MINUTES
Energy Planning & Resources Committee
of the Clean Power Alliance of Southern California
Regular Meeting
Wednesday, June 28, 2023, 12:15 p.m.
Meeting videos are available on CPA's YouTube Channel.
http://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
West Hollywood City Hall
3rd Floor Conference Room
8300 Santa Monica Blvd.
West Hollywood, CA 90069
Howard Building
368 Queenstown Road
Greater London, SW11
England, United Kingdom
City of Oxnard Service Center 1
East Conference Room
214 South C Street
Oxnard, CA 93030
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 Absent
West Hollywood Chelsea Byers Committee Member Remote
All votes are unanimous, unless otherwise stated.
Clean Power Alliance Energy Planning & Resources Committee Page 2 of 3 June 28, 2023
GENERAL PUBLIC COMMENT
There was no public comment.
CONSENT AGENDA
1. Approve Minutes from May 24, 2023, Energy Committee Meeting
2. Receive and File May 2023 Risk Management Team Report Motion: Committee Member Mahmud, South Pasadena
Second: Committee Member Lesser, Manhattan Beach
Vote: The consent agenda was approved by a roll call vote with an abstention by Chair Parkhurst on Item 1.
REGULAR AGENDA
3. Oral Update from Vice President, Power Supply
Lindsay Saxby, Vice President, Power Supply, stated that CPA successfully fulfilled its Resource Adequacy (RA) requirements for August and is progressing toward meeting them for September. The California Independent System Operator (CAISO) released their summer 2023 load and resource assessment, which indicates an anticipated moderate surplus due to the addition of new grid capacity and storage projects expected to contribute over 4,000 megawatts of energy. Ted Bardacke, CEO, added that meeting CPA’s 2024 Year-Ahead RA compliance by the end of October remains challenging and relies on the activation of new resources.
Committee Member Mahmud asked about the Commercial Operation Date (COD) for the referenced contract, and Ms. Saxby stated that it should receive CAISO’s authorization to begin operations next week. In response to Chair Parkhurst’s request for updates regarding the 2024 Year-Ahead RA compliance, staff noted it will continue to procure resources until the deadline and provide updates to the Committee.
4. Review and Recommend Approval of Proposed Energy Risk Management Policy (ERMP) Amendments to the Board of Directors
David McNeil, Chief Financial Officer, presented proposed amendments to the ERMP, which governs the power procurement and related business activities of CPA and undergoes an annual review process. Staff recommends four updates, including adjusting the delegation of transaction execution authority, revising hedge target ranges, refining compliance measurement timing language, and adjusting language to reflect regulatory and market changes. The proposed updates to delegation of authority include adding maturity limits and term limits, reducing the term limit for tolling agreements from 5 years to 3 years, increasing the term limit for existing resources from 5 years to 10 years, and eliminating CEO approval authority. Staff proposes adopting quarterly hedge targets, increasing the upper and lower renewable energy hedge targets, increasing the upper carbon-free hedge targets, including the current year in renewable and carbon-free hedge targets, and increasing the minimum targets for RA. Lastly, staff recommends revising the measurement timing for energy, renewable energy, carbon-free energy, and RA to clarify implementation.
Committee Member Lesser requested further context on the origins of the policy and any metrics or regulatory considerations used to construct the policy and amendments. Mr. McNeil explained that the ERMP is an industry best practice used to manage procurement activities and is governed by the Board, requiring an Clean Power Alliance Energy Planning & Resources Committee Page 3 of 3 June 28, 2023
annual review and updates to manage risks effectively. Matt Langer, Chief Operating Officer, added that proposed amendments stem from challenges that arise during the regular course of business. Committee Member Mahmud asked about the impact of regulatory requirements. Mr. Langer indicated that in response to the changing regulatory environment, staff may incorporate aspects of new regulatory requirements into the ERMP as needed. Committee Member Kulcsar asked clarifying questions about RMT delegations and the CEO signing authority, distinctions between short- and long-term contracts, and dollar limits set by the Board for energy risk hedging strategy. Staff clarified that the RMT approves contracts governed by credit and notional limits, not a dollar amount. Staff proposes that for different transaction types, the definition of short- and long-term would change; tolling agreements would be defined as three years or less, and new construction short-term contracts as five years or less. The delegation of authority depends on the transaction type and associated risks. Regarding energy risk hedging limits, Mr. Langer explained that there is no dollar value limit associated with the hedging strategy, as it would hinder staff from executing transactions swiftly and expose customers to volatile market prices. The proposed amendments to the ERMP aim to increase the hedging target ranges to provide staff with greater flexibility. Any deviations from the ERMP are reported monthly to the Energy and Finance Committees, while the activities of the RMT are reported to the Board on a quarterly basis.
Committee Member Mahmud suggested including the member composition of the RMT in the ERMP, and staff agreed to incorporate the suggestion. Committee Member Kulcsar expressed discomfort with increasing contract term limits beyond five years. Committee Member Lesser voiced support for the recommended amendments and noted that more context would help with decision-making at the Board level. Committee Member Mallory asked about the economic impacts of increasing term limits beyond five years. Staff explained that contract deliveries become financial commitments in the year they occur, which can be at any point within the contracted timeframe. The recommended amendments aim to reduce future product costs. Committee Member Maloney explained that the ERMP provides staff with Board-approved guidelines in order to operate in the energy market, and the organization has greatly benefitted from it; he expressed support for the amendments as they circumscribe delegation of authority to staff even further while providing the necessary flexibility. Committee Member Mahmud added that limiting the delegation of authority to existing facilities poses less risk, and staff will utilize most of the delegation of authority with short-term contract extensions.
Motion: Committee Member Mahmud, South Pasadena
Second: Committee Member Maloney, Alhambra
Vote: Item 4, with one minor addition, was approved by a roll call vote, with a no vote from Committee Member Kulcsar.
COMMITTEE MEMBER COMMENTS
Committee Member Lesser thanked Chair Parkhurst for his excellent chairmanship.
ADJOURN
Chair Parkhurst adjourned the meeting at 1:29 p.m.