May 2, 2024
MINUTES
Board of Directors of the
Clean Power Alliance of Southern California
Regular Meeting
Thursday, May 2, 2024
2:00 p.m.
Meeting videos are available on CPA's YouTube Channel.
http://www.youtube.com/@CPApublicmeetings
Board members participated from the following locations:
Calabasas City Hall
Council Conference Room
100 Civic Center Way
Calabasas, CA 91301
Ventura County Government Center
Channel Islands Conference Room, 4th Floor
Hall of Administration
800 South Victoria Avenue
Ventura, CA 93009
Whittier City Hall
Admin Conference Room
13230 Penn Street
Whittier, CA 90602
South Bay Cities Council of Governments
Conference Room
2355 Crenshaw Blvd., Suite 125
Torrance, CA 90501
JW Marriot Desert Springs at SCAG Conference
Director 1 Conference Room
74-855 Country Club Drive
Palm Desert, CA 92260
CALL TO ORDER & ROLL CALL
Chair Klein Lopez called the meeting to order at 2:00 p.m. and Gabriela Monzon, Clerk of the Board, conducted roll call.
PLEDGE OF ALLEGIANCE
Director Hicks led the pledge of allegiance.
Roll Call
1 Agoura Hills Deborah Klein Lopez Chair Present
2 Alhambra Jeff Maloney Director Present
3 Arcadia Dominic Lazzaretto Director Present
4 Beverly Hills Julian Gold Alternate Present
5 Calabasas David Shapiro
Ed Albrecht
Director
Alternate Remote
6 Camarillo Susan Santangelo Director Remote
7 Carson Cedric Hicks Director Present
8 Claremont Jennifer Stark Alternate Present
9 Culver City Yasmine-Imani McMorrin Director Remote
10 Downey Horacio Ortiz Director Remote
11 Hawaiian Gardens Ramie L. Torres Alternate Remote
12 Hawthorne Alex Monteiro Director Present
13 Hermosa Beach Doug Krauss Alternate Remote
14 Los Angeles County Rita Kampalath Alternate Present
15 Malibu Marianne Riggins Director Remote
16 Manhattan Beach Amy Howorth Director Remote
17 Monrovia Dylan Feik Alternate Remote
18 Moorpark Renee Delgado Director Remote
19 Ojai Betsy Stix Director Remote
20 Oxnard Absent
21 Paramount Absent
22 Redondo Beach Absent
23 Rolling Hills Estates Steve Zuckerman Alternate Remote 24 Santa Monica Gleam Davis Director Present
25 Santa Paula Jenny Crosswhite Director Remote
26 Sierra Madre Robert Parkhurst Director Present
27 Simi Valley Rocky Rhodes Director Remote
28 South Pasadena Jon Primuth Director Present
29 Temple City Absent
30 Thousand Oaks David Newman Director Remote
31 City of Ventura Liz Campos Director Remote
32 Ventura County Vianey Lopez Vice Chair Remote
33 West Hollywood John Erickson
Chelsea Byers
Director
Alternate
Present
Remote
34 Westlake Village Absent
35 Whittier Leon Vasquez Alternate Remote
*All votes are unanimous unless otherwise stated.
GENERAL PUBLIC COMMENT
None.
CONSENT AGENDA
1. Approve Minutes from the April 4, 2024 Board of Directors Meeting
2. Re-appoint 9 Current Community Advisory Committee Members for the May 2024 – April 2026 Term and Appoint 1 New Member to the Open Position in West/Unincorporated Ventura County Region for a May 2024 – April 2026 Term
3. (a) Approve Professional Services Agreement with Municipal Capital Markets Group, Inc. with a Per-Transaction Fee of $281,500 and a Total Not-to-Exceed Amount of $844,500 to be Paid from Bond Proceeds for Municipal Financial Advisory, Guaranteed Investment Contract Broker, and Qualified Independent Representative Services on One or More Future Prepay Transactions (b) Approve Legal Services Agreement with Chapman and Cutler, LLP with a Per Transaction Fee of $175,000 and a total Not-to-Exceed Amount of $525,000 to be Paid from Bond Proceeds for Prepay Counsel Services on One or More Future Prepay Transactions
4. Authorize the Chief Executive Officer to Execute Task Order No. 6 with Ascend Analytics for 2024 Clean Energy and Reliability RFO Support Services for a Not-to-Exceed Amount of $210,000
5. Approve a Support Position on Assembly Bill 1176, as Recommended by the Legislative & Regulatory Committee at its March 27, 2024 Meeting
6. Receive and File Bill Positions March 2024 Monthly Report
7. Receive and File Monthly Community Advisory Committee Report Director Rhodes commented on Item 5, noting that the bill requirements are burdensome for cities.
Motion: Director Hicks, Carson
Second: Director Gold, Beverly Hills
Vote: The consent agenda was approved by a roll call vote, with a No vote from Director Rhodes on Item 5 only.
REGULAR AGENDA
8. Election Executive Committee At-Large Positions for Two-Year Terms from July 1, 2024 to June 30, 2026
Los Angeles County Regular Directors unanimously elected Director Jeff Maloney, City of Alhambra and Director Alex Montero, City of Hawthorne, as At-Large Los Angeles County Representatives on the Executive Committee.
Ventura County Regular Directors unanimously elected Director Betsy Stix, City of Ojai, as an At-Large Ventura County Representative on the Executive Committee.
9. Approve a Rate Setting Approach for FY 2024/25: (A) Select an option establishing a reserve percentage target and resulting total bill comparison levels for residential and small business rates using SCE’s June 1, 2024 rates: Option 1 – Low Reserve Scenario with a reserve percentage target of 34-38%: Target 100% Green Power rates to provide a 3% premium with Clean Power at a 1% discount and Lean Power at a 2% discount; Option 2 (Recommended by Executive Committee) – Medium Reserve Scenario with a reserve percentage target of 38-41%: Target 100% Green Power rates to provide a 5% premium with Clean Power at a 0% discount and Lean Power at a 1% discount; Option 3 – High Reserve Scenario with a reserve percentage target of 38-42%: Target 100% Green Power rates to provide a 5% premium with Clean Power at a 1% premium and Lean Power at a 0% discount; (B) Update rates for large commercial, industrial, pumping and agriculture, and streetlighting rate classes to reflect CPA’s current cost of service (COS) and based on the selected reserve option; and (C) Set total bill comparisons for customers in the cities of Hermosa Beach, Monrovia, and Santa Paula at the same total bill comparison levels as customers that began to receive service in 2018-2020 at the selected reserve option.
Karen Schmidt, Director, Rates & Strategy presented the approach recommendation, with a brief review of the process. The options presented are based on rate product content based on Board feedback and the new targets maintain CPA’s overall preference for renewables, keep the 100% Green product intact, and allow for competitive rates. CPA’s Cost of Service (COS) analysis projects a 0-1% increase in the product price differential between Lean/Clean and 100% Green Power. Based on SCE’s projected June 2024 rate change, total bill comparisons would remain within historic competitive ranges at current CPA rates, though results would be uneven across PCIA vintages and customer classes. Ms.
Schmidt also reviewed the FY 24/25 total bill comparison options that offer a range of potential outcomes for CPA’s competitiveness, financial and rate stability objectives. The scenarios offered were the Low Reserve, Medium Reserve, and High Reserve. Ms. Schmidt also covered subset rates and the new member community rate approach.
Chair Klein Lopez summarized the Executive Committee discussion, noting that the Committee recommended the Medium reserve option as it aligned best with CPA’s goals and would allow CPA to contribute to reserves. Directors Parkhurst, Gold, and Kampalath expressed support for the Medium Reserve option as it would support reserves, the execution of more energy contracts, creation of more local programs, and maintain competitiveness. In response to Director Primuth’s question regarding customer behavior and the effect of rate setting on behavior, Mr. Bardacke expressed that participation rates have generally not fluctuated by more than a full percentage point since 2020 even as rate comparisons have changed. Director Hicks expressed that although the differential in bills may be small, the amounts add up for customers; the Medium reserve option would communicate to CPA customers that CPA is empathetic to their needs. In response to Director Zuckerman’s question regarding street lighting, staff explained that CPA has not been competitive with SCE’s street lighting rates but approximately 20 cities have remained with their default street lighting rates, and the remainder have either opted to Lean or opted out.
Motion: Director Monteiro, Hawthorne
Second: Director Gold, Beverly Hills
Vote: Item 9A with the selection of the Medium Reserve option, 9B, and 9C were approved by a roll call vote with three abstentions by Directors Ortiz, Torres, and Vasquez.
10.Approve and Authorize the Chief Executive Officer to Execute the Following Long-Term Energy Storage Agreements:
a. 20-Year Energy Storage Agreement with Key Energy Storage, LLC for the 190 MW Key Project
b. 20-Year Energy Storage Agreement with Desert Sands II Energy Storage, LLC for the 140 MW Desert Sands Project
c. 20-Year Energy Storage Agreement with VESI 17 LLC for the 93 MW Denali Project
Lindsay Descagnia, Vice President, Power Supply, presented the item. The 2023 Clean Energy and Reliability Request for Offers (RFO) aims to fill a larger portion of CPA’s portfolio with long-term contracts. In September 2023, the Energy Committee approved a shortlist of 10 projects and a waitlist of 17 projects. Staff believes there is risk related to CPA’s near-term goal of having 95% of its annual renewable energy and 90% of RA needs under long-term contract by 2027 because of changing market conditions and uncertainty around new project development. Staff recommend consideration of high-value bilateral project offers with Full Capacity Deliverability Status (“FCDS”), or a high likelihood to receive it, and not wait until the next RFO to consider the offers. In April 2024, the Energy Committee authorized staff to enter into negotiations for four bilateral offers that have FCDS, or the likelihood of receiving it. Staff recommends approval of three Energy Storage Agreements. Ms. Descagnia presented details about FCDS, a designation made by CAISO. Ms. Descagnia also described challenging market conditions, provided an update on RFO, the RFO shortlist and waitlist, and further described the three projects for Board consideration.
Responding to Chair Klein Lopez’s question, Ms. Descagnia clarified that the developers included terms in the contract to allow for CPA to exit the contract if they are not able to receive FCDS. Director Parkhurst, Chair of the Energy Committee, expressed support for the item, noting that they are high quality projects that can help CPA attain its goal of having more renewables under long term contract. In response to Director Gold’s questions about contracts terms and projections, Ms. Descagnia explained that there are contract terms preventing developers from walking away from their commitment to CPA; developers would be required to provide a large security posting and all contracts have a Right of First Offer (“ROFO”), which survives a contract termination. Nancy Whang, General Counsel, noted before entering into a contract, staff would perform due diligence to determine whether another buyer has an existing ROFO right as to mitigate against potential liability from that buyer. Regarding projections, Ms.
Descagnia explained that projections are based on forward projections of load growth and changes to electricity demand. Directors Maloney and Rhodes thanked staff for seeking out these opportunities and expressed support for the contracts.
Director Feik asked why some projects did not include the community project funding; Mr. Bardacke explained that CPA does not solicit this type of funding in the RFO process as it does not want it to affect final project costs but that some developers offered it as part of their business practices.
Motion: Director Erickson, West Hollywood
Second: Director Parkhurst, Sierra Madre
Vote: Item 10 was approved by a roll call vote.
11.Review FY 2024/25 Budget Priorities and Operating Expense Highlights Ted Bardacke, CEO reviewed FY 2024/25 Budget Priorities and Operating Expenses. Mr. Bardacke noted that almost one-fourth of operating expenses are fixed by regulatory, contractual, or policy obligations. Mr. Bardacke discussed operating expense increase drivers, the staffing budget, customer programs budget, and marketing and communications budget, which have all increased slightly to support CPA’s operations.
Chair Klein Lopez and Director Hicks applauded the improvements in staff turnover and retention as well as outreach, customer programs, and communication efforts. Directors Gold and Kampalath commented on the EV Charging initiative, and the importance of growing and marketing that program.
Director Gold suggested a more granular role at the Board level to focus on achieving a sustainable and growing EV charging program.
COMMITTEE CHAIR UPDATES
Director Susan Santangelo, Chair, Finance Committee, reported that the Committee budget priorities and recommended Municipal Capital Markets as the municipal financial advisor and Chapman and Cutler for prepaid legal services.
Director Robert Parkhurst, Chair, Energy Planning & Resources Committee, shared that the Committee discussed the RFOs and bilateral offers.
MANAGEMENT REPORT
Mr. Bardacke discussed the Board retreat June 21st and noted that California achieving 100% renewable energy supply for parts of many days this spring was due in part to one CPA’s project coming online.
BOARD MEMBER COMMENTS
Director Gleam Davis thanked Mr. Bardacke for his participation in events held in the prior week at the LA County Board of Supervisors and the City of Santa Monica and reported that the Santa Monica Malibu Unified School District has moved to 100% Green energy following advocacy by local students.
REPORT FROM THE CHAIR
None.
ADJOURN
Chair Klein Lopez adjourned the meeting at 4:05 p.m.