Energy Planning & Resources Committee
of the Clean Power Alliance of Southern California
Regular Meeting
Wednesday, February 28, 2024
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.
Clean Power Alliance
Executive Conference Room
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
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 Agenda Page 1 of 17
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, the entire Consent Agenda, or individual items in the Regular Agenda. Please refer to Policy No. 8 – Public Comment for additional information.
NAVIGATING OUR AGENDA PACKETS: The meeting agenda packets are bookmarked PDFs, which display a list of agenda items to the left of the page and allow you to click to view specific items within the packet. If viewing in your browser, click the "document outline" button in the upper left corner of the screen.
If the PDF is downloaded, the bookmark panel (ribbon icon) appears on the left side of the screen.
ACCESSIBILITY: Meetings are accessible to people with disabilities. Individuals who need special assistance or a disability-related modification or accommodation to participate in this meeting, or who have a disability and wish to request an alternative format for the meeting materials, should contact the Clerk of the Board at least two (2) working days before the meeting at [email protected] or (213) 713- 5995. Notification in advance of the meeting, while not required, will enable us to make reasonable arrangements to ensure accessibility to this meeting and the materials related to it.
CALL TO ORDER & ROLL CALL
GENERAL PUBLIC COMMENT
CONSENT AGENDA
1. Approve Minutes from the January 24, 2024, Energy Committee Meeting
2. Receive and File January 2024 Risk Management Team Report
REGULAR AGENDA
3. Oral Update from the Vice President of Power Supply
4. Receive Presentation on Renewable Energy and Carbon Free Energy Procurement, including a Market Update, Regulatory Developments, and Potential Changes to the Product Content of CPA Rate Offerings
COMMITTEE MEMBER COMMENTS
ADJOURN – NEXT MEETING MARCH 27, 2024
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 of 17
Staff Report – Agenda Item 1
To: Energy Planning & Resources Committee
Subject: Approve Minutes from the January 24, 2024 Energy Committee Meeting
Date: February 28, 2024
RECOMMENDATION
Approve.
ATTACHMENT
1. Minutes
Agenda Page 3 of 17
Energy Planning & Resources Committee Item 1
MINUTES
Energy Planning & Resources Committee
of the Clean Power Alliance of Southern California
Regular Meeting
Wednesday, January 24, 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
Alhambra City Hall
Conference Room A
111 S. First Street
Alhambra, CA 91802
Carson City Hall
Executive Conference Room
701 East Carson Street
Carson, CA 90745
Sierra Madre City Hall
Council Chambers
232 W. Sierra Madre Blvd.
Sierra Madre, CA 91024
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
Los Angeles County Sanitation District
1955 Workman Mill Road
Whittier, CA 90601
Clean Power Alliance
Executive Conference Room
801 S. Grand Ave., Suite 400
Los Angeles, CA 90017
CALL TO ORDER & ROLL CALL
Chair Robert 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 Absent
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
Agenda Page 4 of 17
Energy Planning & Resources Committee Item 1
West Hollywood Chelsea Byers Committee Member Present
All votes are unanimous, unless otherwise stated.
GENERAL PUBLIC COMMENT
There was no public comment.
CONSENT AGENDA
1. Approve Minutes from September 27, 2023, Energy Committee Meeting
2. Receive and File September-December 2023 Risk Management Team Report Motion: Committee Member Byers, West Hollywood
Second: Committee Member Kulcsar, Carson
Vote: The consent agenda was approved by a roll call vote.
REGULAR AGENDA
3. Oral Update from the Vice President of Power Supply
Lindsay Descagnia, Vice President of Power Supply, provided a report on upcoming Energy Committee items. The Committee will review long-term product content assumptions, the 2024 Integrated Resource Plan (IRP), resource adequacy (RA), and multiple RFOs.
In response to Committee Member Lesser’s question about the Committee’s role in the review process for items recommended to the Board, staff explained that the Committee usually examines technical items such as the IRP and the Energy Risk Management Policy. In response to Committee Member Chelsea Byers’ question regarding changes to product content, Ted Bardacke, CEO, responded that the process is tied in with the IRP and considers market conditions and budget. Committee Members emphasized that sufficient background and training should be provided to ensure that the Committee understands the IRP process.
4. Receive Presentation on 2023 Clean Energy & Reliability RFO and 2023 Power Ready RFO Status
John McNamara, Director of Structured Contracts, presented the status of the 2023 Clean Energy RFO Shortlist and the 2023 Power Ready RFO. In February, the Board will consider two energy storage contracts: a 60 MW stand-alone storage project and a 300 MW stand-alone storage project. Mr. McNamara reviewed the Full Capacity Deliverability Status (FCDS) that a project must receive from CAISO to provide Resource Adequacy (RA). Some of CPA’s shortlisted projects have not received FCDS but expect status from CAISO in May 2024. Mr. McNamara presented on Project C, a battery storage project in Moorpark with 300 MW / 1200 MWh, contract to start June 1, 2027, FCDS expected in 2024; and Project E, a battery storage project in Castaic with 60 MW / 240 MWh, COD expected June 1, 2026, FCDS expected in 2024.
In response to questions regarding FCDS from Committee Members Byers and Mallory, staff clarified that if a project does not receive FCDS, CPA may not have time to negotiate with other projects and could look to the next RFO; determination of FCDS is based on the availability of grid capacity at any given point and/or how many other projects are applying. Committee Member Kulcsar asked if there would be changes in the PPA terms if a developer was granted partial deliverability status. Mr. Langer responded that partial deliverability may be acceptable and the project may be downsized or the contract may be re-negotiated. Committee Member Lesser asked about the vulnerabilities of the RFO Agenda Page 5 of 17
Energy Planning & Resources Committee Item 1
shortlist and waitlist process; Mr. Langer explained that there is more competition as the market has changed and more load serving entities have purchased more renewables. In the future, CPA may have two separate tracks for projects with FCDS and without; CPA expects that some projects won’t move forward, and staff have set procurement goals at three times what is needed.
Mr. McNamara presented on the Power Ready RFO. CPA received proposals from installation companies. The selected proposer will be fully responsible for securing permits, site leases, planning, commissioning, and maintenance of the systems. Services will be contracted through a 20-year PPA with CPA. The proposal is made up of a consortium of multiple entities with significant experience, willingness to secure a Project Labor Agreement, and commitment to bring systems online within 18 months. It scored high on the evaluation ranking. Mr. Bardacke added that staff is working to secure more communities in the program; staff is preparing for round two of recruitment in the Fall.
Committee Member Kulcsar thanked staff for implementing lessons learned from the first round of the program. Committee Member Mallory asked about current participating communities and next steps. John Spector, Program Manager of Resiliency Programs and Grants, said staff is developing materials for member agency review relating to feasibility and installation; 11 agencies are currently participating. Mr. Bardacke added that site lease will be a critical issue. In response to Committee Member Lesser’s question about flexibility in the 20-year term and other site options, Mr. Bardacke noted that 20 years is necessary for projects to be financially sound; other public agency buildings or non-profit entities may offer suitable alternative locations for member agencies to participate in the program.
COMMITTEE MEMBER COMMENTS
Chair Parkhurst reflected on the work ahead for the Energy Committee, welcomed new committee members and staff members, and expressed excitement for the SunZia project and for new cities joining CPA.
ADJOURN
Chair Parkhurst adjourned the meeting at 1:04 p.m.
Agenda Page 6 of 17
Staff Report – Agenda Item 2
To: Energy Planning & Resources Committee
From: Lyon Hardgrave, Director, Energy Risk Management
Approved By: Ted Bardacke, Chief Executive Officer
David McNeil, Chief Financial Officer
Subject: Receive and File January 2024 Risk Management Team Report Date: February 28, 2024
January 2024 RMT REPORT
Key Actions
• Reviewed the counterparty credit exposure summary
• Reviewed October 2023 day-ahead load forecast performance • Reviewed December 2023 market performance
• Reviewed energy positions and approved 2024-2028 hedges for monthly RFO • Reviewed positions for Resource Adequacy (RA), RPS and Carbon-Free energy • products (CF)
• Update provided on 2023 Long Term PPA deliveries
• Reviewed the 2025-2027 slice of day RA position
• Reviewed Energy Risk Management Policy (ERMP) compliance for RA, REC, CF, and energy
• Reviewed January 2024 CRR Allocations
• Reviewed and approved the Negative REC Price Strategy Policy Compliance
Policy Deviation Required Action
In December 2023, the
second quarter (April to
June) Energy Hedge
Position increased above
the maximum second
quarter hedge limit
starting in 2027 and
continuing in the second
None.
The policy deviations arise from CPA continuing to enter into long term contracts for renewable energy consistent with its objective to reduce exposure to the short-term renewable energy market. The deviations occur during
the second quarter because electricity consumption by
CPA customers is projected to be at its lowest level in this Agenda Page 7 of 17
Energy Planning & Resources Committee Item 2
quarter of each year
through the end of the
measurement window in
2033.
quarter. The deviations are expected to resolve
themselves as the electricity production period nears and the corresponding policy hedge limit maximums increase
above the level of energy hedges under contract.
During the 2024 ERMP review, staff will consider
proposing an amendment to the ERMP, increasing the
maximum hedge limit in the second quarter of years that are four and more years in the future to eliminate policy deviations caused by load and generation patterns
specific to the second quarter.
ATTACHMENTS
None.
Agenda Page 8 of 17
Staff Report – Agenda Item 3
To: Energy Planning & Resources Committee
From: Lindsay Descagnia, Vice President, Power Supply
Subject: Oral Update from Vice President, Power Supply
Date: February 28, 2024
The VP will provide an oral report on CPA energy procurement activities, including:
• Sentinel Energy Center, LLC - Resource Adequacy confirmation preview Agenda Page 9 of 17
Staff Report – Agenda Item 4
To: Energy Planning & Resources Committee
From: Lindsay Descagnia, Vice President, Power Supply
Approved By: Ted Bardacke, Chief Executive Officer
Subject: Receive Presentation on Procurement Overview
Date: February 28, 2024
Staff will provide a presentation on the item.
ATTACHMENT
1. Presentation
Agenda Page 10 of 17
Renewable Energy and Carbon
Free Energy Procurement:
Market Update, Regulatory
Developments, and Potential
Changes to the Product Content of
CPA Rate Offerings
February 28, 2024
Agenda Page 11 of 17
68% of CPA’s load is now on the 100% Green product, essentially “locking -in” a significant amount of customer demand for renewable energy; CPA’s overall energy portfolio in 2023 and 2024 is expected to contain 75%-80% renewable energy
As part of the 2023 Clean Energy and Reliability RFO, CPA set ambitious targets to secure 95% of its renewable energy demand under long-term contract by 2029. However, CPA is still dependent on short-term renewable energy purchases until new projects come online Prices for short-term renewable energy contracts have increased significantly in recent years and supply is tightening. These factors are putting pressure on CPA’s ability to meet customer demand for renewable energy in 2025 and 2026 at current product content levels CPA has prioritized renewable energy sources across all rate products in the past, as these sources are the only zero and low carbon current technologies that can be built new at commercial scale (unlike non-renewable carbon-free sources like large dams and nuclear) Given market conditions and regulatory changes beginning in 2030, CPA will be exploring a shift in the coming years to GHG benchmarking for the Lean and Clean products. Those benchmarks would be met though a combination of renewable and carbon-free resources 2 Summary
Agenda Page 12 of 17
3 Pricing for short-term renewable energy (PCC1) and
carbon-free energy has increased five-fold over a two-year period The spike in pricing can be attributed to several factors:
• Decreased supply from out of state due to new low
carbon energy regulations in other Western states
• Greater demand from CA Load Serving Entities
increasing renewable targets, exceeding state
requirements
• Slower build-out of new projects related to supply
chain issues and interconnection delays
• Demand from ‘big tech’ sustainability programs
While prices are expected to start to decline in the
coming years, its uncertain if pricing will decline to the < $20/MWh pricing that was relatively stable for the
years leading up to 2022.
It is not clear how much more short-term renewable
energy supply can be procured, even at these elevated
prices as trading volume for 2025 and 2026 remains
very low even as prices have spiked
Short-term Market: Renewable and
Carbon-free Energy
Agenda Page 13 of 17
Eligible Renewable Energy Resources
Bioenergy (biomass, eligible biodiesel)
Geothermal
Small hydroelectric (30 MW or under)
Solar Photovoltaic
Wind
Ocean (tidal, wave, thermal)
Fuel cells using eligible renewable fuel
Refresher on Renewable and Carbon-free Energy
Eligible Carbon-free or Low Carbon Energy
Large hydroelectric (above 30 MW)
Asset Controlling Supplier (2 suppliers
approved by CARB, mostly large hydro but
may source from other technologies like
nuclear)
Renewable Carbon-free
Bioenergy
Geothermal
(both sources can have
small amounts of carbon
emissions)
Solar
Wind
Small Hydro
Large hydro
Nuclear
RE + CF
Agenda Page 14 of 17
Under Senate Bill 100, 60% of the state’s electricity must come from eligible renewable energy resources by 2030 and 100% renewable and carbon-free energy 2045 Signed in 2022, SB 1020 provides that renewable energy resources and carbon-free resources must supply:
90% of all retail sales of electricity to California end-use customers by December 31, 2035, 95% of all retail sales of electricity to California end-use customers by December 31, 2040 As the state moves toward meeting the joint renewable and carbon-free targets in the 2030’s there will be increased flexibility in any one year to meet and exceed state mandates with a combination of renewable and non-renewable carbon free energy.
CPA’s current overall renewable portfolio exceeds the state targets by over 25% Staff believe that the procurement priority overall should remain focused on renewables but that flexibility in any one year to swap out renewables for large hydro should be enhanced in response to market and supply conditions
Regulatory framework
Agenda Page 15 of 17
6 Potential Product Content Adjustments
68% of CPA’s load is now on the 100% Green product, committing CPA to a significant amount of customer demand for renewable energy for the foreseeable future. There are little to no opportunities for new-build non-renewable carbon-free technologies CPA’s overall energy portfolio in 2023 and 2024 is expected to contain 75%-80% renewable energy
2023 Product Content targets
• Lean = 40% carbon-free with a minimum of 20% renewable • Clean = 50% carbon-free all from renewable sources
• 100% Green = 100% renewable
As discussed with Executive Committee two weeks ago, a move to carbon-free based targets for the Lean and Clean products with a preference for renewable energy will be recommended for the 2024 – 2026 period.
While renewable energy can be procured on both a short and long-term basis, carbon free energy is typically transacted for in 1-3 year terms to account for varying hydrologic conditions making it risky to put too much emphasis on this resource over the long-term CPA has elected to received allocations of carbon-free energy from SCE as part of the PCIA and believes this opportunity may continue into the future, which can lower the cost of the Lean and Clean products
Agenda Page 16 of 17
Additional actions to procure short term renewable energy include:
RFOs every 6-8 weeks and active in seeking out bilateral renewable and carbon-free deals Swapping renewable length in 2024 for supply in 2025 and/or 2026 – this approach has proven fruitful so far
Outreach to project owners who have long term IOU contracts expiring in 2024 to take over those projects
Staff is ramping up the Integrated Resource Planning process, a 10-year forward plan to benchmark against state and CPA’s renewable and carbon-free targets and identify the technologies needed to continue building out CPA’s portfolio of renewable and carbon-free resources.
In connection with the FY 2024/25 rate setting process, staff is presenting rate options to the Executive Committee and Board over the next three months. Those options will include scenarios for CPA’s Lean and Clean products that enhance the flexibility to use a broader combination of renewable and carbon-free energy in the 2024 – 2026 time period.
This flexibility will enhance CPA’s ability to maintain stable and competitive rates with SCE although the premium cost of the 100% Green product will likely increase relative to the Lean and Clean rate products
7 Next Steps
Agenda Page 17 of 17