Energy Planning & Resources Committee
of the Clean Power Alliance of Southern California
Regular Meeting
Wednesday, August 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
Arcadia City Hall
Council Chambers Conference Room
240 W. Huntington Drive
Arcadia, CA 91007
Carson City Hall
City Manager’s 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
City of Oxnard Service Center 1
East Conference Room
214 South C Street
Oxnard, CA 93030
Sierra Madre City Hall
Council Chambers
232 W. Sierra Madre Blvd.
Sierra Madre, CA 91024
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
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.
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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 June 26, 2024, Energy Committee Meeting
2. Receive and File June 2024 and July 2024 Risk Management Team Reports
REGULAR AGENDA
3. Oral Update from the Vice President of Power Supply
4. 2024 RFO Longlist Overview
COMMITTEE MEMBER COMMENTS
ADJOURN – NEXT MEETING SEPTEMBER 25, 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
Staff Report – Agenda Item 1
To: Energy Planning & Resources Committee
Subject: Approve Minutes from the June 26, 2024 Energy Committee Meeting
Date: August 28, 2024
RECOMMENDATION
Approve.
ATTACHMENT
1. Minutes
Agenda Page 3
Energy Planning & Resources Committee Item 1
MINUTES
Energy Planning & Resources Committee
of the Clean Power Alliance of Southern California
Regular Meeting
Wednesday, June 26, 2024, 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
Clean Power Alliance Office
Executive Conference Room
801 S. Grand Ave., Suite 400
Los Angeles, CA 90017
Alhambra City Hall
Conference Room A
111 S. First Street
Alhambra, CA 91802
Arcadia City Hall
Council Chambers Conference Room
240 W. Huntington Drive
Arcadia, CA 91007
West Hollywood City Hall
3rd Floor Conference Room
8300 Santa Monica Blvd.
West Hollywood, CA 90069
Los Angeles County Sanitation District
Conference Room D
1955 Workman Mill Road
Whittier, CA 90601
City of Oxnard Service Center 1
East Conference Room
214 South C Street
Oxnard, CA 93030
California Climate & Energy Collaborative
Forum Margaritaville Resort
Coconut Telegraph Center/Business Center
1600 North Indian Canyon Drive
Palm Springs, CA 92262
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
Arcadia Michael Cao 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
West Hollywood Chelsea Byers Committee Member Absent
All votes are unanimous, unless otherwise stated.
Agenda Page 4
Energy Planning & Resources Committee Item 1
GENERAL PUBLIC COMMENT
There was no public comment.
CONSENT AGENDA
1. Approve Minutes from the May 28, 2024, Energy Committee Meeting
2. Receive and File May 2024 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, with an abstention from Committee Member Cao on Item 1.
REGULAR AGENDA
3. Oral Update from the Vice President of Power Supply
Lindsay Descagnia, Vice President of Power Supply, provided an update on the 2024 Clean Energy and Reliability RFO, and discussed the Interconnection Consultant Contract.
4. Review and Recommend Approval of Proposed ERMP Amendments to the Board of Directors
Lyon Hardgrave, Director of Energy Risk Management, presented the item.
Proposed updates respond to emerging risks, changing business conditions, and regulatory requirements. They include raising the maximum hedge limits for transactions in the second quarter (Q2) for years four or more in the future from 70% to 90%; adjusting CPA’s Resource Adequacy (RA) purchasing and maximum hedge requirements; clarifying the amendment of long-term contracts; clarify certain procurement contracting and credit terms; and streamlining financial reporting. Mr. Hardgrave reviewed the changes in RA requirements, mainly that hedge limits changed from a monthly context to a new slice-of-day framework.
CPA must procure RA in each hour to better match resource availability with demand patterns throughout the day. Staff also presented proposed amendments to CPA’s policy requiring Board approval for changes to long-term contracts, specifically, adding clarification to define administrative changes staff can make in contrast to material changes that require Board approval. In response to Committee Member questions, staff clarified what would be considered administrative changes to long-term contracts. The proposed edits include monthly reporting to the Board on any such changes. Mr. Hardgrave also discussed changes to Section 6 Credit Policy and Counterparty Suitability, intended to govern short-term transactions. Staff also recommends eliminating the financial report from the quarterly RMT and presented only in the Quarterly Financial Report. Mr.
Bardacke clarified that the Energy Risk Management Policy is periodically reviewed by CAISO, even though the ERMP is not a regulatory requirement.
Committee Member Lesser requested comparative data on raising the hedge limits and its impact. Staff described the fluctuations in energy production throughout the year as a response to lower energy consumption by customers in the second quarter. The goal is not to be hedged too far in the future if retail prices drop, cutting into CPA’s expected revenue. Changing the hedge limits can help mitigate this risk; overall, buying long-term renewable energy contracts buffers against short-term volatile markets and helps decarbonization. The Committee directed staff to expand its explanation regarding hedge limits to the full Board. Regarding Agenda Page 5
Energy Planning & Resources Committee Item 1
Committee Member Kulscar’s inquiry about the minimum number of staff members on the RMT, Nancy Whang, General Counsel, provided sample language clarifying that four staff members are assigned and three are required to take action, which would be incorporated into the proposal presented to the Board. If staff members are on leave, other staff may be appointed on an interim basis.
Motion: Committee Member Kulcsar, Carson
Second: Committee Member Mallory, Oxnard
Vote: Item 4 was approved by a roll call vote.
COMMITTEE MEMBER COMMENTS
Committee Members expressed their appreciation for the recent Board Retreat and welcomed the opportunities to meet other Board members in person and to learn about CPA’s operations and the clean energy industry.
ADJOURN
Chair Parkhurst adjourned the meeting at 1:04 p.m.
Agenda Page 6
Staff Report – Agenda Item 2
To: Energy Committee
From: Lyon Hardgrave, Director, Energy Risk Management
Approved By: Ted Bardacke, Chief Executive Officer
David McNeil, Chief Financial Officer
Subject: Receive and File June & July 2024 Risk Management Team Reports
Date: August 28, 2024
June 2024 RMT REPORT
Key Actions
• Reviewed the counterparty credit exposure summary
• Reviewed March 2024 day-ahead load forecast performance • Reviewed May 2024 market performance
• Reviewed energy positions and approved 2024-2028 hedge proposal for monthly RFO
• Reviewed positions for Resource Adequacy (RA), RPS and Carbon-Free energy products (CF)
• Update provided on 2024 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 June 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
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
Agenda Page 7
Energy Committee Item 2
continuing in the second
quarter of each year
through the end of the
measurement window in
2033.
CPA customers is projected to be at its lowest level in this quarter.
On July 11, 2024 the Board approved an amendment to
the ERMP that increased 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. This action cured this policy deviation beginning with the July 2024 reporting month.
In April 2024, the energy
hedge position for the third
quarter of 2027 (July to
September) exceeded the
maximum hedge limit for
that period.
None.
This policy deviation arises 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.
This policy deviation also arises from the latest load
forecast which includes a reduction in demand in Q3 2027 which increased CPA's hedge percentage for this period.
This deviation is expected to be resolved by Q3 2025 as the electricity production period nears and the
corresponding policy hedge limit maximums increase
above the level of energy hedges under contract.
July 2024 RMT REPORT
Key Actions
• Reviewed the counterparty credit exposure summary
• Reviewed April 2024 day-ahead load forecast performance • Reviewed June 2024 market performance
• Energy hedge proposal review is postponed to the weekly RMT meeting on July 23 • Reviewed positions for Resource Adequacy (RA), RPS and Carbon-Free energy products (CF)
• Reviewed the 2025 RA purchase strategy
• Reviewed the 2025-2027 slice of day RA position
• Reviewed Energy Risk Management Policy (ERMP) compliance for RA, REC, CF, and Energy
• Reviewed July 2024 CRR Allocations
• Reviewed and approved the Negative REC Price Strategy Agenda Page 8
Energy Committee Item 2
Policy Compliance
Policy Deviation Required Action
In April 2024, the energy
hedge position for the third
quarter of 2027 (July to
September) exceeded the
maximum hedge limit for
that period.
None.
This policy deviation arises 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.
This policy deviation also arises from the latest load
forecast which includes a reduction in demand in Q3 2027 which increased CPA's hedge percentage for this period.
This deviation is expected to be resolved by Q3 2025 as the electricity production period nears and the
corresponding policy hedge limit maximums increase
above the level of energy hedges under contract.
ATTACHMENT
None.
Agenda Page 9
Staff Report – Agenda Item 3
To: Energy Planning & Resources Committee
From: Lindsay Descagnia, Vice President, Power Supply
Subject: Oral Report from Vice President, Power Supply
Date: August 28, 2024
The VP will provide an oral report on CPA energy procurement activities, including:
• Update on SunZia Amended and Restated PPA
Agenda Page 10
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: 2024 RFO Longlist Overview
Date: August 28, 2024
Staff will provide a presentation on the item
ATTACHMENT
1. 2024 Clean Energy and Reliability RFO Longlist Presentation Agenda Page 11
2024 Clean Energy and
Reliability RFO Longlist
August 28, 2024
Agenda Page 12
CPA received a robust response for the 2024 Clean Energy and Reliability RFO, with more bids submitted than any of CPAs past long-term RFOs. However, more than half of the bids were for early-stage Queue Cluster 15 (QC 15) projects and/or projects without Full Capacity Deliverability Status (FCDS).
Viable projects are being marketed in an extremely competitive environment. Projects with FCDS are expected to become even more scarce beginning in 2025 due to limitations with grid interconnection.
In deciding how many and which projects to shortlist, CPA, the Review Team and the Energy Committee will need to balance the inclination towards procuring more now, given the anticipated scarcity of FCDS, with CPA's traditional ratable purchasing strategy that minimizes the chances of over procuring when prices are elevated.
For renewable generation, solar was the only offered technology. Other technologies (i.e. wind, geothermal, biomass) will likely need to come from bilateral opportunities outside of this RFO.
Staff is preforming due diligence on offers and valuation results will be presented to the RFO Review Team and Energy Committee in September.
Two more solicitations are planned for later in FY 2024/25 - one for Power Share local solar + storage projects and the other for new technologies in early project development 2 Executive Summary
Agenda Page 13
Background
Agenda Page 14
3 2024 RFO Overview and Goals
The purpose of the 2024 Clean Energy and Reliability RFO is to solicit competitive proposals to fill a larger portion of CPA's portfolio needs with long-term contracts, reducing the need to procure products such as Resource Adequacy (RA) and renewable energy in volatile short-term markets.
CPA is looking to shortlist 1,250,000 to 1,500,000 MWh of renewable energy. RA targets still are under-development given the complexity of the RA “slice-of-day” framework starting in 2025.
Similar to the 2023 RFO, the 2024 RFO has a ‘fast-track’ path that allows CPA to start negotiations on high-value projects before CPA’s Energy Committee considers the Review Team’s shortlist recommendation in September.
Fast track projects still need to be shortlisted.
CPA will also use this RFO to allocate QC 15 commercial interest points to early-stage projects. QC 15 projects must show a commercial interest from a Load Serving Entity (LSE) to maximize the projects chances of being studied for interconnection. Being studied for interconnection is a prerequisite for ultimately getting interconnection but in no way guarantees it.
CPA will enter exclusivity with selected QC 15 projects, which will then be required to offer the project into a future RFO, after the interconnection costs are known and the counterparty can offer a firm price. Staff will bring a recommended shortlist of QC 15 projects to Review Team and Energy Committee later this fall.
Agenda Page 15
4 Opportunities for Projects with FCDS are Limited
5 The CAISO’s Transmission Plan Deliverability (TPD) Allocation Report indicates there is little FCDS capacity left on the grid for new projects.
Viable project opportunities are in high demand. Until additional interconnection capacity on the grid is built, new projects with FCDS may be very scarce for the next several years.
Projects that were awarded FCDS in May 2024 will either have executed a PPA or demonstrate to CAISO that they are shortlisted by an LSE by February 1, 2025 to have the best chance at retaining FCDS.
Opportunities to contract with projects that can provide FCDS will likely become limited as early as 2025.
QC 15 interconnection studies will be conducted throughout 2026, and CPA would not expect shortlisted QC 15 resources to resubmit an offer prior to late 2026.
Agenda Page 16
Baseload Renewable Opportunities Remain Scarce
6 Opportunities for geothermal or bioenergy facilities, which can provide renewable energy 24 hours a day, remain scarce.
CPA received one non-conforming geothermal offer in the RFO that failed to meet the minimum size eligibility requirements.
CPA needs a small amount of additional baseload renewable resources to meet its Mid-Term Reliability compliance requirements but expects future opportunities to come through bilateral offers, outside of RFOs, due to the scarcity of such resources.
Staff is exploring bilateral opportunities for geothermal resources and could potentially bring an offer to the Review Team in September, in conjunction with the RFO shortlist.
Agenda Page 17
Procurement Planning During Uncertainty
7 The 1,250,000 to 1,500,000 MWh renewable energy shortlisting target puts CPA on a reasonable path towards filling 95% of its renewable energy needs via long-term contracts to be executed over the next three years and provides opportunities to contract with high-value projects with FCDS
The smaller shortlist target (compared to previous years) recognizes the high-price current market environment, the lack of non-solar technologies that bid into the RFO, and new regulatory uncertainty
On August 22, the CPUC approved a Decision that sets up a central procurement entity (CPE), administered by the Department of Water Resources, that could procure ‘long-lead time’ resources, such as off-shore wind, geothermal, and long-duration storage on behalf of LSEs The CPE could procure some or all of these resources and the costs and benefits would be allocated to CPA on a proportional basis. The CPE is not obligated to procure, and any resources would likely not come online until early – mid 2030s Agenda Page 18
Offer Overview
Agenda Page 19
8 RFO Offer Overview
Summary Stats
Number of conforming offers 172
Number of QC 15 offers 92
Number of conforming Non-QC 15 offers 80
Number of offers with FCDS 58
Number of sellers submitting offers 66
Counties spanned by submissions 34
States represented by offers AZ, CA, NV
Number of new facility offers 69
Number of existing facility offers 11
Local Projects 10
Bundled Offers 4
Fast-Track Requests 20
Earliest online date 7/1/2025
Latest online date 12/31/2030
Product Type
(Conforming Offers) Total Local
Standalone Storage 24 3
RA-only 15 4
RPS + Storage 22 0
RPS only 9 1
PCC1 Energy
(Fixed or Index Plus) 6 2
Tolls (Dispatchable Gas) 4 0
Total 80 10
Agenda Page 20
Offer Locations are Concentrated
Offers by County
Kern, San Bernardino, Riverside and Los Angeles Counties continue to be the dominant regions for renewable project development; stand alone storage is more dispersed Agenda Page 21
Offers by Product and Technology Type
No wind or geothermal projects were offered in 2024, solar and storage are the dominant technologies
Agenda Page 22
Near-Term Commercial Online Dates Remain Scarce
Projects with early CODs remain scarce, most online dates are in 2027 to 2028 and many projects were offered at the latest eligible COD Agenda Page 23
13 Large Scale Projects Are Popular
0 100
200
300
400
500
600
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 Renewable Generation Power (MW) Storage Power (MW) RA-Only Power (MW) Thermal Power (MW) The industry trend is towards offering larger projects
QC 15 offers are excluded from this slide
Agenda Page 24
Solar and Storage Pricing is Less Volatile
Average prices continue to increase year over year since 2021 except for standalone storage, which is now slightly lower than 2022 and 2023 QC 15 offers are excluded from this slide
$/kWh $/kW-mo $/kW-mo
Agenda Page 25
Reduced Emissions Thermal Toll Offer Overview
CPA received bids from three Sellers for 4 total thermal toll offers Projects are located in Riverside, Solano, and San Joaquin counties None of the projects are located in Disadvantaged Communities (DACs) No bidders indicated accelerated decommissioning in their bids Gas Toll Product Type Count
Existing dispatchable gas with storage 3
Existing dispatchable gas with blended fuels
(renewable biogas)
1 Agenda Page 26
16 Fast-Track Offer Negotiations are Underway
CPA allowed bidders to request fast-track consideration if the project’s circumstances and/or CPA’s procurement needs warrant quick action
Staff identified four projects for fast-track including two large solar plus storage installations, one local RA-only energy storage offer and one “index plus REC” energy only offer All projects are at a mature stage of development with nearer-term CODs, offered with FCDS (not applicable to index plus REC offers) and have competitive offer prices Fast-tracked projects will be included for shortlist consideration at the RFO Review Team and Energy Committee and, if approved, could come to the Board for approval as early as October Note: One shortlisted offer from the 2023 RFO has re-entered contract negotiations and is in exclusivity with CPA. CPA anticipates presenting this offer to the Review Team and Energy Committee along with the RFO offers in September
Agenda Page 27
Takeaways
There are a limited number of viable projects with FCDS, resulting in a tighter market. Many new-build projects will not be able to obtain FCDS for the foreseeable future.
Balancing FCDS availability with higher prices for renewable energy will be a key consideration when discussing the shortlist recommendation There were no conforming offers for wind, biomass, or geothermal resources but staff is working on bilateral opportunities
There are opportunities for natural gas tolls with storage and with blended fuels, staff will need to work closely with developers to understand the options for fuel type, associated pricing and difference in emissions intensity for these opportunities Agenda Page 28
2024 Clean Energy and Reliability RFO Schedule
June 11, 2024
RFO Opens
July 17, 2024
Deadline to submit RFO Proposals
Mid-September 2024
RFO Review Team reviews offers (schedule TBD)
September 25, 2024
Energy Committee shortlist consideration
Late September
Bidders notified of shortlist status
August* – January 2024
Power Purchase Agreement (PPA), Energy Storage
Agreement (ESA) Resource Adequacy Agreement
(RAA) negotiations
October 2024 – February 2025
Board Consideration of PPAs
* Includes Fast-Tracked projects
Agenda Page 29
2025 Tentative Future RFO/RFI Schedules
Milestone 2025 Emerging Technology RFI 2025 Power Share RFO Purpose of RFO/RFI
Identify future procurement opportunities
for and assist with the development of
emerging energy generation and storage
technologies
Procure local resources to provide income
qualified customers with renewable energy and
bill savings
RFO/RFI LaunchJanuary 2025April 2025
Deadline to submit RFO/RFI
Proposals
April 2025October 2025
RFO/RFI Review Team reviews
offers
June 20251Mid-November 2025
Energy Committee shortlist
consideration
Early July 2025Late-November 2025
Bidders notified of shortlist
status
Mid July 2025December 2025
Contract negotiations September 2025 – October 20252December 2025 – February 2026 Board Consideration of
Contracts
TBDMarch 2026 – May 2026
1 Submissions for the Emerging Technology RFI will be held on a rolling basis, with initial bids due June 2025 and a second submission due date in October 2025, with an ongoing March/Oct cadence
2 CPA intents to develop a Memorandum of Understanding with first offer rights at the end of this process Agenda Page 30
2024 Clean Energy
and Reliability RFO
2025 Emerging
Technology RFI 2025 Power Share RFO
Procure long-term resources to fulfil
portfolio needs for energy and RA
Identify future procurement opportunities for
and assist with the development of
emerging energy and storage technologies
Procure local resources to provide income
qualified customers with renewable energy
and bill savings
Robert Parkhurst Robert Parkhurst David Lesser
Jeff Maloney Michael Cao Chelsea Byers
Kathleen Mallory David Lesser Reata Kulcsar
Diana Mahmud Chelsea Byers Diana Mahmud
RFO/RFI Review Team Members
Agenda Page 31
Appendix
Agenda Page 32
21 Central Procurement Authority (CPE)
22 On August 22, 2024 the California Public Utilities Commission (CPUC) approved a Decision that implements a centralized procurement entity for long lead-time resources, and describing the general process by which resources will be centrally procured by the Department of Water Resources (DWR) under Assembly Bill (AB) 1373.
The Decision allows the CPUC to request that DWR procure electricity from long lead-time (LLT) resources on behalf of customers of all load-serving entities under the Commission’s IRP purview.
This initial need determination totals up to 10.6 gigawatts (GW) of nameplate capacity of the following:
Up to 7.6 GW of offshore wind
Up to 1 GW of enhanced geothermal systems
Up to 1 GW of multi-day long-duration energy storage (LDES) that does not include lithium-ion batteries Up to 1 GW of LDES with a discharge period of at least 12 hours A subsequent request may be sent to DWR within six months of the adoption of the decision asking that they initiate procurement activities
DWR is not obligated to procure and could choose not to based on a cost/benefit calculation If DWR does procure, LSEs will not be permitted to opt out of their share of the centralized procurement authorized CPA will need to plan for the potential that DWR procures some or all of these resources and that the costs and benefits are allocated to CPA.
Agenda Page 33
Due to an increasing and unprecedented number of applications over the last several years, the CAISO has implemented a significant change to the interconnection process, starting with QC 15 projects.
The Interconnection Process Enhancements (IPE) are designed to narrow down the pool of applications for projects to those most ready to be studied.
For the first time, Load Serving Entities (LSEs) like CCAs will be part of the process. Each LSE will have the ability to allocate points to individual projects which will increase the likelihood that a project is studied and ultimately interconnects to the grid.
QC 15 project offers will be at an early stage, so certain details will be preliminary, including submission of an indicative price.
Projects will be evaluated and ranked based on quantitative and qualitative metrics in alignment with CPAs traditional scoring criteria.
Top ranked projects will be offered Commercial Interest points. In return, the developer must sign an Exclusivity Agreement that will require the developer to rebid the project after the interconnection study process is completed in 2026, when there is more certainty of the project's timelines and costs, and the developer can bid a firm price. 23 QC 15 Interconnection Process Enhancements
Agenda Page 34
1. Commercial Interest: Opportunity for LSEs to express interest in particular projects. • LSE point allocation is based on load share
• LSE points will account for 30% of the overall scoring weight • CAISO encourages LSEs to solicit QC 15 projects, conduct due diligence and allocate LSE scoring points
• LSE’s will have to allocate their points to projects by 12/20/2024 • 79,000 MW of allocated capacity (points) are available. There are 354,000 MW in the queue.
2. Project Viability: Developers will be given scores based on two separate criteria:
• Percent completion of engineering design plan
• New build or expansion of existing facility
3. System Need: Developers will be given scores based on two separate criteria:
• Located in a designated Transmission Zone
• Long-Lead Time Resources (defined as geothermal, out-of-state wind, offshore wind, pumped hydro and long duration energy storage)
24 CAISO Scoring Process for QC 15 Projects
There are three key categories CAISO will use to evaluate projects in order for projects to advance in the interconnection study process.
Agenda Page 35
Zonal Approach: The CAISO will make information available to stakeholders to enable the zonal approach, which encourages interconnection requests in transmission zones with available and approved transmission capacity.
FERC Order No. 2023: Interconnection requests will have to meet FERC Order No. 2023 requirements for site control, entry fees, and deposits, and are expected to submit documentation to enable their progression through the interconnection process.
Scoring Criteria: The ISO proposes to score interconnection requests based on a set of clear and verifiable criteria used to rank the projects for progression to the study process.
25 Highlighted Changes to the Interconnection Process
CAISO’s plan includes the following, among other changes:
Agenda Page 36
2024 RFO Product Types and Eligibility
26 Product Types Description of Eligible Resources Term (Years) Size (MW) 3 Max Start Date4 Renewable Portfolio
Standard (RPS)
Generation Only
Solar, wind, geothermal, biomass, small hydro (bundled
with RA or energy-only) 10 to 201 15 to 500 December 31, 20302 RPS Generation +
Storage RPS generation paired with storage 10 to 20 15 to 500 December 31, 2030 Standalone Storage Standalone storage facilities with a minimum duration of at least 4 hours 10 to 20 15 to 500 December 31, 2030
Resource Adequacy
(RA) - Only Offers from any technology for RA capacity (no energy) 5 to 15 15 to 500 December 31, 2030 Blended or Hybrid
Tolls
Natural gas facilities that reduce emissions by converting to a blended fuel source and/or adding battery energy
storage
2 to 10 10 MW Minimum December 31, 2030
1 Term limits for Energy Only offers will be 5 to 20 years 2 MTR Eligible baseload projects can come online as late as 6/1/2031 3 The minimum size eligibility requirement for projects located within Los Angeles or Ventura county (excluding product type Blended or Hybrid Tolls) will remain at 5 MWs 4 There will be no limitation on the max start date for any QC 15 project bidding into the RFO Agenda Page 37
Evaluation Criteria
With the exception of natural gas tolls, projects will be ranked using CPA’s standard criteria (see Appendix for detailed descriptions):
Environmental
Stewardship
Workforce
Development
Quantitative
Evaluation
(Value)
Development
Risk
Project
Location
Benefits to
DACs
Agenda Page 38
27 Project Location Scoring
HIGH In Los Angeles and Ventura counties
Other counties within California
Projects located within a Federally-designated energy community or on tribal lands with demonstrated community support (including outside of California)
MEDIUM
Projects outside of California not located in a Federally-designated energy community or on tribal lands without demonstrated community support LOW Agenda Page 39
Toll Evaluation Criteria
• CPA received tolling offers from hybrid natural gas facilities that incorporate battery energy storage or use a blended fuel source, such as renewable biogas Only offers that can demonstrate a plan for this cleaner alternative are eligible for participation in this RFO
CPA will use the following criteria when evaluating these offers:
Workforce
Development
Quantitative
Evaluation
(Value)
Plan for
Transition to
Cleaner
Operations
Benefits to
DACs
29 GHG
Emissions
Agenda Page 40
GHG Emissions
30 CPA will forecast the expected generation and associated GHG emissions at a natural gas facility
CPA may receive offers from facilities that are very efficient and are expected to run frequently and offers from facilities that are less efficient and expected to run infrequently
CPA will use forecasted data to analyze a facility’s total GHG output and the facility’s efficiency and determine the effects such facility will have on CPA's Product Content Label and GHG emissions profile
This will be a quantitative measure, not ranked High, Medium, Low Agenda Page 41
Disadvantaged Community Impacts
Natural Gas resources will have differing impacts on DACs than renewable resources. Impacts to DACs will be assessed in conjunction with scoring in the three qualitative evaluation criteria; 1) impacts of the agreement on a transition to cleaner operations, 2) workforce development, and 3) GHG emissions Demonstrates DAC benefits, including transition to cleaner operations or retirement at the end of the contract term
HIGH
Project does not demonstrate additional DAC benefits, or is not located in a DAC
NEUTRAL
LOW Project is harmful or inconsistent with community priorities Agenda Page 42
Workforce Development
• CPA will use its traditional workforce development criteria with a slight modification to address existing facilities
The project is a union site or will use targeted-hire, union labor, or multi-trade project labor agreements (including requirements for state-apprenticeship graduates) HIGH
The project is not a union site or does not have a labor agreement, but can demonstrate prevailing wage, union labor, and targeted hire commitments MEDIUM
The project does not demonstrate prevailing wage, union labor, and targeted hire commitments
LOW
Agenda Page 43