MINUTES
Board of Directors of the
Clean Power Alliance of Southern California
Regular Meeting
Thursday, July 11, 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
Clean Power Alliance
Diana Mahmud Board Room
801 S. Grand Ave., Suite 400
Los Angeles, CA 90017
Whittier City Hall
Admin Conference Room
13230 Penn Street
Whittier, CA 90602
Ventura County Government Center
Point Mugu Conference Room, 4th Floor
Hall of Administration
800 South Victoria Avenue
Ventura, CA 93009
South Bay Cities Council of Governments
Conference Room
2355 Crenshaw Blvd., Suite 125
Torrance, CA 90501
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 Parkhurst led the pledge of allegiance.
Roll Call
1 Agoura Hills Deborah Klein Lopez Chair Present
2 Alhambra Jeff Maloney Director Present
3 Arcadia Michael Cao Director Present
4 Beverly Hills Julian Gold Director Present
5 Calabasas Ed Albrecht Director Remote
6 Camarillo Susan Santangelo Director Remote
7 Carson Reata Kulcsar Alternate Remote
8 Claremont Corey Calaycay Director Present
9 Culver City Yasmine Imani McMorrin Director Present
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 Absent
17 Monrovia Edward Belden Director Present
18 Moorpark Renee Delgado Director Remote
19 Ojai Betsy Stix Director Remote
20 Oxnard Bert Perello Director Remote
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 Present
28 South Pasadena Diana Mahmud Alternate Present
29 Temple City Ed Chen Director Present
30 Thousand Oaks David Newman Director Remote
31 City of Ventura Absent
32 Ventura County Vianey Lopez Vice Chair Remote
33 West Hollywood Absent
34 Westlake Village Absent
35 Whittier Mary Ann Pacheco Director Remote
All votes are unanimous unless otherwise stated.
GENERAL PUBLIC COMMENT
There was no public comment.
CONSENT AGENDA
1. Approve Minutes from the June 6, 2024 Board of Directors Meeting
2. Adopt Resolution 24-07-068 to Approve the Proposed Amendments to the Energy Risk Management Policy
3. Authorize the Chief Executive Officer to Execute Task Order No. 1 with GDS Associates, Inc for 2024 Clean Energy and Reliability RFO Technical Evaluation and Ongoing Contract Related Support Services for a Not-to-Exceed (NTE) Amount of $150,000
4. Approve the following Special Assessments with the California Community Choice Association (“CalCCA”):
A. A Special Assessment for Regulatory Engagement in Southern California Edison’s (“SCE”) General Rate Case Phase II with:
i. Keyes & Fox LLP (“K&F”) with an NTE amount of $81,920 for an Initial Term of August 1, 2024 to December 31, 2025; and, ii. NewGen Strategies & Solutions LLP (“NewGen”) with an NTE Amount of $57,680 with an Initial Term of August 1, 2024 to December 31, 2025;
B. An Update to the Special Assessment for 2022 SCE Energy Resource Recovery Account (“ERRA”) Compliance and 2024 SCE ERRA Forecast Proceedings Reallocating $20,000 of NewGen’s total NTE to Keyes & Fox; There is No Change to the Overall Special Assessment Total and No Additional Payment Needed
5. Approve and Authorize the Chief Executive Officer to Execute the Following Amendments to Renewable Power Purchase Agreements (PPAs) for Local Rooftop Solar Projects for the Power Share Program:
A. Amendment No. 1 to the Renewable PPA with Pivot Energy PPA 27 LLC (Beverly); and,
B. Amendment No. 1 to the Renewable Power Purchase Agreement with Pivot Energy PPA 28 LLC (San Gabriel)
6. Approve and Authorize the Chief Executive Officer to Execute Amendment No. 2 for an Increase of $1.709 Million to the Professional Service Agreement with Bloom Ads Global Media Group for Fiscal Year 2024/25 for a Total NTE Amount of $2,059,000 for Paid Media
7. Approve a Statement of Work with Mercer, Inc for a Compensation Study Refresh and Benefits Market Data Study with a Total NTE Amount of $148,000
8. Approve a Professional Services Agreement with TRC Engineers, Inc. for Software Data and Systems Strategic Planning Services with a Total NTE Amount of $241,990
9. Receive and File Bill Positions July 2024 Monthly Report
10. Receive and File Monthly Community Advisory Committee Report Motion: Director Mahmud, South Pasadena
Second: Director Parkhurst, Sierra Madre
Vote: The consent agenda was approved by roll call vote with an abstention from Director Zuckerman and a no vote from Director Rhodes on Item 9.
REGULAR AGENDA
11. A. Adopt Resolutions Nos. 24-07-069, 24-07-070, and 24-07-071 Approving Parameters Under which up to a Total of Three Energy Prepayment Transactions can be Completed with Either Goldman Sachs, Morgan Stanley, or Royal Bank of Canada as CPA’s Underwriter & Prepaid Supplier; Authorizing and/or Approving Documents or “Form of” Documents Supporting the Prepay Transactions; and Directing California Community Choice Financing Authority to make Payments to Service Providers for Issuance Costs from Prepay Bond Proceeds; and,
B. Delegate Authority to the Chief Executive Officer to Select the Funding Recipient(s) for Prepay Transactions Completed with Either Goldman Sachs or Morgan Stanley David McNeil, Chief Financial Officer, introduced the item, stating that staff is requesting that the Board adopt resolutions approving parameters for up to three prepayment transactions to be completed with either Goldman Sachs (GS), Morgan Stanley (MS), or Royal Bank of Canada (RBC) up to $1.5 billion each and up to $4.5 billion total. Kate Freeman, Strategic Finance Manager, continued the presentation, stating that prepaid transactions are a well-established financing mechanism used to allow utilities to issue tax-exempt debt to reduce energy costs. The transactions will reduce CPA’s renewable energy costs by approximately $98 million over an eight-year period, an estimated $2 to $5 million annually. In May 2024, the Board approved contracts with Municipal Capital Markets and Chapman & Cutler to prepare one to three additional prepay transactions. GS and MS offer a structure by which CPA can use a different bank as the funding recipient if that bank offers better savings to CPA.
Current market conditions are positive, and staff views the program’s risks as acceptable. Ms. Freeman provided details about the prepay transactions: bonds will be limited obligations of CCCFA, not obligations of CPA; CPA’s cost savings as provided for in the Clean Energy Purchase Contracts will be at least five percent of fixed cash flows or equivalent dollar per MWh; and CCCFA's total cost of issuance shall not exceed 1.25% of the amount of bond proceeds. Finance Committee Chair Santangelo stated that the Committee unanimously approved the recommended actions.
Director Zuckerman inquired about RBC being both an underwriter and a prepaid supplier; staff responded that the functions with GS and MS can be separated to allow for increased savings for the borrower if a different prepaid supplier can provide enhanced savings. In response to Director Kulcsar’s question about prepaying for various contracts, staff stated that CPA can prepay both long- and short-term purchases, but the bank prefers long-term electricity purchases to be routed through the deals. CPA has the ability to add in short-term contracts or pair them up with long-term contracts. Staff confirmed for Director Perello that the Royal Bank of Canada was the only financial institution being considered that was foreign owned. Director Crosswhite asked about long-term PPAs that do not meet Commercial Operation Dates (CODs) and Ms. Freeman responded there are allowances for shortfalls by which the bank would provide the extra power and CPA would take a slight reduction in savings; a delay of a few months could be absorbed that way. CPA could also use other contracts for the prepay deals. In response to Director Parkhurst’s question about risks, Ms. Freeman stated the program is low risk because the market would have to crash and remain so for several months to impact the rating fee, which would be paid out of bond proceeds. Ms. Freeman also clarified that a severe drop in interest rates or investor demand would prevent CPA from getting the minimum 5% savings required to benefit from a prepaid transaction. Director Mahmud asked if CPA has ever used prepayment for a contract that did not achieve COD, and staff clarified that did occur in the first two prepay deals and CPA had to use a mixture of projects already online to complete the transaction. Director Mahmud asked about prepayments for storage, and staff replied they cannot use prepayments for standalone storage, but can for renewable energy projects that include a storage component onsite. Staff clarified for Director Mahmud that the Board would be authorizing up to three prepayment bond issuances but they could end up using one or all three of the different underwriters, or any combination, depending on how the banks respond and market conditions.
Responding to Director Rhodes inquiry about the role of CCCFA, staff explained that that CCCFA issues bonds, but bond repayment is the responsibility of the funding recipient. Each transaction is separate from other bonds issued by CCCFA; CPA is never responsible for another CCA’s obligations. Staff confirmed that the bonds cannot be used for Resource Adequacy or reserve funding, and explained that the savings are accounted for annually due to periodical repricing and that bond proceeds are paid out of a trust account that CPA never touches. Regarding Director Gold’s questions about CPA issuing more bonds, staff replied that CPA can only prepay for energy needed to serve customer load. Director Gold asked about investors and staff indicated that large investment firms and insurance providers are attracted to tax-free bonds.
Staff clarified the basics of the prepayment program for Director Belden, highlighting aspects of the U.S. Tax Code available exclusively to municipal utilities and CCAs, allowing financial institutions to issue tax-exempt debt. Staff explained that once the CPA Board approves the transactions, the CCCFA Board will perform due diligence procedures as the next step.
Motion: Director Santangelo, Camarillo
Second: Director Monteiro, Hawthorne
Vote: Item 11 was approved by a roll call vote.
COMMITTEE CHAIR UPDATES
Director Santangelo, Chair of the Finance Committee, welcomed Director Albrecht from Calabasas as the newest member of the committee.
Director Parkhurst, Chair of the Energy Committee, reported that CPA launched a new RFO in June; offers are due back in July. He also reported that the Committee reviewed the Energy Risk Management Plan and welcomed Director Michael Cao to the Committee.
MANAGEMENT REPORT
Ted Bardacke, Chief Executive Officer, thanked Board members who participated in the Board Retreat. A summary of the discussions will be provided by the end of the summer.
As a result of feedback, CPA will begin conducting ongoing educational forums for Board members. Mr. Bardacke also mentioned the new member agency portal and discussed AB 1852, which was signed by the Governor allowing non-elected CPA board participants the ability to vote in closed sessions. Mr. Bardacke also thanked staff for securing CPA’s certification as a Great Place to Work. He closed his report by noting that the grid has been stable during the most recent heat wave and demand response and fiscal impacts have been minimal.
BOARD MEMBER COMMENTS
Director Mahmud informed the Board that CAISO offers live information online about the grid and power pricing in California and throughout the West.
REPORT FROM THE CHAIR
Chair Klein Lopez closed the meeting with thanks to staff for an excellent Board Retreat, emphasizing the benefit of connecting with other Board Directors in person.
ADJOURN
Chair Klein Lopez adjourned the meeting at 3:35 p.m.