Energy Planning & Resources Committee
of the Clean Power Alliance of Southern California
Regular Meeting
Wednesday, September 27, 2023
12:15 p.m.
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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
Thousand Oaks City Hall
Public Works Conference Room
2100 Thousand Oaks Blvd.
Thousand Oaks, CA 91362
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CALL TO ORDER & ROLL CALL
GENERAL PUBLIC COMMENT
CONSENT AGENDA
1. Approve Minutes from August 23, 2023, Energy Committee Meeting
2. Receive and File August 2023 Risk Management Team Report
REGULAR AGENDA
3. a. Approve the 2023 Clean Energy RFO Shortlist and Waitlist as Recommended by the RFO Review Team
b. Authorize Staff to Enter Bilateral Discussions with Shortlisted Project G as Recommended by the RFO Review Team
4. Approve the 2023 Power Ready RFO Shortlist Consisting of a Primary Offer and Backup Offer as Recommended by the RFO Review Team
COMMITTEE MEMBER COMMENTS
ADJOURN – NEXT MEETING OCTOBER 25, 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.
MINUTES
Energy Planning & Resources Committee
of the Clean Power Alliance of Southern California
Regular Meeting
Wednesday, August 23, 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
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 Absent
Thousand Oaks Helen Cox Committee Member Absent
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 July 26, 2023, Energy Committee Meeting
2. Receive and File July 2023 Risk Management Team Report Motion: Committee Member Lesser, Manhattan Beach
Second: Committee Member Mallory, Oxnard
Vote: The consent agenda was approved by a roll call vote.
REGULAR AGENDA
3. 2023 Clean Energy and Reliability RFO Longlist Overview Lindsay Saxby, Vice President, Power Supply, provided a presentation on the 2023 Clean Energy and Reliability Request for Offers (RFO) longlist. Ms. Saxby reviewed the purpose, expansions, and goals of the 2023 RFO. CPA received a total of 128 compliant offers and 21 offers from 16 local projects, with most offers being for standalone storage. Ms. Saxby compared the offers based on product and technology type, location, commercial online date, capacity ranking, and solar and storage pricing. Among the bids received were 12 thermal toll offers, 8 offers for existing dispatchable thermal resources with added energy storage, and 3 offers for hydrogen blending. Ms. Saxby also discussed the advantages of hydrogen blending and the addition of storage to existing thermal resources. For expedited project consideration, CPA allowed sellers to request fast track evaluation based on project circumstances and/or CPA’s procurement needs, resulting in 14 such requests across all product categories.
Responding to Committee Member Lesser’s questions about the market shift, Ms.
Saxby explained that the substantial response to the RFOs indicates that the market is increasingly competitive, which would ideally decrease market prices.
Committee Member Mallory asked about staff assessment of hydrogen types and the impact of the Inflation Reduction Act (IRA). Ms. Saxby explained that the staff will also take into consideration a project’s potential incentive from the IRA or other state funding. Matt Langer, Chief Operating Officer, added that only Green Hydrogen is under consideration, awaiting further guidance from the Department of Treasury. In response to Committee Member Mallory’s question about the fast track process, staff clarified that many projects drop out between receiving an offer and being approved for a shortlist; the fast track process streamlines contract signing in a competitive market. Committee Member Kulcsar requested more information about the water intensity of Green Hydrogen, and staff agreed to provide future updates. Chair Parkhurst asked several questions about early decommissioning, Resource Adequacy (RA) compliance updates and impacts, and hydrogen sources. Staff clarified that CPA may transition a traditional thermal plant to cleaner operations to provide capacity for a cleaner resource. Regarding RA compliance, Ms. Saxby noted challenges in meeting Year Ahead RA requirements due to limited market capacity, potentially resulting in citations and expansion restrictions. Lastly, staff clarified that two of the three hydrogen-blending RFO offers propose that CPA might need to supply its own hydrogen, necessitating further research for the best approach. In response to Committee Member Lesser’s question about RA procurement options, Mr. Langer noted that staff is focused on both short- and long-term procurement; long-term capacity will enhance CPA’s control and reduce reliance on the short-term market.
4. Power Ready Request for Offers (RFO) Update
Ms. Saxby provided a presentation on the Power Ready RFOs. The Power Ready program offers CPA member agencies the opportunity to host a no-cost behind-the-meter battery energy storage system (BESS) and solar photovoltaic system, enhancing resiliency. Ms. Saxby noted there are 11 different member agency sites; discussed the Power Ready RFO process. Final bids are due September 1 and an RFO Review Team will evaluate final submissions and make recommendations to the Energy Committee for approval.
Committee Member Lesser noted there was some concern regarding contract length and asked if there is any leniency with regard to the length of contracts and asked about bid responses. Staff noted they expect to receive responses from all four bidders. After the initial round of responses, a program analysis will be conducted, seeking feedback for necessary refinements. Chair Parkhurst inquired about potential conflicts of interest relating to Energy Committee members participating in the analysis, especially if their cities are involved in Power Ready projects. Nancy Whang, General Counsel, clarified that staff had evaluated any potential conflicts and are comfortable with committee members engaging in the analysis phase and actively participate in the review team as needed because similar to Clean Energy RFOs, the member agencies are not competing with other bidders in the solicitation process. As other member agencies receive approval for future projects, they will be able to vote in the PPA decisions.
COMMITTEE MEMBER COMMENTS
None.
ADJOURN
Chair Parkhurst adjourned the meeting at 1:13 p.m.
Staff Report – Agenda Item 2
To: Energy Committee
From: Geoff Ihle, Manager, Energy Risk Management
Approved By: Ted Bardacke, Chief Executive Officer
David McNeil, Chief Financial Officer
Subject: Risk Management Team Report
Date: September 27, 2023
August 2023 RMT REPORT
Key Actions
• Reviewed current counterparty credit exposure
• Reviewed July 2023 market performance
• Reviewed July 2023 generation and storage performance • Reviewed energy positions and approved 2023-2027 hedges • Reviewed May 2023 day-ahead load forecast performance • Reviewed positions for RPS and carbon-free energy products • 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
ATTACHMENTS
None.
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 Shortlist Approval Date: September 27, 2023
RECOMMENDATION
A. Approve the 2023 Clean Energy RFO shortlist and waitlist as recommended by the RFO Review Team.
B. Authorize staff to enter bilateral discussions with shortlisted Project G as recommended by the RFO Review Team.
ATTACHMENT
1. 2023 Clean Energy and Reliability RFO Shortlist Approval
2023 Clean Energy and
Reliability RFO
Shortlist and Waitlist
Approval
September 27, 2023
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 in short-term markets, which are often volatile Long-term contracts also help CPA pursue its mission of adding new renewable energy capacity to the grid In addition to renewable energy 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 128 conforming bids, more than any previous long-term RFO
Most offers were for standalone storage, however each product category received a robust response. No baseload renewable (geothermal or biomass) offers were received. CPA received 21 offers from 16 local projects
On September 18, a Review Team composed of four Energy Committee members and CPA Staff including the CEO, COO, and VP of Power Supply met to produce a shortlist and waitlist recommendation. The purpose of today’s presentation is for the Energy Committee to consider the Review Team’s recommendation 2 Executive Summary
Requested Action
3 A. Approve the 2023 Clean Energy and Reliability RFO shortlist (Slide 27) and waitlist (Slide 28) as recommended by the RFO Review Team
B. Authorize staff to enter into bilateral discussions with shortlisted Project G to see if there is a viable path to a contract that includes a 30% or more Hydrogen Blend that is price competitive and environmentally favorable
Agenda
Background
Offer Overview
Valuation
Shortlisting Approach
Shortlist and Waitlist Proposal (Slides 28-29)
Next Steps
4 Background
5 2023 RFO Overview
The 2023 Clean Energy and Reliability RFO solicited competitive proposals to meet CPA’s various energy portfolio needs, while also complying with California Public Utilities Commission (CPUC) Procurement Orders and Resource Adequacy (RA) requirements.
Relative to CPA’s prior RFOs, CPA expanded procurement options to attract more offers in the RFO, including:
o Resource Adequacy-only: CPA considered RA-only offers o Tolls for RA with Natural Gas: CPA allowed offers for natural gas energy bundled with RA to access RA from existing facilities, with a preference for facilities that would transition to cleaner operations
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 o Flexible Contract Duration: Counterparties bid terms anywhere from 10 to 20 years in most product categories
o Package Deals: CPA allowed for inclusive offers so bidders may bid a portfolio of resources at a lower price relative to individual offers for each resource
6 2023 RFO Product Types and Eligibility
7 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
In recent RFOs, CPA’s main objective has been to meet its SB 100 and Mid-term Reliability (MTR) mandates as directed by the California Public Utilities Commission (CPUC). CPA has largely procured its MTR needs and has fulfilled its SB 100 long-term contracting requirements
In the 2023 Clean Energy and Reliability RFO, CPA’s goal is to fill a larger portion of its portfolio needs with long-term contracts, reducing the need to procure Resource Adequacy and renewable energy in unstable short-term markets, while increasing overall system supply of clean energy and capacity
CPA is targeting procurement of 1,300,000 MWh of energy and 400 MW of Resource Adequacy through this solicitation. Subject to market conditions, this is approximately one-quarter of what CPA anticipates needing to procure through long-term contracts each year for the next four years in order to adequately reduce short-term market risk 8 Targeted Volumes
Current Long-Term PPAs – Online and
Contracted
9 -500
0 500
1000
1500
2000
12:00
AM
1:00
AM
2:00
AM
3:00
AM
4:00
AM
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7:00
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8:00
AM
9:00
AM
10:00
AM
11:00
AM
12:00
PM
1:00
PM
2:00
PM
3:00
PM
4:00
PM
5:00
PM
6:00
PM
7:00
PM
8:00
PM
9:00
PM
10:00
PM
11:00
PM
Average Hourly Load versus Average Hourly PPA Generation - 2028 Average of Hydro Gen
Average of Geothermal Gen
Average of Wind Gen
Average of Solar + Storage Gen
Average of Load
Offer Overview
10 RFO Offer Overview
Summary Stats
Number of offers submitted 137
Number of conforming 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 14
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
Offers by Product and Technology Type
(Conforming 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
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
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
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)
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
Thermal 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
• About half of the projects were located 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
0 50
100
150
200
250
300
350
Thermal Generation Capacity at Delivery Point
(MW):
18 Fast Track Offers
The RFO 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 CPA is currently in provisional negotiations with these two projects, and could bring them to the Board for consideration as soon as October if they are approved for shortlisting
Fast-tracked projects are included in the Review Team’s recommended shortlist
Valuation
19 Quantitative Valuation Approach
Since long-term procurement of both RECs and RA was targeted in this RFO, projects were valued using two metrics RA Normalized NPV: Net Present Value (NPV) per MW of Resource Adequacy (RA) Net Qualifying Capacity (NQC). This ranking metric is more appropriate for projects that provide capacity attributes such as standalone storage, RPS + storage, and thermal project s Energy Normalized NPV: NPV per MWh of generated energy. This ranking metric may be more appropriate for generation only projects.
Offers were categorized into first through fourth quartiles based on their NPV rankings (Q1-Q4) • PPA Energy Cost ($/MWh)
Energy price CPA pays the counterparty
• Storage Only: PPA Storage Cost ($/kW-month)
Capacity price CPA pays the counterparty
Benefits Costs
• Energy Revenue ($/kWh)
Earnings from selling energy generation from facility
• Resource Adequacy ($/kW-month)
Replaces RA CPA would otherwise have to purchase
• Renewables Only: Renewable Energy Credit (REC) ($/kWh) Replaces RECs CPA would otherwise have to purchase
• Storage Only: Ancillary Services (AS) ($/kWh)
Earnings from selling ancillary services
• Storage Only: Energy Revenue ($/kWh)
Earnings from selling energy (from discharging the battery) Value (NPV) = Benefits – Costs
Valuation Range
RA Normalized NPV ($/Average MW RA)
Q1 Q2 Q3 Q4
Valuation Range by Technology
Standalone Storage Renewable Generation
Only
Renewable Generation
+ Storage
RA-Only Existing Dispatchable
Gas w/ Blended Fuel
(with RA)
Existing Dispatchable
Gas + Storage (with RA)
Existing Dispatchable
Gas (with RA)
RA Normalized NPV ($/Average MW RA)
Valuation Range by Technology
23 Renewable Generation Only Renewable Generation + Storage Energy Normalized NPV ($/MWh Generation)
Shortlisting
Approach
24 Shortlisting Considerations
Historically at least half of shortlisted projects in CPA’s RFOs have not resulted in executed contracts This is typical in the industry and has gotten more acute in recent years – for example, in the 2022 Midterm Reliability RFO, of the shortlist of 6 projects, only 2 entered exclusive negotiations and 1 resulted in an executed contract. Of the waitlist of 3 projects, only 1 entered exclusivity and resulted in an executed contract.
To reach the target of approximately 1,300,000 MWh of renewable energy and 400 MW of RA in the 2023 Clean Energy and Reliability RFO, the Review Team determined that the shortlist should have approximately
2.5x of the targeted amount of renewable energy and a minimum of 3x of the targeted amount of RA ~3,250,000 MWh of renewable energy
~1200 MW of RA
Within the RA category, projects that offer 24/7 RA or RA at specific peak times are particularly valuable given new “slice-of-day” RA compliance regulations coming into effect in 2025 and were prioritized Also within the RA category, in some cases the Review Team went deeper into to the value stack to prioritize projects with more certain deliverability status
Waitlisted projects are those that could replace projects on the shortlist that do not enter exclusive negotiations
Thermal Proposal (Project G) Evaluation
CPA received 12 thermal offers: one thermal-only; three with a hydrogen blend; and eight that added storage to reduce natural gas burn Most of the thermal offers with transition to cleaner operations were not price competitive, however, one RA-only offer for an existing thermal facility is included in the shortlist recommendation RA-only Offer (No Energy)
212 MW
10-year term
Contract start in 2027
Counts as 24/7 resource in the “slice of day” RA framework No impact to CPA’s Power Content Label or GHG emissions profile The same Bidder which provided this RA-only offer also submitted an offer for a toll with a transition to Hydrogen Blend from the same facility
The price details, environmental performance, and logistics of the transition to a Hydrogen blend proposal were unresolved and not “contract-ready”
Though it was not formally offered, the theoretical price from this Bidder without Hydrogen would be a first quartile NPV valuation, indicating that a Hydrogen blend could potentially be available at a reasonable price The Review Team recommended that the Energy Committee shortlist the RA-only offer from this Bidder and that the Energy Committee authorize staff to enter bilateral discussions with the Bidder to see if there is a viable path to a contract that includes a 30% or more Hydrogen Blend that is price competitive and environmentally favorable. If there is no viable path at this time, the RA-only deal could still proceed
26 Shortlist and Waitlist Summary
Shortlist
Project
Count
Average
NQC Average MWh
RA-Only 1 212 0
Renewable Generation + Storage 4 364 1,970,000
Renewable Generation Only 1 152 1,580,000
Standalone Storage 4 710 0
Total 10 1,438 MW 3,550,000 MWh
Waitlist
Project
Count
Average
NQC Average MWh
Renewable Generation +
Storage 5 520 2,030,000
Renewable Generation Only 1 17 150,000
Standalone Storage 11 1,716 0
Total 17 2,254 MW 2,180,000 MWh
• All shortlist and waitlist projects are in either the first or second NPV quartile
• The shortlist contains three solar + storage projects, an in-state wind plus storage project, an out-of-state wind project (fast track), and the RA-only offer from a thermal project
• All four standalone storage projects on the
recommended shortlist are in LA or Ventura
Counties, including three in CPA’s service territory,
one of which has been fast-tracked
• Capacity from one particularly large standalone
storage project located in Ventura County is split
between the shortlist and the waitlist
• The Review Team does not recommend including
any thermal tolls in the shortlist, though
recommends further bilateral conversations with
one bidder for a potential hydrogen blend
Shortlist Recommendation
28 Project
NPV
Qtr Online Project Type
MW Gen
Range
MW Storage
Range
Environmental
Stewardship
Benefits to
DACs
Workforce
Development
Project
Location
Development
Score County
A* 1 Q2 2026 Renewable Generation
Only 400-500 N/A Medium Neutral High Medium High Lincoln, NM B 1 Q2 2028 Renewable Generation
+ Storage 100-250 50-100 Neutral Neutral Medium Medium Low Merced C 1 Q2 2028 Renewable Generation
+ Storage 50-100 50-100 Neutral High Medium Medium Low Tulare D 1 Q1 2028 Renewable Generation
+ Storage 250-400 100-250 Neutral High Medium Medium Medium Inyo E 1 Q2 2027 Standalone Storage N/A 100-250 Neutral Neutral High High Medium Ventura F* 1 Q2 2026 Standalone Storage N/A 50-100 High Medium High High High Los Angeles
G 2 Q1 2027 RA-Only N/A N/A Neutral Neutral High Medium High Riverside H 2 Q2 2025 Renewable Generation
+ Storage 100-250 50-100 Neutral High High Medium High Merced I 2 Q2 2026 Standalone Storage N/A 100-250 Medium High High High High Los Angeles
J 2 Q3 2025 Standalone Storage N/A 100-250 High High High High High Los Angeles
*Indicates a fast-tracked project
Waitlist Recommendation
29 Project
NPV
Qtr Online Project Type
MW
Gen
Range
MW
Storage
Range
Environmental
Stewardship
Benefits to
DACs
Workforce
Development Project Location
Development
Score County
A 1 Q2 2028 Renew able Generation Only 50-100 N/A Neutral Neutral High Low High Lincoln, ID B 1 Q4 2027 Standalone Storage N/A 100-250 Neutral Medium Medium Medium Low Riverside C 1
Q2 2027 Standalone Storage N/A 250-400 Neutral Neutral High High Medium Ventura D 1 Q4 2027 Renew able Generation + Storage 50-100 50-100 Neutral High High Medium Medium Fresno E 1
Q4 2027 Renew able Generation + Storage 100-250 100-250 Medium High High Medium High Kern F 1
Q2 2027 Standalone Storage N/A 100-250 Neutral Medium High Medium High Riverside G 1 Q2 2028 Standalone Storage N/A 50-100 Medium High High Medium Medium Madera H 2 Q2 2026 Standalone Storage N/A 100-250 Medium Neutral High Medium Medium Riverside I 2 Q1 2028 Renew able Generation + Storage 250-400 250-400 Neutral High Medium Medium Medium Inyo J 2 Q2 2027 Renew able Generation + Storage 50-100 50-100 High High High Medium Medium Fresno K 2 Q2 2026 Standalone Storage N/A 50-100 Neutral Neutral High Medium Medium San Diego L 2 Q4 2025 Standalone Storage N/A 100-250 Neutral Medium High High High Los Angeles M 2
Q2 2028 Standalone Storage N/A 250-400 High Neutral High Medium Medium San Bernardino
N 2
Q2 2027 Standalone Storage N/A 100-250 High Medium High High Medium San Bernardino
O 2 Q4 2026 Renew able Generation + Storage 100-250 0-50 Neutral High High Medium High Merced P 2 Q1 2026 Standalone Storage N/A 0-50 High Neutral Medium High High Fresno Q 2 Q2 2026 Standalone Storage N/A 50-100 Neutral Neutral Medium Medium Medium San Joaquin
Next Steps
30 Next Steps
31 Item Date
Energy Committee Shortlist Consideration September 27, 2023 Proposer notified of shortlist status September 29, 2023 Power Purchase Agreement (PPA) and Energy Storage
Agreement (ESA) brought to the Board for approval
October 2023 – February 2024
Requested Action
32 A. Approve the 2023 Clean Energy and Reliability RFO shortlist (Slide 27) and waitlist (Slide 28) as recommended by the RFO Review Team
B. Authorize staff to enter into bilateral discussions with shortlisted Project G to see if there is a viable path to a contract that includes a 30% or more Hydrogen Blend that is price competitive and environmentally favorable
Appendix
–
Qualitative Evaluation
Criteria
33 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
34 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
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
36 GHG
Emissions
Transition to Cleaner Operations
37 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
GHG Emissions
38 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
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
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
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: 2023 Power Ready Request for Offers (RFO) Shortlist Date: September 27, 2023
RECOMMENDATION
Approve the 2023 Power Ready RFO shortlist consisting of a primary offer and backup offer as recommended by the RFO Review Team.
ATTACHMENT
1. 2023 Power Ready Request for Offers (RFO) Shortlist
2023 Power Ready Request for
Offers (RFO) Shortlist
Energy Committee
September 27, 2023
Executive Summary
2 On February 8, 2023 CPA launched the Power Ready Request for Offers (RFO) seeking proposals from installation companies (Proposers) to undertake, finance, and complete behind-the-meter battery energy storage (BESS) and solar photovoltaic systems (PV) at 11-member agency sites on a timely and cost-efficient basis
Final bids from 3 proposers were received on September 1, 2023 An RFO Review Team including four Energy Committee members reviewed confidential offer information and developed a recommended shortlist for the 2023 Power Ready RFO ACTION REQUESTED: Approve the Power Ready shortlist consisting of Developer A as the primary offer and Developer B as the backup offer as recommended by the RFO Review Team
Agenda
3 Program and RFO background
Offer Overview
Recommendations
Program and RFO
background
4 Power Ready Overview
Power Ready is a resiliency program where CPA member agencies have the opportunity to host a behind-the-meter battery energy storage (BESS) and solar photovoltaic system (PV). 11 member agency sites are participating in this round of the program.
What is Power Ready?
5 How Does it Work?
During outages, such as Public Safety Power Shutoffs (PSPS), natural disasters, and other outages, the member agency will get the benefit of islanded backup power to meet critical loads for at least 4 hours.
Systems will provide benefits to CPA including demand response and load shifting from high Time of Use periods and Peak Demand Reduction.
Batteries can be discharged at peak times to provide more cost-effective electricity.
There will be no additional costs to member agencies. The services will be provided at a monthly cost equal or less than what they would have paid if they were not participating in the program and the developer will handle all maintenance.
Types of Facilities:
Community Centers/Parks
City Halls/Civic Centers
Police/Fire Stations
Public Works
Other
RFO Background
CPA sought proposals from PV and BESS installation companies that have demonstrated qualifications, resources, expertise, and experience sufficient to undertake, finance, and complete the project on a timely and cost-efficient basis.
The proposer selected by CPA will be fully responsible for:
o Securing any and all necessary permits, site leases, and utility agreements o Planning, designing, financing, scheduling, constructing, installing, commissioning, operating, and maintaining the systems.
Services will be contracted through a 20-year Power Purchase Agreement with CPA CPA retained EcoMotion to assist with evaluating each member agency site, recommending system sizing and siting, and technical review of the RFO proposals
Power Ready Member Agency Sites
7 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 156.9 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 52.3 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 sought pricing proposals at the BESS sizes shown in the above table as well as an alternate configuration that increases the BESS size.
RFO Selection Criteria
Given the unique nature of Power Ready, the selection criteria for the offers is customized to the program:
Workforce development criteria include:
o Requirement to pay prevailing wages
o Additional preferences for Project Labor Agreements (High), and targeted local hire/use of journeymen for a certain number of hours (Medium)
8 Workforce
Development Price/Value
Developer
Experience and
Qualifications
Schedule/Project
Delivery Plan
Program Structure
9 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: The system will
generate bill savings that CPA
will recapture through a
charge on the member agency
bill. The total 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 develops, owns, operates the solar +
storage system for a 20-year term
Developer guarantees a minimum amount of
yearly bill savings
CPA is the PPA Buyer and makes energy and
capacity payments to the Developer
CPA benefits from solar + storage system during
normal operating times
Member agency serves as the site host
Member agency uses system as back-up power
during outages
No cost will be passed to the member agencies
Overview of Offers
10 Power Ready Offer Result Summary
CPA received bids from 3 proposers
In the quantitative evaluation of the bids, energy and capacity payments CPA would make to the developer were compared to the bill savings the systems would provide
o The evaluation results indicated that no bids were NPV positive. Over the contract term, total energy and capacity payments were projected to be greater than total bill savings. This was expected, mostly due to the size of the battery systems, which have been optimized for resiliency purposes o The contract structure requires the developer to guarantee a minimum amount of bill savings. The valuation ranking is based on the proposed minimum guaranteed savings. In actual operation, the systems could produce higher savings, which would reduce the subsidy – or “cost of resiliency” – CPA is providing to the projects 11 Developer NPV Rank Development Score Workforce Development Schedule/Project Delivery Developer A 1 High High No concerns
Developer B 2 Medium High Proposer seeks an online date within 22 months of PPA execution
Developer C 3 High High
BESS footprint size poses challenges for
many of the sites
Developer A Proposal Overview
Experience: The proposal is from a consortium of multiple entities. The bid team has significant experience design, installing, owning, and operating numerous behind-the-meter solar plus battery systems in California.
Workforce Development: Developer A is willing to secure a PLA, pay prevailing hourly wages, and meet other targeted hire requirements listed in the RFO protocol
COD: Developer A committed to bring the systems online within 18 months of PPA execution, in line with the RFO Protocol
Proposal Overview
12 Criteria Score/Rank
Value
Highest
ranked NPV
offer
Development Score High
Workforce
Development High
Schedule/Project
Delivery No concerns
Evaluation Summary
Developer B Proposal Overview
Experience: Developer B is a commercial and residential energy storage and solar PV developer, with numerous home energy and commercial energy systems sold, completed or in development. Developer B has some behind-the-meter solar plus battery systems in California under management Development Rating: The bid has a “Medium” Developer Rating score because it has (a) few number of similar projects under management, and (b) it does not yet have financing secured
Workforce Development: Developer B is willing to secure a PLA, pay prevailing hourly wages, and meet other targeted hire requirements listed in the RFO protocol
COD: Developer B seeks an online date 22 months from PPA execution, rather than the 18 months called for in the RFO Protocol Proposal Overview
13 Criteria Score/Rank
Value 2
nd Highest ranked
NPV offer
Development
Score Medium
Workforce
Development High
Schedule/Project
Delivery
Proposer seeks an
online date 22
months from PPA
execution
Evaluation Summary
Developer C Proposal Overview
Experience: Developer C has completedseveral similar projects in California to date and has experience owning and operating the systems. The Proposer has completed similar projects for public entities and has experience working with other CCAs.
Workforce Development: Proposer is willing to secure a PLA, pay prevailing hourly wages and meet other targeted hire requirements listed in the RFO protocol
BESS footprint: Proposed BESS footprint (average of 538 sf) poses project delivery challenges at many of the project sites
COD: Proposer committed to bring the systems online within 18 months of PPA execution in line with the RFO Protocol
Proposal Overview
14 Criteria Score/Rank
Value Lowest ranked
NPV offer
Development
Score High
Workforce
Development High
Schedule/Project
Delivery
BESS footprint
size poses
challenges
at many sites
Evaluation Summary
Shortlisting Approach
15 The Review Team considered the proposals holistically across all evaluation categories to arrive at a recommended primary offer and backup offer The Review Team also concluded that there is more due diligence required in areas such as:
• Labor and other costs for the expected 10-year battery replacement need • Scope of O&M services for the duration of the contract • Decommissioning protocols at the end of the 20-year PPA • Reference checks
These areas will be addressed in discussions and negotiations with the primary developer, should they be shortlisted today.
The Review Team will reconvene to consider moving to the backup offer if these areas are not satisfactorily addressed
Power Ready Shortlist Recommendations
16 The Review Team recommends Developer A as the primary offer and Developer B as a backup offer
Requested Action: Approve the recommended shortlist and backup offer
Recommendation Developer Name NPV Rank Developer Rating Workforce
Development
Schedule/Project
Delivery
Primary Offer Developer A 1 High High No concerns
Backup Offer Developer B 2 Medium High
Proposer seeks an online
date within 22 months of
PPA execution
Next Steps
17 Next Steps
18 Date Action
September 27, 2023 Energy Committee shortlist consideration September 29, 2023 Bidders notified of shortlist status Beginning October 2023 PPA negotiations
Q4 2023 or Q1 2024 Board consideration of PPA
Appendix – RFO Process
Power Ready RFO Process
20 The RFO utilized a two-step process:
1. On February 8, 2023 CPA launched the RFO process by releasing a public version of the RFO and sought initial offers from bidders. Based on these submissions, CPA selected bidders to participate in the second-round. 4 proposers sent in bids. The 4 bidders were selected for the second round.
2. After initial screen, 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 were received September 1, 2023. 3 proposers sent in final bids.
Following CPA’s standard RFO review process, an RFO Review Team will evaluate final submission and make a recommendation to Energy Committee for approval
Minimum developer qualifications and experience
• Proof of applicable state licenses – e.g., Electrical (C-10), Solar Contractor (C-46), and General Building Contractor (B) • Must demonstrate previous experience with installing, owning, and operating solar plus batteries systems and/or microgrids, preferably for municipal facilities in Southern California and with Southern California Edison interconnection • Must demonstrate the financial strength to underwrite a project of this size
RFO Process
21 • Staff presents confidential valuation results to RFO Review Team • Review Team meets to develop selection approach and recommended a Proposer to be selected for Energy Committee consideration
• Selected Proposer is invited to enter exclusivity
• Negotiations begin
• Intake final offers
• Perform quality control (QC) on all offers
• Perform valuation
• PPAs brought to full Board for approval
• Intake initial offers
• Perform quality control (QC) on all initial offers
• Perform initial valuation, remove ineligible proposals • Provide confidential site information to selected Proposers • Recommendation of the selected Proposer presented to Energy Committee for approval
• Confidential information is removed
• Announce RFO to market