Energy Planning & Resources Committee
of the Clean Power Alliance of Southern California
Regular Meeting
Wednesday, August 23, 2023
12:15 p.m.
Visit CPA’s YouTube Channel to watch a Live Stream of the Meeting *There may be a streaming delay of up to 90 seconds. This is a view-only live stream.
CPA Office
801 S. Grand Ave., Suite 400
Los Angeles, CA 90017
Members of the public may also participate in this meeting remotely at the following locations:
Manhattan Beach City Hall
City Manager Conference Room
1400 Highland Avenue
Manhattan Beach, CA 90266
Alhambra City Hall
Conference Room A
111 S. First St.
Alhambra, CA 91801
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
West Hollywood City Hall
3rd Floor Conference Room
8300 Santa Monica Blvd.
West Hollywood, CA 90069
City of Oxnard Service Center 1
East Conference Room
214 South C Street
Oxnard, CA 93030
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: The General Public Comment item is reserved for persons wishing to address the Committee 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 Committee at CPA’s Office are requested to complete a comment card and provide it to staff. If you are attending from a remote location, please identify yourself to a CPA representative when your 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, Agenda Page 1
the entire Consent Agenda, or individual items in the Regular Agenda. Please refer to Policy No. 8 – Public Comment for additional information.
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CALL TO ORDER & ROLL CALL
GENERAL PUBLIC COMMENT
CONSENT AGENDA
1. Approve Minutes from July 26, 2023, Energy Committee Meeting
2. Receive and File July 2023 Risk Management Team Report
REGULAR AGENDA
3. 2023 Clean Energy and Reliability RFO Longlist Overview
4. Power Ready Request for Offers (RFO) Update
COMMITTEE MEMBER COMMENTS
ADJOURN – NEXT MEETING SEPTEMBER 27, 2023
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. Public records are available for inspection at CPA’s Office at 801 S. Grand Ave., Suite 400, Los Angeles, CA 90017, or online at www.cleanpoweralliance.org/agendas.
Agenda Page 2
Staff Report – Agenda Item 1
To: Energy Planning & Resources Committee
Subject: Approve Minutes from July 26, 2023 Energy Committee Meeting Date: August 23, 2023
RECOMMENDATION
Approve.
ATTACHMENT
1. Minutes
Agenda Page 3
Energy Planning & Resources Committee Item 1
MINUTES
Energy Planning & Resources Committee
of the Clean Power Alliance of Southern California
Regular Meeting
Wednesday, July 26, 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
Sierra Madre City Hall
Council Chambers
232 W. Sierra Madre Blvd.
Sierra Madre, CA 91024
City of Oxnard Service Center 1
East Conference Room
214 South C Street
Oxnard, CA 93030
Thousand Oaks City Hall
Public Works Conference Room
2100 Thousand Oaks Blvd.
Thousand Oaks, CA 91362
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
Agenda Page 4
Energy Planning & Resources Committee Item 1
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 June 28, 2023, Energy Committee Meeting
2. Receive and File June 2023 Risk Management Team Report Motion: Committee Member Lesser, Manhattan Beach
Second: Committee Member Byers, West Hollywood
Vote: The consent agenda was approved by a roll call vote.
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 September and is increasingly focused on meeting the 2024 year-ahead RA requirements due at the end of October in the face of continued challenging market conditions. CPA received a robust response for each of its product categories in the Clean Energy and Reliability Request for Offers (RFO). Due to recent heat events, the California Independent System Operator (CAISO) has been exporting energy to support western states. Staff is monitoring CAISO emergency protocol executions, but Flex Alerts have not been issued in July.
In response to Committee Member Mahmud’s question concerning Power Response notices, Matt Langer, Chief Operating Officer, explained that notices are deployed via a third party when market energy price thresholds are reached. Committee Member Mahmud expressed concern about repeating notices causing participant fatigue and recommended adjusting criteria for notices and/or increasing program compensation.
Responding to Chair Parkhurst’s inquiry about grid forecasts, staff indicated that the energy load appears manageable due to the significant number of new resources on-line and favorable weather. Committee Member Lesser asked about the state’s energy capacity, and Mr. Langer noted that energy loads are below 45,000 MW but recent challenges with thermal plant outages make it difficult to predict load capacity. Responding to Chair Parkhurst’s questions about RFOs, Ms. Saxby reviewed the timeline for review teams, shortlisting, and approvals.
4. A) Approve the DAC-GT shortlist as recommended by the 2022 Power Share RFO Review Team; B) Approve the CS-GT shortlist as recommended by the 2022 Power Share RFO Review Team
Alexandra Caryotakis, Contract Manager, provided a presentation on the 2022 Power Share RFO shortlist. CPA’s Power Share Program includes both the Disadvantaged Community Green Tariff (DAC-GT) and Community Solar Green Tariff (CSGT) programs, providing approximately 7,600 income-qualified customers in disadvantaged communities with 100% renewable energy. The California Public Utilities Commission (CPUC) is currently evaluating potential modifications, terminations, or expansions of the DAC-GT and CSGT programs in its Green Access Program (GAP) proceeding. Staff recommends Agenda Page 5
Energy Planning & Resources Committee Item 1
filling the entire program allocation now, as the GAP review might result in the discontinuation of both programs for future solicitations. Ms. Caryotakis reviewed the DAC-GT and CSGT program descriptions, offer results summaries, and shortlist recommendations from the RFO Review Team.
Committee Member Mahmud asked several questions about Developer B. Ms. Caryotakis indicated that CPA currently has contracts with Developer B for other DAC-GT projects; all projects are in good standing; PPA requirements include a security deposit. Staff added that the DAC-GT projects are facing Wholesale Distribution Access Tariff (WDAT) interconnection delays, but Developer B is compliant with allowable extensions of the PPA-specified milestones. Staff is monitoring the delays and providing quarterly updates to the CPUC detailing the project timelines and delays. In response to Committee Member Kulcsar’s question about progress reports submitted to the CPUC, staff noted they contain confidential information from the developers. Chair Parkhurst asked several questions about the scope of Power Share programs offered, program performance results, and additional load acquired. Mr. Langer clarified that CCAs and IOUs have Power Share programs if they serve disadvantaged communities, but those with programs have not fully allocated the DAC-GT and CSGT programs. CPA has one of the most successful programs and the highest number of signed contracts. Regarding the additional load, staff clarified that CPA acquired some small community solar allocations from other CCAs. CPA was the first CCA to implement the Power Share program, reach full program subscription, and with the proposed shortlist will fulfill the full megawatt allocation. Chair Parkhurst asked about the cost implications of having executed the shortlist contracts if the CPUC decides not to cover the above-market costs in the future. Staff indicated it would be highly unlikely for the CPUC to approve 20-year contracts with a cost recovery and then change course. Additionally, if CPA were unable to downsize two of the proposed shortlisted projects, the yearly cost not reimbursed by the CPUC would be in the manageable tens of thousands of dollars range. Committee Member Mahmud commented that the CPUC has always provided 100% recovery of the above-market contracts entered into by IOUs.
Motion: Committee Member Mahmud, South Pasadena
Second: Committee Member Lesser, Manhattan Beach
Vote: Item 4a was approved by a roll call vote.
Motion: Committee Member Mahmud, South Pasadena
Second: Committee Member Lesser, Manhattan Beach
Vote: Item 4b was approved by a roll call vote with a recusal from Committee Member Kulcsar as the City of Carson is a Community Sponsor for the CSGT projects.
COMMITTEE MEMBER COMMENTS
Committee Members Mahmud and Lesser thanked staff for their excellent work to increase reliability and benefit CPA’s low-income customers.
ADJOURN
Chair Parkhurst adjourned the meeting at 1:15 p.m.
Agenda Page 6
Staff Report – Agenda Item 2
To: Energy Planning & Resources Committee
From: Geoff Ihle, Manager, Energy Risk Management
Approved By: Ted Bardacke, Chief Executive Officer
Subject: Risk Management Team Report
Date: August 23, 2023
July 2023 RMT REPORT
Key Actions
• Reviewed current counterparty credit exposure
• Reviewed June 2023 market performance
• Reviewed June 2023 generation and storage performance • Reviewed energy positions and approved 2023-2027 hedges • Reviewed April 2023 day-ahead load forecast performance • Reviewed positions for RPS and carbon free products
• Reviewed Resource Adequacy (RA) positions, including CPA’s 2023 and 2024 Month-Ahead and 2024-2027 Year-Ahead open positions and procurement strategy
• Reviewed Energy Risk Management Policy (ERMP) compliance • Reviewed July 2023 CRR Allocations and Auction and 2023 YTD performance Policy Compliance
Policy Deviation Required Action
None. None.
ATTACHMENT
None.
Agenda Page 7
Staff Report – Agenda Item 3
To: Energy Planning & Resources Committee
From: Lindsay Saxby, Vice President, Power Supply
Approved By: Ted Bardacke, Chief Executive Officer
Subject: 2023 Clean Energy and Reliability RFO Longlist Overview Date: August 23, 2023
RECOMMENDATION
Staff will provide a presentation on the item.
ATTACHMENT
1. 2023 Clean Energy and Reliability RFO Longlist Presentation Agenda Page 8
2023 Clean Energy and
Reliability RFO Longlist
August 23, 2023
Agenda Page 9
CPA launched the 2023 Clean Energy and Reliability RFO in June to fill a larger portion of its portfolio needs with long-term contracts, reducing the need to procure products such as Resource Adequacy (RA) and Renewable Energy Credits (RECs) in short-term markets
In addition to renewable and storage offers, for the first time, CPA solicited offers for RA -only and natural gas tolling agreements (tolls) as part of the RFO. Staff received and incorporated feedback from the Energy Committee on how these tolls should be evaluated
Bids were received on July 19, 2023
CPA received a robust response, with more bids submitted than any of CPA’s past long-term RFOs The majority of offers received were for standalone storage, however each product category received a robust response, although no baseload renewable (geothermal or biomass) offers were received. CPA received 21 offers from 16 local projects
Once valuation results are complete, the RFO Review Team will meet mid-September and the Energy Committee will consider a recommended shortlist on September 27, 2023 2 Executive Summary
Agenda Page 10
Background
Agenda Page 11
3 Mid-Term Reliability Compliance
On June 24, 2021, the CPUC issued its Decision Requiring Procurement to Address Mid-Term Reliability (MTR) (2023- 2026), which ordered CPA to procure a total of 679 MW of new compliant capacity between 2023-2026 On February 28, 2023, the CPUC issued Decision 23-02-040 which added new procurement requirements while delaying others and providing additional compliance flexibility With that decision plus recent procurement activity, CPA has procured the vast majority of its MTR requirements, with a small short in generic capacity in 2027 and a miniscule short in baseload renewables in 2028 Online Date
Category Description 8/1/2023 6/1/2024 6/1/2025 6/1/2026 6/1/2027 6/1/2028 1 Cumulative CPA Procurement Need - Generic Capacity (MW) 118 354 156.7 117 117 CPA's Executed Contracts (MW) 118 354 156.7 117 105
Compliance Long / (Short) (MW) 0 0 0 0 (12)
2 CPA Procurement Need – Baseload Renewables (MW) 59
CPA's Executed Contracts (MW) 58.9
Compliance Long / (Short) (MW) (.1)
3 CPA Procurement Need – Long-Duration Storage (MW) 59
CPA’s Executed Contracts (MW) 63
Compliance Long / (Short) (MW) 4
Agenda Page 12
2023 RFO Overview and Goals
The purpose of the 2023 Clean Energy and Reliability RFO is to solicit competitive proposals to allow CPA to meet its various energy portfolio needs, while also complying with CPUC Procurement Orders and RA requirements.
This solicitation was expanded to include RA-only and existing thermal energy resources with preferences for those that are transitioning to cleaner operations, along with typical renewable energy and storage resources.
CPA implemented changes to its RFO eligibility requirements, including:
o Flexible Contract Duration: Counterparties bid terms anywhere from 10 to 20 years in most product categories
o Bundled Deals: CPA allowed for bundled offers so bidders may bid a portfolio of resources at a lower price relative to individual offers for each resource o Fast Track Offers: CPA may enter negotiations prior to notifying Proposers of their shortlist status. Such fast-track exceptions are limited to Proposers with exigent circumstances, including earlier CODs or other time-sensitive milestones and take place on a contingent basis until shortlisting
Agenda Page 13
5 Offer Overview
Agenda Page 14
6 RFO Offer Overview
Summary Stats
Number of offers submitted 137
Number of compliant offers 128
Number of sellers submitting offers 55
Counties spanned by submissions 29
States represented by offers AZ, CA, ID, NM, NV, WY
Number of new offers 113
Number of existing offers 15
Local Offers 21
Local Projects 16
Bundled Offers 3 bundles of 2 projects each
Fast Track Requests 16
Earliest online date 8/1/2023
Latest online date 6/1/2028
Local Projects by Product Type
Standalone Storage 8
RA-only 4
RPS + Storage 2
RPS only 1
Tolls (Dispatchable Gas) 1
Agenda Page 15
Offers by Product and Technology Type
(Compliant Offers Only)
102
1 1 1
Count of Offers by Storage Type
Lithium ion batteries
Compressed air energy storage
NAS Battery (Sodium Sulfur)
Zinc Bromide
69.2%
7.7%
5.8%
1.9% 15.4%
Percentage of Offers by Generation Type
Solar PV
Wind - Onshore
Thermal w/ Blended Fuels
Thermal Only
Thermal w/ Storage
1% 2%
6%
11%
18%
24%
38%
Percentage of Offers by Product Type
Thermal Only
Thermal w/ Blended Fuels
Thermal w/ Storage
Renewable Generation Only
Renewable Generation + Storage
RA-Only
Standalone Storage
Agenda Page 16
Offer Location
26 17
12 10
8 6
2 4 4
3 3 3
2 2 2 2 2
3 2
1 2 2 2 2
1 1 1 1 1 1
Riverside
Los Angeles
San Bernardino
Fresno
San Diego
Kern
Kings
San Joaquin
Ventura
Imperial
Merced
Solano
Lincoln, NM
Alameda
Clark, NV
Inyo
LA PAZ, AZ
Madera
Monterey
NYE, NV
Orange
PlacerTulare
Yuma, AZ
Colusa
Contra Costa
Santa Barbara
Stanislaus
Sweetwater, WY
Twin Falls, ID
Offers by County
Agenda Page 17
Offers by Commercial Online Date
6 3
2 2
8 31
1 7
11 18
2 4
11 22
2025 Q1 2025 Q2 2025 Q3 2025 Q4 2026 Q1 2026 Q2 2026 Q3 2026 Q4 2027 Q1 2027 Q2 2027 Q3 2027 Q4 2028 Q1 2028 Q2 Agenda Page 18
Offers Ranked by Capacity (MW)
The RFO limited all product categories, except for thermals, to 5-500 MW in size. Thermal projects were required to be at least 10 MW with no maximum size 0 100
200
300
400
500
600
700
800
900
13579
111315171921232527293133353739414345474951535557596163656769717375777981838587899193959799 101103105107109111113115117119121123125127
MW
Renewable Generation Capacity (MW) Storage Capacity (MW) Thermal Capacity (MW) RA-Only Capacity (MW) Agenda Page 19
Solar and Storage Pricing Trends Storage Price ($/kWm)
Solar Price ($/MWh)
2023 RFO
2022 MTR RFO
2021 MTR RFO
Solar + Storage Projects Storage Only Projects
Agenda Page 20
Toll Offer Overview
• CPA received bids from four Sellers for 12 total thermal toll offers • Projects are located in San Diego, San Bernardino, Riverside, Fresno, Solano, and Los Angeles counties
• Most projects were not located in DACs, but some projects are in DACs • No bidders indicated accelerated decommissioning in their bids Gas Toll Product Type Count
Existing dispatchable gas with storage 8
Existing dispatchable gas with blended fuels
(i.e. some hydrogen capacity)
3 Existing dispatchable gas only 1
Agenda Page 21
Tolling Offers
with Storage
Agenda Page 22
14 • CPA received eight offers for existing dispatchable thermal resources with energy storage added
• Adding storage to existing thermal resources can reduce the amount that the thermal resources are dispatched, leading to lower GHG and emissions that impact local air quality
• Thermal ”peaker” plants are typically used infrequently (< 3% of hours in a year) in stressed system times, and often are needed for less than 1 hour at a time.
• A one-hour battery can run instead of the peaker during the shortest dispatches, providing the same reliability benefit with fewer emissions • Another benefit is that in peak summer demand hours, hot weather can force “de-rating” of the capacity of thermal resources, while augmenting with an on- site battery can ensure full plant capacity remains available, thus increasing RA value
15 Tolls with Energy Storage Added
Agenda Page 23
Tolling offers
with blended
fuels
Agenda Page 24
16 • In the 2023 Clean Energy and Reliability RFO, CPA solicited bids for existing dispatchable gas projects running on blended fuels, i.e. green hydrogen or renewable biogas
• CPA received 3 bids for hydrogen blending
• Although the technology is early stage and not yet widely deployed, hydrogen can be introduced to the fuel mix of natural gas facilities, potentially showing reductions in CO2 emissions
• The extent of emissions reduction (including GHG and other emission reductions) depends on how the hydrogen is produced and the proportion of hydrogen blending with the fossil fuel
• CPA received three offers for existing dispatchable thermal resources with blended fuels beginning in 2027, all using hydrogen as the blended fuel at 30-35% mix of hydrogen to traditional methane gas
17 Tolls with Blended Fuel
Agenda Page 25
18 Hydrogen Overview - Production
Colors of Hydrogen
Variable Grey Hydrogen Blue Hydrogen Turquoise Hydrogen Green Hydrogen Description
Hydrogen created
from natural gas
through steam
methane
reformation
Grey hydrogen that
has been paired with
carbon capture to
reduce CO2
emissions
Like grey and blue
hydrogen, uses methane
as a feedstock, but the
carbon produced is in solid
form, negating the need for
carbon capture.
Hydrogen created
from water through
electrolysis powered
by renewable
electricity
GHG
Emissions High Medium Low Low / None
Hydrogen is the most abundant element on earth (the “H2” in H2O) Like natural gas, hydrogen gas can theoretically be used to fuel trucks, power plants, industrial manufacturing, aviation, and more
Hydrogen is created by splitting chemical compounds that contain hydrogen; the different methods of production determine how “clean” hydrogen is Agenda Page 26
19 Green Hydrogen for Electricity
• Thermal power plants using natural gas can be
converted to burn hydrogen with upgrades to the
engines, plant equipment, and fuel distribution
systems
• Lower hydrogen blends require fewer upgrades. To
date, a 100% hydrogen mix is not considered
commercially feasible, though the technology is
rapidly developing.
• Using green hydrogen as a fuel source may reduce
the GHG-emissions from a facility
• The 2022 Federal Inflation Reduction Act
(IRA) provides substantial incentives for green
hydrogen production, with incentives ranging
from $0.65/kg to $3.00/kg. Regulations governing
these incentives are subject to intense debate.
Agenda Page 27
• Section 45V of the Inflation Reduction Act (IRA) created a generous hydrogen Production Tax Credit (PTC). The incentive is tiered, with higher incentives going to hydrogen production with lower carbon emissions rates
• At the highest incentive level, hydrogen production can earn up to $3/kg of H2 produced, but the electricity used in the process must come from a carbon-free source, therefore typical grid-supplied electricity would not qualify under current rules • The US Treasury Department is developing guidelines (due as soon as October 2023) such that businesses know what production processes will qualify as green hydrogen and be eligible for the full tax credit
20 Defining Green Hydrogen
Agenda Page 28
21 Defining Green Hydrogen, continued
Issue Description Least
Restrictive
Middle
Option
Cleanest
Option
1. Incrementality The issue of whether clean energy used to create hydrogen should be from newly built clean resources. Producing green hydrogen adds to overall demand for energy. Even if existing clean resources are sourced to produce hydrogen, the increased overall demand would likely be met by existing emitting resources unless new renewables are added to the grid.
No incrementality
requirement
Require
incremental supply
of clean energy
2. Temporal matching The timeframe under which clean energy is matched to supply to meet the needs of hydrogen production. For reference, the California Renewable Portfolio Standard requires annual matching of renewable production against retail demand.
Annual matching Monthly matching Hourly matching
3. Proximity of the
clean energy to
hydrogen production
The principle that the clean energy used to produce hydrogen should be connected to the hydrogen production.
Clean energy is
delivered in the
same grid (east,
west, Texas)
Clean Energy is
delivered to the same
balance area (CAISO,
LADWP, etc.)
Clean Energy
project is directly
connected to the
H2 production or in
close proximity
electrically
Although Green Hydrogen is defined as hydrogen generated by carbon-free energy, a debate is ongoing about how the clean energy is supplied that will partially be resolved by Treasury guidelines.
California may adopt additional guidelines and standards for GHG measurement and reporting.
Agenda Page 29
Fast Track and
Next Steps
Agenda Page 30
22 23
Fast Track Offers
• CPA allowed sellers to request fast track consideration of their projects if the project circumstances and/or CPA’s procurement needs warrant quick action • CPA received 14 requests to fast track offers in all product categories, with the majority of the requests from standalone storage offers
• CPA staff reviewed bidders’ reasoning for fast-track requests, along with assessing the projects’ preliminary qualitative and quantitative traits, and decided to fast-track two of the requested projects, one wind project and one local standalone storage project • Fast-tracked projects will be included for shortlist consideration at the RFO Review Team and potentially the Energy Committee
• If approved for shortlisting by Energy Committee and negotiations are successful, fast-track PPAs could come to the Board for approval as early as October Agenda Page 31
Takeaways
• CPA received a robust response with a variety of resource types, terms and online dates to consider.
• CPA will have an opportunity to procure a considerable amount of renewable energy and capacity under long-term contracts
• For stand-alone storage, CPA has many offers to choose from, with the technology continuing to be dominated by lithium-ion batteries
• CPA still has a small short position for it long-lead baseload resources under the MTR procurement order, however received no MTR-compliant baseload offers • There are limited opportunities to procure wind resources, mostly out of state offers • There are opportunities for tolls with storage and with blended fuels but for blended fuels, many key details of hydrogen fuel usage and supply need to be worked out Agenda Page 32
RFO Schedule
June 1, 2023 RFO Opens
July 19, 2023 Deadline to submit RFO Proposals
Mid-September 2023 RFO Review Team reviews offers (schedule TBD) September 27, 2023 Energy Committee shortlist consideration Late September Bidders notified of shortlist status
September* – January 2024 Power Purchase Agreement (PPA) and Energy Storage Agreement (ESA) negotiations
October 2023 – February 2024 Board Consideration of PPAs *Fast track negotiations began in August
Agenda Page 33
Appendix
Agenda Page 34
26 2023 RFO Product Types and Eligibility
27 Product Types Description of Eligible Resources Term (Years) Size Max Start Date Renewable Portfolio
Standard (RPS)
Generation Only
Solar, wind, geothermal, biomass, small hydro 10 to 20 5 MW to 500 MW June 1, 2028 RPS Generation +
Storage RPS generation paired with storage 10 to 20 5 MW to 500 MW June 1, 2028 Standalone Storage
Standalone storage facilities with a minimum duration
of at least 4 hours, or long-duration storage of 8 hours or more
10 to 20 5 MW to 500 MW June 1, 2028
Resource Adequacy
(RA) - Only
Offers from any technology for RA capacity (no
energy) 5 to 15 5 MW to 500 MW June 1, 2028
Natural Gas Tolls Resources that use natural gas and/or other preferable fuel sources 2 to 10 10 MW Minimum January 1, 2027 Agenda Page 35
28 Green Hydrogen Production and Distribution Chain
Hydrogen can be distributed via gas
pipelines or by road, train, or ship.
Significant upgrades are needed to
utilize existing pipelines.
Once produced, hydrogen can be stored
as a gas or liquid in either man-made
tanks or underground geologic features
(empty salt caverns). Storage as liquid
requires a gas-to-liquid conversion.
Energy from renewable resources
(i.e. wind & solar) is used to power
an electrolyzer, which separates
water into oxygen and hydrogen.
Production Storage Distribution
Agenda Page 36
Evaluation Criteria
With the exception of tolls, projects will be ranked using CPA’s traditional criteria (see Appendix for detailed
descriptions):
Environmental
Stewardship
Workforce
Development
Quantitative
Evaluation
(Value)
Development
Risk
Project
Location
Benefits to
DACs
Agenda Page 37
29 Update to Project Location Scoring
HIGH In Los Angeles and Ventura counties
Other counties within California
Projects located within a Federally-designated energy community or on tribal lands with demonstrated community support (including outside of California)
MEDIUM
Projects outside of California not located in a Federally-designated energy community or on tribal lands without demonstrated community support LOW Agenda Page 38
Toll Evaluation Criteria
CPA could receive offers ranging from traditional natural gas tolling agreements to hybrid facilities that incorporate battery energy storage or a conversion to a green hydrogen fuel source
Offers that extend the scheduled retirement date of an existing natural gas facility without providing a transition to a cleaner alternative will be ineligible for participation in the RFO
CPA will use new criteria when evaluating natural gas offers:
Workforce
Development
Quantitative
Evaluation
(Value)
Transition to
Cleaner
Operations
Benefits to
DACs
31 GHG
Emissions
Agenda Page 39
Transition to Cleaner Operations
32 CPA will rank toll projects according to the following criteria:
HIGH
MEDIUM
LOW
Offers that include a plan to transition to cleaner operations and/or reduce emissions within the contract term, examples include:
Tolls paired with energy storage
Tolls that can run fully or partially on renewable fuels and/or green hydrogen If this option is pursued, CPA will be requesting detailed information on fuel production and impacts on GHG emissions and local air quality
Offers that include a plan to transition cleaner operations and/or reduce emissions afterthe contract term, examples include:
Tolls that will either shutdown the facility at the end of the contract term or give CPA the right to direct the Seller to decommission the facility
Tolls that will convert the facility to a cleaner fuel source after the end of the contract term and will give CPA a right of first offer on the new facility
Tolls that do not meet the above criteria
Agenda Page 40
GHG Emissions
33 CPA will forecast the expected generation and associated GHG emissions at a natural gas facility
CPA may receive offers from facilities that are very efficient and are expected to run frequently and offers from facilities that are less efficient and expected to run infrequently
CPA will use forecasted data to analyze a facility’s total GHG output and the facility’s efficiency and determine the effects such facility will have on CPA's Product Content Label and GHG emissions profile
This will be a quantitative measure, not ranked High, Medium, Low Agenda Page 41
Disadvantaged Community Impacts
Natural Gas resources will have differing impacts on DACs than renewable resources. Impacts to DACs will be assessed in conjunction with scoring in the three qualitative evaluation criteria; 1) impacts of the agreement on a transition to cleaner operations, 2) workforce development, and 3) GHG emissions Demonstrates DAC benefits, including transition to cleaner operations or retirement at the end of the contract term
HIGH
Project does not demonstrate additional DAC benefits, or is not located in a DAC
NEUTRAL
LOW Project is harmful or inconsistent with community priorities Agenda Page 42
Workforce Development
• CPA will use its traditional workforce development criteria with a slight modification to address existing facilities
The project is a union site or will use targeted-hire, union labor, or multi-trade project labor agreements (including requirements for state-apprenticeship graduates) HIGH
The project is not a union site or does not have a labor agreement, but can demonstrate prevailing wage, union labor, and targeted hire commitments MEDIUM
The project does not demonstrate prevailing wage, union labor, and targeted hire commitments
LOW
Agenda Page 43
Staff Report – Agenda Item 4
To: Energy Planning & Resources Committee
From: Lindsay Saxby, Vice President, Power Supply
Approved By: Ted Bardacke, Chief Executive Officer
Subject: Power Ready Request for Offers (RFO) Update
Date: August 23, 2023
RECOMMENDATION
Staff will provide a presentation on this item.
ATTACHMENT
1. Power Ready RFO Presentation
Agenda Page 44
Power Ready
Request for Offers (RFO)
August 23, 2023
Agenda Page 45
Power Ready Overview
Power Ready is a resiliency program where CPA member agencies have the opportunity to host a no-cost behind-the-meter battery energy storage system (BESS) and solar photovoltaic system (PV).
What is Power Ready?
2 How Does it Work?
During outages, such as Public Safety Power Shutoffs (PSPS), natural disasters, local infrastructure failure, or grid disturbances, the member agency will get the benefit of islanded backup power to meet critical loads for at least 4 hours.
A portion of the batteries will be discharged at peak times and systems will provide demand response to CPA, reducing costs by shifting member agency’s load from high time-of-use periods.
There is no costs to member agencies. After system installation electricity costs will be equal to or less than what member agencies would have paid if they were not participating in the program The systems will be owned by third-party developers who are responsible for all operations and maintenance.
Types of Facilities:
Community Centers/Parks
City Halls/Civic Centers
Police/Fire Stations
Public Works
Other
Agenda Page 46
How Does This Work?
3 CPA
Member
Agency Developer SITE LEASE
Site Lease: Member agency
provides Developer access
to the facility site under the
site lease agreement
PPA: CPA pays Developer
for the output of the solar +
storage system under the
terms of the PPA
MOU: Member agency electricity bill
from CPA will be equal to or less
than what they would have paid if
they were not participating in the
program
Developer constructs, owns, operates the
solar and storage system for a 20-year term
CPA is the energy off-taker through a Power
Purchase Agreement (PPA)
CPA benefits from the solar and storage
system during normal operating times
Member agency serves as the site host
Member agency uses the system as back-up
power during outages
No cost will be passed to the member
agencies
Agenda Page 47
Power Ready Member Agency Sites
4 Member Agency Address Expected Project
PV Size (kW) PV Type Expected Project
BESS Size (kW)
Expected Project
BESS Size (kWh)
Agoura Hills Agoura Hills Rec Center 152.15 Rooftop 100 (175)* 400 (700)* Beverly Hills Roxbury Park Community Center 96.92 Rooftop 66.75 267 LA County - Hacienda Heights Hacienda Heights Library 67.47 Rooftop 33.25 133 LA County - Claremont Claremont Helen Renwick Library 66.93 Rooftop 66.75 267 LA County - Paramount Paramount Library 61.44 Rooftop 33.25 133 Oxnard Oxnard Service Center 178.48 Rooftop 100 400
Sierra Madre Sierra Madre City Hall Complex 156.90 Rooftop 66.75 267 South Pasadena South Pasadena City Hall Complex 211.03 Carport 166.75 667 Ventura County - Ojai / Oak View Oak View Park & Resource Center 29.99 Rooftop 33.25 133 Ventura County – Simi Valley Simi Valley Fire Station #41 52.30 Rooftop 33.25 133 Westlake Village Civic Center Complex 179.58 Rooftop 100 (250)* 400 (1,000)* TOTAL 11 Sites 1.25 MW 10 Rooftop /
1 Carport 0.8 MW 3.2 MWh
*Agoura Hills and Westlake Village will be seeking pricing proposals at the BESS sizes shown in the above table as well as an alternate configuration that increases the BESS size with a cost contribution from the member agency
Agenda Page 48
Power Ready RFO Process
5 The RFO is a two-step process to qualify bidders:
1. On February 8, 2023, CPA launched the RFO and sought initial offers from bidders. Based on these submissions, CPA selected bidders to participate in the second-round. 4 proposers submitted bids and all 4 bidders were selected for the second round.
2. After the initial screen and execution of an NDA, CPA released confidential site information (detailed site plans, member agency billing data, etc.) to the selected bidders to present a best and final offer. Final bids are due September 1, 2023.
Following CPA’s standard RFO review process, an RFO Review Team will evaluate final submission and make a recommendation to Energy Committee for approval Agenda Page 49
RFO Schedule
6 Date Item
September 1, 2023 Deadline to submit best and final proposals 5:00pm PST
Mid- September 2023 Review Team meeting to review final bids and staff recommendation for selection
September 29, 2023 Energy Committee meeting to approve selected developer
Q4 2023/Q1 2024 Power Purchase Agreement (PPA) negotiations Q4 2023/Q1 2024 Board Approval of PPA and execution
~Q1/Q2 2024 Break Ground
Agenda Page 50
Appendix
Agenda Page 51
7 Timeline
8 Complete
Site identification
Complete
Member Agencies MOU
Execution
Complete
CPA Opens Request for
Offer
Q3 2023
RFO Evaluation and
Selection
Q4 2023
Agreement Negotiation
Q1/Q2
2024
Break Ground
Local governments were asked to submit their top five candidate sites. EcoMotion, CPA’s technical advisor, reviewed each site; optimal sites were selected for participating member agencies
Member agencies executed a Memorandum of Understanding to confirm participation in the program
CPA released a two-step Request For Offer (RFO) for prospective developers to bid on owning, constructing, operating, and maintaining systems. The RFO launched in January 2023. Final bids due September 1, 2023
CPA intends to select one developer from the RFO for the portfolio of systems. Notification to the selected proposer will be October 1, 2023
CPA to execute a PPA with the awarded developer. Member agencies will execute site lease agreements with the awarded developer.
Construction of systems will begin in 2024
Agenda Page 52
Evaluation Criteria
Given the unique nature of Power Ready, the selection criteria for the offers is customized to the program:
The RFO includes the following workforce development requirements for all projects:
o Prevailing wage required
o Additional preferences for Project Labor Agreements (PLAs), targeted hire (i.e., local workers, Disadvantaged Workers, journeymen or wiremen from state approved apprenticeship programs etc.), and our typical workforce development criteria 9 Workforce
Development Price/Value
Developer
Experience and
Qualifications
Schedule/Project
Delivery Plan
Agenda Page 53
Developer Responsibilities
Under the PPA, the developer must:
Secure site control by executing a site lease with each member agency and obtain all other necessary permits. Apro forma agreement was included in RFO materials
Design, permit, finance, and construct solar and BESS systems to CPA’s specifications • Sizing and specifications include member agency design considerations as assessed by EcoMotion during site visits • Systems may include rooftop or carport solar, depending on individual site specifications • Design may include repairs or replacement of roofing sections The developer must operate and maintain the systems during the life of the contract, including dispatching the BESS per CPA’s instructed use cases (peak load reduction and/or demand response) The developer ensures the system will island during an outage event and allow the solar and BESS to meet agreed-upon member agencies critical on-site loads The developer must meet performance obligations for routine and emergency operations as defined in the PPA Once the term of the PPA has concluded, the developer is responsible for decommissioning the system and site restoration
Agenda Page 54
10 CPA Responsibilities
CPA will execute a 20-year PPA with the awarded developer and pay a fixed $/MWh rate for the output of the solar plus storage systems. In addition:
CPA will administer the RFO to select the developer for the program.
CPA will manage the PPA executed with developer selected.
CPA will be a development liaison during construction of the systems.
CPA will manage the billing for each site, ensuring the participating member agencies cost is equal or less than what they would have paid if they were not participating in the program.
Agenda Page 55
11 Member Agencies Responsibilities
Member Agencies will be responsible for executing a site lease with developers Cooperate with selected developer to secure necessary permits Member Agencies electricity costs will be equal to or less than the amount that would otherwise been charged to the Member Agency if the Member Agency did not participate in the Power Ready Program
Agenda Page 56
12