywood
Second: Committee Member Lesser, Manhattan Beach
Vote: The consent agenda was approved by a roll call vote.
REGULAR AGENDA
3. Provide Feedback on Expanding Energy Procurement Options Matthew Langer, Chief Operating Officer, provided a presentation on expanding energy procurement options. CPA will meet or exceed its long-term contracting requirements under the Renewable Portfolio Standard (RPS) and the Mid-Term Reliability (MTR) order. However, current market conditions will make short-term procurement of renewable energy and Resource Adequacy (RA) compliance challenging. Mr. Langer identified various reasons for the Renewable Energy Credit (REC) and RA availability and price increases. Fewer buyers have submitted offers in CPA’s long-term Request for Offers (RFOs) in recent years due to increased competition from the MTR requirements for new capacity. Staff is seeking ways to attract more offers in upcoming RFOs so CPA can add a significant amount of long-term resources to the portfolio and reduce dependence on the volatile short-term markets. Staff are exploring other options, such as more flexible contract durations, RA-only offers, and RA bundled with natural gas.
Committee Member Lesser asked several questions about the rate impact of the current RA shortage and the reception of proposers on the expansion of RFO requirements. Mr. Langer explained that staff’s priority is meeting the RA compliance requirement, and acquiring long-term contracts rather than short-term contracts has a more positive rate impact. Expansion ideas come from staff as well as feedback from developers; developers have provided positive feedback on the procurement options. Responding to Committee Member Mahmud’s comments regarding direct ownership of infrastructure, CEO Ted Bardacke noted that direct infrastructure ownership may yield a reduction in cost but prepay bond transactions are also generating higher savings than expected, making them more comparable to those of a model of direct ownership without CPA taking on asset ownership risk. Committee Member Mahmud asked questions regarding renegotiations with existing projects for RA, the California Public Utilities Commission’s (CPUC’s) RA policy, and Southern California Edison’s (SCE’s) RA availability. Mr. Langer explained that staff have added storage to projects with solar-only facilities and that staff continue to search for methods to optimize existing resources.
Concerning the CPUC’s RA policy, Mr. Langer indicated that the CPUC has rejected all of California Community Choice Association’s (CalCCA’s) attempts to include an allocation option for RA. CPA has exhausted all its options and the CPUC has decided that the IOUs should keep the capacity rather than share them with the other LSE’s whose customers paid for the capacity. Finally, SCE has a competitive advantage over CPA in their compliance position for various structural reasons; staff have made the CPUC aware of these inequities. Chair Parkhurst asked if the RA concern is centered more around reliability than rates. Mr. Langer shared that acquiring long-term contracts for new and/or existing resources allows CPA to achieve lower costs and a higher probability of meeting compliance targets, resulting in more competitive rates. Chair Parkhurst commented that CPA’s financial stability, despite climate and market challenges, is due to CPA’s healthy procurement levels.
Mr. Langer reviewed the possibility of procurement of natural gas bundled with RA also known as tolling agreements (tolls). Currently, CPA displays significant amounts of Unspecified Power on the Power Content Label (PCL) in the Lean and Clean Power products; unspecified power is generic system power that CPA purchases to meet the balance of customer needs that is not met by specified sources. Natural gas energy purchases would displace Unspecified Power on the PCL, but the emissions impact is unit specific. Staff will need to modify the evaluation criteria for natural gas tolling agreements. The standard Energy Committee and Board approval process would apply to any solicited long-term agreements with a natural gas resource.
Chair Parkhurst inquired about the percent of Unspecified Power for the Lean and Clean products for FY 2022/23. The Unspecified Power accounted for roughly 58% of Lean power and just under 40% of Clean power. Committee Member Kulcsar asked several questions on the impact of contracting for natural gas resources on the PCL for different rate products. Staff clarified that purchasing energy with RA would impact the PCL, but the purchase of RA alone would not. Purchasing natural gas resources would displace Unspecified Power within the overall portfolio and would be broken out by rate product on the PCL, with no natural gas going to the 100% Green product because that product does not have any Unspecified Power in the PCL. Mr. Bardacke clarified that the PCL is measured over the course of an entire year and is not a measure of 24-hour energy being dispatched to the grid.
Committee Member Cox expressed a concern that CPA’s use of natural gas resources would keep peaker plants running longer than anticipated. Staff indicated that the impact of CPA contracts on the retirement of such plants would be considered during the evaluation process. Committee Member Mahmud noted that all existing natural gas plants have existing interconnections, which presents a significant advantage because it alleviates the need for new interconnection construction, which have recently experienced delays. In response to Committee Member Mahmud’s question about the Unspecified Power greenhouse gas calculations, Mr. Langer explained that staff must use an administratively set greenhouse gas value provide by the state for the calculation of Unspecified Power. Responding to Committee Member Mallory’s question about resources in Unspecified Power, staff clarified that it includes every resource on the grid, including coal and nuclear, but the amounts are unknown. Committee Member Kulcsar expressed concern about including natural gas resources in CPA’s RFOs and asked about the possibility of having a separate process. Chair Parkhurst commented that expanding the RFO would allow staff to explore options to help CPA meet the RA compliance requirements and avoid CPUC fines. Mr. Langer added that there is no obligation to sign any contracts, and a single RFO allows staff to determine CPA’s portfolio needs wholistically. Committee Member Mahmud expressed support for the RFO expansion options, adding that enhancing CPA’s ability to obtain its RA compliance has important political and economic ramifications. Committee Member Byers expressed support for including the new opportunities in the RFO as this would allow the committee and the full Board to make decisions with more complete information in hand.
COMMITTEE MEMBER COMMENTS
Committee Member Lesser shared that he will be meeting with the U.S. Assistant Secretary of Energy to discuss expansion initiatives to support electric infrastructure growth.
ADJOURN
Chair Parkhurst adjourned the meeting at 1:40 p.m.